Win for Salaried Kenyans in Affordable Housing Plan

Facing growing public criticism and concerns over mission drift, the Kenyan government is adjusting its approach to the contentious Housing Levy, prioritising salaried employees for affordable housing units. 

The decision follows a high-level meeting between President William Ruto and Francis Atwoli, Secretary-General of the Central Organisation of Trade Unions (COTU), and marks a significant policy shift amid widespread discontent. Under the revised framework, salaried employees contributing to the Housing Levy will now receive preferential treatment in the allocation of state-funded housing units. Furthermore, the mandatory deposit required to purchase these units is reduced from 10 percent to 5 percent, which aims to lower a substantial barrier to homeownership for many wage earners.

The move represents a course correction from recent government efforts to broaden the application of the Housing Levy beyond its initial scope, specifically affordable housing projects. These expansion plans, which include channelling funds into market construction, schools, and other public facilities, triggered widespread criticism. These concerns often cite a lack of transparency and a perceived deviation from the levy's primary objective. 

COTU, having previously voiced frustration at being excluded from crucial decisions regarding the fund's utilisation, seems to have re-established its influence through renewed engagement with the executive branch. According to government sources, all market construction projects funded by the Housing Levy are now halted, except for 400 projects currently underway. These ongoing projects will proceed to completion, but no new initiatives of a similar nature will be financed through the housing fund.

To strengthen financial oversight, the government will establish a new oversight committee under the Affordable Housing Board. This committee, comprising representatives from both national and county governments, will monitor the levy's flow and application. They will primarily ensure that any funds previously diverted to non-housing projects are recovered and reassigned to the housing mandate. This structural addition aims to improve governance standards in line with citizen expectations and constitutional obligations.

The re-centring of the levy on its core mission, affordable housing, is interpreted as a political and practical response to escalating dissatisfaction, particularly among civil servants and unionised workers. While the President continues to advocate using the fund as a broader economic stimulus tool, the compromise reached with COTU indicates a re-evaluation of these ambitions given mounting scrutiny. From a policy perspective, directly linking eligibility for housing units to contribution history and employment status introduces a degree of equity for those regularly financing the scheme through payroll deductions. 

However, it raises questions about how the program will accommodate informal sector workers and low-income earners who do not fall within the salaried bracket. While social housing remains a distinct category, the boundaries between access, eligibility, and fairness will require careful management to prevent future backlash.

The government also pledges to develop necessary infrastructure, such as schools and markets, within the boundaries of the housing projects themselves. 

In the unusual cases where such integration proves unfeasible, adjacent public facilities can receive support, but only if demonstrably connected to the housing scheme's beneficiaries. This constraint places explicit limits on the fund's usage and potentially restricts discretionary spending. In rare instances where integration is not feasible, adjacent facilities can receive support but only if linked to the housing scheme.