PS Hinga Explains Why Landlords in Nairobi Slums Earn Higher Returns Than Investors in Affluent Estates
Housing Principal Secretary Charles Hinga has sparked fresh debate over Kenya’s housing sector after claiming that some of the most profitable real estate investments in Nairobi are found not in wealthy neighbourhoods such as Kilimani or Muthaiga, but in informal settlements.
Speaking during the 4th International Research Conference, Skills Competition and Expo at Kabete National Polytechnic, Hinga challenged conventional perceptions about property investment, arguing that returns in low-income settlements often surpass those generated by high-end residential developments.
According to the PS, many investors assume that luxury apartments and upscale homes offer the best financial rewards. However, he said the reality on the ground paints a very different picture.
“Some of you in real estate may think apartments in Kilimani are very lucrative, or that a palatial home in Muthaiga gives good returns. Let me shock you, the best returns in real estate in Kenya are in the slums,” Hinga told participants.
His remarks centred on what he described as a system in which residents of informal settlements frequently pay significantly higher prices for basic services than households living in formal housing developments.
Nairobi’s major informal and low-income settlements, including Kibra, Mathare, Huruma, Kawangware, Kangemi, Dandora, Kariobangi, Embakasi, Kasarani and parts of Eastleigh, are among areas where such challenges have long been reported.
Hinga claimed that despite widespread informal electricity connections in some settlements, tenants are often charged rates that far exceed the actual cost of power supplied.
According to him, some landlords and intermediaries purchase electricity through unofficial channels before reselling it to tenants at inflated prices.
He further alleged that residents in informal settlements can end up paying nearly 140 per cent more for electricity compared to consumers who receive power directly from Kenya Power.
The Housing PS also pointed to water access as another major contributor to the high cost of living in low-income areas.
“Then comes water, they do not provide you with water in the house, but they have got water cartels, water boozers that are selling, and they sell water up to 175 per cent more to their clients,” he said.
He argued that because many households lack direct water connections, residents are forced to rely on private vendors who often charge significantly higher prices than regulated utility providers.
Beyond electricity and water, Hinga said some residents must also pay separately to access sanitation facilities, including public toilets and washing areas, further increasing the daily cost of living.
The PS described the phenomenon as the “penalty of poverty”, a situation where low-income households end up spending a larger proportion of their earnings on essential services than wealthier families living in formal estates.
His comments come as the government continues to roll out the Affordable Housing Programme, one of the flagship projects under Kenya’s housing agenda.
Hinga said the initiative was designed partly to address the inequalities faced by residents of informal settlements by providing access to decent housing, reliable utilities and improved sanitation infrastructure.
Supporters of the programme argue that affordable housing developments could help reduce exploitation by middlemen and service cartels, while critics maintain that broader reforms are needed to address poverty, land ownership challenges and the high cost of urban living.
The remarks are likely to fuel further discussion about housing affordability, service delivery and the economics of informal settlements, particularly as Nairobi continues to experience rapid urbanisation and increasing demand for low-cost housing.
Also Read: EPRA Introduces New Power Charges, Adding Ksh3.87 Per Unit to June Bills