The Affordable Housing Act, 2024, enacted by the Parliament of Kenya, aims to fulfill Article 43(1)(b) of the Constitution by providing a framework for the development and access to affordable housing and institutional housing. The Act establishes various bodies and mechanisms, including the Affordable Housing Fund, Affordable Housing Board, and County Affordable Housing Committees. Key definitions outlined in the Act include “affordable housing” as housing costing not more than thirty percent of a person’s income per month, and “institutional housing” for public institutions. The Act imposes a levy to facilitate affordable housing provision and outlines guiding principles for its implementation, including adherence to national values, public finance principles, and principles of public service as per the Constitution.
The legislation establishes an Affordable Housing Levy at a rate of 1.5% on either an individual’s gross salary or gross income not subject to the levy on salary. This levy is payable to the collector for remittance into the Fund within nine working days after the end of the relevant month. Employers are mandated to deduct and remit the levy from employees’ gross salaries and also remit an equivalent amount to the collector. Compliance with these provisions exempts individuals from liability for the levy on other forms of income. The Cabinet Secretary for the National Treasury, upon recommendation, may exempt certain incomes or individuals from the levy through Gazette notices. Failure to remit the levy incurs a penalty of 3% of the unpaid amount per month or part thereof, recoverable as a civil debt.
The Affordable Housing Fund is established and managed by a board. Sources of funding for the fund include levies, appropriations, grants, donations, income from investments, loans, and other income accruing to the fund. The fund aims to provide resources for the design, development, and maintenance of affordable housing, institutional housing, and associated infrastructure. It facilitates home ownership, provides low-interest loans, develops long-term finance solutions, and funds maintenance and services for housing projects.
The board allocates funds for affordable housing programs, institutional housing, and infrastructure projects, subject to annual investment programs and regulations. It also oversees investments and borrowing for fund objectives. A five-year affordable housing investment program is developed and approved by the Cabinet, with annual investment programs drawn from it. The Affordable Housing Board, a body corporate, is established to oversee affordable housing development, with functions including fund management, coordination, monitoring, and evaluation.
Board members are appointed based on qualifications and diversity criteria, serving renewable three-year terms. They receive remuneration as recommended. The Chief Executive Officer, appointed competitively, administers the fund and implements board policies. A Corporation Secretary is appointed to provide governance guidance and support to the board.
The board operates according to specified procedures, may establish committees, and requires members to disclose conflicts of interest. The fund administrator ensures financial prudence and compliance, with administrative costs capped at 2% of audited statements. The administrator has access to relevant data for their functions and ensures bank accounts are not overdrawn.
The Board has the authority to appoint necessary staff members to fulfill its functions, with terms and conditions determined by the Board itself. The staff of the Board serves as the secretariat of the Fund, reporting to the Chief Executive Officer. Additionally, the Board can delegate its powers or functions to the administrator, an officer, employee, or agent of the Board through resolution. The common seal of the Board is to be kept under its direction and can only be used with its order. When affixed to a document and properly authenticated, the common seal is recognized judicially and officially. Any order or authorization by the Board concerning the seal is presumed valid unless proven otherwise.
In Part IV, the legislation outlines the role of county governments in facilitating affordable housing through the establishment of County Rural and Urban Affordable Housing Committees. These committees are composed of various stakeholders including a non-executive chairperson nominated by the county governor, relevant county executive committee members, representatives from different sectors such as traders, residential associations, and the public, as well as the chief officer responsible for housing serving as the secretary.
Nominees for committee membership undergo vetting and approval by the county assembly to ensure their suitability. Gender balance, ethnic diversity, and representation of marginalized groups like youth and persons with disabilities are considerations in the nomination process.
Qualifications for committee chairperson and members include relevant education, experience, residency, and adherence to constitutional requirements. The tenure of office is three years, with the possibility of reappointment for an additional term. Removal from office can occur under specified conditions such as repeated absences, bankruptcy, criminal convictions, or violations of constitutional provisions.
Remuneration for committee members is determined by the Salaries and Remuneration Commission. The conduct of committee affairs follows prescribed guidelines and may be adjusted for efficiency.
The functions of the County Committee include developing housing frameworks, advising the governor on housing programs, and collaborating with local authorities on infrastructure plans. They also report regularly to the Board and the county assembly, in addition to undertaking duties assigned by the county governor.
The legislation clarifies that county governments retain the authority to enact further legislation related to affordable housing within their jurisdictions.
The implementation of affordable housing is regulated by the provisions outlined in the Land Act, which apply to the allocation of public land for affordable housing and institutional housing schemes. Public participation and stakeholder engagement are required before land held by a county government can be allocated for this purpose. The Board overseeing affordable housing may appoint national government agencies for development tasks and can disburse funds accordingly. Agreements can be made with public and private institutions for housing development, financing, and material supply, subject to prescribed procedures and tender invitations. Community involvement and support are emphasized in the use of local materials and labor, as well as providing opportunities for internships or practical experience. Special consideration is given to existing settlements, with residents being informed, resettled if necessary, and given priority for purchasing units in affordable housing projects.
The eligibility criteria and application procedure for affordable housing units are outlined as follows:
1. Eligibility Criteria:
– Individuals must meet criteria prescribed by regulations.
– The term “person” refers to a natural person.
2. Application Procedure:
– Applicants meeting the eligibility criteria must apply to the Board in the specified manner.
– Required documents include proof of deposit, national identity card, incorporation certificate for bodies corporate, Kenya Revenue Authority personal identification number certificate, tax compliance certificate, and any other information determined by the Board.
– Preference is given to marginalized persons, vulnerable groups, youth, women, and persons with disabilities in the allocation process.
3. Off-taking of Affordable Housing Units:
– The Board may off-take affordable housing units under approved schemes meeting policy, statutory requirements, and Board-set criteria or conditions.
– Regulations may be issued by the Cabinet Secretary, in consultation with the Board, for the implementation of off-taking.
4. Loan Interest Rate:
– Interest rates or administration fees for loans issued under the Act are payable on a reducing balance at rates prescribed by the Cabinet Secretary.
5. Voluntary Savings:
– Eligible individuals can make voluntary savings with the Fund to raise a deposit for an affordable housing unit.
– Separate bank accounts are opened for voluntary savings, with interest credited to these accounts.
– Each saver is issued an account number.
– If not allocated a housing unit, savers may withdraw their savings with a ninety-day notice for refund with accrued interest or apply for approval for an affordable mortgage to develop a rural housing unit, agreeing to use their deposits and land as collateral.
regarding the ownership of affordable housing units:
The Board, with the approval of the Cabinet Secretary, can transfer ownership of affordable housing units to qualified applicants upon completion of payment of the agreed price.
The Registrar cannot register a transfer of any housing unit under this Act without written consent from the Board.
The certificate issued by the Board confirming the sale of an affordable housing unit under this Act serves as conclusive evidence of consent for registration.
Registration of the owner of affordable housing units must comply with the Sectional Properties Act.
Purchasers of affordable housing units cannot sell or transfer their unit without prior written consent from the Board.
Section 56 outlines offences related to misappropriation of funds from the Fund, prescribing penalties of up to twenty million shillings or imprisonment for up to ten years, along with mandatory fines if a quantifiable benefit is received or a quantifiable loss is suffered. Section 57 addresses other offences such as providing inaccurate information or unauthorized communication of documents, with penalties of fines up to ten million shillings or imprisonment for up to five years. Section 58 provides protection from personal liability for actions done in good faith and in accordance with the law. Section 59 empowers the Cabinet Secretary to make regulations for effective implementation of the Act, covering various aspects including exemptions, eligibility criteria, deposit requirements, and technology integration. These regulations require parliamentary approval. Section 60 deals with consequential amendments and transition, specifying that actions taken under repealed sections are deemed valid under the new Act. Section 61 revokes previous regulations related to affordable housing and transfers funds held by the National Housing Corporation to the Fund, with contributors being notified and given individual accounts.
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