The Affordable Housing Programme is facing a Ksh118.3 billion funding shortfall, with 176 projects stalled due to delayed payments to contractors, according to a report by the Parliamentary Budget Office (PBO).

🇰🇪 Breaking It Down

The stalled projects are part of a Ksh1.76 trillion affordable housing pipeline that has spent Ksh198 billion since the programme began in 2023, with the funding gap threatening to delay the completion of developments across the country.

According to the report, the stalled projects represented about 15 per cent of the projects under construction as of June, with contractors awaiting payments before work could resume.

“The stalled projects include 16 affordable housing projects, 22 social housing and slum upgrading projects, 91 institutional and student housing projects and 47 social and physical infrastructure projects,” the report stated.

📌 What You Need to Know

The PBO said the programme faces a Ksh118.3 billion funding gap, which represents more than half of its financing requirements for the current financial year.

The shortfall comes despite the government collecting Ksh205.7 billion through the housing levy since its introduction in 2023, raising questions over the pace at which funds are being converted into completed projects, according to Bloomberg .

The Budget Office warned that prolonged delays could increase construction costs and recommended that the government prioritise projects that are close to completion.

The recommendation is aimed at enabling the government to complete and sell the units sooner, generating revenue that can then be reinvested into other developments.

The funding challenges come as the government targets the construction of 200,000 affordable housing units every year to increase access to lower-cost homes.

Housing Principal Secretary Charles Hinga previously said the levy alone could not generate enough money to sustain the annual construction target.

📰 Source: Kenyans.co.ke