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Confusion At City Hall Hits Hard On Housing As Deals Fall

BY Juma · February 5, 2020 09:02 am

The confusion and delays in the issuance of permits to property developers by City Hall have hit hard on the sector with projects shrinking by 69 billion shillings in a period of 12 months to December 2019.

In 2019, according to a report released by the Architectural Association of Kenya (AAK), the value of properties approved dropped to 141.27 billion shillings, a 32.8 percent drop from 210 billion shillings report at the same period in 2018.

“The delay in the processing of construction permits by the Nairobi City County Government negatively affects all persons in the construction value chain by prolonging project implementation timelines,” said AAK.

There has been confusion at City Hall as a result of Governor Mike Sonko making various changes including the firing of those mandated with issuing the permits. The delays have also been blamed on technical hitches at City Hall as well as the Court’s decision to bar Governor Mike Sonko from accessing his office over an ongoing corruption case.

In 2019, according to AAK, total fees collected by the county from permits dropped to 102.9 million shillings from 333.1 million shillings in 2018. The number of approved development applications, during the same period, dropped to 613 from 955 during the second quarter of 2019.

Mr. Charles Hinga, Housing Permanent Secretary, has hit out on the county government of Nairobi saying the delays were affecting the housing sector in the county and piling costs on developers. “The delays add an extra 15 percent cost to the development budget that is ultimately passed to buyers.”

In 2019, according to the report by AAK, 71.56 percent of approved projects were residential units, 13.74 percent were public units, 5.21 percent industrial structures, 5.69 percent commercial buildings and 2.3 percent were mixed-use houses.

The county government is yet to issue a statement on how it is planning to fix the delays even as developers continue to incur losses as the wait goes on. The delays, according to experts, might also lead to corruption deals where developers will start setting up properties without the right approvals.

READ: Real Estate Sector Grew 4.8% in First Three Quarters of 2019

Juma is an enthusiastic journalist who believes that journalism has power to change the world either negatively or positively depending on how one uses it. (020) 528 0222 or Email: info@sokodirectory.com

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