Court of Appeal delivers fresh ruling on Affordable Housing projects - details

The Court of Appeal upheld the constitutionality of the Affordable Housing Act, clearing a key legal hurdle that has surrounded President William Ruto's flagship housing initiative since its introduction.

The appellate court in a ruling on Friday, September 25, 2026, dismissed a series of consolidated appeals challenging the legislation, including cases associated with Busia Senator Okiya Omtatah, and upheld the legal framework supporting the affordable housing levy and the prograe.

This comes after years of litigation over the legality of the housing levy, the legislative process behind the program and the use of public land for affordable housing projects.

The dispute dates back to 2023, when the original Affordable Housing Levy was introduced through the Finance Act, 2023.

The High Court subsequently declared the levy unconstitutional, finding that there was no comprehensive legal framework governing it and that imposing it on people in formal employment while excluding informal income earners was discriminatory.

That decision prompted the government to introduce a standalone Affordable Housing Bill.

President Ruto assented to the Affordable Housing Act, 2024, on March 19, 2024, and the law commenced on March 22, 2024.

The new legislation created a framework for affordable and institutional housing and addressed concerns raised in the earlier litigation.

The constitutionality of the new law was then challenged in a fresh set of petitions.

Petitioners questioned several provisions of the Affordable Housing Act, including the 1.5 per cent housing levy, the administration of the Affordable Housing Fund, the role of the Kenya Revenue Authority (KRA) in collecting the levy and the use of public land for housing projects.

Some petitioners also argued that the legislation had not undergone adequate public participation.

In one of the consolidated High Court petitions, petitioners specifically sought orders prohibiting the government from using public land to construct houses that would subsequently be privatised under the Affordable Housing Act.

The disputes also spilled into individual housing projects, with litigation over whether particular parcels of public or community land had been lawfully allocated and whether affected residents had been adequately consulted.

A major issue in the constitutional challenge was whether Kenyans had been given a meaningful opportunity to participate in the legislative process.

The Judiciary's account of the earlier High Court litigation shows that petitioners had argued that public participation for the Affordable Housing Act was inadequate, including concerns over the geographical reach of the consultations.

The Court of Appeal has now rejected the challenge to the legislative process, upholding the Act against the arguments advanced in the consolidated appeals.

The decision removes a major legal uncertainty surrounding the 1.5 per cent Affordable Housing Levy created under the 2024 legislation.

The levy is separate from the provision that was struck down in the Finance Act, 2023.

In 2024, the Supreme Court in its judgment noted that the new Affordable Housing Act had been enacted specifically following the earlier High Court decision and that the concerns surrounding the original levy had consequently been addressed through the new legislation.

The ruling comes as separate disputes continue to emerge over individual affordable housing developments and the use of public land.

Litigation concerning the Southlands Affordable Housing Project in Lang'ata has raised questions about environmental approvals, land-use planning, public participation and whether land historically reserved for public infrastructure could lawfully be used for housing.

A 2026 Environment and Land Court petition over the project sought, among other orders, to stop construction until environmental, land-use and public participation requirements were met.