The Open Access Initiative Housing Development Cost Benchmarking in Kenya

Housing Development cost benchmarking (HDCB) as conducted by the Centre for Affordable Housing Finance in Africa (CAHF) is an analytic tool, following broadly the above process steps. The tool unpacks the typical total development cost of various types of affordable housing products in great detail. This analysis can improve stakeholders’ awareness and understanding of real development costs and the critical cost drivers in the affordable housing development process and enables them to explore strategies and actions to mitigate (or leverage) the effects of these in favor of enhancing affordability.

The price of a completed product to the end user in the marketplace often obscures historic sunk costs and other hidden subsidies in cash or kind. This makes it difficult for governments and public agencies when they need to budget for housing programs and when they need to assess the replicability and sustainability of housing projects. It also makes it difficult for investors who would like to invest in real estate but are not aware of what the hidden costs or subsidies are and can therefore, not develop a well-informed business case. These are difficult to quantify as little if any data is available, but the HDCB work attempts to raise awareness of these implicit, often ‘hidden’ costs, regardless of who pays, or paid at some time in the past.

Also Read: Findings from Affordable Housing Developers Outreach