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A boom in Kisumu housing sector in the offing

By DALTON NYABUNDI (Updated Wednesday, December 3rd, 2014) – Daily Nation- Read original article here.

Kisumu is set to experience a boom in the housing sector in the next five years.

A series of development projects are scheduled to begin in January 2016, targeting low- and middle-income earners.

And not just that: the developers at the lakeside city have chosen to use pre-engineered structural insulated panels (Sips) and interlocking bricks, both of which cut construction costs by up to 50 per cent.

These technologies will be used in upgrading informal settlements in a partnership that ropes private developers into the ambitious Kisumu Urban Project (Kup) and the Kisumu Integrated Urban Development (KIUD) plans.

Sips are a form of prefabricated construction technology popular with both Housing Finance and National Housing Corporation (NHC) projects.

It comprises building materials made from a form of plastic engineered to fit the specifications of the structures to be built.

At the site, therefore, the partitions are just assembled into complete units, which can go up to four storeys high.

The interlocking blocks, on the other hand, are a cheaper alternative to bricks and stones.

LOW-INCOME EARNERS
The pre-engineered houses are being introduced by Kisumu Real Estates (KRE). They will cost up to half the prices of the concrete types. The developers are targeting the low- income earners with these.

Kisumu is further warming up to Korean investors, whose construction technologies have resolved housing crisis in Seoul.

KRE will in early January assemble a model three-bedroom unit at Otonglo before proceeding to build 250 units at Obambo, some 12 kilometres away from the CBD on the Kisumu-Bondo road.

KRE co-founder Luke Murfit is however concerned about the negative perceptions by locals on the alternative housing technology.

“Contrary to prevailing beliefs that the houses are weak, the SIPs system, for example, (makes houses that) last up to 90 years and do not crack,” he says.

The technologies will be used to construct storeyed buildings as Kisumu moves to turn slums into satellite cities.

A 2005 report by UN-Habitat shows that more than 50 per cent of Kisumu residents cannot afford standard houses, and that those living in unplanned informal settlements make about 70 per cent.

ECONOMIC CONSTRAINT
Most residents in the lower middle income group live in flats, where rents take up to 20 per cent of their gross incomes. Those fresh into careers spend even more, according to a number of interviews by DN2.

It is this economic constraint that the new developments seek to end by providing cheaper houses and improving living environments.

KUP will revamp basic infrastructure, after which KIUD will move in to implement the projects. The work will involve phasing out run-down houses and upgrading slums.

These are not the only projects on the drawing board, though. More than 1,500 middle-income housing units are planned for construction by various private real estate firms over the same period.

At the end of last month, KRE started construction of 800 housing units at Kisian, some 10 kilometres from Kisumu CBD.

The controlled housing project, whose construction has been estimated at over Sh4 billion, will be of the now trending gated community type, complete with a shopping mall, communication hub, a community centre, schools, a hospital and nature trail.

LUCRATIVE MARKET
In this housing trend, prospective home owners purchase land then they approach selected banks for mortgage to finance construction.

Other projects in progress are by the Lake Estate Agencies, which is building middle-income rental apartments at Mililani Estate.

NHC is also building some 180 housing units in the lakeside town. According to the director, Nishma Karia, the demand for apartments is high in Kisumu, caused by the rising number holiday-makers from the diaspora who are opting for rentals as opposed to hotels.

Demand from the diaspora market has seen realtors embark on homes expos to tighten their grip on the lucrative market.

The annual Kisumu Homes Expo has been making efforts toward showcasing the resurgent real estate sub-sector by targeting contacts and representatives of the diaspora

Upmarket residential houses are to be found in the new Riat Hills and Mamboleo estates. Detached bungalows are migrating to the hillside estates following invasion of Milimani, also an upmarket estate, by expansionists who have put up mixed-use developments.

WOOING INVESTORS
The county is planning to use this balanced growth in its charm offensive to woo more investors.

The announcement by Kenya Airports Authority that the Kisumu International Airport will start handling cargo from July 2015 is expected to draw heavy commercial and residential structures on land adjacent to the airport.

“The area will turn into a warehouse city,” KRE director Murfit predicts.

City manager, Ms Ombara says the expansion of basic amenities into the peri-urban neighbourhoods will create an infrastructural network that, coupled with others nearing completion, will further attract investments into the ballooning economy.