Hello. Happy Friday. What a great turnout. Thank you all for coming. My name is Victoria Beard. In case you don’t know, I’ve done a number of these colloquiums this semester, but in case you don’t know me, I’m a professor in city and regional planning, and I also direct the Cornell Mui Ho Center for Cities. It’s great to see all of you, but it’s even a greater pleasure of mine to introduce our speaker today, Tom Gillespie from the University of Manchester. Tom is one of those rare scholars that works both in the global north and in the global south. It’s really exciting to have him here where he can talk about housing, financialization, but he can also talk and reflect and connect to work that he does in African cities on African urbanism.

Tom and I met last year when I was visiting at the University of Manchester, but I was reviewing his website and how you list your research interests, and I was thinking, that’s what we’re interested in. That’s what all of us are interested in. So he does comparative urbanization. He’s interested in issues of inequality. He’s interested in breaking down binaries between global north and global south. So super exciting research agenda. This is going to be great. So please join me and welcome Tom. Thank you. Ding, did you have to do any housekeeping? Do you do housekeeping or no? Okay, perfect.

Okay. Thanks so much, Victoria, and thank you for the invitation to be here. It’s really nice to see you all. Thank you for coming. And it’s really nice to be presenting in such a stunning theatre. So, I mean, as you can see from the title of this talk, I’m going to be talking about today. And the kind of basic premise of today’s talk is that in the 21st century, we’ve seen an important shift in housing policy in many urban contexts.

So whereas from the 1980s onwards, international housing policy said that the state should have a limited role in housing production, it should sort of step back from building housing and it should just try and create an enabling environment for the private sector and community self-help. What we’ve seen in recent years is state actors are becoming more actively involved in housing production. They’re adopting more interventionist approaches in housing production. And this is something that we can observe across the global North and the global South. And this is really a response to the fact that the global housing challenge, which I’m going to talk about in a bit, is, you know, extremely big.

And these enabling policies have basically failed. So, you know, enabling the market and enabling self-help hasn’t been able to address this problem. So, states are becoming more interventionist, but this isn’t a return to the sort of mid-20th century paradigm of publicly funded housing construction. Instead, this state intervention is occurring in a context where housing and urban development in general are becoming increasingly financialized. I’m going to tell you what this means. I’m going to talk about this concept of financialization, that basically

Private finance is becoming increasingly dominant in the production of housing. So what I’m going to do is I’m going to look at how at the moment there’s this kind of conjuncture of increased state intervention in housing production and also growing financialization of housing. And I’m going to use affordable housing specifically as a way of thinking about how the relationship between the state and private finance are changing. And I’m going to use the concept of urban statecraft as a concept for thinking about how state actors in different urban contexts are actively engaging with financialization processes in order to try and address development problems like housing unaffordability.

So, as you can see from this slide, there’s lots of other names on here. It’s not just me. So this presentation draws on a comparative paper that I’ve been writing with some colleagues who are named here. So this paper came out of a session at the Royal Geographical Society conference in London in 2023, where we got people together to try and think about the changing relationship between the state and private finance in relation to housing production. And we tried to do this thinking across the global north-south distinction. So out of this session, we started writing a paper together. And this paper basically compares what’s going on in a number of cities. So we have Nairobi, Casablanca and Shanghai in the global south. And then we have Paris, Salford, which is part of Greater Manchester, where I live, and Rome in the global north. So this paper is really trying to kind of think across this north-south distinction.

Historically, research on housing has been quite compartmentalised between the global north and global south. So one of the things we’re trying to do is kind of disrupt that compartmentalisation—that’s a hard word to say—a bit. So what we do is we compare what’s going on in these different cities. And we use this concept of statecraft to think about how our state actors are engaging with financialisation processes. And we’ve identified three dimensions across which state agency can be compared.

So the first is state motivations for becoming more interventionist in housing production and the types of financial innovations that they engage in, in order to do this. The second is the types of risk that are produced by financialisation processes and how these risks are kind of distributed unevenly across different social groups. And then the third dimension is whether and to what extent state actors try and kind of mitigate these risks by kind of creating barriers between financial markets and housing sectors.

And basically, we argue that, you know, even though there’s this kind of general tendency towards state intervention and financialisation, what we’re seeing is basically a very uneven geography. What this looks like differs enormously between different urban contexts. And so, you know, when you’re looking at this, you need to be sensitive to things like political, economic contingency.

So what I’m going to do today is basically illustrate this by talking about my own research on state-led affordable housing production in Nairobi. Okay, so here’s the structure of the talk. So I’m going to begin by talking about this idea of the global housing challenge and how it’s been framed in such a way in order to kind of lead state actors to take a particular approach to addressing this challenge. In particular, there’s a kind of very narrow focus on the idea of housing deficits, which leads to a focus on basically trying to mass produce as many new housing units as possible.

Then we’re going to move on to look at academic debates around housing financialisation, the role of the state in urban development. And I’m going to propose this concept of urban statecraft as a way of thinking about how these things kind of come together and how states try and engage with financialisation processes. And then I’m going to try and ground all of this in a particular urban context. I’m going to talk about my ongoing research in Nairobi.

Okay, so I just want to begin by saying that there is a very real problem with urban housing globally. You know, this is a material problem. So, you know, the Sustainable Development Goal 11, this is the SDG that focuses on city. This set the target of providing access to—let me get the exact wording here—adequate, safe and affordable housing, providing access to adequate, safe and affordable housing for all by the year 2030. You know, clearly this target is not going to be met in the next five years.

The UN estimate that there’s 1.1 billion people living in so-called slum housing, mostly in Africa and Asia. And, you know, this is housing that is characterised by problems like overcrowding, tenure insecurity, poor quality construction materials, lack of access to water and sanitation.

And the number of people living in this type of housing is actually increasing rather than decreasing as a result of rapid urbanisation. So, you know, this is a problem that’s not going away. And I think it’s important to recognise that this isn’t a problem that is just confined to rapidly urbanising areas in the global south. You know, the housing problem is also very present in rich countries. So, for example, in England, there’s over 100,000 households who are homeless living in temporary accommodation. And this number has kind of doubled in the last 15 years or so since the introduction of austerity policies after the 2008 financial crisis.

So these are people that are living in very kind of poor quality, insecure, overcrowded housing, often entire families living in one room, often very kind of damp and mouldy accommodation. You know, in some ways, this kind of resonates with what the UN talk about when they talk about slum housing. So, you know, this is a problem that I argue kind of cuts across the global north-south distinction, even though it’s clearly a lot more acute in the global south. And Deborah Potts, who’s written a really excellent book on the global housing crisis, argues that actually there’s a kind of similar dynamic that underpins the housing problem in both the global north and south. And that’s the growing commodification of housing and the fact that capitalist markets are unable to deliver good quality, affordable housing to people on low incomes.

So, you know, this is a very real and significant problem. But this problem is also discursively framed in a particular way by powerful actors such as private consultancy organisations and multilateral development organisations. And this framing has led to state actors adopting a very kind of particular approach to addressing the housing problem. So these actors often talk about the global housing problem in terms of quantitative deficits of units. So, for example, McKinsey Global Institute, they wrote a very influential report in 2014, where they argued that globally there is a housing deficit of 440 million units.

You know, we also see this at a national scale as well. People talk about countries having national housing deficits. So, for example, Kenya, which I’m going to talk about, apparently has a housing deficit of 2 million units. And these deficits are explained in terms of the supply of new units being constrained. So basically supply can’t keep up with demand. And, you know, there’s various explanations for this. Some people kind of blame the public sector. They say that things like planning and land delivery can’t kind of keep up with the market. But the point is that there’s a very kind of narrow focus on units and supply, and of course this then leads to a very particular solution to this problem.

So organisations like McKinsey argue that basically we need kind of mass construction of new housing units using industrial construction methods in order to try and address these housing deficits. So the focus is really on kind of scaling up industrial production of housing. And it’s argued that, you know, this is good in itself, we need more housing, but this could also help us to achieve wider economic development objectives.

So in the context of Africa, for example, the African Development Bank has argued that by scaling up affordable housing production, this can contribute to industrialisation and economic transformation in African countries by, you know, kind of energising the housing supply chain. So this mass construction of new housing, it’s argued that, you know, this is a big opportunity to kind of drive economic growth and development.

So this framing of the problem and the solution. I think it’s important to note that ideas that became popular in academia and civil society and international development institutions towards the end of the 20th century—ideas such as housing as a verb, you know, housing is something that’s kind of constructed incrementally by the people living in it—these kind of ideas that have encouraged participatory approaches to housing production, these ideas have become very kind of sidelined by this way of thinking about housing. This is all about kind of mass industrial construction of housing, and the people who live in this housing are just seen as kind of passive beneficiaries.

So the problem is kind of framed in these very narrow terms in terms of, you know, we need to scale up supply of new housing units. But the question is, okay, how do you actually achieve this? So what’s the kind of proper relationship between states and markets to achieve this large scale affordable housing production?

So as I said at the beginning, for a long time, the assumption was that states should sort of take a backseat and should just try and enable the private sector and enable communities to build their own housing. But increasingly, I think the scale and the extent of the housing challenge has led state actors to kind of move away from this enabling approach and to become more directly involved in housing production. So we’ve seen this in global South countries, particularly in Latin America, where national governments have launched new affordable housing programs.

So this image on the left here, this is new housing that was built in Brazil as part of the Mina Casa Mina Vida program launched by the Workers Party government in 2009. I think they’ve built over 4 million units since then. A lot of this is kind of new housing estates on the periphery of existing cities. And there’s a focus here on trying to expand homeownerships to new social groups, often through provision of subsidized housing finance. And we’ve also seen increased state intervention in the global North as well.

So this picture on the right here, this is the mayor of Salford, Paul Dennett. Politicians love to put on a high-vis vest and a hard hat. This is one of their favorite pastimes. So this is him showing off a construction site for some new social housing that’s being built in Salford. So Salford have established a new company called Derive, which is named after the Situationist International. And this is a council-owned company, which is going to start building social housing, which is something that we haven’t really seen in the UK for decades now.

In both of these contexts, this increased intervention in housing production is informed by a critique of neoliberalism. You know, it’s quite consciously kind of turning away from the policy consensus of the end of the 20th century. So, you know, the Vina Casa Mina Vida program in Brazil, for example, you know, this has to be understood as part of the pink tide in Latin America, where socialist governments, you know, very explicitly decided to reject the Washington consensus and become, you know, more kind of interventionist and redistributed.

And then in the UK, Paul Dennett and Salford Council, this is part of a movement that’s often referred to as radical municipalism, where local government very kind of deliberately distances itself from national neoliberal policies and tries to kind of forge a more progressive path.

So my argument is that we’re kind of seeing this trend towards increased state intervention in housing, and this can be observed across the global north and the global south. But I think it’s really important to qualify this and say that this isn’t a return to the kind of public housing construction that we saw after the Second World War. And that’s because, you know, housing in the 21st century is becoming increasingly financialized. So we need to kind of understand how increased state intervention is kind of occurring in conjunction with increased financialization.

Okay, so financialization is one of these terms that is used a lot in the social sciences. And with all these kind of widely used concepts, there’s always a danger that they become a bit kind of meaningless. So it’s important to, you know, explain what it is you exactly mean when you’re talking about housing financialization. So I want to identify three kind of defining characteristics of housing financialization.

So the first is that housing is becoming increasingly integrated with and also subordinate to financial markets. So probably the most kind of obvious way that this occurs is through the expansion of mortgage debt. And this is something that, you know, we see across many countries where mortgage debt, as a proportion of GDP, has increased in the past few decades, as people become increasingly dependent on private finance as a way of accessing housing.

The second characteristic of housing financialization is that housing is turned into an asset. And by this, I mean, something that rent can be extracted from. So housing is a rent-generating asset. I mean, we see this particularly clearly in institutional investors—things like pension funds, private equity funds—buying up lots of housing as a rental investment. So where I live in Manchester, in recent years, we’ve seen the construction of very large tower blocks of private rental accommodation. And often entire blocks are sold as a whole to institutional investors, which then use them as basically as like rent-generating machines. So this is what we mean when we talk about assetization and rent extraction.

And then finally, housing—basically, as a result of those first two things—housing becomes increasingly kind of dictated by practices of speculation. And as a result, housing becomes increasingly subject to the risk. And, you know, probably the most obvious example of this is the packaging up of mortgages into financial assets called mortgage-backed securities, which are then traded globally on financial markets.

Has everyone seen these two films? OK, so these—if you want to understand housing financialization, then basically you have to watch these two films, and they go really well together. So The Big Short kind of helps us to understand the mechanisms of housing financialization. And 99 Homes helps us to understand the outcomes of housing financialization.

So The Big Short is a film about, you know, basically how did the 2008 financial crisis happen? It talks about how so-called subprime mortgages—so, you know, mortgages that were lent to people on low incomes who probably couldn’t afford to pay them back—how these were packaged up into these mortgage-backed securities and then traded globally. And this created huge systemic risk. And then basically, when it became clear that the mortgages in these securities were no good, that people were going to default on these mortgages, this blew a huge hole in the balance sheets of enormous banks. And these banks had to be bailed out to the tune of trillions of dollars by the public—by you and me.

So that’s The Big Short. That kind of helps us to understand, you know, how did this happen? And then 99 Homes helps us to understand, OK, well, what happened in terms of risk, like who eventually had to pay the cost of these risky practices of speculation? And this film follows a man, a working man, who basically has his house repossessed. He loses his home. And then it kind of follows what he has to do to try and get his home back. And I won’t spoil what it is that he has to do. So these films go really well together.

And one of the things that financialisation researchers are really interested in is this question of risk. How is risk distributed unequally between different social groups? Who ultimately pays the price for speculation and risk?

OK. So that’s my kind of very hotted introduction to housing financialisation. What does this mean for our understanding of the state in global urban development? If housing is increasingly becoming financialised, what is the role of the state in all of this?

So I’ve got three different readings here that I think are particularly important if you’re interested in this question. So the first is a paper by Daniela Gabor called The Wall Street Consensus. So this is a really influential paper. I think it was published four years ago, and it’s already got 600 citations. So these are the kind of citation numbers most of us can only dream of. And Gabor identifies a kind of new—what she argues is like a new paradigm of global development characterised by financialisation. And she argues that in this context of growing financialisation, the role of state actors is to basically try and attract private finance to invest in infrastructure by de-risking these investments.

So states, they basically try and remove the risk from private capital and basically put that risk onto the public. And they do this through things like subsidising private investments to make them more profitable, doing things like guaranteeing demand for services so that there’s basically no risk for the investor. So within this kind of paradigm of de-risking, the role of the state is very kind of constrained. It’s basically just reduced to trying to kind of entice private finance to invest in things like affordable housing.

Some people have argued, though, that this is a bit of a reductive account of state agency. You know, states aren’t just totally kind of dominated by the whims of private finance. Particularly in light of the rise of China, we’ve actually seen a kind of growing trend towards increased state intervention and state-led development in recent decades. Governments are increasingly engaging in things like national development planning. They’re engaging in things like industrial policy.

And so people like Ilyas, who’s written about the kind of contemporary rise of state capitalism, they argue that, you know, we can’t just kind of reduce state agency to just basically trying to kind of subsidise and attract private finance. States are—they have more agency than this. They’re able to kind of do things and use private finance in order to address development goals.

So we need to kind of hold these two things in tension: the fact that on the one hand, private finance is becoming more powerful, but on the other hand, states are also becoming more interventionist. And I think the concept of statecraft is really useful, kind of bringing these two things together.

So this is a book by a British geographer called Andy Pike, who’s written about statecraft in local government in England. And he basically talks about how local governments engage with financialisation processes in different ways and to different extents in order to try and achieve their policy goals. This concept of statecraft—it’s actually achieved quite kind of wide interest, not just in rich countries like the UK. So Fulong Wu has talked about statecraft in the context of China. Liza Rose Sirolia has talked about it in urban Africa. So this is a concept that seems to have quite wide kind of geographical relevance.

And basically, I’m going to use this concept today to think about how state actors try and engage with and harness and also sometimes kind of push back on and resist financialisation processes in different ways in order to achieve their development objectives.

And I think the importance of the concept of statecraft is that there can be a tendency when people talk about financialisation to view states as quite kind of passive and helpless. You know, financialisation—people talk about this huge wall of money that just kind of floods into national housing sectors. And it’s easy to think about governments as being quite passive in this process. Whereas I think the concept of statecraft is useful because it helps us to understand that, you know, state actors are often active participants in financialisation processes.

Okay. So as I said at the beginning, we compared financialisation and statecraft in the area of affordable housing production across six different cities. And we identified three dimensions across which state agency can be analysed and compared.

So the first is state motivations and financial innovation. So we found that state actors are often trying to kind of wrestle with the fact that housing has a very kind of contradictory status. So on the one hand, it’s increasingly a financial asset, which is used to generate rent. On the other hand, it’s a vital infrastructure of social reproductions. You know, we all need housing. It’s something that’s necessary to human survival. And in engaging with financialisation processes to try and build affordable housing, state actors are basically trying to kind of reconcile these two contradictory functions of housing. And state actors adopt a very wide range of different financial innovations in order to achieve this.

The second dimension: the uneven distribution of risk. So as state actors are engaging with financialisation processes, it’s inevitable that some risk is involved in this. So financialisation is inherently risky. The question is, how is this risk distributed across different social groups? You know, who are the winners and who are the losers in this process? Risk can’t be disappeared. It can only be moved around. And so the question is, you know, who does it fall on ultimately?

And then finally, mitigating risk. So to what extent do state actors try and mitigate the risk associated with financialisation processes?

In some contexts, we found that state actors are deliberately creating institutional barriers between financial markets and housing sectors, whereas in others, they are more relaxed and allow financialization to occur without much restraint. I don’t have enough time today to explain all the different case studies from our comparative paper, so I’ll focus on one particular example of urban statecraft: affordable housing production in Nairobi, the capital of Kenya.

This research has been ongoing since 2023, and I’m still figuring some things out. So far, I’ve conducted interviews with policymakers and urban planners, visited affordable housing project sites, talked to residents affected by these projects, and analyzed policy documents and Kenyan media.

First, some context: what is the housing situation in Nairobi? How does the housing challenge manifest in this city? Is anyone familiar with Nairobi or have you studied it before? Okay, I might cover some familiar points, but hopefully this will reinforce what you know.

Housing in Nairobi is dominated by private renting — 70% of the population live in a single rented room. This could be a shack in an informal settlement or a room in a high-rise tenement building, like the ones pictured here. Nairobi’s built environment is distinctive for these high-rise tenements. Marie Huxemeyer referred to Nairobi as a “tenement city,” comparing it to 19th century Berlin, where the city is dominated by high-rise private rental accommodation.

Most people in Nairobi live in overcrowded, poor-quality, and expensive private rental housing. Only about 5% of the population have access to mortgage finance, so homeownership is a dream for the majority. Some people save to build their own homes, but mortgage finance is mainly available to the elite.

Mario Schmidt’s recent ethnography explores the experiences of young men who moved to Nairobi to live in these high-rise tenements, highlighting the pressures and difficulties of this living environment.

So, the housing challenge is characterized by overcrowded, expensive, poor-quality rental housing. The Kenyan government wants to address this by expanding homeownership opportunities to new social groups. This happens in a context where the government has embraced national development planning and become more interventionist.

In 2008, the government launched Vision 2030, a national development strategy aiming to make Kenya a middle-income industrializing country. Initially, the focus was on transport infrastructure — roads, railways, ports — hoping these projects would drive economic transformation. More recently, housing has been viewed as another driver of industrialization.

In 2017, President Uhuru Kenyatta launched the National Affordable Housing Program, also known as “Bomayangu” (My Home in Swahili). The goal was to build 100,000 new housing units annually to address a national deficit of 2 million units. When President William Ruto was elected in 2022, he pledged to continue and scale up this program, targeting 250,000 new units per year. This policy enjoys support across Kenya’s political elite.

Now, regarding the institutional and financial mechanisms used to achieve these goals: The government has twin objectives — addressing the housing challenge by expanding homeownership and scaling up housing production, and using housing construction as a catalyst for economic development, such as creating jobs for artisans involved in building materials.

However, Kenya faces a fiscal constraint. After investing heavily in transport infrastructure and coping with the economic impact of COVID-19, the government has limited public resources for housing investment. Thus, new housing projects must be “bankable” — profitable — to attract private investment.

The approach is to make affordable housing profitable by forming joint ventures between the government and private developers. The government contributes land, infrastructure, and incentives like tax breaks, while developers secure private finance and handle construction.

Once completed, housing units are split between the government and developer — usually a 70-30 split. The developer sells its 30% share at market prices to recoup investment and earn profit. The government allocates its 70% to citizens at “affordable” prices, ranging from 600,000 to 4 million Kenyan shillings, roughly $5,000 to $30,000 USD.

The image on the right shows the first project built under this joint venture model — the Park Road project in East Nairobi. An old public housing estate for civil servants was demolished, and the government partnered with a Chinese state-owned enterprise to build about 1,300 new apartments. Of these, 70% were allocated at affordable prices. Any Kenyan citizen can apply, needing to save a 10% deposit to qualify. However, as I’ll discuss, the reality often diverges from this ideal.

Now, getting a bit technical: to make these projects profitable, the government created the National Housing Development Fund. This fund de-risks both supply and demand. On the supply side, it provides developers with an off-take guarantee, meaning the government promises to buy any units built so developers won’t be left with unsold apartments. On the demand side, it subsidizes housing finance through a tenant purchase scheme — people pay rent, which eventually contributes to home ownership, making housing finance accessible to those who normally can’t get mortgages.

But where does the money for this fund come from? The government is fiscally constrained, so besides some investment from development finance institutions and citizen deposits, it introduced a compulsory 1.5% payroll levy on all formal sector employees. Everyone with a formal salaried job must contribute to the fund, regardless of whether they plan to apply for housing units. This levy has been very controversial.

At the local level, Nairobi City County is taking a similar approach. The county owns many old public housing estates built during the colonial era, which are now dilapidated and low-density. The county is demolishing these and replacing them with large high-rise developments under a joint venture model like the national government’s. For example, the Pangani Estate is being transformed from 48 houses into 1,562 new units — a massive densification project.

However, the overlapping roles of national and local governments in housing can create political tensions. Housing is supposed to be a devolved function under the Kenyan constitution, and some local officials see the national government’s involvement as recentralizing power.

Finally, the affordable housing program creates significant political risks for the government. The payroll levy sparked protests, especially amid cost-of-living crises. Recent tax increases led to street protests in Nairobi, some turning violent, with the state responding with repression. This program lacks popular legitimacy partly due to low public trust in the government, given past corruption scandals around large infrastructure projects. One senior official even said that President Ruto has gambled his legacy on this policy.

Another risk involves the assetization of land — since the government doesn’t provide construction finance, developers must secure their own funding, adding financial pressure.

And this is difficult in Kenya. It often involves developers getting very high interest loans from banks. And one thing that developers have started doing is particularly with these housing estates in East Nairobi, they started using the land. This is land that was public land. They started using it as collateral for loans from banks. So this is a headline from a Kenyan newspaper talking about how the developer on one of these estates, the Jivangi estate, used the title deeds for that estate as collateral for a 1.9 billion shilling loan from the National Bank of Kenya. So because the government’s kind of relying on private finance in order to build these things, developers are having to use what was public land as an asset to generate finance.

In some contexts, the assetization of public land, I don’t think it would generate much of a response. People would kind of shrug their shoulders and say, you know, whatever. In the Kenyan context, this is extremely sensitive. And this is because, you know, Kenya was a settler colony. So the colony was founded on the violent dispossession of land by white settlers. And then following independence, this kind of dispossession continued as the Kenyan political elite grabbed huge amounts of public land in order to enrich themselves. So land is really at the center of Kenyan politics, and people are very kind of anxious about land, and in particular, public land. And so when it came out that developers were using public land as collateral for finance for these affordable housing projects, you know, this generated quite a lot of controversy.

So one journalist writing in The Nation, you know, he wrote this kind of very strong condemnation of this saying, under the pretext of affordable housing, historic sites and communal spaces are quietly slipping into private hands, disappearing into the coffers of properties and land speculators. So because of Kenya’s history of land dispossession, this process of assetization is very kind of fraught, and people are very concerned about basically affordable housing being used as an excuse for further land grabbing.

The third type of risk I want to talk about is the risk associated with the financial uncertainty around these projects, and in particular, the risk of people being displaced from their housing estates as they’re redeveloped.

I think with financialization research, there can be a tendency to overstate the extent to which things are financialized. So there’s a kind of assumption that finance is insatiable. Finance wants to financialize everything. But Nick Bernard has written a critique of this recently, where he argues that, you know, actually, in practice, when states try and de-risk private finance, they’re doing it in a way that’s trying to anticipate what finance wants. But in practice, you know, this is very uncertain, and often, private finance isn’t really interested in investing in development projects, particularly in low-income countries. So he argues that, you know, often, there’s all this kind of attempt to de-risk finance, but finance isn’t forthcoming.

And this is something that we’ve seen with these redevelopment projects in Nairobi. So the Pangani estate redevelopment was originally scheduled to be completed in 2022. But the developer really struggled to secure financing for the project. So despite having all these subsidies, despite having, you know, public land, they still couldn’t secure finance for construction. And as a result, the construction just ground to a halt for years, and it’s still not complete at this point in time.

So this kind of shows how, you know, financialization, people can try to de-risk private finance, but it’s a very uncertain thing, and it might not come off, it might not come to fruition. And this is reflected in something that one of the officers at the county government said to me, where he said, you know, we’ve got all this land, but there’s no finance, we just can’t, we can’t get the finance. So this attempt to kind of bring land and finance together isn’t working. So de-risking is uncertain, and it actually creates kind of new risks. In particular, it’s created the risk of displacement for the people that are living on these estates that are being redeveloped.

So both the Pangani and Jeevan Jee estates, the initial housing was demolished. The people who were living there were moved off-site into private rental accommodation and told, basically, when the houses are finished, then, you know, you’re welcome to come back. But the houses aren’t finished, and so these people are kind of stuck in a state of limbo. They’ve got no idea when they’re going to be able to return to their estate. And, you know, this is clearly a form of displacement. As a result of this, other estates that are being sized up for redevelopment, the people that are living on these estates are becoming very anxious. You know, they are kind of living in this state of uncertainty, and they’re sort of anticipating displacement themselves. They’re really worried that they’re going to be next, and the same thing is going to happen to them. So, as I was saying before, with this kind of de-risking stuff, it might try and remove some of the risks for private capital, but it creates new risks. And in this case, it’s created the risk of displacement for the affected groups.

Okay, and then the final type of risk I want to talk about is the risk of elite capture of these properties. So, rather than building public rental housing, as it might have done, you know, if we were talking about what was going on in the 1950s and the 1960s, the government’s decided that it wants to build affordable housing as private housing. You know, it wants to expand private home ownership. And so, what it’s really doing is, you know, it’s creating new private property. It’s trying to kind of create a whole new class of property owners in Kenya. And this kind of reflects the fact that the post-colonial state in Kenya has always associated citizenship and aspiration with property ownership. So, this quote is from the Kenyan legal scholar Ambreena Manji, and she says that the state’s conception of the citizen is first and foremost of a property-owning subject. And when I spoke to one of the civil servants who was building these projects, he said that, you know, it’s really important that we create new homeowners because then they’ll have a stake in society and they’ll be less likely to engage in the anti-government protests.

So, there’s this really strong ideology of private home ownership, but as previous slum upgrading initiatives in Nairobi have demonstrated, the problem is when you create privately owned homes, they often become attractive to the wealthy. The wealthy often try and capture them so that they can use them as a rental investment. And this is something that we’ve seen in the Park Road project. So, in theory, these houses should have been basically allocated on a first-come, first-served basis to anyone who applied as long as they had an income below the threshold of 150,000 Kenya shillings a year. But the idea was to kind of limit this to middle and lower income people. But in practice, this was kind of disregarded for this project. The units were offered to civil servants first before anyone else. And a lot of these units have subsequently appeared on Airbnb. So, this is an advert for one of these affordable housing units on Airbnb, which suggests that, you know, a lot of these units were probably acquired by people who already owned a home and they’ve acquired them as a rental investment. So, the risk here is that rather than expanding home ownership to new groups, you basically just create opportunities for landlordism, for rentiership amongst people who are already property owners.

Okay, I think I’m more or less out of time. As I said, this is still work in progress. I’m still thinking about this. So, just a kind of few thoughts that I wanted to conclude with. So, I’ve given you a particular example of urban statecraft where the Kenyan government has tried to harness financialization processes in order to address housing needs. And I think statecraft is often about trying to navigate this contradiction where housing, on the one hand, housing is increasingly a financial asset, something to generate rent from. On the other hand, it’s an infrastructure of social reproduction. It’s something that we all need to survive. And statecraft, I think, is really kind of grappling with this contradiction.

And statecraft is always going to be shaped by the particular context within which it occurs. So, we need to kind of understand how political economic contingency shapes whether statecraft is successful or not. I’ve talked a bit about these contingencies in Kenya and how things like colonial legacies, you know, histories of settler colonialism and land grabbing, how this has kind of shaped how people respond to this type of statecraft and whether this statecraft can kind of command popular legitimacy or not. And then finally, I talked about how, you know, the state can try and de-risk private finance. Sometimes it might be successful, sometimes it might not be successful. But either way, engaging with these financialization processes, it always creates new social and political risks. And, you know, ultimately, the question is, who do these risks fall on? Who pays the cost for this? And this comes down to questions of power, I think. OK, thanks very much for listening. So, I’d be really interested to hear what you guys think about this. Maybe this resonates with some of the urban contexts you’ve been studying. Maybe it doesn’t. Maybe you have kind of counterexamples and you want to you want to kind of push back against what I’m saying. So, yeah, over to you guys.

And thank you. Thank you for your presentation. My name is Hental Simon, first year PhD student at CRP. And you didn’t talk much about this and I didn’t read the paper that you wrote. So, I do have some questions regarding the clarification of the theoretical initiative of this paper, which is comparative urbanism, because it sounds like this paper is like it’s a case study of six cities across the global north and south. And you talk about the uneven distribution of risks across social groups within one city. But I do wonder, like, what about the distributions of unevenness across spaces? Like, how does this joint project, which is a pretty big project comprising of like 12 scholars, contribute to a more systematic understanding of the uneven geography of housing landscape, which continue to define center and periphery historically? And how was that spatial hierarchy constructed? And based on that, I guess my bigger question regarding this comparative urbanist project is that, considering the claim that you made at the very start of the project, which is to, you know, try to blur the dualism between global north and south, what is left there after you do this? Like, is that what is left there, like, a bunch of like, almost like a word bank style case studies of the parallel of different cities? Do you think there is still any room for a more holistic and a structuralist studies of cities across geographies? Thank you.

Alright, thank you. Can you hear me? I’m not sure if the microphone’s working. And so yeah, I mean, that’s a really interesting question. I mean, something I didn’t really have time to talk about in this presentation, but that we talk about more in the written paper is the idea of conjunctural analysis, which is quite trendy in geography at the moment. I think Jamie Peck referred to it as a hipster analysis. But it’s basically the idea that we need to kind of understand how general tendencies and processes interact with a particular contingency. So, I mean, I mentioned a bit about, you know, thinking about contingency. And, you know, I think this is an idea that’s really come out of kind of ongoing debates in geography and urban studies between Marxist and postcolonial approaches. So that, you know, the Marxists tend to argue more for generalization, whereas the postcolonialists have tended to place greater emphasis on, you know, contextual difference. And I think the idea of conjunctural analysis, my understanding is that this is a way of sort of synthesizing these two approaches together and kind of balancing the general with the particular. So, I mean, one of the things we talk about in the comparative paper is that statecraft is a useful concept for sort of navigating the general and the particular.

So, on the one hand, you have these tendencies of the increased financialization of housing and increased state intervention in urban development. But we really don’t want to kind of flatten things geographically. We don’t want to say that, you know, everything is the same everywhere and that we don’t need to worry about global north and south anymore. We don’t need to worry about core and periphery anymore because, you know, we don’t believe that that is useful. So we argue in the paper that in order to understand how state, how basically these kind of general tendencies land in particular urban spaces, we need to understand how sort of the local political economic situation shapes this.

So, for example, we talk about the case of Shanghai and how the national government in China became quite anxious about housing commodification and financialization. They saw speculation as a threat to social stability, but they decided that they were going to become more kind of, they were going to step in basically and tell local governments that they had to produce more affordable housing in order to try and basically achieve a better balance between these dual functions of housing that I was talking about. And the Fulong Wu and his colleagues have talked about this as a form of statecraft called state entrepreneurialism, where the national government is basically able to kind of prioritize policy objectives over capital accumulation.

And that is a very kind of particular thing, you know, what the national government can do in China is very different to the case of Paris that we also looked at, where the national government attempted to do something similar. It basically tried to instruct local government to build more affordable housing and local government basically said get lost, we’re not interested, because the political economy is so different in Paris. National government wasn’t really able to kind of exert its will over local government to the same extent. So what we argue is that we need to kind of understand these general trends in relation to quite a kind of situated analysis, which understands political economy in different contexts. But I mean, what we don’t really find is that there are kind of general trends that can be mapped on to north and south and core periphery, you know, I mean, with in particular with the Paris Shanghai comparison, it actually seems that statecraft is much more effective in a so-called southern context than a northern context. So I think ultimately, our comparison kind of problematizes any simple geographical binary between north and south. I hope that answers your question.

Hi, my name is Justin. I’m a first year MRP student. And my question kind of relates to that slide you showed about the park road development in Nairobi. And you said that it was partly Chinese state owned, a Chinese state owned enterprise had a stake in this project. So my question is, in your opinion, what are some of the risks or benefits that could be involved in China’s involvement in affordable housing development in Nairobi? And how does it relate to your understanding of foreign statecraft intervention in Nairobi? Thank you.

Yeah, great question. So I mean, from the kind of Kenyan perspective, obviously, a big advantage of Chinese state capital partnering with them is that, you know, that is a viable source of finance, you know, securing financing for these problems, for these project problems has been really challenging, as we saw with the with the Pangani estate project. And so the fact that, you know, state capital from China can finance these projects, that is, that’s something that’s appealing to the Kenyan government. But there’s, again, there’s kind of political risks involved in this as well. So in Kenya, as in, I think, other African contexts, there are debates about the role of China, you know, whether China is a kind of partner, or whether China is a kind of new colonizing force or not. And so, yeah, it’s not a risk free thing at all, it kind of can kind of add to this, the fact that this statecraft carries political risk for the government of Kenya. And I think in other projects that tended to partner with Kenyan developers, you know, partly as a response to that risk, but then the Kenyan developers really struggled to get access to finance. So constant trade offs are involved.

Hello, hi, my name is Stella. I’m a first year MRP student. And my question was relating to something you brought up kind of early in the presentation regarding that McKinsey paper about affordable housing. And I guess like the role of the private sector, especially consulting firms in defining the problem space. I was just wondering, given the fact that they all obviously, like, offer a range of services, and also in like the implementation, kind of how this conflict of interest that consulting firms play kind of play throughout the financialization of housing, because I know there’s been like a lot of work in infrastructure and transportation that look at how firms such as like AECOM will be like, oh, there needs to be this infrastructure project here, obviously, for this is this reasons. And oh, yeah, by the way, we also offer all these services. So I guess I was wondering, like, kind of on two dimensions. So first, like, defining the problem space in a way that they can also advertise those services for implementation. And then also, given the fact that a lot of these firms are all like advising, like, private developers or like private equity firms that will be buying up housing stock.

Yeah, I mean, that’s such an interesting question. I mean, I think in my answer, I’m going to distinguish between kind of thinking about capital in general, you know, kind of capital in aggregate terms. And if you think about McKinsey as kind of part of that, you know, they’re obviously framing the problem and the solution in a way that is good for capital. And they’re saying, you know, guess what? We need to build loads of new housing. You know, it’s not enough to upgrade existing housing. It’s not enough to make better use of existing housing stock. We need huge construction program. You know, they openly say this is a huge business opportunity for the real estate and finance sectors.

I think they describe it as a 16 trillion dollar business opportunity. So they’re not kind of shy about this. And they see it as a win-win thing. They don’t really see any contradiction between capital profiting from housing and addressing the affordability challenge. I mean, regarding McKinsey as a kind of specific actor and other specific actors, I mean, in the Kenyan context, I’m not aware of their involvement in housing construction. I think there’s a kind of irony here where in global terms, this is framed as a sort of huge business opportunity and everyone’s kind of rubbing their hands together. But then when the Kenyan state actually tries to build these projects and they’re like, does anyone want to finance that? You know, it’s cricket. So again, this comes back to this question about uneven geographies and the fact that, you know, in some contexts, housing financialization is very extensive. You know, in Italy, in Europe, North America, housing is seen as a really good debt by finance capital. But then when state actors try and attract private finance in a context like Kenya, you know, capital is much more risk averse. So, yeah, I mean, it would be an interesting research question to look at whether the actors who are kind of framing this thing have a sort of material interest in it. But yeah, I’m not aware of that in the specific Kenyan context.

Thank you. Thank you. Hi, I’m Lizzie. I’m a first year MRP student. You spoke about the tension between the national and local interventions. And I was wondering if you could speak to which of the two have had more success in programming or building affordable housing?

Yeah, good question. I was actually thinking about this yesterday. I hadn’t really thought about that before. And so I started writing this presentation. And I was thinking about and the short answer is that the national government programs have been more successful in terms of actually constructing units, whereas as we talked about the local initiatives, they tend to ground to a halt for years and years. And that’s basically because the national government can do this financial innovation. It can create this housing fund, which it uses for de-risking. And that’s basically because the national government has fiscal power that the local government doesn’t. It can say to workers, I’m taking 1.5% of your salary, whether you like it or not. And local government just can’t do that. So local government doesn’t have this kind of pool of public money that it can use to try and suck in private finance. Thank you.

Thank you for coming here for this colloquium. My name is Juan Fernandez. I am a Master of Regional Planning student. I wanted to know a little bit more about the local context, specifically how political movements might respond to some of the new risks that you brought up. So it seems like the housing policy in Kenya is popular enough for the current president to, I believe you said, bet his legacy on it. And it seems like he continued it from a previous administration. So I would like to know, like an opposition party, how are they proposing any alternatives, or is it like a continuation that maybe just would enforce rules that would keep civil servants from making it a second home or an apartment? And a question that could also go with that is, you mentioned that the Parisian government, when brought a similar financing mechanism, said no. Do they have another alternative for increasing the housing supply? And I’d love to know those contexts.

Okay, great, thank you. Yeah, so I mean in terms of the Kenya context, I mean, there seems to be a kind of consensus between different political elites that, you know, this is broadly a good thing and that the housing levy is necessary in order to finance this. I mean, they can kind of afford to alienate formal sector workers who are contributing to this, because they represent a minority of the population, you know, the vast majority of the population work in the informal sector, and so won’t be contributing to the housing fund. The issue with the housing fund is more that it’s just kind of contributing to a sort of general narrative about people being overtaxed in Kenya. But there’s other taxes that have much more a much kind of more direct effect on the entire population, such as, you know, increased taxes on consumption, things like food and fuel. In terms of movement, this is a really important question. So far, this has been a very top-down initiative. The government has done very little to engage with civil society. It’s done very little to kind of involve people in this in a participatory way. There’s loads of really great participatory urban development stuff going on in Nairobi. Victoria and Smith who are here today have worked on this. I think you guys have probably heard about some of this stuff already. But at the moment, these two things seem to be kind of happening in parallel to one another. And so I think one of the things Smith is working on at the moment is talking to civil society organizations in Nairobi about how they might start to engage with the state around this to try and make these projects more participatory. This is particularly important regarding the estate redevelopments, where you have sitting tenants who are going to be directly affected by this. You know, they should really be involved in the design of these projects.

Paris. Yeah, interesting one. I mean, personally, I’m not too familiar with the Parisian context. So, you know, I wish my co-author was here so that he could talk about this. But I mean, basically, you had a situation where the national government was trying to provide funding as an incentive to local governments to build more affordable housing. But basically, local governments in wealthy areas in Paris decided that they would rather, you know, forgo that money and just build expensive housing. So that’s kind of a, you know, I don’t really like the term NIMBYism, but there was a sort of kind of bourgeois NIMBYism at work there, where they felt like they could afford to say no, because it would keep their wealthy voters on site. And this contrasted really strongly to Shanghai, where the national Chinese state could basically say, you’re building affordable housing, deal with it. Yeah, I hope that gives you a bit of extra background for those cases.

My name is John. I’m a second year MRP student. I was wondering what has been done with sort of this public-private joint venture in other cities such as Manchester?

Yeah, great question. So this is something that local governments in the UK have been quite enthusiastic to embrace in recent years. So the kind of national policy context in the UK is that the government is very anti-public housing. So Margaret Thatcher introduced the policy called the right to buy policy at the beginning of the 1980s. Probably the worst policy in the history of the UK. It’s, you know, quite a competitive field, but basically huge amounts of public housing were just sold off to the people that occupied it, which, you know, the kind of idea about it was that, you know, this is great because it will give people the opportunity to become homeowners. But in practice, again, a lot of this housing ended up in the hands of landlords and ended up being rental investment. Well, I used to live in London in a, what was a former council house that had been turned into a private rental property. And this policy of privatization has really kind of poured fuel on the fire of the UK’s housing crisis. So anyway, in the last few years, local governments have really tried to kind of break away from this national policy settlement and find ways that they can start building social housing again. The problem is if you build council housing as a local authority in the UK, it can just get privatized straight away through the right to buy policy. So they came up with a clever workaround for this, where rather than the housing being owned by the council, the housing was owned by an arm’s length company. So they would set up a company that was owned by the council, and that company would build and own the housing. And that meant that it was exempt from the right to buy policy. So this institutional innovation has allowed local government to start building social housing again in the UK, which is really great. The problem is local government in the UK has very little in the way of resources. You know, councils are very poor indeed. So again, they’ve had to engage with financialization processes to try and generate finance for building new housing. So this has often involved basically building market housing, building housing which is sold on the market in order to create revenue for social housing. You know, some people argue that, you know, this is not ideal, but it’s necessary. There’s no other way to finance affordable housing. Some people have argued that the problem with this is the state is basically kind of buying into the logic of rising property prices and financialization. So it’s ultimately kind of contributing to the problem that’s driving the housing crisis in the first place. So, you know, there’s no easy solutions to this, state act that are kind of having to work in a very imperfect environment.

All right. Very good. Thank you.

You’re going to hit that top corner after me. They’ve been up for a while. So is it a timeline problem for profit, like affordable housing investment versus there’s just other investments that are faster and give higher returns? Because, right, we’re speaking in these terms of like, oh, we’re eliminating risk. We’re saying it’s proof of concept, like we can set up the housing. It’ll be government owned. Eventually the people living in there, the rent will go towards them just owning the property by the end. And it should be basically set, like, where are the units, like how much they cost. It shouldn’t really go that much higher if the government sets how much they cost. If all those cases are still like not driving investment, like, but I can’t, I can’t, I can’t like comprehend that a guaranteed profit on any profit on any timeline guaranteed isn’t driving investment. So is there like other players that don’t want these kind of projects to succeed? Or is it that, yes, there’s just faster, higher returns out there that these, you know, homes can’t compete with?

Yeah, faster, higher return, basically. So the kind of the sort of fallacy that underpins this idea of de-risking private finance is that basically, if you kind of make, make it attractive enough, then private finance will build things like housing or infrastructure. But so there’s a, there’s a British geographer called Brett Christophers who, who worked in Sweden. And he’s, he’s written about this in relation to the green energy transition. And he says that the thing with private finance is it doesn’t really want to build stuff. You know, building stuff is kind of complicated and difficult. And, you know, you have to wait for your return on investment. Private finance would much rather buy stuff that’s already been built. So often what, you know, asset managers, people that are managing big pools of capital, what they really want to do is, you know, buy a shopping mall that’s already been built by someone else or buy a car park that’s already been built by someone else and just start extracting rent from it. So, you know, this is a big problem really is that people are kind of hoping that private finance is going to do stuff that ultimately it’s not really interested in doing. Does that make sense?

Okay. Thanks, Tom. So it’s me, Victoria, again, with my question. My question is mostly about the Kenyan case. So just thinking about the beginning of your talk and that there is, let’s just say we all accept that there is a real housing shortage, a housing crisis. And I sometimes, and I, I heard a lot about this new tax, this 1.5 that was being levied when I was in Nairobi and how upset people were about it. But in a way, when I think about it, I think the problem with this is the framing of it as affordable housing. Because I also heard a lot about that, like, oh, we’re going to pay this 1.5 tax, but they’re going to build this new housing. It’s not going to be, and I’m hearing this from SDI, so it is colored in a certain way, but it’s not going to be affordable for the poor. And so I was thinking about this and I was talking to colleagues at SDI and I was saying, you know, probably the most affordable way to provide housing to the urban poor in the Nairobi context is upgrading informal settlements. So I sort of feel like, oh, this 1.5, it’s being levied on the formal workers. So they’re the kind of rising middle class. And in the U.S. we have this problem of the missing middle class and trying to find housing, even housing stock, let alone affordable, just the supply issue. So I wondered if it was framed as, okay, this fund, which is being levied on this rising middle class, is essentially funding middle class housing. Like, it’s bad that some of it’s ending up on Airbnb. And I was just thinking about this response to the tax. In most global south countries, people pay very low, there’s very low tax collection. I don’t know what it is in Kenya, but usually compared to the global north, it’s extremely low. And so it just seems kind of reasonable to me. Anyway, so I was just thinking about that. And I was talking to a colleague about urban finance the other day, and he was just underscoring the part that you also brought up. If there’s corruption, it’s fine if people are fine to pay taxes and people are willing to do it if they think they get something for it. And so it’s like this issue of corruption and trust. And that is probably maybe more of the issue than, oh, the 1.5 is unreasonable, and there probably needs to be more middle class housing.

For me, when I was listening, I was just thinking, ah, it’s probably more the issue that people resent having to pay their taxes when they’re unconvinced that it’s not going to be, like, fettered away or something like this. So I don’t know, I was just, I’m not quite sure where my question is in this, but I was just thinking about that framing of affordable. That’s, I feel like, what, at least the SDI people I was talking to that sort of seemed like, like, that one diagram you showed us that I think the reference was from, like, it was an acronym, it was the GOC. So I’m sure that was the government of Kenya one, where it showed, like, the money going in and how the risk, like that. I was like, wow, that’s kind of a clever scheme. Like, I don’t see anything wrong with how that money’s coming into a pool and they’re taking risk away from these different actors. And especially when you show me another housing project where they’re trying to build it, it took years and it’s not succeeding. I’m sort of thinking that fund’s kind of needed, and this is kind of a clever mechanism. So I was trying to figure out, and the tax seems kind of progressive. So I guess I was trying to find the problem in it in some ways. Maybe that’s my question. What do you think, what do you think the problem is with the scheme?

So, I mean, I, you know, I think it’s great that the state is getting more involved in housing production. You know, I don’t think you can leave it for the market. And, you know, as you said, you know, if they’re taxing middle income people to build middle income housing, you know, maybe that’s okay. Middle income people need somewhere to live as well. And if, you know, this gets them out of overcrowded tenement buildings into, you know, somewhere that they own as an asset, you know, that’s, that’s quite nice. I think, I mean, so the concept of affordable housing, it’s kind of meaningless, you know, affordable housing can mean anything. I think in the UK, it can mean housing that costs up to 80% of the market rate, which is completely unaffordable for most people. So, you know, maybe if they called it middle class housing, then that would be kind of more, more transparent. I think they, you know, policymakers would say that this, this is kind of part of a suite of housing intervention. And as you say, we have informal settlement upgrading for people on low incomes. The county governments are also planning to build some social housing on these new estates, as well as the tenant purchase housing. And there’s a recognition there that, you know, not everyone can afford to, to buy housing, you have to have at least some social rental housing for people on the lowest, lowest income. So I think this is fine as part of a kind of broader range of interventions. But, you know, I mean, I think you kind of answered your own question a bit where you said that the real issue here is, is the lack of trust in the Kenyan state.

So I had an interview, no, it wasn’t an interview, I just had a informal conversation with someone in Nairobi, who worked as a kind of lab technician in a university there. And so he was going to start paying the housing levy. And he said, Look, I don’t, I don’t have a problem with being taxed to pay for housing, if that is what it’s going to be used for. But people would just have so little faith in the Kenyan state. There’s like a real sense that the state basically just exists as a tool to enrich the elite. And you know, that’s that has historically been the case with public land grabbing since independence. And then also people have this very recent experience of all these Vision 2030 infrastructure projects, where basically the budget for the project became massively inflated as a result of corruption. And then the government of Kenya becomes hugely indebted as a result of these expensive projects. And then you get austerity, and you get tax increases for ordinary people. So it’s kind of a problem of legitimacy, really, and trying to build trust and legitimacy for this kind of statecraft. And, you know, I hope that, I hope that it’s successful, and that they are able to kind of build trust with the public, because I do think that there’s a genuine attempt there to kind of wrestle with with the housing crisis, and find a policy solution to it. But yeah, I mean, some of the stuff I learned about how, you know, they weren’t really following the process when it came to allocation of units, and how these units were obviously ending up on Airbnb. Yeah, I don’t know. I don’t know how it’s gonna end up. I’m trying to be optimistic. Yeah, well, there’s quite a few units on Airbnb. So a few bad apples.

Oh, hello. Hi. Thank you for your talk. I’m Mansi. I’m a second year. I wanted to ask about if there are any incentives from the private lending sector for first-home buyers that you have seen in Kenya, particularly in the global southern sort of, and also another question about, I think you mentioned mortgage-backed securities. And I wanted to know if they help sort of aiding developers pull in some equity for construction in Kenya, or any kind of other case studies that you have seen in the global south?

Yeah, great. Thank you. Yeah, I mean, in terms of mortgage-backed securities, the Kenyan government has talked about using securitization as a way of generating finance for the National Housing Fund. I don’t think they’ve made progress with that yet. But I mean, maybe as more people get allocated housing, and, you know, there’s more people with mortgages on these properties, then that might become a viable thing. So that’s kind of one to watch.

I mean, in terms of lending and financing for housing, you know, for formal housing finance is kind of non-existent in Kenya, really, you know, like I said, it’s only 5% who can get what we would recognize as a mortgage from a bank. So most people, you know, if you’re lucky enough to be able to become a homeowner, it’s normally through saving up, buying a plot of land and then building your own house incrementally. And some people access finance through kind of collective savings initiatives. So there’s something called savings and credit cooperatives, which are very popular in Kenya, where basically people kind of get together into a cooperative, put money in, and then take it in terms to draw credit out in order to fund housing construction. So that’s the kind of dominant way in which people build and own housing in Kenya, the idea of kind of getting a mortgage so that you can own a, you know, fully constructed housing unit. It’s kind of an alien thing for most people. And so, you know, that would be a kind of criticism of this kind of policy approach is that it’s quite kind of abstract from the reality of how people house themselves in this context.

There’s a really great housing scholar called Gautam Bhan, who writes about this in India, and how he talks about how, you know, the reality of housing for the majority in India is these practices of auto construction. Housing is this kind of incremental practice, whereas, you know, this idea that you kind of, you buy a finished unit that’s been built by a developer, and you have a mortgage on it, this is a very kind of foreign concept. You know, we’ll see, maybe it will become more commonplace as a result of these kind of intervention.

So, please join me. I know there are other questions, but we are heading, we are over time, we will head over to 105 for a talkback session. So, please join me to thank Tom for this very rich talk and engagement. And please also join us in 105 for an informal chat with Tom. Thank you.