Thousands of new university and college students flock to their respective institutions every September, with admission letters in hand but nowhere to sleep.
The result? Many are forced to squeeze in cramped hostels, share rooms with strangers, or make daily commutes from unsafe and overcrowded neighborhoods.
For over 30 years, Kenya has invested heavily in making higher education more accessible and sustainable. While we have made significant progress, we still need to address the shortfall of over 350,000 bed spaces in student accommodation.
Just a month ago, the Higher Education Loans Board (HELB) disbursed Kes. 9.46 billion to support over 300,000 university students across the country. This included a Kes. 5.76 billion for tuition fees and Kes. 3.7 billion for student upkeep.
This followed the Ministry of Education’s announcement, which increased the HELB allocation fund for the 2025/2026 academic year. “To ensure no student is left behind, the Government has increased HELB’s annual funding from Kes. 36 billion to Kes. 41 billion, a significant boost in Kes. .5 billion,” the Cabinet Secretary stated.
If spread out evenly, this translates to Kes. 4,000 per month, barely enough to cover basic rent, food, utilities, and transport. The math appears to be sound on paper, but it leaves students struggling.
It’s no secret that most university students will skip a meal or two, walk long distances, or undertake menial jobs to scrape by. This often comes at the expense of their well-being and education, with some dropping out of school or missing out on classes.
Now the question lingers: How can we unlock the next chapter of higher education through affordable, purpose-built student accommodation?
Current Status of Student Housing in Kenya
Every first-year student dreams of safe campus hostels. Yet in Kenya, only one out of four will ever get a bed, a trend mirrored by our West Africa counterparts.
Where does this leave 75% of students? We have centered our funding around tuition fees and student upkeep, but with little to no consideration of student housing. This has created a reliance on the private sector to fulfill the deficit, attributed to insufficient funding and budget constraints.
Our students risk living in unsafe rentals and under exploitative landlords, eating into upkeep loans. The quality of education also deteriorates as hungry and tired commuting students barely thrive.
Even on campus, hostel conditions have barely improved over the last 5 decades, with outdated facilities, zero privacy, and overcrowding. This barely facilitates the modern-day student’s demands, and we risk dragging higher education backwards.
Unlocking Affordable Housing Through Purpose-Built Student Accommodation
Student housing follows similar principles to real estate investing, where property value appreciates over time. The biggest challenge would be making it appealing enough to draw in private investors and close the deficit.
The private sector has been the major player in student housing, including driving public-private partnerships. A report by Cytonn shows that private hostels charge about Kes. 8,742 monthly.
This is in comparison to on-campus hostels, charging around Kes. 10,000 per semester (An average of Kes. 3,333 per month). On the other hand, monthly rents for PBSA range from Kes. 10,000, with the highest in the market being Kshs 31,000 per month.
South Africa leads the PBSA market in Africa, borrowing success from the U.S.A., U.K., Australia, and China. To achieve similar success, Kenya needs to treat student housing as a critical infrastructure of higher learning, similar to roads and power.
We need to create appropriate legal frameworks that unlock public land as special-purpose vehicles to attract private capital. The government could allocate land within or adjacent to universities to private partners under long leases and at near-zero cost or through subsidized rates.
This would be the first step in driving investor appeal, which would lower upfront costs and create predictable cash flows. By adopting a Design-Build-Operate-Transfer (DBOT) framework, potential investors would have the flexibility to exit the market within 7 to 10 years.
Purpose-built student accommodation will also require high development and management expertise. This would require a certain set of skills, standards, and experience demonstrated by the developers. The market has already established success by Qejani and Qwetu student residences, but we need to look at this on a bigger scale.
The most successful Public-Private Partnerships treat developers as partners and not competitors. The government can further drive investor appeal through:
Student Support Schemes – The government can extend HELB loans to cover housing, even through direct university housing grants to guarantee occupancy. These grants would help subsidize costs while recovering the initial capital for developers.
Student Housing REITS – The creation of Student Housing REITS would help pool capital to sustain the DBOT framework. This would allow developers to build, sell to a REIT, and exit the market within the 7-10 year timeline. Ideally, REITs would manage and collect rent in the long term, distributing dividends to investors.
In context, rent flows monthly from thousands of students enrolling every semester. The expected returns may not match those of the U.K. or U.S. markets, but a well-structured REIT could result in an annual dividend of 6-8%.
Co-living Model – Co-living models yield more rentable rooms for a lower construction cost per room, combining the best qualities of dormitories and apartments. A higher density in residential spaces equals a steady rental income while keeping unit prices affordable for students and young professionals.
This would also improve communication and interaction among students through open study areas and lounges. By improving student lifestyle, we equally promote the quality of education and opportunities for better international student exchange programs.
Conclusion
If we can fund tuition, we can equally fund where students live. The ideal solution for PBSA is not a magic bullet but a layered strategy that includes land subsidies, university grants, HELB loans, student housing REITs, and co-living models.
For developers, the only viable path would be an early market exit through REITs or buy-back agreements in Public-Private Partnerships (PPPs) for this to be a financially viable investment. On the other hand, it leaves room for long-term investors such as pension funds, insurance companies, SACCOs, and banks to enjoy stable cash flows.
Purpose-Built Student Accommodation (PBSA) is not a form of luxury, but the missing pillar that strengthens Kenya’s higher education system. Only then can Kenya build spaces where students live, learn, and thrive.