Executive Summary Introduction and Study Setting An innovative research project has created an array of holistic strategies to support tenure security, equitable access to services, and justice for residents of Nairobi’s informal settlements. The study was spearheaded by an interdisciplinary team comprised of city planners at the University of Nairobi, pro-poor financial strategists at Akiba Mashinani Trust (AMT), legal and finance professors at Strathmore University, and lawyers at the Katiba Institute. Supported by the International Development Research Centre (IDRC) from 2012-2014, these researchers combined surveys, interviews, focus groups, and spatial data gathered in Mukuru with a desk review of best practices from Kenyan or other cities. Based on these detailed findings, the team has developed a set of financial, legal, and planning proposals that can benefit households in Mukuru and other informal settlements. Its recommendations will have wider relevance for Kenya’s urban development policies and will contribute to broader debates about improving well-being among the urban poor, helping to fulfill the promise of equitable development in Kenya’s Constitution and devolution reforms.

Over the multi-stage research project, the team partnered closely with residents to develop a thorough situation analysis and to propose future interventions in Mukuru. In the situation analysis, researchers explored the relations between settlement types and service provision as well as examined alternative models of service delivery. Findings helped to reveal key links between meagre services, insecure land tenure, and unjust governance institutions in Nairobi’s informal settlements. Going beyond analysing slums’ land tenure and service delivery, the final report has explored the potential of applying public interest-oriented legal, planning, and financial tools to strengthen the legitimacy and accountability of public authorities in the areas of governance, security, and justice. This modelling report has offered a range of policy-relevant recommendations such as inclusive slum upgrading initiatives, pro-poor financial strategies, and supportive legal frameworks in Mukuru (see below for detailed findings and proposals).

Mukuru is a rapidly-expanding settlement located on prime lands in Nairobi’s industrial area, where households are usually crowded into tiny iron shacks with only minimal service provision. Detailed surveys found that just 3.6% of Mukuru households have access to adequate bathrooms, 7% have adequate toilets, and 29% have adequate water. Although 78% have electricity, these tenuous illegal connections frequently expose residents to other challenges including regular blackouts and elevated risks of electrocution. Moreover, in a staggering ‘Poverty Penalty,’ Mukuru residents can only access higher-cost, lower-quality services than in Nairobi’s formal estates. For instance, the average structure in Mukuru (a 10-by-10-foot rented room without amenities) is 10% to 26% more expensive per square-foot than neighbouring formal estates with all services provided. Similarly, Mukuru households must pay 45% to 142% more for their monthly electricity bills than residents enjoying formal KPLC provision. For water, the poverty penalty is especially crippling as slum-dwellers usually consume less water, at lower quality, but at higher costs than residents with formal provision. Mukuru residents typically pay tariffs per cubic-metre that are as much as 172% the rates of formal water customers. The situation analysis found that such inequitable burdens in service delivery are also gendered: women and girls are disproportionately affected, particularly when they risk rape or assault to use Mukuru’s inadequate toilets after nightfall. As in many other slums, Mukuru’s population figures are highly contested and uncertain, while insecure land tenure is another source of conflict in the settlement. The 2009 Census reported a population of 118,435 for Mukuru, but grassroots organisations have considered this a significant underestimate. Following this, Muungano Support Trust (MuST) and Muungano wa Wanavijiji (MWW or Federation of Slum-dwellers) conducted a self-enumeration in 2010 that reported a higher figure of 191,600 Mukuru residents. Living on lands usually held by private individuals, Mukuru households must grapple with a complex mix of formal and informal tenure arrangements. ‘Formal tenure’ denotes land that, while originally public, has since been allocated to private individuals holding title deeds. Although some of these individuals still hold the titles, others have sold it to second or third purchasers and in other cases they have since been charged to financial institutions. In ‘informal tenure,’ individuals have typically been allocated lands by the provincial administration and local political leaders. Alternatively, private individuals may encroach upon the lands before constructing buildings that are rented out, and these slumlords frequently operate in a hybrid arrangement where illegality sits side-by-side with legitimacy. The interdisciplinary research team has offered thorough analyses and recommendations that not only reflect this complex reality in Mukuru, but can also support integrated, lasting solutions in Nairobi’s informal settlements.

Legal Analysis and Recommendations Addressing the plight of Mukuru residents will require appreciating and disentangling these multi-layered tenurial arrangements within the settlement. In response, we argue for converting it into community land based on the provisions of the Constitution, Land Act, and the draft community land law. We underscore the pivotal importance of tenure security, which serves as the bedrock of slum upgrading processes that can transform residents’ living conditions and promote equitable access to key services. Our pioneering model of a Community Land Trust (CLT) aims to ensure that the property rights of Mukuru’s squatters shall not only be recognised but also secured; the process shall adhere to Constitutional dictates; and our strategies shall produce a lasting resolution of slums’ land problems. This approach will simultaneously achieve the Constitutional rights to housing, water, health and sanitation (guaranteed by Article 43 under the Bill of Rights), as well as respecting and protecting property rights.

Adopting a CLT in Mukuru will respond to the major exigencies in informal settlements, helping to realise the right to shelter both now and in perpetuity. The CLT will ensure that the land is always available, not just to Mukuru’s current residents but to future low-income communities. Furthermore, the model will enable individuals to take advantage of the benefits of the market and individual rights. Our findings and recommendations to support secure land tenure and constitutional rights to shelter are as follows: Promote Security of Tenure: Tenure security for Mukuru residents and others living in informal settlements will be critical for the enjoyment of services. The rights to water, sanitation, and housing will not be realized in the absence of secure tenure. Establish Community Land Rights: In securing tenure rights for Kenyan slum-dwellers, there is a need to innovate around community land rights so as to enable members to enjoy individual rights within the broader communal land tenure rights. Protecting community rights will offer a window of opportunity to secure tenure for Mukuru residents. This is not a new concept in Kenya, although it was only formally recognised for the first time under the 2010 Constitution. It has long been realised that private and public land tenure cannot adequately offer land tenure security for certain categories of persons, such as residents of informal settlements like Mukuru. Develop Flexible Approaches: Any innovation seeking to improve tenure security should be flexible in nature, in order to accommodate Mukuru’s unique features and to promote residents’ vigorous participation in decision-making processes surrounding land rights. Ensure Government Support: At the national and county levels, the Government has important policy and legislative roles to play in supporting the realization of secure tenure rights for residents of informal settlements.

Planning Analysis and Recommendations In its model, the planning team has aimed to foster liveability, safety, affordability, and inclusiveness for all residents. The proposed strategies will support in-situ, incremental upgrading and comprehensive redevelopment in Mukuru. Our planning interventions are intended to benefit four categories of Mukuru residents, regardless of their income levels, tenure or ownership patterns: 1) current land-owners; 2) new land allocations (structure-owners and tenants in contested lands with resources); 3) current tenants and structure-owners before land allocation (with minimal resources on contested land); and 4) vulnerable groups such as widows, orphans, or the very poor. To reach these beneficiaries, we recommend the following planning initiatives and cross-cutting approaches that can support equitable access to key services, shelter, and livelihoods in Mukuru:

•     Improve Service Delivery: The team has proposed a two-pronged approach involving the public service providers on the one hand and grassroots actors on the other. We recommend establishing a partnership between service providers and community structures. An efficient monitoring and surveillance in service distribution is recommended for providers, while also streamlining of grassroots actors via community-based management structures. If successful, this framework will lead to the dismantling of insecure, low-quality and costly service cartels that have operated in Nairobi’s informal settlements. •     Promote gender equity: Gender-equitable strategies should be mainstreamed throughout the slum upgrading process, including particular efforts to ensure the visibility of women and girls, as well as to provide equitable benefits in property and livelihoods for female-headed households. For instance, the model will give women equal opportunities to participate in the economic and livelihoods aspects of the upgrading project. The study also proposes the equal representation and recognition of women in granting property rights. Improved service provision (such as adequate sanitation and water) may also have particular benefits for women and girls in Mukuru. Our approach can therefore support gender equity in access to services, livelihoods, and property rights, in addition to ensuring gender-equitable participation throughout the proposed model. •     Build Skills for Youth: During the upgrading project, we recommend the promotion of industrial trainings and encouraging entrepreneurial skills transfer for Mukuru’s youth. In turn, the upgrading will foster value-addition in terms of skilled human resources. •     Support Community Savings Groups: We advocate continued support for grassroots savings schemes in Mukuru for several reasons. Beyond improving the purchasing power of poor households, we argue that savings groups are a vital tool for community-building and enhancing residents’ abilities to negotiate with their government representatives. •     Create Holistic Planning Interventions: There is a need to embrace multiple models of slum upgrading, in order to cater for the diversity of issues and players prevalent in informal settlements. This appreciation of diversity calls for a plural, negotiated, and tailored approach to upgrading with a range of stakeholders, as opposed to a singular or fixed strategy.

Financial Analysis and Recommendations The finance team aimed to develop inclusive financing processes that can achieve positive change, working with both the formal and informal institutions rooted in informal settlements. Building upon its situational analysis and review of past experiences, the finance team sought to understand the 1) institutional and structural bottlenecks that prevent Mukuru households from accessing financial support to improve their livelihoods; 2) the willingness and ability of a Mukuru resident to repay loans; and 3) coping mechanisms employed by the lowest-income households that are most vulnerable to gentrification. Applying the housing costs proposed by the planning team, the final report also provides calculations of the financing gap in Mukuru. Finally, the finance team has suggested innovative ways to overcome this gap by carefully analysing case studies of prior slum upgrading projects as well as the role of various stakeholders. Key findings and recommendations are as follows:

•     Bridge the Financing Gap: Our analysis indicates that a Mukuru household can only afford improvements below Kshs. 300,000 (Type I (a): In-situ /Re-blocking and Type IV: Live-and-Work Housing and Market, as explained in our costing calculations). However, this can only accommodate 50% of residents in Mukuru, with the remaining half unable to fully qualify for credit facilities to support the proposed improvements. The state has an important role to play in bridging this gap by providing targeted subsidies (especially to reduce the interest rate and infrastructure costs) and by creating policies to regularise tenure. With such enabling policies, favourable market financiers could also create mortgage terms and conditions to promote repayment by considering slum-dwellers’ variability of income. •     Establish a Mukuru Housing Special Purpose Entity (SPE): Owned by the Mukuru community for high-end redevelopment purposes, the SPE could further reduce the housing gap. We propose establishing an SPE that can effectively steer the redevelopment process, with representatives from community residents’ associations, strategic private investors, and qualifying microfinance institutions or banks. •     Issue modified revenue bonds that leverage Small Scale Service Providers (SSSP’s): SSSP’s already possess invaluable on-the-ground knowledge of how to deliver affordable services in Mukuru, which can be leveraged in designing service distribution systems. Formal institutions can bring investors into the sector to provide core infrastructure, while using SSSP’s to operationalise and maintain the systems. This arrangement could generate revenues for the formal institution, in addition to building upon local expertise and enhancing service delivery for Mukuru residents. •     Expand Participation in Community Savings: As noted by the planning team, savings have several benefits and can strongly enhance slum upgrading projects. A household that saves Kshs. 50 per day for the next three years will accumulate Kshs. 54,000, or from 5% to 25% of the cost of shelter improvements (depending on the type of housing unit selected). This will give the household greater leverage in negotiating credit terms, as well as influencing favourable actions in the course of making such improvements. According to the situation analysis, just 7.5% of Mukuru residents are consistent savers. The finance team thus recommends the embedding of a savings culture and wider participation, so that these activities may have a more significant impact across informal settlements.

Media Enquiries: Gloria Lihemo Communications and Public Affairs Officer, International Development Research Centre Regional Office for sub-Saharan Africa / glihemo@idrc.ca /+254 727 903 983/ www.idrc.ca