March 13th, 2025

The Muungano wa Ghetto housing initiative originated from Muungano wa Wanavijiji’s efforts in the 1990s to mobilise informal settlement residents for improved living conditions. In 2003, Ghetto was designated for upgrading, and a Memorandum of Understanding was signed between Nairobi County Government and Muungano wa Ghetto, granting land to the community at no cost. In return, the residents of Huruma were expected to redevelop the area.

Initially, the community constructed basic starter housing shells—without doors, windows, plumbing, wiring, or plastering—costing Ksh 160,000 per unit. They later transitioned to more complete starter units with some provisions, priced at Ksh 250,000. To accelerate housing availability and lower the financial barrier for entry, the project team shifted their approach from constructing complete units to focusing solely on laying foundations at a reduced cost of Ksh 50,000–60,000. This made the 20% deposit more accessible, allowing more residents to start their housing journey.

By the time the foundations were completed, the Covid-19 outbreak disrupted financing, leaving Ghetto Cooperative members struggling to progress beyond the foundation stage. For nearly four years, construction stalled, and even those with starter units faced delays in completing their first floors. Of the 550 planned houses to be built in the entire settlement, only 100 were built to varying levels of completion between 2011 and 2020.

In 2024, Akiba Mashinani Trust (AMT) secured funding from the Livelihood Impact Fund (LIF), with support from FSD Kenya, to pilot a housing project in Ghetto. The pilot aimed to assess the feasibility of increased investment by LIF and other investors, while testing scalable and sustainable housing delivery models. The project also provided valuable insights into financing, cost management, and stakeholder engagement.

Given the time gap since the last starter house was built, LIF needed to reassess construction costs. To achieve this, CAHF, on behalf of LIF, commissioned a feasibility study. A quantity surveying (QS) firm estimated the cost of a two-bedroom house at Ksh 1,019,642—almost 2.5 times higher than Muungano wa Ghetto’s estimate of Ksh 429,630.

AMT and Muungano wa Ghetto contested the high estimate, citing cost-saving community practices such as:
•Self-casting of waffle slabs and beams to reduce steel and labor costs.
• Shared staircases between two houses, distributing costs.
• Cluster-based foundation work for 20–30 units, lowering individual costs.

However, rising material and labour costs had not been factored into Muungano’s estimates. Cement prices had risen from Ksh 500 to Ksh 800 per bag, while skilled labour wages had increased from Ksh 800 to Ksh 1,200–1,500 per day. To address cost discrepancies and optimise investment, LIF, AMT, CAHF, and the Ghetto Cooperative agreed to shift to a ground-plus-one housing design instead of a single-floor starter unit to optimise cost estimation and construction methodologies.

Pilot project design and construction 

The pilot project involved constructing four units which included:

• Two smaller houses, each with two rooms (14.29 m² per room).
• Two larger houses, each with two rooms (21.16 m² per room).
• All units are connected by a shared wall
• An external shared staircase frees up interior space, allowing beneficiaries to occupy one unit while potentially renting out the upper unit to support loan repayments.
• Balcony areas enhance natural lighting and ventilation, improving the overall living environment.
• Due to space constraints, the two smaller two-bedroom units share a single bathroom, while each room in the larger two-bedroom units has its own bathroom.

The project was completed in 35 weeks, with CAHF tracking and evaluating progress to inform future investments. Construction was carried out by the Ghetto community under the supervision of Muungano wa Ghetto’s community-led committee. A site manager, supported by clerks of works, oversaw construction activities. Throughout the 35-week period, the project monitored cost efficiencies, construction methodologies, and scalability potential.

The total construction cost for the four housing units was Ksh 2,853,929, translating to an average of Ksh 717,485 per two-bedroom house and Ksh 16,491 per square meter.

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Summary cost tracking for the four house units

Total Cost for the 4 Pilot Houses	Amount in Ksh	Amount in USD as of December 2024
Substructure	162,226	1,253
Ground Slab	164,655	1,272
GF Masonry Wall	223,975	1,730
GF Ring Beam	160,770	1,242
1st Floor Precast Beams + Waffle Slabs + Staircase	221,900	1,714
1st Floor Slab	165,890	1,281
1st Floor Masonry Wall	265,458	2,050
1st Floor Ring Beam	152,780	1,180
2nd Floor Precast Beams + Waffle Slabs	194,480	1,502
2nd Floor Slab	100,155	773
2nd Floor Masonry Wall (4 courses)	90,070	696
Interior Construction Works	831,890	6,433
External Finishes Works	119,680	925
Total Costs as of 20th December 2024	2,853,929	22,069
Total Costs as of 2oth December 2024 (excluding substructure costs)	2,691,703	20,814

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Breakdown of costs per house categorised by workstreams

NB: Labour and material costs are included in each of the workstreams mentioned below.

Broken Down Workstreams	Small House (A) + Portion of Common Space	Small House (B) + Portion of Common Space	Large House (A) + Portion of Common Space	Large House (B) + Portion of Common Space	Total Cost Per Workstream	% of Workstream on the Total Construction Cost
Substructure (minus ground slab)	40,557	40,557	40,557	40,557	162,226	6%
Ground Slab	33,542	33,542	48,785	48,785	164,655	6%
GF Masonry Wall	39,675	39,675	70,782	73,844	223,975	8%
GF Ring Beam	40,193	40,193	40,193	40,193	160,770	6%
1st Floor Precast Beams + Waffle Slabs + Staircase	53,200	53,200	57,750	57,750	221,900	8%
1st Floor Slab	38,168	38,168	44,778	44,778	165,890	6%
1st Floor Masonry Wall	49,391	49,391	83,338	83,338	265,458	9%
1st Floor Ring Beam	38,195	38,195	38,195	38,195	152,780	5%
2nd Floor Precast Beams + Waffle Slabs	48,620	48,620	48,620	48,620	194,480	7%
2nd Floor Slab	21,611	21,611	28,466	28,466	100,155	3%
2nd Floor Masonry Wall (4 courses)	19,119	19,119	25,916	25,916	90,070	3%
Interior Construction Works	207,973	207,973	207,973	207,973	831,890	29%
External Finishes Works	25,518	25,518	34,322	34,322	119,680	4%
Total Cost (ksh)	655,760	655,760	769,674	772,736	2,853,929	100%
Cost per square metre (ksh)	18,601	18,601	15,011	15,071	16,491

Note: Interior works include plumbing, plastering, purchase and installation of windows and doors, electrical works, and casting of kitchen tops and slab.  Exterior finishes include façade rendering, installation of inspection chambers and connection to the manhole for the large houses.

From a financing perspective, it showed that if the cooperative were able to prove savings and repayment ability, impact funders like LIF would be willing to extend funding to build a ground + two storey structure (total 3 rooms) on a 10 year tenor at 9.5%, with a 20% downpayment. This resulted in a monthly loan repayment of KShs 12,287/= fund a Ground + two storey structure, and the beneficiaries could rent the upper two rooms at 5,500/= each (prevailing market rent), resulting in a net payment to the family of Kshs 2,387/-. It shows that building the entire house G+2 house and renting out 2 rooms, is more affordable than building a G+1 house and renting out one room. To attract such impact funding, cooperatives need to show track record of savings and repayment

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For a detailed account of the methodology – download the report and the financial model below that has the costs recorded daily and the financial feasibility.

Financial model on Ghetto financial feasibility

Livelihood Impact Fund pilot project – A case study of ghetto housing construction

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This article was first published by the Centre for Affordable Housing Finance in Africa (CAHF) here. 

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