State Housing Department Needs Sh2bn to Build 500,000 Low-Cost Homes
The State Department of Housing has asked the National Assembly for Sh6 billion to deliver several things including 500,000 low-cost homes and the creation of Kenya Mortgage Refinance Company, a government-backed form that will issue bonds in the capital markets. Sh4 billion of the money will be used in a project to upgrade the slums while the rest will be used to deliver the aforementioned homes by 2023.
“We need Sh2 billion for delivery of the housing units. This money will also be used to restructure the National Housing Corporation and establish the Kenya Mortgage Refinance Company and set up the National Housing Development Fund,” Permanent Secretary Aidah Munano told the Transport Committee that was looking into the Budget Policy in February 2018.
CS Treasury Henry Rotich said a task force has already been created to establish the government-backed form which will have the role of issuing binds which will be “extended as long-term loans to banks as security against the mortgage.
Additionally, Patrick Bucha, Housing Secretary said to the MPs that the department had also begun a pilot scheme for developing low-cost houses in Shauri Moyo, Mavoko, Makongeni, and Parklands.
“We are discussing with various county executive committee members to identify land for this project which will be developed through public-private partnerships with the government providing infrastructure and incentives to investors to build housing units for sale to Kenyans,” Mr Bucha asserted.
“The government will give both financial and non-financial support to the private sector. The World Bank will give mortgages at 0.75 percent while the Kenya Mortgage Refinance Company will give bank guarantee to offer affordable mortgages to Kenyans.”
Nevertheless, incentives will have little effect if bureaucracy is not addressed in state departments. For instance, Jeremy Awori, Barclays Bank of Kenya Managing Director said,” If we can make it easier for you to register a charge and do a transfer of property so that instead of taking weeks or months, it happens within a week, I think we would be in a much better system.”