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1.1 Background of the study

The provision of affordable housing remains a challenge to most countries in the world, particularly those in the developing world and in transition. It has been estimated that the world’s urban population will double to more than five billion by 2025, with 90% of the increase taking place in the developing world (UNHSP, 2003). This mass urbanization will be catastrophic, especially in the Africa continent where the urban population is exploding at an approximate rate of 6.9% amidst a period of slow economic progress.

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In Kenya 10 million people live in urban area, 60% (6million) live in slums and informal settlements and 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. Kenya’s population is expected to grow from 38.6 million people in 2009 to 65.9 million by 2030 (UN-habitat 2015)

Therefore this study will aim at examining the housing cooperatives as alternative provider of affordable and sustainable housing in Kenya. The central message is that affordable housing in Kenya remains a serious and considerable challenge, especially for low-income households. Due to a lack of affordable and well located housing alternatives, nearly 60% of urban households in Kenyan live in slums and informal settlements (Muraguri 2011).The presence and expansion of these is a physical manifestation of poorly functioning housing sectors, which do not provide a range of affordable housing alternatives, especially for low- and middle-income households.

1.1.1 History of Housing Co-operatives around the World

Co-operatives can be traced back to 2067 BC when King Hummurabi introduced cooperative farming in Babylon. Other early forms of co-operatives include credit unions in ancient China, craftsman guilds in Rome and funeral societies in early Greece (Association to Resource Co-operative Housing, undated). In comparison with other co-operatives, housing co-operatives had a slow start due to the unique constraints pertaining to housing. Housing co-operatives could only be started with outside support (private and/or state) due to the high start-up costs (which poor people usually cannot afford). Initial support for housing co-operatives came from the capital-rich consumer co-operatives. Housing co-operatives were preceded by other forms of housing e.g. private renting, housing associations and mortgage owner-occupation. Trade unions and churches have played a major role in the development of co-operative housing (Birchall, 1997) in BC Institute for Co-operative Studies, undated).

Although the first known housing co-operative in the world was brought into being after a large fire created a serious housing shortage in Rennes, France in 1720 as explained by Richard Siegler and Herbert J. Cooper-Levy (1986) as a member and former member of the National Association of Housing Cooperatives. Housing co-operatives are deeply rooted in the co-operative movement. Co-operative housing is owned by the residents through a legal co-operative structure using it as a vehicle to reach their collective goal, namely providing shelter. Each member purchases a share in the co-operative, which entitles them to live within a specific unit, participate in decisions regarding their individual and common living spaces and are actively involved in the governance of the co-operative. A housing co-operative member’s share is their investment and carries with it the right to occupancy under an occupancy agreement.

 In the mid 1800’s several apartment associations operated co-operatively in New York City and the first housing cooperative was called a “home club” was established in New York City in 1876 but cooperatives did not become well established in the United States until after World War I. In Birmingham, England a Building Society was used for a group of people to save collectively and build row housing. Once everybody was housed, the Society was terminated (BC Institute for Co-operative Studies, undated).

In Norway, if you are not an individual home owner, you are most likely to occupy a housing co-operative home than any other form of housing. Fourteen per cent of their total housing stock of 1.7 million dwellings is co-operatively owned and managed under the umbrella of the Norwegian Federation of Co-operative Housing Associations (NBBL). The NBBL are responsible for 15-20 per cent of total housing production in Norway each year.

Sweden has two major co-operative housing organizations. The largest housing cooperative, HSB Riksforbund, manages over half a million homes. In the United States, housing co-operatives are sponsored by a development group. The development group was established to assist housing co-operatives and the co-owners of the co-operative jointly own the physical structures through shares in the co-operative.

Canadian Housing Co-operatives are served by independent resource groups who acquire land, design and constructing the houses while funding comes mainly from a Government body. Today housing co-operatives are the largest non-profit housing sector housing over 250 000 Canadians.

In Europe Co-operative housing has been historically, and still remains an important part of the housing market, there are 10 614 000 housing co-operatives. Fifteen per cent of Norway and 2 per cent of the United Kingdom’s housing stock is co-operative. The Czech Republic has 10 000 housing co-operatives and the largest co-operative housing complex in the world is the Kent Co-operative in Baitikent, Turkey where over 250 000 households live in co-operative managed homes. Twenty-five per cent of housing developments in Turkey in the last 25 years has been through the co-operative system (Karlyle, 2005)

1.1.2 Housing Co-operatives in Africa

In Africa, the housing situation is poor in urban areas due to rapid urbanization. In 2009, when Africa’s population crossed 1 billion, it was estimated about 40 per cent of total population lived in urban areas. In addition, African cities are said to have retained the strongest demographic growth in the world. It is projected growth in the next forty years will mostly take place in slums. In cites, access to housing including slum upgrading are part of the major challenges in Africa (UN-Habitat, 2010). These highlights imply very serious challenges for urban Africa, especially in providing decent affordable housing and immediate strategy need to be sought by African governments.

Housing co-operatives as alternative housing provider often manage to provide housing at costs that are below the price of a similar home in the open housing market. The reason for this is that the prime objective of housing co-operatives is to provide good quality and affordable housing in the interests of their members, and not to maximize profit for developers or shareholders. The cooperatives have re-emerged as important organizational elements of housing in African countries in the face of the neoliberal policies that swept across during the early 1990s. The ‘enabling’ approach emphasized by the World Bank (1993) and the United Nations Centre for Human Settlements (now UN-Habitat) Global Shelter Strategy in 1988 (UNCHS 1996) sought to reduce the scope of the public sector as a provider, while enhancing the role of the private housing markets. With the retreat of the public sector, and the inability of the private sector to cater to low-income groups, third sector organizations like housing cooperatives gained significance in Africa countries.

Housing cooperative as collective organizations, cooperatives are regaining policy interest in developing countries. Recognizing the significance of housing cooperatives, the UN-Habitat (2000) carried out a broad assessment of cooperative housing strategies in eastern and southern African countries, such as Kenya, South Africa, Tanzania, Uganda, and Zimbabwe. Vakil’s (1999) literature review of 30 cases of community-based organizations in Africa and Latin America between 1964 and 1994 shows that an overwhelming majority (22 of them) were organized as cooperatives. Newer forms of collective organizations, such as community land trusts, bear significant synergies with housing cooperatives (UN-Habitat 2012).The United Nations has recognized 2012 as the International Year of Cooperatives. Birchall (2003, 2004) argues that cooperatives are key organizational partners not only for reducing poverty, but also for attaining the Millennium Development Goals. In the housing sector, cooperatives are useful mechanisms for social housing and to foster community action.

1.1.3 Housing Cooperatives in Kenya

In Kenya co-operative dates back in 1908 when the first Cooperative was established by white settlers. In 1979 National Cooperative Housing Union (NACHU) was registered as the umbrella organization for housing cooperatives in Kenya. NACHU’s mission is to contribute to improved shelter and quality of life for low-income communities through the provision of advocacy, technical, and financial services. NACHU also supports member cooperatives with training in financial management, governance, and other important topics including HIV/AIDS prevention. (Sally et al, 2007)

Originally set up as a technical service organization, NACHU became member-driven and controlled by democratic governance structures. Today, NACHU has become a leading organization in the provision of housing microfinance, capacity building and technical services. In 2011, there were more than 390 housing co-operatives registered with NACHU in seven regions of Kenya. NACHU’s vision is to be a leader in facilitating affordable and integrated shelter solutions in Africa.

In 2012 the Kenyan population was 38.8 million with approximately 26.5 million living in rural areas and 12.3 million in the urban centers. Urban planning has not been able to keep up with the rapid urbanization in Kenya and the demand of housing far exceeds the supply. The need for new housing in urban areas currently stands at 150,000 units annually while only 23% of this demand is met. In rural areas, estimates show that over 300,000 housing units require improvements each year. The gap between supply and demand is more relevant to low and middle income households who represent 48% of the required new houses.

The expansion of access to adequate and affordable housing for Kenyans has featured in all key national policy initiatives, starting with the 1966 Sessional Paper No. 5 on Housing. Subsequently, policy objectives relating to the access to adequate housing have been elaborated in various five-year National Development Plans and Poverty Reduction Strategy Papers (PRSPs). The latest addition to the housing policy framework is the Sessional Paper No. 3 on National Housing Policy of 2004 but much has not been achieved.

Organizationally, the main emphasis of cooperatives is on the collective organization and management. Housing cooperatives are not specifically oriented toward any income group per se. On one hand, cooperatives have been used by high-income groups for housing exclusivity (Maldonado and Rose 1996). On the other hand, cooperatives have been vehicles for social housing, particularly in housing low-and moderate-income households. With the retreat of public housing for low-income households, and the inability of the private sector to accommodate these households, cooperatives have been viewed by developing countries as a mechanism to foster low-income housing (Fruet 2005). Yet, the use of cooperatives across the income groups could be useful in averting the stigma of cooperatives as solely low income projects. At the same time, the high-income cooperatives may have more capacity to set up institutional support structures.

1.2 Statement of the problem

Kenya has been experiencing very rapid urbanization resulting from natural population growth and large-scale rural-urban migration driven by rapid social economic changes and development. This phenomenon of urbanization has brought with it enormous challenges manifested in the acute shortage of housing resulting to overcrowding, high house prices, substandard human settlement conditions such as slums and squatter settlements, inadequate infrastructure, community facilities and services. The demand for affordable and sustainable housing in urban areas has been critical since the 1960s, with relatively little efforts made to produce a sufficient supply.

However, housing affordability issue has always been discussed on its own, without including other factors that would influence it. Housing affordability should be mutually discussed with sustainability issue because they are affecting one another. Indeed, Maliene and Malys (2009) have emphasized that affordable housing is one of the criteria that could deliver a sustainable community. Similarly, to create a sustainable community, the existence of affordable housing products is important in any housing development.

Housing is one of the areas in which co-operatives can play a leading role as a result of their long experience in promoting sustainable development and reduction of poverty by providing sustainable livelihoods, promoting partnerships and building capacity. Research in co-operative housing could not have come at a better time than now, when we are experiencing acute shortage of housing in the urban areas. The need to explore the housing co-operatives in Kenya to know how they have been faring, the successes and failures recorded over the years becomes imperative with a view to advancing strategies that will ensure viable and sustainable housing co-operatives and the real problem of housing delivery does not lie in the allocation subsystem or co-ordination subsystem, but in the delivery process.

Above all, the United Nations (UN, 2009) reports that there is lack of research on cooperatives Housing which made it impossible to know how they have impacted the society, this lack of research according to United Nation resulted in Kenyan government not being able to make informed decision on affordability and sustainability co-operative housing. To this end, research in co-operative housing is imperative in Kenya because such a study has not been done before.

1.3 Significance of the study

This study differs from earlier studies carried in this area thus will contribute significantly on the existing literature. Studies carried in this area focused on the contribution of affordable housing through public private partnership model  Mutisya (2015) Ojwang’ (2015) Kung’u (2013) Ottawa, (2011) Nabutola (2004) Ooko (2013) Kwamboka (2013) However this study will focus on co-operative housing as provider of affordable and sustainable housing to low and middle income earners.

Rapid increase of slums and informal settlement, Inadequate housing, poverty, overcrowding, urban population growth and increase in crimes among others has resulted to deterioration of environmental hygiene and causing heath problem to the resident in urban areas.

Furthermore, the data to be collected after research, can be useful to ministry of housing rural-urban development ,county governments, NACHU  and  other key stakeholders . Housing encourage healthy living as it is always said “a properly housed population is a healthy nation hence a wealthy nation”.

In general, the research results seek to inspire people of Kenya to become creative and demonstrate ways of making our urban residential housing attractive physically, environmentally, culturally and economically.

1.4 General objective of the study

The general objective of this study will to determine whether co-operative housing deliver affordable and sustainable housing in Kenya.

1.4.1 Specific objective of the study

i)                    To evaluate the contribution made by  co-operative housing in provision of affordable and  sustainable housing in Kenya

ii)                  To determine the factors influencing affordability of  Co-operative housing  in Kenya

iii)                To determine the factors influencing sustainability of  Co-operative housing  in Kenya

iv)                To establish the  relationship between affordability and sustainability of co-operative  housing in Kenya