# 4. OVERARCHING POLICIES AND CONTEXT

Through the [Bottom Up Economic Transformation Agenda](https://manifesto.delivery.go.ke/) the Government of Kenya has identified six key areas of economic tranformation including Housing and Settlement with a focus on affordable housing. Under affordable housing, the Government intends to:&#x20;

* Facilitate the delivery of 250,000 housing units every year under affordable long-term housing finance schemes.&#x20;
* Grow the number of mortgages to 1,000,000 by enabling low-cost mortgages of less than KES 10,000.&#x20;
* Give developers incentives to build more affordable housing.&#x20;

**The AHP includes several supply side, demand side and enabling environment guidelines and incentives to deliver housing. These include:**

* <mark style="color:green;">Enabling Environment: provide land and bulk infrastructure, provide infrastructure funding, provide tax incentives, standardize designs and processes, and create a one-stop shop for approvals.</mark>
* <mark style="color:green;">Supply Side: promote master plans and mega city approach, promote mixed-use developments with social infrastructure and amenities, and provide offtake financing to developers</mark>
* <mark style="color:green;">Demand side: Promote tenant purchase schemes, optimize KMRC for long-term mortgage finance at concessional rates initially, and create a Boma Yangu Portal to match supply and demand</mark>

The Government has introduced the [Boma Yangu Platform](https://www.bomayangu.go.ke/about) which connects people to the Affordable Housing Program by allowing them to save towards home ownership and access to affordable mortgages and the National Tenant Purchase Scheme.&#x20;

While the framework was conceived to be holistic and enable the delivery of housing, it has faced significant challenges due to lack of financing as the proposed mandatory National Housing Fund that was expected to finance the developers’ offtake was quashed in court, and there continues to be a lack of coordination amongst the various agencies to enable delivery of housing.

### The AHP itself sits within the broader context of the Constitution of the Republic of Kenya, and various overarching laws/ policies/regulations that contextualize the Kenyan’s government policy on housing that are contained in:

* &#x20;[**Constitution of Kenya 2010**](https://cahf.gitbook.io/kenya-legal-policy-and-institutional-review/annex-a-laws-policies-regulations-governing-the-breadth-of-the-housing-value-chain/1.-constitution-of-kenya-2010) - which provides the overall framework and sets out the distribution of functions between the national government and the county government in the Fourth Schedule. Functions relevant to housing that are reposed in the national government under the Fourth Schedule of the Constitution are: housing policy, national public works, general principles of land planning and co-ordination of planning by counties, protection of the environment including energy policy and water protection, energy policy, disaster management, transport and communications, consumer protection, monetary policy and banking, courts, and water resources. Functions relevant to housing that are vested in county governments under the Fourth Schedule are: county planning and development including housing, land survey and mapping, boundaries and fencing and energy regulation/electricity reticulation; county transport including county roads, street lighting, traffic and parking, and public road transport; trade development and regulation including cooperative societies, markets and trading licences (excluding regulation of professions); county public works and services including stormwater management systems in built-up areas and water and sanitation services; and firefighting services and disaster management.  The Constitution of Kenya under the Bill of Rights (article 43) also provides that every person has the right to accessible and adequate housing. Accordingly, the State is obligated to take steps towards achieving this socio-economic right for its citizens. The High Court, in [*Satrose Ayuma & 11 others v Registered Trustees of the Kenya Railways Staff Retirement Benefits Scheme & 3 others*, Petition 65 of 2010](https://new.kenyalaw.org/akn/ke/judgment/kehc/2015/8007/eng@2015-12-18)  seemed to adopt the international definition of adequate housing by the United Nations of ‘adequate housing’ at paragraph 71 as that which has “i) *legal security of tenure to guarantee against forced eviction; ii) Availability of services, materials, facilities and infrastructure; iii) affordability such that housing costs are commensurate with income levels and do not imperil other basic needs; iv) accessibility including to disadvantaged groups v) habitability in terms of being free from rain, dampness, wind, cold or other discomforts; vi) in a location which allows access to employment and other amenities; vii) cultural adequacy than enables the inhabitants to express their cultural identity and their diversity of housing*.” Relatedly, in a recent judgment delivered in 2022, the Environment and Land Court in [*Law Society of Kenya v Service & 5 others; Migot-Adholla & another (Interested Party)* (Environment & Land Petition E029 of 2022) \[2022\] KEELC 3962 \[KLR\]](https://new.kenyalaw.org/akn/ke/judgment/keelc/2022/3962/eng@2022-08-12) quoted the decision of the Supreme Court in *Mitu Bell* (at para 151) with approval which had stated: “*Where the landless occupied public land and established homes thereon, they acquired not title to the land, but a protectable right to housing over the same. The right to housing over public land crystallized by virtue of a long period of occupation by people who had established homes and raised families on the land. That right derived from the principle of equitable access to land under article 60(1)(a) of the Constitution*.” This finding was in relation to an equitable claim of landless people (squatters) who had lived on public land held by a public university and established their homes there since 1984. In such instances, the Supreme Court in [*Mitu-Bell Welfare Society vs Kenya Airports Authority & 2 others; Initiative for Strategic Litigation in Africa (Amicus Curiae)* (Petition 3 of 2018) \[2021\] KESC 34 (KLR)](https://new.kenyalaw.org/akn/ke/judgment/kesc/2021/34/eng@2021-01-11) had held that such landless people occupying public land must be allocated such land or be compensated if any eviction is to occur. The Supreme Court in this case held that it is the duty of the state to provide housing to citizens, but this right could only be achieved progressively (para 146). The apex court in paragraph 153 stated: “*The right to housing in its base form (shelter) need not be predicated upon “title to land”. Indeed, it is the inability of many citizens to acquire private title to land, that condemns them to the indignity of “informal settlement”. Where the Government fails to provide accessible and adequate housing to all the people, the very least it must do, is to protect the rights and dignity of those in informal settlements. The courts are there to ensure that such protection is realized, otherwise these citizens, must forever, wander the corners of their country, in the grim reality of “the wretched of the earth”*”.&#x20;
* [**Sessional Paper No. 3 of 2016 on National Housing Policy**](https://cahf.gitbook.io/kenya-legal-policy-and-institutional-review/annex-a-laws-policies-regulations-governing-the-breadth-of-the-housing-value-chain/4.-sessional-paper-no.-3-of-2016-on-national-housing-policy): This is the main policy document that articulates the vision, mission and strategic direction of the government with respect to the housing sector in Kenya. It was drafted before the AHP of 2017, but its provisions hold.
* [**Housing Act 1953**](https://cahf.gitbook.io/kenya-legal-policy-and-institutional-review/annex-a-laws-policies-regulations-governing-the-breadth-of-the-housing-value-chain/2.-housing-act-1953-cap-117-revised-in-2012): provided for establishment of the National Housing Corporation (NHC) and the National Housing Development Fund (NHDF) to be administered by the NHC. The NHC was vested with powers to make loans or grants from the NHDF to private and public sector players to deliver housing, develop a land bank for housing and encourage research and information dissemination on housing. The Affordable Housing Fund, established under the Affordable Housing Act, replaces the NHDF. NHC is further required to surrender all the funds in the NHDF to the Affordable Housing Fund. It is popularly understood that NHC has a land bank valued at approximately $ 2 billion in 2021, however, the total delivery of housing units has been limited (estimated at around 20,000 units since inception). The potential of NHC to utilise its land bank to drive affordable housing is vast and should be explore&#x64;*.*&#x20;
* [**Sessional Paper No. 02 of 2016 on National Slum Upgrading and Prevention Policy**](https://www.urbanagendaplatform.org/sites/default/files/2022-04/National%20Slum%20Upgrading%20%26%20Prevention%20Policy.pdf)The goal of this Policy is to guide the country towards upgrading existing and preventing emergence of new slums in a coordinated and systematic manner. This policy's overall objective is to promote, secure and protect dignified livelihoods of the poor living and working in slums by strategically integrating them into the social, political and economic framework in line with the Constitution. There have been efforts in the past geared toward upgrading and improving informal settlements and slums with the support of development partners. Such efforts and programmes include: [Kenya Slum Upgrading Programme](https://housingandurban.go.ke/kenya-slum-upgrading-programme-kensup/) (KENSUP); [Kenya Informal Settlement Improvement Project (KISIP)](https://housingandurban.go.ke/project/jet-hotels/) supported by the World Bank which seeks to provide social and physical infrastructure, promote security of tenure and build capacity in select urban areas; the ‘Adopt a Light Movement’ which was a collaboration between the private sector and the then Nairobi City Council that sought to install efficient light poles and high masts in select slum areas. These slum upgrading efforts and initiatives have however faced challenges such as: gentrification;\[1] insufficient funding to enable scaling; limited capacity and coordination challenges. The policy paper has provided for various recommendations and implementation proposals which would go a long way in dealing with the challenges facing informal settlements and slums. The implementation of these policy proposals however requires significant funding, political goodwill and collaboration among government, private sector and development partners to complement efforts.
* [**Sessional Paper No. 3 of 2012 on Population Policy for National Development**](https://tciurbanhealth.org/wp-content/uploads/2017/06/Kenya_Population_Policy_for_National_Development.pdf)**-** This Sessional Paper provides an overall framework and proposes key policy measures to be undertaken to address critical population management issues. The Policy identifies rapid population growth and a youthful population structure as key issues that will pose challenges in the realization of Vision 2030 and the long-term development of the country. High fertility coupled with a high unmet need for family planning over a long period of time, has contributed largely to the observed youthful population structure.

  The question of population is essential as it is the one that determines the housing units needed since these people need to be sheltered. The fact that Kenya needs about 250,000 housing units to be built annually is a testament to the high population growth which is making this necessary. Indeed, the policy notes that the continued high rate of urbanization in general has led to problems such as increased urban poverty and inadequate services, especially among the poor. It notes that the continued strain on the existing urban infrastructure, particularly on housing, transportation, educational and health facilities, and employment has created new challenges.

  With respect to housing, the policy provides for: monitoring trends in demand and supply for housing and considering population trends; providing affordable and quality housing to the growing population; and designing medium to long-term plans for the development of intermediate towns to curb rural-urban migration.
* [Affordable Housing Act](https://new.kenyalaw.org/akn/ke/act/2024/2/eng@2024-03-22) 2024: seeks to give effect to Article 43(1)(b) of the Constitution of Kenya by providing a legal framework for the development and access to affordable housing in the country. The Act establishes the Affordable Housing Fund and imposes the Affordable Housing Levy which is payable at a rate of 1.5% of the gross salary of an employee or a non-salaried person. For employed individuals, the employer should match the employee’s contribution. The inclusion of non-salaried persons was intended to align the law with the decision of the High Court in [Okoiti & 6 others v Cabinet Secretary for the National Treasury and Planning & 3 others; Commissioner-General, Kenya Revenue Authority & 3 others (Interested Parties) (Petition E181 of 2023) \[2023\] KEHC 25656 (KLR) (Constitutional and Human Rights) (10 July 2023) (Ruling)](https://new.kenyalaw.org/akn/ke/judgment/kehc/2023/25656/eng@2023-07-10) where the Court declared that the Affordable Housing Levy was unconstitutional as it was only payable by salaried persons.&#x20;

<table data-header-hidden data-full-width="true"><thead><tr><th></th><th></th></tr></thead><tbody><tr><td><strong>AFFORDABLE HOUSING ACT, 2024</strong> </td><td> </td></tr><tr><td><strong>ISSUE / STATUS</strong> </td><td><strong>RECOMMENDATION</strong> </td></tr><tr><td><p>Section 48 of the Act stipulates that eligibility for units under the affordable housing schemes is restricted to natural persons. On the other hand, Section 49 (2) (c) of the Act provides that a  Certificate of Incorporation can be part of the documents to be provided by a company applying for an affordable housing unit.  </p><p>These conflicting provisions have created ambiguity in determining who is eligible for a housing unit.  </p><p>In practice we note that the affordable housing units are allocated to natural persons only. </p><p> </p></td><td><mark style="color:green;">Review of the Affordable Housing Act to address the ambiguity resulting from the conflicting provisions.</mark> </td></tr><tr><td><p>There has been public outcry against the Affordable Housing Levy on the grounds that it increases the tax burden.  </p><p> </p></td><td><mark style="color:green;">In as much as the government is trying to expand its revenue base to address the affordable housing deficit, it is important to conduct constructive stakeholder engagement to identifty areas of collaboration and compliance.</mark> </td></tr></tbody></table>

&#x20;

<table data-header-hidden data-full-width="true"><thead><tr><th></th><th></th></tr></thead><tbody><tr><td><strong>GAPS IN THE LEGAL AND POLICY SPACE GOVERNING THE HOUSING SECTOR</strong></td><td> </td></tr><tr><td><strong>ISSUE / STATUS</strong></td><td><strong>RECOMMENDATION</strong></td></tr><tr><td>There lacks adequate consumer protection for home buyers and especially for off-plan housing units</td><td><mark style="color:green;">The legal framework should clearly integrate consumer protection for households both during construction (for example, protection of buyer instalments via an escrow) and upon occupation (for example, by requiring annual service charge audits freely accessible to owners and occupiers of a housing development).</mark></td></tr><tr><td>There is need to create data banks. This is much needed and should be promoted as a national priority. It is unknown, how many housing unit approvals, starts and completions there are in any given year in Kenya, and such data would need to be coordinated via the counties.</td><td><mark style="color:green;">Amendment of the Housing Act to provide for the creation of data banks. This is an important area for technical assistance.</mark></td></tr><tr><td><p>There lacks adequate legal framework to govern green housing.   </p><p>The Proposed Climate Change (Green &#x26; Resilient Buildings) Regulations 2023 provides for the designing and construction of buildings which reduce carbon footprint and are sustainable and resilient to the impacts of climate change.  This is critical, especially with respect to climate-resilient housing that meets the needs and capacities of the affordable market so that it is financially feasible to deliver.</p></td><td><mark style="color:green;">Adoption of the Proposed Climate Change (Green &#x26; Resilient Buildings) Regulations 2023.  Specific focus should be given to the setting of appropriate industry standards. There is an opportunity for research into this area, to ensure that the standards that are developed do not undermine housing affordability and promote climate resilience.</mark></td></tr><tr><td>There are several organizations with overlapping mandates. For instance the mandate of the National Housing Corporation is similar with that of the State Department of Housing and Urban Development. </td><td><mark style="color:green;">There is a need to harmonize all the regulatory frameworks and bodies, to ensure smooth delivery of housing rather than duplication of costs and time. It is worth noting that housing is increasingly provided as part of ‘mixed-use developments’ and hence the regulation and standards may be better monitored under a broader ‘real estate delivery mandate’ with certain clauses applicable to housing. This is worth further investigation.</mark></td></tr></tbody></table>

**The key conclusion** from an overarching review of Kenya’s housing policy since 1953 points to the need for greater collaboration, transparency and efficiencies to create an enabling environment in which affordable housing can be delivered. While public financing sources are limited, there is significant public land that can be made available for housing. With some projects delivered, the sector will begin to witness economies of scale which will motivate efforts to drive affordability further\\

***

\[1] Gentrification refers to a process where the character of a poor urban area such as a slum or informal settlement is changed by wealthier people moving in, improving housing, and attracting new businesses, often displacing current inhabitants in the process. As a result of gentrification, intended beneficiaries are unable to benefit from improved habitation.
