The government’s ambitious programme of delivering affordable housing is expected to generate at least 1.8 million jobs.
Housing PS Charles Hinga said one housing unit will create at least nine jobs.
This means that the 200,000 housing units will create 1.8 million jobs.
“Masonry, plumbing, and carpentry are some of the jobs that will be created,” Hinga said
The PS said the project is on course.
The government of Kenya aims to deliver housing on ownership terms for citizens. The ambition is to move from 30,000 mortgages to 1,000,000 mortgages with favourable terms with monthly payments as low as Sh5,000.
The state also aims to bridge the annual gap of 250,000 homes by activating projects across the nation.
It seeks to focus on the pipeline to launch ready projects on both national and county levels; promote economic recovery by linking MSMEs and the jua kali sector to these projects and making provisions in legislation for cheap and stable financing to underwrite projects en mass.
Under the National Development Plan, Vision 2030, the government targets to provide 200,000 housing units annually for all income levels.
With only 50,000 new housing units supplied every year, Kenya faces a shortage of about two million housing units.
Most of the housing units are built by the private sector, with 80 per cent targeting the high-end market and only two per cent for the middle-income population.
The state wants to change this trend.
The programme is expected to change the economic fortunes of the country as it is expected to raise the GDP from seven per cent to 14 per cent.
It is envisaged that every US1 invested in the sector will add between US1.5 and US3 to the economy.
Hinga says counties have taken strides in the programme as 39 have committed to putting up 2,000 units.
Already, 1,370 units have been completed in Park Road and are occupied, with some 1,600 units 80 per cent complete in the Pangani project.
Hinga said 220 units in Embu are complete, while 5,400 units are yet to be launched in Mavoko.
About 180 units are in Kiambu and another 220 units are complete in Machakos.
In Nakuru, 605 units are 70 per cent complete.
They are one, two and three units.
Already, the ministry has announced that houses under the civil servants' housing scheme developed under the affordable housing programme are on sale in Embu, Machakos and Nakuru.
In Embu, 80 units that are two bedrooms and ready for occupation are going for Sh 3.5 million.
Another 140 three-bedroom units in Embu are ready for occupation and are going for Sh4.8 million.
In Machakos, 100 two-bedroom units ready for occupation are going for Sh3.3 million.
Another 100 three-bedroom units ready for occupation are going for Sh4.3 million.
In Nakuru, nine one-bedroom units are still under construction and selling for Sh 1.5 million.
Another 36 two-bedroom units under construction in Nakuru are going for Sh 3.1 million, while 76 three-bedroom units coming up are going for Sh4.2 million.
The ministry said interested civil servants in the national government are invited to apply for the houses commensurate with their grades and within their capacity to repay.
The construction of the houses was financed by the civil servants housing scheme fund. Successful purchasers will be required to pay 10 per cent of the sale price as a minimum deposit while the balance will be paid under tenant purchase terms.
In Mombasa’s Buxton area, 2,500 units are 60 per cent complete while another 1,050 units are set for construction in Ruiru.
On January 27, President William Ruto presided over the ground-breaking of the Shauri Moyo affordable housing project in Nairobi.
This was Ruto's third ground-breaking of the AHP in Nairobi county.
So far, Ruto has commissioned AHPs in Mukuru Met Site and Kibera in Soweto B.
Ruto also launched the Mavoko AHP in Machakos county.
The Sh10 billion Shauri Moyo project will provide more than 3,000 housing units.
In November last year, Ruto announced that 3,000 acres of Nairobi public land will be used for the affordable housing programme.
He said his administration would prioritise the project to provide residents with affordable homes.
“We are going to work with the Nairobi county government and all the other agencies so with these 3,000 acres, we can at least do 400,000 to 500,000 housing units that will support the people of Nairobi, as we do it elsewhere,” the President said
The National Treasury allocated the affordable housing programme a budget of Sh27.2 billion in the current financial year.
At the start of his second term, former President Uhuru Kenyatta announced the Big 4 Agenda, which included the construction of 500,000 affordable housing units.
Hinga said 3,100 units are also coming up in Starehe, and another 25,000 units in Makongeni.
Affordable housing projects have also been adopted by the private sector.
Hinga said 740 units are complete in Ongata Rongai, while 4,100 units are ongoing in Mavoko by the private sector.
Some 4,500 social housing units that cost Sh1 million and below are lined up for Kibera while another 15,000 units are lined up for Mukuru.
Hinga said supplies of building materials used in the exercise such as cement, doors and windows among others are set to reap big.
Further, the critical pool of workers is set to be trained by Tivets.
During the construction, incentives will be offered.
Some of the tax incentives include the reduction of import duties for items that will be used in the construction and VAT exemption for affordable housing for locally manufactured products and professional fees.
Further, there is eligibility for corporate tax at 15 per cent for developers with 100 units or more based on project assessment, not project start date.
The state will also explore the use of favourable tax structures such as Special Economic Zones for sizeable projects.
Funding of bulk infrastructure will also come with incentives.
This includes enhancing service delivery through the identification and prioritisation of special planning areas where human settlements are likely to grow fastest and by ensuring that bulk infrastructure is available for projects.
Amounts spent on infrastructure will be treated as capital expenditure to allow for accelerated capital allowance (set off at 100 per cent against the tax payable).
The project will also come with a raft of benefits for homeowners.
For instance, there will be no stamp duty for first-time home buyers under the programme.
There will also be tax relief on interest paid on a mortgage up to a maximum of Sh300,000 per annum.
Homeowners will also access as much as 40 per cent of pension funds towards the purchase of a home.
Developers building more than 100 units will use 15 per cent to calculate the corporate tax rate.
Also, there will be no interest restriction for companies undertaking projects under affordable housing projects.
The Housing Fund will mobilise capital from the state, development finance institutions, and voluntary contributions from the homeowners and local banks to fulfil its mandate.
The projects will have three major types.
The one-bedroom will be 30 square meters; two bedrooms will be 40 square meters while the three bedrooms will be 60 square meters.
Through the Housing Fund, the state may provide a national tenant purchase scheme with monthly costs.
A one-bedroom will go for Sh5,000, two bedrooms for Sh10,000 and three bedrooms for Sh15,000.
The interest rate from Housing Fund be fixed at five per cent and tenures will be 30 years.
Generally, the selling price (all in cost) will be Sh50,000 per square metre.
A 10 per cent deposit is required to secure a unit and the average service charge costs are Sh3,000 per month.
(Edited by V. Graham)
