President Ruto Signs Affordable Housing Bill Into Law

In a hurry? Here’s a quick summary…

• President William Ruto signs Affordable Housing Bill into law, reinstating controversial housing levy deductions.
• The law mandates employers and employees to remit 1.5% of monthly salaries, aiming to address housing needs across various income brackets with provisions for local sourcing of materials and labor.

President William Ruto has officially signed the contentious Affordable Housing Bill into law at State House, Nairobi, marking a significant development in housing policy. 

The bill’s enactment, which occurred on Tuesday, reinstates the divisive housing levy deductions that were previously suspended.

Following approval by both the Senate and the National Assembly, the bill underwent several amendments, notably incorporating county governments into its scope. 

Under the new law, all employers and employees are obligated to remit a deduction of 1.5% from their monthly salaries, impacting citizens’ finances.

This move comes after the High Court declared the housing levy unconstitutional in 2023, a decision upheld by the Court of Appeal, which cited the lack of a legal framework for its introduction.

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Despite these legal setbacks, the Ruto administration persisted, leveraging the suspension period to overhaul the bill, now providing a fresh legal foundation for the levy.

The Affordable Housing Bill delineates four key components, catering to various income brackets: the Social Housing Unit for individuals earning below Ksh.20,000, Middle-Class Housing for those earning above Ksh.49,000, General Affordable Housing for earners between Ksh.20,000 to Ksh.149,000, and Rural Housing for residents outside urban areas.

Implementation of the housing project will involve collaboration among multiple stakeholders, including the Ministry of Housing, National Housing Corporation (NHC), county governments, and private entities approved by the fund’s management body, the Affordable Housing Board. 

Notably, the bill emphasizes prioritizing slum areas for affordable housing construction and preventing multiple allocations of housing units.

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Furthermore, the legislation stipulates the sourcing of construction materials from local manufacturers and the engagement of local communities for labor, fostering economic growth and sustainability within communities.