• Hinga on Thursday likened the three per cent monthly contribution to a sacco plan which most Kenyans are already into.
• He said the Housing Fund will operate on a rent-to-own mortgage model at an interest rate of five per cent payable over a period of 30 years.
Image: FILE
President William Ruto's ambitious Housing Fund has continued to attract criticism with questions touching on viability and how the initiative will benefit ordinary Kenyans.
Housing and Urban Development Principal Secretary Charles Hinga's likening of the scheme to a national chama or Sacco has further elicited questions from a cross-section of leaders.
Hinga on Thursday likened the three per cent monthly contribution to a sacco plan which most Kenyans are already into.
"So even when there is an uproar about the Housing Fund, it's not like we are bankrupting Kenyans," the PS said in an interview with Spice FM.
Hinga said the Housing Fund will operate on a rent-to-own mortgage model at an interest rate of five per cent payable over a period of 30 years.
"A Kenyan in Maralal will enter into a house and continue paying the same rent under the scheme for 30 years, then the house becomes his," the PS said.
But former Mukurweini MP Kabando wa Kabando dismissed this explanation in a tweet on Thursday.
He said it being a welcome idea for the Housing Fund to operate like a sacco or chama, it should therefore follow that people voluntarily make contributions.
"The good PS Bwana Charles Hinga likens the 3+3 = 6% housing tax to a national chama/sacco. Well, good. But don't we join Saccos voluntarily?" Kabando posed.
While proposing the formation of the Housing Fund on April 23, President William said all salaried Kenyans will have to make a compulsory monthly contribution equivalent to three per cent of their gross pay.
"If you earn Sh10,000, then three per cent is Sh300 every month," Ruto said.
The President said the employer will make an equal contribution towards the fund under the affordable housing project which he later clarified is not a form of tax as claimed by the Opposition.
"If it is national, why target only those in formal employment? Kabando asked.
His sentiments were echoed by Kileleshwa MCA Robert Alai who termed the project "a huge scam".
"Let parastatals and counties build affordable housing they can charge rent on cheaply to control the cost of housing. But don't run this affordable housing scam. It will be one huge mess soon," Alai said in a tweet.
Two days after the President spoke about the Housing Fund, teachers joined other civil servants in opposing the scheme.
Led by Kuppet Deputy Secretary General Moses Nthurima, they said they were expecting salary increments not more deductions.
"Under the new PSSS Act, teachers can access up to 40 per cent of their pension contributions to build houses. They do not need a new tax for housing development," he said.
Azimio leader Raila Odinga has also faulted the President on the model of the fund saying some Kenyans already own houses and do not need to be forced to make contributions towards the Housing Fund.