The affordable housing projects currently underway will mostly benefit government employees, dashing the hopes of many of owning homes under the programme - at least in the short term.
A memo by the Ministry of Housing to civil servants invited them to start buying some of the houses that are set for completion in the course of this year.
Housing Principal Secretary Charles Hinga, in the letter to ministries and other government offices, listed over 1,000 units that are currently being developed in Nairobi, Kiambu, Embu and Kisumu counties that are available to civil servants.
He said the units will be completed by end of this year and gave the government employees up to April 28 to express interest in acquiring the houses.
The houses in Ngara will be shared between civil servants and other Kenyans while those in the other counties will be exclusively available to civil servants. This is because they have been put up by the Civil Servants Housing Scheme Fund, according to the ministry.
“The Ministry of Transport, Infrastructure, Housing, Urban Development, and Public Works and the Civil Servants Housing Scheme Fund (CSHSF) offers for sale to serving civil servants residential housing units in Park Road, Nairobi City, Embu Town, Machakos Town, Kiambu Town, and Kisumu City,” said Mr Hinga in the January 29 letter to all government agencies.
“Some of these units will be sold to civil servants while the rest have been reserved for other citizens.”
At Park Road in Nairobi’s Ngara Area, where 1,370 units are being put up, civil servants have been assigned 548 units, more than a third of the total.
Already, 228 units were completed and handed over to the ministry last month, and are awaiting allocation.
In the memo to civil servants, Hinga also pointed out that residents of the units in Ngara will have to buy parking space.
“A parking silo has been provided in the project and a unit parking space will be purchased separately at Sh390,000,” the PS said.
“The construction of the housing projects in Embu, Machakos, Kiambu and Kisumu counties has been financed by the CSHSF… (they) are at an advanced stage of completion and will be completed soon this year.
The Kisumu City housing project is complete and about 50 per cent of the units have been sold.”
Interested serving civil servants were invited to apply for the houses commensurate with their grades and within their capacity to repay.
“Successful purchasers will be required to pay 10 per cent of the sale price as minimum deposit while the balance will be paid under the Tenant Purchase terms,” said the memo.
The cost of the houses that the government has put up for sale ranges from Sh1.5 million for a one-bedroom house and Sh2 million for a two-bedroom unit to Sh3.5 million and Sh5.4 million for three-bedroom houses.
The government targets 500,000 housing units by 2022, with the bulk of the units expected to be built by the private sector.
The state will play an enabling role, including putting up utility infrastructures such as sewerage, electricity and water.
It is expected that ordinary Kenyans will eventually get a shot at buying the affordable houses once developers get their projects underway and start delivering the units in the larger scheme of the Big Four Agenda.
Buyers will need to express their interest on the Boma Yangu portal, which the ministry notes has already received over 280,000 applications.
They will also need to have saved 12.5 per cent of the selling price before getting a mortgage to offset the balance at nine per cent interest for a period of up to 25 years.
The Housing ministry has in the past said the target for the half a million houses would be surpassed considering the over Sh1 trillion that has been committed by investors.
Among the investors is the United Nations Office for Project Services, which has committed Sh500 billion to develop 100,000 units in Athi River.
Investors will also get tax breaks as well as other incentives such as fast-tracked approvals for projects.
Initial plans to force employers to deduct the equivalent of 1.5 per cent of workers’ pay for the Housing Fund were dashed by the courts, which ruled that the proposal was illegal.
The government now wants to make the savings optional and has proposed to entice Kenyans to save by offering tax relief.