FACTORS AFFECTING THE SUPPLY OF AFFORDABLE RESIDENTIAL HOUSING UNITS IN KENYAN URBAN AREAS: A CASE OF NAIROBI CITY AND ITS ENVIRONS

Abstract

Purpose: The study focused on the factors affecting the supply of affordable residential housing units in Kenyan urban areas in the case of Nairobi city and its environs.Methodology: A descriptive survey research design was used. The target population comprised of all the real estate agents, valuers and property managers with headquarters in Nairobi totaling 90. A sample of 40% or 36 firms was taken and a random stratified sampling technique was used to select the sample units. The study used primary data collected through using questionnaires as well as secondary data as a source of literature review. The data collected was analyzed by use of descriptive statistics. In particular, frequency tables and proportions or percentages were used. In addition factor analysis was used to supplement the descriptive statistics.Results: Findings from factor analysis indicated that the factors affecting the supply of affordable residential housing in Nairobi could be reduced to a three factor model. Findings from the study indicated that upon calculation of the rotated factor loadings, the Eigen Values of the three factors were still greater than 1 and the three factors still explained 75.51% of the total variance. The Unrotated factor loadings gave a clear picture of the importance of the variables to the factors. It seemed from the study that Factor1 was mostly defined by ‘legal’ variable, factor2 by ‘cost’ variable, and factor3 by ‘financial’, ‘socioeconomic’ and ‘infrastructural’ variables.Unique contribution to theory, practice and policy: The study recommended that to address cost related constraints to the supply of affordable housing in Nairobi, the architectural community should engage in research on cheap building products. The government through the central government and through the newly created counties should make infrastructural investment a priority. The legal framework relating to housing needed to be overhauled by the introduction of a new act on housing. It was the responsibility of the government in collaboration with the private sector to ensure that the high level of unemployment was addressed, that the inflation rate was lowered to an acceptable level and that the economic growth was enhanced. It was important to increase the access of mortgages and housing finance products to both the banked and the unbanked. The factors affecting the demand of affordable residential housing in Nairobi and other urban areas would form an area of further study. In addition, the determinants of the prices of residential and non-residential houses in Nairobi would form an interesting study.