Article 43 of the Constitution of Kenya under the Bill of Rights provides that every person has the right to accessible and adequate housing. This idea frames the overall policy & regulatory framework
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The policy and regulatory framework for Kenya includes a multiplicity of policies, laws and institutions/agencies, charged with different functions, in each link of the housing value chain. Many of these lengthen and complicate the housing delivery process unnecessarily and increase costs and risks, thereby deterring investment in housing. Broadly, there is a need for better coordination and simplification amongst the various national and county government departments to enable faster and more cost-effective approvals for housing related activities.
The change in the scope of 2 key ministries in October 2022, is likely to help the coordination for all functions to deliver housing. Previously, the were housed under the Ministry of Transport, Infrastructure, Housing, Urban Development and Public Works. These national government functions have now been moved to the , which should help the coordination along the value chain to deliver housing more effectively.
There is also a critical need to provide support to and implement current policies and laws that remain unimplemented. These include: the ; the ; the ; the , the , among others.
Within the context of the housing reform that the government has been seeking, there are a few Bills currently in Parliament (National Disaster Risk Management Bill 2023, National Land Commission (Amendment) Bill 2023) which require finalisation and promulgation. The Housing Bill 2021 , Landlord and Tenant Bill, 2021 and the Valuer’s Bill 2022 will need to be reintroduced since they are considered to have expired following the end of the term of the 13th Parliament. To deal with this regulatory backlog, it is critical that the Bills are reviewed with adequate stakeholder contribution and passed in the current (13th) Parliament.
Further, gaps identified in the regulatory and institutional framework suggest the following:
There is a need to integrate public transport and other climate-resilient measures with the objectives of the affordable housing agenda. At the time of the preparation of this document, the State Department for Public Works has already proposed Climate Change (Green & Resilient Buildings) Regulations 2023 which provide for the designing and construction of buildings which reduce the carbon footprint and are sustainable and resilient to the impacts of climate change. There is a need to fast-track the adoption and implementation of these proposed regulations. As for the former need for integrating public transport with Affordable Housing, the existing lacuna needs consideration.
While public and private land is available for housing, capital to invest in infrastructure and construction has been limited (as seen by the limited refinancing of units to the Kenya Mortgage Refinance Corporation). A key hurdle is the high interest rates payable on government paper which sets a high benchmark for returns required for investment in housing, which inherently has more risk. This suggests that housing objectives must be accommodated also in Kenya’s wider economic policy.
There is a critical need to streamline and operationalise the supply and demand side incentives which are provided in law, but which have proven difficult to implement. This is needed to enable the delivery of housing at prices that are affordable to the target market; a need to generally increase the alignment of the national tax policy with the potential of housing to drive economic growth.
There is a need to streamline the mortgage and foreclosure laws to facilitate the realization of underlying collateral in the event of a default.
More direct and enforceable consumer protection measures are required to protect household investment in housing and particularly in off-plan housing. Further, incentives to promote savings for housing are currently missing from the regulatory framework.
The regulatory and institutional framework already creates multiple opportunities for data, through the regulatory function that public institutions perform. This data could and should be leveraged beyond the regulatory function to support greater market transparency, which would reduce risk in support of increased investment. A commitment to sharing data as a key enabler to drive patient capital to invest in housing is necessary and should be promoted.