President Ruto seeks counties’ help in housing plan

President William Ruto operates an excavator machine as he launched the Soweto East Zone B social housing programme in Kibera.

President William Ruto operates an excavator machine as he launched the Soweto East Zone B social housing programme in Kibera on October 25, 2022. The project will comprise 4000 houses.

Photo credit: File | Nation Media Group

President William Ruto’s administration is fast-tracking the construction of housing units by counties to deliver affordable housing for Kenyans.

The national government is partnering with county governments to create anchor projects that will catalyse housing delivery while awaiting the operationalisation of the Housing Fund.

“There are 69 projects advertised for development on government land across the country, tender closes on January 6, yielding over 100,000 units on design, finance build and sale basis,” said Housing Principal Secretary Charles Hinga.

In November, the government launched an 11-acre affordable housing project in Homa Bay town that will yield 110 units in the first phase over a one-year period. Other projects that are ongoing or coming soon include Park Road Ngara (1,370 units), Pangani (1,600 units), Jabavu, (1,800 units), Shauri Moyo (3,000 units) and Starehe (2,500 units).

Others are Makongeni (25,000 units), Bondeni Nakuru (605 units), Rongai (740), Buxton Mombasa (2,600), Mavoko (5,000), Mukuru (5,000) and Kibera Soweto B (4,500).

“Some 27 county governments had already signed MoUs to build at least 2,000 units and begin the process of identifying appropriate pieces of land. If all counties commit, they will yield at least 94,000 units which can be funded by the Housing Fund,” a situational brief on the projects states.

Mobilise capital

The Housing Fund will mobilise capital from the government, development finance institutions, voluntary contributions from potential homeowners and local banks to fulfil its mandate, the brief adds.

The national government will also support county governments with technical assistance through funding consultants or seconding staff from the ministry.

The government plans to increase the number of mortgages from 30,000 to one million, with monthly payments as low as Sh5,000.

Former President Uhuru Kenyatta had a target of 500,000 units in five years. However, under 9,000 units had been delivered by the time he was leaving office according to Mr Hinga. 

The new administration is hoping to perform better by introducing incentives. 

“The incentives include VAT waiver on all construction materials like cement and steel, 4 per cent stamp duty waiver for all first-time homeowners, 50 per cent waiver on corporate tax as well as provision of infrastructure like roads, water, sewer and power,” said Mr Hinga.

Currently, there are 20 counties that are ready to construct 16,094 units if granted funding and other approvals. Cumulatively, there were 30 projects within these counties that were previously advertised and are either under contract or going to be re-advertised in order to attract the right kind of investors.

An additional 39,102 units are expected to be realised from 57 housing projects in 34 counties by the National Housing Corporation (NHC). The firm has secured Sh3.8 billion in funding from Treasury to identify projects that can be launched within the first 120 days. These will include slum upgrading programmes. 

For slum upgrading, the fund will continue to provide financing at the 3 per cent fixed interest rates and 25-year tenures. For rural housing, the fund will continue to provide financing at the proposed 5 per cent fixed interest rates and longer 30-year tenures.

President Ruto will also be looking to utilise the Boma Yangu Savings plan. To date, there are 330,487 individuals registered in the plan, with a total of Sh1.6 billion. 

Strategic partners will be facilitated to meet the needs of bulk purchasers such as Saccos and other schemes. 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.