Contractors involved in Kenya’s Affordable Housing Programme (AHP) are set to earn an estimated Sh86 billion in profits from the first phase of the government-backed housing projects, sparking fresh debate over Kenya’s affordable housing levy and the cost of public housing developments, according to a report by the Daily Nation.
A government-commissioned report shows that developers handling affordable housing projects worth about Sh285.5 billion are expected to post profit margins of nearly 30 percent. The report states that the returns are significantly higher than the internationally recommended range of between 2 percent and 15 percent for publicly funded construction projects.
The findings have intensified scrutiny of Kenya’s Affordable Housing Programme, one of the current government’s flagship initiatives aimed at addressing the country’s housing deficit, creating jobs, and driving economic growth through the construction sector.
Critics argue that contractors are benefiting heavily from taxpayer-funded incentives and deductions made through the affordable housing levy. Developers involved in the projects reportedly enjoy access to free or subsidised public land, tax incentives, and government-funded infrastructure support designed to lower construction costs and improve housing affordability for Kenyans.
Despite these incentives, the report suggests that the savings are not being passed on fully to homebuyers or contributors to the housing fund. The study estimates that for every Sh100 collected through the housing levy, roughly Sh30 ends up as contractor profit.
The controversy is likely to fuel further debate over transparency, procurement practices, and value for money in Kenya’s affordable housing projects. However, the government continues to defend the programme, saying it is helping to stimulate the economy, create employment opportunities, support urban renewal, and expand access to decent and affordable homes for low- and middle-income Kenyans.
