This archive report was first published on 8 July 2020.
Kenya's urban population is growing at an alarming rate, with the country lagging behind the sub-Saharan urbanization average. According to the UN-Habitat, Africa is urbanizing at an annual rate of four percent, making it the fastest urbanizing region in the world. By 2050, three out of every four Africans will be town dwellers, while only three out of ten Kenyans currently live in towns.
As the population grows, so does the pressure on social amenities. Housing is a major challenge, with the UN-Habitat estimating a housing deficit of 2 million units in Kenya. To meet this demand, the country must build at least 250,000 houses every year, yet on average, only 50,000 are added annually.
Private investments in housing are crucial to meet the demand, and the government should incentivize investors with a favorable tax regime and friendly policies. Streamlining land governance and documentation is also essential to reduce the cost and risk of investing in land.
Urban planning is critical in addressing the challenges of rapid urbanization. The growth of work-and-live communities, such as Tatu City, is a good example of this trend. These communities incorporate shops, offices, schools, medical centers, sports, and entertainment facilities, and business and logistics parks.
Investors in these communities should prioritize climate control, using sustainable materials, green spaces, and landscaping efforts to preserve or augment nature. A realistic development of this scale requires a minimum of 2,500 acres of land, which can be challenging to obtain in urban areas like Nairobi.
However, counties like Kiambu, Kajiado, and Machakos offer an abundance of land, serenity, and a cleaner environment, making them ideal locations for fine urban living. The Hass Housing index confirms that land and property are cheaper to rent or buy in these counties compared to Nairobi.
Examples of gated estates in Kenya include Edenville Estate in Kiambu, Bahati Ridge in Thika, and Green Park Estate in Athi River. While some of these estates are completed, others are ongoing or planned, and few can rival Tatu City in size and grandness of design.
As the housing market grows, so does the risk of unscrupulous investors who under-quote and over-promise to lure clients. Buyers are advised to carefully interrogate investors' portfolios and history before making a decision.
