In Kenya's fast growing cities there is a paradox of too many houses - Out of reach of the majority of the population. Recent statistics for Kenya show that income is heavily skewed in favour of the rich and against the poor. The country’s top 10% households control 42% of the total income while the bottom 10% control less than 1%. This means that for every shilling earned by the poorest 10% households, the richest 10% earn about Kshs 56. It is notable that the 8th, 9th and 10th population groups account for over 70% of the income. In Nairobi, theproportions for the lower, the middle and the upper income groups were 72.12%, 24.12%, and 3.76% respectively.
Estimates (2014) on Kenya demographics indicate that 0-14 years: 42.1%; 15-24 years: 18.7% ; 25-54 years: 32.8% ; 55-64 years: 3.7% while 65 years and over: 2.8%. The Kenyan urban population makes up for 24% of total population (2011) while the rate of urbanization is 4.36% annual rate of change (2010-15).
The growing urban population and low spending power are among factors blamed for the predicament of inadequate housing. According to Hass Consult 2011 property index, the immense activity in real estate has only met a quarter of the market demand. This is 35,000 of the 120,000 new housing units required in a year. The real estate consultant links the shortfall to ever escalating property prices. As a result of this mismatched supply and demand, housing prices have increased 100 per cent in recent years.
Shortage of housing is a matter of great concern to any country. In Kenya, the problem has been exacerbated by high rates of population growth and migration to urban areas in search of greener pastures. The extent of such a problem varies with urban centers but the results are the same. This results to high population densities, sanitation problems, unhealthy living conditions and insecurity of tenure. Consequently, the mushrooming of slums and shanty suburbs in city centers particularly in the developing world, becomes the order of the day. Housing demand in Nairobi has been escalating over time as the population rises. The fact that conventional housing finance usually works in favor of middle and high income groups is reflected in highly segmented housing markets. There is oversupply of middle and high income residential neighborhoods such as Westlands and Kileleshwa with low density bungalows and townhouses in Karen and Langata. The initially traditional lower middle income family areas such as South C, Buruburu, are transforming and down grading into mixed use with extensions.
Lower middle income residential neighborhoods targeting young professionals/ graduates and students who are competing for safe, accessfull and affordable spaces are mainly located on the Thika highway corridor, Kiambu corridor and Limuru corridor which are mainly characterized by high-rise apartments. The prices in these zones have escalated because of the increased demand and also the low supply of the houses.
The quality of houses in these areas is low, mainly dark, small and with poor drainage not to talk about the poor roads that feed into it. Majority of them branch off the highways into areas deep within that have muddy roads and no street lighting. This has led to rising cases of insecurity in these areas.
The high prices have also been influenced by the influx of shopping malls which causes the rise of land prices and consequently housing prices. Location is another factor to consider. Developers dealing in this market have had to secure land in the outskirts of Nairobi due to affordability and the fact that the houses have to cost as little as possible.
The housing demand in Nairobi has escalated over the years prompting private investors to oversupply of high-rise amenity buildings on initially zoned single –dwelling plots. The youthful population are today faced with the harsh reality that they are unable to compete in the real estate market, relegating them to be spectators in the lucrative market scene. The initial houses targeting this group have now become scarce due to the change in demand by the population. This is indicated by the struggle and scramble for houses right on the highway and close to the CBD which has in a major way led to the increase of the housing prices.