Treasury CS Hints at Housing Levy Changes

• Treasury CS Hints at Housing Levy Changes;

Treasury Cabinet Secretary John Mbadi stated that the government may revisit the Affordable Housing Levy as Kenya’s waged workers express growing discontent.

Speaking while he appeared before the Senate on Wednesday,Mbadi acknowledged the levy’s original intention to address the housing problem in the country but admitted that it is causing a financial burden for workers in the formal sector.

“There is an ongoing conversation on how to restructure it.I believe the program offers important benefits, but the concerns raised by employees with payslips are valid and must be taken seriously,” he noted.

The levy, introduced under the Kenya Kwanza government’s 2023 Affordable Housing Programme, charges a 1.5 percent contribution each from workers and employers, totaling 3 percent of an employee’s gross income, to raise funds for the government-backed housing project.

While the government defends the policy as a bold move to reduce the shortage of housing, the majority in the formal sector argue that the deductions are unfair and yield no immediate benefit.

Mbadi assured that debate on altering the levy adjustment is ongoing, and adjustments, potentially including flexible contributions or other sources of funds, may be tabled in the near future.

Last month, President William Ruto handed over 1,080 affordable housing units to residents of Mukuru in Nairobi, in what he described as the most consequential moment of his political career.

“We have handed over keys to life-changing 1,080 social housing units; these are not keys to open doors or houses; these are keys to homes,” Ruto said.

The President commissioned 5,616 bedsitter units in Lot 1-Phase 1, with 3,024 one-bedroom and 4,608 two-bedroom units (Lots 2 and 3) already under construction at the New Mukuru Housing Estate.

Ruto noted that the project is a turning point in the government’s affordable housing agenda to provide decent homes for Kenyans, particularly those at the bottom of the wealth pyramid.

“In these homes, we are providing better sanitation, security and livelihoods to thousands of ordinary people who would never have had such a chance,” he said.