Nairobi City Council housing guaranty (Umoja I)

Final PES covers the period 9/79-12/82; no methodology is given. The project largely achieved its goal of demonstrating that owner- occupied housing for low-income families can be built without substantial public subsidy by reducing building standards and relying on private investment by allottees to improve their dwellings. The project"s greatest success was that the Nairobi City Council (NCC) was able to deliver the housing, completed, in a timely and efficient manner. A total of 2,924 units were built with a cost overrun of 42%, the latter due largely to the devaluation of the Kenya shilling and inflation of construction costs. As a result of the overrun, the NCC will probably have to cover part of the HG loan repayments, but citizens" willingness to pay for housing may allow for full cost recovery. The project also spurred private investment, generating KSh.56 for each KSh.100 of the HG loan; 75% of the core housing units were added to within 4.5 years. Private investment, now Ksh.42,000,000, will increase to KSh.55,860,000 when the remaining units are expanded. The project has not, however, permanently increased Nairobi"s supply of affordable low-income housing. Umoja I was conceived as an owner- occupied development, but 76% of the units are now subleased, in violation of the tenant purchase agreement. Only 14% of current residents have incomes below the Nairobi median, 66% are in the 60th percentile for Nairobi income, and 25% in the 80th percentile. However, assuming that most of the original allottees did have incomes below the median, the poor have benefited from the project - largely by generating rental income. Subleased income far exceeds mortgage payments; return on investment is in excess of 18% per annum. Although a nursery school, an outdoor market, a health clinic, a secondary school site, and parks, recreation, and playing fields were to be provided (most by 1/78), only the primary school, health clinic, and some market stalls were completed by that date.