The government faces a backlash in the implementation of the affordable housing agenda after it emerged that only 33% of the salaried employees are willing to make contributions to the affordable housing fund. The government through the State Department of Housing and Urban Development, has been trying to win the hearts of Kenyans into the plan but most citizens seem reluctant.
Many see the tax as an additional burden to the already huge tax load they have to deal with, relative to considerably low incomes across a large segment of the workforce. However, Housing PS Charles Hinga remains determined to the cause.
The government has wanted employees to contribute 1.5 per cent of their monthly earnings, subject to a maximum of KSh. 2500 per month to the fund, an amount which the PS says would amount to just KSh. 450,000 for each employee over the next 15 years assuming the maximum contribution is made.
Speaking during an event organized by cement maker, Bamburi, Mr. Hinga said that Kenyans are at a disadvantage because of historical mistakes which have to be corrected. In a country where the cost of 1 acre piece of land can be as high as KSh. 500 million, the PS said one of the biggest barrier to achieving the universal affordable housing dream remains the high cost of land.
“We can’t talk about a billion shillings and acre and still talk about affordable housing in the same sentence,” the PS remarked. He also mentioned that apart from initiatives to increase investor access to land, the government was working on a one-stop shop for developers to sort out all approvals within a matter of days.
The government is trying to tackle the challenge by providing cheap or free land to serious investors in order to kick off the projects. County governments have also been keen to avail land to investors. Recently, Meru county government promised a delegation of Chinese investors access to free land and a speedy issuance of licenses to build hotels and factories in the county.