Kenya National Assembly has approved an additional KSh25 billion allocation to the State Department for Housing, offering a lifeline to more than 1,700 affordable housing units that were at risk of stalling.
The funding, passed through the Budget and Appropriations Committee report under Supplementary Estimates I for the 2025/26 financial year, is expected to ensure continuity of ongoing projects and timely payment of contractors.
The move follows concerns that funds invested in Treasury Bills had not been factored into the supplementary budget.
According to the committee report, lawmakers endorsed an increase of KSh25 billion in development expenditure under Appropriations in Aid to stabilise the housing programme.
The funds will be drawn from investments made by the Affordable Housing Board, which had been locked in short-term government securities.
Funding gap threat to housing projects
The allocation follows a warning by Housing Principal Secretary Charles Hinga that failure to include the funds in the supplementary budget would halt projects across the country.
Appearing before the Housing Committee on 19 March 2026, Hinga said the National Treasury had initially declined to incorporate the funds, creating uncertainty over financing. He cautioned that without the allocation, the department would be unable to pay contractors or utilise about KSh6 billion generated monthly from the Housing Levy in the final quarter of the financial year.
The warning raised concern among lawmakers, as the affordable housing programme remains a central pillar of the government development agenda.
Hinga told MPs the funds, currently invested in 90-day Treasury Bills, are set to mature but could not be spent without formal budgetary provision.
As of January 2026, the Affordable Housing Board had utilised 79.5% of its allocated budget while continuing to process payment certificates for projects across the country. This increased pressure on the department to secure immediate financing.
“I have invested money in Treasury Bills, which are maturing, but without fiscal space in the Supplementary Budget, I cannot spend it,” Hinga said.
The ministry has written to the Central Bank of Kenya requesting the release of the KSh25 billion by the end of the month.
The approval is expected to restore momentum in the housing sector, ensuring construction timelines remain intact and boosting confidence among contractors and investors.
