An Act of Parliament to give effect to article 43(1)(b) of the Constitution and to provide a framework for access to affordable housing.
| PART I - PRELIMINARY | ||
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| PROPOSED PROVISION FOR AMENDMENT | PROPOSED AMENDMENT | OUR COMMENTS |
| Clause 2 Interpretation | “administrator of the Fund” means the person designated as the administrator of the Fund under section 11. | We propose the deletion of the words “section 11” and replacing it with the words “section 22”. The chief executive officer has been designated as the administrator of the Fund in clause 22(1) of the Bill. |
“affordable housing” means housing that is adequate and costs not more than thirty percent of the income of a person per month to rent or acquire. | Access to adequate and affordable housing is a basic human need which is enshrined in article 43 of the Constitution. |
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“agency” means an institution allocated monies for affordable housing under section 11. | The agencies listed in clause 11 of the Bill will be allocated monies which will be used for the development and maintenance of affordable housing projects. |
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“affordable housing scheme” means the construction of affordable housing units including such other social amenity, infrastructure or services and the acquisition, laying out, subdivision and the development of land comprised within the area of the scheme necessary for social welfare and trading. | The inclusion of social amenities and infrastructure allows residents to benefit from a more convenient and comfortable living environment with access to recreational opportunities, healthcare services and transportation options. |
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“collector” means: a. the Commissioner-General of the Kenya Revenue Authority (“KRA”), appointed under section 11(1) of the Kenya Revenue Authority Act; or b. any other person appointed by the Cabinet Secretary for the time being responsible for National Treasury for the purpose of collection funds under this Act. | In Okiya Omtatah and six others v the Cabinet Secretary for the National Treasury and Planning and 3 others (Petition No. E181 of 2023), the High Court (Majanja J, Meoli J and Mugambi J) noted that the Affordable Housing Levy (“the Levy”) is not one of the taxes KRA is empowered to collect. The Bill seeks to address this issue by mandating the Commissioner-General of KRA to be the collector of the Levy. |
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For the purposes of this Act, “affordable housing unit” refers to: a. a social housing unit with a plinth area of between eighteen and thirty square metres and targeted to a person whose monthly income is below twenty thousand shillings; b. an affordable housing unit with a plinth area of between thirty-six and eighty square metres and targeted at a person whose income is between twenty thousand and one hundred and forty-nine thousand shillings; or c. an affordable housing unit with a plinth area of between thirty-six and eighty square metres for the middle to high income and targeted at a person whose monthly income is over one hundred and forty-nine thousand shillings. | By categorizing affordable housing units based on income levels, this ensures that housing units are available to all individuals across various income brackets. This ensures that everyone has access to safe, decent and affordable housing units. |
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Clause 3 Objects and guiding principles | The objects of this Act shall be to: a. give effect to article 43(1)(b) of the Constitution on the right to accessible and adequate housing; b. impose a levy to facilitate the provision of affordable housing; and c. provide a legal framework for the implementation of the affordable housing programmes and projects. The implementation of this Act shall be guided by: a. the national values and principles of governance under article 10(2)(b) of the Constitution; b. the principles of public finance under article 201 of the Constitution; and c. the values and principles of public service under article 232 of the Constitution. | The imposition of the Levy to facilitate the provision of affordable housing creates a dedicated source of funding for housing programs and projects. This ensures sustainable financing for initiatives aimed at increasing housing affordability and accessibility. Secondly, the Bill provides a clear legal framework for the implementation of affordable housing programs and projects. This clarity helps streamline processes, enhance accountability and ensure effective execution of affordable housing initiatives. |
Guiding principles provide clarity about the intent and purpose of the Bill. They help Parliament to articulate the fundamental values and goals the Bill aims to achieve, ensuring consistency in its interpretation and application over time. By clearly stating the objects of the Bill, it helps in interpreting and understanding its provisions. Further, objects ensure that the Bill is effectively implemented, applied consistently and aligned with its intended purposes. |
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PART II - IMPOSITION OF AN AFFORDABLE HOUSING LEVY | ||
Clause 4 Imposition of the Levy | There is imposed a levy known as the Affordable Housing Levy. The Levy shall be at the rate of one point five percent of: a. the gross salary of an employee; b. the gross income of a person received or accrued which is not subject to the Levy under paragraph (a). The Levy shall be payable to the collector, for remittance into the Affordable Housing Fund (“the Fund”), not later than the ninth working day after the end of the month in which the gross salary was due or gross income was received or accrued. | This clause ensures that both salaried and non-salaried persons pay the Levy. This was an issue raised in Okiya Omtatah and six others v the Cabinet Secretary for the National Treasury and Planning and 3 others (Petition No. E181 of 2023) where the High Court determined that the Levy was discriminatory as it was only being paid by salaried persons. Secondly, the Bill is silent on how the Levy will be collected from non-salaried persons. We propose that the government creates a system to address this issue. This will allow for timely and efficient collection of the Levy from non-salaried persons. Thirdly, the addition of sub-clause (3) is a good proposal as it seeks to align the date of remittance of the Levy with the date in which P.A.Y.E. is remitted to KRA. |
Clause 5 Obligations of an employer | An employer shall: a. deduct and remit the amount referred to in section 4(2)(a) from the gross salary of an employee; and b. remit an amount equivalent to the amount deducted under section 4(2)(a), to the collector. | Clearly defined obligations ensure that employers comply with the provisions of this Bill. This reduces the risk of legal disputes, fines or penalties for non-compliance. |
Clause 6 Exemption from imposition of the Levy | The Cabinet Secretary for the time being responsible for the National Treasury may, on the recommendation of the Cabinet Secretary, provide, by notice in the Gazette, that: a. any income or class of income; or b. any person or category of persons, shall be exempt from the application of section 4 to the extent specified in the notice. | We propose that the criteria used by the Cabinet Secretary to determine if a person will be exempted from paying the Levy is included in this clause. This proposal enhances transparency as it creates a legal framework that the Cabinet Secretary will follow in determining whether a person can be exempted from paying the Levy. |
Clause 7 Default in payment of amount of the Levy | Where an amount of the Levy remains unpaid after the date when it becomes due and payable by a person liable to remit the amount, a penalty equal to three percent of the unpaid amount shall be due and payable for each month or part thereof that the amount remains unpaid and shall be summarily recovered as a civil debt from the person liable to remit the amount. | The imposition of penalties allows for timely payment of the Levy. This reduces instances of delayed payments and ensures that the provisions of this clause are complied with. |
PART III – ESTABLISHMENT AND MANAGEMENT OF THE AFFORDABLE HOUSING FUND | ||
Clause 8 Establishment of the Fund | There is established a fund to be known as the Affordable Housing Fund which shall be vested in and managed by the Board. | The Fund will be used to develop affordable housing units and associated social and physical infrastructure. This will allow Kenyans to have access to housing units pursuant to article 43(1)(b) of the Constitution. |
Clause 9 Sources of funds | There shall be paid into the Fund: a. monies deducted or payable as the Levy under this Act; b. monies appropriated by the National Assembly for the purposes of the Fund; c. gifts, grants or donations; d. income from investments made by the Fund; e. income accruing to the Fund in the course of the performance of its functions under any written law. | This clause indicates the methods used to raise funds which will be used to construct affordable housing units and associated social and physical infrastructure. |
Clause 10 Purpose of the Fund | The purpose of the Fund shall be to provide funds for the development of affordable housing and associated social and physical infrastructure. Without prejudice to the generality of subsection (1), the Fund shall: a. facilitate the provision of funds for affordable housing and affordable housing schemes in the promotion of home ownership; b. provide low interest loans for the acquisition of affordable housing units within the approved affordable housing schemes; c. facilitate the development of affordable housing schemes in all counties; d. develop long term finance solutions for the development and off-take of affordable housing; e. provide funds for maintenance of any land or building, estate or interest therein, for any of the purposes of the Fund; and f. fund any other activities incidental to the furtherance of the objects of the Fund. | The addition of paragraph (b) is a good addition. Firstly, providing low-interest loans for the acquisition of affordable housing units promotes home ownership and helps individuals and families achieve housing security and stability. For paragraph (c), the Fund aims to facilitate the development of affordable housing schemes in all counties. This contributes to balanced regional development and reduces disparities in housing availability between urban and rural areas. For paragraph (d), developing long-term finance solutions for the development and off-take of affordable housing promotes sustainable housing development practices and ensures ongoing availability of funds for affordable housing projects. |
Clause 11 Allocations out of the Fund | The Board shall allocate out of the Fund: a. thirty percent of the monies to the National Housing Corporation for the development, maintenance, rehabilitation and off-take of affordable housing programmes and projects; b. thirty percent of the monies to slum upgrading, maintenance, rehabilitation and offtake of affordable housing programmes and projects under the Public Finance Management (Kenya Slum Upgrading, Low-Cost Housing and Infrastructure Trust Fund) Regulations 2006; c. thirty six percent of the monies to the State Department responsible for matters relating to affordable housing for the development, maintenance, rehabilitation and offtake of institutional housing programmes and projects approved by Cabinet; d. up to two percent to the collector for the collection of the Levy as may be approved by the Cabinet Secretary forie the time being responsible for the National Treasury on the recommendation of the Cabinet Secretary; and e. up to two percent of the monies to the Board for the administration of the Fund as may be approved by the Cabinet Secretary for the time being responsible for the National Treasury on the recommendation of the Cabinet Secretary. | By allocating specific percentages of funds to different agencies, the Board ensures that resources are directed towards targeted areas of affordable housing development, including maintenance, rehabilitation and slum upgrading. This focused utilization enhances the impact and effectiveness of the Fund's activities in addressing housing affordability challenges. Secondly, the allocation percentages reflect a balanced approach to addressing various aspects of affordable housing, including the development of institutional housing, slum upgrading and maintenance. This ensures that resources are distributed equitably across different priority areas, promoting balanced and inclusive development. |
Clause 12 Establishment of the Board | There is established a Board to be known as the Affordable Housing Board. The Board is a body corporate with perpetual succession and a common seal and shall, in its corporate name, be capable of: a. suing and being sued: b. taking, purchasing or otherwise acquiring, holding, charging or disposing of movable and immovable property; and c. doing or performing all other things or acts for the furtherance of the provisions of this Act which may be lawfully done or performed by a body corporate. The Board shall consist of the following: a. a non-executive Chairperson appointed by the President; b. the Principal Secretary to the National Treasury or his representative designated in writing; c. the Principal Secretary of the State Department for the time being responsible for matters relating to affordable housing or his representative designated in writing; d. three other persons who shall be appointed by the Cabinet Secretary, of whom: i. one shall be a nominee of the Council of County Governors; ii. one shall be a nominee of the Central Organization of Trade Unions; and iii. one shall be a nominee of the Federation of Kenya Employers. e. Three persons, not being public officers, appointed by the Cabinet Secretary and who shall possess qualifications in built environment, finance or law; and f. The chief executive officer who shall have no right to vote at a meeting of the Board. In nominating a person to be a member under subsection (3)(d), the nominating bodies shall present the names of three persons to the Cabinet Secretary from amongst whom one shall be appointed. The members of the Board referred to in subsection (3)(a), (d) and (e) shall be appointed at different times so that the respective expiry dates of their terms of office shall be at different times. | The purpose of sub-clause (2) is to give the Board legal capacity to act in its own name. For sub-clause (3)(a), we propose that the Chairperson is appointed through a fair, transparent and competitive process. This proposal has the following benefits: a. a fair, transparent and competitive appointment process ensures that candidates are evaluated based on their qualifications, skills and experience. This helps to attract and select the most suitable individual, contributing to the overall effectiveness and efficiency of the Board; and b. this proposal ensures that appointments are done in a fair and transparent manner in accordance with the values and principles set out in the Constitution. For sub-clause (3), the Board has an odd number of members who can vote during meetings. When there’s an even number of members who can vote, there’s a greater risk of deadlocks. This makes it difficult for the Board to make decisions, resolve conflicts or move forward with its agenda. An odd number ensures that there will always be a majority decision. The addition of sub-clause (5) is a good proposal. Different appointment dates for members minimize the potential for disruption caused by mass turnover or vacancies on the Board. By spreading out the expiration dates of members' terms, the Board remains stable and functional, avoiding periods of uncertainty or instability. |
Clause 13 Functions of the Board | The object and purpose for which the Board is established is to oversee the development of affordable housing and associated social and physical infrastructure in Kenya, the maintenance and rehabilitation of affordable housing projects funded by the Fund and to advise the Cabinet Secretary on all matters related thereto. Without prejudice to the generality of subsection (1), the Board shall: a. co-ordinate the optimal utilization of the Fund in the implementation of programmes and projects relating to the maintenance, rehabilitation and development of affordable housing and associated social and physical infrastructure; b. seek to achieve optimal efficiency and cost effectiveness in the development of affordable housing programmes and projects funded by the Fund; c. based in a five-year affordable housing investment programme approved by the Cabinet Secretary and the Cabinet Secretary for the time being responsible for the National Treasury, determine the allocation of financial resources required for the development, maintenance and rehabilitation of the affordable housing projects and associated social and physical infrastructure; d. manage the Fund and allocate monies in accordance with section 11; e. ensure that the monies allocated annually under section 11 are based on an annual work programme derived from the five-year affordable housing investment programme approved by the Cabinet Secretary and the Cabinet Secretary for the time being responsible for the National Treasury; f. ensure that not more than five percent of all monies allocated to each agency is utilized for the maintenance and rehabilitation of units and associated social and physical infrastructure by the said agency; g. monitor and evaluate, by means of technical, financial and performance audits, the delivery of goods, works and services funded by the Board; h. in implementing paragraph (g), pay due regard to public procurement and disposal regulations and additional guidelines issued or approved by the Cabinet Secretary for the time being responsible for the National Treasury; i. identify, quantify and recommend to the Cabinet Secretary such other potential sources of revenue as may be available to the Fund for the development, rehabilitation and maintenance of affordable housing programmes and projects and associated social and physical infrastructure for consideration by the Cabinet Secretary to the National Treasury; j. approve the opening and closing of bank accounts of the Fund by the administrator of the Fund; k. approve estimates of revenue and expenditure of the Fund for each financial year; and l. perform such other duties as may be assigned by the Cabinet Secretary in writing. | The functions of the Board have been clearly stated to ensure that it does not perform tasks that are ultra vires. |
Clause 14 Qualifications for appointment | A person appointed as the Chairperson of the Board shall be appointed by virtue of their knowledge or experience in matters relating to housing, banking or law. A person qualifies to be appointed as a member of the Board, other than as an ex-officio member, if the person: a. meets the requirements of chapter six of the Constitution; b. has not been convicted of a criminal offence which attracts imprisonment for a term not exceeding six months; c. has not been adjudged bankrupt or entered into a composition or arrangement with the creditors of the person; and d. is not disqualified under any other written law from appointment as such. | Specifying qualifications in the Bill provides clear and standardized criteria for eligibility in a particular position. This clarity helps both applicants and decision makers understand the minimum requirements for the role. |
The addition of sub-clause (2)(a) is a good proposal. Leadership and integrity principles ensure that members of the Board possess a strong commitment to ethical conduct. |
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For sub-clauses (1) and (2), we propose the addition of a prescribed period of experience in housing, banking or law before a person can be appointed as a Chairperson or a member of the Board. Requiring a minimum level of experience in a certain field ensures that individuals appointed to positions possess the relevant skills, knowledge and expertise to perform their duties effectively. Further, the minimum years of experience required to be appointed as a chief executive officer of the Board has been provided in clause 21(2) of the Bill i.e., a minimum of at least ten years’ experience in a managerial capacity in affordable housing matters, finance, investment or the banking sector. |
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Clause 15 Tenure of office | The Chairperson and the members of the Board, other than the ex-officio members, shall hold office for a term of three years and may be eligible for re-appointment to a further and final term of three years. Despite the provisions of subsection (1), a member of the Board, other than an ex-officio member, may be removed from office if that person: a. has been absent from three consecutive meetings of the Board without justifiable cause or the permission of the Chairperson; b. is adjudged bankrupt or enters into a composition or arrangement with the creditors of the person; c. is convicted of an offence involving dishonesty or corruption; d. becomes incapable of carrying out the functions of his or her office, either arising from an infirmity of mind or body; e. violates chapter six of the Constitution; or f. fails to disclose any interest in a matter under consideration by the Board as provided under section 19(1). A member of the Board, other than an ex-officio member, shall cease to be a member of the Board if that member resigns from office by a notice in writing addressed to the appointing authority. | A fixed tenure provides stability to an organization by ensuring continuity in leadership and decision-making. It prevents frequent turnover and the associated disruptions that can occur with frequent changes in personnel. Secondly, individuals with a fixed tenure are accountable for their performance during that period. This accountability leads to increased focus and commitment to achieve the goals and objectives of the Board. Thirdly, knowing when a position will become vacant allows the Board to engage in effective succession planning. It provides an opportunity to identify and groom potential successors. This ensures there’s a smooth transition when the incumbents’ tenure ends. |
Clause 16 Filling of vacancy | Whenever the office of the Chairperson or a member, other than an ex-officio member becomes vacant before the expiry of the term of office, the appointing authority shall, on the recommendation of the nominating body, where applicable, appoint a person who holds a similar qualification to fill the vacant position for the remainder of the term. | We propose the addition of timelines in this clause. This proposal ensures that the vacancy is filled by the appointing authority within a prescribed period without delays. |
Clause 18 Conduct of affairs and business of the Board | The Board may establish committees consisting of such members of the Board to deal with such matters as the Board may specify. The Board may co-opt persons who are not members of the Board to committees established under subsection (1) for a particular reason and such persons shall serve in such committees for such period as the Board may determine. | The addition of sub-clause (2) is a good proposal. Co-opting allows the Board to bring in individuals with specialized expertise, knowledge or experience that will assist it in performing its functions. This can be valuable when the existing board members lack the required skills or expertise. |
Clause 19 Disclosure of interest | If a member of the Board is present at a meeting of the Board or any committee of the Board at which any matter is the subject of consideration and in which matter the member or the dependents of the member are directly or indirectly interested in a private capacity, the member shall, as soon as practicable, after the commencement of the meeting, disclose such interest and shall not, unless the Board otherwise directs, take part in any consideration or discussion, or vote on any question relating on such matter. A disclosure of interest made under this section shall be recorded in the minutes of the meeting at which it is made. Failure to disclose such interest shall lead to the disqualification of the member from holding office as a member. | This proposal ensures that a member of the Board discloses a conflict of interest when it arises. A member that doesn’t have a conflict of interest can make decisions that are in the best interests of the Board. Further, this ensures fairness and objectivity as the member is not influenced by personal gain or biases. Secondly, we propose the inclusion of an offence in sub-clause (3) if a member fails to disclose a conflict of interest to the Board. This proposal acts as a deterrence as it ensures that a member of the Board complies with the provisions of this clause by disclosing a conflict of interest. |
Clause 20 Remuneration of Board members | The Chairperson and the members of the Board shall be paid such sitting allowances or other remuneration for expenses as recommended by the Salaries and Remuneration Commission. | This proposal will be in line with article 230(4)(a) of the Constitution which gives the Salaries and Remuneration Commission power to set and review the remuneration and benefits of all public officers. |
Clause 21 Chief executive officer of the Board | There shall be a chief executive officer of the Board who shall be competitively recruited and appointed by the Board, in consultation with the Cabinet Secretary, on such terms and conditions of service as shall be specified in the instrument of appointment or otherwise in writing from time to time. A person qualifies to be appointed as the chief executive officer if that person has at least ten years’ experience in a managerial capacity in affordable housing matters, finance, investment or the banking sector. | For sub-clause (1), a fair, transparent and competitive appointment process has the following benefits: a. a fair, transparent and competitive appointment process ensures that candidates are evaluated based on their qualifications, skills and experience. This helps to attract and select the most suitable individual, contributing to the overall effectiveness and efficiency of the Board; and b. this proposal ensures that appointments are done in a fair and transparent manner in accordance with the values and principles set out in the Constitution. For sub-clause (2), we propose that a person meets the requirements in chapter six of the Constitution as a requirement for appointment as a chief executive officer of the Board. Leadership and integrity principles ensure that the person possesses a strong commitment to ethical conduct. |
Clause 22 Administrator of the Fund | The chief executive officer shall be the administrator of the Fund. The administrator of the Fund shall: a. supervise and control the day-to-day administration of the Fund; b. receive the annual work plans and the five-year affordable housing investment programmes and recommend the same to the Board for approval; c. open and operate the accounts of the Fund with the approval of the Board and the National Treasury; d. prepare estimates of annual revenue and expenditure of the Fund and submit to the Board for approval; e. implement policies approved by the Board for the attainment of the objects of the Fund; f. advise the Board on matters relating to the administration of the Board; g. co-ordinate the monitoring and evaluation of affordable housing projects and programmes financed from the Fund; h. keep books of accounts and other books and records in relation to the Fund of all activities and undertakings financed by the Fund; i. be the custodian of the assets, property and equipment of the Fund; j. establish proper systems of internal control and management in accordance with provisions of the relevant laws; k. prepare, in respect of each financial year and within three months after the end thereof, a statement of accounts relating to the Fund and showing the expenditure incurred from the Fund in accordance with the Public Audit Act 2015; and l. undertake any other duty the Board may assign in furtherance of the objects and purpose of the Fund. | The functions of the chief executive officer have been clearly stated to ensure that he does not perform tasks that are ultra vires. |
Clause 23 Fund not to be overdrawn | The administrator of the Fund shall ensure that no bank accounts of the Fund are overdrawn. | By preventing bank accounts from being overdrawn, the administrator of the Fund promotes financial discipline and responsible management of monies in the Fund. This helps maintain financial stability and prevents unnecessary debt accumulation. |
Clause 24 Administrative costs | The administrative costs of the Fund shall not exceed two percent of the latest audited financial statement of the Fund. | This proposal ensures that a significant portion of the Fund is allocated to its core mission of providing funds for affordable housing projects. This promotes efficient use of funds and maximizes the impact of the Fund’s purpose. |
Clause 25 Power of the administrator of the Fund to access information | The administrator of the Fund may access any programme and project related data that the administrator considers necessary for the performance of their functions under this Act. | We propose the addition of a sub-clause providing that the administrator of the Fund adheres to the provisions of the Data Protection Act 2019. Access to data may raise concerns about data privacy and confidentiality, particularly if sensitive information is involved. Further, this proposal respects a data subject’s right to privacy under article 31 of the Constitution. |
Clause 26 Corporation secretary | There shall be a corporation secretary to the Board who shall be competitively recruited and appointed by the Board. A person shall be qualified to be appointed as the Corporation Secretary if that person: a. holds a degree from a university recognized in Kenya; b. is a certified public secretary and a member of the Institute of Certified Public Secretaries of Kenya in good standing; c. has at least ten years’ experience in offering the services of a certified public secretary; and d. meets the requirements of chapter six of the Constitution. The corporation secretary shall be responsible for: a. providing guidance to the members of the Board on their duties, responsibilities and powers and how these should be exercised in the best interests of the Board; b. ensuring that the procedures of the Board are followed and reviewed regularly, and that the members of the Board comply with written law; c. assisting the Chairperson of the Board to organize the activities of the Board, including providing information, preparing agenda, issuing notices and preparing for meetings, conducting evaluations of the Board and development programmes of the Board; d. providing secretarial services to the Board, including ensuring that the work plan of the Board is prepared and adhered to, circulating Board papers in advance of the meeting and keeping the record of attendance of the meetings; e. ensuring that the minutes of the meetings of the Board and committees of the Board are promptly prepared and circulated; f. keeping the members of the Board abreast of and informed on current governance practice; g. keeping a record of conflicts of interest declared by each member of the Board; and h. co-ordinating the governance audit process. | The addition of sub-clause (1) has the following benefits: a. a fair, transparent and competitive appointment process ensures that candidates are evaluated based on their qualifications, skills and experience. This helps to attract and select the most suitable individual, contributing to the overall effectiveness and efficiency of the Board; and b. this proposal ensures that appointments are done in a fair and transparent manner in accordance with the values and principles set out in the Constitution. Secondly, the addition of sub-clause (2) is a good proposal. Specifying qualifications in the Bill provides clear and standardized criteria for eligibility in a particular position. This clarity helps both applicants and decision makers understand the minimum requirements for the role. For sub-clause (2)(d), leadership and integrity principles ensure that the appointed person possesses a strong commitment to ethical conduct. |
Clause 27 Staff of the Board | The Board may appoint such members of staff as may be necessary for the proper discharge of the functions of the Board on such terms and conditions as the Board may determine. The staff of the Board shall be the secretariat of the Fund reporting to the chief executive officer. | We propose that the remuneration of the staff is determined by the Board in consultation with the Salaries and Remuneration Commission. This proposal will be in line with Article 230(4)(a) of the Constitution which gives the Salaries and Remuneration Commission power to set and review the remuneration and benefits of all public officers. |
Clause 28 Delegation of powers | The Board may, by resolution generally or in any particular case, delegate to the administrator of the Fund, an officer, employee or agent of the Board, the exercise of any of the powers or the performance of any of its functions under this Act or under any other written law. | Delegating powers to a person who specializes in a particular area allows for more efficient and effective decision-making within that domain. This leads to better outcomes and higher-quality work. Secondly, delegating powers create a clear chain of accountability for specific tasks or responsibilities. This clarity ensures that individuals are held responsible for their actions and outcomes. |
Clause 29 The common seal | The common seal of the Board shall be kept in such custody as the Board may direct and shall not be used except by the order of the Board. The common seal of the Board shall, when affixed to a document and is duly authenticated, be judicially and officially noticed, and unless and until the contrary is proved, any necessary order or authorization by the Board under this section shall be presumed to have been duly given. | A common seal is used to authenticate documents, indicating that they have been formally approved or endorsed by the Board. |
| PART IV – ELIGIBILITY CRITERIA AND APPLICATION PROCEDURE FOR AN AFFORDABLE HOUSING UNIT | ||
Clause 30 Eligibility criteria | A person qualifies to be allocated an affordable housing unit if that person is a Kenyan citizen who is at least eighteen years of age and holds a Kenyan identity card. | The purpose of using an identity card is to provide official identification for Kenyans who are of majority age. It serves as a legal document to verify an individual's identity and personal details such as name, date of birth and place of birth. |
Clause 31 Application for allocation of an affordable housing unit | A person who meets the criteria set out under section 30 and desires to be allocated an affordable housing unit shall make an application to the relevant agency in a manner specified by that agency. An application made under subsection (1) shall be accompanied by: a. proof of the requisite deposit approved by the relevant agency of at least ten percent of the value of the affordable housing unit being applied for; b. a copy of the national identity card; c. a copy of the KRA personal identification number; and d. such other information as may be determined by the relevant agency. In determining the allocation of an affordable housing unit under this section, the relevant agency shall give preference to marginalized persons, vulnerable groups, youth, women and persons with disabilities. | We propose the addition of timelines in this clause. This proposal ensures that the application form is reviewed by the relevant agency within a prescribed period without delays. |
Clause 32 Off-taking of affordable housing units | An agency may off-take affordable housing units under an affordable housing scheme if the affordable housing scheme: a. has been approved by the agency; b. meets policy and statutory requirements; and c. meets any other criteria or conditions set by the agency. | For sub-clause (b), we propose that the policy and statutory requirements are clearly spelt out in this Bill to avoid ambiguity. Secondly, off-taking allows the Government to get corporate buyers to avoid “dead capital”. For example, saccos who then sell the units to their members. This in turn enables the Government to shed off already completed projects and generate revenue where there are no individual buyers taking up the units. Additionally, it takes away the burden of the Government in dealing with several individuals in the sale of units (one agency may take up to 2000 units instead of the government dealing with 2000 different individuals.). |
Clause 33 Change of affordable housing unit | An allottee may make an application to the respective agency requesting for a change of an affordable housing unit upon meeting the requirements set by the agency from time to time. Where a request made under subsection (1) is granted, the allottee shall: a. enter into an agreement with the respective agency requiring that all his or her loan repayments be transferred to the new allocation; b. forfeit the current affordable housing unit; and c. where there is an existing loan, and if necessary, make a new loan application to facilitate the new allocation. | For sub-clause (1), we propose that a template of the application form is included in the Schedule of this Bill. A template provides a standard format that is easy to understand and use. Further, the use of a template enhances uniformity. Secondly, we propose the addition of timelines in this clause. This proposal ensures that the application form is reviewed by the relevant agency within a prescribed period without delays. |
Clause 34 Loan application | An eligible person who desires to be considered for a loan towards the purchase of an affordable housing unit shall make an application to the respective agency in the manner specified by that agency. Every eligible person who has been advanced a loan shall be issued with a loanee account number. | This proposal enables individuals who may not otherwise qualify for traditional mortgages to become homeowners. This promotes stability and financial security for families and individuals who receive the affordable housing units. |
Clause 35 Evaluation of the loan application | Upon receipt of a loan application, an agency shall evaluate the application to ensure compliance with the criteria set by that agency. Upon evaluation under subsection (1), the agency may approve or reject the application for a loan giving reasons thereof. An applicant whose application has been rejected may submit a new application upon fulfillment of the requirements set by the Agency. | We propose the addition of timelines in this clause. This proposal ensures that the agency reviews the loan application within a prescribed period without delays. |
Clause 36 Loan interest rate | The interest rate or administration fee for a loan issued under this Act shall be payable on a reducing balance as follows: a. for social housing units, up to three percent or an administrative fee of an equivalent amount; b. for affordable housing units, up to three percent or an administrative fee of an equivalent amount; and c. for affordable market housing units, up to nine percent or an administrative fee of an equivalent amount. | Loans with favorable terms such as low interest rates make homeownership more accessible to low- and moderate-income individuals. This helps address affordability challenges and reduces the risk of homelessness. |
Clause 37 Loan repayment | A loan advanced under this Act for an affordable housing unit shall be repaid in full within the period specified in the loan agreement. All sums due to an agency under this Act shall be recoverable as a debt due to that agency and, without prejudice to any other remedy, may be recovered summarily as a civil debt. | We propose that a template of a loan agreement is included in the Schedule of this Bill outlining the general terms of such a loan. A template provides a standard format that is easy to understand and use. Further, the use of a template enhances uniformity. |
Clause 38 Voluntary savings | An eligible person may make voluntary savings with an agency for the purpose of raising a deposit towards the allocation of an affordable housing unit. An agency shall open a separate bank account where voluntary savings shall be kept and any interest arising from investment of voluntary savings shall be credited to this account. An agency shall issue an account number to each person making a voluntary saving. A person who has made a voluntary saving and has not been allocated an affordable housing unit and desires to withdraw his or her savings shall give a ninety days’ notice to the agency for a refund with accrued interest, if any. | Voluntary savings increase the likelihood of individuals being able to afford housing units, thereby improving access to homeownership and reducing reliance on external financing. Secondly, the provision for accruing interest on voluntary savings incentivizes individuals to save, potentially increasing the overall amount available for the deposit and provide a modest return on investment. |
PART V – FINANCIAL PROVISIONS | ||
Clause 39 Accounts and audit | The administrator of the Fund shall cause to be kept proper books and records of account of the income, expenditure and assets of the Fund. Within a period of three months from the end of each financial year, the administrator of the Fund shall submit to the Auditor-General the accounts of the Fund together with: a. a statement of the income and expenditure of the Fund during the year; and b. a statement of the assets and liabilities of the Fund on the last day of that year. The accounts of the Fund shall be audited and reported upon in accordance with the Public Audit Act 2015. The Board shall inform the public of its activities and operations through regular publications unless there are reasons for commercial confidentiality or security justifying exclusions. | This clause ensures that monies allocated to the Fund can be tracked and easily accounted for. |
| PART VI – MISCELLANEOUS PROVISIONS | ||
| Clause 40 Offences | A person who: a. misappropriates any funds or assets of the Fund, or assists or causes any person to misappropriate or apply the Funds otherwise than in the manner provided in this Act; b. fails to give information or gives inaccurate or misleading information of falsifies information or misrepresents information required under this Act; c. having possession of, or control over, or access to any documents, information, returns or forms relating to applications or granting of loans, communicating anything contained therein: i. to any person other than a person to whom he is authorized by the Board to communicate it; or ii. otherwise than for the purposes of this Act. commits an offence and shall be liable, on conviction, to a fine not exceeding ten million shillings or imprisonment of a term not exceeding five years, or to both. | This clause acts as a deterrence in ensuring that a person complies with the provisions of this Bill. |
Clause 41 Protection from personal liability | No matter or thing done by any person under this Act shall, if the matter or thing is done in good faith, render that person personally liable to any action, claim or demand whatsoever. | This clause enhances accountability as a person can be held liable for actions not done in good faith. |
Clause 43 Consequential amendment and transition | The Employment Act 2007 (“the Employment Act”) is amended by: a. repealing section 31B; and b. repealing section 31C. Any payment made or action taken under the sections repealed under subsection (1) shall be deemed to have been paid or taken under this Act. Any commitment or obligation on the National Government on affordable housing which may have arisen or made in accordance with an Act of Parliament shall be deemed to be a commitment or obligation made under this Act. | Initially, Parliament sought to introduce the Levy through an amendment of the Employment Act. In Okiya Omtatah and six others v the Cabinet Secretary for the National Treasury and Planning and 3 others (Petition No. E181 of 2023), the High Court stated as follows: “That, the introduction of the Housing levy through an amendment of the Employment Act by Section 84 of the Finance Act, 2023 lacks a comprehensive legal framework in violation of Articles 10, 201, 206 and 210 of the Constitution.” (Emphasis ours) |