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Case study of sites and services schemes in Kenya: Lessonsfrom Dandora and Thika

Table of Contents

0. Summary

0.1 Profile of the projects

0.2 Validity of the project assumptions

0.3 Target group and beneficiaries

0.4 Project performance

1. Kenya, general background

1.1 Population

1.2 Urban development and planning

o 1.2.1 The urbanization process

o 1.2.2 National urban policy

o 1.2.3 Public and private investment in growth centres

1.3 Housing

o 1.3.1 Housing policy

o 1.3.2 Need and supply

o 1.3.3 Affordability and willingness to pay

o 1.3.4 Formal and informal development

o 1.3.5 Evolution of sites and services schemes

2. Sites and services in Thika

2.1 Thika

2.2 Housing and land

o 2.2.1 Housing and land investments in the economy overall

o 2.2.2 Land supply systems

o 2.2.3 Housing supply systems

2.3 Sites and services strategy and projects

2.4 Makongeni - 1200 plots in 1971

2.5 Profile of house developers

2.6 Profile of tenants

2.7 Financing and organization

2.8 Performance

o 2.8.1 The scale of the supply

o 2.8.2 Beneficiaries

o 2.8.3 Quality of the scheme

o 2.8.4 Institutional performance

2.9 Wider impacts

3. Sites and services in Nairobi

3.1 Nairobi

3.2 Housing and land

o Land supply systems

3.2.1 Public land supply

3.2.2 Private land supply

3.2.3 Informal land supply

o Housing supply systems

3.2.4 Public housing supply

3.2.5 Private formal housing sector

3.2.6 Informal housing sector

3.3 Sites and services strategy and projects

3.4 Dandora

o 3.4.1 Project components

o 3.4.2 Finance

o 3.4.3 Technical aspects

o 3.4.4 Institutional arrangements for implementation

o 3.4.5 Allocation procedures

o 3.4.6 Land tenure

o 3.4.7 Target group

o 3.4.8 Selling the plots

o 3.4.9 Subletting

3.5 Profile of house owners

3.6 Profile of tenants

3.7 Project organization and house construction

o 3.7.1 Project organization

o 3.7.2 Construction of houses

3.8 Performance

o 3.8.1 Institutional performance

o 3.8.2 Housing standards

3.9 Wider impacts

4. The performance of sites and services schemes in Kenya

Summary of performance

o Dandora

o Makongeni

4.1 The target group

o 4.1.2 Allocation

o 4.1.3 Social and economic benefits

4.2 Management and economic performance

o 4.2.1 Project management

o 4.2.2 Development control

o 4.2.3. Financial performance, cost recovery

o 4.2.4 Allottees, economic performance

o 4.2.5 Maintenance and services in the schemes

4.3 Standards and quality of buildings, infrastructure and environment

o 4.3.1 Infrastructure

o 4.3.2 Plot size, density and layout

o 4.3.3 Buildings

o 4.3.4 Environment

o 4.3.5 Public transport

o 4.3.6 Public institutions

4.4 Resources and development generated

o 4.5.1 The projects and housing need

o 4.5.2 Impact on unauthorized development

o 4.5.4 Home ownership, owner-occupancy and landlordism

4.5 Wider impacts

4.6 Replicability

o 4.6.1 The transfer of experience to other sites and services projects in Kenya

5. Conclusions

5.1 Transferability of lessons

5.2 Appropriateness of the sites and services strategy

5.3 Housing need, demand and the low income target group

5.4 Sites and services as a strategy to combat informal development

5.5 Support to housing suppliers

5.6 Generation of employment

5.7 Technical issues and building standards

5.8 Recommendations

Bibliography

Appendix: Comparison of returns 1980-85 on private investments made in 1980 in Makongeni and Dandora inKSh.


List of Figures

Figure 1. Housing deficit and dwellings completed 1979-84

Figure 2. Households accommodated Thika 1969-85 by house category

Figure 1. Housing deficit and dwellings completed 1979-84

Source: Economic Survey 1985.

Figure 2. Households accommodated Thika 1969-85 by house category

Housing production in the informal sector increased from almost nothing in the mid-1960s to over 350 units per yearbetween 1973 and 1977, mainly due to stagnation in the formal sector. the explosive growth of Makongeni sites andservices house production after 1976 shows a significant impact on the informal sector.


List of Photos

Photo 1. In many rural areas land and incomes are inadequate to sustain a family. Young male members of the familyleave wife and children in the rural home to seek employment in town. the economic and the ideologicalattachment to the home land is very strong, and inherited land, however small, is not given up.

Photo 2. Most people consider the town a wage work enclave only. urban income is not sufficient to sustain the lifeof the whole family there. so the family is compelled to live separated. The working men considerthemselves as temporary residents with aspirations real or mythical one day to move to the rural home.Housing resources are invested in the rural home. hence the demand for rental housing in town.

Photo 3. National housing corporation aspirations 1969 (annual report) the post independence period wascharacterized by efforts to replace colonial policies of single roomed dwellings with a new strategy toprovide decent homes for Kenyans. Increased cost per unit resulted in a reduced number of housesproduced.

Photo 4. Squatters near Dandora. high urban population growth combined with the provision of limited numbers ofunaffordable houses resulted in a boom in various forms of informal housing during the 1960s. Policies tocombat this situation by building according to what people could afford were devised by the government inthe late 1960s.

Typology of informal housing

Photo 5. Squatters Mathare Valley 1969. individual families building a house without permission for their ownuse on land belonging to others. Such squatters dominated the informal housing movement in the early1960s. Renting on a small scale soon became a feature of the squatter areas. Today squatting is a marginalphenomenon in Kenya.

Photo 6. Informal company built housing, Mathare valley 1970. Commercialization of the informal housingsector through cooperatives and companies proceeded rapidly around 1970. The demolition of thousandsof squatter houses facilitated this transition.

Photo 7. Informal subdivision, Kiganjo ranching company, Thika. Land legally purchased by co-operatives,and subdivided for 1,500 members. Plans, land use and construction never authorized. During the 1970s thetypical informal housing in Kenya was in rental blocks, built of mudor timber with no provision ofinfrastructure.

Photo 8. Approved subdivision with uncontrolled housing, Ruiru. Planned for a couple of families, the plot isoften exploited to its full capacity, with over 20 households per plot. Today the most urgent issue is theplanning, management and guidance of the large informal and formal subdivisions for private development,for which capacity is very restricted.

Photo 9. Planned and serviced sites for low-income people, Pumwani 1920. For the urban African population,the Colonial Government adopted subdivisions with minimal services. The areas were built up with the 4-6roomed Swahili corridor house type. Pumwani in Nairobi and the 'Majengos' in many towns were laid out inthe 1920s. (Photo 1971)

Photo 10. Modern type of sites and services scheme. Today the sites and services scheme usually providesone wet core per plot and access to loans to start the first phase of a house. This method had already beenapplied in 1951 under the name of 'Vasey' schemes.

Photo 11. Makongeni sites and services scheme, Thika 1985.

Photo 12. Kiandutu village, informally subdivided 1967. A cooperative purchased, planned and subdivided the landfor 450 members, who have constructed substandard houses for rent. In some cases more than 70households are recorded on one plot of 100 x 100 feet. Upgrading with World Bank support is in progress.

Photo 13. Kiang'ombe village. temporary settlement of landless. 1964 public land held by 'Thika landless society' ontemporary license for grazing. The settlement (not a squatter settlement) is unplanned and incrementallydeveloped, but construction requires authorization by the society leaders, and growth is restricted. (photo

1985)

Photo 14. Unauthorized rental housing, after 1975. Rental blocks in the informal subdivision of the Kiganjo ranchingcompany. This quarter-acre plot accommodates 45 rooms.

Photo 15. Public rental housing, 1969. After independence the quality of public rental housing was raised, but thequantitative output was lowered correspondingly. Thus severe overcrowding developed alongsideincreased pressure in the informal housing sector.

Photo 16. Majengo. Sites and services scheme of the 'Vasey' type, 1951. With the explicit objective of promoting'stability', the Colonial Government produced a genuine sites and services scheme in Thika for Africans tobuild their own houses on plots serviced with wet cores and supplemented with building materials as a loan.The approach and layout are very similar to the Dandora strategy.

Photo 17. Sites and services phase 3 (popularly known as 'pilot'), 1971. Sites and services schemes were revived bythe government in 1968. All plots were acquired by influentials, and permanent houses were built to full plotcapacity, for renting by the room.

Photo 18. Tenants in Makongeni. With few exceptions owners do not live in the scheme. Many young factoryworkers share rooms. Some 85 per cent of married men have wives and/or children in the rural home.

Photo 19. Housing developer. Developers act as builders. they manage construction, buy the materials and hire theworkers and the foreman or a small contractor. Funds are usually generated locally, from the owner'sbusiness or from non-institutional sources, and loans are paid back in 1-2 years. Housing construction isconsidered very safe and very profitable.

Photo 20. Typical courtyard in Makongeni. The courtyard type house performs very well internally. occupantsinterviewed unanimously agree that neighbour-relations are good and that mutual assistance is verycommon.

Photo 21. External environment, Makongeni. Communal responsibility for the inner courtyard does not extend to thespace between the blocks. The municipality does not manage and maintain the area properly, a problemtypical of many low-income housing areas in Kenyan towns and cities.

Photo 22. Middle class sites and services scheme Makongeni phase 10. No public housing was constructed in Thikaafter 1974 resulting in a serious shortage of middle income housing. House types and target group thereforechanged in the later expansion of the Makongeni sites and services scheme. (Photo 1984).

Photo 23. Aerial view of Dandora sites and services scheme 1985.

Photo 24. Older type of public rental housing. Kaloleni. Old inexpensive public housing is becoming increasinglyattractive in comparison with private rented rooms in site and services and other schemes. The productionof public low-income rented housing today is negligible.

Photo 25. Decent housing for middle and high-income earners, Buru Buru. Public housing has increasingly beendirected towards higher income groups, leaving only the sites and services schemes alone to accommodatelow-income groups.

Photo 26. Squatters, Mathare Valley 1969. Individual squatters constructing houses for their own use still operate inNairobi, but the phenomenon is marginal. From the very lowest to the very highest cost categories, housingis dominated by renting.

Photo 27. Aerial view of informal housing at Kibera, 1985. In Nairobi the majority of informal rental housing hasdeveloped in recent years on big areas without clearly defined ownership and jurisdiction. The developersare not squatters. Local leaders often give an 'informal authorization' for construction.

Photo 28. Informally authorized settlement adjacent to Dandora, 1984. Over a few years Korogocho housing has beendeveloped on public land according to a primitive plan. In rented shacks, the area accommodates a numberof inhabitants believed to exceed that of Dandora.

Photo 29. Informal subdivision for middle-class housing, Ruaraka. The pressure for land has resulted in unauthorizedsubdivisions also for middle-income group housing. in recent years, government support to subdivisions

has flooded the market with a number of plots far in excess of what is available in all sites and servicesschemes.

Photo 30. Kariobangi sites and services scheme, 1965. Serviced sites for individual house builders were part of thestrategy in the 1950s and 1960s. Much earlier, from the 1920s onwards, a sites and services strategy wasalso adopted in the Pumwani area.

Photo 31. Wet cores in sites and services scheme near Mathare Valley 1971. The emphasis on sites and services ingovernment policy, was not followed up by the Nairobi City Council in the early 1970s. Very few plots weredeveloped in this period.

Photo 32. Site and service tenants. Dandora was designed for at least one room to be sublet, to improve the economyof the plot allottee. Strict allocation control secured the plots for the low-income target group, but 2/3 of therooms are today rented, and this proportion is rising.

Photo 33. Low-income house developers. Houses are usually built by skilled workers, in some cases by smallcontractors. Plot owners organize and manage the process and have been able to mobilize informal financeto complete the house with 5-6 rooms. The project included supervision and assistance to developers froma housing development department.

Photo 34. Temporary stage 1, and permanent stage 2 of construction. The possibility of starting with a temporary wasimportant to low-income families, but provoked fierce opposition from the Nairobi City Council. The speedof completion of houses has been impressive and is related to the profitability of housing investment

Photo 35. Garbage collection. Urban maintenance and services, have been poorly managed. the problem is lack oforganization rather than lack of resources.

Photo 36. Blocked drains. Adding to the problems of maintenance, the population density has become higher thananticipated. the low standard of infrastructure is not appropriate in an area dominated by private rentalhousing, where nobody feels responsible for the environment.

Photo 37. Economic activities. The Dandora project was designed for business to be concentrated in centres, whichwere, however, completed too late. The result is that that small businesses have flourished andconsolidated on the plots. Whilst to some this means a chance to generate an income with little investment,to many, the proliferation of bars has become a nuisance. Today Dandora has a bad reputation due to lackof security.

Photo 38. Dandora

Photo 39. Busy street in Dandora, 1985.

Photo 40. Tenants Makongeni, Thika.

Photo 41. Kiandutu village. The site and service schemes in Kenya could meet a substantial proportion of thelow-income group's need for rental rooms, if produced on a large enough scale. The experience from the twocase studies, however, confirms that for the 20 per cent of the population in the weakest economic situation,the sites and services option is not available.

Photo 42. Soweto, informal subdivision in the Nairobi - Thika corridor. Despite vigorous promotion of site and serviceschemes, the quantity of plots only meets a fraction of the need. informal subdivisions have producednearly four times as many plots in the period 1981 to 1985. The site and service strategy should besupplemented by an effort to assist and guide this explosive development.

[In order to reduce the file size of this electronic version of the book, the photographs have not been inluded.]


List of Plans

Plan 1. Regional development plan for Central Province. 1969

Plan 2. Thika and the hinterland, population density

Plan 3. Thika with Makongeni

Plan 4. Plan of Makongeni

Plan 5. Model plans of houses in Makongeni

Plan 6. Nairobi region

Plan 7. Nairobi and the location of Dandora

Plan 8. Lay out of 6000 plots and services in Dandora community project

Plan 9. Type plans, Dandora

Plan 1. Regional development plan for Central Province. 1969

Plan 2. Thika and the hinterland, population density (1 dot = 5,000 people)

Thika is favoured by a location in a zone of extensively used farm land and proximity to large labour reserves and toNairobi (35 km)

Plan 3. Thika with Makongeni. (grid = 1 km)

Plan 4. Plan of Makongeni

The scheme was designed with space for public institutions, commercial activities and public rental schemes. Thesefacilities were not integrated in the financing plan.

Plan 5. Model plans of houses in Makongeni

The original plans were designed with relatively large plots to accommodate pit latrines, a maximum of six rooms andlimited subletting by the owner-occupants. After pit latrines were abandoned, the plans were revised to accommodateeight rooms. All for renting.

Plan 6. Nairobi region

Plan 7. Nairobi and the location of Dandora

Plan 8. Lay out of 6000 plots and services in Dandora community project

Plan 9. Type plans, Dandora

Plots were unusually small to prevent large- scale subletting, to minimize the cost of infrastructure per plot and toobtain units which, if sublet at the outset, could one day be converted into family units.


List of Tables

Plan 1. Kenya, urban and rural population 1969-2000 (million)

Plan 2. Urban occupant status and house tenure in per cent

Plan 3. Proposed public investments 1979-83

Plan 4. Monthly charges for 120 sq.m. plot holder in KSh.

Table 1. Kenya, urban and rural population 1969-2000 (million) 1969 1979 1990 2000

T otal population 10.9 15.3 24.9 37.5Rural population 9.8 13.0 19.6 26.1

Urban population 1.1 2.3 5.3 11.4Urban population percentage 9.9 15.1 21.4 30.4

No. of urban households (by 4.2 p.p. household) 2.7 0.3 0.6 1.3Source: Economic Survey 1985

Table 2. Urban occupant status and house tenure in per centMarket sector O wner-occupied Rented

Private individuals 35,7% 64,3%Private developers 23,4% 76,6%

T enant purchase 16,2% 83,8%Sites and services 5,9% 94,1%

Other (public rental, a.o.) 14,5% 85,5%Total 27,7% 72,3%

Source: Economic Survey 1985.

Table 3. Proposed public investments 1979-83

TownPe rcentage share of:

Urban growth Housing investment Roads investmentNairobi 41 70 57

Mombasa 10 13 25Kisumu 6 9 5

Other towns 43 8 14Source: Development Plan 1979-83.

Table 4. Monthly charges for 120 sq.m. plot holder in KSh.Lot preparation, servicing, wet core unit 37

Risk reserve 2Land rent 4

Rates 6Utilities 24

T otal mortgage and utilities first five years 73Building materials loans (max.) after 5 year grace period 54

T otal after five years 131Source: World Bank: Appraisal of a site and service project, 1975, p.19.


Abbreviations and acronymsDANIDA Danish International Development AgencyHDD Housing Development Department (Nairobi)KANU Kenya African National UnionMEDIS Monitoring and Evaluation Study of Dandora CommunityNCC Nairobi City CouncilNHC National Housing Corporation


BibliographyBibliography related to the two case studies

Andreasen, J., Evaluation of Danish assistance to physical planning in Thika Municipality, Kenya, for DanishInternational Development Agency (DANIDA), Copenhagen 1986.

Andreasen, J. and Beedholm, B., Ekspert i Kenya (in Danish) IDR paper a. 74.12, Institute for Development Research,1974 Copenhagen.

Andreasen, J. and Kryger, N.H., Thika development plan 1970-74, Thika Municipal Council, 1972 Thika.

Carlsen, J., Economic and social transformation in rural Kenya research, Scandinavian Institute of African Studies,1980 Uppsala.

Kenya Government, National development plans 1970-74,1974-79,1979-83,1984-88, Gvt. Printer, 1970-84 Nairobi.

Kenya Republic, Min. of Urban Development and Housing, Kenya low-cost housing by-law study final report, volumeone, main report. ACME Press, 198? Nairobi.

Macharia, K., Housing policy in Kenya - the view from the bottom, Int. Journal of Urban and Regional Research Vol. 9– 3, Edward Arnold, 1985.

Mazingira Institute, Formal and informal financing in sites and services projects in Kenya: a case study, for: UNCHS(Habitat), 1983 Nairobi.

Mutiso - Menezes International, Umoja phase ii - project identification, for: Nairobi City Commission, and US.A.I.D.,1983 Nairobi.

Physical Planning Dept., Min. of Lands and Settlement, Human settlements in Kenya, A strategy for urban and ruraldevelopment, Government printer, 1978 Nairobi.

Senga, Ndeti and associates, Monitoring and evaluation study of Dandora community development project 1- 8, for:Kenya Government, 1977- 80 Nairobi.

Stamp, A.P.D., Governing Thika: dilemmas of municipal politics in Kenya, Ph.d. Dissertation - faculty of economics,Unpublished, 1980, University of London.

World Bank, Appraisal of site and service project - Kenya (Dandora), 1973 Washington, D.C.

World Bank, Kenya - economic development and urbanization policy volume ii, 1983.


BibliographyOther literature on housing and urbanization in Kenya

Amis, P., Capital and shelter, The commercialization of 'squatter' housing in Nairobi 1960-80, Housing Research andDevelopment Unit and University of Kenya, 1982.

Etherton, D. et al. Mathare Valley, A case study of uncontrolled settlement in Nairobi, HRDU, University of Nairobi,1971 Nairobi.

Hannoun, Z., Kyhn, B. and Thety, B., Housing in Kenya a socio-economic study, Masters degree, Royal DanishAcademy of Fine Arts, 1975 Copenhagen.

Johnson, G.E. and Whitelaw, W.E., Urban-rural income transfers in Kenya: an estimated remittances function, IDSdiscussion paper 137, University of Nairobi, 1972 Nairobi

Kabagambe, D. and Moughtin, C., Housing the poor - a case study in Nairobi, Third World Planning Review 5 – 3,Liverpool University Press, 1983 Liverpool.

Oucho and Mukras, Migration, transfers, and rural development - a case study of Kenya, University of Nairobi, 1983Nairobi.

Rempel, H., The extent and nature of the population movement into towns, In Obudho (ed.) Urbanization anddevelopment planning in Kenya, Kenya Literature Bureau, 1981 Nairobi.

Stren, R. Urban development in Kenya and Tanzania, Working paper no. 147, Institute for Development Studies,University of Nairobi, 1974 Nairobi.

Werlin, H., The politics of housing, in: Governing an African city, Africana Publishing House, 1974 U.S.A.


Introductory note

This study is based on existing surveys, studies and data on the two projects. The source of information withrespect to Makongeni in Thika is first and foremost a recent evaluation of the impact of urban planning in Thika,prepared for the Danish International Development Agency (DANIDA).(1) Thorough monitoring and evaluation of theperformance of DANDORA were carried out from 1976 to 1980 and concentrated on phase 1 of this project, coveringonly 954 of the total of 6,000 plots.(2) This has not been continued systematically. The present study, therefore, suffersfrom a lack of significant data on the later phases of the DANDORA.


Currency equivalents

1975 1 US$ = 7 KSh

1985 1 US$ = 16 KSh


Notes

1. DANIDA: Evaluation of Danish Assistance to Physical Planning in Thika Municipality. Danish InternationalDevelopment Agency, Copenhagen, 1986.

2. Senga, Ndeti and Associates: Monitoring and Evaluation Study of Dandora Community Development Project,Vol. 1-8, 1978-1980 ( in the following referred to as MEDIS).

3. DANIDA 1986, op.cit. and Jørgen Andreasen, The Impact of rural ties on the settlement and housing pattern ofthe urban Kenyan, forthcoming 1987.

4. DANIDA 1986, op.cit. and Jørgen Andreasen, op.cit. With reference to corruption in housing, a Governmentpublication, Kenya Low-Cost Housing By-Law Study (Gvt. of Kenya, 1983, p.32) identifies the 'Influentials', i.e.councillors, MP's, businessmen/women, civil servants, etc.

5. Mazingira Institute: Formal and Informal Financing in a Sites and Services Project, 1983.

6. MEDIS Vol. 3, p. 25 objective 6.01 according to which the Nairobi City Council as part of the project agreementwere supposed to "allow no additional unauthorized settlements to be erected". Dandora was part of thegovernment policy applying sites and services to combat unauthorized development, see note page 57, andAppraisal of Dandora §§ 1.01 and 2.04.

7. Statistical Abstract 1983, p. 237.

8. See for example, the elaborate research by Oucho and Mukras: Migration, Transfers and Rural Development - ACase Study of Kenya, Univ. of Nairobi, 1983.

9. Wescott, Industrial Location and Public Policy. 1976 .

10. Economic Survey 1985.

11. Mutiso-Menezes International. Umoja -Project Identification, Nairobi 1983.

12. Andreasen, 1987, op.cit.

13. Squatters are here defined as persons occupying land without the consent of the owner or of other persons orauthorities controlling the [and. In Kenya, in the 1920s, European settlers applied the term 'squatter' to farmlabourers permitted to use a part of the big farm for subsistence farming.

14. DANIDA, Evaluation 1986, p. 95.

15. The average developer buys the plot from the original allottee, pays the public fees and the building costs. Theinterest rate based on 15 years repayment is 9% p.a. computed on the basis of monthly net income 8 rooms @KSh 200 = KSh 1,600 and plot and fees: 30,000 - construction: 120,000 - total investment 150,000.

16. The population is estimated to have grown from 43,400 in 1978 to 63,400 people in 1985. Household size usedfor the calculation is 3.3.

17. Comparing the two options for the low-income group, Makongeni and Kiandutu, the value received per shillingrent paid is considerably lower in the slums. A roam in mud, iron sheets or timber offcuts without any kind ofsanitation, cost around KSh 2,000 to build in 1980 and the corresponding rent today is close to KSh 100 permonth. In 1980. a Makongeni room cost around KSh 10,000 to build and today it may fetch KSh 250 per month,i.e. a maximum of KSh 200 net including water, The 'built value' received per shilling of rent paid is therefore 2.5time higher in Makongeni. See appendix for a detailed account of profits in different schemes.

18. See footnote 16.

19. R.C. Tiwari: Urbanization and development planning in Kenya. Editor R.A. Obudho 1981.

20. Government of Kenya Development Plan 1970-74, Table 19.7 and section 19.32.

21. Government of Kenya Development Plan 1974-1978, sect. 21.26.

22. Government of Kenya Development Plan 1984-88, Table 5.7.

23. In 1979, the rent of a room in a sites and services scheme was KSh 240 (MEDIS 8, Feb 1980) requiring a monthlyincome of not less than KSh 700. So people doubled up. Even so, single tenants needed an average monthlyincome of KSh 850 (ibid). In 1979, 37% of Nairobi wage earners received below KSh 700 monthly (Statisticalabstract 1982, p.258).

24. World Bank, Appraisal of a Sites and Services Project, Kenya, 1975, p.1.

25. The National Development Plan of 1974-78 states that sites and services schemes will be a significant part ofthe housing programme in urban areas. If no alternatives are available, the lowest-income families will buildtemporary houses anyway, as witnessed by the existence of large and expanding areas of illegal squatter areasnear the urban area. It should be the responsibility of the local authorities and the National HousingCorporation to ensure that this activity was channelled into proper self-help schemes on serviced plots, lest thetask of removing them or providing them with service later on would one day become a grave problem,

26. See World Bank: Appraisal of A Site and Service Project, 1975; "while it will not satisfy the total demand forserviced plots, the technical assistance .. will help formulate shelter programs ... and enable Government andLocal Authorities to plan and execute such projects in future" (Summary p. i); The project "should demonstratethe feasibility of large-scale self-help schemes ..." (p.19). Replicability of sites and services projects assisted isno longer an objective of the Bank; " a new system has been devised which ensures that the project will belargely self-financing and thus replicable" (p.17).

27. MEDIS Vol.2, p.52. Op.cit.

28. Mazingira Institute (1983) op.cit.

29. World Bank, 1975, p.20. op.cit.

30. MEDIS Vol. 5, March 1979. op.cit.

31a. Mazingira Institute (1983) op.cit., p. 40.

31b. Mazingira Institute (1983) op.cit., p. 42.

31c. Mazingira Institute (1983) op.cit., p. 54.

32. N. Ndungu, 1985.

33. World Bank: Staff Appraisal Report, Second Urban Project, 1978, p.5.

34. Mazingira, 1983, p.15. Op.cit, Unfortunately, data on later phases are not published.

35. MEDIS Volumes 4 and 7, Op.cit.

36. World bank, 1975, summary, p. iv.

37. World Bank, 1975, Annex 3, Op.cit.

38. Out of a total population increase of 1,225,000 in urban areas between 1969 and 1979, Nairobi's share was319,000 persons (26 per cent), and Thika's share was 23,000 persons (2 per cent).

39. Republic of Kenya, Min. of Urban Development and Housing. Kenya Low-Cost Housing By-Law Study, 1983,Final Report, Vol. 2 p.32f.

40. Mazingira Institute (1983) op.cit.,p. 51

41. Mazingira Institute (1983) op.cit.,p.40.

42. Mazingira Institute (1983) op.cit.. Construction cost of one extra room was KSh 13,200 in 1983, and thecorresponding rent around KSh 300 per month. See appendix.

43. Mazingira Institute (1983) op.cit., op.cit.

44. Gvt. of Kenya, Economic Survey 1985, table 4.5. The table shows only 400 persons employed in construction in1984, the low figure most likely being explained by unregistred employment.

45. DANIDA, 1986, op.cit. Interviews in Thika in 1985 indicated that 15 Makongeni landlords each had severalproperties in Thika and Nairobi. Two of the interviewees had 7, two had four and six had three plots inMakongeni. Most of the owners were businessmen and mixed business surplus and housing returns.

46. Many researchers have shown how the urban sectors drain the surpluses from rural areas, where investmentsyield very low profits, and even the banking system is characterized by the use of peasant savings in the urbansectors (J. Carlsen, Economic and Social Transformation in Rural Kenya). Surveys in Thika, however, indicatethat funds are remitted from urban households to rural families. In fact every person employed in the townmaintains, on average, one person in the rural areas. J. Andreasen, Urban-rural ties and their impact on urbanhousing, 1987, forthcoming.

47. The upper limit was, at some point in time, changed from 40th to 50th percentile of the income groups. Herequoted from Mazingira, 1983, op.cit. p. 46.

48a. MEDIS, Vol. 8. op.cit.

48b. In a sample of 722 households, 7% of those moving to Makongeni from other areas in Thika came from theshanty areas of Kiandutu. By contrast, 29% of those moving to Kiandutue came from Makongeni. The samplesuggests that, in absolute numbers, 190 moved from Makongeni and 97 in the opposite direction. Andreasen,1987, op.cit.

49. DANIDA, 1986 op.cit.

50. Notes of a working meeting between USAID and HDD, 19.5.1983, 1 (review of Umoja Ph. 2).

51. World Bank Appraisal Report, Second Urban Project, 1978, p. 25.

52. A resident of a Nairobi middle class housing scheme, lamenting on the environmental decay of that area isquoted for saying: "The houses were welt planned and looked beautiful that time. But now, Buru Buru is goingto be the future Dandora, or worse" (Nation, 4.11, 1985).

53. In Thika, recent sites and services schemes have been designated for the middle income group which hassuffered from the almost complete abolition by the Government of tenant purchase and rental schemes, infavour of low-income sites and services. These projects are located adjacent to the low-income sites andservices schemes.

54. Economic Survey 1985, table 3.8.

55. The case study in Thika shows that construction there is a continuous and high level of activity, that almostsatisfies demand and that initial profits are quite moderate.

56. See p.79.

57. It is worth remembering that also in Europe, in the fast century, building bye-laws defining minimum standardswere introduced to protect renters.

58. By contrast, the public housing areas in Thika with even higher densities are very well kept and maintained.

ABOUTCase study of sites and services schemes in

Kenya:Lessons from Dandora and Thika

HS/111/87 EISBNE 92-1-131534-4 (electronic version)

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Foreword

The adoption of a sites-and-services approach has, for many years, been advanced as a crucial component ofprogrammes to meet low-income shelter targets. Various developing countries have implemented one or two prototypeprojects (usually supported by grants from international aid agencies), but none has established a sites-and-servicesprogramme or committed any significant funding to sites-and-services efforts. At the time, no worthwhile proposalshave been made for an alternative approach to the low-income shelter problem.

In the framework of the international Year of Shelter for the Homeless (IYSH), the United Nations Centre forHuman Settlements (Habitat) is reviewing relevant experiences in the production of low-income shelter. This reportexamines two sites-and-services projects in Kenya, weighs up their success in meeting shelter targets and looks at theimplications of the project approach in the context of over-all shelter demand. The lessons to be drawn from theKenyan experience should be helpful to other developing countries facing similar shelter problems.

I wish to acknowledge the contribution made by Messrs. Jørgen Andreasen and Niels H. Kryger, and Miss.Njoki Ndungu in preparing the text and graphic material for this report. I also wish to thank the Housing DevelopmentDepartment of the Nairobi City Commission and the Mazingira Institute, Nairobi, for help given in assembling thisdocument.

Arcot RamachandranExecutive Director and Under-Secretary-General

United Nations Centre for Human Settlements (Habitat)


Chapter 0. Summary0.1 Profile of the projects

This study is concerned with the impact of the sites and services strategy as it has been implemented in Kenyaover the last 15 years. Two projects have been studied, Makongeni in Thika, one of Kenya's secondary towns, andDandora in Nairobi.

MAKONGENI was conceived in 1970 with the intention of providing sufficient plots to accommodate around60 per cent of the predicted population growth in Thika. The project was implemented with some foreign technicalassistance, and very limited public capital was invested (KSh 3,200 per plot). Plots were completed in 1971, butconstruction of houses only began in 1976, due to conflicts over plot allocation procedures.

DANDORA was designed in 1974 and construction of houses started in 1976. The project was part of the seriesof sites and services projects supported by the World Bank in many countries. Considerable foreign assistance andloans were involved in the project. Over a five year period, according to the World Bank's appraisal, Dandora wasintended to cater for 5 per cent of Nairobi's total growth, all in the 20th to the 40th percentile income group.

Both projects were based on the idea of individual low-income families building their own houses, initially insimple materials, which could later be improved. In Makongeni, the authorities were to provide the plot, communalwater supply, roads, etc. In Dandora each allottee would also be allocated a wet core and a loan for building materials.


Chapter 0. Summary0.2 Validity of the project assumptions

The study emphasizes two aspects of the urban dynamics determining housing development, which have beengiven inadequate consideration in both projects. These factors had a significant impact upon the results of theprojects.

The first issue which has been misinterpreted or given insufficient consideration is the nature of informalhousing provision. (informal housing in this study is defined as categories of housing lacking formal authorization ofone or more of the following aspects: land acquisition, subdivision, land use, plan, and construction). Informaldevelopment was interpreted as squatting, i.e. poor people building their own substandard houses or huts on landbelonging to others and without their consent. Squatter settlements in this conventional form characterized the earlydevelopment of areas such as Mathare Valley in the 1960s. The study concludes that by 1970 squatting had almoststopped, giving way to unauthorized tenement blocks for rental built by companies, co-operatives or petty landlords,with formal or informal authorization to occupy the land. For the two projects under study, however, the strategy wasbased on the existence of owner-occupier squatters, who did not exist in reality. At that juncture it might have beenmore appropriate to ask how the activities of the co-operatives, companies and private speculators might be divertedfrom informal into planned and organized urban development.

The second issue, to which planners and architects did not pay sufficient attention, was the very stronglinkages between urban households and their rural homes, a phenomenon which reconfirmed the fact that urban livingis considered a temporary phase in life, rendered necessary by the need for a wage income, and by shortages of land inthe rural home to which many aspire to return.

Recent surveys(3) have shown that in Thika 84 per cent of all men have access to rural land and of those, 67 percent of the married men have left their wives and/or children in the rural home. For the purposes of this study it issignificant that most urban families stressed the investment of a house 'at home', while in town they preferred to seekout accessible, inexpensive, rented accommodation. We would therefore argue that the underlying policy assumptionsof the blessings likely to accrue to low-income families as home owner-builders, were based on a0 unsubstantiatedconception of the reality of Kenya.


Chapter 0. Summary0.3 Target group and beneficiaries

Both projects eventually turned into private rental housing schemes for reasons discussed in the previousparagraph. Both had anticipated some sub-letting, but not at the level experienced (almost 100 per cent of Makongeniand around 75 per cent of Dandora residents are tenants). In Makongeni, the pressure exerted by 'influentials', and theconditions attached to the construction of houses, excluded the low and even the middle income population fromdeveloping houses. Thus 85 per cent of the plots were sold to better off people, who could afford to build the 8 roomsdemanded in permanent materials.(4)

The survey shows that with the exception of sites allocated to one savings co-operative, no owners actuallylive on the plots. Tenants are mostly young unmarried or married workers at the nearby industrial area. 20 per cent ofthe Thika population cannot afford or is not willing to pay the rent charged and is compelled to live in theunauthorized slum areas. Very few people move from a room in the slums to better areas. Since take-off, the number ofhouses produced by Makongeni's high-income developers has been impressive. In fact, since 1978, each year 660 outof an average growth in the number of households of 860, i.e. 76 percent, have been accommodated. TodayMakongeni and the older sites-and-services schemes together accommodate 46 per cent of Thika's population asagainst 22 percent in 1969.

In Dandora, World Bank insistence on impartial plot allocation met strong resistance from local politicians.However, plots were finally allocated mostly to people in the target group, and the strong backing from the institutionsdeveloped to manage the Dandora project eventually ensured that most low-income families fact completed theirhouses.

Affordability criteria which had been an important component in the design of the project, proved to be of onlyacademic value because incomes from sub-letting made the venture a very good business for the allottees, regardlessof how low their income was. It should not therefore have been necessary to exclude the bottom 20 per cent ofhouseholds on the basis of affordability, although there could have been other implicit objectives, such as theintention to benefit workers in permanent employment.

More than half the allottees preferred to sublet the entire house and remain in lower quality housing areas inorder to give highest priority to other basic necessities.(5) In both Dandora and Makongeni, the surveys indicated thatmany of the landlords are themselves tenants elsewhere, e.g. in the inexpensive public housing schemes. Manyincome earners are committed to supporting large families in the rural areas and are not in a position to pay anythingnear the 25 per cent of income for housing, commonly suggested as a criterion of affordability. Furthermore, the wellknown difficulties of determining income suggest that affordability criteria need to be supplemented by a concept ofwillingness to pay.


Chapter 0. Summary0.4 Project performance

With 6,000 plots, Dandora is the biggest single sites and services project in Kenya to date, a major achievementcompared with the 1,200 plots in Makongeni. However, if related to the size of Nairobi, the number of plots in Dandorais much less significant than the plots provided in Thika. While in the period 1975-85 Makongeni accommodated 66 percent of the total population growth in Thika (16,000 people), over the same period Dandora accommodated only some60,000 people compared with a population growth of 500,000, i.e. 12 per cent.

Informal development in Thika has been monitored. It shows an acceleration from 1967 to 1978, with thepercentage of rooms in the informal sector increasing steadily from 0 per cent in 1965 to 6 per cent in 1970, 14 per centin 1972 and 25 per cent in 1978 after which the share declined, in particular the substandard component. The fact thatinformal housing has not increased its share of the total housing stock since construction of houses in Makongenistarted, suggests that the large volume of sites and services houses has made a contribution to reducing informaldevelopment. However, informal development will probably continue because 20 per cent of the population cannotafford the rents in sites and services areas. Informal housing was responsible for 22 per cent of the total housingconstruction between 1978 and 1983.

An important objective of the Dandora project was to eliminate future informal development.(6) The relativelymodest quantitative performance rules out any possibility that this objective has been met. A conspicuous illustrationof this fact, in the absence of supporting data, is the proliferation of landlord-developed slums adjacent to Dandora,where the population has grown faster than in Dandora itself. The Dandora project, however, was intended as the firstphase in a long term strategy of providing serviced plots for more than 500,000 people in eastern Nairobi (Kayole, VillaFranca, Mathare Valley North, and Riruta).

There was some expectation that flooding the market would reduce room rents and plot prices. If there were anyevidence of this, competition should have reduced rents in Thika. They have, however, grown by 50 per cent over 7years, and there are no rooms vacant. Land ownership is a profitable and secure form of investment in Kenya. Thisadds to the attractiveness of housing as an investment which, in its turn, contributes to high land prices.

Thus in both schemes, plots allocated free of initial payment for land, are traded at over KSh 20,000 inMakongeni and up to KSh 50,000 in Dandora (1985). This compares with the cost of constructing one room (aroundKSh 15,000), and the minimum annual wage of KSh 7,000 (1985 prices). In both projects, considerable quantities ofprivate savings and loans were mobilised, in Thika, nearly 30 shillings for every shilling of public money invested. Thissuccess is closely connected with the growth of a lucrative market for privately rented rooms.

The DANIDA-study in Thika shows that construction in sites and services schemes generated 470 jobs whichhave subsequently become full-time employment, i.e., 3 per cent of the total in Thika. To this should be added otherdirectly or indirectly linked activities. In 1982, registered earnings in the construction sector reached 4.5 times their1978 level compared with a 22 per cent increase for all wage employees over the same period. They only accounted for3.5 per cent of the total, however.(7)

The study concludes that serviced sites have played an important role in accommodating the low-incomepopulation in Kenya since the 1920s, that sites and services have made a significant contribution to the housing stockover the last 20 years, and that they will continue to be an important element in housing provision. It suggests thatconsiderable private savings can be mobilised. As the Thika experience shows, if developed in adequate quantities,sites and services plots can reduce informal development, although in their current form this will not benefit the 20 percent of the population with the lowest ability to pay. In the mid-1970s, in Nairobi, there was insufficient institutionalcapacity to initiate and manage the development of sufficient numbers of units.

The sites and services strategy was transferred in a form which reflected experiences from other and differentsocieties and it needs rethinking. While the foreign exchange burden associated with large loans from the World Bankand others financing Dandora and the majority of new sites and services schemes worries many urban planners, manyeconomists argue that the World Bank loans for housing attract badly needed foreign exchange on a scale whichexceeds the import needs of the project itself. Foreign currency for other government requirements is thereforegenerated through housing loans. Public sector attitudes towards sites and services schemes are today less positivethan in 1970, despite continued official support for the policy in practice.

The forward planning of urban growth in which sites and services development was to play key role in

ensuring well organised environments, has been overtaken by events. Since 1980, most areas designated formetropolitan growth have been subdivided into plots by co-operatives and companies, sometimes according toapproved plans and sometimes not. While Dandora has supplied 500 plots per year since 1975, it is estimated thatprivate subdivisions in the metropolitan area may have created 5,000 plots per year in the same period. This will lead tomassive long-term problems of regularisation and upgrading, because the development has been entirelyunco-ordinated and implemented without any kind of planning. The urban development strategy will need to changeits focus to upgrade these subdivisions before too much more is built up.

For the lowest income groups, the study foresees continued informal development of rented tenement housing.Upgrading to raise standards is becoming increasingly urgent, but the process demands very complex methods toprevent the benefits being entirely appropriated by the landlords, and the tenants being driven out by market forces.


Chapter 1. Kenya, general backgroundPlan 1

Kenya covers an area of 582,646 km2 and the country is characterized by a great variation of climatic zones fromthe tropical coastal climate in the east, sub-tropical highlands to desert and semi-desert in the north-east.

Kenya's economic base is primarily agriculture but since independence in 1963; Kenya has embarked onagro-based industrial development. The major contributors to the GDP are: agriculture, accounting for 30 per cent;manufacturing, around 13 per cent; and domestic trade, about 11 per cent. The building sector accounts for 6 per centof GDP. The Kenyan economy is, however, characterized by a relatively large non-monetary or traditional subsistenceeconomy.

Table 1


Chapter 1. Kenya, general background1.1 Population

Kenya's population increased from 5.4 million in 1962 to 15.3 million in 1979, a rise in annual growth rate from 2per cent per year in the 1940s to around 4 per cent at present. The total population is expected to pass 25 million in1990 and 37 million in 2000.

In 1969 the rural population represented 90 per cent of the total. By 1979 this had dropped to 85 per cent, and in2000, is expected to approach 70 per cent. For decades, therefore, Kenya will remain predominantly rural with apotential for high rates of rural-urban migration.

The growth of urban centres is extremely rapid, averaging between 7 and 8 per cent per annum with no declineforecast. Thus, the population in urban areas increased from just over one million in 1969, to 2.3 million in 1979, with anofficial estimate of more than 11 million by the year 2000. The new urban population to be accommodated between 1979and 2000 is therefore four times the size of the 1979 urban population.

However, the growth and distribution of the urban population is not even in all urban centres. In 1969, morethan half the urban population were residents of Nairobi, and Nairobi and Mombasa together accounted for two thirds.The growth rates of small towns, however, exceed those of Nairobi and Mombasa, in some cases approaching 10% peryear.

The male/female ratio in 1969 in both Nairobi and Thika was 3 : 2, and 36 per cent of the population in bothtowns were under fifteen. The composition of the population in both Nairobi and Thika has not changed significantlyduring the period 1969-1979.


Chapter 1. Kenya, general background1.2 Urban development and planning

1.2.1 The urbanization process

In Kenya, population movements have taken the form of 'circular migration', first between homestead andcolonial plantations and subsequently between homestead and city. The explanation for this goes back to earlycolonization which deprived the population of its self-sufficient economy and culture, and replaced it with a system ofinadequate family farmland combined with wage labour in the European plantations. In most cases urban jobexpansion after 1950 did not provide an adequate income to sustain the life of a family in town, and circular migrationcontinued but with the urban centres as its focus. Ordinary families in rural areas cannot survive on the small plots ofland available but need a supplement from urban wages. At the same time, the low wages and high prices in townsmake it prohibitive for the family to live together there.

The linkage to the rural home is not only economic in nature. The land at home represents the connection toancestors and the place where people can retire and one day be buried. It is here, on the land given to the son by hisfather, that the son is expected to build his house. It represents the social security not found in an unreliable job intown. Remittances from urban residents towards their rural homes play an important role in rural development.(8)

Urban inhabitants with strong linkages to the rural home tend to place any savings there and not in town. Theyhave no intention of investing in an urban home. They prefer to rent.

In the highest and the lowest social groups the practice differs not because their ideological attraction to ruralland is different but because their economic opportunities are different. The wealthy can afford to build a big houseinitially at the rural home, and subsequently one in town. Some even combine an urban job and a rural home,commuting daily from their rural location. The wealthy family can afford to live together in the town. Among thepoorest groups, access to rural land is less common and the family is compelled by circumstances to live together intown. Despite the dream of many of the landless of one day being allocated a plot in a new settlement scheme, themajority realise that they have to remain in town forever. They are not, however, economically capable of constructingtheir own house (expect for occasional squatters) and they are barred from allocation of plots in sites and servicesschemes. As a consequence, the number of house-owning occupants in Kenyan towns is very small.

Table 2



1.2.2 National urban policy

The national urban policy, as expressed in successive National Development Plans, is designed to serve therural areas in order to support the rural developments upon which 85 per cent of the population depends, andcounteract excessive urban congestion in Nairobi and Mombasa. Basically, this strategy is based on the developmentof a planned network of designated service centres at different levels throughout the country and a few strategicallylocated growth centres intended to promote regional growth.

Essentially, the desirable pattern of human settlements can be described as a combination of limiteddecentralization at the national and regional levels, and selective concentration at the local level. The strategy adoptsthe following measures:

The development of service centres,

The development of growth centres,

The development of an integrated transportation and communications system,

Rural development, and

The development of appropriate standards for urban infrastructure.

Some towns already have a well developed infrastructual base. Thika, Nakuru and Eldoret are the most evidentexamples of this, while others such as Kakamega, Kisii and Embu need substantial public and private investment.



1.2.3 Public and private investment in grow th centres

Although the urbanization policy has been an integral part of overall principles of the last four NationalDevelopment Plans, public and private investments have been directed on the basis of other factors. The basis forprivate development is a well functioning public sector and a well developed infrastructural network. Publicinvestments in these services can provide some incentive for attracting private development such as industry, and theGovernment thus has a tool to promote decentralization of development. However, this tool has not been used inaccordance with overall regional policies but on the basis of political and ethnic influences.(9)

In both the budget and in reality, Nairobi and Mombasa receive the major share of public investment in areassuch as housing and roads. In the National Development Plan 1979-1983, proposed investment in housing and roadsfavoured the two main cities.

Table 3

Industrial investments are among the most important since, not surprisingly, studies of migration conclude thatjobs and economic opportunities are vital to attracting migrants. Nairobi and Mombasa have been the major industrialcentres and markets for industrial goods, but Thika is a also powerful industrial centre. In Thika, industry employs 63per cent of wage earners (Statistical abstract, 1983). The evidence of relatively low growth rates in Nairobi and Thikadoes not, however, lend support to the hypothesis that industrial development promotes high migration rates. Onereason for this is, that new industries are not labour-intensive. Thus, between 1969 and 1979, Thika's populationincreased five times as much as did the number of jobs in manufacturing industries.(10)

Figure 1


Chapter 1. Kenya, general background1.3 Housing

1.3.1 Housing policy

The National Development Plan 1970-1974 stated that: "The prime objective of Government policy in housing isto move towards a situation where every family in Kenya, will live in a decent home, whether privately built or statesponsored, which provides at least the basic standards of health privacy and security". The Plan, however, recognizedthat until the fundamental problem of inadequate incomes for the majority of the population had been solved, decenthousing would continue to be beyond the reach of a significant portion of the population. In recognition of this, theGovernment therefore strongly recommended sites and services schemes for the low-income group. The conceptimplied self-help construction of housing units on serviced plots provided by the public sector. To fulfil thisobligation, the Government stressed the need to strengthen the financial institutions and the various implementingorganisations as well as educating professionals and labourers.

In the 1974-1978 Plan, objectives and policies were tightened and it was stated that "Housing design andconstruction had to conform to Government standards" and that "each housing unit in urban areas should have atleast two rooms plus its own kitchen and toilet". The plan further stated that a prime objective was "to ensure that: a)no additional unauthorized housing settlements were erected; and b) slums are removed when satisfactory alternativehousing has been found; and c) substandard housing has been improved". The change in policy had a profoundimpact in relation to the definition of development standards. The previous grade II bye-laws which had permittedlower standards, such as the use of pit latrines, were dropped.



1.3.2 Need and supply

Housing is viewed as a basic need which affects everybody. Therefore provision of housing has always been adominant factor in public debate. Such prominence in discussion, however, has not been matched by investments, andthe gap between need and supply has increased rather than decreased.

The urban population is expected to increase from approximately 2.3 million in 1979 to more than 11 million bythe turn of the century. Of the 11 million urban residents, Nairobi is expected to cater for approximately 40 per cent orclose to 4.5 million, and Thika is expected to grow from approximately 45,000 in 1979 to more than 180,000 in 2000.Thus, before 2000, an additional 800,000 housing units have to be developed in Nairobi and 35,000 in Thika (assumingone unit per household of 4.3 persons).

The recorded completion of dwellings by both public and private sectors as compared with the formation ofnew households is shown in figure 1. As can be seen, the housing supply caters for only 20 per cent of need if eachunit accommodates one household, leaving 80 per cent without their own dwelling. In the case of sites and servicesunits, however, the average occupancy rate per plot/unit is approximately four households. The deficit is thereforearound 60 per cent of urban households, which have no choice other than the informal housing sector.



1.3.3 Affordability and w illingness to pay

It is the stated objective of the Government to provide decent and affordable homes to all Kenyan households.In the 1974-1978 National Development Plan a decent home was defined as a housing unit of at least two rooms, akitchen, bath and toilet. Public housing programmes were based on the relation between cost and affordability. Thecalculations assumed that the cost of housing provision should not exceed 25-30 per cent of total household income.In general, low-income housing was defined as housing units affordable for households with incomes below themedian.

The median household income in 1983 was KSh 2,300 and this income would cover only the cost of two roomsand basic infrastructure. With a monthly income of KSh 1,500 such a household could only afford one room withshared facilities.(11)

In 1983, 68 per cent of wage employed in Kenya earned less than KSh 1,500. If the large group of unemployedand the underemployed in the informal sector are added, the discussion of income-based computation of affordability,with costs and standards as indicators for housing needs and categories becomes almost irrelevant. Many incomeearners have heavy commitments to family in the rural areas. Others give housing standards a lower priority than otherareas of life. Therefore a concept of 'willingness to pay' may be a more appropriate criterion than theoretical,income-based affordability calculations.



1.3.4 Formal and informal development

FORMAL HOUSING development is defined as approved public and private housing schemes or buildings,financed through recognized institutions and developed on land planned for this purpose. Formal housing is normallybuilt in permanent materials.

INFORMAL HOUSING development is defined as unapproved buildings or groups of buildings developed onland not usually planned for the purpose. Informal housing development usually lacks basic services and is most oftenbuilt in temporary materials.

Informal housing may be constructed by squatters (i.e. individuals settling on land belonging to others withoutthe owner's permission), or it may be promoted collectively through groups such as land buying co-operatives andcompanies. Many forms of informal authorizations' however do exist in Kenya as in other countries.

In recent years an increasing proportion of the informal housing is made up of permanent buildings erected onunapproved subdivisions of land in private ownership.

Most of the formal development is not affordable by the majority of the population in urban areas, mostsignificantly in Nairobi. It has thus been recognized that it is necessary to provide plots for self-help or sites andservices schemes which include options for sub-letting.

The provision of formal housing is, however, not sufficient to meet the requirements, either in terms ofaffordability or in terms of volume. Informal housing therefore caters for more than 62 per cent of new urbanhouseholds. Informal development covers both medium and low-income housing, although very low standards ofhousing predominate in the large towns of Nairobi, Mombasa and Kisumu.



1.3.5 Evolution of sites and services schemes

The concept of serviced plots is not new in Kenya. Under different labels, sites and services schemes havebeen developed since the 1920s e.g. Pumwani in Nairobi and Majengo in Thika. Traditional sites and services schemeswere developed further during the 1960s and the early 1970s. Changamwe in Mombasa was developed in 1960 and theKariobangi scheme in Nairobi in 1965.

With a few exceptions, plot sizes were relatively large, most plots were provided with water and waterbornesanitation but few with street lighting. Most of the housing units were designed, either with external access toindividual rooms or with access from a corridor as in the Swahili type, both suitable for subletting. Few schemes werecharacterized by self-contained 'family' units. Apart from Kariobangi, with more than 700, the number of plots perscheme was generally low, plots were big and plot coverage in most schemes was kept low at 33 percent.

With the Makongeni sites and services Scheme in Thika followed by Dandora in Nairobi the number of plotsper scheme increased dramatically and the plot coverage was increased to 50 per cent. In the Dandora scheme, plotsizes were reduced and houses constructed back to back.

In the Town Planning Handbook of June 1971 sites and services schemes are divided into two categories: 1)schemes with basic services; and, 2) schemes with sewage disposal. In the first, Grade Two By-Laws apply, allowingthe use of temporary, materials for housing units, murrain roads and pit latrines. An earlier proposal to provide pitlatrines, at least as a provisional solution, was rejected by the Ministry of Health. Because of the size of the schemeand the low standards proposed, sites and services became a topic of heated debate in the early 1970s, in no small wayreflecting the income-generating possibilities of the plots, and the interests of potential landlords. The debate wasreflected in the National Development Plan 1974-1978 where sites and services was maintained, but at higherstandards, expressed through the objective of providing so-called decent housing for the population.

In the case of Dandora, plot sizes were reduced, infrastructual services were provided to each individual plot,and, most importantly, allocation procedures were changed in order to avoid allocation of plots to people who did notbelong to the target group. In addition to the provision of plots, infrastructual services and community facilities,project components further encompassed the formation of building groups and a Housing Development Departmentunder the City Council whose function was to supervise the project.


Chapter 2. Sites and services in Thika2.1 Thika

Plan 2

Thika is the sixth of Kenya's secondary towns, with a population approaching 65,000. It developed as a stationtown on the railway line which was extended north from Nairobi before 1920. Industrial development started in the late1930s based on the processing of local agricultural produce, e.g. pineapples, leather, tanning extracts. Geography andhistory favoured industrial growth in Thika. Good rail and road communications 45 min. by road to Nairobi, the centreof decision making, diversified services and markets, combined with adequate water supply, provided the basicconditions for industry. The proximity to large labour reserves in the Central Province and very low land pricesconstituted other fundamental attractions to industrial investors. Thika today is an industrial town, known as "littleBirmingham" in the words of the investment promotion pamphlets.

The overwhelming proportion of Thika's population is recent migrants, 50 per cent of the population arrivedwithin the past 6 years. A survey in 1985 showed that only four per cent of the adult heads of households were born inThika. By 1949, Thika had only 5,000 inhabitants, and virtually all housing existing today was constructed after 1950.

Situated on the edge of vast tracts of extensively utilized ranching and sisal estates Thika has had ample roomfor expansion. Before independence, the colonial government and the Railways Corporation had acquired thousandsof acres of land for the expansion of Thika. To date, this stock of land has not been exhausted.

Local Government is very active and stresses self-management. Since 1970, however, central government hastaken an increasing share of the control, not least in the field of revenues. Thika therefore depends largely on centralgovernment for grants and other investment decisions.

These are among the main factors conditioning urban development and shaping housing development in aparticular way in Thika. Studies of different towns in Kenya demonstrate that conditions vary greatly from town totown. Thus a standard approach to an area such as housing, if applied uniformly to different situations and at differentmoments in time, will produce widely differing results.

The links of the population to their rural homes are very pronounced in Thika. The vast majority of residentsregard their stay in Thika as temporary, forced on them by economic conditions. Whether the aspiration to move backto the rural area one day is realised, or whether it remains a myth, the aspiration affects their priorities. They give lowpriority to investing energy and resources in an urban home, and inexpensive, rented accommodation is their preferredsolution.

House-ownership is an option open to only a few, and attractive mostly as a rent generating business. Aminority of houseowners live in their houses, some taking advantage of connections to provide them with inexpensivepublic rental housing for their own residence.(12)


Chapter 2. Sites and services in Thika2.2 Housing and land

2.2.1 Housing and land investments in the economy overall

It is only recently that the savings of Kenyans have been invested in the agricultural and manufacturingsectors, the former yielding relatively low returns on investment, the latter being for many years, the almost exclusivedomain of foreign companies in Thika. Local investable surpluses have increased rapidly since independence but thepreferred areas of investment have been retail trade, transport, bars and hotels, housing, and small-scale constructionoperations where the demand for capital and skills was not too high. Above all, investments have been made in land,although genuine land speculation (buying - subdividing - selling) is rare.

The pressure to invest in housing has been very high and prices have spiralled. There is no sign of a saturationof the supply and consequent reduction of rents and prices. Housing is characterised by the promoters in Thika asone of the most lucrative investments in the Republic.

As a consequence of the limitation to only a few sectors of investment, such sectors - not least housing - havebecome the object of fierce political struggles in Thika as in so many other towns and cities. The housing sector is alsopolitically sensitive owing to its capacity to provide a conspicuous reflection of social conditions.



2.2.2 Land supply systems

The sites and services policy implies strong intervention in the land market. The land market in Thika differsfrom the general pattern in Kenya in two respects: a) the abundance of public land up to the present day; and, b) theabsence of unauthorized land occupation (including squatting).

The public land supply has dominated the scene because of the large farms acquired by the Government in theprocess of independence. Today, therefore, Thika still has public land reserves, although they are almost exhaustedfor housing. This situation provided Thika with a privileged possibility for organized urban growth and for reducedcost of the land component. Most housing and industry in Thika is constructed on plots planned and allocated by theauthorities with development in private informal subdivisions the exception. The sites and services schemesimplemented since 1968 are all developed on public land.

Three big informal subdivisions were carried out by land-owning co-operatives and companies before 1975.The areas were subdivided according to non-approved plans accommodating a total of 3,000 plots. Individual plots areusually acquired for construction, for the future of the children, or just as a safe investment. Therefore marketing ofplots is fairly limited despite the fact that most plots are vacant. It is characteristic that the idea of plot subdivisions forthe purposes of unauthorized rental housing came to Thika with people who had experience of the speculativedevelopment in Nairobi's Mathare Valley. Since 1982, it has been common practice of land-owning companies to seekauthorization of the plans before subdivision, while they do not usually obtain building permits. The unauthorizedsubdivisions lack provision for and investments in water supplies and other infrastructure. The abundance of plotsdoes not therefore necessarily result in housing development anywhere, but chiefly where water is within closeproximity.



2.2.3 Housing supply systems

PUBLIC HOUSING dominated the supply in Thika until the late 1960s, when it represented over 20 per cent ofthe total stock of rooms. The last public rental schemes were produced in 1975. The share had consequently droppedto around 7 per cent in 1985. After 1969, public housing focused on middle-class, self-contained family housing units,with rents corresponding to the total wage of an industrial worker. Rent increases have been less than wage increases,and today public housing stock is the most attractive in Thika. It should also be mentioned that Council maintenanceis very good compared with the standard in the private sector.

PRIVATE HOUSING includes a wide variety of forms, from publicly aided tenant purchase, mortgage housesand apartment blocks to semi-urban houses on the rural fringes of Thika. Its share has dropped from 25 per cent to 16per cent since 1969.

STAFF HOUSING used to be widespread in industries, schools, hospitals and other public institutions, e.g.,the Police. The share dropped from 22 per cent in 1969 to 7 per cent in 1983.

SQUATTERS(13) do not exist in Thika, although different forms of unapproved (not necessarily illegal) housesdo exist.

INFORMAL HOUSING in Thika consists mainly of the following three categories, all without approvedbuildings or subdivisions and, until recently without proper piped water or roads:

1) Rural-type temporary villages have been built legally (but without formal permits being required) onGovernment land rented for grazing. Although, every year, many houses are constructed, a similarnumber dilapidate and are pulled down. The share of the total stock of rooms has been maintained ataround 2.5 per cent. Renting of rooms is on the increase.

2) The Kianjau Co-operative Society initiated a planned, but unauthorized village of rental housesimmediately outside the pre-1971 boundaries. 450 plots were distributed to the members in 1967, butso far development has only occurred on 170 plots, almost all as substandard mud or wooden rentalblocks. Occasionally densities on the developed plots are very high, in some cases, 75 roomsaccommodating 200 people were fitted onto a 1,000 sq.m. plot. The stock of rooms grew from 336 in1969 to 2,200 in 1978, but then to only 2,500 in 1985. The village named Kiandutu, todayaccommodates 12.5 per cent of the stock of rooms in Thika.

3) New unapproved land subdivisions since Kiandutu have been on a larger scale - 1,500 plots in theKiganjo Ranching Company and in Witeithie with over 1,000 plots, the latter immediately outside themunicipal boundaries. These subdivisions are characterised by a large share of houses constructedin permanent materials. Ex-post approval of the subdivisions has not yet been granted andconstruction of houses has been very slow due to the absence of water supply in both schemes. Asa consequence, rents obtained are less than 50 per cent of the rent in serviced areas. The newsubdivisions accommodate 8.4 per cent of the stock of rooms in Thika.

As a whole, the informal sector grew from 2 per cent in 1967 to 25 per cent in 1978, since which it has remainedat that share. In the years from 1972 to 1978 before Makongeni housing construction had really started, the informalsector was responsible for almost 50 per cent of the supply of new rooms in Thika. Today, the informal sector's shareof all new rooms constructed in Thika is below 20 per cent.


Chapter 2. Sites and services in Thika2.3 Sites and services strategy and projects

In the process of finding ways to reduce public investment in housing for Africans, the then National HousingBoard promoted a so-called 'Vasey-scheme' in Thika in 1951. The project combined allocation of small serviced siteswith loans in the form of building materials. Plots were usually built up for letting of rooms, each plot accommodating5-8 rooms. On bigger plots, the National Housing Corporation promoted the second generation of sites and services in1968, adopting house types explicitly designed for subletting of rooms, built in permanent materials.

Hence, practice in Thika suggested a mode of development quite different from the basic ideas of the sites andservices advocated in Government circles and in the international community, where sites and services was seen as analternative to spontaneous, individual squatting, as a way to provide organised plots for potential squatters. As ameans of providing sites for rental houses, Thika supported the site and strategy strongly, although in its allocationprocedures it favoured people within or with close relation to the Council and the Town Hall.

Testing the possibilities of semi-permanent structures in an experimental scheme proved to be a failure. Theallottees and the Council went ahead with full utilization of the plots to their ultimate capacity, employing onlypermanent materials.


Chapter 2. Sites and services in Thika2.4 Makongeni - 1200 plots in 1971

Plan 3Plan 4

As part of the National Housing Corporation programmes an ambitious project, comprising nearly 1,200 sitesand services plots had been launched as a result of Thika's decision to spend the bulk of its public funds on this typeof housing development. The total project cost was KSh 3.8 million including waterborne sewerage. The differentparties involved in the project, however, had different ideas about the sites and services procedures, beneficiaries andstandards. Government and the international advisers advocated temporary houses of a couple of rooms, built initiallyby the occupants and later improved and extended when resources allowed. Infrastructure was to be very cheap toallow for the lowest income groups, i.e. gravel roads, communal water taps and pit latrines on fairly big plots (300 m2).Plots were to be allocated by ballot to low-income families. Subletting in existing sites and services schemes was seenas a result of an inadequate supply of plots and houses, and not an issue for the future.

The Council saw sites and services as the necessary infrastructure for capable investors, where decentpermanent houses could be developed for renting to people on lower incomes. Showing favour through plot allocationwas a part of the established rights of politicians, who in many cases had very limited sources of income. Pit latrinesand mud houses were seen as a step backwards to standards like those of the rural areas.

These conflicts gradually came into the open. The Government nullified the allocation of plots which had beenconducted in a way that was unacceptable to the Ministry. Disagreements were handled at very high level and took avery long time. Five years later the Government formally ordered a reallocation. In practice, however, in most cases thenew and the original allottees were identical. While some 'brotherization' marked the allocation process, it is importantto stress that a large proportion of the allottees was by no means well-to-do.

During the period of waiting from 1971 to 1976 the Ministry of Health and the Thika Municipal Council revisedthe standards of the infrastructure, constructing water-supply and sewer connections to each plot. Similarly, typedrawings were revised to increase the number of rooms to eight.

The following conditions militated against low-income people developing a house on the plot:

1) Allottees were expected to pay the total cost of water-supply and sewerage before obtaining abuilding permit, a sum which, together with other fees, today comes to KSh 12,000, i.e., a year's salaryfor an industrial worker.

2) Occupancy permits were only to be issued upon completion of all eight rooms in permanentmaterials.

In consequence, some 85 per cent of the plots changed hands before construction started, going to thosedevelopers with adequate funds to invest.

According to the conditions attached to the letter of allocation, the plot could not be sold undeveloped: for aperiod, however, the Government sanctioned plot transfers. When, later, the Government refused to accept suchtransfers, Thika lawyers designed a model-agreement under which the buyer was allowed to build a house on the plotof the seller who would, upon completion of the house, transfer the plot to the buyer against the sale price, of aroundKSh 7,000 in 1976, equivalent to well above KSh 20,000 today. On top of this, official fees had to be added.

Interviews with a number of allottees who sold their plots suggest that the funds were spent on their children'seducation, purchase of rural land and starting up small businesses. In other cases allottees were puppets for influentialpersons (known as 'influentials'). Selling the plot is the result of a combination of the inability to finance theconstruction and the higher priority attached by allottees to important aspects of life other than housing. As aconsequence, Makongeni has now developed, in line with the expectations of the Council, as a private rental housingscheme.

Plan 5


Chapter 2. Sites and services in Thika2.5 Tenant profiles

1985 rent levels of KSh 180-260 per month exclude 20 per cent of the population from even sharing a room inMakongeni with others.(14) Some people are definitely unable to afford the rent, while others are unwilling to givehousing higher priority than children's education, support to the family at home in the rural areas, etc.

Interviews suggested that 77 per cent had access to rural land, or expected to inherit land. About 60 per cent ofthese families lived separated, usually with the husband in Thika and the wife and/or children in the rural home. Withfew exceptions, the tenants are young and in permanent employment or have some other stable income. The locationof Makongeni facing the industrial area has made it the natural housing area for industrial workers. 70 per cent of thehouseholds have at least one person working in the industries located there.

Migration from western Kenya has increased in recent years, and migrants from there constitute 38 per cent ofthe Makongeni tenants (0 per cent of house-owners ).


Chapter 2. Sites and services in Thika2.6 House developer profiles

Except for members of the Co-operative Savings and Credit Union, house-owners do not live in Makongeni.They belong to the higher-income groups in Thika, typically businessmen with shops, farms, transport companies etc.Many are well-to-do farmers living in the neighbouring Kiambu and Murang'a districts, or are businessmen in Nairobi.

The Council, before issuing an occupation permit, demanded a completed eight-roomed house. This factor hasprevented many of the original allottees from building at all, while others have spent many years to completing thefull-size house, instead of completing it ore room at a time and during that time have been unable to occupy it officially.

According to all the developers interviewed, sites and services housing is one of the most attractiveinvestments available today. At 1985 prices, private investment in the 662 eight-room sites and services houses builtbetween 1978 and 1985 has been KSh 100 million with no foreign loans involved. Our computations however, suggestthat initial returns are rather modest, hardly exceeding 10 per cent p.a.(15) Among the major advantages of investment inhousing are the security, the inflation gains, and the limited effort required after the initial promotion of the house. Agradual concentration of ownership has been observed, with many owners holding 2-5 houses, and same even morethan 20 houses.


Chapter 2. Sites and services in Thika2.7 Financing and organization

Developers indicate that the funds for plot acquisition and construction are mostly savings from business orshort term bank loans. Private loans from relatives and funds from land selling also play a role, most loans being repaidafter one to two years. None of the developers interviewed had any outstanding debts. In most cases, the developerbuys the building materials, he employs the labourers and the foreman, he acquires the drawings needed and hesupervises the construction.

The rent level is determined by the services provided e.g. electricity, the size of rooms and the proximity totown. Too high a rent level causes tenant instability and consequent loss of rent. Some landlords find that they canachieve both high rents and tenant stability by responsible maintenance of the property. Rents are either collected byagents or by the owner. A grace period of 2-14 days is observed, much depending on the relationship between tenantand landlord. After this tenants are evicted. Landlords do not advertise vacant rooms, but nonetheless few were foundvacant.


Chapter 2. Sites and services in Thika2.8 Performance of the Makongeni sites and services scheme

2.8.1 The scale of the supply

The efficiency of the planning, surveying and developing of the plots was surprising in view of the limitedadministrative set-up in Thika. Misunderstandings and disputes over allocation procedures and standards ofinfrastructure, however, delayed construction starts by nearly five years, so that 15 years after the completion of thescheme, and 9 years after the final plot allocation, 45 per cent of the plots were still undeveloped.

With big rental houses constructed and 7 to 8 households accommodated per plot, the capacity of the schemehas been far greater than anticipated. The 55 per cent of the plots developed in fact accommodated 660 households peryear since 1978. The corresponding increase in the total number of households in Thika was around 870 per year.(16)

Therefore, the supply of plots has been in excess of the demand for plots for this type of development. Thehigh incidence of undeveloped plots may also be explained partly by slow governmental procedures in issuing lettersof allocation and partly with the difficulties of investing in an eight-roomed stone house to be constructed in oneoperation and not incrementally.



2.8.2 Beneficiaries

The benefits of the scheme vary according to social group. Those directly affected are:

1) Some politicians who obtained or sold plots during the first allocations;

2) The original allottees most of whom sold the plots and invested the money in other ways reflectingtheir real priorities;

3) The developers who acquired the possibility of a secure investment yielding a good return; and

4) The tenants from the middle and lower social groups who were accommodated in a decent roomwith access to basic sanitary facilities;

As for the lowest income groups in Thika, those who could not afford the rents in Makongeni it is not clearwhether the sites and services strategy may actually have worsened their situation in the slums of Kiandutu?

As has already beer shown, the financial gains for landlords are good, but by no means excessive. Makongeniis able to compete with new public construction:

If constructed by the public sector, the cost of building would not be less than KSh 150,000. Repayment over15 years at 12 per cent interest, would bring the monthly rent to KSh 225 excluding water etc.

The tenants are generally satisfied with the well-constructed room and access to sanitation. Many have movedto Makongeni to reduce their rent payments, which in more centrally located sites and services schemes are 50 percent higher. Others find the rent very high by comparison with the attractive public rental housing, constructed inyears of low construction cost and financed with loans at 6.5 per cent interest. Considering the current officialminimum wage of KSh 600 per month, a rent of KSh 200-250 is very high. Many are forced to share a room, others areforced to live in the slum area of Kiandutu.(17)

In Thika, when over 1,000 households were asked how much they were willing and able to pay for betterhousing, 15 per cent indicated that they could or would not pay more than KSh 90 per month, i.e. not even sufficientfor a shared room in a sites and services scheme. The conclusion is clear, that the lower the tenants' social status, theless they receive for each shilling spent on housing.

The evidence does not support the suspicion that the sites and services schemes have aggravated conditionsfor the lowest income groups. The high number of rental rooms constructed has provided an alternative to the slumsfor a large proportion of the wage workers. Without Makongeni, rental slums would have expanded rapidly, and rentlevels would have increased to the disadvantage of the lowest income groups.



2.8.3 Quality of the scheme

HOUSES in Makongeni are well built, and the room height compensates for the heat penetrating the corrugatediron sheet roofs. The courtyard house is basically designed to maximize the number of rooms per plot. However, itrepresents a familiar, almost traditional house pattern known over wide areas of Africa. Its main strength is theprotected internal courtyard, its main weakness, the poor external environment.

Co-operation and neighbour relations are surprisingly good, in spite of persistent myths of tribalism. In fact,landlords select tenants of mixed tribes to prevent organized action. With very few exceptions, the householdsinterviewed indicated many examples of how tenants help each other, e.g. looking after children when somebody issick, lending money for the rent etc. Relations between neighbours are notably worse on those plots where the owneris resident (as in the Kenya Canners Co-operative Union). The energy devoted to ensuring good interaction is mostevident among the young.

There is a lot of movement from plot to plot by tenants trying to find agreeable neighbours, responsiblelandlords, a secure water supply and cheap rent or sometimes, according to the landlords, trying to evade rent arrears.The few people who do stay in Makongeni over 6 years, develop a desire for privacy and a self-contained house.

INFRASTRUCTURE suffers from many problems. Although included in the project finance, streetlighting wasnever installed and this leads to a feeling of insecurity. Water pressure is inadequate over a large part of the area, andthis sometimes leaves people without water for the whole day. The sewerage system suffers from frequent blockages,in particular on plots with irresponsible landlords. Gravel roads are in a miserable condition, difficult to negotiate bythe many mini-taxis linking Makongeni with the town centre, which they nevertheless do efficiently and cheaply.

THE ENVIRONMENT suffers from a lack of concern for street cleaning by municipality, landlords, andinhabitants alike. Garbage bins are paid for but not supplied. Litter is discarded by tenants in the streets where, withinadequate surface water drainage it contributes to the creation of a deplorable environment. Tree planting andplaygrounds are unknown.

The Municipality appears to give higher priority to other housing areas in Thika and those tenants whocollectively keep their courtyards very tidy, do not feel responsible for the external areas. The house types adoptedhave contributed to this problem since they create so many 'waste areas', i.e., the leftovers of the plot outside thecourtyard blocks. This open space between the houses suffers from lack of definition of responsibilities.

With a capacity of 20-30 persons per plot, it is not surprising to find an active life in the streets, not least afterworking hours, when many people assemble outside the gates of the courtyards and watch others promenading.Despite the Council's intention to concentrate business activities in a walled market, a fair number of informal bars andshops have appeared in the streets, providing facilities for buying essential commodities at a convenient distance fromthe house and, at the same time, offering some additional income-generating opportunities.



2.8.4 Institutional performance

On the implementation side, Thika has done very well with limited manpower. The simple layout and the fewhouse options, facilitated control during the construction phase. Thika has been able to implement new phases ofMakongeni with modified house types without external assistance, but maintenance of the rapidly increasing housingareas is a serious institutional problem in Thika, as elsewhere.

The problem of FINANCIAL. MANAGEMENT is resolved in Thika by simply demanding the entire cost of theservices paid in a lump sum, before the building permit is issued, a practice introduced following disastrousmanagement in the early 1970s. In view of the fact that developers have access to funds and that the infrastructureonly represents 8 per cent of the total cost, this system is acceptable. It is particularly appropriate in Thika where thelimitations of the existing administrative capacity virtually exclude alternatives requiring a greater administrative input.It does, however, exclude the possibility of low and middle income groups developing the plots.

MANAGEMENT AND MAINTENANCE OF INFRASTRUCTURE AND SERVICES have been the most seriousinstitutional problem. It is a problem of manpower, organization, equipment and funds. What might have beenorganised at community level among the inhabitants has failed to materialise, owing to the serious lack of communityworkers. The institutions to handle these problems have not been expanded significantly over the past 15 years,despite an increase in population from 24,000 to 55,000. At a conservative estimate, another 60,000 people will beadded during the coming 15 years.


Chapter 2. Sites and services in Thika2.9 Wider impacts

Sites and services schemes in Thika have made a considerable contribution to over-all housing production. Of13,000 rooms - in most cases each accommodating one household - constructed between 1969 and 1983, 50 per centwere in sites and services schemes. Since 1978, sites and services has provided 70 per cent of all new rooms and todaynearly 50 per cent of the population lives in sites and services schemes. Since 1978, the Makongeni sites and servicesscheme has accommodated 700 rooms annually, housing an average of 660 new households. In the same period, bycomparison, the average annual increase in households for Thika was 866 from 1978 to 1985.(18)

The share of the population unable to pay the rent in sites and services schemes, however, is growing fast.Therefore, the informal sector will continue to expand until a realistic alternative is provided. The sites and servicesstrategy has reduced the growth of informal housing but has not stopped it.

Thika provided important lessons in the early 1970s, before the World Bank-financed sites and servicesprojects started. Some lessons influenced government policies and the design of the Dandora scheme. Firstly, the plotallocation procedures were changed, to ensure impartial allocation to low-income people, which had failed in Thika.Secondly, the standards were revised to provide each plot with an ablution block before allocation. Thirdly, theallottees were given an adequate loan to build at least one room.

With the boom in sites and services schemes, formal construction activity in Thika tripled. It is worth notingthat 50 per cent of informal construction after 1978 was in permanent materials of a standard very similar to that of thesites and services houses. The building activity boosted the local economy. It is estimated that not less than 70 percent of the investment generated local employment in producing building materials (local stone, timber, doors,windows, etc.) and in the construction sector itself. Similarly, skills were developed locally. Of the remaining 30 percent, a major share consist of 'imports' from Nairobi, e.g. sanitary-ware, electrical fittings, glass and roofing sheets. Theneed for imported funds, skills and materials has been relatively small.

Figure 2

The predominance of renting and the low incidence of owner-occupancy is fundamentally rooted in thesocio-economic, cultural and political reality of Kenya. In this respect it differs from e.g. Latin America, from wheremuch of the experience applied by international agencies was drawn. Rental housing is least pronounced in the coastalregion and fully developed in the central parts of Kenya, and commercialization is a trend in all parts of East Africa.The development of private rental housing in the projects studied is not the result of poor implementation or weakenforcement. Indeed, insisting on home owner-occupancy for low-income families is futile and hardly worth the effort.Benefits have accrued to councillors who were in many cases paid by the allottees, to the allottees selling ordeveloping the plots, and to landlords constructing rental housing. There were low income earners among thebeneficiaries, but few. To the low income groups the main benefit is the increased provision of affordable rooms torent, as an alternative to the low standard slums. The lowest income groups, from the 20th percentile and below, didnot benefit in any way from the Makongeni project.

The questions still remain whether the emphasis on sites and services schemes actually made things worse forthe lowest income groups, and whether funds which might have benefited the poorest, were diverted from otherhousing options? In theory, public rental housing could have been produced at rents competitive with those in theslums, as demonstrated in an experimental scheme. However, the Council's insistence on 'decent' standards excludedthe possibility of reaching the poor in that way. In fact, for the lowest income group in Kenya, no realistic alternativesexisted at that time, nor has any yet emerged.


Chapter 3. Sites and services in Nairobi3.1 Nairobi

Plan 6

Nairobi was established in its present location as a tented camp at the foothills of the Aberdare mountains. Theinitial function of the early settlement was as a transfer station, railway workshops etc. during the construction of theMombasa-Kampala railway, which reached the site in the year 1900. When the colonial administration, followed by agreat number of Indian traders, moved from Mombasa, Nairobi soon grew in importance and became the main service,trading and industrial centre in Kenya.

The first town boundary was drawn in 1900 and extended in 1929, in 1948 and finally in 1964. Nairobi acquiredcity status in 1948 after which it was governed by a city council. The first comprehensive development plan wasprepared at that time. Apart from extending the town boundaries, however, the plan was not very successful, mainlybecause of the mounting unrest leading up to the Emergency and subsequent independence.(19)

The ethnic and social composition of the Nairobi population under colonial rule was characterized by an upperclass of Europeans, a middle class of Indian traders and clerks and a working class of Africans. The three groups weresegregated, which was reflected in the spatial organization and location of the residential areas. The low densityEuropean residential areas were located to the west and north-west of the city centre in the hilly fertile land, themedium-density, Indian residential areas were located to the north-east, and the African quarters were located to theeast on the dry plains. Under colonial rule, however, African in-migration was prohibited in Nairobi. Only domesticservants and public civil servants e.g., those employed by the railway corporation and the post office and wereallowed in the city.

After independence the social and ethnic composition of the Nairobi population changed as it did in thecountry as a whole. While the total population increased from 8.6 million in 1962 to 15.3 million in 1979, the Asianpopulation dropped from 176,000 to 78,000 in the same period and the European population dropped from 55,000 to39,000. In 1979, half the European and Asian population lived in Nairobi (Statistical Abstract, 1982).

Since then, a small African upper and middle class have grown and settled in the low and medium-density areaspreviously reserved for the European and Asian community. With the lifting of the ban on African in-migration intoNairobi in 1960, the population increased dramatically, the migrants being attracted by job opportunities. The highurban population growth rates put tremendous pressure on the housing market and provision of land.

In the National Development Plan 1970 -1974 the total need for urban housing was estimated at more than10,000 units, of which Nairobi needed 5,880 in the plan period. In the 1974 -1978 plan the need had increased to morethan 68,000 in total and 35,000 units in Nairobi. The 1979-1983 plan estimated the need at approximately 75,000 units intotal and more than 40,000 units in Nairobi. Current formal housing production only caters for some 20 per cent of newhouseholds.

Prior to the initiation of the Dandora scheme, the Nairobi Urban Study Group estimated, that in 1971 there wereapproximately 75,000 housing units in the old city area. Of these, 53,000 were approved and 22,000 unapproved. Ingeneral, the unapproved units were inadequately serviced and lacked proper roads, sanitation, lighting and watersupply. Many of the 53,000 approved units were aging, one-roomed City Council and East African Community unitswhich were also inadequately serviced.

Nairobi's annual population increase at that time was estimated to be 7.4 per cent p.a. while the stock ofapproved housing only increased by 1.5 percent annually from 1962 to 1971 and most of the increase was in high andmiddle-income housing. In consequence, informal, unauthorized developments mushroomed in Mathare Valley, Kiberaand Korogocho.

Plan 7


Chapter 3. Sites and services in Nairobi3.2 Land and housing supply systems in Nairobi

Land supply systems3.2.1 Public land supply

The Government has played an important role in the acquisition and provision of land for low-income housing.Within the City boundaries today a considerable amount of land is available in the eastern extension areas of Dandora,Doonholm and Ruaraka, most of which has been acquired by the Government. Most of this land has been reserved forlow-income housing purposes.



Land supply systems3.2.2 Private land supply

Private landowners supply land in two distinct areas. High class housing areas develop on fertile land to thewest, expanding into coffee plantations. The number of plots subdivided on private land is very high.

On the northern fringe of Nairobi and mainly outside the boundary, many privately owned estates have beenacquired by companies or co-operatives for subdivision. This activity has been encouraged in recent years, andconstitutes the chief supply of land today. Subdivisions are usually approved but not always for housingdevelopment.



Land supply systems3.2.3 Informal land supply

In contrast to Thika, Nairobi experienced many violations of private property rights, notably through squattingin Mathare Valley. By 1970 this mode of land occupation was only found occasionally, for example, along the NairobiRiver.

Large tracts of public land or land with no clearly defined ownership and user rights, were occupied, bought orallocated through various informal authorization procedures. None of these subdivisions and settlements involvedofficial plans, although unapproved plans in many cases have guided the development. This type of land supply hasundoubtedly accommodated the biggest proportion of the population growth in Nairobi in the past 15 years.



Housing supply systems3.2.4 Public housing supply

Two public authorities are responsible for the provision of housing. One is the Ministry of Housing underwhich the excuting agency, the National Housing Corporation, operates. The N.H.C. is responsible for the provision oflow and medium-income housing and sites and services plots.

The other, the Ministry of Works, Housing and Physical Planning, is the co-ordinating agency developing pooland staff housing for Government employees. The units are for rental, but government policy is to move away fromproviding staff housing and leave development to other sectors.

RENTAL HOUSING was supposed to cater primarily for the low-income population groups. The supply ofrental units has not, however, been sufficient, and a tendency for middle-income families to occupy units intended forthe low-income groups is common.

TENANT PURCHASE HOUSING is provided either by the National Housing Corporation or semi-privateagencies such as the Housing Finance Corporation of Kenya. After a period of repayment on a rental basis of 15 to 20years, the allottee becomes the owner of the house. However, tenant purchase housing has only been developed inlimited numbers.

SITES AND SERVICES SCHEMES are mixed public and private projects, the public sector developing theserviced sites and private individuals erecting the housing units. The sites and services schemes are designed to caterfor the low-income population. In the 1970-1974 Development Plan, sites and services schemes were planned to meet43 per cent of all demand in Nairobi.(20) In the 1974-1978 Plan, this was increased to 56 per cent.(21) In the 1984-1988Development Plan, sites and services units planned for Nairobi constituted 80 per cent of total planned output.(22) Alarge proportion of the population cannot afford the cost of a rented room in a sites and services scheme(23) and has noother option than sub-standard accommodation in the informal sector.



Housing supply systems3.2.5 Private formal housing sector

The private formal sector develops mortgage-finance based housing primarily for the high-income groups.Private developers, however, also develop blocks of rental units financed through commercial banking institutions.



Housing supply systems3.2.6 Informal housing sector

Informal housing constitutes the major share of development. The informal housing sector includes squatterswho illegally occupy land next to shacks developed by companies or individual tycoons. This development ismushrooming in Mathare Valley, Kibera and in Korogocho adjacent to Dandora.

In recent years, higher standard informal development has taken place on private land on the fringe of the Cityboundaries. The units are constructed in permanent materials, but the developments lack basic infrastructure andcommunity facilities. They cater for people of higher income who have no alternative, but who do have sufficientfinance to pay for higher standard units.


Chapter 3. Sites and services in Nairobi3.3 Sites and services strategy and projects in Nairobi

From the 1920s onwards, various forms of sites and services schemes have been constructed (e.g. Pumwani).The 1950s policy of stabilizing the urban population was crystallized into genuine sites and services projects followingthe recommendations of the Vasey Report (1950): "the means of creating a permanent... urban native community, withits own sense of responsibility and communal pride exists - they should be used, but cannot effectively be taken in,unless the fundamental unit of association and community is materially created in bricks and mortar..."

In the 1960s, the serviced plot projects were revived under the name sites and services schemes. Uhuru andKariobangi are examples of this approach, the latter adopting shared shower and toilet blocks. The two schemesperformed very well in terms of cost of housing and target group but the authorities were not very happy with the lowstandard of housing resulting from sites and services schemes.(24)

Therefore, until 1975, despite government policies and National Housing Corporation programmes explicitlyadvocating sites and services schemes,(25) the number of sites and services plots developed in Nairobi was so low thatthey were of limited importance in meeting the need. The City Council demolished a number of squatter settlements inthe 1960s and the beginning of the 1970s and maintained in Council housing a standard of "decent homes" ofself-contained family housing units of at least two rooms, kitchen, bath and toilet, as advocated in the NationalDevelopment Plan.

Foreign advisers to the Nairobi City Council, the Metropolitan Urban Study Group, demonstrated theinappropriateness of current City policies towards informal housing development. As part of a broader developmentstrategy they supported adoption of the Government's policy in Nairobi, proposing a shift to low-income housingprogrammes such as sites and services, and squatter settlement upgrading schemes. This policy was approved in1972. The objectives of the policy were broadly as follows:

To test the suitability of the sites and services and the squatter settlements upgrading approach for meetingthe housing needs of the low-income population;

To improve employment potentials in the building industry;

To improve health conditions and raise living standards for the urban poor;

Through more efficient planning and implementation, to help households increase their savings;

To provide Government with the possibility of reducing the cost of services and housing units, and therebyof reaching larger numbers of the urban poor;

To improve the capacity of Government institutions in order to increase the number of units in sites andservices and upgrading schemes.

In addition, the programme was supposed to demonstrate the extent to which self-help could be relied upon toreduce the cost of housing units.


Chapter 3. Sites and services in Nairobi3.4 Dandora

Plan 8Plan 9

The Dandora project was initiated to test the legitimacy of the sites and services strategy in providing low-costshelter for low-income households. The philosophy was to combine public investment in land and infrastructure withmobilization of the savings and labour of the individual family. Self-help housing was on the agenda of theinternational agencies, with much inspiration from Latin America.

In Nairobi, unemployment, inadequate incomes and a severe shortage of low-cost housing to cope withpost-independence population growth and migration had resulted in the flourishing of squatter settlements andvarious forms of informal rental slums.

By 1974, neither the formal private sector nor the public sector could meet more than a fraction of the need forhousing accessible to low-income people. The public sector catered for 10 per cent of the annual need, the formalprivate sector produced nothing for low-income people.

In any case, one third of the population could not afford the cheapest public rental housing, even if they hadaccess to it.



3.4.1 Project components

In 1974, contact was established between the Nairobi City Council and the World Bank, to negotiate supportfor implementation of this policy.

As part of the World Bank's recently initiated focus on urbanization and housing, the Bank agreed to provide aloan for a project on an unprecedented scale comprising the following elements:

6,000 plots demarcated and provided with wet cores (toilet and shower);

A materials loan fund to purchase sufficient building materials for self-help construction of one room;

Community facilities, i.e. 6 primary schools, 2 health centres, 2 multi-purpose community centres, 1 sportscomplex, 400 market stalls and a workshop cluster;

Trunk infrastructure, i.e. sewers, stabilization ponds, drains, access roads and street lighting; and

Technical assistance to the plot holders.

In addition to these components, a Municipal Finance Study was to be included together with support for aHousing Operations Unit for the City Council, systematic monitoring of the project, development of a pilotdemonstration project and a survey of nutrition needs.


Chapter 3. Sites and services in Nairobi3.4 Dandora3.4.2 Finance

The total project was estimated to cost US $ 29.52 million, the World Bank/IDA providing US $ 16 million as aloan, the remainder to be allocated by the Kenya Government.

A fundamental aspect of the World Bank strategy was the idea of demonstration projects, which were to bereplicable without ongoing foreign support in manpower or finance. The project was to provide lessons leading tochanges of attitudes and policies towards sites and services and slum upgrading programmes.(26) Revolving funds wereto provide continued inputs into future projects. After completion of the demonstration project, the institutionscreated were to become a permanent part of the City Council administration.

The Bank considered full recovery of funds invested without any element of subsidy to be crucial. This is partof the reason why the lowest 20 per cent on the income-scale was excluded from the target group, since it was believedthat they were incapable of both constructing the houses and repaying their loans. So the conventional affordabilitycriteria were applied mechanically in this case.

The Kenyan Government was the principal borrower of the necessary funds from IBRD and IDA. TheGovernment then lent to the City Council of Nairobi at an interest rate of 8.5 per cent over 25 years with a four yeargrace period. The City Council was supposed to bear the costs of infrastructure and these were eventually berecovered through utility charges, user fees, property rates, and servicing costs.

From the lot holders the following costs were recovered; 90% of costs of site preparation, 50% of costs ofon-site infrastructure; 100% of costs of core units and building materials loans; and 100% of design and engineeringfees associated with these items. Land was allocated by the Government, for which a very small land rent was charged.The brake-down of the monthly charges for a typical unit on a 120 sq.m. plot is shown below according to the originalestimates. It should be noted that the total monthly payment after five years is much below the rental income of asingle room, which, already by 1977 had reached KSh 200-250 per month.(27)

Table 4



3.4.3 Technical aspects

The standards were kept low to limit monthly charges. This became a major point of dispute between projectdesigners and the Bank on the one hand and the NCC on the other.

By African standards, plot sizes were reduced considerably from the common 250-450 sq.m. to only 100-160sq.m, with the aims of: 1) reducing infrastructure costs; and 2) limiting the maximum possible number of rooms per plotto five or six. Roads were constructed in murram and drains were open.

A considerable number of layout options were made available to developers, most of them very suitable forsubletting. Some of the standard plans are illustrated in plan 9.



3.4.4 Institutional arrangements for implementation

A new unit, the Housing Development Department (HDD) was created to assume responsibility for projectimplementation, answerable to a Housing Committee composed of members from the Ministry of Local Government,Ministry of Finance and Planning and the National Housing Corporation, with the Nairobi Town Clerk as secretary.



3.4.5 Allocation procedures

The procedures for allocation proposed by the project unit were to depend upon an impartial computerizedballotting. Thus the usual 'right' of the Council to select beneficiaries was rejected, although a serious struggle tookplace on this point.

Some people of middle and upper income appear to have penetrated the upper limit for allottees, but as a rulethe plot allocation in phase 1 reached the target group. Monitoring studies suggested that many people understatedtheir incomes in order to be eligible.

A small sample of 53 households studied,(28) suggests that 45 per cent of the allottees were within the targetgroup. Before coming to Dandora, the majority of allottees lived in informal settlements, e.g. Kibera, Kawangware andMathare Valley. Later phases of Dandora allocations show a higher degree of penetration of the higher income groups.The subsequent bias in allocations was caused by a variety of factors. In 1980, the Nairobi City Councillors, amongothers, began interfering with plot allocations. Firstly, allottees who were in arrears (the normal limit being six months)had their plots repossessed and sold on to individuals in league with councillors and others. These actionscontributed to the Government decision to dissolve the Nairobi City Council and to appoint a Commission to overseethe operations of City Hall. Secondly, delays in plot allocation resulted in increased building materials and labourcosts, compelling many to sell off their undeveloped plots.



3.4.6 Land tenure

The Kenya Government was to retain ownership of the land, providing all allottees with 50 year renewableleases. If plot-holders wanted to transfer or sell their plots, the Nairobi City Council was supposed to mediate and paycompensation to the plot owner for investments such as building materials and imputed labour costs. Plots would bereallocated by the NCC at prices covering all costs.



3.4.7 Target group

The project was explicitly concerned with people with a stable residence in Nairobi and an income of betweenKSh 280 and 650. Applicants who already owned a house were not eligible. In an attempt to match incomes to costs,three plot options were available.

In computing affordability, the income limit of the target group was lowered by permitting subletting. Theproject systematically introduced subletting as an income-generating practice to the benefit of the allottees. Tofacilitate this, others were consequently supposed to pay for rooms at market rents. 65 per cent of the plots werecross-subsidized by the sale of 300 plots (i.e. 5 per cent of the total) at market prices, thus lowering the cost of theformer by some 20 per cent. Concern with the lowest income groups was expressed in the loan conditions, whichcommitted the NCC to refraining from demolition of informal housing and to preventing further informal development.



3.4.8 Selling the plots

Many allottees preferred to sell the plots to obtain money for other higher priority purposes than housing, e.g.buying rural land or starting a business. Type A plots without any investment by the allottee, initially fetched KSh15,000, but today prices are approaching 50,000. Monitoring studies confirm that plots are sold - a fact which is evidentfrom newspaper advertisements - but the extent has not yet been investigated. It is clear, however, that selling ofundeveloped plots is far less common than in the case of Thika. Plots are sold at free market prices and not throughthe procedures demanded by the HDD.



3.4.9 Subletting

While the project had assumed that by the end of five years, the households.".. will have consolidated enoughto allow at least one room for subletting...",(29) it was soon discovered that many allottees were living elsewhere. Evenwhere the allottee lived on the site, instead of the letting of one room, it was found that a majority of the rooms werebeing let.(30) In 1979, MEDIS Vol.8 reported that 50 per cent of the allottees were not living on the plot. On plots wherethe allottees actually lived, subletting was recorded in 79 per cent of the cases. In a sample survey in 1983, 96% of thehouse owners sublet rooms on their plot.(31a) In 1980, two thirds of the population were renters. This figure has certainlynot decreased over the last five years. Dandora became a one household per room housing scheme just likeMakongeni in Thika and all previous sites and services schemes. Consolidation was very rapid, full capacity beingreached after only a few years, due mainly to the profitability of investment in rooms for renting and the growinghousing shortage.


Chapter 3. Sites and services in Nairobi3.5 House owner profiles

Whilst, in the first phase, allocation appears to have reached the target group, in the later phases, the tendencyhas been for the plot owners to have an income above that of the target group.

Several factors may be responsible for the change, including: 1) Allocations were delayed and the cost ofmaterials and labour rose in the meantime, while wage incomes did not increase at the same rate; 2) there was politicalintervention and corruption in allocation procedures which were not supervised by the World Bank in the laterphases; 3) reselling of plots allocated to people within the target group took place, due to shifts in priorities, such asinvesting in children's education, business or the purchase of land in their rural homesteads.

The allottees who have built and rented their units have done well economically. A study carried out by theMazingira Institute in 1983 showed that rent provided 47 per cent of the household income of the allottee. In example,the allottees of the smaller units (type A) had an average monthly income from subletting of KSh 788, compared withall other incomes totalling KSh 767.(31b)


Chapter 3. Sites and services in Nairobi3.6 Tenant profiles

Most tenants have higher incomes than the landlords who are within the original target group. It appears thatas rent increases in other parts of the town, people move to lower-income housing units, such as Dandora to allow forother needs. As pressure an rented accommodation in Dandora increases, a number of allottees are moving fromDandora to "less good quality housing"(31c) A spot survey confirmed a similar trend in phase 2 and suggested thatmany of the allottees have moved to informal housing areas.(32) Only a few of the higher income "penetrators" live inDandora.

Most of the tenants work either in the nearby industrial areas or in the city centre. They generally have a stableincome from wage employment. Unlike owner-occupiers, the tenants do not operate informal business activities on theplots, not least because the landlords do not encourage such activities.


Chapter 3. Sites and services in Nairobi3.7 Project organization and house construction

3.7.1 Project organization

The HOUSING DEVELOPMENT DEPARTMENT is responsible for the over-all supervision and management ofthe Dandora project. The FINANCE DIVISION is responsible for keeping project accounts and collecting plot charges,rates and materials-loan instalments.

The COMMUNITY DEVELOPMENT DEPARTMENT is responsible for the allocation of plots and informationto allottees prior to plot occupation. The department also liaises with the Finance Division on the revolving welfarefund as well as assisting tenants and allottees when plots are likely to be repossessed for rent arrears.


Chapter 3. Sites and services in Nairobi3.7 Project organization and house construction

3.7.2 Construction of houses

The allottees are responsible for constructing their own housing units. The materials loans are only supposedto be seed capital to finance two rooms. Most allottees in both areas 1 and 2 have been able to mobilize funds fromsavings, wages, rent, private loans and gifts, in order to complete the construction of the four rooms allowed - in somecases ever more.

Some allottees in wage employment have been able to borrow money from co-operatives at an average interestrate of 12 per cent, which is lower than commercial bank loans. As indicated by a recent study of finance in theDandora scheme by the Mazingira Institute, 47 per cent obtained financial resources through loans from the CityCouncil, friends and relatives, employers or banks. Almost 45 per cent obtained finance from savings through wages,family business or rents, and 7.5 percent of the finance was obtained through gifts.

Under the supervision of the Housing Development Department, lower-income groups have formed buildinggroups, in which they save money to develop two rooms on each member's plot. The very poor allottees who are notable to join the building groups can borrow money from a REVOLVING WELFARE FUND. These allottees repay theloans at an interest rate of 8.5 per cent when they start collecting rents.


Chapter 3. Sites and services in Nairobi3.8 The performance of Dandora

According to the plans, the 6,000 units should have been completed in the period 1974-78. Construction ofhouses did not start until 1977/78 and still by 1980 less than 1,000 units had been constructed. The issues causing thedelays are officially referred to as "governmental and administrative weaknesses", and "halfhearted acceptance by thecity council of the principles involved", main the principles of impartial plot allocation.(33) The process has so far takenten years as opposed to the five years originally intended.

Individual developers have completed the houses at an impressive speed and to their full size. By the end of1982, 98 per cent of the 954 plots in phase 1 had been developed with two or more rooms on each plot, and phase 2was consolidating even quicker.(34) Possible reasons for the remarkable speed of implementation in phase 2 are:

Disbursements of the materials loans were made in full, instead of in instalments based on the level ofdevelopment on the plot. The loans were disbursed in full in order to beat the December deadline, which wasthe time for project completion.

A building materials store had been established on the site, thus giving the allottees easy access to thematerials.

The higher -income groups who managed to penetrate the scheme, had easier access to funds and thereforebuilt as soon as plots were acquired.



3.8.1 Institutional performance

The Housing Development Department (HDD) was established specifically to execute first the Dandora schemeand, later, other similar schemes in Nairobi, including the upgrading of informal housing.

In reviewing experience to date, it appears that DANDORA has achieved many of its objectives, despite manyconstraints. It may be that in terms of size and expectations, the project was on too big a scale and too ambitious forthe skill levels, implementing capacity, and prior experience of financing. A simpler initial project with fewer plots andfewer components might have given the local staff involved in the project execution a better chance of learning bydoing. The technical division suffered from shortages of manpower resulting in supervision which was not alwaysadequate. Slow approval procedures led to delays in construction. Many allottees built extra rooms with no orimproper permission. In reality, control on the development of business on or adjacent to the plots was abandoned.



3.8.2 Housing standards

The quality of construction is impressive. Not only the use of the low cost and high quality stone mostly cut innearby quarries, but the craftsmanship is better than one may hope for in any public or private scheme developed byexperienced contractors. The main reason for this is the close supervision by the individual plot owner and developer.Dandora represented an improvement in technical standard to many inhabitants; 36% came from a mud-and-wattlehouse. Buildings and interior courtyards are welt maintained in sharp contrast to the public open space, the roads andthe drains.

The majority occupy one room only, and few owners and tenants occupy more than two rooms. Even amongthe resident owners the 86 per cent occupy a single habitable room only (85% did that before moving to Dandora). Thekitchen is in most cases used for habitation; 22 per cent of the owners live in the kitchen with no other room available.(35)


Chapter 3. Sites and services in Nairobi3.9 Wider impacts

The Dandora project had a big impact on consolidating the emphasis on sites and services strategy in housingpolicy. The project influenced the design of many schemes following Dandora. The experience gained was utilized inthe preparation of the Second Urban Project, in Kisumu, Mombasa, and in Nairobi (Kayole and Umoja). The experiencetransferred, however, mostly relates to technical issues in relation to plot sizes, service provision and finance.

Compared to pre-1975 performance, Dandora represented a major change in terms of project size in Nairobi.Formation of the Housing Development Department responsible for project supervision and assistance to buildinggroups, allottees and tenants marked a definite improvement over the previous situation.

The need for housing in Nairobi between 1974 and 1983 was estimated to 75,000 units (p.49) which correspondsto about 90,000 units in the period 1977 - 86. In the ten years from 1977 to 1986, at a high estimate, Dandora hasaccommodated 12,000 households, i.e. 13% of total needs. The 20 per cent of the population with the lowest incomesdid not benefit, for the simple reasons that a) they were not eligible for allocation, unjustifiably being consideredunable to afford loan repayments;(36) and b) because, as tenants, they could not afford the rents charged by thelandlords. The only alternative for this group and for many more in the income groups above, is renting a room insubstandard informal shacks in the Mathare Valley, Kibera or Korogocho areas.

One major aim of the Dandora project was to provide home ownership for the majority of the populationincrease in the target group, but that the house owners would accommodate some renters. Approximately 25 per centof the households living in Dandora are owner-occupier households, and the 75 per cent are renters. The number ofowner-occupier households in Dandora is around 2,500 or close to 3 per cent of the increase in the number ofhouseholds in Nairobi, in the period 1977 - 86. In that period, very few other schemes were completed for the targetgroup in question. It was with surprise that the authors of the MEDIS reports discovered the high and increasingshare of plotholders subletting, from 35 per cent in 1977, to 41 per cent in 1978, 66 per cent in 1978, until, in 1983, theMazingira study found that 96 per cent of the house owners were subletting rooms. Thus, there is no doubt thatDandora favoured landlordism.

Although the majority of the tenants improved their housing conditions in terms of infrastructure, watersupply, building quality and proximity to public services such as education, according to MEDIS Vol. 7, the higherrents and increased transportation cost have worsened their living conditions in other areas such as nutrition.


Chapter 4. The performance of sites and services schemes

Facilitating self-build housing for the low-income population by providing plots and infrastructure, is not newin Kenya. Since the 1920s such projects have been implemented under different labels.

Since the mid-1960s and particularly after 1970, a significant contribution to housing production was achievedunder the name of sites and services schemes. Four consecutive five-year Development Plans spelt out the focus onsites and services as a means of providing housing for the poor, and preventing unauthorized housing construction.With a point of departure in the recommendations of a UN-mission to Kenya on housing (Bloomberg and Abrams) in1965, Kenya, immediately after Independence, seriously related Government housing policy to people's incomes.

Sites and services plots were intended to accommodate low-standard single-family units, in some cases usingpit latrines on fairly big plots. Plot owners were to provide a substantial share of the labour input required to constructtheir houses. The legal basis for these reduced standards existed in the so-called Grade II by-laws. By the early 1970s,when the first of the two projects in this study was being prepared, sites and services were contributing an increasingnumber of units.

From 1970 to 72, the number of sites and services plots completed in all towns reached 3,734 as against 6,114publicly built houses.(37) It should be noted that 54 per cent of these sites and services plots were competed in Nairobiand 33 per cent in Thika, far greater than their share of total urban growth over this period.(38) Nevertheless, the 650plots per year provided in Nairobi fell far short of the need to accommodate 7,000 families annually.

The significance of these projects lies in their attempt to meet this need, both in quantity and in cost, first inThika from 1970, by producing sufficient plots to accommodate 60 per cent of the population increase, and after 1975 inNairobi, with a target of 25 per cent of the need over a five-year period.


Chapter 4. The performance of sites and services schemesSummary of performance

DandoraO bjectives or evaluative criteria Performance

Provision of 6,000 plots with infrastructure, wet coresand materials loans, over the period 1974 - 78.

As planned, but delay in allocation and development over a much building longerperiod than anticipated.

Allottees to construct houses for owner-occupancywith some subletting.

50 per cent of allottees do not live on the plot. 75 per cent of households arerenters.

Accommodate 25 per cent of needs of target groupfrom 1974 to 1978 i.e. 7.5 per cent of total needs in

Nairobi.Accommodated 13 per cent of total needs in the period 1976-86.

Regulating housing development. T oo small to have an effect on informal housing construction. Attractedinformal housing in adjacent area.

Low-income households to develop houses.Rent income from one room sufficient to pay all charges. 4 year grace period on

building materials loans. T hus even allottee households with very low incomeshave a net income.

Affordability of rents for low-income households. Rents of rooms high. Renters have higher incomes than owners. Householdsbelow 30th percentile cannot afford the rent.

Standard of buildings HighStandard of environment. Poor.

Recovery of loans. Increasingly difficult.


Chapter 4. The performance of sites and services schemesSummary of performance

MakongeniO bjectives or evaluative criteria Performance

Provision of 1,200 plots with communal water taps,gravel roads and pit latrines.

As planned, but delay in allocation and development over a much longerperiod than anticipated. Water borne sewerage introduced.

Allottees to construct houses for owner-occupancy withsome subletting. Almost 100 per cent sublet. Very few owners live in the area.

Accommodate 50 per cent of total increase in numberof households from 1970 to 1974.

Accomodated 50 per cent of total needs in the period 1969-83, and 70 percent after 1978.

Regulating housing development. Informal development reduced significantly.

Low-income households to develop houses. None, except in the Kenya Canners Cooperative Union. Low income plotallottees sold plots.

Affordability of rents for low-income households. Rents affordable from the 20th income percentile of income groups andabove. Rooms often shared.

Standard of buildings HighStandard of environment. Poor.

Recovery of loans. Good.


Chapter 4. The performance of sites and services schemes4.1 The target group

In the period up to 1974, it was a fundamental idea of sites and services projects that they should accommodatethe poorest groups, with no lower income limit for allottees. The Government proposed sites and services for thelowest one third of the income groups. Makongeni was conceived in 1970 to fall within these parameters. Informaldevelopment was still interpreted as squatting, i.e. individual house builders, despite the fact that informal housingand land supply had already been commercialised by 1970.

Under the influence of the World Bank, after 1974, factors related to ability to build, and more importantly to theBank's ability to recover the loans, led to the lowest 20 per cent of the income groups being considered ineligible forallocation of plots in Dandora. However, at least in phase 1, strict monitoring of an upper limit at the 40th percentilewas maintained. In the Dandora project, affordability and access for low-income families were greatly enhanced bybuilding loans, cross-subsidization and incentives to sublet.



4.1.2 Allocation

The projects at Makongeni and Dandora generated a fierce struggle between the Government, which insistedon impartial allocation to the target group, and the local councils fighting for their established practice of obtainingpolitical or economic benefits through the distribution of plots.

In Thika, the Government nullified the allocations after three years of struggle, arguing that improperprocedures had been adopted, resulting in plots being allocated to existing property owners, and to manynon-residents of Thika. While reallocation was carried out formally, in reality, most of the former allottees were alsoconsidered for the new allocations. Nevertheless, in Thika few allottees had sufficient means to develop the plotsaccording to the Town Hall's requirements, and most plots ended up in the hands of well-off people.

The lessons of Thika were well known to the Government and to the planners who launched the Dandoraproject. Procedures were therefore changed and strictly controlled by the World Bank. This radical interventionagainst the established 'rights' of the city councillors to distribute plots caused severe political conflicts, at timesthreatening the very continuation of the project. Strict control was exercised by special institutions, including theHousing Development Department, developed to cater for Dandora as their first task. Evaluations of Dandora phase 1(16 per cent of the total) suggest that 50 per cent of the allottees in fact belong to the designated target group. Laterallocations, however, are believed to have a bias towards higher income groups, as a result of various forms ofintervention by influential people.

It is worth quoting at length from a Government report on Bye-Laws for Low-Cost Housing to illustrate some ofthe fundamental issues experienced in these two projects:(39)

"The most significant aspect of corruption in low-cost housing is the question of allocation of plots... Usually whensites and services plots are advertised the influentials (Councillors, MPs, businessmen/women, civil servants etc.)find poor relatives and/or friends who qualify for allocation. These usually get allocated plots. Soon after theperson allocated then goes to a lawyer with the influential where they enter a legal contract transferring the plot tothe influential or to his friends...

Not all influentials who get plots this way keep them. They sell them to others through legal contracts again.Very good money is being made in the towns by selling these plots".



4.1.3 Social and economic benefits

In both schemes, the inhabitants have experienced unquestionable improvements in habitat conditions, ascompared with their previous living places. Economically, however, the tenants pay a high cost for the rooms rented.To the allottees, the empty, serviced plot represents a value which far exceeds its cost of provision, a value which canbe capitalized through selling or development. In Dandora, in addition, loans on very reasonable repayment terms,further contribute to the good fortune of the allottee.

In Thika, the majority of allottees have only benefited by selling the plots, at prices in excess of the annualwage of an industrial worker. In Dandora, although some allottees have sold their plots, in phase 1, they represent amuch lower proportion of the total.

In Dandora, in contrast to Makongeni, the benefit obtained through renting of rooms, therefore, accrues tomany low-income families. The rental income from a single room in Dandora approaches KSh 400 (1987), that is threetimes the total repayment on the initial building materials loans, the rates, etc. payable to the local government, and formany houseowners, rent provides over 50 per cent of their total income. The return on the Dandora allottee's owninvestment is well above the 20 per cent suggested in the project evaluation, because of the benefits of favourableloans.

The logic of the market economy has resulted in an overwhelming renting of rooms in the two schemes. InThika the owners never intended to live in the sites and services scheme, in Dandora most owners find the incomefrom renting more important than the accommodation there. Thus, many live in low -standard, informal housing areas.

In Makongeni nearly 100 per cent and in Dandora 75 per cent of the people benefiting from living there aretenants paying market rents. The assessment of the tenants' situation in MEDIS Vol. 8 indicates that their benefits aredubious. The tendency to evaluate the success of Dandora by measuring the benefits of the allottees is too narrow.

In both cases the benefits are paid for by the least well-off, the people not taken into consideration in theallocations. The implications are that the benefits for one allottee are paid for by between 3 and 8 rent contributors.Thus, a policy based on home-ownership and subletting will never benefit more than a fraction of the low-incomepopulation. It is true, however, that for those who can afford the rents, this policy offers an alternative tohomelessness or to living in the slums.

The lowest 20 per cent of income groups have been excluded from Dandora by the affordability criteria. In fact,anyone could have 'afforded' the handsome net income from a plot in Dandora. In Thika the lowest 20 per cent of theincome earners could neither afford to build (although they benefited from selling their plots), nor could they affordthe rent on a single room.

Summarizing, the government's sites and services strategy has not reached the lowest-income group, for whichit was originally devised. The projects accommodate salaried workers with stable incomes in single rooms, at rents andprofits levels above those in public housing, but at higher standards and lower profits than in unauthorized housing.For this group, therefore, the choice is between the high rent and fair technical standard in a single sites and servicesroom, and the low rent and very low standard in the slums. To many low-income workers, however, the choice isbetween sharing with others a room in sites and services, and having one's own room in the slum area.

Today's dream, however, is of the two-roomed, self-contained public authority house, built in 1970 and rentednow at KSh 300 per month, the same as a single room in sites and services schemes built the in same year at Thika.Monthly payments in current projects of single roomed self-contained units (Umoja phase 2) exceed KSh 500.


Chapter 4. The performance of sites and services schemes4.2 Management and economic performance

The two schemes differ considerably in institutional, management and economic arrangements. Makongeni wasimplemented without adequate consideration of financial management. In Dandora, very elaborate systems and newadministrative units were created to ensure the success of the project. In both cases maintenance and servicing of thecompleted schemes appear to be difficult issues for the local authorities to handle.



4.2.1 Project management

The Thika project was implemented by means of the few municipal technicians who included some Danishassistance experts from 1969 to 1973. Thus, the demarcation of the 1,200 plots was carried out by one surveyor,programming and layout designed by one architect-planner and building inspection carried out by one technician.

Accordingly, to minimize procedures, the Council offered only three options for building, and phaseddevelopment was not permitted. Infrastructure projects were prepared by engineering consultants.

Compared with the almost zero-cost institutional set-up in Thika, Dandora involved technical assistanceamounting to 10 per cent of the project cost, or KSh 15 million. The building of special institutions was not withoutproblems and in performing their duties today they face many difficulties, deriving, in particular from competition withsuch bodies as the housing directorate, the municipal engineers and the planning department. Transferring power andresponsibilities to new units invariably gives rise to resistance.

The different results of the two projects should be attributed not only to formal institutional arrangements, butalso to 1) the increased power of central Government between 1971 and 1976, and 2) the very strong intervention of theWorld Bank as the lending agency.



4.2.2 Development control

Research in 1985 indicated that building control in Thika is fairly efficient. This is quite impressive, bearing inmind the capabilities of the Town Engineer's Department and the volume of construction (1,000 rooms per yearcompared with about 2,000 rooms per year in Dandora). Despite the institutional machinery in Dandora, some ownersadd rooms without formal permission.

The Housing Development Department fails to control the development of on-plot economic activitiesincluding beer halls, kiosks, charcoal selling, butcheries, surgeries and nursery schools. Notwithstanding the nuisancecreated by drinking places, for example, they are an asset from an economic point of view, in that they generate incomeand employment for many.

Much of the inadequate development control could be attributed to conflict between or non-coordination ofefforts by the new Housing Development Department and the Physical Planning authority in the City Council inapproving development applications.



4.2.3. Financial performance, cost recovery

The capabilities and skills within the Treasurer's Department in Thika were not adequate to manage, amongother issues, the finances of Makongeni. In 1973 the Department collapsed and the Government intervened.

Contributing to further problems, the many years of delay in plot allocation and in issuing letters of allocation,resulted in a prolonged period without the budgeted repayments from plot allottees. As a consequence the Councildecided to recover the invested loans immediately upon the issue of building permits, a fact which has prevented eventhe middle-income group from developing sites and services houses. The merit was a crash recovery programme.

The clear bias towards well-to-do developers in Thika ensures that the authorities can recover fundsimmediately, and that houses will be developed without public loans. This system, in turn, reinforces the social bias ofdevelopers, benefiting middle and upper class developers.

By contrast, building consolidation in Dandora has been remarkable, and financial management has been good.However, cost recovery has proceeded with increasing difficulty. By 1983, 15% of the plots were in arrears by 6months or more, in phase one and phase 2 alike.(40) There has been some fear that this is caused by increasing numbersof unrented rooms; in 1983, the vacancy rate of rooms was as high as 7 per cent in phase 1, i.e. 259 rooms.(41) It shouldbe noticed, however, that to the house owners the monthly repayment to HDD represents less than 25 per cent of theaverage rental income per plot. Such a fear, therefore, may seem unfounded.



4.2.4 Allottees, economic performance

However the return on the developers' investment is computed, the venture has been very successful for thelucky allottees in Dandora. In the first five years, the private investment is returned three times (see appendix).

Allottees have managed to build 2-4 rooms in addition to the one financed through the building materials loan,mobilizing their own savings and very short-term loans. Rental income provides in the first five years an annual profitof 29 per cent of the house-owner's own investment, and around 25 per cent if computed over a 15 year period.(42) Thisfact is reflected in the prices of plots and houses marketed.

These facts suggest that the careful considerations of lower limit affordability have been of only theoretical orpolitical value. Net rental income on the average plot in Dandora is today equal to the official minimum wage. Hence,even the lowest income earners can afford to become plot and houseowners/landlords in Dandora, but not to becometenants of one room.

In Thika, plots are usually purchased at market prices from the original allottees, infrastructure costs are paid intotal before construction starts and public loans are not available for construction. The lowest-income earners canafford to become allottees but only to resell the plot to others capable of building. The net profit to house developersin the first year, represents only 9 per cent of the funds invested, nevertheless this is sufficient to make housinginvestment attractive in Thika.

Rents are determined by landlords in competition with others, taking into account the tenants' willingness topay. Low rents are rewarded with stable tenants. Proper maintenance is regarded by many landlords as a goodinvestment permitting higher rents to be charged.

While, as mentioned above, in Dandora the incidence of empty rooms in phase one reached 7 per cent,extremely few rooms were empty in Makongeni. Losses from arrears in Makongeni, were less than 112 a month's rentper plot, mostly due to tenants being evicted or leaving in the middle of the month to evade rent payment.

In Thika, a concentration of ownership has taken place, some owners now controlling over 10 plots. Suchowners deliberately acquire geographically scattered plots to prevent disputes on one plot from spreading to others,and to reduce the possibility of the income tax department identifying large holdings.



4.2.5 Maintenance and services in the schemes

In both Makongeni and Dandora, maintenance of infrastructure is a serious problem. Tree planting has notbeen implemented. Street lights were installed in Dandora, but all the lamps have been stolen.

Streets, whether paved or in murram, can only be negotiated with difficulty because of lack of maintenance.Open drains are frequently blocked and sewer blockages are common. In Thika, water pressure is insufficient to caterfor the large number of people. Garbage collection and street cleaning are poorly organized and leave both areas in avery dirty condition.

In both cases the stated reason is lack of staff, equipment and funds, but organization appears to be the mainhurdle. In a few cases in Thika, residents have organized cleaning outside their plots.


Chapter 4. The performance of sites and services schemes4.3 Standards and quality of buildings, infrastructure and environment

The question of design standards is crucial to the success of sites and services projects and is the subject ofvery heated discussions. High standards are mostly advocated by politicians, ostensibly to provide decent homes.Low standards are advocated by foreign organizations and many technicians, apparently to ensure affordable houses.The issue of standards involves six aspects:

1. Infrastructure;

2. Plot size, density and layout;

3. Buildings and plot coverage;

4. Physical and social environment, and security;

5. Public transport; and

6. Social institutions and facilities



4.3.1 Infrastructure

The Makongeni project in Thika was conceived with the lowest possible infrastructure cost, i.e. murram roads,communal water taps, pit latrines and basic street lighting. The pit latrines implied the use of fairly big plots, 242 sq.m.with only five rooms per plot until sewers had been developed.

Interest in full utilization of the plot for the well known dormitory-type houses, led to rejection of pit latrinesand the Council obtained loans to construct water-supply and sewerage to each plot, thus permitting eight rooms perplot.

The Dandora architects adopted water-borne sewerage and water supply to the plot, following the experience inThika. Roads were constructed in tarmac or in murram. To minimize plot infrastructure costs, the layout was designedwith plots down to 100 sq.m., exceptionally small by African standards. The resulting infrastructure standard in thetwo schemes is therefore the same. Today, the loads on the infrastructure are already exceeding their design capacityand their operation suffers.



4.3.2 Plot size, density and layout

In both cases the layout and the plot sixes were determined in the false belief that plots would be occupied bythe allottee's family and perhaps a single renter or two. The layout leaves many varied areas for communal use.However, the conventional attempt to differentiate between roads for vehicles and routes for pedestrians inMakongeni has proved quite useless.

In Makongeni, the house types selected left or wasted land between the blocks - land which is difficult toutilise and where nobody feels responsible for cleaning.

In Dandora, much less land is undefined. However, many informal activities and the failure of the streetcleaning, are a hindrance to the planned utilization of the open space.

The fact that both schemes have eventually been transformed into private rental housing makes it necessary todiscuss the block layout. With all houses rented by the room, joining the internal courtyard space into one bigger area,seems to be the best option.

There is no doubt that, given the facts of commercialization of sites and services schemes, the low standardsoriginally suggested in Makongeni would have been highly problematic, particularly if 8 households should use thesingle pit latrine proposed on the plot.

It is questionable if the savings realized by applying low road standards in the two schemes are appropriate.Infrastructure is run down due to more users than originally assumed. Tenants do not benefit from the low standardsince the absentee landlords charge much the same rent as if the roads were good. Given a situation where the rentpaid by tenants is determined by willingness to pay rather than actual construction costs, the extra road chargeswould have a negligible impact on rents, while perhaps reducing slightly the already generous profits to the landlord.

The issue of infrastructure standards, therefore, should be seen as closely linked with the tenure system: onlyin private owner-occupied systems or in public rental schemes, may the low standards be reflected in lower paymentsby the inhabitants.

It may be worth recalling here that in Europe too, in the early stages of industrialisation, as in Kenya today,private rental housing dominated the scene, and in their struggle against the landlords, in Europe, renters demandedhigher standards. These were achieved by the introduction and enforcement of legislation guaranteeing what was atthat time seen as minimum environmental space and construction standards.

International opinion as represented by bodies such as the World Bank and USAID, is very much biased bythe predominance of private owner-occupiers in both Latin America and North America. The long-established privaterental system in Africa calls for different approaches.



4.3.3 Buildings

The decision to allow non-permanent construction in Makongeni and Dandora was based on the assumptionthat the houses were to be constructed by and for the use of the allottees.

In Thika, this approach was rejected after criticism of experimental houses, combining permanent and traditionalbuilding techniques. 'Native' houses were not to be built. Contributing to this decision was the fact that security ofloans from the local banks were not considered for less than permanent standard houses. The result was that nopermission would be given for less than eight rooms, initially built in block or stone.

In Dandora the project allowed allottees to build and occupy temporary houses until a permanent house with atleast one room had been completed. This came under heavy attack from the City Council in the first stages ofimplementation but was supported by the World Bank. Temporary houses, however, soon gave way to full size stonehouses.

Thus in both schemes, well-built stone houses of a fairly high standard dominate the scene today. The dilemmaof standards presented in the chapter on infrastructure is also relevant to the building standards. Very low standardsare acceptable for owner-occupiers, but not for renting, One illustration of this is the rate of profit on rented rooms,which in mud or timber tenements approaches 100 per cent per year, while in the permanently built private rental roomsof Dandora and Makongeni it is 29 per cent and 10 per cent respectively for private funds invested (see Appendix).



4.3.4 Environment

The quality of the environment is not impressive in either of these areas. In the project implementation stage,trees were not planted, and street lights were omitted or stolen. By day they are without shadow and they lackacceptable recreation areas. At night, security is a grave problem, particularly in Dandora. The local organization ofKANU Youth Wingers has greatly helped this situation in Thika.

Neglect of infrastructure repairs, street cleaning and garbage collection is one reason for the filthy streets andopen spaces which has certainly contributed to Dandora's a bad name.

Uncontrolled proliferation of economic activities on and near the plots is the result of unrealistic planning forspecial business zones. In Thika, strict control of such activities has been attempted; in Dandora it has beenabandoned. Although these economic activities certainly provide essential jobs and incomes while only demandinglimited start -up capital, complaints about the numerous drinking places suggest that this permissive practice causesproblems for many residents.

Despite the considerable negative aspects, after working hours the open spaces between the houses are turnedinto busy streets with groups of people gathering at the entrance of the blocks, young people promenading andchildren playing. Stalls and teashops offer their services until late at night. With very little efforts and at minimal cost,these activities could be guided, assisted and encouraged.

Other social interaction is centred on the inner courtyards. In Makongeni, with very few exceptions, theinhabitants commend the good relations between neighbours. Mutual assistance is common for child care, rentdefault, at weddings, funerals or sicks. Relationships are thus established across tribal borders.

It should be stressed, however, that most inhabitants are young and demonstrate a willingness and energy toadjust to this environment. It is not unlikely that after 10 years, these relationships on the plot will have deteriorated,and that the majority will be looking for self-contained units with more privacy.



4.3.5 Public transport

In Thika the sole means of communal transport is Matatus, small vans with a designed seating capacity ofaround 12 people, although they frequently carry two or more times this number. The distance to town is 3 km and thetrip takes only a few minutes and costs KSh 2. At certain times there are up to 20 departures per hour. Mostinhabitants, however, work in the nearby industries, at 10 minute's walking distance.

Dandora is some distance from Nairobi city centre, the trip often lasting 30 minutes. Many Dandora residentscomplain of the burden of transport costs. Dandora is served by both public and private transport companies.



4.3.6 Public institutions

Public institutions were planned for Makongeni but not part of the project 'package'. By contrast, the "DandoraCommunity Project" systematically included provision for schools, nurseries, markets etc. In Dandora, the marketswere too expensive and seriously delayed The result was a proliferation of informal shop development. In Thika,school development is behind schedule, for lack of funds.


Chapter 4. The performance of sites and services schemes4.4 Resources and development generated

Through public investment, the two projects have mobilized considerable private savings and channelled theminto housing construction, thus generating employment, rental income and capital value.

While this issue may be evaluated for the two schemes as such, other important questions tying housingproduction in with the overall economy are more difficult to answer: Would private housing investment have occurredelsewhere in any case? Was capital diverted from more vital "productive sectors", such as agriculture? Did theprojects add to the foreign debt burden?

Small scale contractors found employment through the sale of building materials and the building work itself.Low-skilled construction workers have been able to refine their skills and are now finding employment in the evergrowing construction sector serving the private subdivision schemes. New skills have been learned by people neverpreviously engaged in construction. It should be noted that the import content in the building sector is fairly small, thework is labour intensive and local employment generation per shilling invested, quite high.

Surveys in Thika suggest an even higher rate of mobilization than in Dandora, with public investmentmaintained at around KSh 3,000 per plot at 1972 prices (equal to 6,000 at 1978 prices) as against the KSh 90,000 ofprivate investment in each house. In other words each one shilling invested by the public in 1971-73 generated aprivate investment of KSh 15 in fixed prices. KSh 1,000 invested by the public in 1972 generated one man-year ofemployment. Moreover, every thousand shillings of public investment in 1972, generated one man-year ofemployment. In Dandora, each shilling of public investment led to an induced private investment of KSh 1.88.(43)

Since 1977, house building in Makongeni has provided jobs for several hundred people as casual labourers or'fundhis'. If converted to full time employment the average annual input has been approximately 480 man-years, or 3.2per cent of the total Thika labour force which averaged 15,000 over the period 1977-84. From 1979 to 1985, Thikaexperienced as the only town in Kenya an increase in employment in the construction sector.(44)

Interviews in Thika show that, to a large extent, income earned from renting rooms is ploughed back intoinvestment in more land and construction, and into various forms of business.(45)

The extemely secure investment in housing is used in parallel with the less secure business ventures,small-scale production, and job income (often considered unreliable). House ownership therefore permits greater risksin productive investments.

Security of investment, rapid inflation in the prices of houses and land, and the fairly limited start-up capital andskills required to enter housing as a developer, has made this sector very lucrative. Hence it has attracted surplusesfrom agriculture and urban business.(46)

Returning to the issue of foreign debt, the Dandora approach attracted foreign exchange, originally estimated atUS $ 16 million or almost KSh 100,000 per plot. This could be interpreted as a contribution to the necessary transfer offoreign exchange to the national budget of Kenya because the real need for foreign exchange to the project was farless than the total of the foreign loan received. However, like any other foreign loan, this housing loan is onlyrepayable in foreign currency and hence Kenya's dependence upon production for export is increased. Makongeni inThika was implemented without foreign loans. It is estimated that 75 per cent of the products and labour hours weredelivered in and around Thika, the remainder being 'imparted' from Nairobi.

In Dandora, and to a lesser degree in Makongeni, small-scale industries and workshops (metal works,carpenters, tailors, weaving) have been started. In addition, incomes are generated in kiosks, shops, charcoal stalls,butcheries, hotel, beerhalls and more sophisticated enterprises such as surgeries. In both projects, these places ofwork have developed in spite of the planning rather than as a result of it. In Dandora they benefit from a broadercatchment area including the informal areas of Korogocho.


Chapter 4. The performance of sites and services schemes4.5 Wider impacts

4.5.1 The projects and housing need

While the two schemes fulfil many of the original objectives, e.g. number of plots developed andaccommodation of low-income people, the wider impact of the projects and the sites and services strategy must beanalysed critically.

In terms of its quantitative contribution, over the period 1976-86 Makongeni has accommodated over 20,000people compared with Thika's population growth of less than 30,000 people in the same period. Today nearly 50 percent of Thika's population live in sites and services schemes, compared with 22 per cent in 1969, and the share israpidly increasing. Over a ten year period, Makongeni together with other new formal and informal housingconstruction has accommodated a number of people in excess of the population growth, thus reducing theovercrowding in Thika.

In the ten years from 1977 to 1986, at a high estimate, Dandora has accommodated 12,000 households, thusmeeting 13% of total needs which is assumed to have been 90,000 units (page 67). Thus, Dandora has accommodated anumber of households corresponding to 40 per cent of the increase in the number of households in the target group,the 20th to the 50th percentile of income groups.(47) According to the study by Mazingira Institute (1983) 95 per cent ofbeneficiaries, i.e. allottees, had incomes below the 50th percentile of the city's income distribution curve, when rentalincome was not counted. In other words, if including the rental income, they may have incomes above the upper limit.Tenant households, which constitute 75 per cent of all households, have an average income which is 60 per centhigher than the allottees.(48a) It would, therefore, be interesting to know how many households have in fact incomesbelow the 50th percentile mark, and how many of these belong to the 20th to 30th percentile groups.

The number of allottees actually living in Dandora constitute around 25 per cent of the Dandora population. Inother words, the owner-occupiers or allottees accommodated there over the last 10 years constitute approximately 3per cent of Nairobi's population increase. In summary, the idea of promoting low-income owner-occupation has failedcompletely in Thika, and in Dandora it had a negligible effect over-all. The sites and services strategy has primarilyfunctioned as a form of public support for private rental housing.

A significant number of rented rooms has been produced in the two schemes. In Nairobi, however, this hadlittle impact on overall development. In recent years, large private subdivisions, formal and informal, have put between5,000 and 10,000 plots on the market annually in the Nairobi outskirts.



4.5.2 Impact on unauthorized development

It is not easy to answer the question of what the situation would have been without the two schemes. Thebasic idea of sites and services was to provide layouts for the land subdivisions, plots, individual housing designs,and services for what would otherwise have spread as squatter settlements. Squatting and other forms of unauthorizedland occupation, however, had virtually ceased to exist before initiation of the two schemes. Unauthorizeddevelopment had been taken over by petty landlords building tenements for renting, in small units of typically 5-10rooms, on land purchased or - formally or informally - allocated. The interesting question, therefore, is whether theprojects, intended to accommodate individual squatters, were able to divert petty landlords' resources from theunauthorized areas into the planned sites and services schemes.

In Thika, the conditions and practices attached to land allocation and development were extremely well suitedfor the petty and middle class investors, and informal housing production dropped - at the cost of promoting the classof rentiers in the formal sector. The standard required and the related investment excluded the lowest 20 per cent of theincome groups from becoming developers. The construction costs that this policy entailed and the rental profitsexpected excluded the same group from renting even a single room. This was the very group which had been excludedsystematically in Dandora by the eligibility criteria. Thus, while Makongeni has attracted most of the privateinvestments intended for building rental houses for the lower and middle-income sectors in Thika, some verylow-standard houses for rent continue to be needed and produced in the informal areas of Thika. There is, however, aclear trend towards improved building standards in the unauthorized settlements Kiganjo and Witeithie. In spite ofhigh building standards, the areas remain without piped water supply, and hence unattractive to tenants. Thus, manyrooms are vacant, and landlords are unable to charge more than KSh 100 per month per room.

The impact of Dandora on the lowest income groups is nii and its impact on the low-income group isquantitatively limited. Therefore, in the absence of other privately or publicly developed alternatives, unauthorizedhousing has proceeded largely unaffected.

A dramatic illustration of this can be found in the Korogocho slum area adjacent to Dandora, where thepopulation has increased much faster than in Dandora itself. Dandora has undoubtedly made that area attractive forinformal landlord development, but of course is not the direct cause of this development.

In conclusion, the experience from Thika shows that planned subdivisions, e.g. as sites and services projects,combined with private rental housing can in fact reduce unauthorized development considerably, but that informaldevelopment will continue, among other reasons, due to the absence of alternatives for the poorest 20 per cent of thepopulation. The success of the policy depends both on a large number of plots being provided and on the rightconditions being attached to them.



4.5.4 Home ow nership, ow ner-occupancy and landlordism

Dandora has increased the number of rental units for low-income people, but the question remains as to whothe real beneficiaries are. It is unlikely that many residents of slum areas in Nairobi who are paying KSh 100 per monthcan afford to move to Dandora and pay 300 KSh per month for a room.

In Thika, it was found that very few people moved from the slums to the sites and services schemes - manymore moved the other way. Interviews in slum areas show that few inhabitants are willing to pay the rent of one roomin Makongeni.(48b)

Landlordism could be seen as an exploitation of tenants: Why should a tenant have to pay KSh 300 for a room,if, with some public support and his own energy and resources, he can build more cheaply?

First, we have shown that sites and services housing attracts many investors, but that returns on housing arenot excessive.

Second, many urban residents are migrants and have no intention of remaining urban dwellers.(49) They requireinexpensive rented accommodation and are not interested in investing in an urban dwelling, preferring to reserve theirsavings for investment in the house in the rural home area. The issue of promoting home-ownership in urban Kenya isnot very appropriate today, a fact which some foreign aid agencies, such as USAID and the World Bank, fail torecognize.(50)

One question, however, remains - whether, in the future, the accelerating division of people into a propertyowning class and a class of renters will endanger political stability? Will tenants, perceiving renting as exploitation,organize against this system as has happened in many other countries?

Urban and housing policy is conditioned by many factors. Most of these issues are rooted in history andtradition, making land ownership the core of social and political struggles and the key to prosperity in the colonialperiod.


Chapter 4. The performance of sites and services schemes4.6 Replicability

4.6.1 The transfer of experience to other sites and services projects in Kenya

Almost all sites and services schemes initiated and developed since Dandora have been partly financed by theWorld Bank and other foreign organizations such as USAID and the EEC. The Dandora Scheme was named the FirstUrban Project and even before phase 1 was fully implemented, the Second Urban Project was initiated, later followedby the Third Urban Project. The Second Urban Project encompassed more than 25,000 plots of which some 12,000 weresites and services in the three towns of Nairobi, Mombasa and Kisumu, the 9,000 were in Nairobi, in addition toDandora. The remainder were squatter upgrading and low-cost, market-sale plots.(51)

According to the World Bank Staff appraisal report of March 1978, the Dandora Sites and Services Scheme wasconsidered a success, in terms of reaching the target group, implementation and cost recovery. As stated previously,the evaluation was based on observations during the implementation of the first phase only. Transfer and reselling ofplots, illegal extensions, and management problems have increased during the implementation of the following phases,showing the project in a less flattering light today.

The World Bank recognized these problems, and the Second Urban Project included institutional strengtheningfor the Ministry of Local Government, the National Housing Corporation and the City Council. Studies of valuationand taxation problems and housing by-laws were further important components prior to the planning, design andimplementation.

Compared with Dandora, the Second Urban Project's sites and services schemes are thus more stratified, asmixed development was promoted, including plots for sale on the open market, the provision of community facilitiesand small scale industries. Support for community development, nutrition and family planning were further importantproject components.

As Dandora was considered a success, the issues of allocation procedures and beneficiaries which caused somany conflicts and heated discussions during the preparation of Dandora and Makongeni, were not on the agenda,while the discussion of development of standards continued to be a subject of conflict.


Chapter 5. Conclusions5.1 Transferability of the lessons drawn

Any attempt to transfer the lessons drawn from these two case studies to other places and times, should beundertaken with great caution. The studies suggest that the particular social, economic and political conjunctures inwhich the projects evolved, had a strong conditioning influence on their performance. Even if sites and servicesprojects had to be designed in the same two towns today, much of the approach would need revision as a result ofchanges in the societal factors underlying housing development.

The appropriate form of public intervention in low-income housing provision will therefore depend on ananalysis of factors such as: character of need and demand; the attitude of the urban population towards urban life;family and household structure, in particular linkages to rural homesteads; income levels; structure of economy andinvestments; land tenure and market; political system; housing market and supply systems; popular participation andorganization; the character of the building sector; and many other factors. None of these factors should be overlookedwhen designing a housing strategy, and attempting to transfer the lessons learnt.

Regional variations in Kenya are big, and the lessons from this study may not be immediately relevant toplanning for Kenya's coastal areas, and western parts Kenya. It is even more difficult to draw lessons from Kenyawhich would be immediately applicable to other African countries because of the specificity of the housing and landmarkets, characterised firstly by the private ownership of land and secondly by the high degree of housingcommercialization. Thus, in countries such as Mozambique, Tanzania, Ethiopia, and Zambia much greater emphasishas been placed on individual owner-occupier status.

In some countries, but not in Kenya, support for individual owner-occupancy is still a viable strategy.

There are indications, however, that commercialization of informal housing is in progress in Tanzania,particularly in the Kilimanjaro region, according to studies by Ardhi Institute (Dar es Salaam) in Arusha.


Chapter 5. Conclusions5.2 The appropriateness of the sites and services strategy

The two sites and services schemes studied are elements of a strategy aimed at promoting self help, a strategysustained for over 50 years under different names in Kenya, providing a major share of the housing intended forlow-income families.

Measured with the yardstick of objectives often associated with self-help housing, the schemes were certainlynot successful. They did not fulfil the expectations for modest houses for single owner-occupant families with a tenantor two. In Thika, almost 100 per cent and in Dandora, 80 per cent of the inhabitants are tenants. This, however, is notthe result of poor implementation or inadequate control, but rather due to the fact that rental housing is favoured onthe supply as well as the demand side.

Criticism has been levelled at sites and services schemes in Kenya, for reasons such as not providing access tothe poor, for low standards and unacceptable environments. These arguments have often been raised by the middleclasses to which much less attention has been paid since the boosting of the sites and services projects in the mid1970s.(52) The term 'sites and services' seems to be viewed by many administrators as something bad, while the samepeople may promote serviced sites for other income groups and for a different target group, under a different label.(53)

However, the schemes studied have made a substantial contribution to accommodating low-incomehouseholds in the two towns - in Thika, close to 70 per cent of the entire population growth over a ten year period andin Nairobi, about 13 per cent.

Thus, there is no sound argument for abolishing the sites and services strategy.

The public provision of housing infrastructure, i.e. planned plots, water, roads, sewerage, reservations forschools, commercial areas, workshops, etc. combined with individual or cooperative construction of houses is such afundamental element in the habitat development of all countries that a discussion of its appropriateness should nowbe unnecessary. The volume and speed of plot provision have been inadequate, in particular in and around Nairobi,where sites and services scheme plots have been outnumbered by informal cooperative subdivisions in which, overthe last 10 years, not less than 50,000 plots of 1,000 - 5,000 sq.m. have been demarcated, i.e. 10 times the number ofplots in Dandora. These subdivisions can accommodate over one million inhabitants at densities of 150 persons perhectare, i.e. half the density experienced in Dandora.

At this moment in Kenya, the most important strategy to improve future housing conditions for the poor willbe; 1) a vigorous 'pre-upgrading' of the still sparsely built-up unauthorized, 'Informally planned' subdivisions toprevent slums developing, and to secure adequate space and an institutional framework for public institutions andproduction sectors; and 2) a crash programme of guidance to potential land subdividers in the Thika-Nairobi area.


Chapter 5. Conclusions5.3 Housing need, demand and the low-income target group

Housing demand in urban Kenya is strongly affected by the urban residents' linkages to their rural homesteads,where a substantial number of the householders have wives and children on a small agricultural plots. They regardtheir stay in town as temporary - essential only to earn a cash income. Therefore,

due to people's temporary relationship with the town, much of the housing demand is orientated towards rentalaccommodation, while savings are invested in the (rural) home. Hence, the conventional strategy of promotingowner-occupancy, strongly advocated by some aid agencies, is inappropriate in the case of Kenya.

Whilst allocations to low-income people in Thika, were jeopardized by influential people, in the first phase ofDandora, the funding agency ( World Bank ), prevented a similar trend. The penetration of higher-income allottees inThika and in later phases of Dandora demonstrates that without strict monitoring by foreign funding agencies, whichis certainly not a method that can be applied generally,

It is very difficult to ensure the low-Income target group access to sites and services plots (in competition withinfluential people).

The Dandora project supported allottees with soft loans, advice and organizational support. The goodopportunities for making an income out of renting, transform the venture of being allocated plot and house into a netincome producing business.

Thus, in theory, at least, even families with no income could 'afford' to develop a house if the sites and servicesproject guarantees the following: soft building loans with a grace period for repayment; community assistance in thehouse construction phase; and free access to let rooms.

A government which genuinely wanted to support the lowest income groups would have a good opportunityto do so. What, in theory, are the chances of covering the quantitative need of households in the lowest 20 per cent ofthe income groups - those not allocated plots because they were considered unable to repay the Dandora loans?

They cannot even afford the rent of one room, although they could in fact afford to five there if they were givenaccess as owners/landlords with the opportunity of letting rooms.

During this decade, Nairobi is growing at around 25,000 households per year, i.e. 5,000 households in thepoorest 20 per cent group. Hence, one scheme nearly the size of Dandora would be required every year in order toallocate each of these poorest households a plot ( since they cannot afford to rent ).

At the current rate of one owner to three tenants in Dandora, to afford building according to the Dandoramodel, this group (25 per cent of the population) as owners would have to accommodate almost everyone else asrent-paying tenants, which is evidently unrealistic. Therefore

In its present forms, the sites and services strategy cannot meet more than a fraction of the lowest incomepopulation's housing need either in theory, or in practice.

In any case, in allocating plots, the idea of giving preferential treatment to the poorest groups, those who haveno influence and power to affect decisions, is illusory.

It should, nevertheless, be the aim of planners and others involved, to give the poorest of the population themaximum access to plots.


Chapter 5. Conclusions5.4 Sites and services as a strategy to combat informal development

Sites and services policies were initially adopted with a view to diverting the resources which were increasinglyinvested in unauthorized developments, in organized settlements where the initial modest service supplies could laterbe easily upgraded. In Kenya, where currently 80-90 per cent of new urban households each year are accommodated inunauthorized housing,(54) the effort required in sites and services to combat unplanned development is considerableand costly, not Least of ail because land is primarily in private ownership.

While in absolute terms the volume of houses built in Dandora was unprecedented, it was still inadequaterelative to Nairobi's housing need (13 per cent) and unauthorized housing continued to mushroom in Nairobi. In Thika,although the supply of sites and services plots and houses was smaller in absolute terms, it covered nearly 70 per centof the need over a 10 year period. This contribution seems to have been sufficient to keep down the percentage of newhouseholds accommodated in unauthorized housing to below 20 per cent. It can therefore be concluded, that

with a very big supply of plots, It is possible to divert a significant share of the resources invested in squattersettlements and other forms of informal development, into organised and planned environments.

It is, however, unlikely that the government will provide an answer to the needs of the poorest in the nearfuture. This means that unauthorized rental housing will continue to develop. Therefore, apart from solving thebacklog of registering the unauthorized subdivisions and constructions of more than a decade around Nairobi,

It is advisable that planning be reviewed to incorporate an element of uncertainty, or a qualified prediction ofthe possible location of future unauthorized housing.

It is recommended that monitoring and land information systems be improved and strengthened to deal withthe future informal developments, if for no other reason than to improve the basis for local authority land revenues.


Chapter 5. Conclusions5.5 Support to housing suppliers

Housing plays an important role as an object for private investment: promoted for immediate returns throughrents or sale; for the hope value due to the capacity of real estate to store and inflate value; and because it allows evensmall amounts of money to be invested. The government's ability to mobilise the activity of private housingdevelopers is therefore a nodal point in the housing policies in most countries.

Policies towards private housing suppliers vary tremendously from one country to another. While in somecountries, a private individual may not be permitted to own more than the house in which he lives, in others, privaterental of housing is considered a respectable business. Whilst land is solely public property in some countries, inothers it forms the cornerstone of private ownership and property rights.

The Kenyan framework, within which the sites and services schemes studied have developed, is characterizedby an extremely high degree of commercialization in the consumption of housing. Housing is developed for renting bya considerable number of small and medium-size investors with limited capital, insufficient to enter larger scale farmingor industry, but adequate for the purchase of real estate, shops, bars, and buses.

Land and housing investment does not demand major skills and the investment is very secure.

To this should be added the prestige attached to land ownership. On the supply side, therefore, theattractiveness of the housing sector in Kenya and ample capital to invest result in a high level of supply and quitemodest initial profits, particularly in quality-built rental housing.(55)

A policy which provides many incentives (sites, services, loans, etc.) and which results in high profits todevelopers will generate construction of a large number of houses. Hence, in the two case studies,

the public supply of serviced plots mobilised substantial funds from private individuals which could then beinvested productively.

In Dandora the sale of plots to any buyers at market prices offered the city council an opportunity for a net gainto cross-subsidize other sectors of the project. The local authority in Thika charged the largely middle-income plotowners for the public investments in infrastructure and required immediate payment. These cases suggest that,

In a sites and services development, upon allocation to developers, some of the public investments can berecovered immediately with a profit.


Chapter 5. Conclusions5.6 Employment generation

Funds invested in housing produce more jobs in a very short time than if invested in most other sectors, due tothe high content in local products and labour power, and high spin-off. Only to a limited extent, the plot allotteesinvest their own labour power.

In Thika since 1978, building work on the sites and services scheme has employed casuals and permanentlabourers and fundhis equivalent to 480 full-time jobs, i.e. 3.2% of total employment.(56)

Apart from creating employment in the construction of houses, the building activity has considerable spin-offsin sub-supplies; several hundred persons are employed in the building materials industry and trade alone. Finally, theservice sector incomes in transport, commerce, etc. are largely based on incomes in the productive sectors. Thus,

directly or indirectly, close to 10 per cent of the urban households have had an income from the production ofsites and services houses.


Chapter 5. Conclusions5.7 Technical issues and building standards

The projects studied, especially Dandora, have provided a number of useful lessons on the organization andimplementation of sites and services schemes.

It was particularly valuable that loans to developers were disbursed in full and not in instalments; thatlow-income families were assisted in forming building groups; that a building materials store was established onsite; and that allottees could start building temporary houses.

In recent years, it has been recognized internationally that building standards prescribed are too high to permitanything approaching what the poorest sector of the population can afford. It has, therefore, become a routinestrategy for planners to suggest revision of bye laws to reduce such standards. However,

the experience of these two case studies with their relatively high construction standards, casts some doubt onthe universal wisdom of the strategy reducing standards.

Evidence from Nairobi and Thika shows that profits earned on the rented timber shacks are considerably higherthan on the rented sites and services blocks. Rent in private schemes is less dependent on construction costs than onthe tenants' capability/willingness to pay.

The value obtained per 100 shillings paid in rent is lower if the building standard is low. Systematic approvalof low standards in sites and services rental tenements would encourage many private-rental housing developers tomaximize profits by diverting investments from permanent to low-standard construction, without a correspondingreduction in rent.(57)

In projects where substantial parts of the properties are likely to be converted into private rental housing,maintenance is usually inadequate, and hence the very low standards of construction are particularly inappropriate.While for owner-occupiers quite low standards are acceptable because the owners do not pay in excess of what theyget, and because they may improve standards over time, 'non-permanent' standards should not be approved for rentaltenements. Experience from the two schemes shows that

high population densities and the predominance of private rental accommodation are associated with lowmaintenance and neglect/inability by landlords as well as by the public to maintain buildings, public areas andinfrastructure.(58) These should therefore be designed for hard and intensive use and easy maintenance and cleaning.

Very low standards can really only be recommended where owner-occupancy dominates.

While these considerations are valid for Kenya with its high degree of commercialization of even the pooresthousing, the advice to maintain permanent standards is not necessarily appropriate for countries dominated byowner-occupancy, such as Zambia, Mozambique, Ethiopia, and neighbouring Tanzania. In the latter, however, privateurban rental housing is developing rapidly and many of the lessons from Kenya may soon prove valid in Tanzania.


Chapter 5. Conclusions5.8 Recommendations

The response of planners towards housing need and demand should be based on a careful analysis of thecharacter of this demand and its differentiation. In Kenya, the sites and services strategy has responded reasonablywell to the lower income group's demand for inexpensive, rented accommodation with basic sanitary services.

Sites and services schemes should continue to be an important part of the public housing policy.

With proper public support, even the very lowest income groups can afford and manage building a permanentsites and services house, provided that the major part of it is rent producing. This group can, however, not afford torent one room in the same house. If planners wish to benefit the poorest part of the population (who tend to have lesslinkages to rural areas, i.e. no land and family there) the poorest have to be given preferential access to sites andservices plots and building loans, or they have to be supplied with subsidised/older public rental housing.

In practice, however, no currently known solution has a chance of meeting more than a fraction of the need ofthe poorest 20 per cent in Kenya, and hence unauthorized development will continue to accommodate the majority ofthis group.

A substantial group of middle to high income developers provide the majority of the low to middle-incomeearners with rented rooms. These promoters appear to have a fair access to non-institutional funds, and often repaythem in one to two years. This group is vital in the housing supply, but the case studies show that the total marketprice of a fully serviced plot does not exceed 20 per cent of the cost of constructing the house on the plot. Thus

public funds for land, building loans and infrastructure could be recovered from middle and high incomedevelopers much faster than at present, or the costs incurred to the public could be made payable upon plot allocationto create a revolving fund. For a part of the development, plots should be sold at market prices to permitcross-subsidization of low-income developers.

Public resources should concentrate on: land acquisition; planning; initiation and management of newschemes; Infrastructure provision; support to and organization of developers.

(e.g. building groups, cooperative funding, building materials stores, technical advice); and less on thepermanent financing of land, infrastructure and houses constructed, with the exception of schemes specificallydirected towards the poorest population sectors.

A more active public land acquisition policy is necessary to ensure control of development, and to secure forthe public a bigger share of the profits from the land market.

Land may be developed according to less refined methods, e.g. passed on in large blocks to private developers,with reserves held of the land required for public institutions and roads. The appropriateness of this strategy will differfrom country to country and from town to town according to the political strength of land owners, and the land tenuresystem.

Unauthorized development cannot be prevented completely, but an abundant supply of plots may minimise it.Planning methods should be revised to take into account the probability of continued unauthorized development.

Finally it should be repeated, that at this moment in Kenya, the most important strategy for improving futurehousing conditions for the poor will be a vigorous 'pre-upgrading' of the still sparsely built-up unauthorized,'informally planned' subdivisions to prevent slums developing, and to guarantee sufficient space and provide anadequate institutional framework for public institutions and the productive sectors.


Appendix: Comparison of returns 1980-85 on private investments made in 1980 in Makongeni andDandora in KSh.

Makongeni DandoraDeveloper's investment in land and fees for infrastructure, planning, etc. to public authority 3,125 0

Construction cost for one rooma 12,000 9,000Total private investment for one room 15,125 9,000

Public loans, formal/institutionalised loans receivedb 4,296 2,556Private investment or informal/ non-institutionalised loansc 10,830 6,444

Net rent per month excl. water and electricity 200 300T otal rent 1980-85 12,000 18,000

Repayment on formal/ institutionalised loansb 5,681 1,615Net income over five years 6,319 16,385

Annual interest on private investment 9.6% 29.0%a: Rooms constructed in Makongeni are bigger, and costs there include on-site infrastructure and wet core.b: Loans in Makongeni are only from banks, cooperative unions, employers, etc. Interest is high and repayment period veryshort. Hence the relatively high loan repayment in Makongeni. T he grace period on building materials loans in Dandora reducesrepayment in this five year period. However, in the following five year period, rent increases are higher than the repayment on thisloan.c: Some loans are interest free, e.g. loans from relatives, other loans carry a very high rate of interest and are expected repaidin 1-2 years..

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