Housing Bill now in MPs' hands after public participation closes

Members of Parliament have concluded public participation on the controversial Affordable Housing Bill 2023.

After wrapping up their sessions in Mombasa and Nairobi, the committee spearheading the exercise will now present the proposed law in Parliament for consideration by members once the House resumes.

The National Assembly Joint Committee on Finance and National Planning and that of Housing and Urban Planning chaired by Molo MP Kimani Kuria will now retreat to Mombasa to write the report which he says will be ready by Monday next week.

The hearings saw the Kenya Association of Stock Brokers, Technical University of Kenya, Institute of Certified Public Accountants of Kenya (ICPAK), and Real Estate Developers among others present their views to the Kimani Kuria-led committee.
 
According to six organisations under the Kenya Association of Stock Brokers and Investment Banks, housing levy is not the only solution to curbing the housing challenge.
 
In his submissions, the association CEO Willy Njoroge said the government needs an alternative way of funding the programme.
 
"We want to suggest an alternative funding source because the housing challenges cannot be solved by introducing a levy. We need a real estate investment trust which will cooperate between the public and private sectors," he said.

Nairobi Security Exchange called for a partnership between the private and public sectors in the affordable housing programme.

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"We are looking at this real estate investment trust as being able to surpass that of the equity," they said.

Further, NSE said there should be the introduction of rates where a land owner will come in with a real estate developer and have a buyer come in as a shareholder in developing affordable houses. 

They also tasked the committee to look into the taxes imposed on Kenyans which hugely affect the rates required.

"We are unable to execute rates today because of the taxes imposed and l would like to amend sections of the Bill and identify ways that will enable the government to implement the housing program without taxing Kenyans. Parliament needs to amend the Housing Funds Act," the NSE said.
 
ICPAK urged the committee to define the initiative if it’s a levy or a fund adding that there was a need for accountability. 

They further said the Bill fails to indicate how they will collect the levy from those in the informal sector to avoid discrimination.

For the real estate developers, they proposed that people paying housing mortgages and servicing development loans from Saccos should be exempted from paying the levy because they already have a plan in place.

They want the Bill amended so that the 1.5 per cent housing levy be deducted from basic salary instead of the gross pay.

"Imposing the 1.5 levy on gross income is double taxation and subjecting workers to suffering in these tough economic times. Parliament should set aside funds for housing. Funding should not be through payroll as employees are already paying PAYE," said ICPAK Chairman Philip Kakai.

Baringo residents opposed the Bill saying it is discriminatory and hinders inclusivity and accessibility.

They claim the mandatory 10 per cent deposit for a unit would deny some Kenya’s the opportunity to own a house.

Other questions that were raised during the sessions in Nairobi, regarded public land compensation.

On Monday, advocate Vincent Ombaka, representing the Law Society of Kenya emphasized the need for compensation to communities based on the commercial value of the public land where the housing programme would be implemented.

Ombaka said there is a need to create provisions in the Bill for fair compensation to communities.

Kenya National Congress of Pentecostal Churches led by Rose Mullyungi suggested seeking alternative land rather than demolishing existing houses for the program, while former legislator Sonia Birdi proposed allowing willing private landowners to contribute to the programme.

Kuria said they would wait for National Assembly Speaker Moses Wetang'ula to call for a special sitting for members to deliberate on the Bill or hold till Parliament resumes.

"We hope to have the report ready by Monday and MPs could be called for a special sitting or wait until they come back from the long recess on February 13 where it will be tabled for the second reading," he said.

Once Parliament votes in favour of the Bill, then President William Ruto can assent to it, making it law.

The committee has been receiving views from Kenyans and other stakeholders since January 17 in 19 selected counties.

The hearings were conducted in Narok, Embu, Kisii, Kirinyaga, Homabay, Kiambu, Vihiga, Machakos, Uasin Gishu and Turkana counties.

Others are Baringo, Nairobi, Wajir, Nakuru, Nyandarua, Tana River, Kilifi, Nairobi and Mombasa counties.

Through a notice in the dailies, the National Assembly committed the process to two House committees; Finance and National Planning and of Housing, Urban Planning and Public Works.

The Bill sponsored by Majority Leader Kimani Ichung'wah seeks to provide a legal framework for the establishment of an Affordable Housing Fund and give effect to the right to accessible and adequate housing as provided for in the Constitution.

The Bill is expected to create a legal framework for the housing levy. The government had to go back to the drawing board to regularise the housing levy after courts declared it unconstitutional.

Should Parliament pass the Bill, Kenyans will continue paying the 1.5 per cent housing levy.