Kenya's Affordable Housing Project Criticised for Delays and Fund Misuse

Kenya’s Affordable Housing Programme is facing delays and underperformance, with the Controller of Budget reporting low completion rates and misalignment between funding and project delivery across key sites.

In her August 2025 Budget Implementation and Review Report, Controller of Budget Dr Margaret Nyakang’o noted that the State Department for Housing and Urban Development recorded the lowest budget absorption rate among government departments, at 86 per cent, for the 2024/25 financial year. The report cites planning delays, procurement challenges, and poor inter-agency coordination as key factors hindering progress.

The Affordable Housing Programme, launched after the Affordable Housing Act was passed in March 2024, aims to deliver 200,000 units annually. It is funded through a mandatory 1.5 per cent monthly levy on employees’ gross income, matched by employers. However, the national completion rate for 100,000 units stood at just 13 per cent by mid-2025, slightly below the 15 per cent target.

In Nairobi’s Starehe constituency, only 5 per cent of the planned 1,710 units had been completed, against a target of 40 per cent. In Mavoko, Machakos County, progress stood at 11 per cent for 5,360 units, falling short of the 20 per cent goal. In contrast, Thika and Shauri Moyo projects exceeded their targets, and Ruiru met its 75 per cent milestone for 1,050 units. Despite these pockets of progress, overall implementation remains uneven.

The Urban and Metropolitan Development programme, covering market construction and related infrastructure, recorded no tangible outcomes during the reporting period. In addition to delays in construction, a significant portion of the housing levy has been invested in treasury bills. By February 2025, Sh46 billion had been allocated to short-term government securities, earning Sh2 billion in interest. 

Principal Secretary for Housing and Urban Development Charles Hinga defended the move, stating it complies with the Affordable Housing Act and safeguards unused funds. However, the investment decision has raised concerns given the programme’s current performance shortfalls.

The State Department received an initial allocation of Sh87.57 billion for 2024/25, later revised to Sh82.44 billion through supplementary estimates. This remains higher than the Sh78.18 billion allocated in the previous year.