Why Ruto’s Affordable Housing Project Risks Stalling
The government’s Affordable Housing Programme is now facing serious challenges that could slow down, or even bring parts of it to a halt, following a reduction in funding and ongoing operational struggles.
Speaking before Parliament on Wednesday, the Principal Secretary for the State Department for Housing, Charles Hinga, revealed that donor funding for the programme has been cut by Ksh800 million under the Financial Year 2025/2026 Supplementary Budget I.
This adjustment has reduced the total allocation from Ksh13.3 billion to Ksh12.5 billion.
Hinga warned Members of Parliament that this budget reduction is likely to have a direct impact on ongoing housing projects across the country.
According to him, the shortfall could delay construction timelines, disrupt project continuity, and ultimately slow down the delivery of much-needed housing units to Kenyans who are counting on the programme.
He further explained that the government is currently managing around 1,700 active housing projects nationwide. However, these projects are being handled by a limited number of staff, creating a serious strain on the workforce.
In some cases, officers have been forced to work up to three shifts in a day just to try and meet strict deadlines, highlighting the pressure within the department.
During the session, the Parliamentary Committee, led by Vice Chairperson Mugambi Rindikiri, questioned whether the department had anticipated the funding gap and why measures such as hiring additional staff had not been implemented earlier.
The committee raised concerns about planning and preparedness, especially given the scale of the housing programme.
In response, Hinga admitted that the funding shortfall had indeed been anticipated. He disclosed that about 80 percent of the allocated funds had already been spent, leaving limited resources to sustain ongoing activities. He also revealed that some of the funds had been invested in Treasury Bills.
However, the department has been unable to access this money after the National Treasury declined requests to release it for use in housing projects.
On the issue of staffing, Hinga confirmed that a formal request had been submitted to recruit more personnel, but it has yet to receive approval.
This delay has left the department overstretched and struggling to keep up with the demands of such a large-scale programme.
Members of Parliament responded by promising to engage the Treasury Cabinet Secretary, John Mbadi, in order to get clarity on the funding challenges and explore possible solutions to bridge the financial gap and keep the projects moving.
At the same time, new concerns have emerged over compliance with the Housing Levy, which is meant to support the programme.
A report by Auditor General Nancy Gathungu revealed that at least 6,390 companies have failed to deduct and remit the mandatory 1.5 percent Housing Levy from employees.
The report highlighted a major legal gap within the Affordable Housing Act of 2024. Although the Kenya Revenue Authority is responsible for collecting the levy, it does not have the legal power to enforce compliance.
That responsibility lies with the Affordable Housing Board, which unfortunately does not have access to taxpayer data, making enforcement difficult and ineffective.
As a result, many companies have either failed to deduct the levy altogether or have deducted it but not remitted the funds, leading to widespread non-compliance. This has raised serious concerns about accountability and transparency within the system.
Despite the programme having collected a total of Ksh73.19 billion by June 2025, its performance on the ground has fallen short of expectations.
Only 3,611 housing units have been completed so far, far below the government’s ambitious target of building 200,000 units every year.
Additionally, Ksh45.48 billion of the collected funds remains locked in Treasury Bills, further limiting the programme’s ability to deliver results.
The situation has been made even more difficult by reduced international support. In February, the World Bank significantly cut back the amount of commercial financing it had planned to mobilise for Kenya’s housing and reform programme.
The expected contribution from commercial lenders has now dropped sharply to Ksh46.45 billion (about $360 million), down from the earlier projection of Ksh116.12 billion (about $900 million).
This major reduction signals declining confidence from international financiers and adds further pressure on the government to find alternative sources of funding.
Taken together, these challenges—including reduced funding, staff shortages, weak enforcement of the housing levy, and declining external financing—paint a worrying picture for the future of the Affordable Housing Programme.
Unless urgent action is taken to address these issues, the project risks slowing down significantly, undermining one of the government’s key development promises to provide affordable homes for Kenyans.
Join Kenya Govt Official WhatsApp Channel to stay updated on time
https://whatsapp.com/channel/0029VaWT5gSGufImU8R0DO30
