2018 2022 0 MINISTRY OF TRANSPORT, INFRASTRUCTURE, HOUSING & URBAN DEVELOPMENT (State Department of Housing & Urban Development) One million affordable homes by 2022 program IMPLEMENTATION STRATEGY
1 Project Background Executive summary The programme seeks to Facilitate mass housing production of at least 1,000,000 low cost affordable homes in 5 years through innovating funding mechanisms 2 3 Project drivers CAPEX requirements There are five main drivers of the programme Funding strategy/mechanisms Construction Technology Land Supporting Infrastructure and Legislation The total project CAPEX requirement is appx. KES 2.718 T to deliver the various phases of the programme 4 Land availability Working with county governments to identify suitable Public land for social housing, affordable housing including Urban renewal 5 Funding & Incentives Establishment of Kenya Mortgage Refinancing Company Establishment of National Housing development Fund NEMA fees has been scrapped NCA levies have been scraped 15% corporate tax reduction on developers Other financial and non-financial incentives 1
Proposed Implementation Framework 2 : 5. Ensure a supportive ecosystem Ensure fast public processes, e.g. permitting or transfer of titles Review PPP framework to allow for faster process (schools, access infrastructure). 1Develop demand-based master plan for social and affordable housing. Match supply and needs of target group National/County Governments 2. Unlock land for development Establish the land bank Create incentives for private land owners or idle land 4. Grow mortgage finance market Arrange a credit line (e.g. with WB or AfDB) for long term mortgages Set up the Kenya Mortgage Refinancing Company (KMRC) to manage low cost liquidity for mortgages 3. Scale-up developer capacity and financing Establish PPP arrangements e.g. land swaps to attract developers
Cooperatives 10% Private sector 7% National Housing Corporation Civils servants scheme Employer assisted 2% Housing 2% Rural Housing 3% 2% social housing social housing 20% National government County governments Private sector Cooperatives Rural Housing County governments 10% National government (affordable housing) 44% Employer assisted Housing Civils servants scheme National Housing Corporation 3
*Project Funnel FY2017/2018 FY2018/2019 FY2019/2020 FY2020/2021 FY2021/2022 Lot 5 Master planner to support with identification of locations for the funnel projects and development of implementation schedule Lot 1 Makongeni 141 acres (22,000) Shauri Moyo & Starehe Park Road (2,000) Nakuru, World Bank supported (2,000) Private Developers (10,000) Mavoko (8000) NSSF Land Mavoko (50,000) Portlands Athi River 1 (50,000) Mombasa 1 (50,000) Eldoret 1 (30,000) Cooperatives 2 Private developers 2 Civil Servants 2 (10,000) Lot 2 Police 2 (10,000) Redevelopment of Nairobi Old Estates 1 Nakuru 1 (30,000) Kisumu 1 (30,000) Eldoret 2 (30,000) Portlands Athi River 2 (50,000) Cooperatives 3 Lot 3 Private Developers 3 Civil Servants 3 (10,000) Police 3 (10,000) Redevelopment of Nairobi Old Estates 2 Lot 4 Nakuru 2 (30,000) Kisumu 2 (30,000) Mavoko (12,500) Cooperatives 4 Private Developers 4 Civil Servants 4 (10,000) Police 4 (10,000) Redevelopme nt of Nairobi Old Estates 3 Mombasa 2 (30,000) Cooperatives 5 Private Developers 5 Civil Servants 5 (10,000) Police 5 (10,000) Redevelopme nt of Nairobi Old Estates 4 4
Key Metrics on the 1 M homes programme 800000 200000 1000000 225000 125000 350000 1 million homes 350.000 jobs Affordable Social Total units Direct jobs Indirect & induced jobs Total jobs 100% - Acres developed Real estate & construction sector contribution to GDP <10% of funding from budget 7% 2017 Budgetary allocation <10% 14 2022 Private funding (>60%) and NSSF (<30%) ~7,000 acres developed in 5 regions Kisumu Eldoret 800 1,000 800 Nakuru 3,000 Nairobi 1,200 Mombasa >90% 5
The 1 M homes program combines innovative ideas on all dimensions 2 Land at right location 1 Demand driven master plan All GoK supported housing developments target known demand (affordability, type, location) No single development ends up as ghost town Public land use Max 5km from employment Joint zoning and urban planning with county governments 3 Low construction cost Government negotiated scale discounts for input materials Development of local construction technology sector Design to value & fast project delivery Industrial building systems Innovative designs Standardized building components 4 Affordable home buyer financing 6 Innovative developer financing PPP models, e.g. land swap,,joint ventures, EPC Off-plan sales through regulated escrow accounts 5 Supportive ecosystem Fast permitting and transfer of titles Fast-track PPP process Delivery units between county and national elvel Line of credit Kenya Mortgage Refinancing Company Multi-generational mortgages & extension of background check to cover informal sector Incentives for First Time Home Buyers National Housing Development Fund Kenya Mortgage Refinancing Company 6
PROJECT DRIVERS There are five main drivers for delivery of the 1 million housing units project Facilitate mass housing production of at least 1,000,000 affordable homes in 5 years across the country by working in partnership with financial institutions, private developers, manufacturers of building materials and cooperatives to deliver homes faster and reduce the cost of construction by at least 50%. A B C D E Funding strategy Construction technology Land Supporting Infrastructure Legislation & Incentives National Housing Development Fund KMRC Innovative Financing Models Housing Infrastructure Bonds Mobilise individual contribution Co-operative movement Innovative models: Industrial Building Systems Innovative design Green Building Concept Fast/Quality/Cost effective Intelligent buildings Lessons learned: borrow lessons learned from countries that have delivered on such projects such as Singapore, China Public land: identify 7,000 acres of publicly owned land in Nairobi, Mombasa, Eldoret etc. which is easily transferrable between government agencies Private land: secondary interest for now as requires budgetary line to acquire. Would significantly increase unit cost Roads and other transport infrastructure: engage Transport, KURA and NAMATA to ensure that blue print developed is aligned with current agency plans Other government agencies through cross sector steering committee to be set up by CoS RBA Unclaimed Financial Assets Act Sectional Properties Act NSSF Act Housing Act PPP Act Offer Financial and Non-Financial Incentives 7
Milestones March 2018 2 Land 1 Funding Strategy Establishment of KMRC ongoing Establishment of the National Housing Development Fund ongoing Registration & titling of land earmarked for housing development Identified land for affordable housing ( Mavoko, Park Road, Starehe, Makongeni) Identified land for social Housing ( Kibera, Mariguini, Kiambiu) 64 sites in counties under discussion with CECs for partnership in housing delivery 3 Legislation and incentives Regulatory and legislative amendments to RBA Act, NCA & NEMA fees scraped 15% reduction of corporate tax on developers 4 Construction technology Prequalified 21 No. IBS providers 5 Supporting infrastructure Preparing Technology and building components exhibition Building material innovation partnerships with manufactures ongoing (eg Numerical Machines) 6 Other Logistics Developed Relocation Action Plan (RAP) Established Settlement Executive Committees Established enumeration committees in slum areas Integrated transit plan being planned Water and sewerage master plan being developed Power demand survey going on Access roads development ongoing 8
1,000,000 houses is not a pipe dream, It is possible 9 9