The Jubilee administration is seeking the support of the counties to have governors align their development plans with President Uhuru Kenyatta’s one million homes dream.
A concept paper prepared by the presidency says the administration would push to put in place the legal and financial infrastructure this year to roll out the ambitious project.
The document will form the basis of deliberations at the Fifth Annual Devolution Conference in Kakamega today.
The national government wants to work closely with the counties to build the homes.
It intends to first create a substantial ‘land bank’ for the homes and allocate financing for supporting infrastructure, including power, water and roads
The government has far-reaching legal proposals to align legislation with its ambitious plan to cover major cities and towns.
The National Social Security Fund is expected to be the driver of the projects. The government is proposing to amend the NSSF Act 2013 to increase contributions from the current Sh400 to Sh1,080.
The government will also seek to amend the Retirement Benefits Authority Act to allow the NSSF to invest 30 per cent in real estate to finance the homes.
Also to be amended is the Stamp Duty Act to exempt first-time homeowners from the tax. The Public-Private Partnership Act will be reviewed to fast-track the process for predefined models or cases.
The government will reduce the property transfer costs for social and affordable housing.
The homes will be financed by the private sector to the tune of 60 per cent, the NSSF 30 per cent, while the national government will pump in the remaining 10 per cent. The Jubilee administration is targeting 6,800 acres in five major towns — Nairobi ( 3,000 ), Mombasa ( 1,200 ), Kisumu ( 1,000 ), and Eldoret and Nakuru ( 800 each).
As a pilot project, the government will pump in Sh4 billion from the Unclaimed Assets Authority for a social housing project in a 55-acre parcel in Mavoko, Machakos.
The NSSF will also finance about 1,000 acres in Mavoko through its own revenues, according to the policy document.
The government plans to revamp old houses, including 100,000 units in Nairobi.
By the end of the year, the government hopes to put up 19,000 units in Kibera, Mariguini and Kiambiu.Through the PPP deal, the government’s Portland One programme will have 150,000 housing units.
Infrastructure Chief Administrative Secretary Chris Obure says the focus will be on demand with regard to affordability, type and location.
“To ensure no single development ends out as a ghost town, to ensure low construction cost, the government will have negotiated scale discounts for input materials, develop local construction technology sector while making sure the designs embrace value and fast project delivery,” he said.
The administration intends to partner with local and international firms for financing. If successful, the projects will revolutionise the housing sector.
Treasury and Infrastructure ministries are expected to come up with a demand-based master plan this year. They will then work with the counties and the Lands ministry to establish a ‘land bank’, which must be at most 5km from economic zones.
Public land will be identified against affordable housing targets and swaps made with developers, where necessary.
Private landowners will also be offered incentives. Those who will fail to develop are likely to be slapped with hefty taxes.
To achieve success, the Lands ministry and the National Land Commission will ensure land availability will not be a bottleneck for fast ramp-up of the programme.
The Attorney General has been tasked to come up with legislation on private land incentives or taxes to ensure they are enacted before the projects are rolled out.
Rates for first construction inputs negotiated should be concluded by end of the first quarter.
These rates should result in 15-25 per cent capital savings to be used as the basis for PPP bidding processes in the second quarter.
The government hopes to sign at least two MoUs for investment deals by July.
To scale-up developer capacity and financing, it will rely heavily on Public-Private Partnership, while using the NSSF to finance the projects.