Revealed: Shame of slum upgrading project now benefits state officials

Sarah Mukeli, 80, sits pensively outside Pumwani Highrise Phase 2 flats, staring up at the sky. She was born and bred in Pumwani, which comprises Majengo slum, where she lived until 15 years ago, when she became a beneficiary of the slum upgrading project.

Previously living in a shanty for which she paid Sh300 monthly rent, Ms Mukeli, like most of her neighbours, was pleased by the government’s plan to upgrade them to the low-cost flats.

She moved into the flat in 2006, happy that she would spend her sunset years in tranquility.

The former slum dwellers occupied the flats on a tenant purchase scheme, where allottees occupy the houses and the monthly payments go to redeeming the sale price over an agreed period and interest rate.

But the move to the modern houses, rather than bring her joy, has turned into a torment for Ms Mukeli. She has been fending off rogue dealers at the National Housing Corporation (NHC) from taking over her two-bedroom flat due to rent arrears of Sh3 million.

“My sister, Kabata Musaya, was living here at Block H, but she left in 2014 after she was threatened that her house would be reclaimed by NHC. She sold it for Sh600,000 and told me she had to do that for the sake of her children. She went to the countryside,” Ms Mukeli says, then sits pensively.

Ms Mukeli has fought off the devious officers who are on the prowl in the city, tormenting slum upgrading project beneficiaries. Over the years, she has seen many of her neighbours, having lost the will to fight, surrendering their houses to the unscrupulous officials.

Sh1 million

“I have always refused. They tell me if I do not sell it to them, then they will take it from me by force. The last time the officers came to threaten me, enticing me with Sh1 million, but I told them I will not take the money as I have no other home,” Ms Mukeli says.

The elderly woman reveals that she has been approached five times by officers from the NHC, who tell her that her accumulated debt to the corporation is Sh3 million and she should sell her house to them.

She is not alone. Other tenants have been approached by people they believe to be crooked NHC officials, or people working with the officials, who use the same tactic of threatening them, then offering to buy their houses for as little as Sh600,000 or at best, Sh1 million.

Then there are some tenants, who, unable to bear the rent burden, sub-let their flats and move to rural areas.

Ms Batul Idi Juma, a resident, echoes Ms Mukeli’s sentiments, narrating tales of how the rogue officials approach the tenants with an eviction notice as well as threatening them to either clear the arrears or surrender their homes.

“If you are not informed, you will be scared by the figures they say you owe them and opt to leave them the house for whatever amount they offer. Once you leave, your house is rented to someone with means,” she says.

At the centre of the dealings is an unholy alliance between some tenants and the NHC staff, where the latter use the former to feed them with information regarding the financial status of their next prey.

“We are not sure who to trust. There are some of our neighbours, previously poor just like us, who are now rich. They get commissions for every house they help the rogue NHC officers to reclaim,” she alleges.

Ms Mukeli recalls that when the project was announced, she knew she would be a proud tenant of a modern flat, paying a monthly rent of Sh1,700, just like the tenants of Pumwani Highrise Phase 1 project, which was completed in 1991.

And even when they were told they would instead pay double that at Sh3,400 for the Phase 2 flats -- a price the government justified by saying the new flats were more modern compared to the 274 units in phase 1 – many thought it was still a good deal.

“When I left my mud house in Majengo, I knew the rent for the flat was Sh3,400. I said I would break my back to get the money, because we were told the new houses were comfortable and would give us privacy,” states Ms Mukeli.

But things soon took a wicked twist immediately the new tenants moved into the 160 units. They were told that they would have to pay more than Sh11,000 a month, and to add insult to injury, they were already in arrears of 12 months because they were supposed to have moved in a year earlier.

In a letter of offer by the NHC dated August 17, 2005, seen by the Nation, the flats were offered on tenant-purchase terms from September 2005. The provisional purchase price was Sh1.1 million to be repaid over 15 years at an initial annual revisable interest rate of 10 percent.

“The initial repayment on loan principal amount and annual interest rate computed as provided above will be Sh11,821. Over and above the monthly repayments, an annual insurance premium will be payable,” reads part of the letter.

A 2007 civil case filed before the High Court in Nairobi by Mr Athumani Mponda and 108 others against NHC sheds light on the tussle between the tenants and NHC.

In the suit papers, the tenants wanted NHC to be stopped from repossessing or possessing, or otherwise interfering with the quiet possession of the housing units, pending the hearing and determination of the application.

In February 2007, NHC had already issued the allottees with a 21-day notice to demolish their former structures to give way for the corporation to start Phase 3 of the project.

Minutes of a July 14, 2013 meeting between the Pumwani Phase 2 residents, the NHC and the Ministry of Lands, Housing and Urban development show that the tenants pleaded for a reduction in rent to Sh5,000 because the Sh11,000 was beyond what most of them could afford, forcing some to sell their flats, or lease them out and return to the slums.

“The tenants were forced to demolish their former mud-walled houses and moved to occupy the houses in 2006 against their free will and without agreeing with NHC on what amount they could afford,” reads the document.

Mr Almayo Abebe Tiku, a tenant at Phase 2 expressed his frustration with the NHC and the government for “duping and later on extorting” them.

He says when one is forced to sell and move, NHC officials come to collect rent for the houses.

“There are some staff from NHC who were previously paupers, but now come here driving cars and collecting rent from their tenants. What slum-upgrading project is this?” he asks.

A September 2015 petition by the residents to the corporation’s MD laid bare their frustrations. Rent arrears were then collectively at Sh62 million.

Some of the grievances included accusations of NHC offering two different offer letters with different terms on the same project, hidden charges for insurance and council rates not reflected in the agreements, NHC staff confusing and misleading the tenants to sell their flats to them at throwaway prices, as well as refusing to resolve problems amicably.

“NHC is now threatening to evict 138 out of 160 beneficiaries who have nowhere to go as they regard Pumwani as their home,” states the letter.

This followed a 2013 meeting between the Pumwani Phase 2 residents, NHC and Ministry of Lands on June 19, 2013 where they were told to either pay the arrears within a year or face eviction and the houses sold to willing buyers.

At the meeting, they were told that those who will still be having arrears after three years will be evicted.

Ms Saumu Saidi, the chairperson of the Nyumba Kumi Initiative at Pumwani Highrise Phase 2 flats, showed the Nation some units that previously belonged to the former slum dwellers but which are now owned by rogue NHC officials.

“That house belonged to a woman called Mama Kashingiro. She had been approached several times but she had refused to budge. One day, she was evicted by some men. She was left crying helplessly at the gate of Block H. Her house was given to a person of Somali descent,” says Ms Saidi.

Residents protested the actions against the woman and stoned the windows during a fight with the people who evicted her. To date, the windows of the unit are sealed with metal bars.

Another unit, a floor above the controversial house, is also sealed off.

“This is the government’s house. It belongs to the NHC. The person who was here was chased away some years back. The asking price for this house is around Sh3 million. Whoever can get that amount and pay it to NHC will be allowed in,” the next door neighbour tells the Nation.

Despite numerous calls for a meeting with NHC, the tenants have only been hit with a litany of eviction notices, with the latest dated September 14, 2021.

Ms Saidi says the tenants are not aware of the court ruling being used by NHC to try to evict them or whether the case ended, because they are yet to get information from their previous lawyers.

"We were never involved in the court case, if they are saying that it ended, then we were not told. We are not aware to date," she says.

The tenants are staying put, even though the eviction notice lapsed close to two months ago.

"They did not evict us as they said in their notice. We are still waiting for them. We are currently seeking legal services so that we go for both the Ministry as well as the National Housing Corporation," adds Ms Saidi.

NHC acting MD Patrick Bucha told the Nation that the residents had been offered the units at an agreed price of Sh1.1 million on tenant purchase terms, a claim the residents deny, saying they never agreed to pay that amount.

Servicing loans

“When they forced us out of our slums, they knew our financial status. We paid rent of between Sh100 and Sh500. Where did this 11,000 come from? We have even asked them several times to reduce the rent to Sh5,000 but they have refused,” says Ms Sidi.

“This was to be paid at a monthly rate of Sh10,996 (inclusive of service charge). The necessary agreements were duly executed between NHC and the individual allotees. Soon thereafter, some of the allotees defaulted in servicing their loans,” Mr Bucha said.

NHC added that the civil suit filed by several of the defaulters was dismissed on May 22, 2018. The court issued a decree in favour of NHC on June 11, 2018.

The residents, however, said that as far as they are concerned, their case is still on.

“As of September 14, 2021, when the seven days’ eviction notice was issued, the total outstanding amount from the Pumwani Phase II tenant purchasers stood at Sh245,967,881.97. Out of the 160 tenant purchasers, only 33 percent are up to date with their payments while 53 percent each owe the corporation amounts of over Sh1 million,” the acting NHC boss said. 

Mr Bucha said the corporation wants to recoup the money to commence the development of Phase III.

NHC, however, failed to respond to the claims by residents that some of its staff are involved in swindling the residents of Pumwani Highrise Phase 2 of their houses and then renting them to other private citizens.

Kibera slum

But the troubles are not limited to the Pumwani tenants. The story is the same in Kibera slum, where NHC built more than 630 low-cost flats in four phases.

A tenant who asked to remain anonymous due to fear of victimisation, said the flats were bought by individuals who opted to either live there or rent them out. The process was so flawed that one person could own up to three units. Some NHC officials also had their relatives or friends benefiting from the scheme.

“Although many slum dwellers got the houses, most tenants are definitely not from the slums since the rent is too much. The houses go for between 14,000 and Sh35,000,” he said.

A plan to embark on Phase 2 of upgrading of Soweto slum in Kibra, under the Sh883 billion Kenya Slum Upgrading Programme (Kensup), has run into headwinds.

Even though the government gave the residents a one-month eviction notice in November 2019 for Phase 2, there has been no progress. Phase 2 targeted to put up 4,335 flats in Zone B.

Zone A was completed in Phase I of the project in 2016 to assess its viability. The government handed over 822 houses to the owners in July, 2016.

The director of the slum upgrading programme at the time, Mr Charles Sikuku, pointed out that the project would see the construction of one-, two- and three-bedroom houses going for Sh600,000, Sh1 million and Sh1.5 million, respectively.

In the first phase, the prices were the same, except for the three-room unit that was Sh1.35 million. Occupants have up to 25 years to pay for the houses at an annual three per cent interest rate. This means that those who took up the one-room units were to pay only Sh3,500 at the beginning, while those in the three-room units were to pay Sh7,875, with the amount decreasing over time.

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