Affordable housing conundrum: We must learn from other global models

The Affordable Housing Levy has become one of Kenya’s most contested fiscal policies. While the government presents it as a pillar of the Bottom-Up Economic Transformation Agenda, many employees see it as another mandatory deduction shrinking already stretched pay packets.

Housing is a basic right and central to people’s lives. As John F. Kennedy observed in a 1946 speech on housing, “The home is the central unit of the community, the state, and the nation.” That principle still applies today.

Having worked in housing finance across Africa for more than 15 years, I have seen governments and experts pursue the same goal: making decent housing affordable. The challenge is not whether affordable housing is necessary. It is whether Kenya’s model is the right one.

The government has collected substantial revenue through the levy. Official figures show collections of Sh73.2 billion in the 2024/25 financial year, exceeding Treasury projections, and Sh79.9 billion the following year. Total collections since the levy began now exceed Sh170 billion.

Yet delivery has lagged far behind. Kenya National Bureau of Statistics data shows 3,357 affordable housing units were completed in 2023, 1,655 in 2024, and 6,738 in 2025. The government’s target is 250,000 units every year. That gap explains much of the public scepticism.

Other countries offer useful lessons. Rwanda adopted a rent-to-own model rather than a tax-to-build approach. Homes are priced within income realities, allowing buyers to pay gradually instead of funding construction through compulsory payroll deductions.

Singapore is often cited as Kenya’s inspiration, but its Central Provident Fund is fundamentally different. CPF contributions are deposited into individual accounts that workers own and can track, with savings supporting retirement, healthcare and housing.

Botswana has also used tenant-purchase schemes where rent payments gradually convert into ownership, reducing the burden of mandatory deductions while still expanding homeownership.