Salaried Kenyans will continue to contribute to the Housing Levy after President William Ruto confirmed that the government intends to expand its use beyond affordable housing to include the construction of student hostels in universities and colleges.
Speaking on Wednesday morning at Tom Mboya University in Homa Bay County, President Ruto acknowledged that many Kenyans have expressed frustration and concerns about the statutory deductions. However, he defended the levy, insisting that it is a transformative national development tool that will benefit millions of citizens.
“Many people have been asking me about the housing levy and the housing fund, which is the transformation that the housing levy and the housing fund will bring to us as a nation,” Ruto said.
The Head of State explained that while the levy was initially introduced to fund affordable housing projects, its scope will now be broadened to include the construction of over 400 modern markets across Kenya and the development of safe, affordable, and secure student accommodation.
Why the Government is Expanding Housing Levy Projects
According to Ruto, the decision to channel part of the funds into student hostels was driven by a growing safety concern among learners. Many students in Technical and Vocational Education and Training (TVET) institutions and universities currently live in insecure, overcrowded areas far from their campuses.
“Many of our young men and women in TVETs and universities live in dangerous places; we want them to learn in an environment where they are focused and where they do not face any insecurity,” Ruto stated.
The government aims to provide modern hostels within or near campuses, reducing commuting challenges, enhancing safety, and allowing students to focus more on academics.
Housing Levy – A Controversial but Critical Project
The Housing Levy was introduced through the Finance Act 2023 as a statutory deduction from salaried Kenyans, aimed at funding affordable housing for low-income earners.
While the government has hailed it as a cornerstone of Kenya’s infrastructure development, the levy has faced widespread criticism, legal challenges, and heated public debate. In 2024, court rulings forced the government to make significant amendments to how the levy is implemented.
Despite this, Ruto maintains that the housing program has already delivered success, pointing to completed projects such as the Mukuru Housing Estate Lot 1 — Phase 1, which was commissioned in May 2025.
Impact on Kenyans and the Economy
By expanding the use of the levy to fund student housing and market construction, the government believes it will stimulate job creation, promote local manufacturing of construction materials, and support long-term economic growth.
The plan also seeks to tackle urban overcrowding, improve learning environments, and ensure safer living conditions for thousands of young Kenyans pursuing education.
Ruto urged the public to see the levy not as a burden but as an investment in the nation’s future, noting that the housing and infrastructure program will directly improve lives and drive Kenya towards becoming a middle-income economy.
