Ministry roots for incentives targeting housing developers

Low-cost housing investors might soon benefit from incentives that include reimbursement of cost incurred in laying infrastructure.

The Industry, Trade and Cooperative ministry has initiated negotiations with the National Treasury to ensure organisations and housing cooperative societies investing in low-cost housing get tax incentives.

The ministry’s Principal Secretary Ali Noor Ismail reckons that the proposed incentives are part of a larger programme outlined in the Vision 2030, which seeks to correct the housing gap that has left millions not owning their own homes.

He said the role of cooperatives is to tame the huge supply in the local market by empowering potential home owners.

“In the Vision 2030, cooperatives are set to provide 25 per cent of the total housing in the country in the next 14 years,” explained the PS, adding that organisations playing the role of providing low-cost housing to lower middle level need to be offered incentives to meet the rising demand.

Ismail says his ministry together with other players in the housing sector have been engaging the National Treasury with a view to putting in place a comprehensive framework that will ensure investors in affordable homes get refund for costs incurred in laying infrastructure, including roads, water and electricity.

The push for incentives comes just days before Treasury Cabinet Secretary Henry Rotich presents his 2016-17 Budget estimates to Parliament.

Addressing cooperators during the National Cooperative Housing Union (NACHU) 28th annual general meeting, Ismail observed that production of low cost housing in the country is still low, a situation he attributed to poor investments by the national government, county governments and the private sector.

This, Ismail explained, is despite rising demand for decent housing in both rural and urban areas across the country. In the urban and rural centres, the annual demand for housing stands at 200,000 and 300,000 housing units respectively.

According to experts, about 30 per cent of housing costs goes to providing infrastructure like water, roads, and electricity.