Explained: The ABCs of the Housing Fund

Caption The government's plan to introduce a mandatory housing levy, proposed under the Finance Bill, 2023 continues to face expert support and criticism. They argue that while the proposal may have good intentions, it is being presented at a time when many Kenyans are facing economic hardships. The Bill proposes a three percent deduction from the employee's monthly income, with an additional three percent matched by the employer as contributions. Prof. Alfred Omenya, an expert in Urban Planning and Housing, expressed concerns about the feasibility of the government's housing program. Omenya calls for a more thorough examination of the government's objectives and the specific homeless population they intend to assist. He questions the timing of imposing an additional levy and seeks clarification on the specific target population that the government aims to house. "The entire housing function is devolved, and it is stated in the Constitution. So why is the government involved in building houses or even facilitating their construction in the first place?" he posed. At a press conference held at the State House recently, Housing Principal Secretary Charles Hinga indicated that the government's intention in proposing the housing levy is to address Kenya's broken housing market. According to Omenya, the housing need is not among those in the civil service and private sector that the government is presumably targeting but in unemployed citizens who are either homeless or living in deplorable housing conditions. "There is a distinction between houses and housing. Housing is all those infrastructure and services that make the living environment possible, and you don't solve the housing problem with houses. What you need to do is to put infrastructure - roads, water, social amenities, and so on - and people will build houses for themselves," he avers. "Nobody solves a housing problem by building houses," Prof Omenya observes. Omenya highlights the shortage of both labor and construction materials in the country, which makes it impractical to implement the proposed program. He downplayed the government's claim that labour will naturally emerge in response to the demand, comparing it to the false idea that having a large number of sick people would magically create more doctors. He further emphasizes the specialized nature of the construction sector, explaining that even seemingly simple tasks like painting require a certain level of skill and expertise, making it impossible to rely on unskilled individuals. Ruth Kinyanjui, an economist, observes that the Housing Fund should not be a priority for the government. She, however, says it is crucial for Kenyans to understand the reasons behind the introduction of the Housing Fund by the government. Kinyanjui says she strongly believes in the importance of transparency, advocating that the government provide clear explanations to Kenyans regarding the purpose and benefits of the housing fund. At the same time, the economist questions the timing of the levy's introduction, suggesting that it may not be the most suitable time to prioritise such projects. She called on the government to focus on more urgent issues that require attention and resources. "The housing levy as it also has its downside. Most Kenyans right now are facing more pressing issues than housing. As you can see, most Kenyans are not complaining about other taxes as much as they are complaining about the housing levy," she said. Kinyanjui emphasises the importance of transparency, clear communication, and a thorough understanding of how the housing fund will positively impact the lives of Kenyans. "Kenyans do not want anything hidden; let's tell each other the truth. Let the government tell the truth, and let that culminate in the bottom-up strategy," she added. She encourages the government to address these concerns and provide comprehensive explanations to gain public trust and support. Kenyans on social media have also voiced their opinion on the introduction of the levy. Twitter user Wanjiku M @wanjiku_lm says: "No, and never will. Though I see it will pass whether we like it or not because Kenya Kwanza MPs are determined to please the President rather than their electorates." Antony Weswa @antonyweswa22 wrote: "Yes. Mandatory housing fund should be considered as tax. One of the characteristics of tax is that you must PAY. Deducting the housing fund directly from employees is taken as a form of PAYE. We are being conned, Kenyans. Wake up!" "For me, I fully support. Let's build the house program together for the benefit of future generations," says Enock Kibet~Biko @Kibett_yegon. Wanjiku Maina said, "To balance the economy as a president, you have also to balance oligarchy. The presidency in Kenya isn't for the faint-hearted. If you aren't in the league of the oligarchs as a president, you'll have to collaborate with them to run the country." "It should not be mandatory. There are people who can build their own houses. He (Ruto) should build houses for those in slums, construct hospitals, and establish schools," said Kevin Onchwary.

Explained: The ABCs of the Housing Fund

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