(Nairobi, Kenya) – Kenya’s efforts to close its housing deficit face major hurdles ranging from expensive and inadequate financing to tax uncertainty, with the private sector calling for stronger collaboration with government to unlock investment in affordable homes.
According to International Housing Solutions, a Pan African housing provider, delivering affordable housing at scale will require patient capital, predictable tax policies and a stronger partnership between the public and private sectors.
This comes as Kenya continues to face an accumulated housing deficit of more than two million units, according to the World Bank, with demand growing by between 200,000 and 250,000 units annually.
The government has set a target of constructing 200,000 affordable housing units every year under its Affordable Housing Programme.
IHS Kenya managing director Kioi Wambaa said the scale of the challenge means government cannot solve the housing crisis alone.
“The government cannot do everything. It is unrealistic to think that you can take all your problems to the government and expect them to sort it out,” Wambaa said.
His remarks come as IHS Kenya unveiled Muzi Salama, a KES 1 billion residential development at Tilisi in Limuru that will deliver 240 two and three bedroom apartments. The investment equals approximately $6.4 million or £5.1 million at current exchange rates.
The project reinforces the company’s long term investment in Kenya’s housing sector and expands the supply of professionally developed residential communities.
This milestone positions IHS on track to deliver 3,000 homes by 2030, reinforcing its leadership in the institutional delivery and management of investment grade housing for the middle income market that combines financial sustainability, environmental stewardship and social impact.
Located within the master planned Tilisi development, the project combines quality construction, sustainable design and professional property management to create communities that deliver long term value for both homeowners and investors.
Wambaa said government has made progress but could do more by working closely with developers and other players to identify areas where policy interventions can unlock private investment.
IHS Kenya works with industry players through the Kenya Property Developers Association to engage government on policies affecting housing development.
One of the biggest obstacles, Wambaa said, is access to affordable credit throughout the project cycle.
Affordable housing, particularly rental housing, requires long term and patient capital because developers may take years to recover their investments.
“In Kenya, I think, again, access to credit. And when I say that, it is across the whole project life cycle, whether it is project finance, the front end, the banks providing practical, affordable financing for developers to basically enter into this space,” he said.
The challenge is particularly significant in Nairobi, where Wambaa said more than 70 percent of people are renters, meaning the largest demand is for rental rather than owner occupied housing.
Tax uncertainty is another major concern for developers planning projects with long investment horizons.
Wambaa said Kenya can learn from other countries that have confronted similar housing challenges, stressing that closing the deficit will require sustained long term commitment rather than a short term intervention.
“There is a lot we can learn from the other countries, and how those other countries have done it. It is something that requires long term focus,” he said.
He also backed continued collaboration between government, developers, financiers and other stakeholders, saying no single player can address the housing shortage independently.
IHS Kenya’s Muzi Salama project is part of that private sector contribution. The KES 1 billion development adds 240 homes to the housing stock and is designed around energy and water efficiency, with EDGE certification planned.
Wambaa said affordability should not only be measured by the initial purchase price but also by the cost of living in a home over its lifetime.
IHS says its efficient housing designs can reduce utility consumption, with savings potentially equivalent to about one month’s rent annually.
The company plans to deliver 3,000 homes in Kenya by 2030, highlighting the role institutional investors could play in expanding supply.
For Kenya to bridge its housing gap, Wambaa said policy consistency, accessible financing and sustained public private cooperation will be critical to turning ambitious housing targets into homes that ordinary Kenyans can afford.
“At International Housing Solutions Kenya, we see housing as a catalyst for economic and social transformation. Every development we undertake is designed to leave a lasting impact, not only by delivering quality homes, but by creating communities where families can prosper, investments retain value and sustainable living becomes the norm,” said Wambaa.