EVALUATING THE EFFECTS OF ACCESS TO AFFORDABLE HOUSING ON LOW INCOME EARNERS IN KENYA BY LILIAN WAIRIMU WAMBUGU UNITED STATES INTERNATIONAL UNIVERSITY - AFRICA SPRING 2018 EVALUATING THE EFFECTS OF ACCESS TO AFFORDABLE HOUSING ON LOW INCOME EARNERS IN KENYA BY LILIAN WAIRIMU WAMBUGU A Research Project Report Submitted to the Chandaria School of Business in Partial Fulfillment of the Requirement for the Master of Science in Management and Organizational Development (MOD). UNITED STATES INTERNATIONAL UNIVERSITY - AFRICA SPRING 2018 ii STUDENTS DECLARATION I, the undersigned, declare that this is my original work and has not been submitted to any other college, institution or university other than United States International University - Africa in Nairobi for academic credit. Signed: Date: Lillian Wambugu (Student ID 647785) This project has been presented for examination with my approval as the appointed supervisor. Signed: Date: ____________ Prof. Peter M. Lewa Signed: Date: Dean, Chandaria School of Business COPYRIGHT All rights reserved. No part of this report may be photocopied, recorded or otherwise reproduced, stored in a retrieval system or transmitted in any form by electronic or mechanical means without prior permission. © Copyright Lilian Wambugu 2018 iv ABSTRACT The main objective of this study was to evaluate the effects of access to affordable housing on low income earners in Kenya, a case study of Kangemi. The specific objectives of the study were: to determine the role that government incentives play in access to affordable housing has among low income earners in Kenya’s informal urban settlements, to determine the government strategies laid out to ensure access to affordable housing among low income earners in Kenya’s informal urban settlements, to determine the challenges faced by low income earners in accessing affordable housing in Kenya’s informal urban settlement and to evaluate the benefits of affordable housing to a growing economy such as Kenya. The literature review done from various sources gave more information about the effects of access of affordable housing on low income earners not just in Kenya but in Africa at large. The literature review details the different government incentives in the Kenyan economy as well as the government policies. The study adopted an explanatory mixed method research design with more orientation towards quantitative data because it was investigative in nature. Therefore, the study made use of both qualitative and quantitative research techniques. The target population was composed of approximately 100 study subjects in various low income earning sectors in Kangemi, Nairobi County. A sample of 60 (60%) of respondents was used for the study. Data collection was conducted using structured questionnaire given using a 5-point Likert scale. Data analysis was conducted using SPSS software version 24. The results of the study were conducted using descriptive and inferential statistics including correlations and multiple regressions. The results of the study showed that there is a relationship between the access to affordable housing and low-income earners in Nairobi County. The results therefore lead to the conclusion that the government has a role to play in ensuring that the Kenyans have access to affordable housing. The study therefore recommends that the government should ensure that the incentives are accessible to the private sector as this will ensure that more private citizens invest in this sector. This will end the current crises of affordable homes to the low- income earners. More players in the market will ensure there is affordability. Future studies could focus on determining the impact of cost on access to land and affordable housing in developing urban settlements. The information can help in the formulation of plans that can guide the development of urban settlements that are affordable to the common Mwananchi. v ACKNOWLEDGEMENT I give thanks to the Lord for the strength He’s given me though the entire process and seeing it to completion. My gratitude to my family for the support offered. I also express my sincere appreciation to my supervisor Prof. Peter M. Lewa for the guidance and dedication. vi DEDICATION This study is dedicated to my family for their love and moral support during the time of undertaking the research project proposal. vii TABLE OF CONTENTS STUDENTS DECLARATION ..................................................................................................... iii COPYRIGHT ................................................................................................................................ iv ABSTRACT .................................................................................................................................... v ACKNOWLEDGEMENT ............................................................................................................ vi DEDICATION .............................................................................................................................. vii CHAPTER ONE ............................................................................................................................. 1 1.0 INTRODUCTION .................................................................................................................... 1 1.1 Background of the problem ........................................................................................... 1 1.2 Statement of the Problem ............................................................................................... 6 1.3 General Objective .......................................................................................................... 7 1.5 Significance of this study ............................................................................................... 7 1.6 Scope of the study .......................................................................................................... 8 1.7 Definition of terms ......................................................................................................... 8 1.8 Chapter Summary .......................................................................................................... 9 CHAPTER TWO .......................................................................................................................... 10 2.0 LITERATURE REVIEW ...................................................................................................... 10 2.1 Introduction .................................................................................................................. 10 2.2 Government Legislation and Incentives for affordable housing in Kenya .................. 10 2.3 Strategies for providing affordable housing ................................................................ 13 2.4 Challenges facing affordable housing .......................................................................... 16 2.5 Benefits of affordable housing to a growing economy such as Kenya ........................ 18 CHAPTER THREE ..................................................................................................................... 21 3.0 RESEARCH METHODOLOGY .......................................................................................... 21 3.1 Introduction .................................................................................................................. 21 3.2 Research Design........................................................................................................... 21 3.3 Population and Sampling Design ................................................................................. 21 3.4 Data Collection Methods ............................................................................................. 22 3.5 Research Procedures .................................................................................................... 22 3.6 Data Analysis Methods ................................................................................................ 23 3.7 Chapter Summary ........................................................................................................ 23 CHAPTER FOUR ........................................................................................................................ 24 4.0 RESEARCH FINDINGS AND ANALYSIS......................................................................... 24 4.1 Introduction .................................................................................................................. 24 4.2 Demographic Information ............................................................................................ 24 4.3 Descriptive Statistics .................................................................................................... 29 CHAPTER FIVE .......................................................................................................................... 33 viii 5.0 DISCUSSION, CONCLUSIONS AND RECOMMENDATIONS ..................................... 33 5.1 Introduction .................................................................................................................. 33 5.2 Summary ...................................................................................................................... 33 5.3 Discussion .................................................................................................................... 34 5.4 Conclusions .................................................................................................................