Days after the High Court declared the Affordable Housing Levy unconstitutional, Leader of Majority Kimani Ichung’wa tabled a Bill in parliament to create a framework for the fund’s governance.
The bill named the Affordable Housing Fund 2023 has proposed, among others, creation of a board to govern the fund and other aspects including the fund’s purpose.
According to the Bill document seen by The Kenya Times, the purpose of the fund includes provision of money for affordable housing schemes to upscale home ownership.
Further, the fund will help to develop affordable housing schemes in all counties and provide loans for the acquisition of houses within approved projects.
In terms of the criteria for the distribution of funds under the levy, the Bill has proposed that 30% of the funds be channeled to the National Housing Corporation for development, maintenance, and rehabilitation of housing projects.
Another 30%, the Bill states, will be channeled towards upgrading structures in the slums.
In addition, 36% of the funds, as proposed in the Bill, will go to housing projects approved by the Cabinet, while another 2% will go to the collector to facilitate collection of the fund.
The final 2% will be allocated to the Board selected to manage the fund.
Further in terms of its composition, the bill states that the board named Affordable Housing Board will have 10 members to undertake the role of management.
Membership of the Affordable Housing Board
Among the ten is a non-executive Chairperson appointed by the President, Treasury Principal Secretary, and the PS in charge of Affordable Housing.
However, the two PSs may choose to have someone to represent them on the board.
Additionally, the Board will also comprise three persons nominated by the Cabinet Secretary in charge of the housing role.
The three will comprise one person representing the Council of Governors, a representative of the Central Organization of Trade Unions (COTU), and a person from the Kenya Federation of Employers (FKE).
Also Read: CS Alice Wahome Warns Kenyans on Housing Levy Payment
Further, the board will have three experts in various fields.
Nonetheless, functions of the board will include ensuring optimal utilization of the funds and ensuring its efficiency.
The board will also be in charge of monitoring and evaluating the delivery of goods, works, and services funded by money in the fund.
Similar to the provisions of the Finance Act 2023, the Levy as proposed in the Ichung’wah bill shall be at the rate of 1.5% of the gross salary of an employee.
Persons in Informal Employment Targeted in New Bill
In addition, the bill proposed that the 1.5% deduction will also apply for persons whose income is not classified as a salary.
Also Read: Court Declares Housing Levy Unconstitutional
Notably, exclusion of persons in informal employment became a bone of contention in the case against the levy and saw the judges label the bill as discriminatory.
Both deductions, the Bill reads, should be paid on or before the ninth working day of every month.
Shortly after the High Court made the ruling, President William Ruto announced plans to push a legislation to make the fund compliant as directed by the judges.
The program is one of the flagship projects under the Kenya Kwanza government, with President Ruto affirming his intention to use the projects to create jobs.
