President William Ruto’s administration has made affordable housing a central pillar of its economic and social agenda.
The ambitious plan aims to construct one million housing units by 2027, translating to 200,000 houses annually or approximately 600 completed units daily.
While the vision is commendable, the execution remains a significant challenge. The government, unlike private developers, lacks the experience and efficiency necessary for such large-scale real estate development.
This raises the question: is the government’s approach the right one? At the heart of this initiative is the housing levy, where Kenyans are taxed 1.5% of their gross salary to help subsidize these projects.
Additionally, much of the land used for these developments is public land, removing one of the most significant cost components in housing development. Yet, despite these advantages, the final prices of these government-built units do not differ substantially from those of private sector developments, where land acquisition and construction are fully self-financed.
Two and a half years into President Ruto’s administration, the delivery of these housing units has been underwhelming. As of December 2024, the government had reported only 1,200 completed units—a far cry below the 600 per day target.
This slow progress brings into question the feasibility of the project and whether the government is best placed to spearhead such an initiative.
Government is a facilitator, not a developer. Governments worldwide are most effective when they facilitate economic growth rather than directly engaging in business. The same principle applies to housing.
Rather than positioning itself as the primary developer, the Kenyan government should focus on creating an enabling environment for private developers to build more affordable housing.
This would yield far better results than the current model, which is struggling to meet its own ambitious targets. One of the biggest cost drivers in real estate development is the price of land.
The government can play a crucial role in stabilizing and lowering land costs through mechanisms such as a Land Price Index, which would provide a transparent and standardized valuation system and kill speculation that drives land prices skyward.
Additionally, zoning regulations and urban planning policies can be optimized to encourage well planned high-density developments in key areas, making land use more efficient.
Another major cost component is construction materials. The government should work towards reducing the cost of essential building materials through tax incentives, subsidies, and import duty reductions where necessary. Countries like Singapore and South Korea have successfully managed to provide affordable housing by reducing construction costs through strategic partnerships with private developers and material manufacturers.
Kenya can learn from these models. Engaging Private Developers for Sustainable Housing. The government’s affordable housing project can benefit greatly from collaboration with mainstream developers, and professional associations such as Architectural Association of Kenya (AAK).
These professionals bring technical expertise, efficiency, and cost-effectiveness that the government currently lacks. By offering incentives such as tax breaks, subsidized infrastructure, and expedited approvals, the government can encourage private developers to take on more affordable housing projects.
A model worth considering is the Public-Private Partnership (PPP) approach, where the government provides land and incentives while private developers undertake the actual construction.
Such a framework would not only fast-track the completion of housing units but also ensure quality standards are met while leveraging the private sector’s ability to deliver at scale.
Rethinking Affordable Housing Delivery While the intention behind the government’s affordable housing plan is noble, its execution remains deeply flawed. Rather than acting as a developer, the government should focus on removing barriers that make housing unaffordable in the first place.
Stabilising land prices, reducing construction costs, and incentivising private sector participation will do more to address Kenya’s housing crisis than direct involvement in building projects.
Kenya’s housing deficit will not be solved by government-led construction alone. It requires a multi-faceted approach that harnesses the efficiency and innovation of private developers while ensuring affordability through strategic government interventions.
By shifting from being a developer to a facilitator, the government can achieve far more in delivering truly affordable housing for Kenyans.
The writer is the CEO MySpace Properties
