AN INVESTIGATION INTO THE CAUSES OF HIGH INCREASE IN DEMAND FOR RENTAL HOUSING: A CASE OF KIKUYU TOWN

ABSTRACT
The study had four main objectives. First to investigate the causes of increased demand for
rental houses in Kikuyu town. The second objective was to document the challenges
encountered by new tenants who are looking for rental houses in Kikuyu town. The third
objective was to investigate why the supply of rental houses in Kikuyu town was not high
compared to other parts of Nairobi. Finally, recommendations on possible policy measures
that will be undertaken to solve the disequilibrium in the housing market in Kikuyu town.
The study used different methods such as observations, oral interviews and questionnaires to
gather primary data from the case study. From the field survey it was found out that there has
been changes in the costs of land that have taken place over the years and it was quite evident
that the cost of purchasing land has increased over the years making it very expensive for
individual developers to purchase it and construct rental houses.
The population in Kikuyu town was also seen to have grown according to the reports from
the Kenya Bureau of Statistics which carry out population census. The increase in population
of people around Kikuyu town also led to an increase in demand for rental houses since the
growing population population needs shelter thereby leading to a rise in demand while the
supply of rental houses still remains low. The few players involved in the provision of rental
houses around Kikuyu town also was found to be another factor that has caused a
disequilibrium. Due to the few number of players involved in the provision of rental houses it
was evident that the supply of rental houses was also law hence causing disequilibrium in the
market.
Based on the research findings, the study concludes that Kikuyu town faces rise in demand
that outweighs the supply of rental houses around the area. This is caused by factors such as
the rise in costs of purchasing land in that it is not possible for a majority of individual
private developers to invest in rental houses in Kikuyu town. The study recommends that
individual developers should also come together to create cooperative societies and in this
way they are able to easily come together to purchase land which will be much cheaper
compared to an individual purchasing land by himself which can be rather expensive.