LEGAL, POLICY AND INSTITUTIONAL REVIEW OF THE AFFORDABLE HOUSING SECTOR IN KENYA

This online book is a living document, prepared to review, record, and track developments in the policy, legal and institutional framework governing affordable housing in Kenya.

The book includes summaries and evaluations of over 140 statutes, policies and regulations, and provides further access to and interpretation of 48 cases. We welcome readers to engage with the content, providing commentary, additional relevant cases, updates etc., so that this becomes a live resource for the benefit of all working in Kenya’s affordable housing sector.

For more information, and to submit your comments, please contact Beatrice Mwangi at [e-mail]

Last updated: March 2025

Date first released: 1 Nov 2022 Version: 1.0

Authors: Muriuki Muriungi (Partner, KMK Africa Advocates LLP), Seeta Shah (Affordable Housing Specialist, FSD Kenya) with contributions from CAHF.

Maintained & Updated by: The Centre for Affordable Housing Finance in Africa (CAHF) in partnership with KO Associates LLP.

This book was prepared with funding from FSD Kenya

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Affordable housing is a key pillar of Kenya’s overall growth strategy, an explicit focus of the Ministry of Housing and Urban Development, and a key point of attention for developers, financiers and investors. While the Affordable Housing Programme has been underway for six years, its progress has been shaped by the policy, legislative and institutional framework that governs Kenya’s land, planning, construction and finance sectors.

Article 43 of the Constitution of Kenya under the Bill of Rights provides that every person has the right to accessible and adequate housing. Kenya's policy and regulatory framework seeks to give effect to these rights.

Accordingly, the State is obligated to take steps towards achieving this socio-economic right to its citizens, either directly or by encouraging delivery by the private sector to the wider market. In particular, the 2017–2022 government administration promoted the role of affordable housing within its Big Four Agenda (consisting of Affordable Housing, Manufacturing, Food Security and Affordable Health care).

While there has been some progress in delivering housing units by the Government both directly and by the private sector within this context of reforms, there have been challenges largely arising from some failures in policy, legal and institutional design. A key challenge is the length, breadth and complexity of the housing value chain.

This policy, legal and institutional review serves two central aims:

• First, is to provide a lay of the land on the policy, legal and institutional frameworks governing housing in Kenya; and

• second, is to assess the effectiveness of the policy, legal and institutional framework in achieving the constitutional imperative of access to decent housing, with a view to identifying gaps and opportunities for improvement.

The structure of this report is as follows: The overall housing value chain and institutional framework are described in Sections 2 and 3. Section 4 then sets out the overall policy framework, structured in terms of the housing value chain. The sections which follow provide brief summaries of the laws in respect of each value chain link and identify gaps and propose recommendations. Thereafter, annexes for each value chain link detail some of the substantive provisions of each of the laws reviewed. Recommendations in this review are highlighted in green.

This document has been developed to bring stakeholders together to engage on the most critical areas for regulatory reform in the housing value chain. The report is not prescriptive but rather a best attempt at assessing the vast library of laws, policies and regulations that apply to the housing value chain in Kenya. It is hoped that the report will serve as a baseline for further dialogue in the industry, particularly in prioritizing what regulatory reforms are most required and coming together to support these reforms.

LIST OF ABBREVIATIONS

ADP	Annual Development Plan
AHP	Affordable Housing Programme
BORAQS	Board of Registration of Architects and Quantity Surveyors
CA	Communications Authority of Kenya
CAK	Competition Authority of Kenya
CDT	Commissioner of Domestic Taxes
CECM	County Executive Committee Member
CGT	Capital Gains Tax
CGV	Chief Government Valuer
CIDP	County Integrated Development Plan
CLF	Central Liquidity Fund
CoG	Council of Governors
CPD	Continuous Professional Development
CPI	Consumer Price Index
CPLUDP	County Physical and Land Use Development Plan
CPLUPC	County Physical and Land Use Planning Consultative Forum
DGF	Deposit Guarantee Fund
DGPP	Director General of Physical Planning
e-DAMS	Electronic Development Application Management System
EBK	Engineers Board of Kenya
EIA	Environmental Impact Assessment
EPRA	Energy and Petroleum Regulatory Authority
FRC	Financial Reporting Centre
GDP	Gross Domestic Product
GIS	Geographic Information System
IPDU	Integrated Project Delivery Unit
JV	Joint Venture
KenInvest	Kenya Investment Authority
KENSUP	Kenya Slum Upgrading Programme
KISIP	Kenya Informal Settlements Improvement Programme
KFS	Kenya Forest Service
KMRC	Kenya Mortgage Refinance Company
KNBS	Kenya National Bureau of Statistics
KRA	Kenya Revenue Authority
KRB	Kenya Roads Board
LPLUDP	Local Physical and Land Use Development Plan
LSK	Law Society of Kenya
MLoPP	Ministry of Lands and Physical Planning (under previous regime, changed in October 2022 to Ministry of Lands, Public Works, Housing and Urban Development)
MTIHUDPW	Ministry of Transport, Infrastructure, Housing, Urban Development and Public Works (under previous regime, changed in October 2022 to Ministry of Roads and Transport)
NCA	National Construction Authority
NEAP	National Environmental Action Plan
NEMA	National Environment Management Authority
NHC	National Housing Corporation
NHDF	National Housing Development Fund
NIFCA	Nairobi International Financial Centre Authority
NLIMS	National Land Information Management System
NPLUDP	National Physical and Land Use Development Plan
PDP	Physical Development Plan
PPPS	Public-Private Partnerships
REITS	Real Estate Investment Trusts
RIT	Rental Income Tax
SACCO	Savings and Credit Cooperative Society
SASRA	SACCO Societies Regulatory Authority
SDHUD	State Department of Housing and Urban Development
SDPW	State Department of Public Works
SPVs	Special Purpose Vehicles
SEA	Strategic Environmental Assessment
UFAA	Unclaimed Financial Assets Authority
UFATF	Unclaimed Financial Assets Trust Fund
VAT	Value Added Tax
WMC	Waste Management Council