World Bank says 2m houses need to rein in slum development
The World Bank has raised concern over Kenya’s sprawling slum development, calling on the government and the private sector alike to put up more affordable housing.
This as the World Bank economic update on housing estimates that 61 percent of people living in cities are housed in slums.
The Breton Woods institution recommends that an estimated two million low cost housing units are needed to improve the living standards.
The World Bank has indicated middle and lower income households are grappling with severe shortage in the housing sector.
World Bank financial sector specialist Mehnaz Safavian said addressing the housing deficit would be good for economic growth, creating jobs and deepening the financial sector.
She recons that Kenyans are unnecessarily living in slum dwellings because of limited supply and lack of affordable houses.
“People who live in slums have time to have enough income. But the availability is low. In Kenya there are over 25,000 mortgages. Some Mortgages being offered by banks. We have about 10,000 mortgages offered by saccos,” Ms Safavian said .
The World Bank estimates that one in every three Kenyans live in cities, with the bank predicting the number could grow by 2030.
Over the years, the government has estimated that the country has an annual housing deficit of 50,000 houses.
The World Bank however says that an average of 244,000 affordable homes need to be put on the market to ensure availability of houses.
Speaking during the launch of the report, Central Bank of Kenya Dr Patrick Njoroge governor said constraint to buyers comes down to limited supply of financing saying banks, microfinance banks, and Sacco’s are in the sector.
Dr Njoroge said the country has a dynamic mortgage industry which remains modest at around 30 percent.
“This year’s theme housing unaffordable and unavailable resonates with the general public. The government has taken some steps to making sure houses are affordable. The need for additional decent homes at affordable cost remains acute,” Dr Njoroge said.
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