Sh6 billion houses construction to start amid questions on implementation

Houses under the Kibra Slum Upgrading Housing project built with cheap technology. [File, Standard]

The government will put up 170,000 houses by the end of this financial year using the controversial National Housing Fund as deductions begin in October amid questions on its implementations.

The fund that was part of the Finance Bill signed into law by President Uhuru Kenyatta last month seeks to generate billions for the government to provide housesfor the poor and middle class populace.

Under the Housing Development Fund tax, employees will pay 1.5 per cent of their basic salary as the employer contributes another 1.5 per cent. A five per cent penalty has been slapped on employers who fail to submit their contribution.

Transport, Infrastructure, Housing and Urban Development Cabinet Secretary James Macharia told Sunday Standard the government will raise Sh6 billion to put up the houses.

Graft fears

President Kenyatta is seeking to construct 500,000 affordable houses by 2022 as part of his legacy Big Four Agenda.

However, questions abound on how the government will implement the project and at the same time ensure it is free of corruption.

National Assembly Transport, Infrastructure and Housing Committee Chair David Pkosing said numerous questions have been raised by MPs over the fund.

“We have written to the ministry seeking answers. We want to have a report that will be a reference point for the Big Four Agenda on housing. Once the ministry responds, we will table a comprehensive document,” said Pkosing.

The questions MPs want addressed include the cost of building the houses, where Kenyans will get money to buy them and the counties in which the projects will be located.

“Members are also asking about the criteria for allocating the houses. If it is by ballot, who will be in charge of the process? Who will qualify for mortgage? Will some people be disadvantaged due to their age? Are their any other models for financing? Are people allowed to pay cash?” he said. But according to Macharia, once completed, one-bedroom units will sell for between Sh600,000 and Sh1 million.

Two-bedroom units will go for between Sh1.05 million and Sh1.5 million while three bedroomed units will cost Sh2 million under the social housing programme.

The cost of the units under the affordable housingprogramme will range from Sh800,000 for a bedsitter to Sh3 million for a three-bedroom unit, said Macharia.

The government has identified land in Mavoko, Portland Athi River, Makongeni, Shauri Moyo, Muguga and Starehe for the project. “We are targeting land owned by government and those of its agencies like National Social Security Fund (NSSF) and others. The essence is to cut down on cost because land is one of the expensive factors in construction of houses,” said Macharia.

The ministry is working on a memorandum of understanding (MOU) with all the 47 counties to have them provide land for investors to put up affordable houses.

“Our work will be to provide the investors with the infrastructure including roads, water and sewerage lines and power to the sites. This will cut cost of construction and make the houses ameniable,” Macharia said.

Critics have raised issues over the HousingDevelopment Fund tax, claiming it is a ploy by a broke government to raise funds. They are asking why the National Housing Corporation (NHC) have not solved Kenya’s housing shortage in its years of existing.

But Macharia said he is keen to prove the cynics wrong.

“We are now talking about 500,000 units but in actual sense we want to push ourselves to a one million, a number that is within our reach,” said Macharia.

On distribution, the government will put up a lottery that will be linked to a portal and only those in the portal will access the houses, he said.

“In the portal, we will profile people to ensure that only the needy will get the houses.Once we have those eligible in the list, we will then subject them to a lottery,” he said.

Macharia said the exercise will be free of favouristism witnessed in past state housing projects as the houseswill target those earning Sh90,000  and below.

The government wants plans that cater for open spaces, sports facilities, gathering places, playgrounds and parks.

Amenities such as schools, community centres, retail centres, clinics will be incorporated in the projects.

The government is targeting 68,000 units in the first phase of the projects in the 2018/2019 financial year. They include 1,640 units in Park Road, 20,000 in Makongeni, 5,300 in Shauri Moyo, 3,500 in Starehe, and 5,500 in Mavoko.

The second phase will have constructions in NSSF land in Mavoko, Portland Athi River, Mombasa and Eldoret.