What to Expect from The Affordable Housing Agenda

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Housing is a basic need for human beings, and it is a fundamental right that everyone should have access to affordable and decent housing. Unfortunately, the Kenyan housing market has been faced with challenges such as high cost of construction materials, land, and financing. With an estimated housing deficit of 2 million units, there is a critical need for more affordable housing options for the Kenyan population. Consequently, the Kenyan government under the previous regime launched the Affordable Housing Programme as part of the Big Four Agenda, seeking to accelerate economic growth and development in the country. Under the current regime, the Affordable Housing Programme aims to deliver 250,000 affordable housing units every year.

The government’s plan involves a public-private partnership (PPP) approach, which means that the private sector will play a significant role in the construction and financing of the affordable housing units. To achieve the affordable housing agenda, the Kenyan government has partnered with private developers to build affordable homes across the country. This is through various incentives such as; availing public land to developers for the construction of affordable housing units, lower corporate tax rate to 15.0% for developers of over 100 housing units, and exemption of value added tax (VAT) on imports and purchases for purposes of housing development under the affordable housing agenda.

One of the main hurdles to home ownership in Kenya is the high cost of financing required to acquire homes by buyers. To address this, the government created the Kenya Mortgage Refinance Company (KMRC). The KMRC is a public-private partnership that aims to provide long-term funding to primary mortgage lenders such as banks and SACCOs. This will enable the lenders to offer affordable mortgages to Kenyans at capped interest rates which are lower than the prevailing market rates. In addition to mortgages, the government is also exploring other financing options, such as pension-backed mortgages and rent-to-own schemes. These options will make it easier for low-income earners to access financing and own homes.

Another key feature of the affordable housing agenda is the provision of infrastructure to support the development of affordable housing. The government has committed to investing in infrastructure such as roads, water, and electricity to support the development of affordable housing. This will make it easier for developers to construct affordable housing units in areas that were previously not accessible. This will not only benefit the residents of the affordable housing units but also the surrounding communities by leading to an increase in property values in these areas, providing an additional benefit to property owners.

Moving forward, we can expect to see more government involvement in the real estate industry, particularly in the affordable housing sector. The affordable housing agenda is expected to attract a lot of players in the real estate industry. This increased competition is likely to result in lower prices and better quality homes for Kenyans. The implementation of the affordable housing agenda is also expected to create employment opportunities in the construction industry. To achieve its targets, the success of the affordable housing agenda will depend on the government’s ability to mobilize resources, attract private sector investment, and implement effective policies and regulations to support the construction of affordable housing units, thereby availing decent and affordable housing to more Kenyans.