Kenya is long overdue for a comprehensive rethink of its approach to commercial rental space. Small businesses are suffocating under the weight of exorbitant rental prices, unlawful goodwill demands, and exploitative lease terms, all in a space that remains largely unregulated.
If we are serious about empowering entrepreneurs, growing tax revenues, and building an inclusive economy, then zoning and regulating commercial rental spaces must become a national priority.
Let us begin with the obvious contradiction. Why is commercial rent per square foot often higher than residential rent, yet residential spaces demand more comfort, security, and amenities? It makes little sense that someone running a small cyber café or tailoring shop pays more rent than what they spend to live with their family.
This inversion subverts common sense and exposes the chaos in our urban planning and rental economy. Regulation must begin by restoring logic and fairness in pricing models.
We need to criminalise goodwill demands. These upfront, often unofficial payments demanded by landlords, sometimes running into millions, are nothing short of commercial extortion.
They are not based on any service, infrastructure improvement, or even contractual obligation. They punish ambition. This practice locks out young, energetic entrepreneurs who could otherwise contribute to the economy.
Every commercial space should be registered and audited. This is not just about regulation. It is about equity and tax justice. The Kenya Revenue Authority (KRA) must be able to map every business premise, track compliance, and collect rightful taxes.
County governments should take charge of enforcing authentic rental contracts, and every county should automate the licensing process to ensure real time data sharing with KRA. The informal rental economy cannot remain invisible while businesses struggle under its weight.
The State Department for MSMEs must also step up and champion a national policy on rental business, one rooted in people’s real experiences, one that prioritises affordability, transparency, and fairness.
This policy should cover both physical and digital business spaces. Online trade and e commerce are growing at unprecedented speed. Instagram sellers, TikTok vendors, and Jumia storefronts are no longer side hustles.
They are full scale enterprises. Regulation should protect them, not punish them. Integration into the national economy should come with support structures and fair taxation.
More radically, the Government of Kenya must shift its investment approach in housing. It is time we admit the truth. Government has no business investing in market rate housing.
That space is well served by private developers. Instead, the Government should focus on building social housing and affordable commercial and industrial spaces. In fact, commercial spaces tied to affordable housing developments would be taken up even faster than the houses themselves.
Markets, workshops, offices, and warehouses are in higher demand across counties than overpriced gated units. Let government supply where the market has failed.
Doing so would ultimately reduce the problem of perennial hawking in towns and cities. When cheap and accessible commercial space is available, people move away from pavements and street corners.
The result is not only increased returns to KRA and higher compliance with business permit payments, but also cleaner, more organised, and more predictable inner cities. This is how we begin to solve our social problems by planning around the needs of our people and their businesses.
And what an easy way to bring the informal sector into the tax bracket, just create affordable, accessible, and officially recognised business spaces. With a proper address, formal rental agreement, and access to utilities, even the smallest trader feels seen, supported, and responsible. Compliance naturally follows inclusion.
Regulations and urban laws should promote quality of life, not just economic survival. When small businesses pay more for their shops than their homes, we have a social misalignment. When dreamers are locked out of economic participation by rent structures, we are stifling national growth. It is the point at which we clearly must rethink not only our business environment, but our broader living strategies.
If the Government can regulate passenger fares, fuel prices, and even the cost of unga, surely it can regulate commercial rental space. The survival of small businesses, and by extension, the dreams of millions, depends on it.
