Evolution of the public private partnership (ppps) and its application in down market urban housing in Kenya

Abstract

The State Department of Housing in Kenya puts the housing demand in the country at 250,000 housing units per year, while actual supply is 50,000 units p.a. This demand for housing has accumulated to 1.85 million units as at 2018. This has led to the growing proliferation of slums and informal settlements, with the Department showing that there are over 500 such settlements. This state of affairs has been partly attributed to under-investment in low cost housing by both public and private entities. Stakeholders have therefore recommended the application of Public Private Partnerships (PPPs), which increases the role of the private entities in housing production beyond the traditional procurement method. Under PPPs, the public sector cedes the duty of actual housing development and concentrates on creating an enabling environment for the private party to effectively and efficiently perform the function of shelter provision. In addition to creating an enabling environment, the governments undertake monitoring, evaluation, creation of standards and enforcement. This study utilized secondary review of the literature on the evolution on PPPs and focused group discussion with selected officials at the State Department for Housing in Kenya. The purpose was to juxtapose the secondary literature review on how the concept of PPPs has been appreciated as an alternative to the traditional procurement methods. It was found out that private participation in infrastructure development has evolved over time, assuming many forms like: contracting out, privatization and lately PPPs. Kenya has been applying PPPs since the liberalization of the economy in 1994, though there are were earlier applications of the concept. The country has used PPPs in the hard infrastructure sectors like energy and transport, but little success has been recorded in housing development. It was concluded that PPPs are applicable in down market urban housing in Kenya since the concept has been successfully applied in other areas. Through PPPs, a sector like down market urban housing can access more capital resources, technology, innovation, efficiency and effectiveness. The implication of this finding is that more down market urban housing can be developed to address the huge gap witnessed in Kenya.