The groundbreaking ceremony for 500,000 affordable houses by the government will be held on December 11 at Parklands, Nairobi.
Housing Principal Secretary Charles Mwaura told a parliamentary committee the houses, which will be built in the next four years, will cost Sh1.3 trillion and are aimed at ensuring middle-income households have access to decent and affordable dwellings.
Mr Mwaura told the National Assembly Transport, Public Works and Housing Committee that there will be three categories of houses that will be available to Kenyans depending on the level of income: social, low-cost and mortgage gap.
The social houses will be for people earning up to Sh14,999, low-cost (Sh15,000-49,999) and mortgage gap (Sh50,000-99,999).
One-bedroom houses under the social housing programme will cost Sh600,000, with those buying them expected to pay Sh2,500 per month for 25 years.
Under the same house category, a two-bedroom house will cost Sh1 million, for Sh4,500 per month, while a three-bedroom house will go for Sh1.4 million, for Sh6,500 per month.
The houses will be located in all the 47 counties and will be constructed on both national and county government land.
The Principal Secretary said the national government will have a memorandum of understanding with county governments for delivery of 2,000 housing units per year.
Under the MoU, county governments will provide land while the national government will provide finances and capacity building.
Mr Mwaura told the MPs that the houses will be awarded through an affordable housing portal using a free and transparent system.
Members of the public will be required to register in the online portal, where they will be asked to indicate the preferred location of their houses and they will be provided with information on the type of home they qualify for based on their income.
According to the PS, some of the prequalification criteria to be used to award the houses will be income, family size, choice of preferred location of home, current assets owned and accumulated deposit.
“The system is designed to ensure every deserving applicant is allocated a house. However, it is expected that initially there will be significantly more demand than supply of affordable houses. In the event that an applicant is not allocated a house in the initial round of allocation, their names will remain on the waiting list,” Mr Mwaura said.
Affordable housing is one item on the "Big Four" agenda that President Uhuru Kenyatta has focused on in his second and final term in office.
The other three are manufacturing, universal health coverage and food security and nutrition.
The passage of the Finance Bill in September this year paved the way for workers to be deducted 1.5 percent of their monthly pay to finance the new low-cost housing.
In his last budget, Treasury Secretary Henry Rotich proposed the introduction of a 0.5 percent statutory levy on employees' gross salaries with a monthly maximum of Sh5,000 for high-income earners and employers expected to contribute a similar amount for every employee to the National Housing Development Fund.
According to the Kenya National Bureau of Statistics, formal-sector workers in low-cadre jobs up to the lower-middle income group earning between Sh15,000 to Sh49,000 account for 74.44 percent.
A further 22.62 percent are in the middle-income group that earns between Sh50,000 to Sh99,000.
Only very few Kenyans are in the upper-income group earning a salary of Sh100,000 and above.