The government targets to mobilise Sh9.2 billion in private funds to build at least 2,820 low-cost residential units in the first phase of the Stoni Athi Affordable Housing Project.
This is part of the Sh70 billion the government expects to mobilise through the Public-Private Partnership (PPP) model in the financial year starting July, the 2025 Budget Policy Statement (BPS) shows.
“Government envisages mobilising Sh70 billion within the next Financial Year 2025/26 through private investments in PPPs by working with the private sector to develop projects in priority areas,” says Treasury in the BPS.
The houses will be built on a 23-acre land situated at Mombasa Road, Stoni Athi Estate, Machakos, as the government moves to improve homeownership, particularly among the urban poor. The land belongs to the National Housing Corporation (NHC).
The NHC, the contracting authority, targets to develop 10,500 houses on 150 acres of land in Athi River. The project includes 5,000 affordable housing units and 5,500 medium to high-end units.
With a PPP, the government and the private sector share the cost of a project. In the present case, the land belongs to NHC, which means that the only capital expense for the private developer is for constructing the houses and the attendant amenities.
The government is also expected to provide other physical and social infrastructure such as roads, electricity, and markets to these affordable housing projects making them attractive to potential unit owners or tenants.
Currently, the PPP portfolio has 37 projects at various stages, with the Stoni Athi being the only housing project.
Kenyans, particularly salaried employees, have been paying an affordable housing levy of 1.5 percent, which is matched by their employers, for President William Ruto’s plan to build at least 250,000 units annually.
Already, the NHC has sent out a request for qualification (RFQ), which offers interested applicants information that may be useful in preparing and submitting their applications, and, if pre-qualified, in submitting their bids.
“The Contracting Authority intends to pre-qualify suitable Applicants who will be eligible for participation in the Bid Stage, to award the Project through an open competitive bidding process,” said NHC in the request for qualification (RFQ), which closed on January 25.
The winning bidder, or the project company, is expected to construct both affordable and market-rate residential units. A fraction of the 2,820 affordable housing units are to be handed over to the NHC upon completion, while the rest will be retained by the project company. The developer will also build and retain all the market rate units, estimated to be at least 200.
Half of the affordable housing units will be one-bedroom, while one and two bedrooms will each be 25 percent.
Prices for the affordable housing units will be determined by an agreed criterion set by NHC. “The Contracting Authority will not prescribe or regulate the price at which the MRU are sold,” adds the RSQ.
A source at the NHC disclosed that there will be an investor forum on 5th April, following the closure of the tendering process.
Official data shows that the government has completed the construction of an access road to the Athi River-based project at a total cost of Sh120 million.
This part of the Sh20 billion Stoni Athi Waterfront City, in which the government plans the construction of 10,500 units comprising houses targeting low, middle, and high-income earners on a 150-acre parcel of land.
As early as 2015, the NHC had announced that it would float a Sh5 billion housing bond at the Nairobi Securities Exchange (NSE) with part of the proceeds being used to build maisonettes in Stoni Athi as well as flats in Mombasa.
The government currently has around 78 affordable housing projects in various stages of construction, with only a few considered fully completed, like Buxton Point in Mombasa and Bondeni Affordable Housing in Nakuru.
The affordable housing programme includes houses for military, police, and correctional services personnel, student accommodation, and private-sector developments.
