Home Ownership for All: An Overview of The Affordable Housing Act, 2024

Home Ownership for All: An Overview of The Affordable Housing Act, 2024

Posted on April 23rd, 2024


  • Renice Midar, ACIArb

  • Akur Arop

  • Benson Odiwour


In Kenya, access to adequate housing remains a pressing issue, with a significant portion of the population facing challenges in securing affordable and suitable accommodation. Recognising the urgency of this matter, the government has enacted the Affordable Housing Act, 2024 (the Act), a comprehensive legislative effort aimed at addressing housing deficiencies and promoting sustainable development. As legal practitioners committed to social justice and community welfare, we at TripleOKLaw LLP recognise the importance of understanding and navigating this transformative legislation.

The Act was assented to by the President of the Republic of Kenya on 19th March 2024. The Act is crafted with the primary objective of giving effect to Article 43(1)(b) of the Constitution by providing a robust legal framework for the development and access to affordable housing in Kenya.

Key Provisions under the Act

We summarise the key provisions that are now in force and those set to come into force under the Act.

1. The Affordable Housing Levy

The Act provides that a levy of 1.5% rate be charged over the gross salary of an employee, deductible by the employer and remitted to the Fund within nine working days after the end of the relevant month. Compliance with these provisions exempts individuals from liability to pay the levy on gross income not deducted by the employer.

It further provides that where the levy remains unpaid after it is due, a person liable to remit the amount shall be charged with a penalty of 3% of the unpaid amount which is applicable for each month or part thereof that the amount remains outstanding. This penalty is to be paid along with the original levy amount. Furthermore, the penalty will be collected as a civil debt, implying that legal measures may be taken to ensure its recovery from the individual responsible for remitting the amount.

Removal of Affordable Housing Levy Provisions from Employment Act, 2007

Sections 31B and 31C of the Employment Act, 2007, previously amended by section 84 of the Finance Act, 2023 to introduce the Affordable Housing levy, have been repealed. This change ensures that non-salaried individuals are also liable to pay the levy, especially following the Finance Act Case which declared the levy unconstitutional for being discriminatory, among other grounds.  The obligations under the repealed provisions remain unchanged.

Remittance deadlines

The Act mandates that the Levy be remitted to the Kenya Revenue Authority (KRA) no later than the 9th working day after the end of the relevant income period for unemployed persons or when the gross salary was due for the employed persons.

The Act further provides that if an individual or an entity does not pay the levy by the due date, they will incur a penalty equal to three per cent (3%) of the unpaid amount for each month or part thereof that the payment remains outstanding. This penalty is imposed until the outstanding levy is settled. The penalty is treated as a civil debt, meaning it can be recovered through legal means, such as court action or other enforcement measures, against the person or entity responsible for remitting the levy.

2. The Establishment & Management of the Affordable Housing Fund

The Act establishes the Affordable Housing Fund (the Fund) with the main objective of financing the design, development, and upkeep of affordable housing, institutional housing, and related social and physical infrastructure.

The Fund shall be derived from the Housing Levy, appropriations from the National Assembly designated for the Fund’s objectives, donations or grants, voluntary contributions as specified in the Act, returns on investments made by the Fund, loans authorised by the incumbent Cabinet Secretary responsible for the National Treasury and any revenue generated during the fund’s execution of its duties under applicable laws.

The purpose of the Fund is to support the advancement of infrastructure for Affordable Housing initiatives across all counties, including project maintenance, the establishment of financial strategies to ensure stability and ongoing support and tackling the challenges linked with developing and sustaining demand for affordable housing. This may involve forging partnerships or implementing policies to guarantee a steady and dependable funding stream for the affordable housing sector. Furthermore, the Fund aims to offer low-interest loans to facilitate the purchase of housing units.

3. Establishment of the Affordable Housing Board

The Act provides for the establishment of the Affordable Housing Board (the Board) tasked with the main objective of supervising the progress of affordable housing, institutional housing and related social and physical infrastructure development in Kenya.

The Board is empowered to allocate funds from the Fund for various purposes, including the advancement and implementation of affordable housing programs & projects, the development of institutional housing and the execution of social and physical infrastructure projects.

Furthermore, the Board is authorised to allocate funds from the Fund in the following manner:

  • up to 0.5% of the funds may be allocated to the collector for levy collection, subject to approval by the Cabinet Secretary for the National Treasury upon recommendation by the Cabinet Secretary;
  • up to 2% of the funds may be allocated to the Board for Fund administration, subject to approval by the Cabinet Secretary for the National Treasury upon recommendation by the Cabinet Secretary;
  • and not less than 0.5% of the funds may be allocated to county committees for County Committee administration, subject to approval by the Cabinet Secretary for the National Treasury.

The Board may, with the approval of the Cabinet Secretary in charge of the Treasury, borrow funds for the advancement of the objectives of the Act.

The Board shall develop a five-year affordable housing investment programme every five years. The Board is further mandated to develop an annual investment programme derived from the five-year affordable housing investment plan. This programme encompasses proposed affordable housing and institutional housing projects, the allocation of funds from the Fund and the designated implementing agencies. Following its preparation, the Board shall submit the annual investment programme to the Cabinet Secretary who shall subsequently present the same to Parliament for review and approval.

The Board composition includes: a non-executive Chairperson, appointed by the President; the Principal Secretary to the National Treasury or their designated representative; the Principal Secretary of the State Department responsible for affordable housing matters or their designated representative; three individuals appointed by the Cabinet Secretary, including a nominee from the Council of County Governors, a nominee from the Central Organisation of Trade Unions and a nominee from the Federation of Kenya Employers; three non-public officers appointed through a competitive process by the Cabinet Secretary, possessing qualifications in built environment, finance, or law; and the Chief Executive Officer, who holds no voting rights during Board meetings.

4. Establishment of the County Rural and Urban Affordable Housing Committees

The Act provides for a County Rural and Urban Affordable Housing Committee in each county whose purpose shall be to collaborate with the Board to establish a framework for achieving affordable housing in the county, provide advice to the county governor on affordable housing programs and develop both a five-year affordable housing investment programme and an annual housing investment programme for the county. Additionally, the Committee collaborates with city and municipality boards to formulate plans for social and physical infrastructure related to affordable housing. The committee shall further submit regular written reports on the county’s affordable housing investment programmes to the Board, present annual reports on affordable housing implementation to the county assembly and fulfil any other duties delegated by the county governor in writing.

5. Implementation of the Affordable Housing Act

The Act provides that any allocation of land held by the county governments towards affordable housing must go through public participation and stakeholder engagement with the affected community within the county.

The Board has the authority to engage in agreements with public institutions for two primary purposes: firstly, for the development of institutional housing units and secondly, for the reimbursement of funds disbursed from the Fund for the construction of these institutional housing units.

The Board is authorised to further engage in agreements with private institutions for two main purposes: firstly, to collaborate on the development and construction of affordable housing units along with related social and physical infrastructure and secondly, for the procurement of goods and materials required for the construction of affordable housing units.

6. Eligibility Criteria and Application for An Affordable Housing Unit

A person eligible for a housing unit must be a Kenyan citizen of at least 18 years of age. A person who meets this criteria shall be eligible to make an application which shall be accompanied by;

a. Evidence of an approved deposit, which deposit shall be prescribed by the Cabinet Secretary.

b. Copy of National Identity Card.

c. Copy of Certificate of Incorporation in the case of a body corporate.

d. Copy of KRA Pin Number Certificate and a Tax Compliance Certificate.

e. Any necessary information as may be prescribed by the Board.

The Board shall prioritise marginalised persons, vulnerable groups, youth, women and persons with disabilities in the allocation of the Affordable Housing Units.

The Act has further provided that eligible individuals have the option to voluntarily save with the Fund to accumulate a deposit for the allocation of an affordable housing unit. The Fund’s administrator will establish separate bank accounts to manage these voluntary savings, with any interest earned from these investments credited to these accounts. Each saver will receive a unique account number from the Fund’s administrator. Should a saver not secure an affordable housing unit, they may choose to withdraw their savings with a written notice of ninety days, along with any accrued interest, or they can apply to the Board for approval to use their savings towards obtaining an affordable mortgage to develop a rural affordable housing unit. In the case of the latter, applicants must agree to use their saved deposits and the land intended for the housing unit as collateral, as outlined in the accompanying agreement.

Restriction of eligibility to natural persons

Pursuant to section 48 of the Act, eligibility for affordable housing units is restricted to natural persons. Every kind of artificial person is not eligible to purchase affordable housing units. However, section 49 (2)(c) lists an Incorporation Certificate for a body corporate as part of the documents to accompany the application for an affordable housing unit. However, the Act is silent and does not specify whether the term “person” exclusively refers to natural individuals or includes legal entities like companies. This ambiguity arises from the above conflicting provisions.

7. Ownership of Affordable Housing Units

The Act provides that the Board shall, with the approval of the Cabinet Secretary, transfer the ownership of an affordable housing unit to a qualified applicant upon completion of payment of the agreed price. The certificate of the Board that any affordable housing unit has been sold to an individual shall be conclusive evidence of consent therefore registrable by the Registrar as a transfer.

A purchaser of an affordable housing unit shall not by contract, agreement or otherwise, sell or agree to sell his or her unit or any interest therein to any other person unless with the prior written consent of the Board.

The Act has further provided the clusters of the Affordable Housing Units as follows:

  1. a social housing unit means a house targeted to a person whose monthly income is below twenty thousand shillings;
  2. an affordable housing unit means a house targeted at a person whose monthly income is between twenty thousand and one hundred and forty-nine thousand shillings;
  3. affordable middle-class housing units means middle to high-income housing targeted at persons whose monthly income is over one hundred and forty-nine thousand shillings; or
  4. rural affordable housing unit means a house under section 42 targeted at a person living in any area which is not an urban area.


8. Community Support in Affordable Housing Development

The Act under section 46 provides for community support in the projects to provide opportunities to various stakeholders as follows:

        a) Local Material Usage

The Board is required to guarantee that the construction of affordable housing units maximises the use of materials sourced locally. This requirement is intended to foster sustainability, cut down expenses, and bolster local industries by giving preference to materials easily obtainable in the project’s area.

This stipulation opens doors for local entrepreneurs and businesses dealing with construction materials. Manufacturers and suppliers of bricks, blocks, cement, timber and other building materials can seize this chance by ensuring the quality and accessibility of their products within the project’s vicinity.

      b) Local Labour Sourcing

The Board must guarantee that labour for the projects is recruited from the communities where the projects are situated. This presents an opportunity for local residents proficient in construction skills like carpentry, masonry, plumbing and electrical work to find employment on affordable housing projects.

     c) Student Internships

If an affordable housing project is located close to a university or a technical vocational institution, it is the responsibility of the Board to ensure that students have access to internships or practical experience opportunities on the affordable housing project.

Students enrolled in universities or technical vocational institutions can use this chance to gain hands-on experience and improve their skills in the construction sector. They can explore internship opportunities provided by housing developers, construction companies, or the Board specifically for affordable housing projects.

9. Penalties

The Act considers it an offence for an individual to misuse any funds or assets belonging to the Fund, or to aid or induce another person to misappropriate or use the funds in a manner contrary to what is specified in the Act.

A person who commits the above offence is liable on conviction to a fine not exceeding twenty million shillings or imprisonment of a term not exceeding ten years, or both; and an additional mandatory fine if, as a result of the conduct that constituted the offence, the person received a quantifiable benefit or any other person suffered a quantifiable loss.


The introduction of the Act is a great step towards the progressive realisation of the right to access affordable housing. However, it has not come without its hurdles. The imposition of the housing levy on the Kenyan working class is adding to the already heavy-laden burden that employed Kenyans are facing. Will this be the straw that breaks the camel’s back? Despite, this we remain hopeful that with the right implementation measures and vigilant accountability and transparency steps, Kenyans will be able to reap the benefits as envisioned by the Act.

There are some legal uncertainties and legal controversies within the Act that call for interpretation and examination against constitutional standards. Already, petitions challenging the constitutionality of certain provisions have been lodged in court. However, the Act remains operational unless declared unconstitutional or specific sections are temporarily halted by court orders pending final adjudication. All concerned parties, including employers and employees, must comply with the Act until or unless the collector or the court directs otherwise.

We will provide ongoing updates on the court proceedings regarding these cases.


This alert is provided for informational purposes only and should not be construed as legal advice. If you have any questions or require clarification, contact, Renice Midar, Partner and Head of Real Estate, Banking & Finance  at rmidar@tripleoklaw.com