Opinion

Kenya’s Housing Revolution: Navigating Challenges And Opportunities In The Affordable Housing Bill 2024

BY Steve Biko Wafula · January 15, 2024 10:01 pm

KEY POINTS

In a significant legislative move, the Kenyan National Assembly introduced the Affordable Housing Bill 2024 on December 7, 2023, sparking a crucial discourse on housing rights and economic policy. This bill follows a pivotal High Court ruling that declared Section 84 of the Finance Act, 2023 unconstitutional, highlighting the need for a comprehensive legal framework for affordable housing.

The Bill, now under the scrutiny of the Departmental Committees on Housing, Urban Planning, Public Works, and Finance and National Planning, seeks to realign Kenya’s housing policy with its constitutional mandate. It aims to facilitate accessible and adequate housing with reasonable sanitation standards and to establish a legal framework for affordable housing programs and projects.

A key component of the Bill is the introduction of the Affordable Housing Levy, to be paid by both employed and non-employed persons. The Kenya Revenue Authority (KRA) is designated as the primary collector, with provisions for another collector as determined by the CS for the National Treasury. This levy will fund the Affordable Housing Fund, established under the Bill. However, concerns have been raised about the potential for fund mismanagement, calling for a more stringent definition of ‘collector’ roles and responsibilities.

The High Court had criticized Section 84 of the Finance Act for discriminating against salaried employees. While the new Bill extends the levy to a broader population, it lacks clarity on the mechanisms for collection from non-salaried individuals. For employers, the obligation to deduct and remit levies remains, with a significant penalty for non-compliance. This aspect of the Bill has been deemed punitive, particularly for businesses grappling with economic challenges, suggesting a need for a more lenient penalty structure.

The Bill defines affordable housing units across three income categories, with varying sizes for different income groups. It simplifies eligibility for allocation to adult Kenyan citizens, prioritizing marginalized and vulnerable groups. However, the absence of a clear list of agencies for application submission creates uncertainty.

Another notable aspect of the Bill is the provision for loans to eligible individuals for purchasing affordable housing units. The proposed interest rates vary, with a notably higher rate for affordable market housing units. This discrepancy raises concerns about affordability and accessibility, prompting recommendations for a uniform, lower interest rate.

The Affordable Housing Bill 2024 represents a critical step towards actualizing the constitutional right to housing in Kenya. Its successful implementation promises to enhance the living standards of Kenyans, contributing to national stability and development. However, the concerns raised in its current form must be addressed to ensure it effectively meets the needs of all Kenyans without imposing undue financial burdens. This legislation has the potential to be a landmark in Kenya’s socio-economic landscape, provided it is fine-tuned to align with the realities and aspirations of its populace.

About Steve Biko Wafula

Steve Biko is the CEO OF Soko Directory and the founder of Hidalgo Group of Companies. Steve is currently developing his career in law, finance, entrepreneurship and digital consultancy; and has been implementing consultancy assignments for client organizations comprising of trainings besides capacity building in entrepreneurial matters. He can be reached on: +254 20 510 1124 or Email: info@sokodirectory.com

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