The government plans to develope at least 200,000 homes annually in its quest to address the housing shortage in the country, where nearly 61 per cent of urban households live in slums.
This is under the Affordable Housing Programme, one of the priority areas (Priority no. 3 – Housing and Settlements) in the Kenya Kwanza Manifesto.
The policy directives under Priority No. 3 are in line with the national development blueprint–Kenya Vision 2030, delivering 250,000 homes annually noting that the market already produces about 50,000 homes.
As of 2022, Kenya needed to build 250,000 units annually for at least four years to plug its cumulative housing deficit of two million units, according to the World Bank.
“This deficit continues to rise due to fundamental constraints on both the demand and supply side and is exacerbated by an urbanisation rate of 4.4 per cent , equivalent to 0.5 million new city dwellers every year,” World Bank notes in one of its reports dubbed ‘Kenya Economic Update: Housing—Unavailable and Unaffordable’.
The government, hence is keen to bridge the deficit of 200,000 homes, the State Department for Housing and Urban Development has indicated, with the private sector also being involved in President William Ruto’s ambitious plans.
World Bank in its report noted that Kenya can make housing more affordable to, and in turn, create new channels to boost overall economic growth both at the national and county levels.
“The Government is progressively closing the housing gap through the delivery of 200,000 housing units per year. This will be achieved through a mixture of approaches involving active participation of both levels of government as well as private sector players,” Housing and Urban Development PS Charles Hinga said, “These projects are at various stages of development.”
President Ruto launched 51,666 units in five months, from September to January, a status report seen by the Star shows, creating at least 168,431 jobs in various regions of the country.
The project has had a socio-economic impact in the country despite the government facing opposition mainly on the housing levy, which targeted salaried individuals and companies, with contributions of 1.5 per cent being matched by employers.
The Court of Appeal declined to suspend orders barring the state from deducting housing levy from Kenyans, in a move that sent the government back to the drawing board on raising funds to support the initiative.
Federation of Kenya Employers (FKE) directed its members to stop any further deductions of the levy, as the government moves to appeal the decision.
“In light of the court order, we advise our members not to deduct the levy unless the Court of Appeal rules otherwise after the hearing of the substantive appeal or in the alternative,” a notice issued by the FKE executive director and CEO Jacqueline Mugo reads in part.
Construction workers in different projects in Nairobi and Kiambu counties staged a peaceful demonstration against the court ruling, as they fear for loss of jobs and livelihood.
"This project has changed the lives of many youths in Kibera. People are even hoping it will create more jobs..the youth are ditching crime for meaningful employment," an employee at the Kibera site told the Star.
The affordable housing programme is billed as one that will solve the country's housing crisis while providing jobs to about a million people a year.
In the 2023-24 financial year, the government allocated Sh35.2 billion towards the housing programme.
The government has also mobilised resources to support the construction of affordable housing units and social housing units.
There have been public participation forums in different parts of the country, where a huge section of the public feels the government should either go slow on the housing levy deductions or bring on board all Kenyans, rather than targeting the salaried.
President Ruto has however affirmed his administration's commitment to the affordable housing programme, as he calls for a national dialogue.
“The affordable housing programme is one of the areas identified to create jobs and spur the country’s economic growth…the country must have a conversation on how to promote the programme to run smoothly,” the President said during a recent launch of one of the projects.
The Affordable Housing Programme is forecast to produce 3.26 jobs for every affordable housing unit over the coming five years, according to an internal analysis done by the State Department for Housing and Urban Development.
Furthermore, with 840,622 units in the pipeline, the State Department projects that the programme will lead to the creation of 2,738,902 jobs in five years.
To enhance the programme, the government has identified pieces of land floated to developers for interest in joint development.
So far, the State Department has held three bid rounds advertising for developers which resulted in several projects which are currently under negotiation.
The first bid involved 59 pieces of land across the country. Another 50 parcels of land in nine counties: Bungoma, Elgeyo Marakwet, Embu, Kirinyaga, Kisii, Migori, Nyamira, Tharaka Nithi, and Uasin Gishu were advertised.
In the third bid round for the affordable housing programme, there were 72 parcels of land for institutional housing across the Kenya Defense Forces (KDF), the National Police Service, and several universities, offered up in open tender for housing development. The third bid round closed in November 2023.