An Investigation Of Factors Contributing To Failure Of Local Authorities To Meet Financial Obligations: A Case Study Of City Council Of Nairobi Estates Funded By National Housing Corporation

Abstract

Shelter is one of the most basic of human needs. Governments are obligated to make provisions for the satisfaction of this need, in conjunction with the private sector. In spite of efforts usually made, the demand for adequate shelter continues to be a challenge, especially due to rapidly growing population. The challenge is especially acute in urban areas where migration for employment opportunities and a better life are experienced. The Government of Kenya, through the N.H.C., established a financing mechanism to fund housing development in Kenya. The N.H.C. liaised with various local authorities to develop various housing projects to meet this demand for shelter. Unfortunately, several local authorities were unable to service the loans advanced to them by N.H.C. The purpose of this study was to investigate the reasons for the inability of those local authorities to meet their financial commitments. To do this, a case study of the largest local authority in Kenya, the City Council of Nairobi was carried out to investigate the role of key factors in the repossession. All of the six rental housing estates whose management was taken over by N.H.C. were included in this study. Data for this study was collected through the use of questionnaires and interview schedules. These instruments sought to collect information on the contributions of three factors to the take-over: human resource, debt/rent collection and the financial management practices. The data collected was analysed descriptively by the use of descriptive statistics. The study results showed that the City Council of Nairobi did not effectively plan and execute its management functions over the housing estates and other projects developed with the funding from the National Housing Corporation. This resulted in N.H.C’s decision to take over the management of six rental estates. These findings were inferred from the qualitative design through the in-depth case study approach. Conclusions drawn from the findings therefore indicated that the three factors isolated for investigation into their rok in the take-over are indeed significant. Several recommendations considered essential for the management of housing development by local authorities were made.