UN's push to have governments regulate Africa's housing market

At the recent 13th World Urban Forum held in Baku, Azerbaijan, Principal Secretary of the State Department for Housing and Urban Development Charles Hinga presented a compelling case for the government’s 1.5 per cent housing levy.

He said the tax was necessary for the government to regain control of the country's housing market, which had been left to the private sector in the early 1990s.

While back then, as directed by the International Monetary Fund (IMF) and the World Bank, it was necessary for the government to relegate housing provision to the private sector, Hinga said the dynamics have since changed.'

As such, the government has no choice but to intervene. “Why is the government getting involved? Banks' deposits are short-term, but a mortgage, on average, should be 20 years. So, if you ask banks to take short-term deposits and lend long-term, what do they do? They price out,” he said during the forum held late May.

Hinga explained that, due to the structural adjustment programmes (SAPs) instituted by the IMF and the World Bank, the administration then stopped funding the National Housing Corporation, which was responsible for the development of housing units in municipal towns.

“When you start looking at when the rains started beating us, you have to go back to 1989,” he said.

Hinga argued that an ordinary wage-earning Kenyan cannot afford to own a decent house, as they have been priced out by players in the private sector due to the skyrocketing cost of credit and land.

The latest United Nations Human Settlements Programme (UN-Habitat) report adds more weight to PS Hinga’s argument.

The World Cities Report 2026, titled The Global Housing Crisis: Pathways to Action, insists it is time for governments to re-take control of the housing markets in their jurisdictions.

The report says the role of market facilitator played by governments, as Kenya has been, is no longer helpful in solving the housing crisis.

“In many countries, the shift from State provision to market facilitation has left low-and middle-income households increasingly exposed to volatility, speculation and exclusion,” the report says.

It argues that public authorities are uniquely positioned to set ethical standards, regulate the roles of financial actors, developers and community-based organisations, ensure transparency and accountability in housing markets and coordinate delivery systems.

“Strong State involvement is also critical for addressing the differentiated needs of women, youth, older persons, persons with disabilities, migrants and minority communities, and ensuring that housing systems support climate resilience,” the report says.

The report notes how, over the years, governments have moved from being direct providers of housing to acting as facilitators of market-based solutions.

And, more recently, many have re-emerged as key providers in response to persistent affordability crises. “Affordable housing strategies now rely not only on constructing new units but also on strengthening existing systems, including rental housing,” it says.

The report examines the global housing market in the 60s and 70s, noting how this period was marked by contradictory policies that combined forced evictions and slum eradication with the production of social housing.

“Yet these programmes failed to reach the poorest households and often displaced the very populations they aimed to support. In Rio de Janeiro (Brazil), for example, around 80 favelas were demolished, and about 140,000 residents were relocated between 1962 and 1974, even as new housing estates such as City of God were constructed,” the report says.

PS Hinga, in his presentation, noted how the then administration of post-independent Kenya inherited just 15,000 units from the colonial government and faced rural to urban migration, growing land prices and unemployment, which the government is still grappling with today.

Due to fiscal indiscipline, he said, the IMF and the World Bank came in and gave conditions for their assistance. “One of those conditions in 1989, they told the government to leave housing to the private sector,” he said.

The UN-Habitat report notes that in the developing world, early signs of State retreat in this period were evident in the shift from public housing toward slum upgrading and sites-and-services programmes. This was influenced by the belief that low-income households could address their own housing needs.

This self-help era promoted incremental, self-managed construction – provided it met principles of financial viability and cost recovery.

“Governments gradually abandoned the 'provider' model in favour of the 'enabler' paradigm, emphasising serviced land, upgrading and household-led construction. This paved the way for the market-oriented enabling approach of the late 1980s,” the report says.

The report says this approach, popularised by the World Bank and adopted by major international agencies and governments, including the United Nations, the United Kingdom, and the US, assumed that mass public housing was not a viable solution.

“Housing challenges during this era were increasingly framed as issues of infrastructure and finance,” it says.

The World Bank became highly influential within governments and international development agencies towards increasing home-ownership.

“As a major lender – especially to newly independent nations – the Bretton Woods institution played a central role in steering global housing policy toward market-oriented reforms. It called for a comprehensive national policy “reform” aimed at increasing efficiency by scaling back the state's role and expanding market mechanisms,” the report says.

It adds that through this enabling approach, balancing a number of “demand side” and “supply side” principles in areas such as property rights, mortgage finance, infrastructure and land regulations, the World Bank hoped to enhance the “efficiency” of housing markets and improve outcomes for low-income groups. 

Then, private firms and civic organisations such as non-governmental organisations, voluntary bodies and community-based groups were increasingly viewed as more efficient than State agencies in delivering housing-related services.

This even as governments retained essential regulatory and supportive roles.

“The strategy, however, drew criticism for over-relying on market-driven solutions, often neglecting long-term planning and broader structural issues. These concerns eventually reignited debate on the limits of markets and underscored the continued importance of strong state involvement and collective social action in housing,” the report points out.