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According to ICA (2002) defines housing co-operative as legal association of persons mandated to delivery housing needs in continuing basis to their members. Housing co-operative is owned and controlled by its members. It is differentiated from other form of housing association by its ownership structure and commitment to co-operative principles.

2.2.2 Co-operative housing

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This is an alternative housing approach which is commitment to co-operative principles and value in the process of delivering efficient and affordable housing to their members (National Confederation of Co-operatives, 2004)

2.3 Measurement of affordable housing

According to Stone,(2006)  argue that affordability of housing  is not  characterized by housing itself  but housing services  in relation to capacity and desire to own or rent it. Mengjie and Reed (2008) argues that housing affordability is a link between housing and people. Housing affordability is subjective in nature, Affordability of housing is a selective decision made by a households between housing and non-housing expenditure.

Housing affordability has been measured by a number of scholars and academician across the world including Stone, (2006)); Lau and Li, (2006);Mengjie and Reed,(2008)); and Goh,(2009) ;Niu,(2008)  and Kutty,(2005). Many of this study agreed that measuring affordability of housing is complex, and recommend for more elaborate measure to be adopted like index. Studies found that housing affordability index conducted in Australia, Canada, Republic of Ireland, china, New Zealand, United Kingdom, and United States are more reliable. From the above studies it is clear that there is need to develop an index to measure affordability of housing in Kenya.

2.4. Factors affecting affordable housing

2.4.1 Funding

Funding in housing development is the most critical component for the success of housing. In developed countries financing housing market helps to reduce poverty levels and create more opportunities. However some financial institutions in developed countries are inclined more heavily towards high-income mortgage supply and have not taken the idea of low-cost housing finance into consideration, this is the case of most financial institutions in Kenya. Due to the government insufficient to finance affordable housing, other organization both local and international have joined hands to support low income household in Kenya .They have been funding projects such as Kenya slum upgrading programme (KENSUP) and Kenya Slum Upgrading, Low-cost Housing and Infrastructure Trust Fund (KSULCH&IT). (Housing corporation of Kenya, 2010)

2.4.2 Government regulation and policy framework

The primary aim of housing policy from economist’s point of view has been the affordability of homes, mortgage availability, land-use regulation, and rent control. Land policy focus on the effects of regulation on the price of owner-occupied housing particularly to low-income household. (Somerville and Mayer, 2003) According to Adejumo, (2008) argue that the government has failure to achieve affordable housing and no serious efforts are being made toward implementation of various policies affecting  housing this has been  contributed by  many factors including lack of political will and poor implementation.

2.4.3 Co-operative governance

Governance is about ensuring that an organization complies with its constitution and the law. Recent changes in the policy environment for housing, has increased  deregulation and liberalization in the housing market  creating  new opportunities and challenges for housing co-operatives but have also redefine their role in provision of affordable housing. Due to the changing competitive environment in housing markets, corporate governance models, with a stronger service orientation in member relations, have become more popular in housing market (Czischke 2009).This calls for a reconceptualization of the nature of governance in co-operative housing by examining the composition of co-operatives governance structure (Annual General Meeting, Board members, Supervisory Committee, Managers and other staff). (Mullins et al. 2012)

2.4.4 Social capital

Social capital in housing co-operative can be an important part in delivery of affordable housing to low and middle income household. Social capital play key role in developing communities trust, and mutual reciprocity, participation and voluntarism. Challenges might be there but benefits are abundant According to Merrett & Walzer ,(2004) argues that social capital in housing co-operative have substantial impact on a wellbeing of a member. Housing co-operative is said to have more of social capital compared to other forms of housing provider because of the spirit of voluntarism of members working together for their common goal (Kilner2004)

2.4.5 Co-operative characteristics

Housing Cooperatives are a distinctive form of home ownership that has many characteristics that make it superior compared to others. The characteristics of housing co-operative include co-operative principles and values, co-operative structure and governance, co-operative model among others. The core objective of housing co-operative is the pooling of members resources so that their bargaining power is enhanced by reducing cost per member hence making houses affordable. Another key element of housing co-operative is the supreme power members exercised during annual general meeting. (National Cooperative Law Center, 2017)

2.5 Empirical literature

Kenya is a capitalist economic system whereby supply and demand of goods and services are determined by market forces. The following studies will refill how various factors have influenced affordability of housing for low and middle income household in urban areas in Kenya.

Summary of Empirical Literature and knowledge gaps


Focus on the Study

Key  Findings

Knowledge Gap

Mutisya (2015)

Urban Housing Affordability In Kenya

Socio- economic factors had a positive influence on affordable housing in Kenya.

Factors: macroeconomic environment; property attributes, loan; characteristics,; demographic and household social economic factors,
Scope of the study Nairobi  area
Mode of delivery PPP
home ownership affordability only
Affordability has been measured using ratios and Residual approach


The Influence of Public Private Partnerships
Finance on Provision of Affordable Housing: The
Case of Nairobi County, Kenya

The risk allocation ,private capital, delivery time and cost savings had positive effect on affordable housing

Factors used: Risk Allocation, Private, Capital ,Delivery Time and Cost Savings
Scope of the study Nairobi  area
Mode of deliver PPP
Only primary data
Affordability has been measured using; Increased housing output; Increased private capital; Housing affordability &



An evaluation of public private partnership as a possible solution to the provision of affordable housing in Kenya

Economic and socio factors had a positive influence on  affordable housing

Factors ; Supply side; land, infrastructure, mortgage financing ,planning and management
Government side:  Financial resources, building materials cost& research, institutional capacity and construction technology

Scope of the study Nairobi  area
Mode of delivery PPP

·         Only primary data

Nabutola (2004)

Affordable Housing – Some Experiences From Kenya

Socio-economic factors had a positive influence on affordable housing.

Factors: Land Tenure, Financing, Legal Framework, Building Materials and Appropriate Technology
Scope of the study Nairobi  area
Mode of delivery is through Private developer
Only primary data



Effects of rapid urbanisation on access to Adequate housing in kakamega town

Unemployment, unplanned urban, environmental pollution, deterioration and inadequate basic facilities had direct influence on affordable housing

Factors; unemployment ,cost of land and housing and infrastructure
Scope of the study Kakamega town
Mode of delivery PPP
Only primary data


Kwamboka (2013)

Effects of Governance Practices on Provision of
Housing as a Basic Right for the Low Income Urban
Areas in Kenya; A Case of Mombasa City

National Housing policy influence provision of housing to low income earners

§  Factors; Security of tenure, land. Infrastructure ,resource allocation ,housing policies financing and community participation

Scope of the study Mombasa  town
Mode of delivery PPP
Only primary data

Kinuthia (2017)

Public Private Partnerships as a Means of Developing Affordable Housing
A Case Study of the Civil Servants Housing Scheme Fund Kenya

 Budgetary allocation and other resource constraints influence provision of housing 

§  Factors; Infrastructure, unemployment ,financing, government regulation and policy
§  Mode of delivery PPP
§  Only primary data
§  Target group is civil servants only.


Empirical literature gap

From the above studies it is clear that attempts have been made by different researchers to determine factors influencing affordable housing for low and middle income household in urban areas in Kenya. But there is no study which has been conducted by housing co-operative in provision of affordable housing to low and middle income household in urban areas, Also from the above analysis measurement of affordability of housing is narrow, this study will develop an index of measuring affordability of housing.

2.6 Conceptual Framework

This conceptual framework illustrate housing factors that influence affordable housing. The framework shows the interdependency of government regulation and policy framework, and co-operative characteristics aspects of affordable housing. The framework developed will be used to analyze the housing situation of the low and middle income household in Kenya.



















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