7. CONSTRUCTION AND MAINTENANCE
This section analyzes the particular laws and policies in the construction and housing maintenance value chain, identifies gaps and makes recommendations.
The policy and regulatory framework on construction and maintenance is found in multiple and scattered legal regimes with several implementing agencies, thereby creating overlaps and challenges in implementation. The sector is typified by many agencies that make it burdensome and expensive for actors/developers to comply. The process of acquiring construction permits from the respective agencies including occupation certificate is tedious and takes approximately 159 days and costs 2.8% of the property value.[1] The multiplicity of approvals required from a wide variety of regulatory bodies in order to proceed with a development are outlined in the table below. These complicate the delivery process, adding time and costs.
While there have been real efforts towards transformation in terms of the institutional configuration and the development of some legislation relevant to construction and maintenance, transformation has been slow. The activities of the various state agencies remain largely fragmented and uncoordinated. Further, the policy and regulatory framework has not kept up with technological and other developments in the construction process. For instance, despite changes in building materials and technologies and the need to adopt sustainable/green buildings, the relevant laws (such as the Building Code and Public Health Act) are yet to be updated. While the National Building Code exists, it is not yet operational and has gaps in terms of what the sector requires.
Regulations and policies with respect to the Construction and Maintenance component were reviewed for this study. These are summarized in Annex D with links to their original source for further reference.
Draft Construction Industry Policy, 2018
In addition, the study reviewed some laws, regulations and policies that govern professionals within the housing value chain. These are also summarized in Annex D with links to their sources for further reference.
Valuers Bill 2022 (expired)
Key gaps identified in the Construction and Maintenance component that require attention are:
GAP
RECOMMENDATION
The construction sector lacks a comprehensive and integrated framework within which to operate due to the many pieces of legislation scattered in many statutes. The scattered nature of the legislation makes it difficult for property developers to understand and comply with the requirements and creates further ambiguities that make effective legal enforcement difficult, while also encouraging corruption. For example:
Multiple institutions for approval/permitting;
Uncertainty/delays in approvals;
High submission costs;
Improper checks by the approving institution personnel;
Unqualified/lack of commitment from approving personnel and inspectors.
A draft Construction Industry Policy is currently being promoted by the Council of Governors.
A full review of the institutional, policy and regulatory framework governing residential construction and maintenance is necessary. Ultimately, this should feed into the draft Construction Policy and lead to the adoption of a comprehensive and integrated framework (preferably one single legislation and entity/institution) to govern the sector/value chain. Such a framework should include:
clear lines of responsibility to promote accountability;
the incremental roll-out of functional electronic permitting systems in county governments. Focus on the current teething problems and design challenges in the electronic permitting systems;
The use of technology to more effectively track the approval process;
While the State Department for Housing (as well as county governments) implemented a One Stop Shop framework in 2017, to consolidate all approvals and processes required in law, this is yet to be achieved.
The intentions for a One-Stop-Shop were welcome and are clearly needed. There is a need to consolidate the approval institutions and host them in a single location in order to make it possible for building approvals and site visits to be done jointly.
This rationalized organization structure should give way to only one fee being charged to a developer covering all the aspects of the various approvals and inspection.
There is currently no comprehensive legislation on consumer protection for home buyers, especially in off-plan developments. There have been cases of off plan house purchasers losing their money (deposits) after developers are unable/refuse to complete their development as contracted; do a poor-quality job or charge the property to obtain financing for construction thus exposing consumers/buyers The Sectional Properties Act 2020 touches on consumer protection under Section 43 which requires the developer to provide to the purchaser before the sale of units: the Certificate of Title or the Certificate of Lease for the unit or the parcel on which the unit is located; and any charge over the unit.
A full review of the consumer protection issues that confront consumers and undermine access to finance is necessary. From this, it will be possible to develop and enact robust legal provisions to protect consumers/buyers of off plan developments
The Kenya Bureau of Standards (KEBS)has not yet prepared standards for alternative building and construction materials. This has slowed the uptake of ABMT (Alternative Building Materials and Technologies), as developers are unable to demonstrate their acceptability.
There is an urgent need for the Kenya Bureau of Standards (KEBS) to prepare standards for alternative building/construction materials. Specific attention should be given to their contribution towards reducing costs and improving affordability.
Whilst there is in place a National Maintenance Policy, there is no maintenance manual for buildings to guide the maintenance of residential units. Developers and building managers therefore fail to attend to this critical issue, undermining building longevity and setting residents up for significant refurbishment costs. This also undermines access to finance, as lenders don’t trust that buildings will last for the term of the loan.
The building maintenance issue must be taken on as a priority by the industry. Attention to this could involve the development of building maintenance manuals, together with a dissemination programme to sensitize stakeholders on national and international maintenance standards and guidelines.
The Defects Liability Regulations 2020 were quashed by Court due to lack of public participation in the preparation. No subsequent effort has been made to address the issue. Currently the regulations are focused on commercial rather than on residential buildings. While this is a consumer protection issue, it also has an impact on access to finance as lenders cannot trust that developers will take responsibility for building quality. In other countries, a five-year warranty has become standard.
It is important to place responsibility on developers to deliver good quality buildings, and to ensure that the regulations cover all building types. A review of appropriate building regulations, drawing on international experience, should be undertaken, in support of the finalization and adoption of the existing Defects Liability Regulations 2020. The regulations should consider adequate time for defects to be observed (for example, providing 12 months for a patent defect from certificate of occupation provided by county to developer, may not cover a long duration for a home buyer who may purchase the unit several months after construction completion and move in several months thereafter. An after-sales and occupation timeframe should be considered.
Kenya’s construction industry is not transparent. Information asymmetries undermine each player at different stages in the housing delivery value chain. There is nothing in the framework governing construction and maintenance that seeks to promote transparency and access to information in the market.
By including market transparency as a value in key legislation, and by providing for the collection and sharing of data in the public domain, government can leverage the regulatory process in favour of investment in affordable housing. A concept note setting out the scope of information that might be accessed through regulatory processes could be developed to feed into the finalisation of the Housing Bill 2021, to then be implemented by the relevant State Department.
The policy and regulatory framework for construction and maintenance does not recognize the very active participation of informal builders and the incidence of incremental construction. This means that such activity cannot be regulated, and that it can also not access finance.
Explicit attention needs to be given to the role and practice of informal builders and incremental construction. A full review of the so-called informal sector in Kenya is necessary as a basis from which to draft appropriate and enabling regulations that protect consumers from poor construction quality and support the flow of finance.
Capacity constraints undermine an efficient and quality construction process. On the supply side, developers, building contractors and construction workers require focused training to ensure quality within the scope of end user affordability. On the regulatory side, regulators need to engage with the evolving nature of residential construction insofar as it includes new methods, technologies players (some informal) and new target markets.
A wide-scale assessment of human resource capacity in the building industry, both in the public and private sectors, is critically needed. This would inform staffing plans in county building authorities and recruitment of more personnel to aid in expediting approval and inspection processes, as well as the training plans of the National Construction Authority and Competency Based Training Assessment for building contractors and construction workers.
Specific training in the legal and regulatory framework is also necessary to ensure that members of staff for the various institutions, as well as developers and contractors, are each aware of their responsibilities.
There is no mechanism to ensure oversight over other acts (e.g., Water Act 2016,
Standards Act 1981, Environmental Management and Coordination Act 1999, Energy Act 2019) in the residential construction sector.
Need to streamline oversight of all other sectoral laws that are relevant to the housing sector
The key recommendations for amending/reviewing and enforcement of existing laws are:
BUILDING CODE AND STANDARDS
ISSUE
RECOMMENDATION
At present, there is no comprehensive framework detailing the needs, standards, and guidelines for green buildings, neither for new construction nor for the refurbishment of existing buildings. This undermines Kenya’s intention for green, but also financiers’ ability to emphasize green building in their credit and investment strategies. Green building is addressed in the proposed Climate Change (Green & Resilient Buildings) Regulations 2023 which are yet to be operationalized.
Fasttrack the implementation of the proposed Climate Change (Green & Resilient Building) Regulations 2023 which provide guidelines for the designing and construction of buildings which reduce the carbon footprint and are sustainable and resilient to the impacts of climate change.
There are other green building guidelines and standards being developed by non-governmental sector players such as Kenya Green Building Society, the International Monetary Fund’s Excellence in Design for Greater Efficiencies (EDGE) and the Architectural Association of Kenya (Safari Green Building Index)
Minimum parking requirements as set out in the National Building Code 2024unnecessarily increase housing costs due to limitation of land.
In line with Kenya’s broader strategy for public transport, as well as high land costs, it is necessary to review the parking requirement, adjust it in response to demographic, geographic and management factors. This is especially the case in high density areas meant for affordable housing.
The Regulations overly focus on catering for persons with mobility disabilities to the exclusion of other forms of disability;
In addition, while the requirement to cater for persons with disability is noble, it also has the effect of increasing the costs of modification of buildings
Review the regulations to cater for other forms of disability and reduce the requirements for wheelchair access which may not be feasible to be provided by every private developer
The National Building Code 2024 allows for the use of second hand materials provided the materials meet the performance requirement of the corresponding relevant standard issued under the Standards Act. Notably the use of second hand materials in construction was prohibited under the previous Code. The lifting of the prohibition recognizes that some secondhand materials may be well suited for reuse – a practice which would also be counted as green.
Guidelines and procedures be developed to ensure rigorous assessment and certification of second-hand materials, promoting sustainability while maintaining safety and quality standards. Additionally, training programs for builders and inspectors should be established to familiarize them with the new standards and ensure proper implementation.
The National Building Code 2024recognizes architects and engineers but fails to accommodate the growing array of professionals in the construction sector such as landscape architects, construction managers, interior designers and construction project managers.
The professionalization of the building industry is something that requires attention by the building industry itself. The National Building Code 2024 should be reviewed to recognize and provide for a wide array of professionals to include emerging professionals such as landscapers and project managers.
APPROVALS, INSPECTIONS, AND FEES
· National Construction Authority Regulations 2014
· National Construction Authority Act 2011
· Draft Construction Industry Policy, 2018 – promoted by the Council of Governors
ISSUE
RECOMMENDATION
High and multiple permitting fees
A full review of currently applicable approval statutory costs/charges/fees is necessary to establish inefficiencies and overlaps. This would enable the creation of a single, consolidated and affordable fee.
Specific attention should be given to the potential for exemptions when a housing project is categorized as affordable housing. This might especially be considered in terms of the NCA construction levy and the EIA fees by NEMA.
Overlapping, lengthy, bureaucratic and conflicting institutional frameworks with respect to construction/permitting/approvals.
Currently, the mandate of conducting building inspections appears to be with both NCA and the National Building Inspectorate which is a department within the State Department of Public Works, which lends to the confusion.
In this context, buildings continue to be developed without effective, accountable inspection and building quality issues persist, undermining health and safety and the opportunity for finance. There is significant discretion and opacity in the building code administration system which creates opportunities for corruption.
Focused attention must be given to the building inspections process and how this addresses health and safety issues, while also enabling access to finance. An efficient and effective building inspection process is needed. Such a review might consider entrenching the inspection powers within NCA which is historically charged with this function and removing the function from the National Building Inspectorate department in SDPW.
A key area of attention must be law enforcement, in which inspectors act against unapproved or non-compliant buildings.
Lengthy, complex and bureaucratic processes in the planning and construction value chain and agencies which heighten regulatory and compliance burden.
For instance, the Ministry of Health overseas all public health issues and occupational health and safety in the industry. In addition, there are other institutions involved such as NEMA, National Construction Authority (NCA), Kenya Power, Water Resource Authority, and Kenya Bureau of Standards (KEBS). The activities of these agencies remain largely fragmented and uncoordinated.
Simplify the processes by having a centralized agency to deal with all these requirements, or at least have an electronic platform which expedites these processes.
ENVIRONMENTAL AND HEALTH LAWS/ POLICIES/ REGULATIONS REVIEWED
· Environmental Management and Coordination Act, No. 8 of 1999
· Environmental (Impact Assessment and Audit Regulations), 2003
· Environmental Management and Co-ordination (Water Quality) Regulations, 2006
· The Climate Change (Amendment) Act, 2023
· Public Health Act, 1921 (Cap)
· Forest Conservation and Management Act No. 34 of 2016
· Forests (Harvesting) Rules 2009
ISSUE
RECOMMENDATION
Public Health Act, 1921 (Cap 242) is due for modernization and revision to promote the health of building occupants. Fines in the Act of 200/- for non-compliance, for instance, are no longer a deterrent.
A full review of the Public Health Act, 1921 is necessary to incorporate more recent intentions for and commitments to energy efficiency, and healthy and green buildings. This would lead to a legislative amendment which modernizes the Act in line with current Public Health issues. It is also important that the incentive and disincentive framework of fines is reviewed to ensure effective compliance.
The regulatory framework does not address energy efficiency standards that are key for green buildings as envisaged and required under the Act. This is slowing efforts at greening buildings in this respect.
Cabinet Secretary should formulate regulations to provide for various matters such as: energy efficiency and conservation building codes; energy efficiency standards for specific technologies and buildings; and energy consumption norms and standards for designated consumers.
Also develop regulations to specify the norms for processes and energy consumption standards for any equipment and appliances which consume, generate, transmit or supply energy as required under section 190 of the Energy Act 2019 to effectively promote green buildings by ensuring energy conservation in buildings (houses).
The Environmental Management and Coordination (Noise and Excessive Vibration Pollution) (Control) Regulations, 2009 Provisions are not implemented in residential areas by county governments and NEMA (Standards & Enforcement Review Committee) The function of dealing with noise pollution is devolved to county governments (which also issue licences for bars), though NEMA provides technical assistance. Residents have had to rely on the courts to force the hand of county governments into regulating or cancelling licences of noise polluters such as bars (Kilimani Project Foundation v B Concept Limited t/a B Club Nairobi & 7 others [2019] eKLR;)
Implement permissible noise levels contained in the Environmental Management and Coordination (Noise and Excessive Vibration Pollution) (Control) Regulations, 2009 for residential areas.
Various supply chain regulations have conflicting institutional objectives. For instance, the Mining Act has a levy of 2% on construction materials that are mined in Kenya, increasing the cost of locally produced building materials.
Undertake a review of the regulatory framework of supply chains for affordable housing, to identify areas of conflict with the affordable housing agenda. Where conflict is identified, develop and implement measures to support competing objectives. With respect to the mining levy, consideration could be given to apply the funds from these levies for investment into delivery of infrastructure of other financing for affordable housing, or to exempt some materials from these levies to bring down the cost of affordable housing.
PROFESSIONALS AND FEES
. Engineers (Scale of Fees for Professional Engineers) Rules 2022
· Architects Act & Quantity Surveyors Act
· Advocates Remuneration Order
· Valuers Bill 2022(expired)
ISSUE
RECOMMENDATION
Professional fees are calculated based on a fixed fee scale per unit. This raises the cost of delivering affordable housing, especially insofar as it fails to engage with the shift to large scale similar unit developments where technical input is replicated.
The Competition Authority of Kenya has ruled in this direction, but this has not been realized in the fee structure.
An impact assessment of the current fees structure as is being charged by key professionals in the construction sector such as lawyers, engineers, architects, valuers is required to provide the Competition Authority of Kenya with the evidence needed to grant exemptions in support of affordable housing.
There have been alleged instances of price fixing by players in the construction sector such as cement and steel makers. These concerted and collusive practices increase construction costs thus raising house prices.
Address competition concerns potential concerted practices/collusive behaviour among stakeholders in the sectors particularly manufacturers of construction materials which hurt consumers and increase construction costs.
[1] World Bank. Programs. Economic Profile Kenya. Doing Business 2020. Comparing Business Regulations in 190 Economies.https://www.doingbusiness.org/content/dam/doingBusiness/country/k/kenya/KEN.pdf (Accessed 23 August 2022). Pg. 11
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