The KPDA Bulletin - January to July 2020 Issue

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J A N U A R Y T O J U L Y 2 0 2 0


A Publication by the Kenya Property Developers Association

2020, What a Year! This Issue's

by Elizabeth Mwangi, KPDA CEO


Welcome to the KPDA Bulletin, a publication aimed at bringing

you up to speed on the activities that your Association is

engaged in. It is also our intention to use this platform to share

what is trending globally in the real estate space.

2020 begun on a very hopeful note with most of us believing that

this would be the year that we recover from 2019's tough

economic times. Unfortunately, it has turned out to be a year

that promises to be even tougher than 2019 what with the Covid

19 global pandemic. Several businesses, and not only in the real

estate space have suffered the effects of the pandemic with

companies having to lay off staff , close certain

ventures/projects they may have begun and even close their

offices and branches.

Be that as it may, we remain hopeful that 2021 shall see us

bounce back. Let us not loose hope as all shall work out.

Advertise with KPDA at

80% Off!

“Affordable Housing Can

Become a Reality

for Cities”

The Tilisi Breakfast and


KPDA Directory of


J A N U A R Y T O J U L Y 2 0 2 0

Highlights on KPDA's

Advocacy Activities


To be an advocate is to have courage,

independence and passion for the things that


We strive to represent you better and fulfill our mandate to

''proactively partner with policy-makers, financiers and

citizens to ensure that the property development industry grows

rapidly but in an organized, efficient, economical and ethical


Below are some of the highlights from the advocacy activities

that we have been engaged in:

- Representation on various Advocacy Meetings which included;

- Public Participation Workshop for the Drafting of the Special

Economic Zones Authority (SEZ) Regulations 2019 and the

Review of the 2016 Regulations.

- The 6th KEPSA National


Speaker’s Roundtable (SRT) with

the 12th Parliament.

- The 5th KEPSA Senate Speaker’s


- NCA Workshop to Review and

Finalize the Draft Building

Regulations (Building Code).

Submissions on Various Pieces of


- The Business Laws (Amendment)

Bill 2019

- The Public Finance Management

Amendment Bill 2019

- The Sectional Properties Bill


- Defects Liability Proposal from

the National Construction

Authority Regulations 2019

- The Land Registration

Amendment Bill 2020

- Tax Laws (Amendment) Bill 2020

KPDA has engaged

extensively with

the National

Assembly and the

Senate on key

strategies that can

be explored to

create a more

conducive business

environment for

private businesses

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Key Wins for 2019

KPDA registered with the Joint Building and Construction

Council (JBCC) and therefore will be a member of its Board once

elections are held.

Affordable Housing Tax Incentives: Resulting from persistent

lobbying, the 2019/2020 Finance Act passed the following


- VAT Exemption on goods imported or purchased locally for

use in affordable housing construction.

- Import Declaration Fee & Railway Development Levy

allowing for the fee at a rate of 1.5% shall be charged on the

custom value of input for the construction of houses under an

affordable housing scheme.

- Railway Development Levy allowing for the fee at a rate of

1.5% shall be charged on the custom value of input for the

construction of houses under an affordable housing scheme

The AHP Tax Incentive

Implementation Task Force was

constituted to develop the

implementation process and

respective regulations to

operationalize the passed

incentives and KPDA is


Public Appointments:

- Nomination of a KPDA Liaison to

the Proposed Money Laundering

and Terrorist Financing National

Risk Assessment Exercise under

the National Treasury (April


- Nomination to the Special

Subcommittee to Review the

National Construction Research

Agenda (NACRA) under the

National Construction Authority

(March 2019)

One of our key


achievements for

2019 was the

inclusion of

affordable housing

incentives in the

Finance Act


J A N U A R Y T O J U L Y 2 0 2 0

Affordable Housing Can

Become a Reality for


By the World Economic Forum

Cities are growing at an unprecedented rate, presenting an

incredible opportunity for the development of local economies.

However, their residents need good, affordable housing – and

this remains a challenge around the world. Well-functioning

property markets can act as a financial springboard for

enterprises and job creation. An enabling environment for

affordable housing can be developed with the right

infrastructure, investment and macroeconomic policies targeted

towards social and financial inclusion.

Affordability – Exploring the Problem

The challenge of affordability requires not just short-term fixes

but also long-term strategies. Solutions will need to address both

the supply side and the demand side of the housing market, and

involve public-sector, private-sector and non-profit


It is not only about being able to

afford to buy or rent a house, but

also being able to afford to live in

it. This goes beyond meeting

expenses related to operations

and maintenance; it also involves

considerations of transport,

infrastructure and services. If a

house is cheap enough to buy and

run, but located far from

livelihood opportunities or

amenities such as schools, it

cannot be said to be affordable.

The reasons for a lack of

affordability vary from city to

city, but commonly include

housing costs rising faster than

incomes, supply of houses not

keeping up with demand, scarcity

of land, and demographic changes

such as population growth, ageing

and changes in household


Supply-Side Challenge 2: Land


City governments generally use

two tools – zoning and regulation

– to shape where and how new

houses can be built.


is given to:

- Transit-oriented development,

in which expansion of cities is

planned around new urban

transport infrastructure.

- Algorithmic zoning, with

incentives for developers based

on assessment

of what is needed to maximize the

vibrancy of a community.


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Rent controls offer the potential to

protect tenants, but must also take care not to

restrict the future supply of properties to rent by

unfairly disadvantaging landlords.

- Mixed-use development and inclusionary zoning, to ensure

neighbourhoods have a mix of income levels and proximity to

jobs and services.

- Taxation solutions, such as

taxing the underlying value of land rather than the value of the

property on it, and imposing a tax on vacant land or properties.

Supply-Side Challenge 3: Securing Finance

While some investors are starting to see affordable housing as a

low-risk addition to their portfolio – as demand from key

workers in public services is likely to remain strong through

recessions – the private sector naturally focuses on market rate

housing, where returns are expected to be higher.

The various options for funding the development of affordable

houses include:

- Government provision of tax incentives, grants or exemptions


private developers to develop certain types of property or

develop in

designated areas.

- Government-guaranteed bonds providing cheap, long-term

finance to community-based organizations to develop and

manage affordable housing.

- Employing investment models such as microfinance, real estate

investment trusts (REITs), impact investing and Islamic finance.

Supply-Side Challenge 4: Design and Construction

While land is often the biggest cost in developing housing,

construction costs are not far behind – and sometimes even

greater. It is important to look into how housing can be made

more affordable by bringing these costs down. Approaches


- Minimizing bureaucracy, as the fees and costs of complying


complicated building codes can add significantly to project cost.

There is potential for technology to provide solutions here.

- Emerging construction

technologies such as 3D printing,


bricklayers, self-driving

bulldozers – and solutions related

to the internet of things (IoT) and

artificial intelligence (AI) that

could bring down operational and

maintenance costs.

- Alternative construction

materials such as fly ash, cementcoated

expanded polystyrene panels,

glass fibre-reinforced gypsum,

cross-laminated timber and

compressed earth blocks.

- Public-private partnerships on

training to address skills

shortages in the construction


Demand-Side Challenges

Should strategies try to make

housing affordable for everyone,

or target assistance at certain

sections of the population? And

how should targeted populations

be defined: by income level, age,

number of children or

employment as key workers?

These form some of the

challenges on the demand side of

affordable housing, including:

Different forms of tenure, going

beyond a binary choice between

rental and home-ownership, can

offer more options to city

residents struggling to afford a

house. They include build-to-rent,


ownership and shared equity


J A N U A R Y T O J U L Y 2 0 2 0

Rent controls offer the potential to

protect tenants, but must also take care not to

restrict the future supply of properties to rent by

unfairly disadvantaging landlords.

Rent controls offer the potential to protect tenants, but must

also take care not to restrict the future supply of properties to

rent by unfairly disadvantaging landlords.

- Non-profit organizations such as

community land trusts, housing

cooperatives and microfinance

institutions have a critical role in

bridging the gap between

governments and the private

sector to improve the

affordability of housing, as well as

working with individuals to help

them understand their options

and make informed decisions.

Demand-side interventions need to guard against the risk of

helping in the short term but not the long term.

Mechanisms to keep units affordable on resale include subsidy

recapture and subsidy



Effective strategies need to address both supply and demand

side challenges. Recommendations for the three main

interdependent actors include:

- City governments have to define their long-term plans for


the supply of affordable housing, balancing the need to minimize

urban sprawl with the limits of the viability of building denser

and taller. They need to address political considerations that

could hold back the development of new affordable housing,

ensure that housing developments have adequate

infrastructure, explore ways to improve the situations of those

living in informal housing, and create a strong regulatory

enabling environment for the private and non-profit sectors

- Private-sector players need to keep abreast of emerging

solutions in construction techniques and materials, work with

governments to ensure an adequate flow of skilled labour, and

consider new solutions in financing and innovative tenure



This article is an extract from a

report by the World Economic

Forum published in June 2019 on

Making Affordable Housing a

Reality in Cities. You may access

the full report using the link




The World Economic Forum is the

International Organization for

Public-Private Cooperation.

The Forum engages the foremost

political, business, cultural and

other leaders of society to shape

global, regional and industry


It was established in 1971 as a notfor-profit

foundation and is

headquartered in Geneva,

Switzerland. It is independent,

impartial and not tied to any special


The Forum strives in all its efforts to

demonstrate entrepreneurship in

the global public interest while

upholding the highest standards of

governance. Moral and intellectual

integrity is at the heart of

everything it does.

Visit https://www.weforum.org/

J A N U A R Y T O J U L Y 2 0 2 0

The Tilisi Breakfast and

Bus Tour, 26th February


Event Summary

The Kenya Property Developers Association together with Tilisi

Developments PLC held a breakfast and tour on Tuesday,

25th February 2020.

The theme of the event was “Understanding the Advantages of

Developing a Master Planned Project.”

The event kicked off with a bus tour led by the Co – CEOs of

Tilisi Developments PLC, Ranee Nanji and Kavit Shah and

the Head of Sales, Jay Shah around the 400-acre development

explaining the investment opportunities around the


he second session was characterized by a plenary session

moderated by Nick Langford, Adair Estates and included the

following panelists:

- Esther Omulele– Managing

Partner, MMC Asafo

- Simon N. C. Herd– Regional

Director for Sub-Saharan Africa,

Mace YMR

- Ravi Kohli– Founder & Managing

Director, Karibu Homes. Kenya

- Richard Hough– CEO, Africa

Logistics Properties

The audience comprised of

approximately 90 delegates who

were representatives from

KPDA’s membership.

We would like to send our

gratitude to Tilisi Developments

PLC for fully sponsoring and

hosting the event.

We look forward to organizing

future events together.For more

information, kindly contact the

KPDA Secretariat on 0725 286

689 or 0737 530 290.

To view more photographs from

these event, please click here


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