The construction industry has witnessed a dynamic interplay of forces in 2023, marked by notable achievements and persistent challenges. According to the AAK Built Environment Report 2023: Escalating Cost of Construction and Lack of Planning Still a Hurdle in the achievement of affordable housing, the industry experienced an influx of projects, with the National Construction Authority (NCA) receiving a total of 4,770 applications from January to October 2023. Notably, 70.3 per cent of these applications, totaling 3,354, were successfully registered.
Residential development constituted the majority, representing 54 per cent of the total applications, reflecting a sustained demand for development. However, the sector faced formidable challenges, notably the escalating costs of construction.
Speaking during the unveiling of the report, Florence Nyole, President, Architectural Association of Kenya noted that the cost surged from Sh34,650-77,500 at the beginning of 2023 to Sh41,600-100,800 by December 2023.
She added that the spike was attributed to the increased costs of construction materials and fuel, exemplified by the surge in the price of steel reinforcement bars from Sh140.60 per kg in December 2022 to Sh160.26 per Kg in December 2023, marking a 14.29 per cent increase.
“Similarly, the cost of cement rose from Sh650 per 50 Kg bag in December 2022 to Sh750 in December 2023, marking an approximate increase of 15.38 per cent. These escalations have been largely a result of the increased import costs influenced by the devalued currency.In addition, land rates have surged by an alarming 6.41-fold since December 2007. In urban centers like Nairobi, what was valued at Sh30.3 million has now risen to Sh190.4 million in 2023. These exorbitant construction costs, hinged on the cost of building materials and land, threaten the achievement of affordable housing,” she said.
The status of the Built Environment (SBE) report provides an overview of the current state of the Built Environment in Kenya highlighting key trends, challenges and opportunities. Other issues that the report highlights is the increase in land rates by an alarming 6.41-fold since December 2007. In urban centers like Nairobi, what was valued at Sh30.3 million has now risen to Sh190.4 million in 2023.
These exorbitant construction costs, hinged on the cost of building materials and land, threaten the achievement of affordable housing as development control emerged as a critical challenge stressing construction industry professionals.
“The absence of essential planning and legal frameworks, such as local physical development plans, zoning regulations, Development Control Regulations, and Building Regulations, contributed to haphazard developments in urban areas. For instance, the Nairobi Development Control Ordinances expired in 2014, and the zoning guidelines have been arbitrary,” she revealed.
Recognizing this, AAK surveyed its members to gauge the efficiency of Nairobi, Mombasa, Kisumu, Nakuru, UasinGishu, Kilifi, Tharaka Nithi, and Kiambu counties in granting development control applications.
The survey revealed that the delays in construction permitting experienced in the counties are not inherent to the systems or external factors but result from human actions and oversights. While 43 per cent of AAK members in Nairobi noted an improvement in approval times, with an average of 8 weeks, 7 per cent reported the most prolonged approval timeline, exceeding 32 weeks. In Mombasa County, only 16.7 per cent of applications received approvals, with 83.3 per cent remaining unapproved. In most cases, members have to provide facilitation to county officials for successful processing.
The engagement of consultants in the Affordable Housing Program has been The Architectural Association of Kenya’s (AAK) focus since the inception of AHP under the Big Four Agenda. With a total project pipeline of 838,876 units, the government has completed 584 units and launched 39,879 units, and some 34,355 units were waiting to be launched as of November 2023.
“While some of our members have volunteered to be consultants for the affordable housing project, there is still an issue when it comes to negotiation of the consultation fees for the work they are doing. Feasibility studies also need to be done for the projects and we have given our comments on the same,” the President concluded.