Private Sector Roots For Inclusion As Committee Wraps Up Public Hearings On Affordable Housing Bill
Committee chairman Kuria Kimani (in White Shirt) and other legislators during yesterday's session.
By PSCU
Worth Noting:
- They however appealed for the elimination of the tax burden imposed on them through stamp duty and capital gains, to enable them support the program.
- “Hon. Chair, we propose the amendment of Clause 42 to provide the manner and form by which Real Estate Investment Trusts may develop affordable housing units under the program. We also propose a new clause to allow for private sector participation of institutions licensed by the Capital Markets Authority”, they submitted.
- The Bill in its current form does not recognize the participation of private sector professionals in the management of the fund.
Various organised groups and stakeholders have asked the Joint-Committee conducting Public Hearings on the Affordable Housing Bill 2023 to create a provision in the Bill that allows for private sector participation.
Noting that the private sector could play a key role in the implementation of the Affordable Housing Program, the stakeholders called on the legislators to consider incorporating a mechanism by which additional housing stock can be adopted by the program to supplement the Housing levy.
They made these sentiments when they appeared before a section of the Joint- Committee led by Chairperson of the Departmental Committee on Finance and National Planning who is also the Molo MP Kuria Kimani.
A consortium comprising of Kenya National REIT, Nairobi Securities Exchange, the Kenya Association of Stockbrokers and Investment Banks, Fund Managers Association and the Association of Pension Trustees and Administrators of Kenya, told the legislators that they had capacity to contribute meaningfully to the government’s affordable housing agenda.
They however appealed for the elimination of the tax burden imposed on them through stamp duty and capital gains, to enable them support the program.
“Hon. Chair, we propose the amendment of Clause 42 to provide the manner and form by which Real Estate Investment Trusts may develop affordable housing units under the program. We also propose a new clause to allow for private sector participation of institutions licensed by the Capital Markets Authority”, they submitted.
The Bill in its current form does not recognize the participation of private sector professionals in the management of the fund.
Weighing into this debate, the Real Estate Development and Finance Association (REDFA) Kenya, told the Committee that the government should adopt alternative development approaches. They opined that Kenya could emulate successful models employed in the United Kingdom and Zimbabwe, where the government promotes self-builds through providing serviced plots affixed with essential infrastructure either at subsidized cost or free of charge to its citizens.
They called on the legislators to create a provision that allows for more public-private partnerships where under such arrangements, the government offers land and leaves construction and financing to developers.
“The government should refrain from directly engaging in unit construction to mitigate potential citizen losses and avoid potential financial risks through government-led projects”, they argued.
The same view was raised by the Institute of Certified Public Accountants of Kenya (ICPAK). The Institute further observed that the proposed imposition of a Housing Levy on personal income was tantamount to double taxation and against international best practices. They proposed that Parliament should set aside funds for housing and not through the payroll.
Appearing on behalf of the Kenya Private Sector Alliance (KEPSA), the Kenya Green Building Society’s CEO Ms. Nasra Nanda pointed out that there was need to amend the Bill to provide for a guideline for basic standards of housing units built under the affordable housing program.
She also held that the proposed housing levy should be voluntary and not imposed, and based on pensionable salary to ease administrative costs for small employers.
The Society further proposed for the amendment of the Housing Fund’s allocation to prioritize the development of EDGE-certified green affordable buildings. They argued that this would yield long-term cost savings, improve environmental performance, promote residents well-being while positioning Kenya as a global leader in innovative and responsible development.
Others who made presentations to the Committee were Oxygene Marketing Communications Limited and the Vice Chancellor of the Technical University of Kenya, Prof Benedict Mutua.
On their part, Oxygene held that there was no need to establish a new Housing Board while the National Housing Corporation’s Board is still in operation. They observed that with the creation of a board from scratch, it would take time to have it operational.
Prof. Mutua who supported the Bill appealed to the Committee to create an avenue in the Bill to allow the State Department of Housing to incorporate Universities students’ hostel projects under their docket to meet the large shortfall of students’ housing.
The Joint-Committee has wound up public hearings and is expected to engage with the State Department of Housing before proceeding to prepare its report for consideration by the House.
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