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ATHI RIVER, Kenya, Dec 29 (Thomson Reuters Foundation) - R ecently married with a one-year-old child, Joan Moraa Mbogo dreams of escaping Kenya's noisy, dirty, crime-ridden capital and buying a home close to her mother's newly-built apartment overlooking the Lukenya Hills.
Machakos County, which starts 20 kms (12 miles) south-east of Nairobi, is popular with young Kenyans unable to afford decent homes in the city, where most developers are only building houses for the richest 10 percent of residents.
"I'll get a house here and we'll become neighbours," said 28-year-old Mbogo, dressed in a yellow top and jeans, watching her son, Nathan, totter across her mother's sitting room.
In July, Mbogo's mother moved into Karibu Homes Riverview, a 19-acre development that is set to include 1,000 apartments, shops, basketball courts, a clinic and a nursery when complete.
"There's fresh air. It's nice and quiet," said Veronica Mbogo, a retired civil servant in her 60s, looking out from her fourth floor balcony at the yellow and grey apartments, dotted with acacia trees.
Nearby labourers dig foundations for the second phase of the development, where dozens of units have already been sold.
"They have been haranguing us to buy," said Ravi Kohli, managing director of Karibu Homes at his office in a leafy part of Nairobi. "There is such a huge demand for housing."
Karibu Homes, founded in 2012, is one of a handful of developers building affordable homes in Kenya, seen as critical to stemming the spread of slums and improving the quality of life for many in East Africa's biggest economy.
Although millions of quality, affordable homes are needed, few are built due to high land prices, lack of access to finance and government bureaucracy, experts say.
It is a story echoed across Africa which has the fastest growing cities in the world, with 40 percent of the continent's one billion people in towns and cities, according to UN-Habitat.
Most new homes in Kenya target the middle and upper classes as it's easier to make a profit from high-end property sales.
"It's a property market that's oriented towards wealthy people," said Britt Gwinner, head of housing finance for the World's Bank's International Finance Corporation (IFC).
"That's where the money is."
Karibu Homes says its cheapest property, a one-bedroom apartment, costs 1.8 million Kenyan shillings ($17,660), which is 17-times cheaper than the average asking price of a house in Kenya, at $306,000, according to real estate firm Hass Consult.
The company was born out of the bloodshed that erupted across Kenya following its contested general elections in 2007.
Many people were killed and burned to death in slums across the East African country, often by young men venting their frustration over economic inequality and lack of opportunities.
"The bulk of the population was desperate, had nothing to lose," said Nick Johnson, one of the company's co-founders, who came up with the idea with Kenyan entrepreneur Irfan Keshavjee during a management course at Oxford University in 2008.
"That was a root cause as to why this violence took place."
The two men decided to set up a social enterprise, aiming not only to make money but to have a positive impact on Kenyans' lives by enabling more people to buy their own homes.
Most Nairobians live in slums where they must contend with high crime, irregular power and water supplies, and no toilets in their homes.
With rapid urbanisation and population growth, Karibu Homes estimates that 14 million people will live in Nairobi's metropolitan region - which encompasses the capital and three neighbouring counties - by 2030, up from 9 million today.
"It'll be a horrible place to live if we don't find a solution," said Kohli, who spent eight years building houses in England before returning home to Kenya.
While an average slum-dweller cannot afford a home in Riverview, Karibu Homes is increasing the availability of decent housing stock and showing others that it can be done.
"We are trying to catalyse a market further down the income ladder," said Johnson, comparing it to the building of working-class terraces in Victorian England, which remain popular today.
"Hopefully, by doing what we are doing, more developers, ourselves included, will be able to provide much-needed housing for a bigger proportion of the population."
Major Kenyan financiers, like HF Group and Kenya Commercial Bank (KCB), have announced plans to build cheaper, mass market homes.
"We are looking at projects of probably even 10,000 units," said KCB's mortgage director, Sam Muturi, from his office overlooking downtown Nairobi.
"It's a huge market that has not even been scratched."
But campaigners say cheaper, long-term finance is critical to unlock Africa's housing market as borrowing is expensive for everyone, from manufacturers and developers to banks and buyers.
A pool of affordable finance would enable banks to reduce mortgage rates, which averaged 17 percent in 2015 to just 25,000 borrowers across Kenya, according to Johannesburg-based non-profit Centre for Affordable Housing Finance in Africa (CAHF).
The government capped interest rates at 14 percent in August, but many buyers are sceptical it will last beyond Kenya's 2017 elections and fear long-term loans.
HF Group's managing director, Frank Ireri, would like to see development finance institutions, like the IFC and the African Development Bank, and social investors putting cheap money into the economy for banks to lend onwards.
"The minute you go to the market, it becomes commercial and affordability is out of the window," he told the Thomson Reuters Foundation.
Half of Karibu Homes $3 million financing came from social impact investors, like Blue Haven Initiative, willing to take lower returns and higher risks than traditional financiers.
"They are also investing for the social good," said Samuel Suttner, a researcher with CAHF.
Despite its commitment to help ordinary Kenyans buy their first homes, Karibu Homes discourages mortgages, encouraging buyers to pay in cash instalments and relying on sales to finance construction.
"We have to pay our contractors. If we can't release those funds, we'll basically go bankrupt," said Kohli. "If things go well ... an active mortgage market will trigger the housing ownership revolution."
$1 = 101.9200 Kenyan shillings Reporting by Katy Migiro @katymigiro, editing by Jo Griffin and Belinda Goldsmith; Please credit the Thomson Reuters Foundation, the charitable arm of Thomson Reuters, that covers humanitarian news, women's rights, trafficking, property rights and climate change. Visit news.trust.org to see more stories.