When political discourse around public policy turns into threats of systemic collapse, voters are wise to check the history books. President William Ruto’s recent assertions, claiming that scrapping the controversial Housing Levy under a future administration led by figures like Nairobi Senator Edwin Sifuna would freeze housing developments and destroy millions of jobs, represent classic scaremongering.

A quick look at Kenya’s urban development history shows that public and affordable housing existed long before the current mandatory payroll deduction was introduced.

The National Housing Corporation (NHC) was originally established in 1953 (initially as the Central Housing Board under the Housing Ordinance) to facilitate affordable residential developments across Kenya. Over seven decades, the NHC delivered landmark residential estates across Nairobi and other urban centers, such as Buru Buru, Komarock, Kibera Highrise, and various municipal schemes, long before the concept of a mandatory 1.5% Housing Levy was ever drafted.

Is he done ranting about the 24K I pay for his housing scam because kuna hii 43k I pay every month for his SHA scam we also need to discuss. Tukimaliza hio ndio tuongee juu ya the 500k in PAYE he takes every single month and splashes on tea and mandazi pale state house all the while insulting us the taxpayers that carry the burden of his greed. In 2027 we are cutting the fat out of our budget to bring relief to all Kenyan workers. The housing levy will go with Ruto.

— Edwin Sifuna (@edwinsifuna) October 14, 2026

Historical housing initiatives relied on:

  1. Capital Markets & Housing Bonds: Leveraging government-backed securities to raise long-term development funds.
  2. Public-Private Partnerships (PPPs): Structuring joint ventures with private developers who supplied capital in exchange for land access and infrastructure guarantees.
  3. Budgetary Allocations & Concessional Loans: Utilizing standard national budget allocations alongside targeted development finance from multilateral institutions (such as the World Bank and African Development Bank).

The debate framed by critics like Senator Sifuna isn’t about stopping home construction but it’s about ending an unviable tax burden on heavily taxed formal workers. Eliminating the Housing Levy does not mean abandoning affordable housing, it means shifting the funding model back to sustainable fiscal practices.

Current Housing Levy Model Sustainable Alternative Model
Funding Source Compulsory payroll deductions targeting salaried employees.
Market Impact Reduces disposable income, curbing consumer spending across the economy.
Project Execution State-driven construction subject to bureaucratic inefficiencies and transparency concerns.

Jobs in the construction industry are driven by effective demand, available credit, and stable economic conditions, not by statutory payroll taxes alone. When workers retain more of their monthly earnings, local purchasing power increases, boosting financial markets and commercial banking liquidity. That liquidity, in turn, fuels mortgage markets and private sector real estate development, creating durable, market-backed construction jobs.

The claim that housing construction and job creation will collapse without the Housing Levy ignores 70 years of institutional history. Kenya built estates long before the levy existed, and with sound fiscal management and private sector partnerships, it will continue doing so long after the levy is restructured or repealed.