Purpose Kenya faces a housing paradox presented by a severe urban housing deficit and growing numbers in underutilized palatial homes in rural areas. Approximately 85% of rural households own homes, however a significant proportion of these homes (37%) remain unoccupied for most of the year, especially among households that work in cities or abroad. This study aimed to examine the underlying factors and economic implications of this phenomenon through a qualitative case study of Maitei Village in Meru County, where 39% of households have constructed large modern homes that are rarely inhabited. Design/methodology/approach The study utilized semi-structured interviews with 20 purposively selected homeowners of rarely inhabited homes. The study was guided by the following objectives; to explore motivations for rural housing investments, to analyze the financial information gaps, and to identify perceptions of opportunity cost. Data were analyzed thematically. Findings The study findings indicate that idle palatial homes are driven by cultural needs rather than economic considerations. The owners rarely used these homes except for holiday vacations and family gatherings. The key drivers of growth in idle palatial homes were land inheritance customs, emotional connection to ancestral land and social status fulfillment. Majority of the respondents exhibited financial information gaps in that they did not consider alternative avenues for investment or any financial returns from their investment in rural palatial homes that they rarely occupy. In hindsight, many regretted their decision to construct palatial homes in the rural place. Originality/value The idle investments make up “dead capital” which are assets with high value but with low utilization. The findings demonstrate the need for financial literacy education among the general population to create awareness on opportunity costs and the need for policies that promote better rural land utilization.
Masinde et al. (Tue,) studied this question.