Hinga: Finance Bill proposals on affordable housing will make selling of units hard

Housing and Urban Development Principal Secretary Charles Hinga has told the Senate that it would be difficult to sell an affordable housing unit to another buyer if the proposed Affordable Housing Regulations are adopted by Parliament.

Hinga, who appeared before the Senate Delegated Legislation Committee chaired by Tharaka Nithi Senator Mwenda Gataya, said the regulations which are still undergoing public scrutiny specify that a buyer of an affordable housing unit who intends to sell or agrees to sell the unit or any interest therein to any other person shall seek consent of the Board in accordance with Section 54 of the Act.

He said that they will not allow buyers to sell the units because there are some individuals who could use proxies to buy several units with a view of selling them at market value, which is higher than the affordable housing unit rates.

Distortion

“We must come up with regulations that will guide the transfer of the units from one person to another, if we allow purchasers to sell the units, then we will be distorting the market and the affordable housing scheme which will in the long run defeat it’s key purpose,” said Hinga.

The Principal Secretary gave an example of a three-bedroom housing unit on Park Road in Nairobi under the affordable housing programme which costs Sh3.5 million but is worth Sh7.6 million at market value noting that if they leave it open, some individuals may abuse the programme.

Hinga told the committee that they have received more than 702 proposals on the regulations saying that they will go through them to see what can be included in the final draft and asked Kenyans to provide more input to ensure that they come up with the best regulations.

The draft regulations further state that a person shall be eligible to apply for the allocation of a housing unit if he or she is a Kenyan citizen, is above 18 years and has not been previously allocated a house by the Board.

Application for an affordable housing unit shall be accompanied by the deposit payable at the rate specified by the board with the buyer required to provide a valid passport, a military identification document, details or a list of beneficiaries of the applicant, proof of income and ability to repay the loan and a passport-size photo of the applicant as alternative documents as proof of identification.

“A person may apply for change of an affordable housing unit before or after taking possession of the unit, where applicable, the purchaser may also provide the enumerated unique identification document for slum upgrading projects or a person with disability identification card as proof of identification,” reads part of the draft regulations.