Building Assets, Unlocking Access: Shelter Solutions for the Poor Kenya Housing Market Mapping and Value Chain Analysis November, 2013 In partnership with Contents Acknowledgement .................................................................................................................................. 3 ACRONYMS .............................................................................................................................................. 4 EXECUTIVE SUMMARY ............................................................................................................................ 6 1. INTRODUCTION ............................................................................................................................. 10 2. MARKET MAPPING METHODOLOGY ................................................................................................ 12 3.1 Country Socio Economic Context ............................................................................................... 15 3.2 Overview of the Housing and Property Enabling Environment in Kenya .................................. 17 3.3 Policy and Regulation ................................................................................................................. 21 3.4 Land Tenure in Kenya ................................................................................................................. 22 4. HOUSING VALUE CHAIN MARKET MAPS ........................................................................................... 24 4.1 Acquisition and Tenure of Land ................................................................................................. 24 4.1.1 Community Land Trusts Acquisition and Tenure................................................................. 24 4.1.2 Private Land Holding Acquisition and Tenure ..................................................................... 25 4.1.3 Acquisition of Land through Allotments by Local Authorities ............................................. 25 4.1.4 Securing Title ....................................................................................................................... 26 4.1.5 SWOT Analysis of Acquisition and Tenure .......................................................................... 29 4.2 Provision of Basic Infrastructure at Community Level............................................................... 31 4.2.1 Mapping Provision of Electricity ......................................................................................... 32 4.2.2 SWOT in Electricity .............................................................................................................. 36 4.2.3 Mapping Provision of Water and Sanitation in Kenya ........................................................ 37 4.2.4 SWOT for Water Sector ...................................................................................................... 42 4.3 Housing Construction ................................................................................................................. 43 4.3.1 Overview of Process ............................................................................................................ 43 4.3.2 Detailed Mapping................................................................................................................ 46 4.3.3 SWOT for Low Income Housing Construction ..................................................................... 48 4.4 Microfinance and Housing Finance ............................................................................................ 52 4.4.1 Financial Services Legislation and Regulation .................................................................... 53 4.4.2 Microfinance Sector ............................................................................................................ 54 4.4.3 SACCOs ................................................................................................................................ 55 4.4.4 Summary of Housing Finance ............................................................................................. 56 4.5 Other Support Actors ................................................................................................................. 57 5. HOUSING QUALITY STANDARDS ....................................................................................................... 59 6. HOUSING SUPPORT SERVICES IN KENYA’S HMF MARKET .............................................................. 62 1 6.1 Role and Context of Housing Support Services in Kenya ........................................................... 62 6.2 Access to Land and Security of Tenure ...................................................................................... 62 6.3 Infrastructure ............................................................................................................................. 62 6.4 Construction Assistance ............................................................................................................. 63 7. KENYA LOW INCOME HOUSING MARKET SWOT ANALYSIS ............................................................ 65 8. CONCLUSIONS AND RECOMMENDATIONS ..................................................................................... 66 ANNEX 1 – BIBLIOGRAPHY .................................................................................................................... 70 ANNEX 2 – LIST OF KEY INFORMANTS .................................................................................................. 72 ANNEX 3 ‐ FOCUS GROUP DISCUSSION GUIDE ..................................................................................... 73 ANNEX 4 – ARTISAN INTERVIEW GUIDE ............................................................................................... 75 2 Acknowledgement The Habitat for Humanity International’s Center for Innovation in Shelter and Finance (HFHI’s CISF) would like to acknowledge AYANI as our main consultant for the production of this market mapping and housing value chain analysis; and would like to express our sincere gratitude to the team at Habitat for Humanity Kenya, for its extensive support and input throughout this mapping process. Additionally, we would like to thank Ezekiel Esipisu and Christopher Musoke of Habitat for Humanity International for their overall coordination of this assignment and enriching insights towards the completion of the final report. Special thanks to Ronald Omyonga, and Ruth FHOdera (H Kenya CISF Housing Support Services Specialist and Housing Microfinance Manager), for their field coordination and contacts. Thanks to Voluntary Services Overseas in Kenya for its guidance and support in identifying institutions to participate in our study; and Mary Markaru for her groundwork coordination and mobilization of focus groups. Finally, we would like to thank all sector actors and experts who generously contributed their time and knowledge to inform this study. 3 ABOUT About the MasterCard Foundation The MasterCard Foundation works with visionary organizations to provide greater access to education, skills training and financial services for people living in poverty, primarily in Africa. As one of the largest independent foundations, its work is guided by its mission to advance learning and promote financial inclusion in order to alleviate poverty. Based in Toronto, Canada, The MasterCard Foundation’s independence was established when it was created by MasterCard in 2006. For more information, please visit mastercardfdn.org or follow it on Twitter @MCFoundation. About the Partnership Habitat for Humanity Canada, Habitat for Humanity International and The MasterCard Foundation are partnering to enable 15,000 households in Ghana, Kenya and Uganda to access housing microfinance products and housing support services to improve their homes and their lives. Over five years, $6.6 million in support will expand microfinance services to make it easier for families to access funds for the progressive building, maintenance and improvement of their homes. About the Habitat for Humanity Habitat for Humanity International’s vision is a world where everyone has a decent place to live. Anchored by the conviction that safe and affordable housing provides a critical foundation for breaking the cycle of poverty, Habitat has helped more than 5 million people construct, rehabilitate or preserve their homes since 1976. Habitat also advocates to improve access to decent and affordable shelter and supports a variety of funding models that enable families with limited resources to make needed improvements on their homes as their time and resources allow. Habitat for Humanity operates in 15 countries in Sub‐Saharan Africa through a number of housing initiatives. It has witnessed a growing demand for financial services that address housing needs among microfinance institutions and clients. To learn more, donate or volunteer, visit habitat.org. About the Centre for Innovation in Shelter and Finance This project is implemented by Habitat for Humanity’s Center for Innovation in Shelter and Finance, or CISF. The CISF was established to serve as a place of knowledge, expertise, advice and innovation, enabling low‐ and very‐low‐income families to acquire adequate housing. The CISF team of experts is advancing the development of demand‐driven, scalable housing solutions to low‐income communities. Currently, they are leading efforts to promote and support vibrant housing finance solutions through advisory