No reprieve for Kenyans as housing Bill is passed in Senate

Workers at an affordable housing site

Workers at an affordable housing site in Elburgon, Nakuru County on December 1, 2023. The Affordable Housing Bill 2023 was yesterday passed by Kenya Kwanza senators. 

Photo credit: File | Nation Media Group

What you need to know:

  • Senators allied to the President voted overwhelmingly to defeat amendments proposed by Azimio.
  • 27 senators voted to support the Bill, 10 Azimio senators rejected the Bill while 10 others were nowhere to be seen.

President William Ruto was yesterday handed a major win in his push to entrench the controversial Housing Levy after Kenya Kwanza senators defeated amendments proposed by the minority side.

In marathon House business that went on to just five minutes shy of 7pm, senators allied to the President voted overwhelmingly to defeat amendments proposed by the minority side that would have brought relief to many Kenyans.

Reading the final results of the voting, Deputy Speaker Kathuri Murungi said 27 senators voted to support the Affordable Housing Bill, 2023, approving the same with amendments proposed by the government.

In their opposition, 10 Azimio la Umoja One Kenya senators rejected the Bill as considered by the committee of the whole. However, 10 others who would have also voted were nowhere to be seen.

“The results for the division are as follows; abstentions zero, ayes 27 and nays 10. The ayes have it. Having concluded business in order number 10 and the time being five minutes to seven, the Senate therefore stands adjourned to tomorrow Wednesday at 9am,” said Mr Murungi.

Moving amendments proposed by the minority side, Nyamira Senator Okong’o Omogeni wanted the deductions capped at Sh2,500. He also wanted the levy to be paid at the rate of 1.5 per cent of the net salary of an employee.

The Bill proposes that the levy be pegged on the gross salary of an employee or any gross income received or accrued that is not a salary.

The senator also wanted the National Treasury Cabinet secretary to exempt from payment of the levy any person who enters into a subsisting mortgage that is not contemplated under the Act, any person residing in a rural area and is in possession of a certificate of title registered in their name, and any person engaged in agricultural farming or business activities whose annual turnover is less than Sh288,000 per year.

Other proposed exemptions were for individuals aged 50 years and above and are engaged in informal business activities, as well as any person with less than five years remaining to statutory retirement at the time of the enactment of the Act.

Mr Omogeni further sought to have all monies collected through the levy be allocated to county governments as a conditional grant, and for the devolved units to be tasked with the management of the fund, not the proposed Affordable Housing Fund Board.

“Development functions are a preserve of county governments and if boards were to undertake this function then it would be in conflict with provisions of the constitution,” Mr Omogeni said.

“The Bill creates a board to be in charge of dealing with investment programmes on all housing projects in counties. This will be in conflict with Schedule Six of the constitution that reserves housing and development as a function of counties,” he added.

Attempts by members of the minority side to have their views incorporated as part of the amendments fell on deaf ears as each of their proposed amendments was defeated during voting.

Subdued, the minority side remonstrated with the deputy speaker in heated exchanges that almost degenerated into a physical fight as both sides surrounded the Speaker’s area ahead of the final voting.

However, there was some relief in the government amendments pushed by the Roads, Transportation and Housing committee headed by Kiambu Senator Karungo Thang’wa.

The committee amended the Bill to have a person eligible for allocation of only a single housing unit, provided they meet prescribed criteria in the regulations.

“This amendment seeks to clarify that a person refers to a natural person and the said person may only access one unit. This will ensure that the objective of the Bill to ensure that Kenyans have access to affordable housing is achieved,” said Mr Thang’wa.

Withdraw their savings

The senator also said that should a person who has made a voluntary saving miss out on the unit, then they may withdraw their savings by issuing a 90-day written notice to the agency for refund with any accrued interest.

The individual can also apply to the board for approval of issuance of an affordable mortgage to develop a rural affordable housing unit. The application will need to be accompanied by an agreement that the applicant agrees to have their savings and the land upon which the unit is to be built used as collateral.

“Upon approval by the Board, the applicant shall cause a charge on the title to be executed in favour of the Board,” he said.

Moving to restrict ownership of the housing units, Wajir Senator Mohammed Abass pushed to include a clause that the beneficiary of the housing unit shall not sell or agree to sell his or her unit or any interest in it to any other person unless with the prior written consent of the Board.

To rein in default on payment of the levy, the committee proposed that where an amount of the levy remains unpaid after the date when it becomes due and payable, a penalty equal to 3 per cent of the unpaid amount shall be imposed for each month or part of it that the amount remains unpaid, and shall be recovered as a civil debt from the person liable to remit it.