Applicability Of Public Private Partnerships In Down-Market Urban Housing In Kenya

Abstract

The government of Kenya is duty-bound to provide decent, affordable, accessible, and quality housing for all Kenyans as provided in the Constitution of Kenya 2010 and Kenya Vision 2030. Kenya is also party to international conventions and protocols, such as the New Urban Agenda and Sustainable Development Goals (SDGs) which similarly advocate for sustainable housing development. Since independence, the country has grappled with the best strategies that can be employed to satisfy the huge demand for housing, specifically, housing low-income urban households. The inability to compressively address housing supply has seen demand stand at 250,000 housing units per year, accumulating to over two million units at present. Traditionally, housing has been provided through public, private and informal sectors, with minimal interactions by players. This has necessitated the need for collaborations and partnerships between public and private sectors and Public Private Partnerships (PPPs) have been proposed as the best alternative to promote this role. These partnerships have been proposed because they will address the challenges facing public sector housing such as limited capital, expertise, managerial competencies, and technological applications. The main research objective was to evaluate the applicability of PPPs in the development of down-market urban housing. Specifically, to: evaluate the frameworks for the application of PPPs; determine the challenges facing its application; outline the opportunities that the PPP model of procurement offers in its development in Kenya. Delphi methodology, which is an iterative and consensus-building tool, used mostly where group opinions and consensus on a subject matter is required was utilized for the study. Three rounds of iterations involving 88 respondents in three panels comprising of housing practitioners, housing financiers and housing developers were used. This study discovered that structuring and aligning the interests of the players in PPPs makes it possible to apply the concept in the development and construction of down-market urban housing in Kenya. PPPs have been successfully applied in other sectors where there are legal, regulatory and institutional arrangements to facilitate its application such as the PPP Act, 2013, regulations, institutions and frameworks. Applying the concept in housing is likely to face many challenges including financing, affordability and profit maximization drives, but they can be addressed through collaboration and development of common goals. This study concludes that PPPs are applicable in the sector with the right structuring and recommends that Kenya and other governments promote their use in housing development.