Broken promise: Inside collapse of UNOPS Habitat Heights project

In December 2019, the dusty plains of Lukenya played host to an elaborate ceremony. President Uhuru Kenyatta, flanked by United Nations dignitaries and private developers, launched Habitat Heights — an ambitious housing development promising 8,888 modern units. It was to be the first step in building 100,000 affordable homes under the United Nations Office for Project Services (UNOPS) Sustainable Infrastructure Investments and Innovation (S3i) initiative.

The $647 million (Sh83.6 billion) project was touted as a model public-private partnership, a milestone in Kenya’s affordable housing drive.

Nearly six years later, the site lies deserted. Not a single unit has been completed. A sales gallery, with weeds sprouting through cracked paving, is all that remains. The once-celebrated plaque commemorating the 2019 launch is now corroded, part of its lettering missing. Nearby, herders graze their livestock. “It has remained the same for years,” a local herder remarked.

Satellite imagery confirms the project never progressed beyond the gallery and two show units. Despite UNOPS announcing “the first homes in Kenya are ready” during the 2019 launch, the agency later admitted none were built for habitation. The claim, UNOPS now says, was made under former S3i CEO Vitaly Vanshelboim and referred only to demonstration homes.

The original press statements have since been scrubbed from UNOPS websites. Only archived copies, captured by the Wayback Machine, offer a glimpse into the promises made.

What was billed as a flagship affordable housing project has unravelled into one of the most brazen financial scandals in the UN’s history—one rooted in institutional failure, poor oversight, and deliberate manipulation.

A broken vision

The story began in September 2018 in New York, when UNOPS signed an agreement with the Kenyan government to support President Kenyatta’s Big Four Agenda through S3i. In May 2019, a tripartite agreement was signed between UNOPS, Kenya’s State Department for Housing and Urban Development, and Sustainable Housing Solutions (SHS), a private firm led by businessman David Kendrick.

SHS Chairman Dr Allan Zimbler called the deal “a critical step” in addressing Kenya’s housing deficit. UNOPS Executive Director Grete Faremo declared, “We will do everything we can to ensure the project is a success.”

Those lofty promises now read like fiction. Today, SHS Holdings’ website is defunct. The company is under investigation for receiving millions in UNOPS funds with little to show in return.

Under Faremo and her deputy, Vanshelboim, UNOPS began quietly amassing reserves by overcharging UN clients, using these funds for high-risk investments via the S3i initiative.

Professor Mukesh Kapila, a former UN official, says the agency was never intended to act as a development bank. “UNOPS was created to provide logistics and project management to other UN agencies,” he said. “But they transformed it into a quasi-investment vehicle—and it failed catastrophically.”

A KPMG audit found that from 2016 to 2021, S3i operated as a “special project,” exempt from normal legal, procurement, and oversight protocols. This structure allowed Vanshelboim to channel money to favoured entities—including those tied to Kendrick—without scrutiny.

“The checks and balances were not bypassed; they were dismantled,” Kapila said. “This wasn’t negligence. It was a deliberate scheme.”

Kapila added that member-state diplomats on the UNOPS Executive Board routinely rubber-stamped reports without demanding financial disclosures. “There was no serious oversight,” he said. “It was a system designed to fail.”

Kenya became the face of the S3i initiative, used in UNOPS marketing materials to showcase its commitment to UN Sustainable Development Goals.

Yet a close look reveals that basic due diligence was ignored. SHS had no track record in delivering mass housing. Still, it was entrusted with a $647 million development, allegedly without competitive bidding. Kenyan authorities failed to vet the firm’s capacity.

Former senator and architect Sylvia Kasanga criticised the lack of scrutiny.

“Even small public projects require bidders to demonstrate their capability. How was a 100,000-unit project handed out without a proper background check?”

UNOPS now says it disbursed $11.2 million (Sh1,450,400,000) to the Kenya housing project between 2019 and 2020. However, it no longer confirms whether Habitat Heights received any of this funding—despite financial statements listing the Lukenya project as its only S3i-backed housing development in Kenya. “They say they don’t know where the money went,” said Kapila. “That’s laughable.”

A web of companies

Several companies with ties to Kendrick were involved in the Habitat Heights rollout.

Bau Lifestyle International Design Ltd, which fitted the show units, was marketed as SHS Holdings’ exclusive design partner. Records from the UK show Kendrick served as a director. Another company, Baupanel Systems, listed as a construction partner, was directed by Bernard Sumner, who is linked to over 200 companies in UK filings.

UN records and tribunal findings allege that Vanshelboim channelled nearly $59 million (Sh7,623,951,739) to companies tied to Kendrick. In return, he received personal benefits, including a Mercedes-Benz for his wife and a home renovation.

A UN Dispute Tribunal found Vanshelboim guilty of serious misconduct. He was dismissed, fined, and ordered to repay $58.8 million (Sh7,587,552,000) to UNOPS.

Despite the findings, neither Vanshelboim nor Kendrick has been criminally prosecuted by the UN. In March 2024, Vanshelboim was arrested in Spain pending extradition to the United States, where a grand jury has indicted him for bribery, wire fraud, and money laundering.

UNOPS, in a statement, said it has undertaken “wide-ranging reforms” and ceased all S3i-style investment activity. However, it declined to disclose whether funds recovered from Kendrick-linked firms covered even a fraction of the losses.

For Kenyan families dreaming of home ownership, Habitat Heights was more than a development—it was a promise. A promise broken.

The project targeted working-class families, yet prices ranged from Sh2 million to Sh7 million, far above government housing schemes starting at Sh640,000.

George Muli, a boda boda rider in Athi River, earns Sh1,500 daily and pays Sh2,000 monthly rent. “A house costing over a million? That’s not for us,” he said. “Unless you know someone, you won’t get it.”

Muli lives in a mabati house with his wife and two children. He cannot save for a mortgage, let alone afford monthly repayments of Sh5,000. “These houses were for the rich,” he said. “Not for people like me.”

Habitat Heights’ failure fits a pattern. Kenya’s  Affordable Housing Programme (AHP) launched in 2017 with a goal of 500,000 homes by 2022. According to a Cytonn report, fewer than 14,000 units were completed.

President William Ruto, elected in 2022, pledged to build 200,000 homes annually. As of April 2025, the State Department for Housing reported 1,189 completed units, with 140,000 under construction.

Project documents show the 103-acre plot in Lukenya was originally owned by Habitat Housing Cooperative Society Ltd (HHCSL), a group of UN staff and affiliates. They formed a joint venture with Singapura Developers Ltd to create Habitat Heights Ltd, a Special Purpose Vehicle (SPV) that acquired the land.

Neither Singapura Developers Ltd nor HHCSL responded to requests for comment. Attempts to reach Habitat Heights Ltd were also unsuccessful.

Despite marketing itself as a self-contained mini-city, Habitat Heights collapsed before it began. And while UNOPS has moved on, the land sits idle—a stark reminder of what went wrong. UNOPS insists it will not engage in such projects again. “We acknowledge the serious and significant management failures that resulted in challenges to the government of Kenya’s efforts,” the agency said in a statement.

But no Kenyan government official has been investigated or held accountable.

PS Charles Hinga, who signed the 2018 MOU and 2019 tripartite agreement, continues to serve as the State Department’s principal secretary.

For Professor Kapila, the lesson is clear. “The poorest people in Kenya were used to legitimise a scam,” he said. “Habitat Heights was never about homes. It was about money. And that’s the tragedy.”