The financing costs. It is noted by Sheuya, (2007)

The
urban population accounts for 76% of the total world population and it is
expected to increase to 4 billion people by 2030. (UN-Habitat 2012). More and
more towns are now getting converted into cities. This phenomenon of
urbanization has brought with it enormous challenges manifested in the acute
shortage of housing resulting to expansion of urban slums and informal
settlements, unplanned urban sprawl, environmental pollution, deterioration,
deficiencies in modern basic facilities, and general urban decay. (Aluko,
2010).Yet governments’ effort to provide affordable housing to the urban poor
has remain a dream to be actualized.

The
rapid urbanization has greatly impacted on the housing provision with the
housing sector characterized by an increasing housing demand Vis a Vis low
supply in Kenya. For instance, 150,000 units of houses are demanded yearly and
only 30,000 units of houses are built by both private and public sector yearly
and deficit of 120,000 units needed yearly.  (UN-habitat 2015) Despite
numerous efforts from non-governmental organizations (NGOs) and recent
governmental activities, the trend is yet to be reversed.

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Affordability
of housing can be argued from two tenure perspective; Home ownership policy and
tenant occupant policy. Home ownership policy has been give more priority than
tenant occupant policy or in some country totally ignored, this can be
evidenced from the definition of affordable housing by many authors. According
to Bramley, 1994; Ludwig et al, (2002). Argues that affordability can be
determined by the level and distribution of home prices, household income and
the structure of financing costs. It is noted by Sheuya, (2007) that adequate
housing finance will determine affordability of housing, because it can help to
produce the essential components of housing namely: land, on-site and off-site
infrastructure, building materials, as well as offsetting construction costs.

Affordability
is also perceived as related to incomes, housing costs, housing availability,
employment, maintenance of the existing affordable housing stock, and patterns
of new construction.

Housing
co-operative as third sector in provision of affordable housing has been  classified into three main types of
co-operative namely; full equity, limited equity and non-equity, the first two
correspond to owner-occupation and last correspond to renting. In a full equity
co-operative,  members purchases a share
equal to the value of a unit of house which give him a right for occupancy .When
they leave, they can sell their share at market value. Limited-equity
co-operatives that attempts a compromise between affordability and increase in
market value, when they leave, members receives payment based on formula to
revalue the original share and lastly non-equity co-operative, members are
allocated homes on the need basis after paying a nominal amount for a
membership share, when they leave they only get their nominal share back.
(Birchall,
2009)

Housing
co-operative also have three main tenure model. Limited housing co-operatives,
acquire land and subdivide the land to the members. Multiple mortgage housing
members owns individual units and land but common areas are owned and
maintained by co-operative; continuing housing co-operatives-co-operative owns
land, houses and common areas but members hold equal shares for all assets.
(UNCHS,
1999), generally, housing co-operatives in Kenya can be described as limited
housing cooperatives since co-operative members acquire dwellings in freehold
ownership status after completion.

Housing
co-operative has been historically, still remains the preferred choice for
provision of affordable housing for majority of low income household globally.
Understanding that affordable cooperatives have been developed under varying
historical circumstances provides insights on how they could play a role in the
future supply of affordable housing. In Estonia, housing co-operatives manage
60% of the country’s housing stock, while in Poland housing co-operatives own
20%, and in Sweden and Norway about 18% of the total housing stock and Switzerland
5% of the stock. In contrast, co-operative housing accounts for less than 1% of
all homes in the UK, Canada and the United States (Moreau and Pittini 2012).

Housing
co-operatives in Kenya has been referred as hybrid housing co-operative,
members are able to get all the housing needs from the same co-operative for instance,
acquisition of land, construction of a building and financing ‘one stop shelter
shop” (Sally et al, 2007) Housing co-operative model popular in Kenya is
limited equity co-operative whereby co-operative acquire and build affordable
housing after completion members are handle in all the documents of ownership.

Affordability
of housing in urban area in Kenya has gone high even those with high-income and
upper middle-income cannot affordable housing without a mortgage finance. Low-income
households who constitute of 83% of people in urban area cannot afford quality
housing. Affordability problem is also contributed by inappropriate policies
relating to housing, where they exist, they are not clear and poorly
implemented, and therefore widening the gap between the stated policy and
policy outcome, as a result low income household live in  slum and informal settlement and top income  and 
upper middle groups occupy the housing units planned for the poor.
(Mitullah 1993)

Recent changes in Economy Policy has led
to deregulation and liberalization, creating  new opportunities and challenges for housing
co-operatives particularly on governance issues. It will demand for strong
accountability and control of housing co-operative boards and management
not
only to state bodies, but also to other stakeholders.  (Mullins et al. 2012)

 

 

According to Yates and Gabriel,(2006);
Disney, (2006); Cairney and Boyle, (2004) argues that affordability problems is
influenced by the level and distribution of homes prices, household income and
structure of financing  Today, affordable
housing are faced with numerous challenges, such as adapting to increasing
demand for affordable housing, lack of funds, issues of governance
,inappropriate policies, socio-demographic change, improving the sustainability
of the housing stock and, the environmental quality of the neighborhoods, and
coping with unfavorable conditions in the financial and housing markets.

 

1.2
Statement of the problem

Housing
is where successive generations find home; to keep healthy, protect, develop,
socialize, be educated and prepare one to adulthood. Housing is basic human
need. But no country is yet to satisfy the delivery of affordable housing to
various socio-economic groups that make up its populace. Affordable housing has
been declared by international and national laws as fundamental human right.

Economic
liberalization policy in Kenya enhanced the role of private housing markets and
reduced the scope of public housing, with the retreat of the public sector in
the provision of affordable housing, private sector were unable to cater for
housing needs cross all income groups. Housing co-operatives gained ground as
third sector organization among urban policymakers, scholars and community
activities.

Housing
cooperatives as collective organizations offer several additional advantages
including; useful vehicles for building community, they are used to organize
slum-dwellers into collectives to obtain group credit and to build self-help
housing, they provide a long term shelter with different tenure system .housing
co-operative is “one stop shelter shop” by providing variety of services to
their members, they facilitate mobilization of resources together from their
members hence lowering the individual  transaction cost, fosters collective action
and self-help. It also increases the creditworthiness of a member and lastly
limits or prevents speculation housing co-operative

The
annual demand for affordable housing in urban towns is 200,000 units and the
current annual production is 30,000 units both private and public sector
creating a deficit 170,000 units yearly. However, government effort has not
reversed the trend. For instance, public-private partnership build houses which
consist of 80% of the new houses were for high-and upper middle-income people,
while 83% of the demand is coming from low-income families and 89% of the urban
population cannot afford a mortgage, generally this explain why low and middle
income groups have been left out in housing development and as a result slums
and informal settlement will continue to increase.

Thus the intention is to examine the
policy, the structure and the role of the implementing authorities and their
standards, with the intention of assessing whether the housing needs for low
income groups can be met through them, or whether there is need for
restructuring and/or extending the existing systems. The investigation covers
the key agency, which implemented the UTP scheme and other institutions, which
played a role in establishing, developing and applying the policy.

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