Influence of Supply-side Factors on Provision of Affordable Housing: A Case Study of Real Estate Developers in Kiambu County, Kenya

Abstract

This research focuses on understanding the effects of supply-side factors on affordable housing delivery by developers in Kiambu County-Kenya. Some of the areas of concern are land acquisition, the cost of building materials, the economy, the political environment, and the part played by infrastructure in these factors. Based on theories like Supply and Demand, Housing Market Segmentation, Business Cycle, and Public Choice, this study employs a mixed-methods technique to involve a targeted 114 respondents, including real estate developers, heads of housing, and sub-county planners. Quantitative data was collected using structured questionnaires while qualitative data was collected through semi-structured interviews. Analyzing data descriptively and inferentially, correlation and regression identified major challenges, mainly scarcity of land, high costs of materials for affordable housing, and fluctuations in economic conditions. From the analysis of the results in this study, it is evident that land availability is a contributing factor to affordable housing in Kiambu County since there is a positive relationship between the accessibility of land and housing provision (r = 0.342, p = 0.000). The study established that affordable housing is influenced by the cost of building materials, where high cost immensely affects the capacity to provide housing (ß = 0.367, P < 0.05). The study reveals that the economic factors, particularly financial stability, and available credit ratings, positively contribute to affordable housing in Kiambu County (ß = 0.195, *p = 0.020). The findings show that the economic factors, specifically financial stability, and available credit ratings, have a significant and positive relationship with affordable housing in Kiambu County (ß = 0.195, *p = 0.020). Analyzing the impacts of government policies on the provision of affordable houses was positive but not significant (σ = 0.130; p = 0.064), meaning that the current policies in Kiambu County may not fix housing problems. The introduction of infrastructure development into the model increased the R2 value, indicating better explanatory power. Interaction terms such as availability of land and infrastructure development (β = -0.113, p = 0.000) and cost of building materials with infrastructure development (β = 0.176, p = 0.033) were significant, highlighting that infrastructure development can enhance or mitigate the impacts of other supply-side factors on housing provision. The study recommends that the following policy interventions be made: It is these reforms that should address issues to do with holding land for speculative purposes and encourage the release of land for affordable housing projects. The study recommends that specific financial incentives should be introduced to help reduce the high cost of building materials as the study established that high costs of these materials are among the factors that lead to making houses less affordable. This study recommends that the county government should focus on infrastructural development in areas considered suitable for affordable housing. This study recommends an efficient approval mechanism, a clear code regarding construction, and a robust policy on mixed-income developments. It is crucial to enact policies that will help develop close ties between public agencies, developers, and non-profit organizations to enhance the implementation and regulation of the policies.