Home developers bet on removal of red tape to unlock cheap credit – Business Daily
An apartment under construction at Hill School Estate in Eldoret town. FILE PHOTO | NMG
Property developers are looking to the new government led by President William Ruto to cut red tape in approval processes and help unlock cheaper credit. They say this will kick-start the sector whose performance has performed under par in recent years.
Developers said support for the sector will also come through continued infrastructure development, which was a key pillar in the Jubilee administration.
Mi Vida Homes chief executive Samuel Kariuki said although tax incentives and rebates which were put in place in the last five years were a welcome relief, a lot remained to address bureaucracy around their access.
“The definition of the qualifying projects is also too narrow and not reflective of the practical minimum cost of delivering residential units, especially closer to the key commercial nodes on Nairobi,” said Mr Kariuki.
“We are also looking to the new national and county administrations to look into the costly statutory compliance processes for developers as they are inconsistent with the necessary partnerships between the government and the private sector to address the large deficient in affordable homes production.”
One of the commitments of the new government was to give developers incentives to build more affordable units.
Daniel Ojijo, a property developer said the government should continue improving infrastructure, which is the bedrock for development in the real estate market.
“We need to look at infrastructure and we hope it will be prioritised because it opens up a lot of opportunities in inaccessible land by making it easier for developers to venture out of the city,” said Mr Ojijo.
Urbanisation has caused the city to encroach on former green spaces such as the nearby national parks and forests due to congestion around the central business district.
Mr Ojijo said water and sewer connection and utilities such as electricity are essential that the new government cannot ignore.
He urged authorities to pay attention to legislation and approvals of property developers.
“Speed up approval and legislation processes by providing documentation and licenses to developers in time,” said Mr Ojijo.
The developers also cited the high inflation as a concern, saying it has raised the cost of construction materials slowing down their projects.