Urban transformation and the politics of shelter Understanding Nairobi’s housing markets Baraka Mwau, Alice Sverdlik and Jack Makau Working Paper Urban Keywords: January 2020 Urbanisation, Informal Settlements, Urban Poverty, Housing Partner organisations Slum Dwellers International Kenya (SDI Kenya) works closely with Kenya’s slum dweller federation Muungano wa Wanavijiji and its urban poor fund Akiba Mashinani Trust (AMT). This tripartite Muungano Alliance works to improve shelter, services and quality of life of slum dwellers through policy advocacy and dialogue with government officials, civil society and the private sector. See www.muungano.net/about Acknowledgements The authors would like to thank the following researchers and SDI Kenya staff for their valuable contributions during the research: Sammy Muinde, Mary Mutinda-Kipkemoi, Dennis Mwaniki, Smith Otieno, Jason Waweru, Francis Kivuva, Stephen Mutungi, Lilian Odongo, Naomi Ng’ang’a, Ivy Gichuki and Jackline Wanyonyi. We also deeply appreciate the participation of and insights from residents and community leaders across Nairobi. The research was funded by the UK Department for International Development’s (DFID’s) East Africa Research Fund (EARF) and contributed to the EARF’s research programme: Shaping East African Cities as Systems to Work Better for All. This material has been funded by UK aid from the UK government. However, the views expressed do not necessarily reflect the UK government’s official policies. Produced by IIED’s Human Settlements Group The Human Settlements Group works to reduce poverty and improve health and housing conditions in the urban centres of Africa, Asia and Latin America. It seeks to combine this with promoting good governance and more ecologically sustainable patterns of urban development and rural-urban linkages. Published by IIED, January 2020 Mwau, B, Sverdlik, A and Makau, J (2020) Urban transformation and the politics of shelter: understanding Nairobi’s housing markets. IIED, London. http://pubs.iied.org/10876IIED ISBN: 978-1-78431-777-5 Printed on recycled paper with vegetable-based inks. International Institute for Environment and Development 80-86 Gray’s Inn Road, London WC1X 8NH, UK Tel: +44 (0)20 3463 7399 Fax: +44 (0)20 3514 9055 www.iied.org @iied www.facebook.com/theIIED Download more publications at http://pubs.iied.org/ IIED is a charity registered in England, Charity No.800066 and in Scotland, OSCR Reg No.SC039864 and a company limited by guarantee registered in England No.2188452. IIED WORKING PAPER This working paper presents findings and recommendations from research on access to shelter and services in Nairobi, Kenya. It is part of a three-city study in East Africa also covering Mogadishu, Somalia and Hawassa, Ethiopia. Guided by political economy analysis, the two- year research project investigated why and how city dwellers make certain shelter choices, and generated recommendations to improve access to adequate shelter and basic services for the most vulnerable urban residents. www.iied.org 3 URBAN TRANSFORMATION AND THE POLITICS OF SHELTER | UNDERSTANDING NAIROBi’s hOUSING MARKETS Contents Acronyms and abbreviations 6 4.6 A multi-billion real-estate business founded on single-room shelter 50 Summary 7 4.7 Low-quality shelter: overcrowded and insanitary living conditions 51 1 Introduction 11 4.8 Ongoing transitions within low-cost 1.1 Methodology 11 shelter submarkets 52 4.9 Land markets in informal settlements 55 2 General overview 13 4.10 Occupancy agreements and tenant mobility 56 2.1 Study setting 13 4.11 Evictions and their impacts: lasting 2.2 Kenya’s urbanisation and shelter provision exclusions following displacement 57 context 13 5 Case studies 58 3 The politics of access to shelter and services 19 5.1 Mathare Valley case study 58 3.1 Tracing the origins of Nairobi’s shelter and 5.2 Mukuru case study 61 service provision 19 3.2 Civil society interventions: micro-level 6 Policies and legal framework shaping access upgrading and challenges of scaling up 21 to land and housing 64 3.3 Recent national-level informal settlements 6.1 Policy and legislative reforms 64 upgrading programmes 22 6.2 Revisiting access to land and housing in 3.4 The Big 4 Agenda and public–private post-2010 constitution 64 partnerships to support affordable housing 23 3.5 Key actors and roles in low-cost rental markets 25 7 Gender and inclusion and their impacts on 3.6 Government incapacity and abdication of access to shelter and services 69 planning responsibility for housing 28 7.1 Gender, age, income and household size 69 3.7 Prevailing institutional framework and its 7.2 Homeless and street families 71 implications for service delivery 28 7.3 Barriers linked to disability, migration status and ethnicity 72 4 Current state of housing provision 37 7.4 Multiple exclusions and negotiability in 4.1 Exclusionary housing finance and formal shelter 37 accessing informal shelter 74 4.2 High housing and land costs in Nairobi, with speculative investment and variations 8 Conclusions 75 across the metro 39 8.1 Future research needs 76 4.3 Incomes and shelter affordability 41 8.2 Recommendations 77 4.4 Low-cost shelter typologies 47 4.5 The centrality of single-room housing and References 79 the tenement phenomenon 48 4 www.iied.org IIED WORKING PAPER List of boxes, figures and tables Box 1. Gender and inadequate WASH 33 Box 2. SACCOs and inclusive housing finance 39 Box 3. Extreme densities in tenement developments 49 Box 4. Emerging interventions for providing low-cost transitional shelter 54 Box 5. A typical land-transfer process in an informal settlement 56 Figure 1. Kenya’s urban and rural population as % of total population, 1950 to 2050 14 Figure 2. New jobs created by Kenya’s informal and formal sectors, 2014 to 2018 15 Figure 3. Map of Nairobi City and satellite towns 16 Figure 4. Nairobi’s population growth 17 Figure 5. Nairobi’s population structure by age 18 Figure 6. Satellite image showing Nyayo Estate 21 Figure 7. Map of central Nairobi showing the city centre and sites earmarked for renewal 24 Figure 8. Main distribution network of water in Nairobi 29 Figure 9. Public sewer network coverage 32 Figure 10. Map showing informal settlements in relation to main commercial/industrial clusters 35 Figure 11. Market-based calculations of home-ownership access costs in Nairobi 41 Figure 12. Proportion of households by rent paid per month in Nairobi (in Ksh) 44 Figure 13. Main informal settlements and tenement areas 48 Figure 14. Illustration of space adaptation in a single-room unit 51 Figure 15. Mukuru SPA planning consortia 63 Figure 16. A section of Maili Saba informal settlement, Nairobi 66 Table 1. Shelter typology for low-income households 8 Table 2. Summary of key actors and their roles in Nairobi’s shack and tenement provision 26 Table 3. Share of Nairobi’s opportunities accessible in a given timeframe depending on transport mode used 34 Table 4. Typical household income and expenditure in informal settlements 43 Table 5. Rental rates in selected sections of Nairobi 46 Table 6. Nairobi rental costs per unit of space 47 Table 7. Comparing rental unit payback periods in Mukuru and Kilimani 50 www.iied.org 5 URBAN TRANSFORMATION AND THE POLITICS OF SHELTER | UNDERSTANDING NAIROBi’s hOUSING MARKETS Acronyms and abbreviations AMT Akiba Mashinani Trust, Kenya ATMs Automatic water dispensers (‘water ATMs’) CAHF Centre for Affordable Housing Finance in Africa CBD Central business district CBO Community-based organisation DRC Democratic Republic of Congo EARF East Africa Research Fund FGD Focus group discussion FLT Fresh Life Toilets GDP Gross domestic product GNI Gross national income ID Identity document IIED International Institute for Environment and Development KENSUP Kenya Slum Upgrading Programme KII Key informant interview KIHBS Kenya Integrated Household Budget Survey KISIP Kenya Informal Settlement Improvement Project KKL Kwangu Kwako Ltd KMRC Kenya Mortgage Refinance Company KNBS Kenya National Bureau of Statistics Ksh Kenyan shilling Muungano Muungano wa Wanavijiji, the Kenyan homeless people’s federation NCA National Construction Authority NCWSC Nairobi City Water and Sewerage Company NGO Non-governmental organisation NHC National Housing Corporation NLC National Land Commission NMT Non-motorised transport NSSF National Social Security Fund PLWD People living with disabilities PPA Physical Planning Act PPP Purchasing power parity PPPs Public–private partnerships SACCO Savings and credit cooperative organisation SAPs Structural Adjustment Programmes SDG Sustainable Development Goal SPA Special Planning Area SDI Slum Dwellers International UN United Nations UN-Habitat United Nations Human Settlements Programme VAT Value-added tax WASH Water, sanitation and hygiene Wasreb Water Services Regulatory Board 6 www.iied.org IIED WORKING PAPER Summary Standing alongside Nairobi’s well-known slums are and payback period for a unit in Mukuru (an informal high-rise tenements and other ‘informal’ housing types settlement), as compared to the upmarket housing area that contravene planning and building regulations. of Kilimani. Nairobi’s rental market for single rooms is a The city is undergoing a shift from low-rise shacks significant economic subsector that generates at least to multistorey tenements – about 70 per cent of US$372.2 million annually (see Section 4.6). Given this Nairobi’s residents live in single-room units in informal sector’s scale and profitability, any efforts to improve settlements and tenements (KNBS 2019b). Residents Nairobi’s shelter must engage with private providers in may consider tenements as an improvement on shacks the city’s burgeoning informal rental market. but high-density tenements are still very unsafe, with poor services and infrastructure and of low-quality Barriers to delivering affordable housing construction (Table 1). Despite the president’s recent in Nairobi promise to prioritise affordable housing in his Big 4 Agenda, there are still major shortfalls in government Failures of city planning and land governance have left capacity and a longstanding failure to plan for low- a major vacuum that has encouraged the proliferation income shelter.