Shelter Afrique low-cost housing plan in top gear
Pan-African home financier Shelter Afrique’s campaign to construct 5,000 houses is at an advanced stage and will be officially announced in July.
The mortgage financier had invited global entries on innovative designs of a home which can be produced at a cost of not more than Sh500,000. Three proposals were selected.
First placed was Ghanaian firm S. Teteh & Associates, Kenya’s Morphosis Limited and third place Sharon Davis Design of New York, United States. A cash prize of Sh10 million will be shared among the first three winners at an the firm’s Annual General Meeting (AGM) in July.
Jubilee administration has listed affordable housing as one of its priorities in the second term, with a target of providing a bare minimum of 500,000 units and a target of up to a million units. The other sectors are manufacturing, food security and universal healthcare. In 2016, the government halved corporate tax for developers who put up at least 400 low-cost residential houses to 15 per cent.
The design competition by Shelter Afrique was launched at the 2016 AGM in Abuja, Nigeria. According to the firm’s Managing Director, Femi Adewole, more than 150 entries were received.
“We will develop these 5,000 units across the continent over a period of time using the designs provided by the competition winners,” Mr Adewole said.
The winning proposal is conteptualised as having three critical components; dwelling (living room and bedroom), support (toilet, shower and kitchen) and court (future expansion) which together occupy a total area of 45m².
The court yard can be annexed and converted into an additional room if need be. It comprises a bedsitter with options for upgrade and adaptation to various climatic conditions in Africa.
Low maintenance, availability of materials and modifications to conventional construction techniques help keep the cost low.
The World Bank puts Kenya’s housing deficit at 2 million units cumulatively. This is also true for most major African markets.
“There will be 1.2 billion urban dwellers in major African cities by 2050, who will need a home,” Mr Adewole said.
The market outlook points to increased housing supply as both government and finance institutions focus on low-cost housing. The official noted in incorporating affordable housing as one of its key priorities, the Kenyan government in collaboration with the private sector will bridge housing deficit.
Kenya’s housing demand stands at about 200,000 units annually, with a backlog of 1.85 million units.
“Our new strategy emphasises innovation and large-scale development. We were amazed at the great ideas for affordable housing and the response to the competition,” he said.
The company has a 35-year history in Kenya and in the period has financed over 300 housing projects, currently with over Sh8 billion invested in the housing market.
According to Mr Adewole, Africa is rich of ideas and with better execution, there will be no need to out source expertise from outside the continent. “From the entries we received, everyone who participated showed a passion and commitment to affordable housing. This shows that our problems can be solved by us,” he said.
The panelists also singled out Hydraform of South Africa, Adengo Architecture of Uganda, XTEK Systems of South Africa and Architect Collaborative of Botswana for freshness in their submissions.
Shelter Afrique intends to have the top 10 submissions presented to shareholders at the July AGM.
“ Some reputable universities and research institutions have made their intentions known. We are also receiving a lot of interest from our member countries; many them have initiated large-scale housing projects. We see our competition as a solution to large-scale housing projects, problem” he said.
Jubilee administration says in its housing plan, it will reduce mortgages cost and lower cost of construction through the use of innovative technologies and materials.
Funds will be raised from the private and public sectors for investment in large-scale house construction.
Already, the government has identified 35 contractors in a pilot project to fast-track delivery of the 500,000 housing units.
Phase One of the project which involves construction of 8,200 units on a 55-acre government land in Mavoko, Machakos County is scheduled to start this month.
Transport and Housing Cabinet Secretary James Macharia said the companies were short-listed from a list of 60 that bid for the project.
Only companies with a good record of implementing big housing projects in Kenya and abroad within the shortest time possible were considered.
But high interest caps are affecting mortgage uptake and investment firms are calling for a review of the credit ceiling to encourage many financial institutions to venture more into the sector.
In its January 2018 report titled The Total Cost of Credit Post Rate Cap, Cytonn Investments says financing mortgages is the key to addressing housing shortage.
Already, the World Bank has proposed having a Kenya Mortgage Refinance Company that adapts from other successful models like Malaysia and Morocco that guarantee up to 70 per cent of mortgages. Nigeria, too, subscribed to a bond scheme for citizens to acquire own homes. “This will see the number of mortgages in Kenya that average 25,000 a year rise to an average of 60,000 mortgages,” says the report.