State extends an olive branch to unions in housing row

A building under construction.
The Government has extended an olive branch to trade unions and employers in a bid to break the deadlock that has stalled the implementation of President Uhuru Uhuru Kenyatta’s housing fund levy.

This comes less than a week after the industrial court suspended implementation of the 1.5 levy set to start on January 1, 2019, arguing the Government did not conduct enough stakeholder engagement.

The Ministry of Transport, Infrastructure, Public Works, Housing and Urban Development has now opted to form an advisory board for the fund that will draw membership from trade unions and private sector lobby groups.

“The State Department for Housing and Urban Development invites nominations from the following organisations for the position of member of the advisory board of the Housing Fund,” read in part a notice from the ministry.

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The Central Organisation of Trade Unions (Cotu), Kenya Union of Teachers, the Federation of Kenya Employers (FKE) and the Union of Kenya Civil Servants have each been invited to propose three nominees to the board.

“Members of the advisory board shall be appointed by the Cabinet Secretary Ministry of Transport, Infrastructure, Public Works, Housing and Urban Development,” read the notice in part.

The private sector has also been invited through the Kenya Private Sector Association, and the Kenya Bankers Association to submit their nominees.

The housing fund was proposed by President Kenyatta as a means of achieving his economic agenda of delivering one million affordable housingunits.

The proposal was included in the Finance Act, 2018 with the Government receiving early backing from development partners such as the World Bank and the United Nations.

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In September, at the sidelines of the 73rd UN General Assembly in New York, Kenya and the UN Office for Project Services signed a deal to construct 100,000 affordable housing units at a cost of Sh1.3 billion.

However, several organisations, particularly workers’ unions, and private sector lobby groups have argued that the implementation of the fund was being rushed - ignoring significant administrative concerns.

“The affordable housing plan is a noble idea but is an extra cost employer will now have to factor in and yet there is no clear plan on how the fund will be managed,” explained Tobias Alando, an executive of the Kenya Association of Manufacturing in a past interview.

Earlier this month, Cotu filed a case at the industrial court seeking to suspend the 1.5 per cent housingfund introduced under the Finance Bill, 2019.

“As Cotu, we won’t allow even a single cent to be deducted from workers’ salaries in January in the name of a new housing project,” said Atwoli.

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Cotu boss said the Government was yet to clarify several issues around the fund including the criteria for determining workers who qualify for housing units and the fate of contributors who miss out on houses.

“What will be the mechanisms of accountability and transparency for those who contribute, who are the fund managers and what happens when you contribute and fail to get a house?”

The organisations have been given until January 4th, 2019 to submit their nominees.

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