NAIROBI, June 30 (Xinhua) -- Kenya plans to generate 600 million U.S. dollars for the National Housing Development Fund from salaried employees annually, an official said on Saturday.
Charles Hinga Mwaura, Principal Secretary in the Ministry of Infrastructure and Housing, told reporters that the funds will be used to purchase affordable houses from the private sector.
"Currently, the real estate sector has concentrated on building houses for middle and high-income earners due to huge returns in the sector. The National Housing Development Fund aims to increase supply of affordable houses in the market in order to eradicate the expansion of slums," Mwaura said during the National Cooperative Housing Union 29th Annual General Meeting.
The East African nation has a plan to construct 500,000 affordable houses by the end of 2022.
Mwaura said that government will involve the private sector in order to achieve the ambitious goal.
He said that the government will facilitate investors to begin construction of 160,000 houses in the 2018/2019 financial year, out of which the cooperative sector is expected to construct 40,000 low-income houses.
According to the ministry of infrastructure and housing, only 2 percent of Kenyans can afford to purchase a decent house through mortgage.
The principal secretary said low home ownership rates are due to a lack of a developed financial market.
The principal secretary added that Kenya will adopt a multi-pronged strategy to reduce the country's housing deficit that is estimated at 2 million units.
Mwaura said that to tackle the challenge of high cost of land, the government plans to release serviced land to the private sector for construction of low-cost houses.