It is mind-boggling that the Kenya Kwanza  government believes it can get away with raiding Kenyans’ salaries through the proposed Housing Fund, which will see salaried employees part with as much as KSh 5,000 a month (with the matching amount paid by their employers) to contribute to a fund that may or may not benefit them directly. This at a time when most Kenyans are already suffering financially because of the high cost of living, and when many small and medium-sized companies are struggling to stay afloat. 

What’s worse, chances are that the housing kitty will likely operate as a slush fund as there will be no way to determine whether the money is going towards building affordable housing or is being stashed away for other purposes. Lack of accountability in how the government uses taxpayers’ money has always been an issue in Kenya. No wonder civil servants and unions are threatening to go on strike if the proposal in the new Finance Bill goes through.

President William Ruto is adamant that the Housing Fund is necessary because not just the rich but the poor must also own their houses. One of the reasons put forward by development experts for encouraging home ownership is that it is the most reliable way of ensuring security of tenure.  Home ownership is also seen as an asset that can help people get loans to invest in businesses. So, it is seen as a vehicle for economic growth. 

Singapore is often cited as a country that prospered through affordable housing. It started a housing programme in 1964 that saw 80 percent of Singaporeans owning their own homes within a few decades. The Housing and Development Board built housing units that were highly subsidised and sold on 99-year leasehold basis to applicants who met certain criteria. This was under the premiership of Lee Kuan Yew, who transformed the country economically from a poor squatter settlement to a thriving high-income city-state. 

 But Kenya is clearly not Singapore. 

Firstly, Singapore’s housing programme was carefully thought-out and planned in consultation with the target communities and with all income groups. No such community participation has taken place in Kenya. Secondly, Singapore was and is still one of the least corrupt countries in the world, so the beneficiaries of the scheme trusted and invested in it. Kenyans generally do not trust their government or government agencies with their money. The Auditor-General once reported that more than a third of taxpayers’ money is unaccounted for each year, and corrupt tendering processes are routine in government agencies. Under these conditions, it is unlikely that a Singapore-type housing scheme can work in Kenya. 

Moreover, the majority of Kenyans do not qualify to enter into any kind of housing mortgage scheme because they simply do not earn enough money. According to a baseline survey conducted by the World Bank a decade ago, the average monthly income in Kenya’s 15 largest urban areas in 2013 was KSh 21,748, with three-quarters of urban households earning less than KSh 22,500 a month. Even in the capital city Nairobi, only 33 percent of workers earned more than this amount. (It is likely that these figures remain the same today as incomes have not risen significantly since then despite rising inflation.) 

Now, according to World Bank estimates, a family earning this amount would only be able to afford a mortgage of KSh 485,968. I seriously doubt that any of the houses/flats being built using the housing fund will be less than KSh 2 million each, so these people, who constitute the majority of urban dwellers, will not benefit from the housing fund. So, the housing fund may only benefit middle-income groups with regular incomes, which are a minority in Kenya. And these groups would prefer to build their own homes in an area they choose rather than be forced into buying a house or flat they did not desire or design.  

In addition, what President Ruto and his predecessor Uhuru Kenyatta (who came up with a similar tax but had to retract it because of strong opposition to it) have failed to comprehend is that home ownership is not a priority for Kenyans, particularly those who live in urban areas, the majority of whom see themselves as transient migrants who will eventually return to their rural villages, where they already own a home. Most low-income urban dwellers (ostensibly the targets for the government’s affordable housing scheme) are more concerned about improving the quality of their houses in their villages than in owning a flat in the city. 

The number one priority for the urban poor is to find employment so they can pay for things like food, rent and schooling for their children. What low-income people living in cities need is not home ownership, but more affordable good quality rental housing and related infrastructure. 

While the affordable housing scheme could be lauded for improving the quality of housing for low-income people, the reality is that these people will most likely be edged out of any low-income affordable housing scheme, which will most likely end up benefiting middle-income groups, or will be hijacked by the rich.  The ultimate beneficiaries will be the contractors and private investors who will construct these houses – not to mention the government officials who will take kickbacks to award the tenders. 

The Buxton housing project in Mombasa is a clear example of how private investors end up benefiting from a so-called affordable housing scheme. More than 500 tenants were forcibly evicted to pave the way for 2,000 housing units. The most baffling part of the scheme was that only 10 percent of the units were allocated to Mombasa County; the rest went to the private investor. What’s worse, former tenants were not even given the option to enter a tenant-purchase arrangement, and so the majority now live in poor quality housing in informal settlements. Buxton should serve as a warning on how not to carry out an affordable housing project. 

And why what Singapore did cannot be replicated in Kenya. 


  • Rasna Warah

    Rasna Warah is a Kenyan writer and journalist with over two decades of experience as an editor, writer and communications specialist. She wrote a weekly op-ed column for the Daily Nation, Kenya’s leading newspaper, for many years, and has contributed to various regional and international publications, including, the UK’s Guardian, Africa is a Country, The East African, The Mail and Guardian, The Elephant, and Kwani? She has worked as an editor and writer at the United Nations Human Settlements Programme (UN-Habitat) and has published two books on Somalia: Mogadishu Then and Now (2012) and War Crimes (2016). Her first book, Triple Heritage (1998), explored the history of South Asians in East Africa. Her latest book, Lords of Impunity (2022), examines the failures and internal contradictions of the United Nations and what can be done to transform this global body. She holds a Master’s degree in Communication for Development from Malmö University in Sweden and a Bachelor of Science Degree in Psychology and Women’s Studies from Suffolk University in Boston, USA. She is based in Nairobi, Kenya.