The government will offer incentives worth Sh40 billion to the private sector to help it realise its target of building 4.3 million housing units by 2030.
Speaking in Murang’a recently, Ms Aidah Munano, principal secretary in the Ministry of Housing and Urban Development, said the monetary and legislative rebates were intended to attract partnerships to drive the agenda:
“We are currently open to dialogue with investors who want to partner with us in this agenda. We are offer deliberate incentives that are cushioned in sound win-win partnerships to house the nation,” she said.
Ms Munano noted, that the country’s housing needs have been rising sharply without corresponding supply, thereby condemning even middle-income earners to live in the slums.
“The Kenyan housing sector is characterised by lack of affordable and decent rental housing, low-level of urban homeownership of about 16 percent, extensive and inappropriate dwelling units including slums and squatter settlements.” she said, adding that 52 per cent of the proposed units would target low-income urban households.
She said the incentives will dismantle the challenges that investors cite as hindrances to full partnership to house the nation, noting that the formal private sector housing market mainly caters for urban upper middle and high-income groups, leaving the lower middle and low-income brackets uncatered for.
She said mortgage rates will be reviewed to make it easier for the vast majority of urban dwellers to afford own homes.
“We will address the high house prices and cost of loans. For instance, the required monthly payment of Sh10,000 to service a loan of Sh750,000 for a period of 15 years is not affordable to up to 80 per cent of the employed persons, whose monthly gross earnings are below Sh25,000,” the PS noted.
She said the country’s annual urban housing demand, which stood at 35,000 units in 2008 to was projected to rise to 343,232 in 2030. “We are now at a crossroads and to get out of the fix, we have to prioritise and enhance investment in low-income housing.
“Our basket of incentives open for grabs is tailored to directly guarantee profits for those partners who come on board to walk this housing journey with us,” she said, adding that the structure of the drive will have ripple effect on the economy with indirect and indirect employment opportunities rising from the current 1,015,270 to 2,745,860 by 2030.
“The implementation of the incentives will, therefore, absorb a large number of young, unskilled Kenyans in the labour market – who would otherwise be idle, unproductive and wallowing in frustrations about their state.