The project, which is estimated to cost Sh12 billion, comprises more than 4,000 two and three-bedroom houses that are expected to house 20,000 people.
The project includes construction of a shopping centre, schools and a medical centre for use by the residents.
NHC has entered into a deal with Sahal Construction of Iran to undertake the project.
Two more such projects are planned for Thika and Donholm.
With each unit selling for between Sh2.7 million and Sh3.7 million, it is expected that the mega housing scheme will help lower housing prices.
“This project has the potential of lowering the prices of houses thereby boosting home ownership in Kenya,” said James Otieno, a Nairobi property consultant.
Mr Otieno added that the high costs of housing in the country has been brought about by the huge supply-demand gap, speculative practices, a tedious procurement process and archaic building code.
NHC recently announced plans to build 11,000 houses along Nairobi’s Thika Road and in Mombasa, Kisumu and Eldoret that will include one bedroom apartments – a departure from the usual three to four-bedroom units in upmarket areas.
“We are targeting individuals in the lower and middle market segments who want to access decent housing at friendly prices,” said NHC boss Wachira Njuguna.
NHC is also looking for joint ventures with land owners and concessionary loans from international lenders to increase smaller and more affordable housing units.
The firm will build 3,000 units along Thika Road; 1,200 units in Eldoret; 1,000 units in Kisumu; 1,800 units in Mombasa (Changamwe) and 4,000 units along Mombasa Road.