The allocation of a social housing unit to Ms. Milka Moraa has ignited debate over the affordability of Kenya’s housing program. Financial barriers remain significant, with high down payment and monthly payment requirements. Economists argue that current wages of many Kenyans do not meet these thresholds, raising concerns about the accessibility of housing initiatives. The government’s plans for increased unit releases may confront practical affordability issues for the lower-income population.
The allocation of a social housing unit to Ms. Milka Moraa, who sought rent assistance from a church, has sparked a discussion regarding Kenya’s affordable housing program. Following public donations exceeding Sh500,000 after her appeal was declined by Apostle James Maina Ng’ang’a, the State Department for Housing intervened, offering her a unit in the Mukuru kwa Reuben social housing project. However, this incident exposes the financial obstacles faced by low-income earners aiming to access government housing initiatives.
Despite the Housing Cabinet Secretary, Alice Wahome, asserting that the program targets the lowest-income demographic, the reality reveals complexities. The program mandates a down payment of Sh64,000 for a studio apartment, accompanied by monthly payments of Sh3,900. According to an FSD Kenya report prepared by AIS Capital Advisors for Mi Vida, housing costs should not exceed 30% of gross income, a target challenging for many due to existing debts and financial commitments.
The FSD Kenya report further suggests that monthly repayments should be limited to 50% of net income to mitigate the risk of excessive debt. This financial burden questions the genuine accessibility of the housing scheme for its intended beneficiaries. It indicates that to afford a studio apartment with Sh23,000 in monthly payments, a person must earn Sh76,667 monthly, while one-bedroom and two-bedroom units necessitate monthly incomes of Sh100,000 and Sh223,333 respectively.
These income requirements starkly contrast with the earnings of many Kenyans, where a considerable portion earns less than Sh50,000 monthly. Economist Ken Gichinga of Mentoria Economics notes that the introduction of a 1.5% affordable housing levy has worsened the purchasing power of the populace. This situation highlights the current housing schemes’ inaccessibility for a significant segment of the community.
Currently, the government plans to release 4,888 units by March’s end, with an aim to provide up to 5,000 units quarterly to address an estimated deficit of two million housing units. Nevertheless, the financial realities faced by many Kenyans illustrate a disconnect between policy objectives and the practical affordability of these housing solutions.
In summary, the recent allocation of a housing unit to Ms. Milka Moraa underscores critical gaps in the affordability of Kenya’s housing initiatives. Despite government assertions aimed at helping low-income individuals, the financial barriers remain substantial. With many Kenyans earning below the required thresholds, and additional levies impacting purchasing power, the government’s housing agenda encounters significant challenges in achieving its objectives to adequately address the housing deficit.
Original Source: mwakilishi.com
