EDITORIAL: Housing plan great but rethink staff deductions

What you need to know:

If the government can enforce savings in the formal sector, it would spur the economy and reduce chances of old-age poverty.

It is a safe assumption that most working Kenyans consider acquiring permanent homes a key lifetime achievement. Yet official statistics show that 70 per cent of people living in urban areas stay in rented houses.

Needless to say, a good chunk of the houses is barely fit for habitation.

While the government can be credited with making an effort to addressing the housing deficit during the colonial times and the first two decades post-Independence, it has generally done a poor job thereafter.

There, however, seems to be a sudden resurgence of interest in this critical segment within the officialdom after President Uhuru Kenyatta picked housing as one of the pillars of his legacy.

Grand plans and incentives are being unveiled and even being sold abroad, including in the President’s ongoing tour in London. That should have happened ages ago, especially given the expected economic trickle-down effect of the construction industry.

Among the innovations in the pipeline is a proposal by State Department of Housing and Urban Development for employees to pay five per cent of their salaries to help finance buying of own homes.

READ: Employers to pay part of workers’ home plans

Employers will match the funding in the scheme meant to activate the Housing Act. According to the ministry, this should come in the next budget for the fiscal year 2018/19.

We welcome the spirit in which the officials came up with the concept. Nothing matters more — perhaps beside education of children — to most employees than owning a home.

Besides, if the government can enforce savings in the formal sector, it would spur the economy and reduce chances of old-age poverty.

However, weighty issues that need to be addressed remain. Before coming up with percentages, let’s consult widely and see whether they are practicable.

Can businesses and their staff absorb more deductions? Are there more viable options like employee pension funds?

This is a good plan, but consider deeper consultations.