Loading News Article...
We're loading the full news article for you. This includes the article content, images, author information, and related articles.
/
/
We're loading the full news article for you. This includes the article content, images, author information, and related articles.
The National Housing Corporation (NHC) is engaging a consultant to optimise its property agreements, aiming to enhance revenue streams and address Kenya's significant housing deficit. This move signals a shift towards more market-driven strategies for the state agency.
The National Housing Corporation (NHC), a state agency mandated to implement Kenya's housing policies, has initiated the process of hiring an advisor to monetise its property agreements. This strategic move aims to unlock value from its extensive property portfolio and adopt an 'offtake' model, a common practice among private developers in the Kenyan real estate market.
The NHC, established in 1953, plays a crucial role in addressing Kenya's persistent housing deficit, which stands at over 2 million units, with an annual demand of 250,000 units against a supply of only 50,000. Approximately 60% of Nairobi's residents, and 6.4 million urban Kenyans, live in informal settlements, underscoring the urgent need for affordable housing solutions.
The National Housing Corporation was established by an Act of Parliament (Cap. 117) with the primary mandate of implementing government housing policies and programmes. Historically, it served as the principal medium for the colonial government to promote housing development for Africans and later expanded its powers to stimulate the building industry, encourage housing research, and channel public funds for low-cost housing to local authorities.
Kenya's commitment to adequate housing is enshrined in Article 43(1)(b) of the 2010 Constitution, which guarantees every person the right to accessible and adequate housing. The National Housing Policy, revised in 2016, further outlines measures for providing affordable shelter and addressing housing problems in both rural and urban areas.
The Affordable Housing Act, 2024, signed into law in March 2024, is a significant legislative framework. It establishes the Affordable Housing Levy, charged at 1.5% of gross salary for employees (matched by employers) and 1.5% of gross income for other earners, to fund affordable housing initiatives. The Act also defines different categories of affordable housing units, including social housing for those earning below KES 20,000 per month, affordable housing for those earning between KES 20,000 and KES 149,000, and affordable middle-class housing for incomes above KES 149,000.
The Affordable Housing Board, tasked with overseeing the Affordable Housing Fund, is responsible for ensuring prudent management of these funds and adherence to its mandate. The Board has been urged by the Departmental Committee on Housing, Urban Planning and Public Works to expedite the development of its five-year and annual investment programmes.
The government's Affordable Housing Programme (AHP) aims to deliver 200,000 housing units annually. However, the programme has faced challenges, with only 1,655 units completed in 2024, a 50.7% decrease from 3,357 units in 2023. This slowdown casts doubt on achieving the annual target by 2027.
The National Housing Corporation has previously faced challenges in selling its housing units, with hundreds of houses valued at approximately KES 1.3 billion remaining unsold by June 2023. Some of these units were completed years ago but have not attracted buyers. The NHC has been engaging county governments, SACCOs, and Kenyans in the diaspora to market these unsold properties.
There have also been concerns raised by the Senate Committee on National Cohesion and Equal Opportunity regarding private developers selling affordable housing units at double the market price despite receiving tax incentives. The committee has advocated for the NHC to be the primary implementer of the affordable housing project.
The persistent housing deficit and the challenges in delivering affordable units have significant implications for Kenya's socio-economic development. The high cost of construction, which increased by 45% between 2021 and 2024, coupled with a depreciating shilling and elevated inflation, continues to hinder affordability. The low urban homeownership rate, at around 21.3%, further exacerbates the issue, contributing to the proliferation of informal settlements.
The government's reliance on the Affordable Housing Levy, while providing a funding mechanism, has also faced scrutiny, particularly regarding its impact on taxpayers and the transparency of fund allocation. Delays in project implementation and concerns about private developers' pricing strategies could undermine public trust and the overall success of the AHP.
While the NHC is seeking an advisor to monetise property agreements, the specific details of these agreements and the projected revenue generation remain largely unknown. The effectiveness of the 'offtake' model in the public sector, particularly for affordable housing, will be a key area to watch. Additionally, the full impact of the Affordable Housing Act, 2024, and its regulations on the housing market and individual Kenyans is still unfolding.
The NHC's engagement of an advisor to monetise property agreements is a recent development, with the announcement made on Thursday, October 16, 2025. This move is expected to lead to a re-evaluation of the NHC's property management strategies and potentially new partnerships for housing development. The Affordable Housing Board is also expected to finalise its five-year and annual investment programmes soon.
Observers will be keenly watching the outcomes of the NHC's new strategy to monetise its property agreements and how this contributes to bridging the housing deficit. The transparency and efficiency of the Affordable Housing Board in managing the levy funds and allocating housing units will also be critical. Furthermore, the government's ability to address the rising construction costs and ensure the affordability of housing units for low and middle-income Kenyans remains a key challenge.
