Slumlords are the answer!

Landlords are evil, selfish, self-serving individuals who couldn’t care less about their communities and even less about the tenants who rent their properties. Right?

Wrong.

The perception of landlords around the world is a negative one. But why? The stereotype is that the landlord is in business to generate as much income as possible at the expense of their tenant’s livelihoods. We see it everywhere, on our favourite TV shows and in movies. But is that the reality?

In Nairobi, over 80% of informal settlement houses are owned by landlords. It is the same in most major cities - landlords own most of the properties while the average city population rent or lease the property since most people cannot afford to buy with the high land and property values. Informal settlements are no different. And yet, we treat them differently and ask landlords to give up their properties to tenants. But we would not ask landlords in New York or London to give up their land, secure tenure or property to tenants. In fact, many tenants would not want to buy them anyway because of the price tag and the commitment required to own property - people often don’t plan to stay in a slum for their lifetime. Why then, would we expect slums to be any different?

Over 80% of houses in informal settlements are owned by landlords

Breaking Down the Stereotype

Why not talk to landlords and try to understand them? Why not seek to gain a deeper understanding of informal settlements and the housing markets within them? At Kwangu Kwako, we have met and talked to hundreds of landlords in Nairobi and the majority are active members in their communities. The majority have family ties living in the settlements, even if they have moved away.

The majority seek to improve housing standards and livelihoods in their communities. But what is preventing them from doing so? This is what we’ve found:

• Lack of access to finance given the absence, or complexities, of land title
• Lack of affordable alternative housing and construction practices
• Administrative processes that limit all but formal development

Yet, despite these challenges, landlords in informal settlements refuse to be tied down! Rather, they get creative and find ways to provide housing despite the many constraints and restrictions placed upon them. How? They build semi-permanent structures with the materials available to them and avoid the issues surrounding the construction of permanent structures without land ownership. They consider their target customer and ask themselves, “how much rent can they afford to pay?” And thus, landlords design a home based around the financial capabilities of their tenants using the money available to them to generate a secure return on investment.

"The landlord is the catalyst."

But why not build better houses? Because they are expensive, both for the landlord to construct and for tenants to rent. With what cash will a landlord build better housing? Who will provide funding with limited collateral, fair interest rates and a reasonable payback period? The current formal credit systems have rules that exclude landlords with plots in an informal settlement.

Changing the Approach

We need to think differently. Ignoring or pushing against the landlords has been the predominant approach for decades, but has not yielded any significant results. What if we start by looking at what currently works in the community rather than trying to impose formal systems on informal communities? There are existing solutions, and the landlord is one of them. Any intervention that ignores them will likely fail to have any significant impact. A solution that helps the landlord should also be able to help the tenant as well. The landlord is the catalyst. Encourage them, support them, trust them to improve housing, and the tenant will benefit. It is a win-win situation. The landlord receives a better protected investment from a safer, more secure and robust house, more loyal tenants and safer income. The tenant benefits from an improved home, protected family, feeling of permanence, dignity. Everyone wins! Yes it will not be perfect, and yes it will need to keep being refined as we learn, but with time and patience it will work.

So maybe the slum lords we have feared so much are in fact a vital part of the solution?

Authors: Simon Dixon (Co-Founder) & David Boroto (Fundraising Manager) from Kwangu Kwako Limited.

To learn more about Kwangu Kwako and the work we do visit our website!

This blog is a part of the August 2017 series on Affordable Housing in partnership with Business Call to Action.

Read the full series for more innovative inclusive business models, lessons learnt by practitioners, and the unique challenges of understanding and measuring impact in the housing sector.