Improving Slum Upgrading in Mukuru, the Largest Slum in Kenya “Bridging the Affordability Gap: Towards a Financing Mechanism for Slum Upgrading at Scale in Nairobi” UN-Habitat, IIED/University of Manchester, Slum Dwellers International (October 2019) In 2017, the County Government of Nairobi declared Mukuru, one of the largest slums in Kenya, to be a Special Planning Area (SPA), paving the way for the preparation of an integrated Spatial Development Plan (SPA) for this large informal settlement in collaboration with its residents and partner organizations. Implementing this ambitious plan will require finance for a wide range of infrastructure services and affordable housing as well as complimentary financial interventions to support micro- and small enterprises This report explores the different financing mechanisms for slum upgrading in informal settlements around Nairobi given the huge challenges of mobilizing the vast amounts of capital, affordability and land tenure. These Innovative financing mechanisms also allow for linkages with institutional innovations that seek to deliver Infrastructure services and affordable housing at scale such as the current Governments affordable housing programme (AHP) pillar of development Main Recommendations: - Financing mechanisms hinge on the political, financial and legal context - Infrastructure: a public good to be funded by the public sector, with complementary funding by the private sector - A dedicated institutional channel is needed for financing infrastructure in slums - Financing house construction: Responsibility of private sector but state subsidies are needed for the poorest households. - Sequencing of investments matters, with infrastructure taking precedence over other improvements. - Optimizing land use in strategically located slum settlements, to ensure high social and economic returns (re: compact cities) - Support to micro-enterprises should be an integral part of slum upgrading The report further offers recommendations on the necessary legal and practical steps that will need to be taken by the Nairobi County Government and other partners so that the proposed funding mechanisms can gain traction. This publication discusses three themes: key challenges that urban planning faces today, how a Planning Lab can address these and help local or national governments, and straightforward step-by-step guidelines on how to set up a Planning Lab.
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