When in 2018 the government of Kenya, headed by then president Uhuru Kenyatta, launched its Big Four agenda for transformational development, one of the key pillars was the provision of decent housing for low and middle-income earners.

Although Article 43(1)(b) of the Constitution of Kenya declares that: “Every person has the right to accessible and adequate housing, and to reasonable standards of sanitation”, housing has long been a major challenge in Kenya, particularly in its urban centres, where an estimated 61 per cent of households live in informal settlements. According to data from the international housing NGO Habitat for Humanity, the government only currently supplies 50,000 of the 250,000 housing units needed annually to meet the housing demands of Kenya’s 55-million-strong population.

Kenyatta’s initial plan was to build 500,000 housing units in five years in cities and metropolitan areas around the country under the affordable housing scheme, then known as Boma Yangu (meaning ‘My Home’ in Kiswahili) with workers contributing through a check-off system, while those in the informal sector were to make voluntary contributions to raise the 10 per cent deposit required to begin the journey of becoming a homeowner.

However, due to a number of reasons – including insufficient finance for the scheme, unaffordable mortgages and a lack of available land for development – the fact-checking website Africa Check notes that just over 3 per cent (13,529) of the 500,000 housing units were eventually built by the end of 2022.

Pauline Wanjiru, a fruit trader at a roadside market in the Kenyan capital of Nairobi is one of those who quickly enrolled in the programme, making variable monthly contributions with the aim of raising 250,000 Kenyan shillings (approximately US$1,900) in three to four years, the minimum deposit required for the scheme. If allocated a house, she would then pay off the remaining debt on a 15- to 20-year mortgage plan.

Although she sometimes misses making payments for up to two months, the mother of two boys is still paying into the scheme, despite the economic challenges that have hit Kenya since the Covid-19 pandemic in 2020.

“Saving for this house has meant skipping buying a good dress or a pair of shoes, but I must realise my dream of having a home of my own,” she affirms.

However, the fate of the scheme – which has been rebranded as the Affordable Housing Programme – now hangs in the balance, thanks to resistance to the mandatory levy imposed on salaried Kenyan workers by the Finance Bill 2023 in order to fund the base capital of the project.

The government had created a National Housing Development Fund to fund the construction of 250,000 housing units per year, which would be sold to eligible Kenyan citizens at a cost of between KSH 1 million to KSH 3.5 million (approximately US$7,600 and US$26,600) depending on whether they are eligible for social housing, low-cost housing or an affordable mortgage on the open market. But with an average monthly salary of 14,000 Kenyan shillings (approximately US$106), according to the most up-to-date International Labour Organization (ILO) statistics from 2019, for some workers, even a so-called ‘affordable home’ is completely out of reach. As one worker told Al-Jazeera: “I don’t want to pay a housing levy for a house me or my children will never live in.”

Political grandstanding

Individuals and workers’ associations have successfully challenged the 1.5 per cent national housing levy charged on the gross monthly earnings of employees (which is matched by their employers by the same amount) in court, declaring it “discriminatory and irrational”, as well as unconstitutional. While the government lauds the project for its potential to create hundreds of thousands of construction sector jobs and fill the country’s housing deficit, critics say that workers who have already been hit hard by the soaring cost of living in recent years cannot shoulder additional tax burdens.

In a 26 January ruling, the Kenyan Court of Appeal concluded that the levy was also introduced without a proper legal framework, affirming a November 2023 ruling by the High Court which ruled that the Finance Act 2023 had violated Article 10, 2(a) of the Constitution.

The levy had been deducted from the pay cheques of employees since July 2023. Salaried workers in formal employment make up approximately 16 per cent of the total labour force. However, the government had offered no clear plans on how informal sector workers would be taxed by the scheme, even if they had bigger incomes than salaried workers.

The scheme is further mired in political grandstanding with the current president William Ruto making it his first term trademark project, and vowing it will continue, despite workers protesting that it would only benefit the few middle-class workers who earn enough money and have enough job security to embark on a 15- or 20-year mortgage.

Controversies over the ownership of land in which the houses are being put up have arisen, with some local governments complaining that they are being forced to cede land for the houses, while evictions have also been taking place to make way for the construction of these new homes.

Equally contentious is the fact that while salaried contributors are funding the scheme, there’s no guarantee that they will be allocated a house, for the units will issued through a bidding process.

“A multi-faceted approach is required”

Earlier this month, a public university, Jaramogi Oginga Odinga University of Science and Technology, became the first institution to announce that it was refunding deductions, in what could set a precedent. The Federation of Kenya Employers has also advised its members to immediately cease deducting the housing levy from employees’ salaries.

According to Nairobi lawyer Wahome Thuku, employers henceforth have no legal basis for effecting the deductions. “The Judiciary has not stopped President William Ruto and his government from constructing houses, or from hiring anyone on the construction sites. He is also free to use all the government land to construct apartments. What he shouldn’t, can’t and won’t do is to collect money from employed Kenyans to finance the projects. That is what the court has stopped.”

The government, through the Attorney General, had the option to appeal the decision at the Supreme Court, but Thuku expressed doubt that the highest court would overturn a decision held by two lower courts.

According to international shelter NGO Habitat for Humanity, while it is laudable for the government to focus on affordable housing for middle-income earners, it is important that it also pays attention to social housing solutions that prioritise the needs of the most vulnerable.

“Regarding the recent decision by the Court of Appeal to halt the deductions, Habitat for Humanity Kenya acknowledges the complexity of the issue and respects the legal processes involved. We believe that a multi-faceted approach is necessary to address the housing needs of urban workers and the urban poor effectively,” its Kenya national director, Anthony Okoth tells Equal Times.

Such an approach should include “leveraging innovative financing mechanisms”, such as housing microfinance and public-private partnerships, says Okoth, to empower individuals and communities in accessing affordable housing solutions.

He adds: “Additionally, there is a need for comprehensive urban planning that integrates housing with essential services like water, sanitation, and energy, while also addressing issues of land tenure and policy reform to create an enabling environment for sustainable housing development.”