Court of Appeal backs Affordable Housing Act, dismisses 42 cases

By  Sam Kiplagat

Court Reporter

Nation Media Group

President William Ruto’s affordable housing programme received a major legal boost on Friday after the Court of Appeal upheld the Affordable Housing Act and the housing levy, dismissing a raft of appeals that sought to declare the law unconstitutional.

The appeals also sought to compel the government to refund billions of shillings already collected from workers and employers.

A five-judge bench held that the Affordable Housing Act was enacted to advance the constitutional right to accessible and adequate housing and could not be invalidated merely because some taxpayers consider the levy burdensome or disagree with the government's policy choices.

The court found that the legislation was anchored on Articles 21 and 43 of the Constitution, which obligate the State to take legislative, policy and other measures to progressively realise social and economic rights, including the right to accessible and adequate housing.

“The right articulated in the Constitution is the right of every person to accessible and adequate housing, and to reasonable standards of sanitation,” the judges said.

The judges added that the Constitution places an obligation on the State to take legislative and policy measures, including setting standards, to progressively realise those rights.

The appeals arose from more than 40 petitions challenging the Affordable Housing Act and the mandatory levy, which requires employees and employers to each contribute 1.5 per cent of an employee’s gross monthly salary.

The appellants moved to the Court of Appeal after the High Court ruled that the Act was constitutional.

Among the appellants was Nakuru-based surgeon Dr Magare Gikenyi, who argued that the levy unfairly compels employed Kenyans to finance housing schemes from which they may never benefit.

Dr Gikenyi further argued that compelling one person to contribute towards another person's housing amounted to slavery and servitude.

The appellants also challenged the law on several constitutional grounds, including alleged inadequate public participation, unlawful validation of housing levy collections previously declared unconstitutional, discrimination against salaried workers, the role of the Kenya Revenue Authority in collecting the levy, and what they termed an unconstitutional takeover of county government housing functions by the national government.

They argued that housing is a devolved function and that Parliament had unlawfully transferred powers belonging to counties to the national government.

But the appellate court rejected those arguments, holding that housing is a shared function requiring cooperation between the two levels of government.

“We hold that the Act seeks to surmount the challenge of non-availability of land by marshalling the national and county resources with a view to implementing, at least to some extent, the right to accessible and adequate housing,” the judges said.

The court found that the law does not undermine devolution but instead creates a framework for cooperative governance between the national and county governments in addressing the housing challenge.

“The provisions of the Act are consistent with the constitutional edict that housing is a shared function,” the bench held.

On the housing levy, the judges dismissed claims that the deductions amount to unfair discrimination or unlawful deprivation of property.

“In our view, the implementation of the objective of the Act may entail affirmative action contemplated in Article 27(6) of the Constitution. Accordingly, we are not satisfied that the differentiation in the manner of collecting the levy amounts to unfair discrimination,” the court said.

The judges further held that taxes imposed to enable the State to meet constitutional obligations cannot automatically be regarded as unconstitutional.

The court also observed that decisions on whether taxpayers are overburdened by a particular tax belong in policy and political forums rather than the judiciary.

At the same time, the judges expressed concern that the current housing programme appears to focus largely on those able to buy or develop homes while leaving out the poorest Kenyans.

The court noted that the Affordable Housing Act requires applicants for housing units to provide proof of a deposit and that the programme, as currently structured, is aimed primarily at low-income earners capable of purchasing houses and developers.

The bench warned that unless proper safeguards are established, there is a danger that affordable housing programmes could be captured by political interests.

“Unless this is done there is a real danger that the affordable housing project may be a tool for the political class to reward the cronies, supporters and court jesters at the expense of those deserving of its benefit and for which the right is constitutionally intended,” the court said.

Nevertheless, the judges concluded that the shortcomings identified did not render the law unconstitutional.

“Whereas the Act, as enacted, cannot be said to have fully met the constitutional expectation in Article 43(1)(b) of the Constitution, the enactment of the Act is but one of the measures taken by the State to ensure that the right to accessible and adequate housing is realized,” the court held.

The court also rejected arguments that the Act unlawfully permits the use of public land for housing projects, noting that the National Land Commission retains a central constitutional role in the allocation of public land.

“Any allocation of public land without the approval of the NLC will, accordingly, be unlawful,” the judges said, adding that they could not invalidate the law based on speculative future violations.

The government had urged the court to uphold the legislation. Through the National Housing Corporation, it argued that the right to housing requires coordinated action by both levels of government.

The decision effectively preserves one of President Ruto’s flagship programmes.

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