President William Ruto commissioning construction of houses under the Affordable Housing Programme/PCSAffordable housing was one of President William Ruto’s signature promises during the 2022 presidential campaign, forming a central pillar of his economic agenda and his pledge to create jobs while improving the lives of ordinary Kenyans.
Now one of his administration’s flagship projects, the Affordable Housing Programme has remained at the heart of Ruto’s development agenda, even as its implementation has attracted praise and criticism over funding, construction, access to completed homes and the mandatory levy imposed on workers.
The programme was conceived as more than a housing initiative. The government has presented it as a major economic transformation project designed to create employment, stimulate the construction sector and expand homeownership among low- and middle-income Kenyans.
At the centre of the programme is the Affordable Housing Levy, which provides a dedicated source of financing for construction of low-cost homes and development of related urban infrastructure.
Under the scheme, employees contribute 1.5 per cent of their gross salary, with employers required to make a matching 1.5 per cent contribution.
The Kenya Revenue Authority through the iTax system collects the levy, with remittance required by the ninth working day of the month following the deduction.
Late payments attract a penalty of three per cent for every month the amount remains unpaid, placing employers under pressure to comply.
The government has sought to move the housing programme away from reliance on the national Exchequer by creating a dedicated financing mechanism through the levy.
It has also been investing unspent collections in short-term Treasury bills to generate interest while funds await deployment into construction projects.
More recently, the State Department for Housing has explored securitising future housing levy collections to raise additional financing.
The proposed arrangement would allow the government to use anticipated future levy revenues as collateral to borrow up to Sh100 billion from international development partners to bridge existing financing gaps.
The growing revenues from the levy have become a key feature of the programme.
The Kenya Revenue Authority collected Sh73.2 billion from the housing levy in the 2024/2025 financial year, exceeding the National Treasury's original target of Sh63.2 billion.
The collection represented an achievement rate of 115.82 per cent and marked a 35 per cent increase from the Sh54.2 billion collected during the levy’s first year.
The government has also intensified enforcement against employers and individuals who fail to remit the levy.
Non-compliance can attract enforcement measures, including restrictions on bank accounts, deactivation of KRA PINs and asset recovery, alongside the three per cent monthly penalty on unpaid contributions.
For the government, the figures demonstrate that the levy is capable of supporting a large-scale housing programme without placing the entire burden on the national budget.
But critics argue that the financing model has shifted the burden to workers at a time when many households are already struggling with high living costs.
Opposition politicians have repeatedly called for the abolition of the 1.5 per cent levy, arguing that it reduces workers' disposable income without guaranteeing that contributors will ultimately secure homes.
Ruto has rejected those calls, maintaining that scrapping the levy would undermine one of his administration's major transformation programmes.
“We still have politicians who think you can make populist comments, saying they are going to stop the affordable housing levy to protect the payslips of people,” Ruto has said.
The President has also defended the programme against political criticism, arguing that the government must remain focused on its long-term development agenda.
“No amount of noise or opposition will derail our transformation agenda. We remain committed to delivering the Affordable Housing Programme,” Ruto said.
Opposition leaders have, however, maintained that they would scrap the levy if they form the next government after the 2027 General Election.
The political dispute over the levy has therefore turned affordable housing into one of the issues likely to feature prominently in the next election.
Beyond the financing debate, the government has pointed to an expanding pipeline of housing projects across the country.
Approximately 8,800 affordable housing units have been completed and handed over to buyers, with the pace of completion increasing from about 1,655 units in 2024 to more than 6,700 in 2025.
The figures, however, remain below the President's original target of delivering 250,000 housing units annually.
The government says construction has gained significant momentum, with between 214,000 and 277,000 additional units currently under construction across all 47 counties.
The projects include social housing units, standard affordable homes and more than 73,000 university student accommodation beds.
The administration has also portrayed the programme as a major employment generator.
According to the Presidency, the construction programme has created more than 1.1 million direct and indirect jobs.
The jobs span a wide range of sectors and occupations, including opportunities for young people, mechanics, engineers, plumbers and construction workers.
The nationwide construction drive has also been designed to stimulate local businesses by creating demand for building materials, transport services, skilled labour and other services connected to the construction industry.
The government argues that the programme therefore extends beyond the construction of houses to creating an ecosystem around the building sector.
Interest among Kenyans has also been significant.
More than 1.3 million people have registered on the Boma Yangu platform to express interest in owning homes under the programme.
However, the number of people who have progressed from registration to actual applications and allocations is significantly smaller.
About 38,000 citizens have formally applied for homes, while approximately 11,000 have received allocations.
Around 5,300 families have already moved into their new homes.
To make homeownership more accessible, the government reduced the required upfront deposit from 10 per cent to five per cent.
It has also introduced payment restructuring measures aimed at assisting low-income buyers who experience financial difficulties in meeting their obligations.
The adjustments are intended to address one of the major challenges facing the programme: ensuring that houses built under the initiative are actually affordable to the people the scheme is designed to serve.
Despite the reported progress, the programme has faced criticism and scrutiny in Parliament.
Lawmakers have raised concerns over procurement processes, delays in project implementation, capacity of local contractors and stalled construction sites in some regions.
Questions have also emerged over whether the rapid expansion of the programme can be matched by adequate oversight and transparency in the use of billions of shillings collected from workers and employers.
The scale of the financial commitment has made accountability a central issue.
As the 2027 election approaches, affordable housing is therefore likely to become both a key measure of Ruto's record and a major political battleground.
