> For the complete documentation index, see [llms.txt](https://cahf.gitbook.io/kenya-legal-policy-and-institutional-review/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://cahf.gitbook.io/kenya-legal-policy-and-institutional-review/annex-h-in-depth-analysis-on-hanging-regulations/4.-housing-scheme-fund-regulations-2018-legal-notice-no.-238-of-2018.md). # 4. Housing Scheme Fund Regulations, 2018 (Legal Notice No. 238 of 2018) Quick link:


STATUS / ISSUE	RECOMMENDATION
Regulation 3(2) provides that an affordable housing scheme is differentiated into various schemes viz: social housing (designated for monthly income earners earning up to Ksh 19, 999); low-cost housing (designated for those earning between Ksh 20, 000 to Ksh 49, 999), mortgage gap housing (for those earning between Ksh 50, 000 to Ksh 149, 999), and middle to high income housing (for those earning Ksh 150, 000 and above).	Consider whether another category of middle to high income housing (above KShs. 150,000 to say 300,000/=) is required to enable purchase of formal housing due to lower concessional financing compared to the lower income bands, to enable unlocking of KMRC?
Employers and employees were to each contribute 1.5% making a total of 3% of monthly gross pay (capped at Ksh. 166, 000 per month) to individual accounts known as Housing Fund Credit accounts. The Regulations were however quashed by the court and therefore their implementation derailed.	While housing funds are a critical way to collect the necessary funding to invest into housing, the lack of stakeholder engagement and mandatory nature of the laws meant that this well-meaning regulation was quashed. Questions not addressed in the regulations were what would happen to the funds if the contributor did not utilize it for housing, would a suitable interest rate be paid on this ‘forced savings’, would there be equity in the allocation of housing etc. Support greater stakeholder engagement for equitable regulations that encourage savings for housing.

STATUS / ISSUE

RECOMMENDATION

Regulation 3(2) provides that an affordable housing scheme is differentiated into various schemes viz: social housing (designated for monthly income earners earning up to Ksh 19, 999); low-cost housing (designated for those earning between Ksh 20, 000 to Ksh 49, 999), mortgage gap housing (for those earning between Ksh 50, 000 to Ksh 149, 999), and middle to high income housing (for those earning Ksh 150, 000 and above).

Consider whether another category of middle to high income housing (above KShs. 150,000 to say 300,000/=) is required to enable purchase of formal housing due to lower concessional financing compared to the lower income bands, to enable unlocking of KMRC?

Employers and employees were to each contribute 1.5% making a total of 3% of monthly gross pay (capped at Ksh. 166, 000 per month) to individual accounts known as Housing Fund Credit accounts.

The Regulations were however quashed by the court and therefore their implementation derailed.

While housing funds are a critical way to collect the necessary funding to invest into housing, the lack of stakeholder engagement and mandatory nature of the laws meant that this well-meaning regulation was quashed. Questions not addressed in the regulations were what would happen to the funds if the contributor did not utilize it for housing, would a suitable interest rate be paid on this ‘forced savings’, would there be equity in the allocation of housing etc.

Support greater stakeholder engagement for equitable regulations that encourage savings for housing.

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