Affordable housing was one of President William Ruto’s key promises during the 2022 presidential campaign, forming a major part of his economic agenda and his pledge to create jobs while improving living standards for ordinary Kenyans.
Since taking office, Ruto’s administration has placed the Affordable Housing Programme at the centre of its development agenda. The initiative has attracted both praise and criticism, particularly over its financing model, construction progress, access to completed homes and the mandatory housing levy imposed on workers.
The government has presented the programme as more than a housing project. It is also intended to stimulate the construction industry, create employment and expand homeownership among low- and middle-income households.
At the heart of the programme is the Affordable Housing Levy, which provides a dedicated funding stream for the construction of low-cost homes and related infrastructure.
Employees contribute 1.5 per cent of their gross salaries, while employers make a matching 1.5 per cent contribution. The Kenya Revenue Authority collects the levy through the iTax system, with employers required to remit the money by the ninth working day of the following month.
Late remittances attract a three per cent penalty for every month the contribution remains unpaid.
The government introduced the financing model to reduce the programme’s reliance on allocations from the national Exchequer. Unutilised collections have also been invested in short-term Treasury bills to earn interest before the funds are deployed.
The State Department for Housing has additionally explored securitising future levy collections to raise more funds. Under the proposed arrangement, anticipated future revenues could be used as collateral to secure up to Sh100 billion from international development partners to address financing gaps.
Housing levy collections have grown significantly since the programme was introduced.
The Kenya Revenue Authority collected Sh73.2 billion from the levy during the 2024/2025 financial year, surpassing the National Treasury’s initial target of Sh63.2 billion.
The amount represented an 115.82 per cent achievement rate and was a 35 per cent increase from the Sh54.2 billion collected during the levy’s first year.
The government has also stepped up enforcement against employers and individuals who fail to comply. Measures can include restrictions on bank accounts, deactivation of KRA PINs and asset recovery, in addition to the three per cent monthly penalty on outstanding contributions.
For the administration, the rising collections demonstrate that the levy can provide a sustainable funding mechanism for large-scale housing development.
Critics, however, argue that the model places an additional financial burden on workers whose disposable incomes are already under pressure from the rising cost of living.
Opposition leaders have repeatedly called for the abolition of the 1.5 per cent levy, arguing that workers are losing part of their earnings without a guarantee that they will eventually own houses under the programme.
Ruto has rejected the calls, maintaining that scrapping the levy would undermine one of his administration’s flagship transformation projects.
The President has also dismissed political opposition to the initiative, insisting that his government will continue pursuing its long-term development plans.
“No amount of noise or opposition will derail our transformation agenda. We remain committed to delivering the Affordable Housing Programme,” Ruto has said.
Opposition politicians, meanwhile, have maintained that they would abolish the levy if they take power after the 2027 General Election.
The dispute has consequently transformed affordable housing into a major political issue likely to feature prominently in the next election campaign.
Beyond the levy debate, the government says construction of affordable homes has gathered momentum across the country.
Approximately 8,800 housing units have so far been completed and handed over to buyers. The pace of construction increased from about 1,655 completed units in 2024 to more than 6,700 in 2025.
Despite the progress, the numbers remain below Ruto’s original target of constructing 250,000 units annually.
The government says between 214,000 and 277,000 additional housing units are currently under construction across the 47 counties.
The projects cover different categories, including social housing, standard affordable homes and more than 73,000 beds for university students.
The administration has also positioned the programme as a major source of employment.
According to the Presidency, more than 1.1 million direct and indirect jobs have been created through the construction programme.
The opportunities have extended across various sectors, benefiting young people, engineers, mechanics, plumbers, artisans and other construction workers.
The government says the housing projects are also supporting local businesses by increasing demand for building materials, transportation, skilled labour and other services linked to construction.
This, it argues, makes the programme an economic stimulus extending beyond the construction of homes.
Interest in the programme has been substantial, with more than 1.3 million Kenyans registering on the Boma Yangu platform to express interest in owning homes.
However, there is a significant gap between registration and actual home applications.
Approximately 38,000 people have formally applied for units, while about 11,000 have received allocations. Around 5,300 families have already moved into their new homes.
To make ownership more accessible, the government reduced the required upfront deposit from 10 per cent to five per cent.
It has also introduced payment restructuring options for buyers struggling to meet their obligations and allowed eligible applicants to consider cheaper housing units.
The measures are aimed at addressing one of the programme’s biggest challenges: ensuring that completed houses remain affordable to the people the initiative was designed to benefit.
Despite the reported progress, the Affordable Housing Programme has faced scrutiny in Parliament and from sections of the public.
Lawmakers have raised questions over procurement, project delays, the capacity of local contractors and stalled construction in some areas.
Concerns have also emerged over whether the rapid expansion of the programme is being matched by sufficient oversight and transparency in the management of billions of shillings collected from workers and employers.
The scale of the funds involved has consequently made accountability a central part of the debate surrounding the initiative.
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