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Home Ownership: House, profits & babies, for Kenya from Korea

Central Park's resort sector sprawls inside the Songdo International Business District in Incheon. Courtesy of the office of Incheon Free Economic Zone. PHOTO/COURTESY

By Charles Mungai in Seoul

The government’s commitment to addressing the housing problem is commendable. It is evident from available data, including reports from the Kenya National Bureau of Statistics, that the country faces significant housing challenges. However, it is important to recognize that the issue goes beyond mere housing structures; there are other dynamics at play.

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While creating an enabling environment for private enterprises to be part of the solution is crucial, it is not sufficient to address the housing shortage. In today’s technological era, there are numerous approaches available for the government to explore, which can help build public trust, eliminate doubt, and attract larger public support for the housing agenda.

My Korea Dilemma

Upon arriving in Korea, I was perplexed to discover that it has the lowest fertility rate globally. In 2022, their fertility rate reached a record-breaking low of 0.78%, with only 249,000 babies born in a population of over 50 million. Despite the government’s efforts, including incentive plans and financial rewards for having children, the issue persists.

The repercussions of this population decline are evident. Admissions in universities, with approximately 200 institutions needing 400,000 new students annually, is becoming unattainable. In fact, some universities have started closing down, and elementary schools are merging or shutting their doors.

To comprehend the underlying dynamics, I discovered that half of Korea’s population, around 25 million people, resides in or near the capital, Seoul, due to better opportunities. This is the home of the three most esteemed universities, collectively known as SKY (Seoul National University, Korea University, and Yonsei University). Consequently, individuals strive to be in Seoul to access these renowned institutions and secure well-paying jobs.

As a result, aspiring parents face a dilemma. They want the best for their children, necessitating living in or near the country’s capital. However, the younger generation, having witnessed the struggles of their parents, is reluctant, and fearful of being confronted by similar challenges. Raising a child in Korea is financially burdensome, requiring stable employment and the ability to purchase a home through mortgages. Additionally, Korea’s limited land availability drives the construction of high-rise apartments, making housing a nightmare.

To profitably build these apartments, private companies have determined that constructing 20 floors or more makes more economic sense due to expensive land costs. As a consequence, only corporations can afford the land, build apartments, and sell them at a profit. In Seoul, apartment prices can exceed Ksh. 100 million, driven by the laws of demand and supply.

These circumstances lead to delayed marriages, with men often reaching 40 and women between 35-38 before thinking of starting a family. The cost of education further adds to the challenges, as children must attend government-funded schools and private academies, often spending evenings in academies until midnight in high school.

Unfortunately, this situation contributes to South Korea having the highest suicide rates among Organisation for Economic Co-operation and Development (OECD) countries, with 25.4 suicides per 100,000 people in 2019.

Recognizing the housing challenge as a key factor in the population decline, I engaged two Professors involved in the development of strategic plans for new cities in South Korea. In our conversations, I learned that during economic downturns, the government develops new cities and collaborates with the private sector to build them. These endeavours stimulate the economy, generate employment opportunities, and revitalize industries.

Given this context, I inquired about the possibility of the government directing private enterprises to develop housing units and allocate a portion of them to a social housing program. This approach could help address the housing crisis while benefiting the public. I discovered that the South Korean government is currently exploring such initiatives in recent programs.

Where do you live?

During my younger years, the response to the question “Where do you live?” would simply indicate the location of our home. For a human being, life revolves around three fundamental aspects: sustenance, clothing, and shelter. These elements, along with breathing and sleep, are classified by Maslow as physiological needs. Ezekiel Mphahlele succinctly captures this essence in his book “Man Must Live.”

Nevertheless, individuals are also integral parts of societies, comprising three crucial institutions: the church, the state, and enterprise. These entities continuously vie for influence within society. However, it is only the government that bears the responsibility for addressing the multifaceted dynamics, as exemplified by my observations in South Korea. The private sector or enterprises exist primarily for profit, while the church, despite its social responsibilities, also maintains significant stakes in various private sector institutions such as schools, hospitals, and real estate.

I also urge my fellow Kenyans to exercise caution when private sector representatives insist that the government should refrain from involvement. Their profit-driven interests tend to bias their objectivity in these discussions. Moreover, history has shown, even in the United States, that when large banking corporations fail due to their greed and poor decision-making, they turn to the government for bailouts funded by taxpayers.

The church should also contribute to the dialogue in a balanced manner, avoiding sowing doubt among the populace regarding their government. Just as they did during Jesus’ time when questioning the payment of taxes to the government, they too would be hypocritical if they failed to acknowledge their interest in real estate development for profit.

Government and Technology-Driven Transparency

It is imperative for a responsible government to proactively address the housing problem before it escalates, rather than relying solely on profit-seeking enterprises as the solution. The government of Singapore serves as an excellent case study for effective government social housing initiatives.

In the case of Kenya, the primary concern for many citizens regarding the housing plan is not the contribution itself but rather issues of trust, accountability, and transparency. This challenge of doubt is something governments worldwide have consistently faced from their citizens. As demonstrated in the Bible (Mark 12:13-17), even Jesus acknowledged the issue when church leaders questioned the payment of taxes to Caesar, highlighting their hypocrisy.

In the present era of intelligent computer programs and artificial intelligence, where data-driven decisions are made through machine learning, the allocation of houses based on contributors’ contributions should not be reduced to a mere raffle. Kenyans have witnessed the familiar pattern where politicians and well-connected individuals become the primary beneficiaries of government “social” initiatives.

Contrastingly, the Korean government has embraced an open policy, making all information accessible to the public within the bounds of privacy requirements. In Kenya, however, the requirement to publish all government tenders on a transparency portal remains a challenge.

President William Ruto has also acknowledged the obstacle posed by civil servants, such as those at Kenya Revenue Authority (KRA), in implementing technology solutions that enhance transparency, service accessibility, and efficiency for the public.

To ensure a successful social housing program, a well-designed system should be established to enable contributors to track their contributions, submit applications for housing units, view their allocated units, monitor construction progress, apply for the government mortgage program, and track application status until the property handover.

The government should collaborate with data scientists who can work alongside social officers to develop an allocation formula. The first criterion should prioritize contributors by giving them higher scores compared to non-contributors.

Additional scoring factors should consider the equitable distribution of key social personnel across different buildings, including police officers, doctors, nurses, teachers, children officers, administration officers (e.g., chiefs), social workers, firefighters, paramedics, pharmacists, counselors, among others.

The public should have access to a public portal containing comprehensive information about the private enterprises awarded government tenders for housing development. This information should encompass the scope of work, payment details, and transparent contractor selection processes. Certification information should also be available to assure buyers of the housing units’ quality.

Furthermore, there should be traceability of different components to indigenous local enterprises, rather than relying on international entities that may repatriate profits or engage in corrupt practices in offshore tax havens, as highlighted in the Panama and Pandora scandals.

In this day and age, a simple raffle is inadequate. As a nation accustomed to betting, we understand that the house always wins. Therefore, all decision-making processes and information sharing should be driven by machines. By removing human involvement, machine decisions become rule-based, devoid of emotions or susceptibility to bribery. This approach builds trust, similar to how “Chamas” (investment groups) operate successfully.

Charles Mungai is an Experienced Digital Innovation professional currently undertaking his Masters Research in Artificial Intelligence at Hanyang University in South Korea.

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