Why landlords remain poor despite big investments

Landlords may have expected to more than double their earnings from
house rents when infrastructure transformed some of Kenya’s remote towns.

It has, however, proven to be a difficult task. Despite new electricity
lines and improved road networks, rents in many rural areas have
remained virtually unchanged.

In other cases, initial rent increases were immediately overturned after
tenant protests and evictions.

Many residents in rural areas, according to Joshua Mwangi, a tenant at a
business in a village in Nyeri County’s Kieni, are low-income earners.

Any attempt to charge them a price that will force them to live above
their means is met with opposition, even a boycott of one’s rental units.

“The majority of people simply want a place to rest their heads in the
evening.” “They aren’t searching for elegance,” he explains.

“There is always another option for settling and avoiding a landlord
with high charges.” As a result, despite infrastructure expansion, the
rents charged stay mostly unchanged.

Mwangi claims that rental houses timber in his village may be rented for
as little as Sh500 per month, the same sum as before the village was
connected to the national power grid.

The majority of the houses have timber walls, while others have roofing
sheets.

Daily farmhand responsibilities pay roughly Sh250 per day in this
village in Kieni, and such work are not guaranteed.

With the rising cost of living, their day-to-day expenses leave them
with little disposable income, making a rent of more than Sh500
difficult, says Njuguna, a caretaker who did not speak on behalf of the
landlord because he was unaware of our conversation.

Many of these tenants do not use the electricity placed in their homes,
primarily because it is expensive and they have no control over it.

They still use oil lamps or very little electricity to illuminate their
homes.

According to the World Bank https://www.worldbank.org/en/home, over
one billion people lived without electricity in 2018, largely in
Sub-Saharan Africa and South Asia.

“Since 2010, the number of people gaining access to electricity has
increased to around 118 million per year,” the World Bank said in a
report, “but these efforts will need to accelerate if the world is to
meet Sustainable Development Goal seven of ensuring access to
affordable, reliable, sustainable, and modern energy for all by 2030.”

Mr Mwangi also claims that tenants and landlords have a symbiotic
relationship. Tenants also provide as security for the landowners’
property in a village context where social networks are strong and trust
governs most relationships, he adds.

“As a landlord, you can relax knowing that these people you trust are on
your property. Because you’re a big family, nothing will go wrong
because they’ve got your back.”

If the landlord is unable to pay the workers quickly, his tenants will
not be inconvenienced. He’ll charge them less for rent at the end of the
month after subtracting what they owe.

Rental spaces in such places have so largely remained the same as they
were before the neighborhood’s infrastructure development – same rents,
similar occupancies in many cases.

The fact that many of such houses are low quality and built as temporary
shelters is another factor contributing to the stagnant rents.

Njuguna adds that such tenants, the bulk of whom are casual workers, are
also called upon to participate in the landlord’s farm or other business.

“We don’t have to go out looking for people to come help us when we have
big responsibilities on the farm.” That would be a difficult task. He
says, “We have our army here, and they are ready whenever we need them.”

They are plentiful, providing tenants with a vast selection.

Landlords who have renovated their properties by making them more
appealing have seen a little increase in rents, with few takers. Some
people have had to return to their previous levels.

Some argue that improving infrastructure did not necessarily improve
living conditions because people still live in poverty despite tarmac
roads passing through their villages.

These include bandit-infested locations, semi-arid areas, and areas
where large amounts of energy are not required. There are no industry or
big institutions in these locations, for example.

While land economists have criticized exorbitant land prices and
excessively high rents in Nairobi and other cities, with speculation
abounding as the government embarks on projects for the Big Four Agenda
as well as other megaprojects, rural areas have remained relatively quiet.

Developers in metropolitan regions compete to offer the most appealing
units at the greatest prices to purchasers and tenants. Their
equivalents in rural areas, on the other hand, frequently give the bare
minimum.

In many cases, it is something that the tenants request. It’s all about
what they can afford and are willing to pay.

When the landlord connected the houses to power and was prepared to
leave, Zipporah Wanjiru, a tenant in one of the houses in a Nyeri
village, says she feared she would be unable to pay her rent.

However, after months of consideration, the landlord concluded that it
would not work.

Tenants in houses whose rents were raised massive numbers vacated. They
looked for less expensive alternatives.

“It felt like a loss,” Njuguna says. “Now that we had tarmac and power,
several landlords built stone buildings.” Our landlord-built rooms that
might be used as businesses and hotels here.”

Some of these houses are still unoccupied. Several retailers have closed
their doors due to dwindling business and are unable to reopen despite
assurances that they can pay the same amount.

As a result, despite the government’s Last-Mile Power Connectivity
program, communities remain as quiet as ever. The houses are empty, the
tarmac is seldom utilized, and the power is turned off.

And landlords continue to charge low rents, frustrated by the lack of
access to roads and electricity connections.