Housing Principal Secretary Charles Hinga has sparked discussion after claiming that some of the highest returns in Kenya’s real estate sector are found in informal settlements rather than in Nairobi’s affluent neighbourhoods.
Speaking during the 4th International Research Conference, Skills Competition and Expo at Kabete National Polytechnic, Hinga said many people assume that high-end properties in areas such as Kilimani and Muthaiga offer the best returns, yet the reality on the ground is different.
“Some of you in real estate may think apartments in Kilimani are very lucrative, or that a palatial home in Muthaiga gives good returns. Let me shock you, the best returns in real estate in Kenya are in the slums,” he said.
According to the PS, landlords in many informal settlements benefit from a system where tenants pay significantly more for basic services such as electricity, water and sanitation.
Hinga said residents in some low-income neighbourhoods often access electricity through informal connections linked to nearby transformers but are still charged rates that end up being much higher than what ordinary consumers pay through direct Kenya Power connections.
He noted that this leaves many households spending far more on electricity despite living in areas with limited services and infrastructure.
The PS also pointed to water as another major expense for residents of informal settlements.
Unlike people living in planned estates who receive water directly in their homes, many families in informal settlements depend on vendors for their daily supply.
According to Hinga, the cost of water in some of these areas can be up to 175 per cent higher than what consumers in formal estates pay.
“Then comes water, they do not provide you with water in the house, but they have got water cartels, water boozers that are selling, and they sell water up to 175 per cent more to their clients,” he said.
He added that sanitation services also come at a cost, with some residents required to pay every time they need to use toilets and other basic facilities.
Hinga described the situation as a “penalty of poverty,” arguing that low-income households often spend more on essential services than wealthier Kenyans living in better-serviced estates.
He cited estates such as Kibra, Mathare, Huruma, Kawangware, Kangemi, Dandora, Kariobangi, Kasarani, Embakasi and Eastleigh as examples of areas where such challenges are common.
According to the PS, the government’s Affordable Housing Programme is partly intended to address these inequalities by providing decent housing and improving access to affordable services for low-income families.
His remarks are likely to reignite debate on the cost of living in informal settlements and the challenges many urban residents continue to face despite living in some of the country’s most densely populated areas.