Tactics Developers Are Using to Build Affordable Houses in Nairobi

Just a month after the Hass Consult property index released second-quarter report detailing the cost of building and acquiring houses has hit a record high, developers are now employing new tactics to construct affordable homes in Nairobi.

The rate of inflation and losses occasioned by the weakening shilling made building costs soar, compelling developers to devise new ways of meeting the ballooning demand for affordable homes in the country.

"Inflationary pressures on building materials will push up prices of newer housing units in areas backed by local demand while new build in competitive over supplied markets will see developers lose margins and therefore either reach for product value engineering or exit the market entirely," stated Sakina Hassanali, Head of Development Consulting and Research at HassConsult.

NMS Houses that are under construction in a Nairobi Estate

NMS

Community Land Trust

The Community land trust is where the cost of a home is separated from that of land. In this case, developers advise a community to agree on setting up properties and then share the proceeds.

The community members raise initial money from a combination of local governments, philanthropy organizations, individuals, and bank loans to buy one or more properties.  

The trust then maintains ownership of the land, while the homeowner pays for the cost of the structure, plus a nominal ground lease fee for the use of the land. When the home is sold, the land trust sets limits on its pricing so that it can be affordable for the next buyer.

Joint Ventures

Some developers building apartments and homes in various Nairobi estates enter joint ventures to meet the demand for affordable homes. 

They reach agreements with landowners to construct homes and then, through legal processes, work out a division plan.

So far, this approach has been used to put up over 200 units near Garden City estate.

Using Simple Designs

Some designers are now going for simple house structures and designs. Developers choose simple floors and avoid intricate roofs.

Multi-storey Houses

Instead of building single units, realtors are now going for multi-storey houses. This saves on building usually expensive foundations.

It also saves on the cost of roofing.

A block of apartments in Nairobi.

File

Recycling

Developers are also recycling some materials used in construction to save costs. Some even prefer using second-hand construction materials.

Instead of buying ladders, developers encourage the use of improvised structures. 

"When constructing, you do not have to buy all the necessary material. A cheap and more affordable way is to recycle. You can also go for second-hand construction materials," a realtor stated.

Buying surveyed and bounded plots of land

Real estate agents prefer buying land that is already serviced. This helps them save on the cost of public services.

This also helps cut charges associated with excavating, clearing bushes, or fixing extended drainage.