Regardless of income level, every Kenyan will be obliged to contribute 1.5% of their earnings to the Affordable Housing Fund. The Affordable Housing Bill, 2023, which the National Assembly approved on Wednesday, contains 49 amendments, including this one.
A group of opposition leaders have vowed to challenge the proposal in court, even though it is seen as a significant step in correcting the mistakes that the court, which suspended the housing levy because it was discriminatory, pointed out.
The opposition claims that Parliament is being used to quickly pass laws that benefit the government while simultaneously arguing that there is no clear way to calculate the gross income of Kenyans who do not receive a salary.
"And this is the complaint by salaried people... they're saying why are you deducting money from me to build a house for someone else who has an income yet they are not paying the tax...so to tie that, we're saying if you have to benefit from that house, you must have demonstrated that you're paying the housing levy," National Assembly Finance and Planning Committee Chair and Molo MP Kimani Kuria said.
Did you read this?
"There is a lack of formula that will be used to accurately arrive at 1.5% of the gross income of non-salaried Kenyans," Nominated MP and ODM National Chairperson John Mbadi added.
The National Housing Corporation, the State Department of Housing, the County Government, and the Private Sector are among the organizations designated in the amendments as having the mandate to carry out the housing project.
"Once the entities apply for this fund, they will build the houses as per the investment programme and hand the structures back to the fund so that the off-take of the houses will be managed by the board," MP Kuria added.
The amended Bill also mandates that all money paid through the Boma Yangu platform be transferred to the Affordable Housing Fund upon its implementation, revoking the Affordable Housing Fund Regulations.
Additionally, more severe penalties have been added for embezzling funds intended for affordable housing.
"We have seen people being arraigned for serious crimes such as misappropriation of a billion shillings and they get a fine of Ksh.1 million...so that means that if all of us had the opportunity you'd rather steal and pay a small fine...so now we have made it expressly provided in the law that for whatever amount you have misappropriated, the fine is two times that amount," Kuria added.
The institutional housing project, which aims to address the housing crisis in higher education institutions, is one of the other notable amendments.
"We explicitly provided for institutional housing and the model is the money from the fund will go to these TVETs and universities to develop the housing units and once the units are done they will be handed over to the board and the money will be recovered from renting," noted Kuria.
After the Bill quickly passed the National Assembly, the government plans to resume deducting money from March salaries, and it is now anticipated that the Senate will consider it for the first time on Tuesday.
