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Governor Jimnah Mbaru 500,000 New Housing Units For Nairobi County
Jimnah Mbaru, 500,000 low cost housing units in Nairobi should be nominated by TNA. Once he becomes the candidate for Governor hopefully Jimnah will elaborate more on these core systems: 500,000 units bedsitters or one-bedroomed houses. Construct on 2000 acres council land currently unoccupied. Occupants, 75% of people living in Nairobi aged 35 and below who are single or have small families. Unit types. Occupation, Rent, not buy. Rent range Sh2,500 to Sh4,500 per unit. Developers, private developers to build world class living areas for the residents and workers of this city. Financing, Real Estates Investment Trust, which Kenyans and other interested investors will be able to participate in by purchasing shares; Municipal bonds generating Sh10 billion each year for the next five years.
Jimnah Position: Supply 500,000 Units bedsitters or one-bedroomed houses
Jamhuri Research: Actual demand of housing in any location is based on population and jobs. Nairobi, even with the set-up of other county governments, will continue to have stable jobs so long as it is home to the national government system. However developed economies show that settlement for low income earners works better if spread to bedsitters, one-bed-roomed, two bedroomed and 3 bedroomed units. A spread from a bedsitter of 25 sq m, 1 bedroom of 45 sq m, 2 bedrooms of 60 sq m and a 3 bedrooms of 70 sq m. It would be interesting to hear the justification of just bedsitters and one bedroom’s as reported.
Jimnah Position: Construct on 2000 acres council land currently unoccupied
Jamhuri Research: If the 2,000 acres is located as one area that is not utilized this would be in any of the following wards made up of more than 2,000 acres: Mwiki, 4,700 acres; Clay City, 3,825 acres; Kasarani, 3,825 acres, Roysambu, 5,600 acres; Mihango, 3,725 acres; Kitisuru, 5,325; Embakasi, 5,625 acres, Utawala, 5,625 acres; Karura, 9,550 (Unlikely if all land designated for Forest); Karen, 12,000 acres; Mugumo-ini, 31,600 acres (Unlikely if all land designated for Nairobi Park); Ruai, 24,500 acres. If the 2000 acres of virgin land is in the Ruia Ward of Nairobi then this land would be better placed in a mixed development was done. However, if the 2000 acres are plots in different wards then this supply system would work.
Jimnah Position: Occupants, 75% of people living in Nairobi aged 35 and below who are single or have small families
Jamhuri Research: Whereas age can be a factor of planning settlement, research of urban settlement shows that other factors like current occupation, income or current need of housing are also important. There is no doubt young adults will demand this housing.
Jimnah Position: Rent, Not buy. Rent range Sh2,500 to Sh4,500 per unit
Jamhuri Research: “Rent, Not buy,” if not created the right way could become 100% business system and not necessarily sustainable systems. Just like social systems tried for slum dwellers have failed, business systems can also fail. Many nations that have achieved sustainable systems have added so sustainable systems to either the social approach or business approach that is the foundation of “Rent, Not Buy.” Will look to see which systems Jimnah will add.
Jimnah Position: Private developers to build world class living areas for the residents and workers of this city.
Jamhuri Research: With land coming from the public and the governor looking to set the funding system then the private developers role is reduced to the construction system. If the production cost crosses the point where the Kshs 2,500 and Kshs 4,500 is not viable because the production was not efficient then Jimnah will have failed for he is the Master Developer. Many projects have failed because of this other unforeseen costs that increase production costs. It will be interesting to read how Jimnah has factored them.
Jimnah Position: Real Estates Investment Trust, which Kenyans and other interested investors will be able to participate in by purchasing shares.
Jamhuri Research: Funding systems applied are the success of an economic system especially if the funding system has a long life span. Based on world trends Nairobi in 20 years could stabilize at a population of 3 million as more people migrate out of Nairobi. When will the shares start getting their returns and what is the expected lifespan of the houses will be interesting questions by those looking to invest.
Jimnah Position: Municipal bonds generating Sh10 billion each year for the next five years
Jamhuri Research: This equivalent to Kshs 50 billion is a good financing system. Worked to efficiency this can be a good way of financing. The interest rate to be applied would be important at a 7% the total funding to be paid back bonds plus interest is about Kshs 100 billion. If 10%, 10 year bond, the repayment the total repayment amount is about Kshs 130 billion. If the Kshs 50 billion is used efficiently and finances at Kshs 10,000 per sq meter then it will produce 5 million sq meters or about 150,000 units. Based on the Kshs 100 rent per sq meter and using 75% or Kshs 75 toward servicing municipal bonds then each month at full capacity would raise 375 million to service bond. The 10% bonds repay of 130 billion repaid in 347 months or about 28 years 9 months and the 7% bonds repay of Kshs 100 billion in 267 months or 22 years and 3 months. Since municipal bonds are guaranteed by city resident’s taxation then bonds financing should be very efficient. Bonds financing will normally be abused in the production where the price becomes higher due to so many factors. It will be interesting to hear how Jimnah would make sure that the bonds are paid by the usage of space and at no time do the residents of Nairobi have to pick up this bill through increased fees and taxation.
Jimnah making housing the lead is a good start for Nairobi county. How he goes about making this a reality will make him the Governor Jimnah Mbaru of Nairobi County.