MPs have blocked a plan by the Treasury to allow owners of State-subsidised affordable homes to sell their units to anyone, at any time and without controls on the price they charge.
The National Assembly Finance and Planning Committee notes in its report on the Finance Bill, 2024 that removing restrictions on the sale of affordable houses by their owners would open the scheme to abuse.
The majority of Kenyans who gave their views during public hearings on the proposed law were also opposed to the Treasury proposal, the committee says.
The Treasury had proposed to eliminate a requirement that owners of the houses get approval from the Affordable Housing Board before selling their units.
“The Bill seeks to amend the Affordable Housing Act to eliminate the requirement for owners of affordable housing units to obtain prior written consent from the Affordable Housing Board before selling their units,” the committee notes in its report.
“The Committee noted that the current provision in the Affordable Housing Act limits the right to property as enshrined in the Constitution and would be subject to abuse and therefore recommended deletion of the clause.”
Should MPs adopt the committee’s proposal, they will have put the brakes on the Treasury’s plan that could have seen even people not qualified to own the houses buy them from initial owners.
In the Finance Bill, the Treasury proposed to amend section 54 of the Affordable Housing Act, of 2024, which sets restrictions for owners of affordable housing units.
“The Affordable Housing Act is amended by deleting section 54. The Bill also amends section 54 of the Affordable Housing Act, to clean up the provision following the advisory given by the Attorney-General,” the Bill stated.
Section 54 of the Affordable Housing Act, 2024, states “Except with the prior written consent of the Board, a purchaser of an affordable housing unit under this Act shall not by contract, agreement or otherwise, sell or agree to sell his or her unit or any interest therein to any other person.”
The law also sets clear guidelines on conditions those entitled to the houses must meet, and the prices to be paid.
Following the proposal by the Treasury, many Kenyans sent petitions to Parliament opposing the move, arguing that it risked creating a loophole that would be exploited by rich, non-deserving persons to own the houses.
“Repealing the section that prohibits buyers from selling affordable houses will lead to speculative purchases by the wealthy and well-connected, thereby excluding the citizens who are intended to be the primary and sole beneficiaries of the program,” said Mr Kevin Wanambisi.
Mark Wambura also told the committee that the removal of the restriction would give room to the financially stable people to abuse the intention of the programme “whose purpose was not to make a profit.”
“The amendment should set a time limit within which the affordable units can be sold, to ensure that people who do not need the houses don’t just buy the houses to sell them at a profit,” said Mr Wambura.
Other Kenyans warned that the action could make affordable housing units a money-laundering haven, should they push “the willing buyer, willing seller situation making market forces of demand and supply take shape”.
Most of the Kenyans who petitioned the committee over the issue suggested that the government set a minimum number of years when the houses cannot be resold by their initial owners, with others noting that allowing the houses to be sold in the market could drive their prices up.
“Delete clause 61 because selling the units incentivizes corrupt individuals to take up units built with taxpayer money, sell the same, pocket the difference, and jump the queue again to do it all over again,” said Elizabeth Nyangara.
