The government has announced it will begin the allocation of 1370 affordable housing units next month. Housing PS Charles Hinga told the Star the policy and criteria for allocation will be published next week.
The first 228 completed units of the 1370-unit flagship houses were handed over by the Chinese developer to the government in January. Now another 260 units have been completed for handing over to the government, pending inspection.
The regulations require potential owners to have contributed a minimum of 12.5 percent or (Sh187,500) to qualify for the allocation.
According to a statement by PS Charles Hinga, civil servants are due for a considerable advantage over non-civil servants in the allocation which will see civil servants get 60% while non-civil servants share 40% of the remaining units.
“Once a member has been allocated a unit, they will be removed from the AHP Purchase Allocation Waiting List,” he said.
Mr. Hinga said Nairobi is constructing 1,500 units in Pangani and another 1600 units will be constructed under the Jevanjee project while Kisumu, Homa Bay and Kisii counties are also ready for groundbreaking once the Covid-19 situation is over.
The government has so far certified 20 housing developers to undertake projects in the affordable housing scheme.
Success of the project will be a key driver of homeownership in the country especially following the negative effects of COVID-19 on the economy.
Latest Central Bank of Kenya (CBK) data shows that loan defaults have hit a 13-year high in the wake of the pandemic which has affected businesses and households across the country.
The ratio of Non-Performing Loans rose from 12.5% to 13.1% standing at Ksh. 366.8 billion in April, an increase of Ksh. 11.1 billion.
CBK governor Patrick Njoroge said this was due to increased NPLs in the real estate, trade and manufacturing sectors following a further slowdown in economic activity in these sectors.
The data implies that banks will resort to more cautious lending practices and will even be more conservative towards mortgage borrowers further reducing the potential for homeownership among most Kenyans.