State stops market projects funded by housing levy, agrees to refund money after COTU talks
COTU Secretary-General Francis Atwoli had raised concerns over the misapplication of the funds meant for workers’ housing.
The government has agreed to immediately suspend any ongoing or future construction of markets funded through the Affordable Housing Levy and to refund funds already spent on such projects.
The decision follows a consultative meeting on Wednesday between President William Ruto and Central Organisation of Trade Unions (COTU-K) Secretary-General Francis Atwoli, who had raised concerns over the misapplication of the funds meant for workers’ housing.
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In a statement, Atwoli said the government agreed to strictly use the funds for physical and social infrastructure that is directly associated with affordable housing projects.
“The government has agreed to immediately put on hold any further construction of markets funded through the Affordable Housing Levy. All funds that have already been used to construct markets under the Affordable Housing Programme will be refunded to the Affordable Housing Levy Fund,” Atwoli said.
He noted that, unless absolutely necessary, all infrastructure must be built within affordable housing schemes.
Exceptional cases
However, in exceptional cases where a facility such as a school cannot be constructed within the housing site, support may be extended to a nearby institution that serves the same purpose.
“All associated physical and social infrastructure will be constructed within affordable housing projects only. In exceptional cases where an essential facility like a school cannot be built within a project, the government may support a nearby facility to service delivery to the primary objective of the fund,” read the statement.
Atwoli said the government also agreed that salaried workers who are contributors to the Affordable Housing Levy would be given priority in the allocation of housing units.
“All salaried workers will automatically be considered for allocation of housing units, excluding those eligible under the social class category,” he said.
Reduced down-payment
In what COTU described as a key affordability measure, the government further reduced the required down-payment for earmarked housing allocations from 10 per cent to five per cent of the unit’s purchase price.
The government will also establish a special committee under the Affordable Housing Board to oversee the recovery of funds that had already been used to construct markets. The recovered funds will be rechanneled back into the Affordable Housing Fund.
Atwoli noted that the committee will include representatives from both the national and county governments.
“COTU (K) appreciates the commitment by the Government to protect the interests of Kenyan workers, particularly regarding the allocation and construction of the Affordable Housing Levy,” Atwoli said.
He thanked the President “for his openness to dialogue and for responding to the concerns of workers.”
Ruto's defence
Ruto had defended the use of the funds to develop markets, saying the housing levy is a transformative tool not only for delivering affordable housing but also for expanding critical infrastructure, including markets and student hostels.
Speaking at State House, Nairobi, during a meeting with leaders from the Coast region, Ruto said the government was leveraging the levy to speed up the construction of 260 markets across the country.
“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.
The housing levy, introduced under the Affordable Housing Programme (AHP), deducts 1.5 per cent from every employee’s gross salary, with employers matching the same amount, making a total contribution of 3 per cent.
While the levy has drawn criticism from sections of the public, Ruto defended its impact, saying Kenyans can already see the tangible benefits of the programme.
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