Kenya’s Affordable Housing Drive Under President Ruto: Public vs. Private Sector – Who Can Deliver More Efficiently
Kenya’s affordable housing initiative, a flagship program under President William Ruto’s administration, aims to deliver 500,000 affordable homes by 2027 to tackle the country’s housing deficit of approximately 2 million units. Originally launched in 2018 by former President Uhuru Kenyatta as part of the Big Four Agenda, the program has gained renewed momentum under Ruto’s leadership. In this blog post, Makao Bora analyzes the current state of the Affordable Housing Scheme (AHS), compares the public and private sectors’ ability to meet the target, and incorporates insights from economist and banker James Muli to explore what it would take to succeed.
The Affordable Housing Drive Under President Ruto
Since assuming office in 2022, President Ruto has prioritized the AHS, emphasizing its role in economic growth and job creation. Projects like Pangani Estate, Park Road, and Kisaju View Park Estate have delivered thousands of homes priced between KSh 1 million and KSh 3 million for low- and middle-income earners. By mid-2025, approximately 40,000 units have been completed, according to the State Department for Housing and Urban Development—a significant milestone but still far from the 500,000-unit goal.
Ruto’s administration has introduced measures like the Affordable Housing Levy, tax incentives, and partnerships with financial institutions to provide low-interest mortgages through the Kenya Mortgage Refinance Company (KMRC). However, challenges such as bureaucratic delays, high construction costs, and limited buyer financing persist, prompting debate about whether the private sector could deliver affordable housing more effectively.
James Muli’s Perspective: Private Sector’s Potential
Economist and banker James Muli provides valuable insights into the housing debate, highlighting the private sector’s capacity to outpace the government in delivering affordable housing. He states:
“Private sector can do 1000 times more units than the government under favourable policies… creating more supply, demand and jobs in the sector.”
Muli points to Nairobi’s Kilimani and Kileleshwa neighborhoods, where private developers have rapidly built high-rise apartments, as evidence of their efficiency. He argues that, with supportive policies, the private sector can significantly increase housing supply, stimulate demand, and create jobs in construction and related industries.
Muli also emphasizes the government’s critical role in social housing, which he views as a fundamental human right. Social housing targets the lowest-income groups to eliminate slums and restore dignity, a responsibility best suited for the public sector due to its non-profit nature. In contrast, affordable housing for middle-income earners aligns with the private sector’s profit-driven model.
Public vs. Private Sector: A Comparative Analysis
To determine which sector can deliver Kenya’s affordable housing target more efficiently under President Ruto’s administration, let’s examine their strengths and limitations:
Public Sector: Strengths and Challenges
Strengths:
  • Access to Resources: The government controls vast tracts of land, which it can allocate for housing projects at subsidized rates, as seen in projects like Park Road.
  • Policy Authority: Ruto’s administration can implement incentives like tax exemptions and mortgage subsidies to enhance affordability.
  • Social Housing Mandate: As Muli notes, the government is uniquely positioned to deliver social housing, ensuring inclusivity for the most vulnerable.
Challenges:
  • Bureaucracy: Slow approval processes and land disputes, such as those delaying Pangani Estate, hinder progress.
  • Funding Limitations: Reliance on public funds and the Affordable Housing Levy limits scalability, with only 40,000 units completed in seven years.
  • Implementation Gaps: The public sector often lacks the agility of private developers, slowing delivery against the 500,000-unit target.
Private Sector: Strengths and Challenges
Strengths:
  • Efficiency and Scale: Muli’s observation that the private sector can deliver “1000 times more units” highlights its ability to execute large-scale projects quickly, as evidenced by developments in Kilimani and Kileleshwa.
  • Job Creation: Private sector involvement drives employment in construction, real estate, and related fields, aligning with Ruto’s economic goals.
  • Market Adaptability: Private developers can tailor housing options to meet diverse market needs.
Challenges:
  • Profit-Driven Focus: Without incentives, private developers prioritize high-end projects, sidelining affordable housing.
  • Financing Barriers: High interest rates and limited access to affordable mortgages reduce demand for private-sector projects.
  • Regulatory Obstacles: Complex permitting processes and high land costs deter investment in affordable housing.
What It Would Take to Succeed
Achieving President Ruto’s affordable housing goals requires collaboration between the public and private sectors, with the government creating an enabling environment and the private sector driving execution. Drawing from Muli’s insights, here are key steps to make this happen:
  1. Supportive Policies
    Muli stresses that “policies that support the sector” are essential. Ruto’s administration could:
    • Simplify land acquisition and titling to reduce developer costs.
    • Expand tax incentives, such as VAT exemptions on construction materials, to lower project expenses.
    • Invest in infrastructure (roads, water, electricity) for affordable housing estates to attract private developers.
  2. Public-Private Partnerships (PPPs)
    PPPs can leverage the government’s resources and the private sector’s efficiency. The Park Road project, which delivered 1,370 units by 2024, demonstrates the potential of such collaborations. Ruto’s government could scale up PPPs by providing land and regulatory support while private developers handle construction and marketing.
  3. Improved Financing Access
    Affordable mortgages are critical to boosting demand. The KMRC offers loans at 5-7% interest, but uptake remains low. Expanding KMRC’s reach and partnering with private banks could make financing more accessible, enabling more Kenyans to buy affordable homes.
  4. Clear Division of Roles
    Muli suggests the government focus on social housing to eliminate slums, while the private sector leads in affordable housing for middle-income earners. This division ensures both segments are addressed effectively.
  5. Innovation and Technology
    Private developers can adopt cost-effective construction methods like precast concrete or modular housing to reduce costs and speed up delivery. The government can support this through research and development funding.
Why the Private Sector Could Lead
While Ruto’s administration excels in policy and social housing, the private sector’s efficiency, scalability, and market-driven approach make it better suited to deliver affordable housing at scale. Muli’s examples of Kilimani and Kileleshwa show how private developers can transform markets with the right support. By fostering a favorable policy environment, the government can unlock the private sector’s potential to deliver hundreds of thousands of units, create jobs, and drive economic growth.
How Makao Bora Fits In
At Makao Bora, we are dedicated to connecting buyers and sellers in Kenya’s dynamic real estate market. We list a wide range of properties, from affordable homes to premium estates, and provide well-researched market updates to empower informed decisions. Our services include:
  • Connecting Buyers and Sellers: We facilitate seamless transactions, matching buyers with their ideal homes and sellers with qualified buyers.
  • Property Listings: Explore our diverse portfolio, including affordable housing options like Kisaju View Park Estate, starting at KSh 1 million.
  • Market Insights: Stay informed with our expertly researched articles on trends, policies, and opportunities in Kenya’s housing sector.
While the government plays a crucial role in policy and social housing, economist James Muli argues that the private sector can deliver affordable housing more efficiently with supportive policies. By fostering PPPs, improving financing access, and streamlining regulations, Ruto’s administration can achieve its 500,000-unit target, transforming lives and boosting the economy.
Looking to buy, sell, or stay updated on Kenya’s housing market? Contact Makao Bora today to explore our property listings and market insights tailored to your needs!
Sources:
  • State Department for Housing and Urban Development (2025 data on AHS progress).
  • James Muli’s analysis on housing (Facebook Post).