Nairobi News


Lands CS Zachariah Njeru lists benefits of President Ruto’s housing levy

The Housing Fund is meant to help majority of Kenyans to own homes. This is according to the Cabinet Secretary for Lands, Public Works, Housing and Urban Development, Zachariah Njeru.

While addressing the Senate Standing Committee on Roads, Transportation and Housing in Naivasha on Saturday, Mr Njeru said it is common knowledge that majority of Kenyans were shunned by the traditional home financing institutions because they lacked financial muscle.

The CS said mandatory deductions are aimed to create a long-term financing mechanisms for the housing fund. He also stressed that the deductions will not cause any loss to employees.

The deductions will be made at the rate of 3 per cent of the employees salary which will then be matched with another 3 per cent from the employer.

Majority of Kenyans who will contribute to the fund are expected to buy houses through the Affordable Housing Programme.

The CS said the fund has an opt out provision for those nearing retirement, those who are not eligible for affordable housing and their is room for those wanting to build their own homes to access cheap financing.

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“The contributions to housing fund will attract a return based on the performance of the fund on an annual basis so on exit of the fund, those who opt out woul get a return for their savings,” Njeru said, while pointing out that those who are saving for home ownership will also get a tax relief.

“To ease the burden of saving and balancing monthly household needs, we provided for an affordable housing relief that allows for tax relief of Ksh 8,000 per month as homebuyers save towards a home,” he said.

The committee, led by Senator Karungo Thangwa, sought clarification on the housing policy, the concept of the affordable housing programme, the National Housing Fund, and the long-term housing finance scheme.

Mr Njeru explained that the housing policy has been in place since the 1990s, with the goal of providing housing access to the poor, promoting slum upgrading, researching low-cost building materials, and establishing a Housing Development Fund through budgetary allocations and support from development partners.

He emphasized that the Affordable Housing Programme (AHP) is a key priority under the Kenya Kwanza manifesto, specifically focused on housing and settlements. The AHP aims to produce affordable and safe housing for Kenyan citizens at a cost lower than 30 per cent of their incomes.

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Expounding further on the program, Njeru said AHP has tried to address market risk by aggregating demand through Boma Yangu Housing Portal where members of the public register their interest of owning a home under AHP.

“I am happy to report that to date the portal has registered 300,000 members who have voluntarily saved over Shs 2 billion,” he said.

So far, the AHP land bank has 524 sites across the 47 counties, covering over 700 acres.

The Government has also introduced AHP at a local level with the 200 affordable housing units per constituency initiative which will be funded by the National Assembly and County Governments to stimulate local economic growth.

The CS told the committee that, for home buyers in the lower income segments, the Housing Fund will provide a cheaper and accessible finance through a National Tenant Purchase Scheme (TPS) or tent to own.

“The housing fund will seek to offer participants in the scheme financing with tenures between 20 and 30 years, targeting interest rates between 3 percent and 7 percent,” he added.

Currently 9935 units of Affordable Housing are ongoing at Pangani, Nakuru, Buxton Point in Mombasa. 31,000 units for Affordable Housing are project contracted and ready for launch with 30,000 for Makongeni and 1000 for Thika.

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