Kenya’s real estate sector needs inclusive, community-driven development

Kenya’s real estate sector continues to be one of the country’s most dynamic drivers of economic growth. Tower cranes dot Nairobi’s skyline, new gated communities emerge across suburbs, and high-rise apartments are reshaping the cityscape.

Beyond the visible momentum, the sector contributed approximately 5.3 percent to GDP in 2024, according to the Kenya National Bureau of Statistics’ 2025 Economic Survey. It also supports over 200,000 formal jobs and countless more in the informal economy: spanning artisans, quarry workers, transporters among others.

However, sustaining this progress requires a delicate balance between accelerating development and ensuring it is responsible, inclusive, and community centred. Project delays increasingly reflect challenges related to zoning, environmental considerations, and community engagement processes, areas where more inclusive planning can make a meaningful difference.

Beyond job creation and sectoral growth, real estate development also plays a significant role in public revenue generation.

Delays in project approvals and implementation not only stall private investments but also adversely impact tax collection across multiple tax heads including stamp duty, capital gains tax, VAT on construction materials and corporate income tax.

These lost or delayed revenues deny national and county governments much-needed resources, particularly under the current constrained fiscal space. In this sense, streamlining development processes through collaborative engagement is not just a private sector imperative, but a public interest priority.

Historically, interactions between developers, residents, and planning authorities have sometimes been marked by tensions and misalignment. Yet, these challenges present valuable opportunities to build more collaborative and inclusive approaches moving forward.

As Kenya’s cities face mounting pressures from rapid urbanisation, infrastructure demands, and the need for climate-resilient development, embracing these partnerships becomes ever more critical.

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As Nairobi and other urban centres continue to grow, the demand for efficient land use intensifies.

Land closer to the city centre holds inherent value for high-density developments, enabling cities to accommodate expanding populations, businesses, and infrastructure needs more effectively.

Densification is no longer a matter of choice but a practical necessity for sustainable urban growth.

However, this densification must be guided by robust planning, community input, and infrastructure readiness to ensure that it enhances, rather than compromises, liveability.

Encouragingly, global and regional examples point to a more effective path forward, one where residents are not seen as passive recipients of development or as opponents, but as co-creators of their urban futures.

In Ethiopia, Addis Ababa’s Public Participation Development Offices (PPDOs) organise residents into local development committees, enabling them to actively participate in shaping and implementing urban projects. This bottom-up approach has helped reduce conflict, improve project delivery, and foster civic trust.

Similarly, in South Africa’s Western Cape, the Lynedoch EcoVillage demonstrates what’s possible when developers, public authorities, and residents collaborate from the outset.

The project transformed a former industrial site into an inclusive, sustainable community, integrating housing, education, and environmental infrastructure in a model that has proven both economically and socially viable. Kenya has the potential to adapt and build on these lessons.

Residents’ associations are valuable custodians of community welfare, advocating for infrastructure adequacy, environmental sustainability, and liveability. Their perspectives often highlight critical considerations that can enrich projects, ensuring developments meet long-term needs rather than short-term ambitions.

By engaging residents meaningfully and early in the development cycle, developers can tap into local knowledge, foster goodwill, and enhance project outcomes. These engagements, however, should reflect mutual good faith, noting the practical necessity for dynamic zoning as the city’s population grows.

Aligning interests across all stakeholders is not only possible, but also essential to achieving developments that serve both economic and community needs. What’s needed now is a structured framework that formalises these engagements, encourages transparent dialogue, and incentivizes joint investment in critical infrastructure.

Indeed, we are already seeing promising models emerging within Kenya. In parts of Kiambu and Machakos, developers and residents’ associations have partnered to co-finance roads and drainage infrastructure, recognizing that shared investments yield shared benefits.

These initiatives, while still localised, offer important blueprints that could be scaled through supportive policy, matched funding mechanisms, and clearer planning guidelines.

It is also essential to recognise that the stakes extend beyond the real estate sector itself. The industry fuels demand across sectors from construction materials and manufacturing to banking and retail. Any slowdown has a multiplier effect on the broader economy.

At the same time, sustainable urban growth must be anchored in adequate infrastructure — roads, water, sewage, drainage, and power. These are not optional extras; they are core to building liveable, resilient cities.

Kenya does not need to reinvent the wheel. Models from across Africa and beyond have shown the transformative power of collaborative urban development. What is needed now is a mindset shift: from working in silos to working in partnership; from reactive approvals to proactive planning; and from focusing solely on structures to nurturing thriving, connected, and inclusive communities.

By fostering genuine partnerships, Kenya’s real estate sector can help build not just houses or offices but thriving neighbourhoods and resilient cities, places where progress is shared, and every voice matters.

The writer is the Chief Executive Officer, Mi Vida Homes. Email: [email protected]