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January 21, 2019

Ministry should explain housing distribution plan

President Uhuru Kenyatta with Deputy President William Ruto visit  a housing project in Athi River, Machakos County on April 12, 2016. /PSCU
President Uhuru Kenyatta with Deputy President William Ruto visit a housing project in Athi River, Machakos County on April 12, 2016. /PSCU

The Ministry Housing yesterday outlined how it is going to use blockchain technology to allocate and manage funds for President Uhuru Kenyatta’s affordable housing agenda.

While much information has been offered on how the government plans to raise funds to construct 500,000 units by 2022, little is known about how it plans to distribute those houses.

We can surmise from the information available that the government plans to avail the houses to contributors earning less than Sh100,000 because they can’t afford mortgages.

According to KPMG, of the 2.48 million Kenyans employed in 2016 only 77,000 earned over Sh100,000, which is the threshold for affordable housing.

Therefore, potentially 2.4 million Kenyans qualify for affordable housing against the government target of 500,000 housing units in five years.

Kenyans are expected to start contributing 1.5 per cent of their monthly basic salary, to be matched by their employers, starting in January next year as stipulated in the Finance Act 2018.

Section 31 of the Act that created the National Housing Development Fund states that those who do not qualify for affordable housing will be refunded their contribution upon request at the end of 15 years. However, the interest to be earned is not mentioned.

Similarly, will the houses be distributed via lottery, as CS James Macharia once intimated? The confusion surrounding the housing agenda requires clear explanation from government.

The Ministry of Transport and Housing yesterday outlined how it is going to use blockchain technology to allocate and manage funds for President Uhuru Kenyatta’s affordable housing agenda.  

While much information has been offered on how the government plans to raise funds to construct 500,000 units by 2020, little is out on how it plans to distribute those houses.

We can surmise from the information available that the government plans to avail the houses to contributors earning less than Sh100,000 because they can’t afford current mortgages plans.

According to KPMG, of the 2.48 million Kenyans in employment in 2016 only 77,000 earned over Sh100,000 which is the threshold for affordable housing.

Therefore, potentially 2.4million Kenyans qualify for affordable housing against the government target of 500,000 housing units in five years.

Kenyans are expected to start contributing 1.5 per cent of monthly basic salary to be matched by their employers starting January next year as stipulated in Finance Act 2018.  But while Section 31 of the Finance Act that created National Housing Development Fund (NHDF) states that those who do not qualify for affordable housing will be refunded their contribution upon request at the end of 15 years, the interest to be earned is not mentioned.

Similarly, will the houses be distributed via lottery as CS James Macharia once intimated? The confusion surrounding the housing agenda requires clear explanation from government. 

Quote of the Day: “The job of a citizen is to keep his mouth open.”

Günter Wilhelm Grass

The German writer and playwright (The Tin Drum) and Nobel Prize laureate (1999) was born on October 16, 1927.

 

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