- President William Ruto said his administration intends to put up 250,000 houses yearly.
- He said even after bringing down the unit prices of apartments through the AHP, the majority of Kenyans still find it difficult to buy houses.
Image: COURTESY
Housing Principal Secretary Charles Hinga has once again explained the government's plan for the housing project and why it's urgent.
Speaking during the 9th World Bank Conference in Washington, Hinga said less than 80,000 of the formally employed Kenyans earn salaries ranging above Sh100,000 which can sustain to service a mortgage.
He said it is unfortunate that six decades after Kenya gained independence, 70 per cent of the country's ballooning urban population cannot build, purchase or get a mortgage to own homes.
"The Housing Fund will mobilize capital, offer certainty of sales in the form of an off-take undertaking to developers and provide accessible finance for home buyers through a National Tenant Purchase Scheme," Hinga on Friday.
The PS explained how Kenya has used the rent-to-own concept otherwise known as the Tenant Purchase Scheme and the accompanying policies to reduce the unit price of apartments from the normal market rate of Sh11 million to an average of only Sh3 million.
Some of the statistics he cited include the fact that out of an adult population of more than 24 million people, there are only 27,000 people with mortgage accounts.
He said it is only in the rural areas that the majority of Kenyans occupy their houses with 70 per cent home ownership.
Explaining why the government was compelled to implement the Affordable Housing programme, the PS said it was overwhelming that the majority of Kenyans had failed to achieve the dream to build or purchase houses for themselves.
“In the capital city, one of Africa's most developed and largest cities, 90 per cent of the population lacks the means to realize the dream to live in their own houses,” the PS said.
President William Ruto said his administration intends to put up 250,000 houses yearly.
He said even after bringing down the unit prices of apartments through the AHP, the majority of Kenyans still find it difficult to buy houses.
Image: PCS
Hinga also explained how the Housing Fund works and its role in anchoring the National Tenant Purchase Scheme.
"The Housing Fund will mobilize Capital, offer certainty of sales in the form of an off-take undertaking to developers and provide accessible finance for home buyers through a National Tenant Purchase Scheme," he said.
In the new Finance Bill, the government has proposed a three per cent tax on all salaried employees that will be channelled to the housing fund.
To bring down the cost of housing, the government is partnering with private sector developers. The state also provides land for the projects free of charge.
So far, 42 counties have signed agreements to avail land for the Affordable Housing Programme.
On how the Housing Fund will work, the PS said employees will contribute 3 per cent of their salaries while employers will contribute an equivalent amount to the account of their workers.
The cumulative monthly contributions are not supposed to exceed Sh5, 000.
While contributions are mandatory for the formally employed, the government encourages those who are in the informal sector to make voluntary contributions.
The contributions are meant to accumulate and serve as a 10 per cent deposit before a contributor can become eligible to get a house through the scheme.
Those who fail to qualify will be refunded their money while contributors who do not want to purchase a house can withdraw their savings after seven years.
He said the programme has immense potential to promote economic recovery because it is linked to the Jua Kali and MSMEs.
PS Hinga said the government is rolling out housing projects all across the country to bridge the annual housing deficit of 250,000.