275,000 sign for voluntary housing levy, Sh100m collected

More than 275,000 Kenyans have registered for the voluntary housing levy through the Boma Yangu portal that seeks to provide affordable housing.

Housing and Urban Development Principal Secretary Charles Hinga said on Saturday so far the government has received Sh 100 million from Kenyans who want to own a home.

Speaking in Malindi, he said 18,000 Kenyans have already started saving and contributing towards the voluntary housing levy.

"The housing programme is a private sector-driven initiative, the government is identifying land through national and county government, then the ministry services the land through some of the money," he said.

Hinga said some of the funds are disbursed to the county in municipalities and the Kenya Urban support money to support that housing development, then the private sector is left to invest.

"We have set guidelines, for example, the ceiling of what affordable housing how much they are going to sell so that they don't end up taking advantage of the public," he said.

He said they have made sure tax benefits flow to the end-user, adding the development framework guidelines are in place.

Hinga said affordable housing is not synonymous with cheap and low-quality housing but houses that in 50 years to 100 years from now will still be habitable.

On Jamhuri Day President Uhuru Kenyatta ordered the State Department and Treasury to go back to Parliament and revise the mandatory levy to a voluntary levy.

"Now we have made it open and we have over 275,000 Kenyans who have registered on the Boma Yangu Portal, Hinga said.

"Of those, 18,000 have already started saving and contributing voluntarily towards their homes," he said.

The PS said the government is very encouraged, adding that affordable housing was a complex issue "as one cannot wake up one morning and put shovels in the ground."

He said there must be the right policy framework, right physical space and right incentives in place since the private sector, not the government, will build the houses.

"This year's Finance Act perhaps it should have been renamed the Housing Finance Act because we got the VAT exemption, we got the railway development levy, IDF and tax rates on that," Hinga said.

The PS said there is also no more stamp duties for the first-time homeowners and the homeownership saving plan has been doubled from Sh4,000 to Sh8,000.

Further, Hinga said there is affordable housing relief which gives Kenyans some money back to start saving towards their home.

He said all those efforts were signs that affordable housing is coming.

Currently, in newspapers, he said houses were selling for Sh2 million to Sh3 million, a testament that the programme is working. 

"We are targeting everybody but where the need is most is the bottom of the pyramid. This is where we have got people earning less than Sh20,000 who qualify for a social house," Hinga said.

He said there is also space for low-cost housing targeting those earning between Sh20,000 to Sh100,000, mortgage gap housing of Sh100,000 to Sh50,000 and also space for people earning more than Sh150,000.

The PS said he believed the market itself was going to change to include affordable housing, adding the government will work on a bill that goes to Parliament. 

(Edited by V. Graham)