Ministry wants MPs to allocate Sh6bn for affordable houses

Wednesday February 21 2018

House Transport committee chairman David Pkosing. photo | file

House Transport committee chairman David Pkosing. photo | file  

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The State Department of Housing wants Parliament to allocate Sh6 billion for delivery of 500,000 low-cost affordable housing scheme in President Uhuru Kenyatta’s “Big Four” development agenda.

The department told MPs that Sh2 billion will finance the 500,000 housing units while Sh4 billion will be used in slum upgrading programme.

“We need Sh2 billion for delivery of the housing units. This money will also be used to restructure the National Housing Corporation (NHC) and establish the Kenya Mortgage Refinancing Company and set up the National Housing Development Fund,” Aidah Munano, the principal secretary said in submissions to the Transport Committee that is scrutinising the Budget Policy Statement (BPS).

Housing secretary Patrick Bucha told the committee chaired by Pokot South MP David Pkosing that the 500,000 units are divided into slum upgrading and social development. He said the development of social housing units at Kibera Mariguini, Soweto “B” and Kiambiu requires a total of Sh14.4 billion while affordable housing needs a budget of Sh4 billion.

“We have only been given Sh3 billion by the Treasury, which is inadequate. To deliver the President Big Four plan particularly on the component of affordable housing, we need at least Sh6 billion to start us off,” Mr Bucha said.

He said the department is currently undertaking development of affordable houses on a pilot basis in Mavoko, Shauri Moyo, Parklands and Makongeni.

“We are discussing with various county executive committee members to identify land for this project which will be developed through the Public Private Partnership (PPP) with the government providing infrastructure and incentives to investors to build housing units for sale to Kenyans,” he said.

Mr Bucha said the World Bank has already signed an agreement with the ministry to provide credit to banks to finance the mortgages.

He said the private sector will construct the housing units while the government provides incentives that include reduction of corporate tax.

“The government will give both financial and none financial support to the private sector. The World Bank will give mortgages at 0.75 per cent while the Kenya Mortgage Refinancing Company will give banks guarantee to offer affordable mortgages to Kenyans to own homes build by the private sector,” Mr Bucha said.

He said NHC will offer a tenant purchase scheme once it’s restructured.