Establish structures before imposing housing levy, architects tell Treasury

The incoming Architectural Association of Kenya President Florence Nyole delivers a speech during the general meeting and gala dinner on March 29, 2023. [Edward Kiplimo, Standard]

The Architectural Association of Kenya (AAK) has said the government needs to put in place structures to steer the development of affordable houses before imposing the housing levy on Kenyans.

In its proposal, AAK has called for the setting up of the Kenya Housing Board, which will formulate policy as well as look into modalities of financing developments that could include introduction of the housing levy.

The National Treasury in the Finance Bill 2023 has proposed the imposition of a three per cent housing levy on an employee's basic salary capped at Sh2,500. This will then be matched by their employers, also at three per cent and also capped at Sh2,500.

"We strongly recommend the establishment of the Kenya Housing Board led by industry professionals. The proposed housing board, in collaboration with other stakeholders and county governments and urban management boards, will be responsible for establishing standards, regulations and policies that will guide the operationalisation of the affordable housing programme," said Florence Nyole, the AAK president during a press conference in Nairobi yesterday.

"The Kenya Housing Board will play a crucial role in guiding and managing the housing programme effectively. It will ensure that any funds earmarked for the provision of housing are effectively and efficiently used to address the housing needs while ensuring excellence and affordability of housing."

She added that other industries have taken such an approach and managed to address issues that the country faces.

"We are also cognisant of other sectors that have successfully managed to address the challenges faced in delivering quality service to the public. An example is the Kenya Roads Board that has managed to streamline the maintenance of roads in the country," she said.

KRB, which is funded using the Road Maintenance Levy that motorists pay at Sh18 per litre of diesel and super petrol, channels the funds to road agencies for the maintenance of roads across the country.

The four agencies are Kenya National Highways Authority (Kenha), Kenya Urbans Roads Authority (Kura), the Kenya Rural Roads Authority (Kerra) and the Kenya Wildlife Service (KWS).

"The Kenya Housing Board will play a pivotal role in ensuring regulation of clients, championing local content and standardising materials, thereby promoting local manufacturing and stimulating the local and national economy," said Nyole.

To achieve this, AAK has proposed the formation of a steering committee that will oversee the setting up of the Kenya Housing Board.

Former nominated Senator Sylvia Kasanga said the imposition of the levy was akin to the country trying to walk before it can crawl.

"It is the Kenya Housing Board that will come up with modalities of sourcing for funds to build the affordable houses and also how these funds will be utilised," said Kasanga, who is also an architect.

"For there to be a levy, there has to be a body that manages the levy. What we are suggesting is that the Kenya Housing Board is the overarching body that oversees housing requirements."

She added that counties would also need to develop their own housing boards considering the unique requirements for every county.

"Housing is a county government function and therefore we are also proposing that counties should also come up with County Housing Boards. Each county will have its unique needs and challenges and hence their own creation will be critical even as they feed from the National Housing Board," she said.

Kenya has a requirement of 200,000 housing units annually but produces about 50,000 units. This has resulted in a housing deficit of over two million units, with an estimated 61 per cent of urban households living in slums.

In a past report, the World Bank noted that this deficit continues to rise due to fundamental constraints on both the demand and supply side, which is complicated by high rate of urbanisation.