Govt Hints at Alternative Affordable Housing Funding Model Beyond Housing Levy

Jukwaa

🇰🇪 Breaking It Down

Housing Principal Secretary Charles Hinga on Friday, September 4, said the levy currently raises about Ksh6 billion every month, but added that the collections alone cannot sustain the programme.

Hinga said the government is now exploring long-term financing options with international development partners, including the World Bank, to bridge the funding gap.

“The levy on its own, the total collection of the levy, we are collecting about Ksh6 billion per month. The Ksh6 billion per month on its own is not sufficient to sustain 200,000 units per year,” Hinga said.

📌 What You Need to Know

He explained that the Affordable Housing Programme operates on a model in which units are constructed, completed and sold, with the proceeds then recycled into the development of additional houses.

According to the PS, the government requires an alternative financing mechanism that can provide long-term funding for the Tenant Purchase Agreement scheme while allowing the Housing Levy to continue supporting the programme.

Hinga said the government intends to use the levy as part of a broader financing structure to attract international development partners and unlock additional resources for affordable housing.

“As soon as the units are completed and titled and there is somebody who lives there, we are going to get the money back. We will now have the levy and the sales,” he added.

The proposed model would therefore allow the government to combine Housing Levy collections with proceeds from the sale of completed units and financing from development partners to sustain construction.

The government has set a target of constructing 200,000 affordable housing units every year as part of efforts to increase access to decent and affordable homes for Kenyans, but the financing requirements for achieving the target have continued to put pressure on the programme.

📰 Source: Kenyans.co.ke

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