Affordable housing is one of Jubilee government’s Big Four Agenda, which President Uhuru Kenyatta is seeking to actualise before his tenure ends in 2022.
The State Department for Housing and Urban Development is looking for ways of collecting the money needed to realise affordable housing from the citizens who will benefit from it. The overall plan is to put up provide 500,000 decent, affordable housing units.
The allocation of the few houses to the many Kenyans who will have paid for housing has been a sticking issue amid court battles over the 1.5% Housing Levy that the government seeks to collect from employed Kenya and a similar top up by employers despite the fact that not all will get the house.
Instead, the government plans to conduct a lottery in allocating the houses with those who miss out converting their money into pension savings.
According to the boma.go.ke website, 220,000 Kenyans who are in need of a house have registered for one. So far, the department is close to finishing 228 housing units in Park Road, Nairobi, which will be allocated to those who have registered.
Housing and Urban Development Principal Secretary Charles Hinga says the event that you retire before getting a house, you will receive the money you would have contributed, adding the housing levy will double as a savings account.
Speaking at the CBA Economic forum on Tuesday, Mr Hinga clarified on the presumed lottery mechanism to be used to allocate the houses. Mr Hinga confirmed that 228 house units built on Nairobi’s park road will be ready in September and keys will be given.
“If everything was all about first come first served, it would create so many challenges. These houses are going to be like hotcakes in the market and heavy loaded people will want to buy in bulk,” he said.
“The main issue is how are we going to allocate 228 houses to the thousands who have qualified. The word lottery was a misrepresentation, it is a balloting allocation system,” the PS clarified.
“Actually I thought that after being bashed for so many weeks, it would not be a bad idea to have a game show on National TV where we are allocating houses,” he added humorously.
“Every Kenyan has a right to decent and adequate housing with access to minimum basic services. I think the conversation that people have ran away from is how we were expected to fund those rights and freedoms. There has got to be some collective responsibility as to how we are going to fund these rights and freedoms that we have given ourselves. And so, in that process we agonised about the funding model because not only was the State Department given a very ambitious programme to implement, we were also not given money,” said Hinga.
The benefactors of the houses will live in the houses and continue paying 1.5% of their monthly salary and will officially own the houses after 25 years. Getting a house will mean that you will not be paying rent besides the amount you pay from the percentage of your salary that will be deducted.
Speaking at the event, CBA Kenya Chief Executive Officer Jeremy Ngunze said the bank is keen on sparking conversation and economic thoughts on important development agendas and financial matters in the country.
“We are indeed excited to gather here today to take stock of the journey so far for the affordable housing pillar. Housing is one of the largest household expenditures and a major financial burden for many low income households. Its affordability, therefore, remains central to the welfare of many families and our society at large,” said Ngunze.
The National Treasury has proposed to allocate Ksh 10.5 billion towards the Affordable Housing Initiative in the 2019/2020 budget. This is a 61.5% increase from the Ksh 6.5 billion allocated in the 2018/2019 financial year budget, which shows the national government’s commitment towards delivering affordable housing.
Ngunze added: “As CBA, we look forward to partnering with the government and the private sector on this journey. We are particularly excited about the opportunity to collaborate with the Kenya Mortgage Refinancing Company in bringing down the cost of mortgages.”