Supply Side Determinants of Affordable Housing by Developers in Nairobi City-County, Kenya
Katola, Victoria Mumo
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The real estate sector, specifically the residential segment has been recognized by the government as one of the critical drivers in promoting sustainable economic growth in Kenya. However, it is difficult to attain this if the country lags behind in provision of affordable housing. Housing is one of the government’s economic agenda and this research intended to outline the supply side determinants of affordable housing by developers in Nairobi City-County, Kenya in the current period year 2022. The investment strategies were analyzed as independent variables are cost strategy, design strategy and information strategy. On the other hand, the supply of affordable housing as the dependent variable was anchored on the number of housing units provided by developers. The study was anchored on three theories namely; Theory of Demand and Supply, Modern Portfolio Theory and Decision Theory. The study adopted a descriptive research design to exhibit the relationship between investment strategies and supply of affordable housing. Further, the target population under study was all the fifty-three developers in operation in Nairobi city-county that are registered with Kenya Property Developers Association. A census study was applied to incorporate all the fifty-three developers. The study employed primary data collected using questionnaires administered to the respondents through a drop and pick method. The questionnaires used a five-point scale spanning from strongly disagree to strongly agree to evaluate the responses on the study variables. The collected data was analyzed using the SPSS program. The study was able to obtain a ninety three percent response rate with seven percent of the firms not responding with the allocated timelines for data collection. Correlation tests showed there existed a positive effect of cost strategy, design strategy and information strategy on the supply of affordable housing in Kenya. Regression tests showed that eleven point seven percent of the changes in supply of affordable housing in Nairobi City-County, Kenya are influenced by the Information Strategy, Design Strategy and Cost Strategy. The research concluded there is a positive and significant effect of supply determinants on the supply of affordable housing in Nairobi City-County, Kenya. The study recommends that more policy development should be undertaken to ease building regulation requirements and increase the efficiency of the permit process. The study also recommends the formulation of policies that would facilitate the adoption of alternative building technologies and materials which will help lower costs and increase the delivery of affordable housing in Kenya. The study further recommends that the government ensures it provides quality data through KNBS and during periodic census activities that would increase developers’ knowledge regarding affordable housing demand and supply metrics.