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Centre for Affordable Housing Finance in Africa
  • LEGAL, POLICY AND INSTITUTIONAL REVIEW OF THE AFFORDABLE HOUSING SECTOR IN KENYA
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  • 1. SUMMARY of RECOMMENDATIONS
    • High Level Findings / Recommendations
    • Overall Policy & Regulatory Framework Recommendations
    • Land assembly, land acquisition, title, and registration of land tenure
    • Physical Planning
    • Construction and Maintenance
    • Financing (investment, rental, taxation)
  • 2. HOUSING VALUE CHAIN
    • i. Land assembly, Land Acquisition, Title and Registration of Land Tenure
    • ii. Physical Planning
    • iii. Construction and Maintenance
    • iv. Financing (investment, rental, taxation)
  • 3. INSTITUTIONS INVOLVED IN REGULATION OF HOUSING
    • i. Key National Government Ministries
    • ii. Secondary National Government Ministries
    • iii. County Governments
    • iv. Judiciary
    • v. Professional regulatory and advocacy bodies
  • 4. OVERARCHING POLICIES AND CONTEXT
  • 5. LAND ASSEMBLY, LAND ACQUISITION, TITLE AND REGISTRATION OF TENURE
  • 6. PHYSICAL PLANNING
  • 7. CONSTRUCTION AND MAINTENANCE
  • 8. HOUSING INVESTMENT, FINANCE & TAXATION
    • 8.1 Capital Markets and Wholesale Finance (Equity and Debt)
    • 8.2 Retail Finance
    • 8.3 Financial regulation of rental markets
    • 8.4 Taxation
  • ANNEX A: LAWS / POLICIES / REGULATIONS GOVERNING THE BREADTH OF THE HOUSING VALUE CHAIN
    • 1. Constitution of Kenya 2010
    • 2. Housing Act, 1953 Cap 117 (Revised in 2012)
    • 3. Housing Bill, 2021
    • 4. Sessional Paper No. 3 of 2016 on National Housing Policy
    • 5. Affordable Housing Act 2024
    • 6. Draft Affordable Housing Regulations, 2024
    • 7. The Economic and Social Rights Bill 2022
  • ANNEX B: LAWS / POLICIES / REGULATIONS GOVERNING LAND ASSEMBLY / ACQUISITION / TITLE / TENURE
    • 1. Land Act, No. 6 of 2012
    • 2. Land Registration Act, No. 3 of 2012
    • 3. Idle Land Taxation Policy 2018
    • 4. Community Land Act. No. 27 of 2016
    • 5. Sessional Paper No. 3 of 2009, the National Land Policy
    • 6. National Land Commission Act, No. 5 of 2012
    • 7. National Land Commission (Investigation of Historical Land Injustices) Regulations, 2017
    • 8. National Land Commission (Amendment) Bill, 2023
    • 9. Land Control Act (Cap 302), 1967
    • 10. Land Control Bill, 2023
    • 11. Environment and Land Court Act No. 19 of 2011
    • 12. Survey Act No. 25 of 1961 (Cap 299)
    • 13. Land Registration (General) Regulations, 2017
    • 14. Land Registration (Registration Units) Order, 2017
    • 15. Sectional Properties Act, No. 21 of 2020
    • 16. Land (Amendment) Bill 2022
  • ANNEX C: LAWS / POLICIES / REGULATIONS GOVERNING PHYSICAL PLANNING
    • 1. Sessional Paper No. 1 of 2017 on National Land Use Policy
    • 2. National Land Use Policy Implementation Monitoring and Oversight Tool 2022
    • 3. Kenya National Spatial Plan (2015-2045)
    • 4. Physical and Land Use Planning Act, No. 13 of 2019
    • 5. Physical and Land use Planning (Planning fees), Regulation 2021
    • 6. County Spatial Planning Guidelines, 2018
    • 7. Nairobi City Development Ordinances and Zones Guidelines 2004
    • 8. Nairobi Integrated Urban Development Master Plan (2014-2030)
    • 9. Physical Planning Handbook 2008
    • 10. Sessional Paper No. 10 of 2014 on The National Environment Policy
    • 11. Urban Areas and Cities Act, No. 13 of 2011
    • 12. Physical Planners Registration Act, No. 3 of 1996
    • 13. Export Processing Zones Act, 1990 (Cap 517)
    • 14. Investment Promotion Act, No. 6 of 2004
    • 15. Special Economic Zones Act, No. 16 of 2015
    • 16. Nairobi City County Regularization of Development Act No. 3 of 2015
    • 17. Nairobi City County Community and Neighbourhood Associations Engagement No. 4 of 2016
    • 18. Sectional Properties Regulations, 2021
    • 19. Nairobi City County Development Control Policy
  • ANNEX D: LAWS GOVERNING CONSTRUCTION AND MAINTENANCE
    • 1.Local Government (Adoptive ByLaws) Building Order, 1968 and The Local Government (Adoptive By-Laws
    • 2. National Building Code, 2024
    • 3. National Construction Authority Act, No. 41 of 2011
    • 4. National Construction Authority Regulations, 2014
    • 5. NCA Code of Conduct for the Construction Industry, 2020
    • 6. National Construction Authority (Defects Liability) Regulations, 2020
    • 7. Standards Act, 1974 (Cap 496)
    • 8. Buy Kenya-Build Kenya Strategy 2017
    • 9. Sessional Paper No. 1 of 2013 National Building Maintenance Policy for Kenya
    • 10. National Risk Disaster Management Bill 2023
    • 11. Kenya National Climate Change Response Strategy 2010
    • 12. Sustainable Waste Management Act 2022
    • 13. Forest Conservation and Management Act, No. 34 of 2016
    • 14. Forests (Harvesting) Rules, 2009
    • 15. Public Health Act, 1921 (Cap 242)
    • 16. Public Health (Drainage and Latrine) Rules, 1948
    • 17. Mining Act, No. 12 of 2016
    • 18. Persons with Disabilities Act, No. 14 of 2003
    • 19. The Climate Change (Amendment) Act, 2023
    • 20. Water Act No. 43 of 2016
    • 21. Environmental Management and Coordination Act, No. 8 of 1999
    • 22. Environmental (Impact Assessment and Audit) Regulations, 2003
    • 23. Environmental Management and Co-ordination (Water Quality) Regulations, 2006
    • 24. Environmental Management and Coordination (Noise and Excessive Vibration Pollution) (Control) Re
    • 25. Energy Act No. 1 of 2019
    • 26. Proposed Climate Change (Green & Resilient Buildings) Regulations 2023
    • 27. The National Construction Authority (Amendment) Bill 2022
    • 28. The Water (Amendment) Bill, 2023
    • 29. Persons with Disabilities Bill, 2023
    • Case Law
  • ANNEX E: LAWS AND POLICIES RELATING TO PROFESSIONALS IN HOUSING
    • 1. Architect and Quantity Surveyor Act, 1933 (Cap 525)
    • 2. Architects and Quantity Surveyors By-Laws, 1959
    • 3. Competition Act, No. 12 of 2010
    • 4. Engineers Act, No. 43 of 2011
    • 5. Engineering Rules, 2019
    • 6. Engineers (Scale of Fees for Professional Engineering Services) Rules, 2022
    • 7. Engineering Technology Act, No. 23 of 2016
    • 8. Valuers Act, 1985 (Cap 532)
    • 9. The Construction Project Managers and Construction Managers Bill 2023
    • 10. The Real Estate Management Bill 2023
    • 11. The Physical and Land Use Planning (Outsourcing of Professional Services) Regulations, 2021
    • 12. The Valuers Bill, 2022
  • ANNEX F: LAWS GOVERNING FINANCING / RENTAL / TAXATION
    • 1. Retirement Benefits Act, No. 3 of 1997
    • 2. Building Societies Act, 1956 (Cap 489)
    • 3. Banking Act, 1989 (Cap 488)
    • 4. Capital Markets (Real Estate Investment Trusts) (Collective Investment Schemes) Regulations, 2013
    • 5. Central Bank of Kenya Act 1966 (Cap 491)
    • 6. Estate Agents Act, 1984 (Cap 533)
    • 7. Sacco Societies Act, No. 14 of 2008
    • 8. Sacco Societies (Deposit-Taking Sacco Business) Regulations 2010
    • 9. Sacco Societies (Non-Deposit Taking Business) Regulations 2020
    • 10. Sacco Societies (Amendment) Act, 2022
    • 11. Sacco Societies (Specified Non-Deposit Taking Business) (Levy) Order, 2023
    • 12. Cooperative Societies Act, No. 12 of 1997
    • 13. Employment Act, No. 11 of 2007
    • 14. Guarantee (House Purchase) Act, 1967 (Cap 462)
    • 15. Civil Servants (Housing Scheme Fund) Regulations, 2004
    • 16. Housing Scheme Fund Regulations, 2018 (Legal Notice No. 238 of 2018)
    • 17. Income Tax Act (Cap 470)
    • 18. Finance Act, No. 22 of 2022
    • 19. Public Finance Management Act, No. 18 of 2012
    • 20. Unclaimed Financial Assets Act, No. 40 of 2011
    • 21. Proceeds of Crime and Anti-Money Laundering Act, No. 9 of 2009
    • 22. Kenya Deposit Insurance Act, No. 10 of 2012
    • 23. Mortgages (Special Provisions) Act, 1968 (Cap 304)
    • 24. Auctioneers Act No. 5 of 1996
    • 25. Auctioneers Practice Rules 2009
    • 26. Auctioneer Rules, 1997
    • 27. Rent Restriction Act, 1959 (Cap 296)
    • 28. Stamp Duty Act, 1958 (Cap 480)
    • 29. Stamp Duty (Valuation of Immovable Property) Regulations 2020
    • 30. Value Added Tax Act, No. 35 of 2013
    • 31. Public Private Partnerships Act, No. 14 of 2021
    • 32. County Governments Act, No. 17 of 2012
    • 33. National Rating Act, 2024
    • 34. Distress for Rent Act, 1938 (Cap 293)
    • 35. Landlord and Tenant Bill, No. 3 of 2021
    • 36. The Cooperatives Bill, 2024
    • 37. The Central Bank of Kenya (Mortgage Refinance Companies) Regulations, 2019
    • 38. Finance Act No. 4 of 2023
    • 39. Tax Laws (Amendment) Act 2024
    • 40. Tax Procedures (Amendment) Act 2024
  • ANNEX G: OFF-PLAN HOUSING DEVELOPMENTS
  • ANNEX H: IN-DEPTH ANALYSIS ON HANGING REGULATIONS
    • 1. Housing Bill, 2021
    • 2. Landlord and Tenant Bill, No. 3 of 2021
    • 3. Retirement Benefits (Mortgage Loans) (Amendments) Regulations, 2020
    • 4. Housing Scheme Fund Regulations, 2018 (Legal Notice No. 238 of 2018)
    • 5. Housing Scheme Fund Regulations, 2018 (Legal Notice No. 238 of 2018)
    • 6. National Construction Authority (Defects Liability) Regulations, 2020
    • 7. The Finance Bill, 2024
    • 8. The Valuers Bill, 2022
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  • Key gaps in the land assembly and titling value chain that need attention are:
  • Policies/laws requiring review or amendment

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5. LAND ASSEMBLY, LAND ACQUISITION, TITLE AND REGISTRATION OF TENURE

This section ventures to analyze the individual laws and policies in the land assembly and registration value chain, identifying gaps and proposing recommendations.

Previous4. OVERARCHING POLICIES AND CONTEXTNext6. PHYSICAL PLANNING

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Prior to 2012, the legal framework governing land was overly cumbersome and complex, with five different regimes for dealing in land viz: Registered Land Act, Registration of Titles Act, Government Lands Act, Land Titles Act and the Indian Transfer of Property Act. Pursuant to the 2010 Constitution and the enactment of new land laws in 2012, these multiple legal regimes were consolidated into the Land Act of 2012 (substantive law) and the (procedural law) thus simplifying the legal regime. Both 2012 laws cover all transactions on land, excluding community land, which is governed by the and Community The recognition of Community Land is an important step forward for Kenya which has large land parcels constituting over 60% of total land mass in the country. However, there is limited registration/titling of land under this Act at present.

Transacting in land continues to face challenges due to the various government departments involved and the room for rent-seeking behaviour. There has been an effort to digitize land transactions with the launch of in April 2021. This is a critical step forward, however, the platform has faced teething problems and is not fully operational. Limited titles in Nairobi have been digitized and the transfer of titles has stalled, as a result.

In addition, while the legislation allows for measures to leverage land values for development via effective land banking, idle land taxation, minimum and maximum acreages to be held, and others, these measures have not been enforced.

This component of the Housing Value Chain assesses Kenya’s laws/policies/regulations in the land assembly/acquisition and titling processes with a view to identifying progress, challenges and potential areas of improvement in the policy, legal and regulatory regime. This is important given the central place of land in the entire housing value chain, as land constitutes the key site on which human settlements are built.

The following laws/policies/regulations in the Land Assembly/Titling Component were reviewed in this study. These are summarized in Annex B with links to their source for further reference.

  1. (substantive law on land)

  2. (provides for registration processes including all dealings in land such as charges, leases and transfers)

  3. which provides for the management and registration of community land

  4. which provides for the structure and functions of the Commission.

  5. Survey Manual, 1961

  6. Idle Land Taxation Policy 2018 (only reported to have been developed – but not available for viewing)

  7. The Draft Land Sector Gender Policy– (not available for viewing);

  8. Draft Kenya National Spatial Data Infrastructure Policy (not available for viewing);

  9. ;

Overall, the legal and policy framework with respect to land is complex, notwithstanding the consolidating efforts of the Land Act in 2012. This is further complicated by the fact that some legislation has not been operationalized with regulations. A significant constraint is that it fails to engage productively with the notion of land value, and the impact this has on land use choices and affordable housing.

Key gaps in the land assembly and titling value chain that need attention are:

GAP

RECOMMENDATION

There are no policy instruments or frameworks in place that address issues of gender in land, spatial data, land surveying and mapping. While draft policies are in place, these need to be finalized. Efforts to map geospatial data are hindered by limited resources and capacity, and uncoordinated efforts between different players.

The Land Sector Gender Policy; Kenya National Spatial Data Infrastructure Policy; and the National Land Surveying and Mapping Policy all exist but need to be finalized and operationalized.

The current regulatory framework for land is silent on value. As a result, land values can be distorted by speculative landholders seeking to maximize their advantage. Both the 2010 Constitution and the 2009 National Land policy call for the governance of minimum and maximum acreages of private land, but this has not been developed. While a draft Idle Land Taxation Policy has been developed, it is not yet finalised.

A detailed review of land values and property price dynamics, and measures to leverage these in support of affordable housing (and other developmental objectives) is needed, given the competing pressures, especially in urban areas. From this, it will be possible to consider the development of a land banking policy, a law on minimum and maximum acreages of private land and guidelines/regulations on penalties for compliance, and the appropriate parameters for an Idle Land Taxation Policy.

Policies/laws requiring review or amendment

STATUS / ISSUE

RECOMMENDATION

Fast-tracking the adoption of the Recommendations on Kenya National Land Policy 2023 which has important implications on affordable housing given its impact on the availability and price of land.

STATUS / ISSUE

RECOMMENDATION

Rising land prices are undermining housing affordability in several areas. Section 107A of the Land Act provides for land value indexes, but these have not been developed in many areas.

The recommended review of Kenyan land values and property price dynamics will create the basis for supporting the development of regulations towards the creation of a national land value index throughout the country. It was reported that the Ministry of Lands is finalizing the National Land Value Index. This process has been quite slow and it should be fast-tracked to standardize and harmonize value of land across the country.

Sections 90 and 96 of the Land Act set out the foreclosure process (power by lenders to exercise statutory power of sale). This process is inordinately long and cumbersome (foreclosure takes a minimum of 6 months) thus restricting lenders from recovering their monies upon defaults, and thereby militating against lending, especially to what are perceived as higher-risk clients.

A full review of the impact of the Land Act and its provisions on the practice of mortgage lending, especially to low-income earners, is necessary. This review should engage lenders on how they manage the risk of foreclosure and seek to simplify and shorten the processes involved.

Section 105 of the Land Act gives courts the power to reopen and rewrite charges relating to matrimonial property, and to provide relief to borrowers based on extraneous factors. This interferes with the sanctity of contracts (freedom of contract) and disincentivizes lending.

A full review of the impact of the Land Act 2012 and its provisions on the practice of mortgage lending, especially to low-income earners, is necessary. This review should reconsider the power given to courts to reopen and rewrite charges relating to matrimonial property and to provide relief to borrowers, so that access to finance is not undermined.

National Land Information Management System/ArdhiSasa platform

STATUS / ISSUE

RECOMMENDATION

Section 6 of the Land Registration Act and the Land (Registration Units) Order 2017 set into motion a new registration regime, involving the digitization and migration of title to the new system. At the same time, a moratorium on dealings / transactions on land not yet migrated has been put in place. As the title digitization process has been delayed, all land transactions have been stalled. This has had a particular impact on the availability of finance.

The land title conversion process must be expedited. At the same time, there is a need to deal with the low/lack of confidence among landowners who are sceptical and wary of the title conversion process and reluctant to apply for title conversions.

The Act presumes the development of guidelines/procedures by the Survey Office to inform the issuance of a unique prefix number to support geo-referencing of sectional units. These have not yet been forthcoming, and the deadline was December 2022.

Provide the required guidelines/procedures to support geo-referencing and title migration.

In keeping with the law’s requirement for an electronic land information system, Ardhi Sasa was launched in April 2021. The platform suffers, however, from incomplete digitization, missing records, difficulties in users obtaining consent, and the first in first out principle not being adhered to, making it non-functional.

A review of the intentions, form and function of Ardhi Sasa is needed to address the gaps and ensure it delivers what was envisioned. With the implementation of a digital lands’ registry regime, this review and renovation of Ardhi Sasa is particularly urgent. The review should incorporate views from all key stakeholders including the Ministry of Lands, National Land Commission and County Governments professional bodies such as LSK, and Surveyors.

STATUS / ISSUE

RECOMMENDATION

The Sectional Properties Act and its accompanying regulations provide for the conversion of long-term leases to sectional titles. The timelines set for this to occur, however, are unfeasible and impractical. The implication of not meeting the deadline is that there may be a legal crisis or stalling of transactions.

The Sectional Properties Act should be amended to extend the current statutory timeline of 2 years for title conversion. There have been implementation challenges affecting compliance with the requirements of geo-referencing which is a pre-requisite for conversion of long-term leases to sectional titles. In August 2023, the State Department for Lands & Physical Planning, the Law Society of Kenya, the Institution of Surveyors of Kenya and the Kenya Bankers Association issued a joint memorandum on transitional measures to allow for the registration of long-term leases or transactions dealing with long-term leases while undertaking geo-referencing.

The Regulations exempts from the requirement for conversion to sectional units, long term leases relating to projects of strategic national importance and substantial transactions and where it is expressly provided that the reversionary interest belongs to the developer or lessor or management company as legal owner and not trustee. There is no clarity as to what constitutes substantial transactions. There is also no clear definition of who a “trsutee” is.

Review the Regulations to provide the necessary clarity.

Absence of a procedure in the Sectional Properties Act or the Regulations applying for exemptions from converting long term leases to sectional titles.

Provide guidelines or procedures for applying for exemptions

No clarity in the exemptions on what is meant by ‘mixed use development’ in terms of minimum acreage and diversity.

Review the Regulations to provide the needed clarity.

· Survey Manual 1961

STATUS / ISSUE

RECOMMENDATION

Kenya’s survey laws/policies are old and outdated. For instance, the methods and approaches stipulated in the existing Survey Manual have been overtaken by significant advancement in technology.

There is an opportunity to improve surveying capacity with currently available and deployed digital solutions both for relevance and efficiency. This should be pursued.

· on National Land Policy

The 2009 National Land Policy is outdated and due for review. The National Land Commission (“NLC”) developed the . The Recommended National Land Policy 2023 amends the 2009 National Land Policy to align it with the 2010 Constitution of Kenya and introduces new thematic areas such as land information management, natural resources, environment and conservation, investment and climate change.

·

.

·

Land Registration Act of 2012
Community Land Act 2016
Land Regulations 2017.
Ardhi Sasa
Land Act, No. 6 of 2012
Land Registration Act, No. 3 of 2012
Land Registration (General) Regulations, 2017
Land Registration (Registration Units) Order, 2017
Community Land Act 2016
National Land Commission Act 2012
National Land Commission (Investigation of Historical Land Injustices) Regulations, 2017
National Land Commission (Amendment) Bill, 2023
Community Land Regulations 2017
Sessional Paper No. 3 of 2009, The National Land Policy
Land Control Act (Cap 302) 1967
Land Control Bill, 2023
Environment and Land Court Act No 19 of 2011
Survey Act No. 25 of 1961 (Cap 299)
Sectional Properties Act, No. 21 of 2020
Sectional Properties Regulations, 2021
Draft National Land Surveying and Mapping Policy
Land Amendment Bill 2022
Recommended National Land Policy 2023
Sessional Paper No. 3 of 2009
Recommended National Land Policy 2023
Land Act No. 6 of 2012
Land Registration Act No. 3 of 2012
Land (Registration Units) Order 2017)
Sectional Properties Act 2020
Sectional Properties Regulations 2021
Survey Act 1961 (Cap 299)