Floods in Kenya Give Boost to Ruto’s Affordable Housing Push

(Bloomberg) -- Flooding in Kenya that’s killed hundreds of people and displaced thousands more is helping President William Ruto push one of his controversial campaign promises: Affordable housing.

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Ruto’s administration has imposed a 1.5% levy on workers to finance construction of 250,000 units of low-cost and social housing a year — an unpopular move that’s triggered a string of court challenges.

Seasonal rains exacerbated by the El Niño weather pattern have caused widespread flooding in East Africa, with Kenya suffering the worst impact. So far, about 230 people have died in the nation and 72 are still missing.

In the capital, Nairobi, the government says it has evacuated “forcefully or voluntarily” more than 163,000 people from their homes, mostly shacks perched precariously on river banks running through informal settlements.

That’s provided an opportunity for Ruto, who now says his housing plan is the answer to 40,000 families in Nairobi left homeless.

“We don’t want our citizens living in such shacks, which are swept away every time there’s flooding,” he said Monday, referring to the more than 7 million Kenyans living in shanty towns. “We want to make slum-dwellers home owners.”

Marginalized populations are bearing the heaviest toll from the raging floods, according to Habitat. “This situation underlines the importance of urban planning measures and the critical need for the enforcement of special planning guidelines in urban areas,” the United Nations agency said in an emailed response to questions.

Silver Lining

Affordable housing makes up only 2% of the 50,000 homes the country builds every year, according to government estimates, and Ruto wants to increase that ratio to about half. The supply of new homes meets only a fifth of Kenya’s annual demand and targets mostly affluent and middle-income buyers.

The construction projects for the lower end of the market seek to tackle multiple challenges — unemployment, poor housing and inadequate social services — while generating demand for building materials, the government says.

The cost of the affordable homes is projected to be within the range of what Kenyans in the nation’s more than 1,000 informal settlements already pay for shelter. Households can expect to part with as little as 3,000 shillings ($22) monthly in the government’s rent-to-own program, Ruto said.

Financing the projects has been controversial. Kenya enacted a housing tax law in March through which the government could raise as much as 80 billion shillings annually. A dozen petitions are currently in court seeking to quash the legislation.

“A lot of people have complained, but from the housing fund that we’ve established, we’ll advertise contracts this week,” Ruto said. “This week alone, we’re announcing construction of 20,000 units, which will help people in Nairobi in settlements like this so every citizen lives in clean homes with electricity and water.”

(Updates with UN comment in seventh paragraph.)

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