sustainability Article Affordable Housing Provision in Informal Settlements through Land Value Capture and Inclusionary Housing Bernard Nzau * and Claudia Trillo School of Science, Engineering and Environment, University of Salford, Manchester M5 4WT, UK;
[email protected] * Correspondence:
[email protected] Received: 29 June 2020; Accepted: 18 July 2020; Published: 24 July 2020 Abstract: Public-driven attempts to provide decent housing to slum residents in developing countries have either failed or achieved minimal output when compared to the growing slum population. This has been attributed mainly to shortage of public funds. However, some urban areas in these countries exhibit vibrant real estate markets that may hold the potential to bear the costs of regenerating slums. This paper sheds light on an innovative hypothesis to achieve slum regeneration by harnessing the real estate market. The study seeks to answer the question “How can urban public policy facilitate slum regeneration, increase affordable housing, and enhance social inclusion in cities of developing countries?” The study approaches slum regeneration from an integrated land economics and spatial planning perspective and demonstrates that slum regeneration can successfully be managed by applying land value capture (LVC) and inclusionary housing (IH) instruments. The research methodology adopted is based on a hypothetical master plan and related housing policy and strategy, aimed at addressing housing needs in Kibera, the largest slum in Nairobi, Kenya. This simulated master plan is complemented with economic and residual land value analyses that demonstrate that by availing land to private developers for inclusionary housing development, it is possible to meet slum residents’ housing needs by including at least 27.9% affordable housing in new developments, entirely borne by the private sector.