1. Housing Bill, 2021

The Bill seeks to revise the current Housing Act (Cap 117), require the maintenance of housing data bank and creation of alternative dispute resolution mechanisms.

Quick Link: https://isk.or.ke/download/housing-bill-2021-draft/

· Sections 21 and 22 of the Bill require the government to maintain a database/data bank of low-income individuals living in urban areas in order to identify persons qualifying for “low cost” houses. It is a powerful tool of developing the housing market by providing the necessary aggregated housing data that will help inform developers and thus promote housing supply to the target markets.

· It also regulates the development of guidelines to promote the construction of low-cost houses using appropriate building technology; and provides incentives to investors in the housing and construction industry who invest in low-cost houses.

· The creation of an alternative Dispute Resolution Mechanism via the proposed Tribunal (Section IV), has significant merit. However, there needs to be further thought towards: Potential overlap between the Tribunal set up under the Landlord and Tenant Bill 2021 and the Tribunal under the Housing Bill, may lead to confusion in implementation and jurisdictional overlaps; Timelines for dispute resolution by any Tribunal should be prescribed in law to avoid long drawn out processes which discourage participation and encourage parties to circumvent the framework; Creation of a consumer protection framework is important, and should cover both the development and management phases of housing.

· The functions of the Director General of Housing listed in Section 6 are currently too many (36 in number) creating potential confusion and conflict, as well as challenges in implementation. These functions need to be whittled down to at most 10 as well as to be reconciled with the functions currently being undertaken by the 5 departments/divisions within the State Department for Housing to enable easy implementation.

· The definitions of the Bill with respect to “adequate housing”, “affordable housing,” and “low-cost housing” need clarification. The Bill defines ‘affordable housing’ as ‘housing that is adequate and costs not more than 30% of household income per month to rent or acquire’. This would mean that a family earning KES 1 million a month, would find a house costing KES 300,000/= per month “affordable”. Any definition of ‘affordable housing’ should not be tied to a flat percentage rate. There is significant research indicating that lower income households are unable to dedicate 30% of their income on housing, given other responsibilities (food, healthcare, transport), and therefore spend a lower % of their income on housing. The definition of household income spent on housing should also be clarified as being ‘after tax income’, as this is typically silent in the law and leads to a mismatch between demand affordability and supply expectations of affordability. The Bill defines “low-cost housing” as ‘a house that is functional, adequate and affordable to a person who earns a low income’; and further defines “low income” as ‘the meaning as provided for in the consumer price index guide of Kenya National Bureau of Statistics’. Benchmark low-income tiers for 2021 should be provided as a guide to understand the applicability of the law.