Will the budget rebuild the low-cost housing dream?
1 months ago, 21 June 06:03
One of the issues that most players in the property sector are pondering over following the presentation of the ambitious Sh3 trillion budget last week is whether it sends a strong message about the government’s commitment to making housing affordable.
The 2018/2019 budget, which was centred on Jubilee’s “Big Four” agenda, saw Treasury Cabinet Secretary Henry Rotich allocate Sh460 billion to the key pillars ‑ manufacturing, food and nutrition, universal health coverage, and affordable housing.
In particular, the affordable housing plan, which will see the government build 500,000 affordable houses by 2022, was allocated Sh6.5 billion, which some property insiders say is too little, given the country’s housing woes.
Although this programme offers several incentives to attract investors in low-cost housing, including servicing land in major towns to prepare them for such initiatives, the question is whether the 10 per cent expected to come from the budget, as outlined in the government’s blueprint on affordable housing. is enough, The private sector is expected to contribute a huge chunk of resources and expertise towards the realisation of this dream.
During last year’s Jamhuri Day celebrations, President Uhuru Kenyatta committed to dedicate his energy, time and his administration’s resources in the next five years to the Big Four, affordable housing being one of them.
This financial year’s budget is the first for him to implement the plan, and experts say it is sure to have a big impact on the property market, especially seeing that this is the first time the government is injecting money directly into the sector.
DN2 sought the views of real estate insiders on what this budget portends for the property industry.
Dr Raphael Kieti, a lecturer in the Department of Real Estate and Property Management at Technical University of Kenya, says the government’s move shows commitment since this is the first time it is making a direct allocation to housing.
“Housing is a basic need. After healthcare and food security, it only makes sense that housing comes at number three. However, the allocation is a drop in the ocean, considering the government’s goal of building 500,000 housing units in five years,” he says.
Universal health coverage was allocated Sh44.6 billion while food and nutrition security got Sh20.25 billion. Provision of affordable and decent housing, and manufacturing came third and fourth with Sh6.5 billion and Sh2.4 billion allocations respectively.
Mr Morris Okoth, a director at ProLand Realtors Ltd, a real estate firm based in Nairobi, expressed optimism in the budget. “I think the budget is okay, but of course with provision for supplementary budgets and knowing very well at the back of our minds that a project can spill over to two years, and that the additional budget can come the following year.”
The government has asked the counties to align their budgets with the “Big Four” agenda, and Mr Omollo says, if they were also to allocate funds for affordable housing, and with the support of the private sector through public-private partnerships (PPPs), the country would ...
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