1. real estate

-
t -
r•.. •
,
1'"'...•
\
~.J
,
(
,>-.
'
,
. ,.
• t'
I)
aU
.(:.J ).
THE ROLE OF ES'fATB
HOUSING
. '"
AGEN'~S IN
MARKET
BY
G.N.
GITONGA ~HO
LEC'fUR:::;R,
A PAP~R
'Ih1
DEPAR'I'HBNT
OF LAND DEVELOPMENT.
UNIVERSITY
OF NAIROBI.
READ AND PRESENTED
riOLE Ct' :?RIVATE
S~CTOR
AT THE SEMINAR
IN HOUSING
AT KENYA,TTA CONFF':}~,\lr;,~; CENTRE ,(~':!;PT. 'I
ON
DEVELOPVJENT.
.j
1'~O.
SUl-1HARY
a'
TIns paper which has been written
from the seminar
in housing
organisers,
market.
Section
discusses
':L'he
discussion
I is introductory.
post-independence
development
a rather short ro t i co
tje role of Estate Lgents
fal:s under
It briefly
philosophy,
four e cc t i.cn s ,
touches
on Kuya's
attitudes
and a~)irations
that nave led to the current pattern or categorisation
~ousing
stock wtich the estate agents
property
of property
level, section
market
and structure
estate agents
belong
Section
III
is devoted
is critically
deals with the sali(;
of surveying
is analysed
seen in dual categories
II
of which housing is a unique sec1~.
The functions
agent
deal with in the
market.
On an aQstract
points
of
profession
to whi~
here.
to the Kenyan
housing market
of low and high incomes.
3
The rol(~f'cltatc
looked here in the wider context
of
this dl!alism.
Finally
evaluated
general
in Section
IV, the discussion
and few questions
and suggestions
of this papclis
put forward
lr
discussion.
The theme that runs through
not an ordinary
commodity
l'"l
this paper is that h·!sing is
the property
basic human need and as such ~ social
market.
It
service.
•.
1.
t a
1
INTRODUCTION
_ 1.8
In the last few decades, there has been renewed
the tradi t;ionalprofessions
in the Commonwealth
,s to se~ whether
main conrcrn
so ~.lled developing
a,sum~ng greater
resources.
countries
countries.
such professions
Land ErJnomy etc, have any relevances
interest in
The
as Law, Surveying,
in the development
of the
in which the public sector is
role in use, planning
Where these professions
and control of the land
have been established,
they
have been asked to review their role in society so that they can
attune
themselves
to the evolving
The main cha~lehge
in these countries
,~aced with such challenges,
~emin.rs
and confe~ences
circumstances.
professional
bodies have ~een organisin
with such themes as:
'''Therole of Surveying
in National
"The
is development.
and Land Economy
Devel~pment
Role of Professions
Development"
in Africa,,1
in National
2
"The Law and Rural Development
Eastern
This seminar
discussion,
in a~broader
i.e.
.
has also included a similar
theme for
'The Role of Estate Agents in Housing
spectrum
Development"1
Africa"3
in
of the "Role of Private
Marketli,
sector in Housing
The key word in this seminar and the previous
ones
is Development.
1• 1 .
CONCEPT OF DEVELO:Pf1ENT
In a country like Kenya,
inequitable
access
land resources
"developmentil
to adequat3
where the problems 'of
housing,
health care, education,
etc. were inherite9..from colClnial era, the term
has been a corpmon "password"
for all forward
looking
citizens.
But in most cases th~ term has been assigned
various
meanings.
This was the view of the participants
of one
2
of the seminars mentioned
i.e.
above,
Development
in Eastern
July 1977.
In this s eimna r the concept of "Dev eLopme n t " was
scrutinised
by scientists,
sociologists
Africain
"The Law and"Rural
politicians,
which rejects
development
processes
was seen as a continuous
ones.
by accommodating
In total development
increase
access
majority
of the Kenya citizens.
to land resources,
KENYA'S DEVELOPMENT
procE
4
Paper No.10 of 1965
"
define development
as a process
distributed
freedom
should be seen to
PHILOS01>;ry
MANIFES'W 1963, The
and periodic Dev~lQpment
Plans
that is aimed at. achieving an
high ~ncome
guarant'"!eevery citizen
in new and more
housing, health care to the
It should be noted that K.A.N.U.
equitahly
economists,
the old forms o£ social and e~ono~ic organizations
and productive
Sessional
lawyers,
etc.
In that seminar,
progressive
when it was held in Kisumu in
per .capita
and also to
from "want, disease and
exploitationll•
The sane philosophy
technology,culture
It is under
also accepted
and law" in forging
this open "door-philosophy"
the influx into the country
educational,
organisations
that Kenyan's
b~ckground
in the nane ~f national
was the emergence
"a new African Socialismll•
witnessed
of all sorts of people of different
economic and cultural
their services
the "best of foreign
of institutions,
who claimed to offe
development.
corporations,
of both local and international
Of note too,
companies
magnitude.
and
All
•
were growing up in the name of nation building.
f'o r-e i gn er-e who
government
J)1annc<'!
or private
expartriates.
t.hece
sector
.i ne t Ltutions,
whether
were later referred
Host of the
in the
to as
3.
The coming of expartriates
etc, subjected
our economic
to foreign influence
and ~t~ inherent
and the organisations,
system and particularly
in ierms of high standards
infrastructure,
in the post-colonial
on western
lines.
the distributive
traditional
"modern"
strategies,
professions
lifestyles
elite had also vested
institutions
So whereas
urban areas
of housing,
high consumption
At the same ti~e, the indigenous
development
agencies
interest
that are firmly based
philosophy
spelt out
the elite and particularly
were ambivalent
etc.
the
about the whole
concept.
This ambiva~ence
or dual vision
of the economy into the arbitrary
modern/traditional
informal
sector.
philosophy,
treatment
sun"
or hostile
i8 sometimes,
to the Kenyans,
industry,
manifested
carpeted
balanced
burden
has been given undue
or traditional
For example,
development
professionals
of traditional
low cost
seem
offices,
in
or informal
infrastructure,
luxurious
ete. by the native
to mean
in construction
sector with
It also seems to mean tctal national
of the western
to
to the urban community.
treatment
by change in modern
or consumption
of the development
to as "eye-sorell in the"city
and particularly
replacement
sect6r.
treatment.
of
formal/
sector has been subjected
referred
or as unnecessary
divisions
income housing,
of the informal
In fact the informal
In this ambivalent
modern
high/low
In this m~dus operandi,
to the detriment
embarrassing
housing
sector,
the formal or modern sector
sectors.5
in the bi-classification
is most manifest
wealth as
urban skyline
goods such as cars,'
elite, without a'
quality of life faY all m emb er-s of the society
in this
country.
The bi-classification
informal
sectors,
of the economy as formal and
or low and high cost housing,
etc. apart
from
introducinEj biases and confusion,
and lack of accountability
responsible
to represent
in the economy.
SOURCE OF INSATIABLE
To the indigenous
population,
high standard
or a yardstick
of excellence
to measure
therefore
by the Kenyan s
standards~
Kenyan's
etc. of these
is this impression
to perform
r-u Le rs ,
of expartriates
the coveted
"mythical
No wonder,
who replaces
there
an expartriate
in self-
such as, "I was the first Kenyan Estate Agent!
businessman
The self-glorifying
people
them for their feat
housing,
had to
by the colonial
This was also manifest
I was the first African
reward
ability
foreigners.
that any Kenyan
is by all means a hero.
glorification
attained
seemed
that Kenyans
meant the replacement
who supposedly
skills
ASPIRATION
the expartriates
in the formal sector that vias dominated
Kenyanisation
scapcgoating,
to the entire society as to who is
for certain activities
KENYANISATION:
emulate
it has brought
salaries,
in Moi Avenue
etc.l!
felt that the society
must
in terms of high esteem and pos~
name it .•• fulfilment
of insatiable
eap i r-a t Lous ,
1.4
HIGH COST HOUSING:
THE COMEEHCIAL
In order for the priv&te
manpower
from within Kenya
constitutes
sector
to attract
or from abroad,
one of the terms of service.
to find in the advertisements
if
Terms
BIT?
of service
the best skilled
high class housing
So it is common today
such clauses as;
include
free furnished
•
accommodation,
a eomp~ny
car, medical
and tlontal car-e !",
ilThe terms of service
housing
Because
or generous
of this commitment
include
subsidized
house allowance."
many employerG
are
know!)
+:1"1
5
on the basic salaries
of their employees
in the high income
bracket •
."'On the other hand, where skilled
particularly
in the low income
more on salaries
are given
manpower
workers
than on housing.
is plenty,
the employers
The employees
lImeagre" house allowance
and
spend
on this group
and told to look for their
own accommodation.
DIFFERENTIATED
The housing
divided
market
HOUSING
MARKET
in whic~ the estate agents
into the high and low income
sectors.
sector buye r-s are the government
income
local or multinational
companies,
purchasing
power, are infor~ed
of housing
market,
case of disputes
operate
In the high
institutions
agencies,
and private
etc. who have the
on the beauracratic
procedures
and have "access " to legal institutions
in housing
have less purchasing
.
beauracratic
procedures
legal or administrative
in housing
PROPERTY
Market
situation,
seller
and have inadequate
institution
of
access.
6
to
in case they need redress
HARKE? AND SURVEYING
in economics
wbo are organised,
purposes
power, and ignorant
where
transactions.
2.0
sellers
in
transactions.
On the other hand, we have the low income housing
the buyers
is
of transadting
PROFESSION
means a collection
formally
in certain
of buyers
or informally,
commodities.
we can have "perfectli market
also assumed
u. choice.
to be of equal bargaining
for the
In abstract
where every buyer and
has full knowledge ~about the commodities
so that they have latitude
and
to be transacted
The buyers and sellers are
power so that they are
6
free to transact
terms agreed.
without
compulsion
or undue influence
Where these conditions
are lacking
the market
said to be iOimperfect" and the only way to improve
is by improvin~
the communication
between
on the
is
the situation
the sellers
and
buyers.
Property
under which housing
each property
is unique in terms of physical
characteristics,
confer
etc.
terms and cannot be ass~mbled
purposes.
To make property
knowledge
Property
market perfect,
of the commodity
market
buyers and sellers
acquiring,
disposing,
imperfect.
to spread the
The best person to do
on tho problems
investing
for
is therefore
it is essential
to buyers.
that
is also fixed in spartial
this is the estate agent who in his position
advise
factors
in a central market
Pro~~rty
and
and abstract
exposure to social and economic
value to property
transaction
falls, is heterogenous
as a broker,
c&n
that may arise when
or d~aling
with other property
'7
transactions.'
who shuuld
In this case the estate agent is an intermediary
formally bring buyers and sellers
In ,roperty
the market
market,
sel~ers usually
value and buyers
together.
quote prices above
bid for prices below the same.
the estat~ aGent to be able to advise
competently
on the
"r-eas onab Len eas of such o f f ers'",it may be necessary
the skills
of a valuer.
As a valuer
For
that he has
he should be able to
interpret
the market
in the light of the social,
political
factors that may likely affect
economic and
the value of the
property.
In Kenya,
analysing
the estate agent arrives
the market
buyer viilling-sellerll•
buyer willing
per£ect
that allegedly
at his judgement
operates
What ehouldbe
under
willing-
lI
noted is that willing
seller maxim holds best where the property
and wh er-o the economy
after
does not a have accute
is
disparities
7
in,incomes,
because
education,
job opportunities
where these disparities
the market
is more imperfect
have the same bargaini~g
the operations
because
to have the information
renting
houses
earners
market.
suit for settlement,
people who pretend
of selling
or
people is rampant,
or to the profession
operate
is concerned,
where the aggrieved
not know whether
machinery
party can bring
The problem
Some people
Those
in low income bracket
in these cases to be too prohibitive
expenses
etc.
their
In Kenya,
has called on the institution
practic8,
feGs etc. to be vigilant
members.
The prohlem
under which
the public and parliament
of surveyors
it is ,to determine
may
in terms of time,
The public may also call on the profession
operate.
may
and the beauracracy
involved
the estate agents
civil
here is that
who may know their rights,
find that the costs of hiring lawyers
such
cases brought
they have legal rights against
or tenants.
under
there are two
or it can have fraudulent
and costs.
the
for protection.8
to court for pros8~utions.
responsibility
of what
of their ignorance,
of either having an administrative
as the rent tribunals
landlords
Because
and go to extents
As far as the government
of ignorance
on
cannot have enough
of such fraudulent
which the estate agents
by police
Since services
to unscrupulous
looks to the government
alternatives,
do not
that do not exist.
Where actions
public
market.
low income
fall foul
buyers and sell~rs
to as "r epu t ab Le " estate agents
on the property
they normally
it means that
power, nor are they well informed
in formal sector is referred
information
This is
are prevalent,
of the,prop~rty
is very expensive,
etc.
Kenya,
the standards,
whose
codes of
on the behaviour
h~re is 6om~lex arid intricate.
of
their
The rest
of this section
circumstances
tries to show that under the prevailing
in Kenya, anybody
can be an estate agent, he can
charge wha t he wan t s , and as such,
branch
of sur7eying
estate ag ency is a "waywa rd "
profession.
'I'h a term sur-vey (latin s~wr,
originally
surveyor
over and video, I see)
[want to watch ':"':;r
or keep an eye on.
was an over looker,
In United Kingdom
the surveying
profession
i.o.
or land administration,
began
so on.
building
construction,
They were also expected
implications
of any particular
In K~nya,
the members
to the promotion
experts who understood
agriculture,
of mineral
forestry and
to assess and advise
on the
land use on the estates.
of surveying
profession
are committed
of
"t.ho science
physical
of measuring
features
for registration
and delineating
the
of the earth and the surveying
6f titles
to land, the art of
d et errru ni.ng th"''1.luc of all descriptions
landed property
the practice
and of various
of managing
work and the valuation,
interests
and developing
management,
very large indeed.
or precision
by the surveying
f r-om those
e.g. the land surveyors,
"art" of. managing
judgement.
It ranges
artificer's
0f
of
profe.96ion is
who ;i.Jlsist
on "sci.ence"
to those who insist on
The former cntpgory
The latter has a lot
therein,
development
From the above it is clear that the diversity
that is covered
of the
property"9.
and survey of mineral
specialisation
to evolve
of people skilled
the use to which the land could be put to, techniques
extraction,
the
or a watchman.
when large estate owners sought the services
in surveying
Hence
insist
value judgement
they may claim objert-ivif.,y
in their dealings.
on objective
althou3h
Wh"at should be
9
noted_._is
__
t.h!3.,t.._.in._J.hi.s-..con±.L"Httlttt-.-._----the valuation
various
of alL descriptions
interests
many_~ctivities
this ~ategory
for example auctioning,
has always been referred
By implication
of non e",
it, Land Economy,
simpler;
2.nd of managing
therein
Practice).
and master
Today,
comprehensively
the structure
its functions
when the credit
auctioneers
or estate agents.
rationalise
its structure,
to protect
it does to Quantity
vulnerable
to intrusion
estate agents
of
from bringing
market,
squeeze
in Kenya,
en, they are
of this inability
to
has found it very
has made the profession
by "quacksil and abuse by desparate
deals when they find
cut down the~r earnings.
of this section of the profession
together in the p~operty
on sale, purc~se,
etc. of landed proper~y.
letting,
Note these
by va Lu ers and estate managers.
you find boards and letter haads reading,
Property
Auc t i oneer-s, Property
Developersfl.
What can be said here is that in this spectrum
land economy profession,
as
or Land Surve~ors.
"Va Luer a ;'.:janaging
and Est",te Agents,
Consultants,
they
of thcEe professionals
sellers and buyers
tendering
call
or clarify
Som8times
is clamped
Because
th~ market
f'urrc t'Lon s can be handled
Hence
of their profession
identity
they can also advise
auctioning,
surveyors
who fall under this category
to the public.
Estate Agency as a branch
apart
Surveyor
does not make things
who engage in disreputable
that the dictates
In Britain,
it meant iljack of all tradeG
the activities
The luck of definite
There arc:
estate manager
letting.
the government
Surv8yors
and o f
to as Chartered
but this nomenclature
cannot rationalise
difficulty
"
the commonwealth
sinc~ the professionals
are valuers,
of landed .property
which can be done by a valuer,
or estate agent,
(General
-crf-·the"art of determining
the discernible
branches
of the
such as
valuation,
forms the brighter
part, while the estate agent
forms the darker part of the spectrum.
bri.g h t en this part by adding
valuer
in such firms.
connotations
Hence,
columns
Est".'>?agency also has more commercial
in surveying
titles such as "Boa t "
Home Finders;
most members
"Hon es.t, Homes"
etc. One needs to look at property
too that estate agency
of public
either
the confusion
qualified
profession.
the country
Because
estate agent and a "qua ck " the Institution
initiated
custodian
the proposed
are in preparation
presentation
of the surveying
Estate Agents
in the Attorney
be a member
to Cabinet and Parliament
of the institution
of a University
the Registration
training
of surveyors
been taken.
Bill,
which
for
one will first
of Kenya,
be a
which is recoenised
sufficient
law, Institution
It should be noted that where members
themselves
has
evidence
by
of
as an estate agent or valuer.
nill be able to have control
have carried
Chamber
or valuer,
Board as furnishing
for practice
profession
for debate and enactment.
degree or Diploma
Once these Bills become
has always
of
of 3urveyors
Bill and Valuers
Generals
To qualify as an estate agent
of Kenya
or inside
where
which exists in the public mind as to who is a
of Kenya as the
adequate
is an occupation
from outside
come into contact with the surveying
agents
profession.
in the daily press to see more of them.
It happens
holder
try to
"Va Lu ers " even if there is no
than any other branch
colourful
~xecutive
Estate Agents
of Surveyors
of the whole estate agency.
of I.S.K. who are estate
disreputably,
disciplinary
..•
action
11
HOUSING
In Kenya,
MARKET
AND ESTATE AGSNTS
~here is no adequate
of the term ~ouse.
Rent Restriction
Willy Mutunsa
legal or economic
argues
Act Cap 296, Landlord
definition
that even though the
and Tenant Act Cap 301
and the Public Health Act define
"dwe Ll.Lng=hous
these definitions
and leave a lot of room for
are inadequate
interpretation.
He adds that a search
does not provide
the definition
reason,
tonants
into English
of a house either.
in "Ca r t ori .i g Lo o a:",
"exe cu t Lv e" r-csi.dence,
estate agents
as they relate
HousinG
market
the services
of
this sGction
itself into the basics of housing
market
to estate agency.
is not an ordinary
Like water,
commodity
in the property
industrial
or commercial
food, health care housing
is a bas~...£
In other words it is a social service.
This theme is constantly
Development
from "ag Loo s " to posh
in this seminar,
such as block of officcs,
human need.
10
should be seen as
In the same continnum
paper on housing
premises.
for redress.
in this paper is that since there is a
only restrict
markct,
For this
runs through.
The assumption
should
ri.ng market
all ca t ego ri es of shelters
embracing
detailed
hov
Common Law
"Oaz-ton Ki osks " and "Cav ee "
may want to make use of the rent tribunals
In the same vein,
e" "premises"
emphasised
in every Kenya's
Plan e.g.
"De cent housing
income
""i thin the reach of each
class is recognised
as a major contribution
to family and community
health and to the morale
.
populatlon
Provision
of the working
,,11
of housing
whose responsibility
by the government
in thi ,c:
cuts across
r.ol.1.ntry
government
too is an activity
ministries,
local
12
authorities,
parastotal
individuals.
planning,
private
institutions
For example the government
surveying,
for housing
bodies,
leasing
purposes.
is concerned
or compulsory
The ministry
and
with the
acquisition
of land
of labour deals with
.,
housing
when determining
ministry
house allowance
of Urban Development
in wage agreement
and Housing
housing by virtue of its so~ial service
is concerned
and community
From the above, it is clear that provision
a social service
is not left to the dictates
private
market.
property
Housing
concept
market
of value.
exchange
value and use value.
in the market
is influenced
e.G. the qualities
is influenced
by extrinsic
air, vater or,housing.
though
a lot of value
calling
market
between
intrinsic
of these factors
factors
exchange
and less of value
for objectivity,
inevitably
value
judgement
involves
judgement,
The supply and deman~
determined
of the
such as the human need for
tends to involve a lot of objectivity
Use-value,
of
On tho other hand, use value
factors
Because
as
value of any commodity
by that commodit~s
...,
of diamond.
development
or volition
of value distinguishe~
Exchange
with
of housing
can also be seen in the context
The concept
and
J~
housing
stock in a country may be
by factors such as human need and not the ordinary
forces.
today in Kenya
Hence the stock of housing
is determined
In a community
by use-value
in some urban areas
and not exchange
with high and low incomes,
housing
value.
may
be seen as a status symbol by those in high income bracket
as a need by thoso in t~o low income
may involv~
cxclillnge-value and use-value,
in the housing
People
category.
Those
and
two factors
and mean quite a lot
market.
in the high incom~
and can have a wide l~titude
groups have high purchasing
in choice of the type, quality,
power
location
and nature
has effective
The housing
exchange
For example,
This group also
demand on the type of the housing
in the market.
involve
of tenure with much ease.
market
in this sector will therefor8
V7-].lue~
aLthough , sentimental
it is usual to find an ordinary
accommodation
being outbidded
'bidder pays over 20,000/=
that is available
values may
CO,,lO
in.
residential
in the market where the highest
p.m.
He pays this not oecause
the
hou s e is bu.iLt of gold or other pre eious stones" but it happens
that sentimentally,
lavish
living.
this house befits
Note, tenants
rental advance
the se called
are even prepared
latitude
of choice as to the type, quality,
location
of the premises.
rising
The housing
by the strength
of housing,
The government
the.high.income
middle
intervention
afford
groups.
'1'h5
Socially
to live wit~ the high lncome
group is subjected
one hand towards
low income.
In
sector
for this low income
necessary.
the housing
~arket
falls
to draw a line between
In between
the two,
to as a lower
s is the most er:1b5.r[t:.c:BPd
£;J:vUp
it is not willing
under lower income group.
curved a recognisable
the
ec6nomy.
is therefore
it is difficult
clQSB.
today in housing market.
~laD6ified
houses
group ~ _.;
»n et Lrne s referred
or upper middle
It
tho lIinvisible hand" of the market
and low income
there is an obscure
or
is given.
in resisting
in an inflationary
We should not forget that ~lthough
into this dual category,
They have no
terms of-tenure
situation
forces cannot be relied on in supplying
earners.
earners.
of their incomes
rents and particularly
this category
to pay yearly
for such houses.
On the other end, we have low income
is dictated
executive
Financially
group.
for them.
to the countervailing
to be
it cannot
The economy has not
For this reason,
forcGs,
the
that pullan
the high class and on the other tOlVards the
14
The above analysis
housing
gives the continnum
market and the clients
the property
that eatate agents encounter
the estate agents who operate
hC:YG are wna t in terms of business
"aoph.i e t i cated II
wonders
~hether
properly
in
market.
In the high income housing,
called
of the type of the
11
terminology
have come to be
oe t ab Li shed " or "r cput.ab Le ".
this busin.
view is correct.
~3
But one
Our view is a
trained agent can handle any housing market.
The
"r-epu t ab Le " "est.ab Laahe d!' or "aoph.ist.Lca t ed " depends on the
shark.that
has managed
to follow the big ship in deep waters.
It is the big ship that makes a greater kili.
What has happened
independence,
to have public
financiers
with high values.
~ore valuable
transaction
are informed,
lawyers
etc.
whc were in business
or private :nstitutions,
Since
the property
the better
the deal.
on their rights,
or can afford
the services
"access"
as unnecessary
Business
problems.
is "pea nutsl1•
tribunals
Because
of .this
bother.
involved
the sellers
have low pur-chasi n,
a lot of management
are of low values.
A single
..
Estate agents also know that their clients
this class may be ignorant
of their rights.
"Access"
or other courts in case of gri~vances
The clients are ignorant
of
public control is considered
is risky and involves
Properties
sector
estate agents are v~ry cautious
In the Low er- income housing;
power.
A sing10
since most of the clients in this high income
and adequate
the
It is ~ big kill.
and care very much for their cLi en t e' interest.
by authority
companies,
fee scales are ~ased on ad valorem,
in case of disputes:
awareness,
and
These are clients with large properties
is quite bagful.
Again,
housing narket is, after
there were estate agents
have continued
banks,
in Kenyan
or" fear beauracratic
deal
in
to rent
is inadequate.
procedures.
15
Estate aGents
unscrupulou3
therefore
tend to rel~x and in most cases
in their approaches.
Because
of these uncertainties
market and the relaxed attitudes
is oonsidered
relations.
to be imperative
on the working
of estate agents,
to protect
p~blic control
the woak tenant/landlord
such as Rent Restriction
Measures
of housing
are therefore
found in this category.
3.1.0
HOUSING
HAEKET:
In a theoretical
..•.. -
h ouslng
Report13
relationship
Lean and Goodal
discusses
occuper accommo d a t-lon ro I a t-lons •12
exists.
Before
the Varsey
three decades ago, rented accommodation
activity
in housing market,
accommodation
service
framework,
1 t ln
- a rente d -owner
marce
In Kenya, a similar
V. RENTED ACCOMMODATION
OWNER~OCCUPIER
through
schemes
but since that time, owner-occupied
the process
of tenant-purchase,
site and
etc. has gained prominence.
The same relations
accommodation
was a main
of rented versus owner occupier
is also a recognised
the terms of survice
house allowance,
fact by employers,
for their employees
housing by employer
include
who in
options
or owner occupied
for
house
allowance.
HOUSING
IIARKET:
REr-;.;
_-'ACCOMHODATION
We hav~ just noted that most institutions,
agencies,
include
housing
employees
as a necessary
high income bracket.
good intermediaries
employers
facility,
in renting
those in
here have been very
or acquiring
This contact
for their
and particularly
for the buyers and saIlers
for their employees.
the local dailies,
in the term of s8rvice
The estate agents
arc involved
companies,
where th8se
accommodation
is in most cases through
e.g.
llBank Manager
requires
seven houses in Buru Buru;
and
16
Harambee,
HAirline
eX0cutives1
directors
Ring
;IA
o.
Ngei, South C, Golf Course. Ring No •••••••••
0
require
•••
0
embassy officials,
executive
-Ja pen os c Corporation
requires
especially
Since transactions
houses for their
in Buru Buru, South C,
••••• Ring NO
Golf Course, yearly advance
category,
o
are not statutorily
rents are astronomically
high.
and co')cialscientists,
of tune with average
salaries
Nost premises
When rents have been rising
the financial
dragged
ceiling
e.g. houses
the estate agents
are statutorily
role has not
controlled.
in the higher income housing
dictates
:965
and particularly
have been known
inflation,
estate agents
on behalf
of their clients so that they can accept higher
the premises
Since the Rent Tribunal
housing
market,
harrassed,
the tenants
exploited
sector,
has been
No wonder
or be forced to vacate
the
for they are o.ut
that was fixed at 800/= in
along by economic
in this
per month.
In the low income housing
been a happy one.
controlled
of ~ost of Kenyans,
or 20,000/=
ii
•••••••
Some have boggled
minds of economists
let up to 18,000/~
any are1J.,
rf
••
loca'lstiff
residence,
company
to intimidate
tenants
rents
unceremoniouslyo
has been a weak institution: in
in this sector have been ruthlessly
and dehumanised.
Estate agents
cannot
escape blame in this ecenarto ,
HOUSING. MARKET:
3.1.2
According
sector
OiNNER-OCCUPIER/TENANT
to the national
has been 0xpected
government
to be mainly
PROVISION
to provide
responsible
OF HIGH-COST
In the provision
housing
PURCHASE
policy the private
high cost housing ~nd
for the low cost housing.
HOUSING AND
ESTATE AGENTS
of the high cost housing
the estate agents
d
17
can help to bring financiers,
someti~es
dovelopers
they can also give advises
preliminary
information
requiremcmts
and buyers together.
as to the necessary
as buildin~
S~·~
costs, planning
or legal ma tt er-e that hinge on housing
We shall discuss
two aspects
of new housing here.
is, the supply of land and advertisement
that come under private
construction.
That
for new housing schemes
developerso
SUPPLY OF HOUSING LAND
.
Abrahms
J
Report acknowledged
there "is generally
no shortage
14
and hous i ng " in Kenya.
this statement
(e.)
almost
too decades ago that
of land for urban development
It should be noted that even though
might not be true today in terms of land owner-
ship, it could be true in terms of "spartial
What should be realised
main supplier
supp Ly '",
is that the government; is the
of land for housing
purpOSGS
in most urban areas.
He aLi.ena t es this land at almost a "pepperccrn"
So once the Commissioner
of Lands advertises
in the press or official
Gazette,
of people
for housing
the following
queue at his cash.i er's office,
day -
for alienation
conditions
that those plots should not be transferred
development
advertised
on them.
business
estate agents
Lands and the allottee,
four or ten times tho original
pr000SG
there are strict
without
to find the same
may argue it is not their
between
it is difficult
estate agents why they advertise
~'1
'";
thousands
in the press and with no developments
to kn ow what is agreed
The whole
Although
on it, it is not unusual
by estate agents
Although
u
plots
ready to meet all
conditions
permanent
purposGs
ground rent.
involves
the Commissioner
to be convineed
of
by the:
at prices which are at times
va1'll.e.
speculation,
that leads to the
cost of land to be a major item in building
the ground is brokon
therefore
stopped
told a Surveyor~
for construction
to be
costs even before
purposes.
vhat the Commissioner
Land has
of Lands once
conference.
"To common man Hland"
means
the ground, the soil
or the earth which is said to be the solid
portion
of the earth~
for buildings,
building
growing
considerable
is taken as a source of
and economic
sentimental
land provides
shelter
food, and wealth
•
have a different
view?
with prope:-ty development,
his role as an estate agent is changed.
of a seller as well as a broker.
He is pl~ying the role
He sees the buyer in a
vision and the whole concept of "brokeragell
different
14(b)
AG.L;l\T-CUH-DEVELOPER
Where estate agents are combined
"Agency"
4-
of Land's view of land.
that the estate agents
ESTATE
value,
power to the majority
which are basic needs of the populatlon.
Is ho aware
huma~
It is in this context
social status,
This is the Commissioner
srace
crops, grazing animals.
can be carried.
that land ownership
because
that provides
roads or space in which various
activities
prestige
surface
or
is reduced to mere paper work •
In the last few years,
to have premature
such estate agents
advertisement
Even before
the housing
authorities
and grounds broken,
deposits,
or purchasing
this is solely
to assume
of upcoming
estate is approved
money.
have been known
housing
estatcos.
by the local
the estate agents ask for
What we don't know is whether
the work of estate agents,
t.hat other pro fessionals
01'
we should venture
auch aa lawyers, architects,
19
or financing
Buyers
agencies
have a part to play in the whole scenario.
have been dragged into some sort of contract after
advertisements
in the press, after which they are subjected
all sorts of financial
. do nbt symphathise.
premature
housing
the consumers
inconveniences,
TENANT
This is a category
assistance
to the consumers.
It seems
and running
PURCHASE,
SITE AND SERVICE
SCHEMES
of .housing that is meant to house the
It is highly subsidized.
instalments
costs to
have no prdtectors.
LOW COST HOUSING:
poor.
which even the authorities
In other words all additional
estat~s are passed
to
The down payments,
costs are quite
reasonable.
in terms of loanG or land subsidy
monthly
The government
is very favourable
indeed.
The government
become
objective
ovmer occupiers.
Have the estate agents
is to make the low income
But this objective
contributed
Cou:d it be that the estate agents
entrepreneurship
kindled
in housing
Lets
to this failure?
contributed
to the current
schemes seem to have
market?
have a look at a situation
tenant-purchase
has been defeated.
anything
which the tenant-purchase
in which a very subsidized
scheme is built up for low income workers.
cost of the subsidized
when the purchasers
unit is say 60,000/=
are issued with keys.
in January
In July 1980 an
in the paper under a "reputable"
agen~s
for sale of some of these houses at
letter heading
with this rider li':ortgagearrangement
the purshaaerll•
The
1980
advertisement. appears
100,000/=
earners
estate
will be made for
The same could be said of rents of the same.
If the loan repayment
by the tenant-purchaser
the estate agent Qdvertises
is being let at 1,100/=.
is 300/;::;
p.m.
that the neighbouring
similar
house
2()
The tenant-purchasers
uncritically,
and without
the knowledge
that these advertisemen
to t r-ea t ", reacts by going to the same estate
are "Lnv i tation
agents
who read these advertisement
to have their premises
either let or sold at what will
be called market rent or market value respectively.
The result is that t h...se tenant purchasers
their properties
purchase
and go to.queue
schemes.
the collapse
tenant purchasers
in the official
service,
policy
or speculation
4.0
in tenant-purchase
The analysis
points.
It points
assessment
4.1
is considered
treated
a social
it as a pecunia
of gov ernmen t
or site and service
scheme:
to our attention
few c r-u c:
to the need to have a close review and
professional
and the effuctiveness
institutions
the
in our
of some of our administrative
such as the Rent Tribunal.
We have found that our
arbitrarily
esta
In othe~~'words,
of some of our economic and social policies,
institutions
citho
AND CONCLUSION
given ab ovc brings
role of the traditional
society,
subsidy.
circles housing
EVALUATION
to encourage
over any housing
This is in a way contradiction
especially
meant to help thos
have tended
estate ag~nts havo all through
investment.
lead to
Umoja Estate is an example.
that have an element of government
whereas
tenant
may therefore
of a scheme which was genuinely
In this case Estate Agents
absentee
in the next upcoming
A single advertisement
who are really in need.
lease or sell
divided
dualism
has itsown
housing
programmes
and financial
economy
has informally
into formal and informal
sector.
and
This
•
con t r-a d.i.c t i on , which i's·quite visible
where dilcmas and knots require
resources
in
extra human
to solv~ or entangle.
In 1975, the World Bank Mission
to Kenya15
argued
that
21
~incethe
economic"activilies
of enterprises,
in Kenya
cover a wide continnum
din the natural. order of things there is no
t echno Logd.ca L" or other means to d omarca t e formal sector acti vi ty
from informal
of ability,
sector activity.
technology,
tomy between
artificial
Differences
income -and wealth.
formal and informal
barrier
The mission
activity
are only in degree
As such the dichoemerges only when
is put up in the continnum.
concluded
that by favouring
which was oriGinally
based on foreign
development
a real barrier
goals.is
the formal sector
concepts
to Kenya's
of standards
and
development
philosophy_
\fuere the formal sector has been given undue favour to
the detriment
of the informal
sector,
reality points to the
fact that we need some cool rethinking.
"rna t a t us" transporters.
operation
It is a small vehicle.
Flexible
than the "matatuH•
that was given a favourable
pln.nncrs.
It was the "mighty bus"
treatment
than the matatu, by our
It is the matatu.;today that have thrown
the might bus out of the road and has a possibility
being
f'urrd cd
the energy crisis has led .s?
__~ countries
beautiful"
of even
by tho WarLd Bank. 16
What we need to reflect on is this.
and this concept is applied
urban planning,
house design
into providing
high cost housing
over 20,000/=
this type of housing
since they are
p.m.).
On the global scale,
to think "small is
to motor manufacturer
etc~
In Ke nya , we are now talking
renting
in
and quicker thPn the "mighty bus" which is inflexible
bulky and slower
economic
Take the case of
of .sti[mulatir1g
private
(probably
sector
some that are
What we' should r-eaLi.so is that
fits best in the city Buburbs,
great land consumers.
They at.so i.nvolvc hig;h
22
commuter
4.2
costs.
Another
Arc we aware that energy crisis
point should not escape our attention
A
may pass the Es t a t c AGont's' 2.:
B'i LLa into la1,'!.
two issues
n~~d td-be discussed.
by legislature
owe
17
of skills
the obligations
that protects
which
their skills
.'_
th this sub j ect in greater
as they revolve
Scholars
Dictionary's
monopoly
in Kenya.
So we shall only concern
fundamentals
definition
opinion
conduct and committment
as an organisation
maintains
context
this respect it should reflect
high standard
to a "kind of public
They also aGree that professional
to the social and economic
with the basic
agree with the Webster
of professionalism
force or concerted
of achievement,
ourselves
details
on estate agents and housing market.
on professionalism,
which through
service".
concerns
to the society
The aut hor has dealt
elsewhere
that hinge on pr-o f'e.s sLona Lism
The first one concerns
by a few people and the second
these professions
is the
.
fact that even though our parliament
ValueJo
is with us?
work should be tied
of their countries,
and in
the social valuGs of these
13
.
coun t r-a es ,
We also relatGd
in developing
bodies
earlier in this paper that most governments
countries
have requested
to a t t un e themselves
they practice
thoir skills.
their operations
to evolving
~n Kenya,
are dven detrimental
In Australia,
these traditional
criticie;ed for their "narrow social
ideological
their social
conservatism,
elitism,,19
to the origins
First,
rigidity
the philosophy
was client oriented
circumstances
to government
professions
and protection
in which
policies.
have been
••••••••
in thought and action
atributed
of the professions
behind
profGssional
we find that some of
composition
This critic
and evolution
the traditional
the origins
and
this attitude
in genaral.
of most professions
of "closed shop" interests
or
23
the "guildsti
rather than public oriE:nted.
Secondly,
construction
these professions
especially
industry are market oriented
thrive best where; private
land ownership
those in
and like speculators,
is quaranteed
and has
less p~blic centrol.
Thirdly,
in English
the trainine
of these professions
tra~itions which overstress
has been mainly
private property and
san ct i, ty of con tract, which view ;(\land as a pure merchandise
rather than a cocmunity facility
or amenity.
The trend today is that in most countries,
the government
health
is tb.e IIprovider
Kenya included,
of jobs, land, food, insurance,
care and other necessities".20
The implication
trend is that thore is need to have "new perceptions
as far as t hs pr-of eseLon s" role in land
theories"
and housing
should attuno
themselves
~n~ l~QndR
in developine
utilisation
power of registration
what the society
their affairs,
from such professions
that they should not be "guilds in modern
build and manage all housing
In a situation
the professionals
so that they C6.n regulate
expects and demands
thRt professions
countries.
wh,"re for examplo the governlJ1enthas granted
public
and
is concerned.
It is in the above percAptinnR
design,
of this
is
dl·~ssl'. They should
stock without prejudicing
interest.
In Britain,
Practices
monopolies
commission
Act is a cloar pointer
"technology
professionals
that in a society
has become a dom.inan t' feature
where
of social cuLt.ur-e
"
are not going to be viewed any longer as "men of
c:nd dignityil21
eminence,
and the H[!str:i
c t i v e Trade
or esteem, as the earlier ge~erations
had don e,
In U.S.A. tho credibility
valuers'
of the estate agents and
skills were put to test, when the 1930's econom~c
~:"
. '.,-
'.~
24
depressions,
ilrcnt assunder
the fabric of the mortgage
and led to who 1 Gsele foreclosures.'
raising
the tr~ining
were basad,
of which
the Americans
of these professionals
What Kenya society
expects
of judgement,
market.
A renown
in housing
profession
probity
skills, and above all
ethics when they are dealing
American
on
market.
is to show deligence,
and technical
stick to their professional
housing
involved
advice
also questioned
from the surveying
estate agents are
members
r.
soundness
Apart from
and estate agcntst
doubts on the valuaLions
which the mortGages
.,22
market
with
real estate expert. once
wrote,
"These codes protect
much be expected
the professional,
lest too
of him, as well as the public,
lest two little will be delivered.,,23
"ACCESSII
"Accessl1 or opportunity
claims
for arbitration
income workers
to 'Jring disputes,grievances
to a"' authoritative
institut~on,
or tenants in low cost housing
What we have noted in our discussion
housing
market,
tenant/landlord
most of the grievances
rolationship,
by low
is inadequate.
is that in low cost
that arise
from the
in which the estate agent is an
are brought to the rent tribunal
intArmp~i~ry,
or
as civil suits
or to crimal courts as frauds.
These
courts and tribunals
as the lawreri
system.
because
of cultural,
may not know whether
landlords
intermediaries
etc, who knows the procedures
People in low income groups
addition,
tenants
valuer
require
or estat-.:agents.
surh
of the
cannot afford this.
language,
In
fear or ignorance,
the
they have any rights against
This inadequacy
a lot of room for the unscrupulous
of Tlaccess" leaves
estate agents
this category of people in the housing market.
to exploit
25
4.4
RECOMMENDATIONS
1.
FOR DISCUSSION
If it is of necessity
Kenya
that the provision
has to be seen in dual categories
incomes
then the middle
of housing
in
of low'and high
income should be given a fitting
t-reatmen t ,
2.
Legislation
of Estate Agents and Valuers
Bills should be
expedited,
3.
Any advertisement
of housing
of the government
is premature,
policy,
4.
exploitative
Structure
5.
detrimental
or speculative
of professional
and related
estates which in the opinion
should be sanctioned.
fees also nee~s to be reviewed
to the rest of the economic
Rent Restriction
to goverpment
Act should be reviewed
sectors.
and restructured
with a view to:
(a) taking account
(b) relating
of economic and social realities •.
the "rent ceiling"
to economic
The ceiling should be extended
realities.
to cover premises
of
up to 4,000/= per month.
(c) making
the work of Rent Tribunals
That is, it should be expanded
valuation,
prosecution,
to accommodate
and inspectorate
so as to be able to discharge
Cd) decentralising
more effective.
and creating
of authori ty:,as suggested
Miut un ga,24 " T hat is, starting
departments,
its duties.
more efficient
tentatively
hierarchy
by Willy
with
Rent Magistrate
-~
Senior
Rent rvIagistrate
-7"
Rent court
~
Court of Appeal.
6.
Mr~nopolisation of large public institutions,
few Vo..lll.::ttion,
lvif.l.naging
nnd Estate Agency
in the inte~~c~
and e f f ! c-i.cn0J
n~ ~~'ity and unity
111 h<'\lc'; »s ,.,..,.,..l"o+._
banks
etc. by
firms should stop
of surveying
profession
26
RiITER£NCES
1.
This
conference
5
of Surveyors
September
2.
was or~aniscd
h eLd at
the
4.
"Af r i can So c.i e Li am an d its
Sessional
w~s held
Paper
is
defined
to
ilas the
official
corresponding
J.
Estate
Gazette
Ltd.
to
on Real
Sst::'.to:
The objects:
Fraud
2(,d
Willy
Faculty
if
P'Lan "
1970-7Lf,
London 1966,
Rc pub Li.c of
Chapter
Abr-ahms ,
of Kenya,
Constitution
i:'J.
and society"
of 1(onyn
1964.
by
of Nairobi.
Kenya,
1969,
Lean and B. Goodal,
p , 105.
The Estates
in 'I'o wne and Trading
Centres"
1950~
Nati ons l-1i;"~ion to Koriyn
Government
~978 on "Focus
7.
"Ro po r t on Ilo uc i.ng of Africans
14(M.) "Un i, ted
The
Rampant".
of Ln w , Uni versi ty
"Aap ec t s of Lan d Ec ononri ca it by
Varsey
25,
"Kcn ya : Rent Acts
12.
E.A.
and August
of Surveyors
"Development
13.
Tho'l·n,,;~·n:et.
of Dc c ornb cr 19~ 1977 on
11.
Gazette
C.N.
(i).
raan ua cr i p t of
,
claims,
1973.
and Distortion
Summary of the
ivlutunGCt
disputes,
1965.
ethics
The Institution
paragraph;
by James
H:l.nagcment" by I-1ichael
for
Pr-cs s '",
to brinG
compiled
June
London,
concern
Se con d
and secure authoritative
raisedll
"Law and Resource
issu(;s
"Ph e Weekly Rcv i cw" issues
"Va Lua tion:
in' Kenya i/.
the
University
opportunity
1977.
institutions
Dias,
"Pz-Ln c i pLcs of Estate
See
16th-
of Kenya.
"Keriya : Into
Hopkins
Workshop Reports
and Clarence
July
to Planning
Republic
to t:eny~>., 1975:
"Accessl!
Paul
10.
a pp I i, ca tion
Ba Lt i.no r-o; The John
a Ll.o ca t i.on! ,
9.'
in Kisumu from 1Bth-22nd
Decade",
decisions
B.
from 4th-7tl
Ccn t r e , Nairobi,
Professional
No.10 of 1965,
World Bank Nission
or 0rievances
7.
Nairobi
Nov~mb8r 1973.
The seminar
6.
Region,
1978.
3.
5.
Commonwealth Association
and Land Economy, Africa
The som.ina r- nas
IBth
by the
on Hous i ng" Pr-c pa r ed for
by LawrelJ.0.p N. BloomLerg and Cha.rles
27
14(b)
ULand Tenure in Kenya"
Lands.
by James R Njenga
A paper presented
Commissioner
in the C.A.S.L.E.
of
conference,
see 1 above.
5 above.
15ft
See
16.
Daily Nation,
Officer
19, 1980.
of Automobile
in Meru~~hat
matatus
August
Mr. Njoroge,
Association
the Government
has
of Kenya told Hatatu
rcalised
"Land Economics
and Surveying
and Speculation
By G.M. Gitonga
"Professions
Profession
vch i.c Los!",
in Kenya!! and "Land
in Kenya. Development
Aritho, Department
latter was published
Gerstle
role
play and that World Bank might soon offer facilties
Ownership
18.
owners
the important
to ma tatu owners to enable them buy reliable
17.
the Administrativo
for whom?"
of Land Development.
The
in ":Daily Nation\! April 18, 1980.
for the People:
The politics
Joel and Jacobs Glenn,
SchcnKmann
of skill" Ed. by
Publishing
Co.
New York 1976.
19.
"Professional
Valuer,
Responsibility:
April 1979, p.459,
A Review"
by J.B. Sheehan,
460.
20.
"Law and Resource
Allocation"
21.
"The Professional
man in Societyil by Lord Butler,
Surveyor
22.
The
See 6 above.
Chartered
June 1968.
"EdUcation
of Valuers"
By J.E. Worthington.
The Valuer
April 1978.
23.
24.
"Ethics:
A Mac t er- of Trust" by J .B. Featherston,
Journal
July 1975.
See 10 above.
Appraissal