Court of Appeal rejects challenges to the housing levy but raises concerns about whether the programme adequately reaches Kenya’s poorest citizens.
Kenya’s Court of Appeal has upheld the Affordable Housing Act and the mandatory housing levy, giving President William Ruto’s affordable housing programme a major legal boost.
A five-judge bench dismissed appeals challenging the constitutionality of the legislation and rejected requests for refunds of housing levy payments already collected from workers and employers.
The appeals followed an earlier High Court decision that upheld the Affordable Housing Act.
The case involved more than 40 petitions challenging different aspects of the law, including the housing levy, public participation, taxation, devolution and the role of the Kenya Revenue Authority in collecting the levy.
Court Upholds Constitutional Basis
The appellate court found that the Affordable Housing Act was connected to the constitutional right to accessible and adequate housing.
The judges relied particularly on Articles 21 and 43 of Kenya’s Constitution, which require the State to take legislative, policy and other measures towards progressively realising social and economic rights.
Article 43 includes the right of every person to accessible and adequate housing and reasonable standards of sanitation.
The court therefore rejected the argument that the legislation should be declared unconstitutional simply because some taxpayers considered the levy burdensome or disagreed with the government’s policy approach.
The judges held that taxation used to enable the State to meet its constitutional obligations cannot automatically be regarded as unconstitutional.
Employees And Employers Pay 1.5% Each
The housing levy requires employees and employers to contribute 1.5 per cent each based on an employee’s gross monthly salary.
The levy has been one of the most contested elements of Ruto’s affordable housing programme.
Among those who challenged it was Nakuru-based surgeon Dr Magare Gikenyi, who argued that the scheme compelled employed Kenyans to finance housing projects from which they might never personally benefit.
The appellants also challenged the levy on grounds including alleged discrimination against salaried workers and what they described as unlawful deprivation of property.
The Court of Appeal rejected those arguments.
The judges found that the differentiation involved in collecting the levy did not amount to unfair discrimination and could fall within affirmative action contemplated under Article 27(6) of the Constitution.
Court Rejects Devolution Challenge
Another major issue before the court was whether the national government had improperly taken over housing responsibilities belonging to county governments.
The appellants argued that housing is a devolved function and that Parliament had transferred county responsibilities to the national government through the Affordable Housing Act.
The appellate court rejected that interpretation.
Instead, the judges held that housing is a shared function requiring cooperation between Kenya’s national and county governments.
The court said the legislation provides a framework for combining national and county resources to address the country’s housing needs.
The ruling therefore preserves the Act’s framework for cooperation between the two levels of government.
Court Raises Concern Over Poor Kenyans
Although the court upheld the legislation, the judges raised concerns about the way the affordable housing programme is structured.
The bench observed that the programme appeared to focus significantly on people who have the financial capacity to purchase or develop homes.
The court noted that applicants for housing units are required to provide proof of a deposit, which could exclude some of the poorest Kenyans from benefiting from the programme.
The judges warned that safeguards would be necessary to ensure the programme reaches the people for whom the constitutional right to housing is intended.
The court also warned against the possibility of political interests influencing the distribution of affordable housing benefits.
However, the judges concluded that these concerns did not make the Affordable Housing Act unconstitutional.
They held that the Act represented one of the measures available to the State to progressively realise the constitutional right to housing, even if the legislation did not fully satisfy every constitutional expectation.
Public Land Provisions Also Upheld
The appellants also challenged provisions concerning the use of public land for affordable housing projects.
The court declined to invalidate the legislation on the basis of possible future violations.
The judges stressed that the National Land Commission retains its constitutional role in the allocation of public land.
They said any allocation of public land without the approval of the National Land Commission would be unlawful.
The court therefore distinguished between the legality of the legislation itself and the possibility that individual government actions could later violate constitutional or statutory requirements.
Government Welcomes Legal Backing
The Kenyan government had urged the Court of Appeal to uphold the Affordable Housing Act.
Through the National Housing Corporation, the government argued that the constitutional right to housing requires coordinated action between national and county governments.
The appellate ruling now leaves the government’s legal framework for collecting the housing levy and implementing the programme intact.
The decision also follows continued government investment in affordable housing projects across Kenya.
Recent government figures cited by Kenya’s Interior Principal Secretary Raymond Omollo indicated that approximately 10,000 affordable housing units had been completed, with about 8,000 already occupied, while the government was considering additional financing mechanisms for the programme.
At the same time, the government has been working to regularise land arrangements involving some affordable housing projects. The Standard reported on September 24 that authorities had begun engaging original landowners, including counties and national institutions, to address ownership issues affecting project sites.
What The Ruling Means
The Court of Appeal’s decision means the Affordable Housing Act and the housing levy remain legally operative following the challenges considered by the appellate court.
The ruling does not, however, remove the concerns identified by the judges about access to the programme, particularly for Kenyans with limited financial resources.
It also does not mean that every future implementation decision under the Act would automatically be lawful. The court specifically maintained the constitutional role of the National Land Commission in public-land allocation.
The judgment therefore provides legal backing for the overall housing framework while leaving implementation questions open to scrutiny.
For the Ruto administration, the decision preserves one of its major policy programmes and the revenue mechanism supporting it.
For opponents of the levy, the ruling represents a setback to efforts to have the deductions declared unconstitutional and recover funds already collected.
The court’s concerns over affordability and access also place continued attention on whether the programme can reach lower-income households while complying with Kenya’s constitutional obligation to progressively realise the right to accessible and adequate housing.
