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
"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
"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
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
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
"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
($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