PS Hinga reveals plan to finance Sh800 billion housing projects

The government is relying on billions of shillings collected through the housing levy and revenue from completed homes to keep its Affordable Housing Programme running, with Housing Principal Secretary Charles Hinga dismissing concerns that a Sh707 billion funding gap could derail construction across the country.

Hinga said the programme had made progress despite delays affecting some developments, pointing to more than 313,000 housing units currently under construction, alongside 177,000 student accommodation beds and nearly 600 markets.

Speaking at Kipchoge Keino Stadium in Uasin Gishu County on Monday, October 19, 2026, ahead of Mashujaa Day celebrations, the PS maintained that the initiative had a stable financial base and that the government was taking steps to address projects that had fallen behind schedule.

He said the programme had created more than 1.3 million jobs and paid Sh61 billion to jua kali artisans countrywide. In the North Rift region, artisans and other participants had received Sh3.8 billion, including Sh264 million in Pioneer.

Hinga acknowledged that several housing projects were behind schedule but insisted that the setbacks did not point to a shortage of money.

Of more than 1,290 projects under implementation, he said 33 had stalled completely, while about 145 were experiencing major delays. He attributed the situation to contractors facing tight profit margins and temporary disruptions in payment processing at the start of the financial year.

“They are not stalling because we don’t have money. We have no money problem. The money has been put to good use. We can account for every cent. We are on a sound financial footing, and a few years later, I think the work is speaking for itself,” Hinga noted.

He said the government had recently released Sh35 billion to support construction activities and was working with contractors facing difficulties in meeting their obligations. Where necessary, the government was helping such contractors or bringing in replacements to ensure that projects could proceed.

The PS also warned that contractors who fail to meet agreed completion dates could be subjected to liquidated damages. He maintained that these penalties would not create an additional cost for the government.

Beyond construction, the programme has opened opportunities for Kenyan professionals and young people. Hinga said more than 200 local consulting firms were participating, while 5,500 interns had already joined the initiative.

A further 6,000 internship positions are expected to be advertised, creating more opportunities for young people to gain work experience through the programme.

The government's funding position has come under scrutiny following a Parliamentary Budget Office report that estimated a Sh707 billion gap in financing 227 housing projects.

The report placed expenditure at Sh118 billion against an estimated total requirement of Sh825 billion, raising questions about how the government intends to meet the cost of the developments.

However, Hinga challenged the interpretation of the figures, saying they did not fully consider the time required to complete housing projects. He explained that developments typically take between two and three years, meaning their overall costs are spread across several financial periods.

According to the PS, the programme's signed contracts have now surpassed Sh800 billion, reflecting the scale of projects the government has committed to deliver.

He said the housing levy brings in approximately Sh7 billion each month, amounting to Sh84 billion annually. The government also expects proceeds from completed houses to strengthen its ability to finance new construction without relying solely on levy collections.

More than 45,000 units, including homes in Pioneer, are expected to be sold by January 2027, with the transactions projected to raise about Sh106 billion.

Hinga said the money generated from these sales would be channelled back into the programme to support additional housing developments.

The homes are available through different payment arrangements, including outright cash purchases, mortgages and tenant-purchase plans, giving prospective buyers several ways to acquire property.

On accountability, Hinga said the Kenya Revenue Authority collects the housing levy, with the funds held in an account at the Central Bank. He added that expenditure from the fund is open to examination by the Auditor-General.

The government has structured the housing programme into three categories to accommodate people with varying incomes and payment abilities.

Social housing is intended for households earning Sh20,000 or less per month. Under the rent-to-own arrangement, monthly payments begin at Sh3,800, and buyers are not required to make an initial deposit.

The second category targets households earning between Sh20,000 and Sh149,000 monthly. Applicants in this group must pay a 5 per cent deposit, while repayment can be spread over a period of up to 30 years.

A third category is designed for higher-income earners, extending the programme beyond lower-income households.

Hinga said the pricing approach was based on the amount families already spend on poor-quality or inadequate housing. He argued that the programme was intended to give households an opportunity to put that spending towards owning their homes.

He also noted that some developments had already sold out, pointing to demand for the units being offered under the initiative.

Hinga said the government had adopted measures aimed at reducing the cost of construction while maintaining the quality and affordability of the homes.

These measures include detailed project costing and competitive fixed-price contracts, which are intended to help control spending and limit the risk of rising construction expenses.

The PS maintained that the approach would allow the government to deliver homes at prices suited to the intended buyers while ensuring that public resources were properly accounted for.

With thousands of units still under construction and some projects facing delays, the government is banking on continued housing levy collections and income from completed developments to support its plans.

Hinga remained firm that the programme was financially sound, arguing that the reported funding gap did not fully account for the long-term nature of housing construction or the revenue expected from completed homes.