Housing Fund Levy is not about houses

Once we start seeing it that way you will only be left with philosophical opposition to it. Understood as a fiscal policy, you will understand why making it a refundable scheme as opposed to a tax was actually to address the very question of whether we have a duty to house other people using our money.

PS Hinga is struggling with it because it is not a housing policy. The PS Treasury and Planning is the person supposed to be talking about it.

I philosophically disagree that the government has liberal discretion to determine how my after-tax money is invested; and in the event it has any limited discretion, that it can appropriate the funds for its sovereign functions.

How I see the housing Fund: and this is why I think WSR is insistent on it despite the obvious political problems it comes with. WSR has not suddenly become a political dumbass.

The Housing Levy is a guarantee to private investors (real estate guys, contractors, banks/mortgages/financial institutions) that government will be able to pay for the houses in case they are unable to sell them once constructed… The Housing Levy is NOT what will be used to build the houses. The government will NOT build any houses.

The money government will raise however will go into other government obligations, mainly sovereign debt repayments… With sovereign debt payment specifically, government will get breathing space to be able to borrow more comfortably for running of government.

Now, Ruto is trying to replicate the economic growth by Kibaki… Using the construction industry. For Kibaki, most of the real estate and construction that spurred growth was in urban areas specifically Nairobi and it’s environs.

Ruto wants to build these units in the rest of Kenya. The expectation is that the private investors moneys that will be in circulation will be more than the 3% that they take from employees and employers. The hope is that the economic boost will increase business and then government will be able to collect more in taxation. If this happens, then government will have more ability to borrow if need be, or even to just pay the moneys they earlier borrowed from us thru the housing levy.

The houses will be morgaged to anyone who wishes to buy and the criteria will just place need as one of the major criteria for qualification. But the money from the morgaged will not go to government but to the private investors. Government is just a guarantor.

Essentially, what Ruto is doing is translating sovereign debt owed to/secured by other countries to now be debt owed to private companies in their private capacity.

The process of this translation involves forceful borrowing (in stead of taxing) of money from the people of Kenya for a certain period. The process of translation is done through a model of investment that creates jobs majorly for the unskilled labourers and in the process, expect the government to register all the hustlers who will be employed in those mjengos to be taxpayers too.

In the said model too, the government distorts the housing market making housing cheaper while being able to get more rental housing (for those who will rent these houses)…

From this, it should be clear that housing is just a vehicle to spur the economy.

The worst political hit the government can suffer is to make a law that totally ringfences the money from the Housing Levy from use in government functions except housing. This explains why such a robust fund is being brought in through a Finance Bill (through amendments to the Employment Act) and not a substantive Housing Bill.

Another reason for bringing it thru a Finance Bill is related to some Machiavellian sheenanigans Uhuruto concocted in the standing orders of Parliament on how a Presidential Veto/Recommendation to parliament was made impossible to override through Parliament when it comes to money bills.