UN-HABITAT today signed a Memorandum of Understanding with Housing Finance which is aimed at exploring areas of mutual interest including provision of affordable housing.
The MoU signed by UN-HABITAT’s Executive Director Mrs. Anna Tibaijuka and Housing Finance’s Managing Director Mr. Frank Ireri enables the two organizations to explore opportunities for further collaboration on aspects of mutual interest in the field of affordable housing, infrastructure provision and finance.
“UN-HABITAT is the coordinating agency within the United Nations System for human settlements activities as well as implementation of the Millennium Development Goals of significantly improving the lives of at least 100 million slum dwellers by the year 2020,” said Mrs. Tibaijuka. “This is why we are so pleased to be working with Housing Finance, which is the premier financial enabler for the property industry in Kenya and a clear leader in integrated solutions that support the demand and supply of property. Together we hope to be able to make a difference in the lives of the urban poor in Kenya.”
Mrs. Tibaijuka said investing in the poor was a wise decision because they had shown that they could be relied upon to service their mortgage. “Because they cannot afford legal fees the poor will always strive to service their mortgage and as UN-HABITAT we see this as an advantage,” she said.
The Executive Director decried the high interest rates which she said was locking out many potential home owners. “Double digit mortgage rates are not conducive for the objective of providing adequate shelter for all those in need,” she said.
Potential solutions to this problem which she said could be explored was to follow the American model where Congress passed legislation increasing the mortgage period to 60 years as well as Nordic countries model where housing was encouraged by cooperatives.
On his part Mr. Ireri hailed the partnership between the two organizations saying it marked a milestone in the history of Housing Finance. “In order to address the acute shortage of housing we are positioning ourselves to enter into partnerships and this particular one is crucial to us because UN-HABITAT has the global perspective while we have local strengths that we can exploit,” he said.
The MoU intends to promote the exchange of ideas and models on Pro-poor housing and infrastructure finance mechanisms and for physical low-cost housing designs. Potential activities in this context are joint research projects, seminars and symposiums devoted to the issues of mutual interest including new financial mechanisms or building technologies.
The MoU will also provide the basis for potential cooperation in specific projects aimed at addressing the housing and infrastructure needs of the poor in Kenya. The MoU envisages exploring joint projects in the context of Corporate Social Responsibility (CSR) activities of Housing Finance and applying innovative housing finance mechanisms under UN-HABITAT’s new ERSO initiative.
A final area of joint interest is to undertake activities to lobby for the introduction of conducive public policies for low-cost housing and removal of constraints on lowering building costs in accordance with UN-HABITAT’s Governing Council resolution 21/7 on “Sustainable public-private partnership incentives for attracting large-scale private-sector investment in low-income housing” (adopted April 2007).