Government defends housing levy for markets amidst COTU misuse claims

State Department for Housing and Urban Development PS Charles Hinga. (Photo: X/Charles Hinga)

By Lucy Mumbi
Saturday, June 7, 2025

COTU had warned that the Affordable Housing Regulations introduce loopholes that could allow MPs to redirect the housing levy to initiatives unrelated to the core mandate of providing affordable homes.

The government has defended the use of housing levy funds to build markets, insisting the move aligns with the broader vision of creating complete, livable communities under the affordable housing programme.

This is even as the Central Organisation of Trade Unions (COTU), headed by Francis Atwoli, accused it of straying from the law by using the levy to fund projects that fall outside the scope of housing development.

More To Read

COTU had warned that the Affordable Housing Regulations introduce loopholes that could allow Members of Parliament to redirect the housing levy to initiatives unrelated to the core mandate of providing affordable homes.

“Under the Affordable Housing Regulations, housing levy funds may now, erroneously, be used to construct health facilities, pre-primary education centres, basic education centres, fire stations, police posts, social halls, markets, and open spaces, under the guise of associated social infrastructure,” the union said.

However, Housing Principal Secretary Charles Hinga rubbished the claims, arguing that COTU is misleading Kenyans despite having actively participated in drafting both the Affordable Housing Act and its regulations.

“COTU was represented in person in committees that formulated this Act and regulations. Even in 2018, the Act clearly said — houses, plus social and physical infrastructure that make settlements work,” Hinga said.

The PS maintained that affordable housing extends beyond simply constructing homes. He said the government’s approach was to deliver integrated settlements where essential public amenities are within reach for residents.

“Affordable housing is not just four walls. It’s a package that must include markets, hospitals, and schools for ordinary Kenyans who can’t afford to travel far for services,” he said.

“People who live in these areas can’t afford transport. So, we can’t just build houses and leave them without amenities.”

Responding directly to COTU’s allegation that workers’ contributions are being misused, Hinga insisted that those very workers will benefit from the additional infrastructure being put in place.

“COTU is saying workers’ money is being misused, but those markets will be visited by those very workers, and the markets will be run by county governments,” he said.

The dispute follows President William Ruto’s recent announcement that the housing levy will be used to finance the construction of markets alongside housing units.

“We are not only using the housing levy to construct affordable housing, but we are also using it to build the markets. We now have 260 markets going on in Kenya,” the President said during a meeting with Coast region leaders at State House.

The housing levy, which came into effect as part of the Affordable Housing Programme (AHP), deducts 1.5 per cent from an employee’s gross salary.

Employers match that with an equal 1.5 per cent contribution, bringing the total to 3 per cent. Though the levy has sparked public debate, the President insists its impact is already visible across the country.