Subsidized shelter for Kenya’s urban poor case study of Dandora site and service scheme

Abstract

The housing market process is a slow and inefficient method of increasing the national housing stock, and in providing shelter fpr all income groups. For this reason Governments and other actors in urban housing have designed methods of intervention in the operations of the urban housing markets, so as to accelerate and control their performance. This is necessary due to the fact that there is relatively large housing shortage in urban areas in Kenya. Subsidising housing is one of the approaches used to interfere with the housing market so as to lower the rent and, or the price of houses. There are various subsidy programs in existence in Kenya. The principal ones are through public rental schemes, employer housing, owner occupier housing, staff mortgage schemes of banking and financial institution employees, ,and other financial institution programs as in housing bonds. The programs above are seen to mainly benefit the high and middle income groups. The subsidised housing programs meant for low income groups are found to be mainly in squatter upgrading

and site and service schemes. It is the general view of the government of Kenya and international aid bodies that housing subsidies should be discontinued,

or at least be minimised. The aim of this study was to examine the existing subsidy programs in Kenya so as to find out 'to what extent housing subsidies address the problem of housing shortage most felt by the urban poor.The study will be able to show whether the above view of eliminating or minising subsidies should be encouraged, whether there are measures which can be undertaken to improve the delivery and administration of existing subsidy programs for all income groups and to find if it is only the low income groups who should continue to be subsidised. It is apparent

from the various subsidy programs studted that most of the programs benefit the high and middle income

groups. Even in these, discrimination exists in the distribution and in the amounts of the subsidies. In any country, it is the low income who need assistance if they are to live in conventional housing. However, in Kenya, only a few programs benefit a small percentage of them. Most of the programs meant for the urban poor (same as low income groups earning Ksh. 0-2,000 per month) seem to benefit the middle and high income groups as well. If subsidised shelter is to benefit the urban poor, it should-be delivered in such a way so as to reach them without benefitting the other income groups since it is the low income groups who need assistance if they are to live in

conventional housing. The subsidy should be fairly distributed and given in the right amounts. There are two parts to this study. The first part comprises the introductory chapters generally covering the introductory formalities which include among others, the study objectives, research methodology, and related literature. This part reviews subsidy programs in both developed and developing countries to find out the various subsidy forms, administration of the subsidy and to what extent the subsidy benefits the target groups. The second part consists of chapter three which examined subsidised programs in Kenya, chapter four in which data collected from the field survey is analysed and finally chapter five, which deals with the summary of conclusions and recommendations. The conclusions are based on the findings of the subsidy programs in Kenya and field survey. It is evident that housing subsidies for the low income groups should not be done away with. They should instead, be administered and delivered in such a way that they will benefit the majority of the urban poor. If the subsidising authorities are to do away with subsidies, they should do so to the subsidies for the high and middle income groups who even without the subsidy can afford conventional housing.