The government has awarded some 56 multimillion-shilling contracts for the construction of 26,214 affordable housing units across the country as part of efforts to address a deficit of low-cost homes.
A report submitted to Parliament shows that by March 2023, 14 out of the 47 counties had set aside 266 hectares of land for the construction of about 52,847 affordable houses.
The report shows that 56 bidders were awarded contracts to build low-cost homes on 158 hectares of land in 10 of the counties. The State aims to roll out the programme in all 290 constituencies.
“108 hectares did not attract developers due to the non-existence of horizontal infrastructure and conflict with the neighbourhood developments,” read the report.
The government has maintained that the aggressive focus on the construction of houses will have a multiplier effect on the economy by creating jobs and stimulating the growth of key sectors, especially manufacturing and real estate.
The Kenya Kwanza government introduced a mandatory housing levy of 1.5 percent through the Finance Act, of 2023 to finance the programme.
The levy is charged on the gross monthly pay of workers, which is matched by a similar contribution by employers.
The Treasury collected Sh11.83 billion from the levy in the first quarter of the financial year 2023/24. It collected Sh7.9 billion from the levy in August and Sh3.93 billion in September.
The Treasury projects deductions from the levy to hit Sh63.2 billion this financial year ending June 2024, rising to Sh70 billion in the 2024/25 fiscal year and Sh78 billion in 2025/26.
Revenue from the levy will also be used to purchase private land from willing sellers for the programme that targets to build 250,000 new units annually.
“The projects are expected to stimulate local economic growth through the integration of jua kali artisans and other local communities in the implementation. These groups will benefit from skills transfer as well as supply of building materials and products, such as windows and doors,” read the report.
The State Department of Housing and Urban Development, which is spearheading the programme, has categorised low-cost homes into social, affordable, and market units.
The houses will be sold for between Sh840,000 and Sh5.76 million.
