Lower middle and low income housing a national priority

We are all agreed that provision of housing for the lower middle and low income groups in our urban areas is a major priority. Unemployment remains a key concern too. The housing construction industry, which is largely private sector driven, comes with numerous jobs for skilled and unskilled Kenyans and promotes cement, steel and paint manufacture industries hence creating more jobs. But our real estate industry is the gate valve through which stocks of land for housing are delivered. Therefore, when the delivery of our real estate industry is ineffective, the housing industry cannot flourish. The real estate industry in Kenya is in return controlled through a series of gates manned by practicing professionals and institutional processes. When these are inefficient, the industry chokes and the delivery of housing suffers, undermining job creation as well.

Planning and development approvals suffer costly delays

Sadly, the institutional processes for delivering planning and development approvals for the industry are far from efficient and need fundamental attention. Developers in most of our towns recount incidents of frustrations they endure in following through to obtain land, acquire titles or obtain planning and development approvals. Institutional lethargy, high approval fees and delays are key concerns. The processes to obtain new titles could take years. High costs and delay escalates investment capital, disinterests investors and kills many prospective projects. As a nation, we are “killing the goose from which we expect golden eggs”.

Some small detail illustrates. If the land targeted for development involves subdivision, the investor then requires a licensed surveyor and a registered planner. These two cadres of professionals are not too easy to find and can be quite expensive. The number of licensed surveyors and registered planners remain below three hundred for each discipline, with some in government while most remain concentrated around Nairobi. If transfers and bank loans are required, then a developer will need a conveyancing lawyer and a registered valuer. While we have a reasonable number and spread of lawyers around the country, registered valuers in private practice are few and to be found clustered around Nairobi. The cost of the services of these professionals isn’t insignificant. Generally, the costs and availability of land professionals in Kenya can be quite limiting.

Institutional processes and costly, lengthy and inefficient

But the nightmare and most limiting experience comes from institutional processes. The process of obtaining planning approvals from most local authorities (now City or Municipal Management Boards) and the Lands office in Nairobi routinely takes three months to years. This is the stage at which most developers count big loses; it’s a most humbling experience for professionals and developers. Once planning approval is provided, the survey process commences. Field survey can be expedited but institutional demands slow down the process. Processing rural surveys in County survey offices will take an average of two to three days. This is fine. But obtaining approvals for a set of survey records for urban areas submitted to the Director of Surveys offices at Ruaraka could take anything from two months to over a year, depending on the specific circumstances. This is long for development. Once survey records are ready, registration of title commences. Here again, while in rural County land registries this could take a few days, the Central registry in Nairobi takes months to years to conclude registration. Many developers have their seen the viability of their development proposals collapse while waiting for the registration of documents in the Nairobi office.

NEMA and National Construction Authority have aggravated approval process

Upstream, besides paying registered architects, engineers and quantity surveyors in preparation for construction, developers today have to seek further project approvals from NEMA and the National Construction Authority. There have been complaints of delays and unreasonably high charges associated with these two. This further undermines project viability. When I chaired the KEPSA Land Sector Board a while back, we tried to work with the Lands Ministry to profile the various stages that a developer has to navigate with a view to collapsing and reducing them.

One-stop-desks and policy interventions needed

They were many, repetitive and, in most departments, unnecessary. We encouraged the establishment of multi-disciplinary one-stop approaches to expedite. This can still be explored and implemented in the Management Boards (former local authorities) and in Lands offices. The process costs, particularly institutional approval fees, should be revisited and reduced in some of the institutions. This way, we’ll proactively drive our real estate and housing construction industries. This matter calls for top policy attention in the national and county governments.