Affordable housing programmes have become the single-largest recipient of development funds, dethroning roads for the first time to the top of Kenya’s projects spending.
Official development expenditure data from the National Treasury shows the State Department for Housing and Urban Development absorbed Sh30.01 billion in three months to September 2025, the highest among all state departments.
The disbursement of cash to the housing projects nearly tripled the Sh10.09 billion released for roads underlining the Ruto administration’s big bet on Affordable Housing Programme (AHP) as its flagship economic and social transformation pillar.
The expenditure under the housing department dwarfs last year’s Sh8.18 billion for the same quarter and marks the most substantial first-quarter execution since President William Ruto assumed office.
“Three years ago, when we said we would deliver affordable housing, the cynics dismissed it as a fantasy. When they realised we were serious, they called it impossible. And when we broke ground across the country, they suggested that the projects would stall,” Dr Ruto told Parliament during his third State of the Nation Address on November 20.
“Today, those doubts have given way to a very different question from Kenyans everywhere: How do I get one of those units?” The Treasury data shows that Housing not only accounted for the largest share of total development expenditure at 23.4 percent, but also surpassed the Sh29.18 billion quarterly development spending target.
By contrast, Roads—a historical heavyweight in development spending—absorbed Sh10.09 billion of Sh37.56 billion goal for the first quarter, and marked a sharp drop from Sh25.02 billion in a similar period last year and Sh25.60 billion the year before.
Increased release of funds to housing projects has come in wake of sharper scrutiny over massive shortfall in overall delivery of affordable units, with authorities citing phased nature of approvals and development timelines for building of the houses as the reason for the lag.
In the year ended June 2025, for example, some 1,795 finished units were put on the market, with 93 percent of those houses being snapped against a 50 percent target set by the Affordable Housing Board.
The sluggish pace of actual construction last financial year contrasted with the performance of the housing levy, the 1.5 percent mandatory deduction on monthly pay that employers are required to match.
The Kenya Revenue Authority collected Sh73.2 billion in the review year, the National Treasury reported, exceeding the government’s target of Sh63.2 billion by Sh10 billion.
A report tabled in Parliament in May by the State Department for Housing and Urban Development showed that more than Sh30 billion in proceeds from the housing levy was unspent at the time and had been placed in Treasury bills.
This means nearly half of the collections, which are ring-fenced to avoid diversion to other projects, had been temporarily parked in short-term government securities ranging from three to 12 months.
Dr Ruto said Thursday last week that 230,000 affordable houses were at different stages of development.
He added that 178,000 student beds are being packaged for universities, Technical and Vocational Education and Training (TVET) institutions and Kenya Medical Training College (KMTC) campuses—74,000 of which are under construction.
“This programme is far more than housing. It is a national empowerment engine creating jobs, formalising the informal sector, revitalising MSMEs, restoring our environment and building resilient communities,” he said. “It advances equity, dignity, and sustainable development.”
