Analysis of the Affordable Housing Bill 2023: Key concerns and objectives for comprehensive legislation

  • 12 Jan 2024
  • 3 Mins Read
  • 〜 by Naisiae Simiren


The Affordable Housing Bill 2023 (the Bill) was tabled in the National Assembly for its first reading on 7th December 2023 and referred to the Departmental Committee on Housing, Urban Planning and Public Works and Departmental Committee on Finance and National Planning for consideration and reporting to the House. 

The Bill was formulated after the High Court declared Section 84 of the Finance Act, 2023, unconstitutional for failure to provide a foundational statute providing for a comprehensive legal framework. Section 84 amended the Employment Act, 2007 by introducing the Affordable Housing Levy (the levy) imposed at the rate of 1.5% on the employee’s gross salary and 1.5% on the employer based on the employee’s gross salary. The Employment Act also introduced obligations of the employer to deduct and remit the levies.

Objectives of the Bill

The respondents in the matter appealed the decision and obtained conservatory orders allowing the government to continue collecting the housing levy pending the determination of the appeal. The Bill is in its earlier stage of the legislative process that being the public participation stage, which is set to begin in the coming week. The main objectives of the Bill include giving effect to the constitutional right to accessible and adequate housing with reasonable standards of sanitation, imposing the levy and providing a legal framework for the implementation of affordable housing programmes and projects.

The Bill provides that the levy imposed on both the employed and non-employed persons shall be payable to either two collectors, with the first being the Kenya Revenue Authority and the other to be determined by CS for National Treasury. This money shall be paid into the Affordable Housing Fund (the Fund) established in the Bill. The Bill gives further discretion to the Cabinet Secretary in recommendation with the CS for Housing to exempt the class of income or category of persons from paying the levy. The Kenya Revenue Authority Act mandates the KRA as an agency of the government for the collection and receipt of all revenue. Therefore, the Bill should scrap off the definition of a collector, which allows for the appointment of another collector. The effect of this provision will likely lead to misuse of the funds due to inefficient accountability.

Additionally, the High Court found Section 84 of the Finance Act, 2023, as being discriminatory by targeting only salaried employees. While the Bill provides for persons other than those in formal employment, little is provided on how the levy will be collected. On the other hand, employers are obligated to deduct and remit the amount from the employee’s gross salary not later than the ninth working day after the end of the month. The Bill provides for 3% of the total amount unpaid to the Fund by the employer as a penalty. This penalty is quite punitive and should be reduced downwards, given that the employer’s contribution to the Fund is an additional expense to businesses which are struggling to remain afloat in the current economic recession.

Affordable Housing Units

The Bill defines affordable housing units in three categories, namely, social housing units targeted to persons whose monthly income is below Kshs 20,000, affordable housing units targeted to persons whose monthly income is between Kshs 20,000kshs-149,000 and affordable market housing units targeted to persons earning income of over Kshs 149,000. The categorisation also varies on the plinth area of these units, with the largest being 60 square meters for the middle to high income housing with the least being between 18-30 square meters.  

The eligibility to allocate these housing units has been simplified in the Bill to only adult Kenyan citizens with Kenyan identity cards. The Bill provides that interested eligible Kenyans will apply to the relevant agency in the manner prescribed, and the agency is mandated under the Bill to give preference to marginalised persons, vulnerable groups, youth, women and persons with disabilities. However, the Bill does not provide a list of agencies to which Kenyans will make applications, which creates uncertainty. The Bill, however, allocates the Fund to three housing projects: programmes under the National Housing Corporation, institutional housing projects under the State Department for Housing, and programmes under the Public Finance Management (Kenya Slum Upgrading, Low-Cost Housing and Infrastructure Trust Fund) Regulations 2006.

In addition, the agencies under the Bill have been empowered to provide loans to eligible persons desiring to purchase an affordable housing unit. The loan interest rates for the social housing unit and the affordable housing unit are similar at 3%, whereas for the affordable market housing units it is at 9%. The Bill needs to provide for a uniform loan interest rate as 9% is quite high and will likely discourage the targeted persons who are already taxed heavily from the recently revised tax bands. The rate should, therefore, be set at 3% or revised downwards.  


The Affordable Housing Bill 2023 is an important Bill which provides for a foundational statute that will enable the implementation of Article 43 (1)(b) on the right to accessible and adequate housing. Its implementation will ensure that every person in Kenya enjoys a plethora of other fundamental rights, such as the right to security and health. However, some of the highlighted issues in the Bill must be addressed before the Bill is assented into law by the President.