What to do to ensure affordable housing fund gets critical buy-in
Beginning January, the approximately 2.8 million salaried Kenyans, including those in the formal employment will make a mandatory contribution to fund President Uhuru Kenyatta’s affordable housing scheme.
The Employment Act 2007 was amended to have employees and employers each pay 1.5 per cent to the National Housing Fund. There has been growing opposition to the policy shift, albeit silent resistance to an idea that many economists and other experts believe is impracticable.
To employers, the wage bill will jump up by a staggering 1.5 per cent even before making any salary reviews; to employees already facing tough economic times, it will be akin to taking a forced pay cut. Of course, this wasn’t going to go down well with any of them. For the employers who already find the cost of doing business prohibitive, this will limit their growth.
While the government’s housing plan is noble, especially considering that millions in major towns live in slums, more thought should have gone into drafting the legislation considering that it is one of Mr Kenyatta’s legacy projects.
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It is quite absurd that government would want to get involved in housing and not say, public transport especially in cities, which is more urgent and pressing and which offers multiplier effect on all facets of the economy. Moreover, hasn’t government failed in other sectors?
Experience has shown that taxpayers get a raw deal from government officials who are too eager to dip their hands into the cookie jar. The stories of NSSF, NHC, NYS, NHIF, Kenya Power and Kenya Pipeline are all too familiar.
And shouldn’t the government be making it easy for more Kenyans to own their own houses? Come to think of it; that actually offers better prospects to many would-be homeowners. To be sure, some employers are already financing home loans for their staff in some form meaning the housing tax is a duplication of costs.
It is understandable that the Jubilee Party would want to spread around the prosperity pie. The problem is that they are going about it the wrong way. The National Housing Corporation was set up in 1953 for the same purpose. We should be considering why it failed despite the huge investment and the demand for houses.
Secondly, there has been no clear plan on how the houses will reach the most deserving of citizens. The slum upgrading programme offers sobering lessons on how not to do this. Arguing that the homes will be allocated through a rotary is ridiculous in that luck does not follow need.
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Lastly, locking out the biggest contributors to the scheme from affordable homes are being insensitive.
Many of the supposed well-remunerated workers also have other needs including supporting their extended families, hence using the income alone as a determinant is looking at half the picture.
Why would the hard-pressed workers have to dig deeper into their pockets to fund the new project despite paying for water, security, health and education and transport? Indeed it is insensitive and absurd to expect so much yet do so little.
Considering the importance of housing - everyone wants to have a roof over their heads - it is important that government rethinks the whole project and goes flat out to address the sticky points, if only to get the much needed buy-in especially from employers.
President Uhuru KenyattaEmployment Act 2007Kenya PipelineHousing