New twist as Parliamentary Budget Office warns affordable housing may not benefit the poor

The Parliamentary Budget Office is now warning that the intended beneficiaries of the government’s affordable housing programme may be locked out as over 70 per cent of those targeted are classified as middle and low-income earners.

The Parliamentary Budget Office found that high-income earners were likely to benefit more as 36 per cent of funds set aside for the project were earmarked for the construction of institutional housing programmes and projects which target individuals with a monthly income of above Ksh.149,000.

Though the programme was billed as one aimed at uplifting Kenyans living in deplorable conditions facilitating access to affordable homes and bridging the existing housing deficit of over 2 million units, it appears the plan may after all only favour the privileged.

A financial and economic analysis of the Affordable Housing Bill 2023 by the Parliamentary Budget Office found that homeownership for those with a gross income of less than Ksh.50,000 is low.

Despite the government classifying beneficiaries into three where 30 per cent of the funds will be set aside for social housing targeting those with a monthly income of below Ksh.20,000, and another 30 per cent earmarked for affordable housing projects targeting persons with a monthly income of between Ksh.20,000 and Ksh.149,000, the third 36 per cent set aside for institutional housing programme and projects targeting those earning above Ksh.149,000.

The Parliamentary office noted that while statistics have shown that despite the numbers of those formally and informally employed being huge representing 74 per cent only 60 per cent of the funds had been allocated to their categories of houses.

“Yes, this was one of the issues that came up during public participation the concern being the disparity in allocations and it will be one of the matters that will be debated on,” said Johana Ng'eno, housing committee chairman.

The research office also noted that there was a lack of clarity on how the funds will be utilized under the Kenya Slum Upgrading, Low Cost Housing and Infrastructure Fund especially since counties are part of the program proposing that a framework for utilization of the funds be developed.

During public participation, concerns were raised over whether the government may decide to utilise the proceeds from the housing levy for other functions.

“Ring-fencing of the fund, cannot be used for any other expenditure, this matter has been addressed in the finance act,” Ng’eno added.

The office was further concerned that if the housing levy remained nullified and with the government already grappling with a shortage of resources, it is likely those contractual agreements between developers and the government may run into headwinds.

Some of the issues raised by members of the public include; does the housing levy have an exit clause and has the committee managed to address issues the court flagged as unconstitutional?

The report of the joint committees of finance and housing will be tabled in Parliament next week for consideration.