Housing Levy: Kes206 Billion Later, No One Can Trace a Payslip to a Front Door

Take a Kenyan earning Sh300,000 a month. Sh4,500 leaves a Sh300,000 salary each month, and the employer matches it. Three years and Sh206.46 billion later, no published record follows that money to a finished house. Parliament is now being asked to pledge Sh100 billion of future receipts. If her pay and the levy rate remain unchanged, Sh1.08 million will enter the Fund from that employment relationship over ten years. Half will have come from her salary and half from her employer.

Ten years of the housing levy costs a worker and her employer Sh1.08 million and earns her no claim to a house. That is how the Act is written. What the Act does not require is any account of where the Sh206.46 billion went. None of the compulsory contributions reserve her a home. It gives her no discount, deposit credit, or better place in the allocation queue. If she wants one of the homes, she must apply separately, provide the required deposit, and satisfy the Affordable Housing Board that she can meet the purchase payments.

The Affordable Housing Act 2024 places the levy in a national fund rather than a savings account held for each contributor. The 2025 regulations make citizenship, age, previous allocation, and ability to pay relevant to an application. Years of levy deductions are not an allocation criterion.

Treasury records reported Sh206.46 billion in collections over three financial years by June 2026. The annual figures rose from Sh54.16 billion in 2023/24 to Sh73.20 billion in 2024/25 and Sh79.10 billion in 2025/26. The latest annual figure had not yet passed through a published audit of the Fund by the reporting cut-off.

The worker can see Sh4,500 leave her payslip. The payslip records her deduction, not the employer’s later remittance of that money and its matching contribution. After the money reaches the fund, public reporting splits the trail across accounts, agencies, and reporting periods instead of showing where it was held, which project received it, what the project cost, what was completed, and who eventually occupied the homes.

The levy and the home are separate transactions.

The levy finances a national program. Buying a home begins with a separate voluntary commitment.

An applicant may save towards a deposit through the Boma Yangu platform. Unlike the levy, those voluntary savings are held in the applicant’s name. A person who has not received a unit may withdraw them with accrued interest after giving 90 days’ notice. The regulations set the purchase deposit at up to five percent of the unit price. A buyer then pays the balance through an approved financing arrangement, including tenant purchase, where monthly payments clear the agreed price and interest over time.

Public finance does not ordinarily give each taxpayer personal ownership of the road, school or hospital supported by a tax. The housing program uses public money to support assets that are eventually transferred to selected private buyers.

The Act places the program under the public-finance principles in Article 201 of the Constitution, including openness, accountability, prudent use of public money, and clear fiscal reporting. The worker’s public stake lies in those standards rather than a personal balance in the Fund.

Published project information often gives a selling price without disclosing the full unit cost, the value of public land and infrastructure, or the amount the buyer will repay. The public cannot tell whether the advertised price represents full cost recovery, a subsidy, or a price that leaves land and infrastructure outside the calculation.

Three official numbers measure three different stages.

The Affordable Housing Board reported 1,795 finished units placed on the market in the financial year to June 2025. The provisional figures in the 2026 Economic Survey recorded 6,738 units completed by the State Department for Housing during the 2025 calendar year and another 410 completed by the National Housing Corporation. That produced a provisional total of 7,148 public housing completions for the year.

The same survey recorded 205,311 units under construction at 31 December 2025 with an estimated value of Sh499.9 billion. Affordable housing accounted for 138,474 units, social housing for 53,350, institutional projects for 12,709 and National Housing Corporation projects for 778.

The figures describe units offered for sale, units completed, and units still under construction across different periods and agencies. They cannot be combined into one delivery score. The survey’s Sh499.9 billion valuation covers the wider public housing pipeline rather than levy-financed projects alone. Construction accelerated and the programme now carries a large pipeline.

No published record follows each development from land approval and contract award through construction, completion, allocation, transfer, and occupation. Announcing a unit under construction cannot substitute for recording a home completed, allocated, and occupied.

At one point, Treasury bills held the equivalent of 35.7 percent of collections.

The Auditor-General’s report on the Fund for the year to June 2025 recorded Sh45.48 billion in Treasury bills. By that date, levy collections totalled Sh127.36 billion. The investment balance was equivalent to 35.7 percent of cumulative collections. That is more than a third of everything Kenya's housing levy had ever collected was sitting in Treasury bills rather than in construction. Sh206.46 billion in, the program still cannot show what any of it built.

The ratio compares a point-in-time Treasury-bill balance with collections accumulated over two financial years. It measures liquidity held on one date, not the permanent destination of each contribution. Treasury bills are short-term government securities. They can preserve cash and earn a return while approved projects await payment, and the Act permits the Board to invest money that is not immediately required.

The Board attributed the investment to collections arriving before projects were ready to absorb the cash. The Fund had lent Sh45.48 billion to the Treasury while contributors lacked a current public schedule showing when the bills would mature, which projects the cash was reserved for and how much remained available for new commitments.

Housing Principal Secretary Charles Hinga said in August 2026 that the Fund then had no money remaining in Treasury bills, attributing the change to faster procurement and improved spending. No published project-level schedule traces the Sh45.48 billion from government paper into named project payments and delivery stages.

The audit could not verify land records across much of the portfolio.

The Auditor-General’s special audit of the program examined a portfolio that included housing, markets, lighting, and related infrastructure. It found that 269 of 394 projects lacked verifiable land documentation at the audit stage. Only 48 then had title deeds, allotment letters, searches, or documented community-land status. The State Department later told Parliament that 125 projects had valid documentation after further review.

The audit also found no consolidated feasibility study, formal cost-benefit framework or documented affordability-threshold analysis covering the program before implementation. Land readiness, private investment, and financing assumptions were not supported by a single program appraisal.

Unverified land records threaten the sectional titles buyers will need. Unsupported affordability thresholds prevent the public from testing the income assumptions, public subsidy, financing cost, and monthly payment used to place a unit within reach of its intended buyer. Construction can advance while those gaps remain, but concrete does not cure a defective title or an unsupported price.

A public project page can join the trail.

The program already produces audits, budgets, procurement records, project announcements, and Boma Yangu data. Those records lack a shared project number that joins them. The Parliamentary Budget Office identified the absence of a clear pipeline linking levy inflows to project initiation, progress, completion, and occupation. A contributor must search across different institutions and reporting periods to reconstruct one project’s financial and physical history.

Every project should carry one permanent public number linking its land record, contract price, authorized payments, construction milestones, finished units, and occupation. A monthly portfolio statement should reconcile the Fund’s cash, investments, commitments, payments, and buyer receipts to those project numbers.

Under section 26 of the Act, the Fund administrator authorizes withdrawals subject to Board approval. The controller of budget told Parliament that the levy sits outside her current oversight because it is classified as a levy rather than a budgeted fund. Parliament should close that gap.

Until it does, each major payment should remain traceable from Board approval to the procurement contract and certified work through the same public project number.

The Act sets no expiry date for the levy and no automatic parliamentary review tied to completed and occupied homes. A fixed review cycle would force Parliament to compare the rate and collections with delivery, recoveries from buyers, investment balances, and future commitments before allowing the program to continue unchanged.

The Fund revolves. The deduction does not stop.

Section 9 requires proceeds from sale, rent, and interest to be paid back into the Fund. The revolving mechanism several commentators have proposed already exists in law.

What does not exist is any corresponding end point for the levy. The Act sets no sunset date, no cumulative collection ceiling, no delivery trigger and no periodic rate review. Sales can replenish the Fund indefinitely while 1.5 percent continues to leave every payslip indefinitely. Kenya has built a fund that recycles its proceeds and a levy that recycles nothing back to the person paying it.

The question "at what point will the government say it has collected enough" has an answer. The answer is that the current Parliament declined to write one. The next one should remedy this.

Before the next payslip is pledged

During the National Assembly debate of 3 June 2026, the Housing Committee reported that the State Department had requested Sh150 billion, comprising about Sh50 billion from housing sales and Sh100 billion from securitization.

Securitization converts expected future cash flows into capital today. Used well, it can move viable schemes from drawings to occupation faster than annual collections allow, and there is a serious case for it in a program whose constraint is delivery speed. It also commits a share of future levy income to investors, with financing costs attached, before those collections arrive.

That changes the nature of the deduction. A future Parliament can amend a levy. It cannot easily amend a levy that has been pledged as security, because the obligations built on that revenue stream would still have to be honoured or restructured. Securitization is how a temporary measure acquires a maturity date it did not have before, and the maturity date belongs to the investor rather than the contributor.

No such commitment should proceed without a published term sheet: the amount, the tenor, the interest or investor return, the security, the repayment priority, the transaction fees, the projected sales, the stress tests, and what happens if collections fall short. Parliament should also be told what share of future housing output will service financing rather than produce new units.

The state is preparing to sell the next decade of deductions before publishing what the last three years bought.

Automatic collection requires visible delivery.

If her salary and the levy rate remain unchanged, the worker earning Sh300,000 a month will see Sh540,000 leave her pay over ten years. Her employer will separately remit an equal amount. Their employment relationship will have sent Sh1.08 million to the fund without reserving her a home, reducing her deposit or improving her place in the allocation process.

At the June 2025 audit date, Treasury bills held the equivalent of 35.7 percent of all levy collections received by then. The Fund says that balance is now zero. No published project record traces the money from those investments into named contracts, secure land, finished homes, and occupied units.

Where the levy appears on an employee's payslip, that employee has already borne the statutory charge. Paying it neither guarantees allocation of a home nor counts as the buyer's deposit. Article 201 still requires openness, accountability, prudent use of public money, and clear fiscal reporting. Workers should not have to search through audits, budgets, procurement notices, and political announcements to reconstruct the history of one project.

Another launch, projection, or aggregate cannot supply that account. The public record must connect the project, secure land, authorized contract, certified payment, completed unit, and verified occupation.

The state demands precision from the payslip. It must answer with equal precision in the public account. A levy collected worker by worker must be accounted for project by project and home by home.

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