Why low-cost housing makes no business sense

Tax exemption

There would also be an investment deduction to contractors on machinery and new appropriate technologies.

Any expenditure on putting up social infrastructure would be exempted from tax. But the stakeholders say no meaningful progress has been registered.

“A little has been done; a lot more needs to be done,” said Frank Ireri, the managing director of Housing Finance, Kenya’s leading mortgage provider.

Daniel Ojijo, the chairman of the Mentor Group, a Nairobi-based property firm, said: “Failure by the government to provide infrastructure to private developers has made the provision of low-cost housing untenable.”

Mr Ojijo said the situation has been compounded by the high cost of land, building materials and loans.

Most developers, he said, rely on bank loans repayable at 14-15 per cent interest rate.

But the acting director of the Housing Infrastructure Department at the Ministry of Housing, Makenzi Kiilu, defended the government saying: “We are already providing housing infrastructure facilities such as sewer lines and water lines. We have established that if we can service more land, more developers will build and houses will become cheaper.”

He said the Ministry of Housing is currently building a sewer line in Athi River, around Daystar University.