Kenyans earning at least 30,000 shillings a month will be able to afford a housing unit costing 600,000 shillings when the government completes the first phase of the Affordable Housing project in five years.
Transport, Infrastructure, Housing and Urban Development Cabinet Secretary Dr. James Macharia says this will be done through a tenant purchase agreement.
By 2022 the government has committed to put up 500,000 low cost housing units across the country in order to meet the housing needs of majority of Kenyans as part of the Big Four Plan.
The total cost is pegged at 1.15 trillion shillings; an amount CS James Macharia says is not readily available from the exchequer.
The government in now engaging 20 private sector financiers to device affordable off balance sheet financing mechanisms.
According to the CS, the state has embarked on addressing land issues where 7,000 acres will be needed for the project.
10% of the total project amount is to be spent on providing bulk infrastructure including roads, electricity, sewerage and water as well as on a review of 34 critical regulations that will reduce financing cost.
The Kenya Mortgage Refinancing Company will also allow financial institutions to offer long term liability such as mortgages with an initial Ksh 16 billion debt financing it has received from the World Bank.
Those unable to meet mortgage requirement will be given the option of the rent-to-buy model.
Upon completion, 20% of the houses target social housing or slum upgrade with another 300,000 will be for civil servants.
The total cost of the 1 million housing project requires Ksh 2.6 trillion.
The ground breaking for phase one is expected in the next three months.