The Cabinet Secretary for Lands, Public Works, Housing and Urban Development has prepared the Draft Affordable Housing Regulations. The Draft Regulations seek to operationalize the Affordable Housing Act 2024 by streamlining the process of house allocation and providing financial support where needed.

Key Highlights

Exemption
The following persons; category of persons; income or a class of income would be exempted from paying the affordable housing levy;

1. Persons or a category of persons who are exempted from paying taxes under an international agreement or a host country agreement to which Kenya is a Part of;
2. Income derived from the pension or gratuity paid to a person upon termination of a contract;
3. Reimbursement of medical expenses or travel and accommodation expenses for work-related activity;
4. Income derived from an insurance compensation; or
5. Income exempted from levy or income tax under an Act of Parliament.

Eligibility Criteria
Any Kenyan citizen who is at least eighteen years of age and holds a Kenyan identity card is eligible for allocation of a unit under the Affordable Housing Project.

Application for Allocation of a Unit
This section provides the procedure for applying for a unit under the Affordable Housing Project. An eligible applicant must pay a deposit of 10% of the unit’s sale price. Applicants who cannot raise a deposit may apply for deposit assistance from the Affordable Housing Fund Board. Such an applicant shall be eligible for deposit assistance if (i) their monthly income is below Kshs. 20,000.00, (ii) if they demonstrate that the affordable housing unit to be purchased shall be their primary residence and (iii) that the estimated monthly repayment for the purchase of the affordable housing unit is less than 30% of their monthly income.

Other Provisions
The draft regulations also state that where a person defaults for four consecutive months, the affordable housing unit will be repossessed and reallocated to another eligible person. Other options include changing the person’s affordable housing unit to a lower-value unit or entering into a restructuring arrangement with the person in default. The draft regulations restrict a purchaser from selling their affordable housing unit until 8 years after completion of payment of the agreed price has lapsed. These rules do not apply to the purchase of an affordable housing unit through a mortgage.

Conclusion
These regulations are still in draft form, as members of the public were invited to give their views. They are expected to be reviewed and revised before the final regulations are published and gazetted.

Researched and compiled by Bhoke Inimah, Senior Advocate. For further advice on any matters raised, please feel free to contact Bhoke.