Income Gap Negatively Impacts Kenya’s Affordable Housing Initiative

The allocation of a housing unit to Ms. Milka Moraa has revealed the challenges surrounding Kenya’s affordable housing program. Despite intentions to assist low-income earners, the financial requirements for participation pose significant barriers. Reports highlight the gap between earnings and housing costs, raising questions about the accessibility of these initiatives to the intended beneficiaries.

The allocation of a social housing unit to Ms. Milka Moraa, following her struggle for rent assistance, has sparked discussions about the affordability of Kenya’s housing initiatives. Ms. Moraa received substantial public support after her request was denied by Apostle James Maina Ng’ang’a, leading to donations exceeding Sh500,000. This situation prompted intervention from the State Department for Housing and Urban Development, which offered her a unit in the Mukuru kwa Reuben social housing project. Nonetheless, this raises significant questions regarding the financial accessibility of such programs for low-income earners.

Housing Secretary Alice Wahome asserts that the program is intended for Kenya’s lowest-income individuals. However, the requirement of a down payment of Sh64,000 for a studio apartment, in addition to monthly payments of Sh3,900, complicates this assertion. A report from FSD Kenya, prepared for private developer Mi Vida, reveals that housing costs should not exceed 30% of gross income, a ratio many are unable to meet due to existing debts and financial demands.

The FSD Kenya report further highlights that individuals should limit housing repayments to 50% of net income to avoid falling into excessive debt. Such financial burdens call into question the true accessibility of housing schemes for their targeted beneficiaries. To afford a studio apartment requiring Sh23,000 monthly payments, an individual must earn Sh76,667 monthly—figures that contrast sharply with average salaries in Kenya, where many earn less than Sh50,000.

Economist Ken Gichinga from Mentoria Economics notes that the implementation of a 1.5% affordable housing levy has further reduced the purchasing power of many Kenyans. Only 371,895 workers earn more than Sh100,000 monthly, while approximately 1.36 million earn between Sh50,000 and Sh99,999. This data reflects a troubling gap between policy intentions and the economic realities faced by the populace.

The government’s ambition to provide 4,888 housing units by the end of March and 5,000 units quarterly is a step toward addressing the estimated two million housing unit shortfall. However, the financial realities reveal a stark contrast to the ambitious housing agenda, underscoring the challenges many Kenyans face in achieving homeownership.

The Kenyan government’s housing initiatives, while well-intentioned, seem inaccessible to a significant portion of the population due to substantial financial requirements. The challenges experienced by low-income earners cast doubt on the efficacy of current policies aimed at housing accessibility. Unless adjustments are made to align with the economic realities of average Kenyans, the disparity between policy and affordability will continue to grow.

Original Source: mwakilishi.com