Income Disparity Challenges Kenya’s Affordable Housing Objectives

The allocation of a social housing unit to Ms. Milka Moraa has sparked debate over the affordability of Kenya’s housing program. Despite governmental assertions that the program targets low-income individuals, the financial requirements pose significant barriers. Monthly tools indicate that a majority of Kenyans cannot meet the income thresholds necessary to access these housing units, reinforcing the concerns that current initiatives fall short of practical affordability.

The recent allocation of a social housing unit to Ms. Milka Moraa, who sought rent assistance after her application was denied by a church, has sparked an important discussion regarding the affordability of the Kenyan government’s housing initiatives. Following public outcry and donations exceeding Sh500,000, the State Department for Housing and Urban Development intervened to offer her a unit in the Mukuru kwa Reuben social housing project. Despite this intervention, significant financial obstacles still hinder low-income earners from fully benefiting from the housing program.

Housing Cabinet Secretary Alice Wahome asserts that the program is intended for the lowest-income groups in the country. However, the realities surrounding financial commitments are more nuanced. To secure a studio apartment, prospective buyers must provide a down payment of Sh64,000 and subsequent monthly payments of Sh3,900, which many find unmanageable given existing debts and financial responsibilities. Reports by FSD Kenya and AIS Capital Advisors suggest that housing costs should ideally consume no more than 30% of gross income, a target that is unattainable for the majority.

To afford a studio apartment with monthly repayments of Sh23,000, an individual would need to earn Sh76,667 monthly. In contrast, one-bedroom unit costs are pegged at a desirable monthly income of Sh100,000, while a two-bedroom apartment necessitates earnings of Sh223,333 monthly. These financial requirements starkly contrast with the salaries of many Kenyans, most of whom earn under Sh50,000 each month. Economist Ken Gichinga from Mentoria Economics emphasizes that the newly introduced 1.5% affordable housing levy has further diminished the financial capability of Kenyans, thus reinforcing the challenge for many to access housing.

Although the government aims to deliver 4,888 housing units by the end of March, with a target of 5,000 units quarterly, the fiscal realities indicate a disconnect between policy objectives and actual accessibility. The Kenya National Bureau of Statistics reports that only 371,895 individuals earn over Sh100,000 monthly, while a staggering 1.36 million individuals fall within the income bracket of Sh50,000 to Sh99,999. Therefore, the present housing schemes seem largely unattainable for a significant portion of the population, raising concerns about the efficacy of governmental efforts to resolve the ongoing housing deficit.

The affordability issues tied to Kenya’s social housing initiative reveal a significant disparity between government housing policy aims and the economic capabilities of the average citizen. Despite efforts to allocate housing units, financial constraints obstruct access, particularly among low-income earners. Reports indicate that housing costs far exceed the recommended income thresholds, leading to an ongoing affordability crisis in Kenya’s housing sector.

Original Source: mwakilishi.com