Why Gov't Housing fund is a bad idea - Kwame Owino

Institute for Economic Affairs CEO Kwame Owino insists that the National Housing Levy proposed in the Finance Bill, 2023 is a “bad idea” and that Kenyans should not be hoodwinked to accept it.

Speaking during a debate on the Finance Bill hosted by Citizen TV on Wednesday, Owino said the spirited push by the government to have the housing levy program in place is aimed at fulfilling commitments made to contractors and other beneficiaries of the controversial Housing program.

“Kenyans…anybody who has the chance to listen to me, I am not an elected member of parliament, am not seeking election and I don’t work for the government. Let me tell you, this is a bad idea,” said Kwame.

“We are defining this problem wrong because the PSs (Principal Secretaries) have made commitments to people who are supposed to construct houses and give them free land to do that,” he said.

According to Owino, President William Ruto's administration is not fully honest with Kenyans in its proposal and seeks to benefit a few in society.

“The PS (Hinga) said that they already have people whom they call investors but are not putting their own money, but the investors are being told to construct with the certainty that this fund will cover the risk by paying them,” said Owino.

He added: “Government is being taxed at 11% or 12% today; so what the government is doing is taxes are being used to redistribute, which is not a bad thing. But let us not redistribute money among Kenyans through lies.”

Owino suggests that the State would have instead allowed investors to put up the houses first and an assurance be accorded to the contractor who successfully completes the project. 

 “If the fund was a good idea, the same private investors we are talking about would not need the government, they would say, let us construct the houses and then anyone would off take, meaning, certainty is being provided to whoever does the construction we have an off take plan,” he explained.

“Why is this money important, so that a fund is created, which they are calling a fund that helps to cover that risk so that whoever constructs is assured the government would offtake…It is actually not a funding scheme; it is a financial structure that is being called a fund.”

Owino scoffed at the Fund, saying it was an added burden to Kenyans especially those in the public sector.

Referring to the already existing housing mortgage which he reiterated is being funded by taxpayers, Owino said that most Kenyans were grappling with low income and not necessarily in need of better houses.

 “MPs have come here and have told us that this will be low-cost housing for people who have houses. There is already a high-cost housing subsidy in Kenya; it is given to members of parliament and the people who work in the public sector they can take mortgages of up to Ksh.9 million and it is funded by people through our taxes,” he explained.

He said if the government was indeed keen on fixing the housing problem in the country it should focus on raising income levels instead of building houses for citizens and forcing them to purchase them.

“If the government wants to build houses for people who live in slums or are poorer that is not a bad thing, Article 43 of the Constitution just like phrases in the bible are misused a lot in Kenya today; Constitution says that people have a right to housing and other rights, it does not say that government has to force us to pay for it,” he noted.

“There are 14 million houses in Kenya of different qualities…the problem is not a housing problem. In Nairobi for instance, we have unoccupied houses, the problem is that people don’t have enough income to pay for it. What it means is that the employer is being taxed, and they will pay the maximum amount of Ksh. 2500, but we are told it is not a tax," said Owino.

Institute for Economic Affairs CEO also disputes the assertion that the Affordable housing program will create many jobs as the government is promising.

“According to the Kenya National Bureau of Statistics data, there are 14 million households in Kenya, if 14 million households have not created those bursting jobs that you have, why do these guys think that creating 250,000 houses in one year will create those jobs? You are lying to us,” said Owino in response to a comment from Housing PS Charles Hinga.