President William Ruto’s flagship affordable housing agenda suffered a notable legal blow on January 20, 2026, when the Court of Appeal rejected the government’s bid to introduce fresh evidence in an ongoing challenge to the housing levy.
In a ruling delivered, the appellate court dismissed an application by the state seeking to file a new affidavit from Housing Principal Secretary Charles Hinga. The affidavit was intended to bolster the government’s arguments for continuing deductions under the Affordable Housing Act.
The court’s decision marks a procedural setback for the administration, which has defended the 1.5% mandatory levy deducted from salaried workers’ gross pay alongside employer contributions as essential to funding housing projects for low- and middle-income Kenyans.The case stems from consolidated appeals challenging the constitutionality of the levy and the broader Affordable Housing Act.
Petitioners, including civil society groups and individuals, argue the deductions are discriminatory, unfairly burden formal sector employees, and may not guarantee benefits for contributors. Earlier High Court rulings had upheld aspects of the Act, but appeals persist before a five-judge bench, with hearings ongoing as of January 19-20, 2026.
This rejection comes amid heightened scrutiny of the executive’s compliance with judicial orders, as highlighted in recent media reports on alleged impunity in disregarding court directives.
The housing levy remains a cornerstone of Ruto’s Bottom-Up Economic Transformation Agenda, promising millions of affordable units to address Kenya’s housing deficit. However, persistent legal battles have fueled public debate over its fairness, implementation, and fiscal impact on workers already grappling with high living costs.
The ruling limits the government’s ability to expand its defense at this stage, potentially complicating efforts to sustain collections pending a final determination.
Critics view it as another instance of judicial pushback against executive policies, while supporters maintain the program is vital for national development. As proceedings continue, the outcome could reshape one of Ruto’s signature initiatives and influence public trust in government-led reforms.
By KTN News