A rise in demand for accommodation in western Kenya — following the proliferation of colleges and universities in the region — has created a great opportunity for property developers.
Many public and private institutions have established campuses in the city and in western Kenya in general, to respond to the growing need for post-secondary education and also take their services closer to the people.
Kenya now has some 22 fully accredited public universities and nine constituent university colleges, as well as 17 chartered private universities and five constituent colleges.
The increased population, which is also attributable to the directive that universities implement double intakes, has created a conducive market for housing investment.
This is because the region still lacks student services such as off-campus housing, shuttle services, security and water supply.
This has seem many students living less-than-ideal conditions, with some accommodated in people’s living rooms, servant’s quarters and verandas. Some of these places lack security, adequate water supply and electricity.
George Juma, a student leader at Maseno University campus, says the recent transfer of students to Kisumu from the main campus in Nairobi had severely stretched accommodation facilities.
He says students lack appropriate accommodation, with some forced to live near bars and lodges.
And Moses Oyola, a student leader at University of Nairobi’s Kisumu campus, says their situation is worse since most tenants prefer students from particular universities.
“We are forced to scramble for the few spaces available, which makes us very vulnerable; accommodation has become pretty expensive, with some landlords charging as much as Sh15,000 per month,” he says.
But to people like Mrs Judith Oyieko, who manages a hostel in the city, the crisis is a godsend.
For one, she says, students are prepared to pay higher rents than regular tenants.
“We provide furniture such as beds, mattresses, curtains, reading lamps, in addition to meals served on a pay-as-you-eat basis.
This gives us extra income, compared with regular tenants,” she adds.
Real estate investor Mr Eric Ounga, the director of Ounga Commercial Agencies, points out that, although investment in student accommodation is still low, it has a lot of potential.
“It is the new thing in town since we have very many universities coming up in western Kenya,” he says.
Mr Ounga, who is putting up more than 120 housing units for students within the city, said the market still had room for more investors.
He says the tough economic times have made it difficult for many people to buy houses since people are resorting to smaller spaces, making students the next target for developers.
“We have consumers who are unwilling to buy but the students still find it easy to take a one-off monthly settlement for rent, making the property business viable,” he says.
The Universities’ Academic Staff Union (UASU) National Treasurer, Ms Edwina Kawaka, regrets that the continued expansion to increase accessibility to more people has diluted the standards and quality of education at universities.
“Most of these expansions are done at the expense of knowledge and standards, yet that is not the core mandate of universities,” she says.
Maseno University Vice-Chancellor Prof Dominic Makawiti agrees, adding that is not the university’s responsibility to provide accommodation for students in this day and age.
Speaking during a meeting to woo investors, the Mr Makawiti said the universities’ sole function was to teach, not build hostels.
He said the universities had created an opportunity for investors to build hostels for the ever-increasing number of student.
He added universities had stopped investing in accommodation, and had even put in place stringent measures for those seeking accommodation in the institutions’ limited hostels.
His views are supported by a recent notice to first year students that read: “Due to limited space, accommodation will be on a first come, first come, first served basis upon completion of university fees payment.”
Maseno hopes to absorb more than 3,000 new students in its annual joint placement intakes apart from a number of applications from students joining the school for special programs.
The varsity has a bed capacity that houses 63.9 per cent of its more than 10,000 students thanks to the double intake directive.
All these compete for the limited bed spaces on a first come first served basis, a situation that has created massive investment opportunities for property developers.
The situation is still wanting as some private investors have only converted their rental houses to student hostels which fetch better rent while the shortage persists.
“Despite unattractive interest rates from the banks, this is still an open opportunity for making money ,” he said.
Mr Ounga says the housing system in Kisumu has for the longest time concentrated on middle income earners, a market that has not been served fully.
There are about 300,000 students in public and private universities in Kenya with each currently enrolling slightly above 30,000 students per semester.
The country has seen accelerated growth in both sectors since 2003, with these institutions taking over downtown buildings, acquiring colleges or buying huge chunks of land to cope with rising demand.
Lack of adequate accommodation has led to rampant protests in some universities, and has remained a sticking point that is yet to be addressed by property investors.
The students, especially those posted by the Kenya Universities and Colleges Central Placement Service (Kuccps) have to struggle to find hostels for accommodation.
He lamented that the education sector has become so commercialised that the administration does not care where students live or how they survive.
Midega Fred told DN2 that students could not be expected to get first class degrees when they were accommodated in second-class housing on their campuses
The situation at Moi University is not different, with students complaining about run-down accommodation.
He lamented on the high interest rates charged by banks on loans for property developers but expressed optimism that the income from the sector was still immense.