Housing fund not properly structured

I participated in a media debate last week on the Housing Development Fund. With me on the panel was the Housing principal secretary who did his best to convince us and the public that the fund was the best thing that happened to the country this year. He more or less painted a very rosy picture of the fund.

In his position, all legalities for the establishment and operationalisation of the fund had been taken care of, the requisite public consultations undertaken and the stage set for the roll out from January. I got out of the debate more convinced that as currently structured, the fund is not about solving Kenya’s priority problems.

First things first. The process by which the 1.5 per cent levy came to be introduced raises a lot of legal questions. The first version of the Finance Bill from the Treasury had suggested a contribution of 0.5 per cent of one’s gross income.

This was rejected by parliamentarians. One hoped that this would mark the end of the issue. However, it was brought back by the President through his memorandum on the amended Finance Bill, which dealt with the issue of value added tax (VAT).

Secondly is the fundamental question of the legal anchorage. While the Housing Act speaks about a fund, the detailed framework for the operations of the Housing Development Fund are not included in the law. These will have to be dealt with through legislation. It therefore beats logic for the fund to have been captured in the Finance Act before the requisite legal instruments for its implementation are in place.

Thirdly is who will benefit from the fund. The information oscillates between every Kenyan to the poor and marginalised segments of society. From the little information, the main target group seems to be the poor. This aspect is laudable. The right to adequate and affordable housing is a constitutional right. Initiatives that are geared towards ensuring that all sectors of the Kenyan society are able to enjoy this constitutional promise is positive and deserves the support of all Kenyans. However, there is more o be done than just appealing to the emotions of Kenyans on the target group to be benefited.

The first question that must be answered is where these houses are going to be built. If county headquarters are going to be the site, then majority of the rural population will not benefit from such houses. If you go to Homa Bay County and build the houses on the shores of Lake Victoria you will attract buildings in serene locations. But the majority of the residents of Homa Bay do not frequent the county headquarters. They are more concerned with services in their local centres and homes

This leads to the second question. For the poor and rural Kenyan, the housing challenge they have is not one than can be solved by building low-cost housing for them. What they lack is food, basic amenities of water and health.

They also lack money to put up decent houses similar to the affordable and low-cost housing that the government proposes to build. Their problem will not be addressed by putting up houses in urban areas but by enabling them to build their own houses in their rural land.

It is important that government rethinks the Housing Development Fund and avoid its lofty promises. It will not deliver on those lofty ideals.

The options are either to abandon the fund altogether until the economy improves or rethink its design and operations and open up the debate so that Kenyans can contribute to the model they would be comfortable with. This will enhance public buy-in and increase the chances of the fund being both successful and sustainable.

As currently marketed the only people who may be happy with the idea are the government operatives whose duty it is to implement it and those who are seeing an opportunity for making quick money through tenders.

This cannot be the basis for implementation of the Housing Fund. It must be able to get the buy-in and support of Kenyans on whose behalf its design is pegged and whose Constitutional right it sees to actualise.

Failure to do so, the fund will join the list of initiatives that bring pain and not joy to Kenyans. That is a path which cannot be supported by Kenyans who are already bearing the pains of the economic challenges facing the country.