Impact of Government Policies on Affordable Housing Project in Kenya
Government policies play a crucial role in shaping the real estate industry. These policies will equally determine the success of the Affordable Housing project.
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All projects in Kenya are governed by government policies, whether they are government projects or not. Equally, the Affordable housing project is governed by policies that limit the real estate sector. These policies influence the development and accessibility of affordable housing. They play a key role in determining whether the project will be successful and how fast it will take to achieve that success.
Taxation
To begin with, taxation policies such as property taxes, capital gain taxes, and VAT on construction materials can affect the cost of real estate transactions and investments. Changes in tax rates or regulations can influence investment decisions in the sector. For the Affordable Housing project to be as successful as the government hopes, the cost of taxes on all commodities in the real estate sector should be low. This would facilitate the cheap acquisition of construction materials and, in turn, provide affordable houses to the people of Kenya.
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Infrastructure and development
Government investments in infrastructure such as roads, utilities, and public transportation can increase the value of real estate properties in certain areas and stimulate development in others. The government’s goal to construct 1,000,000 houses across the country by 2027 is dependent on the infrastructure in various construction sites. The quality of the roads at these sites demands how fast the construction materials are delivered and, in turn, how fast the units are completed.
Finance and mortgage policies
Government policies related to mortgage financing, interest rates, and access to credit can affect the affordability of real estate for buyers and developers. The Affordable Housing Project has been met with a lot of opposition, primarily because the financing policies are not clear. That has caused confusion, leading to multiple court appeals against the project. The sooner the government can streamline these policies, the easier it will be to execute and achieve the end goal.
Urban planning and zoning
Government policies on urban planning and zoning can influence the density, layout, and use of land in urban areas, impacting property values and development opportunities. Based on the fact that the goal of the government in the Affordable Housing project is to eliminate slums, the government must have a clear layout of how best to utilize the available space. This way, the government will not cause more congestion in its quest to provide affordable housing.
Overall, government policies play a crucial role in shaping the real estate industry. These policies will equally determine the success of the Affordable Housing project. For the government to achieve its goal of providing affordable and decent housing to Kenyans, taxation, infrastructure, finance, and mortgage policies must be favorable.
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