Civil servants shock as State increases rent

Civil servants occupying government houses are in for a rude shock after the state announced plans to increase rent to the 56,892 housing units located in various parts of the country.

Housing and Urban Planning Principal Secretary Charles Hinga told MPs that his office has written to the National Treasury to allow them to increase rent as the last review was done in 2001 which was 23 years ago.

Hinga said they need more rental income to be able to carry out refurbishment which has been neglected for a long time.

Among those who will be affected by the increment include those in the lower cadres such as drivers and MPs’ security guards who are occupying most of the houses and only pay economic rent.

He said: “On the increment of rent, we wrote to the National Treasury and told them to allow us to increase because we believe this is the high time we looked at this matter because the last review was done in 2021.”

Appearing before the Public Accounts Committee (PAC) chaired by Nominated MP John Mbadi to shed light on audit queries touching on the 2021/2022 financial year, Hinga told the lawmakers that there is a need for review as some of the areas especially in Nairobi county have been paying way below the market price.

For instance, he said civil servants occupying houses along State House road, Nairobi have been paying about Sh30,000 a month which is way below the market rates as housing units along the said road are worth between Sh80,000 to Sh100,000.

In another case, he said the rent average being paid by the civil servants is about Sh2,200 for most houses, with units in Mbotela Jogoo road paying about Sh1,000 for one roomed house which is below the market price.

He however said that rent collection has increased from Sh582 million collected in the financial years 2016/2017, 2017/2018 and 2018/2019 financial year to the Sh1.52 billion collected in 200/2021 and 2021/2022 financial year.

In the financial year 2019/2022 they collected Sh968.6 million.
He added: “The average rent being paid is about Sh2,200. There are people paying as low as Sh1,000 and there are those paying more but still it is very low.”

In his submissions before the committee, Hinga explained that a huge stock of the housing units is under disrepair and requires urgent attention.

He admitted that although some of the houses were not occupied due to their dilapidated condition, they could not be refurbished within the financial year due to cash flow constraints and as such, rent was not received from them.

He said: “The repairs and maintenance, we have not kept up with it because we are collecting very little rent. we have not even followed the best practices which require constant refurbishment.”

And added: “There were times when houses were not occupied immediately, they were vacated.”
His sentiments came even as he confirmed that they had a shortfall of Sh506,585,000 against the expected total of Sh1,524,585,000 in rent from the 56,892 houses during the year under review.

This shortfall, he said, arose from various challenges such as the county government claiming ownership of some of them.

He explained that out of the said figure a total of Sh16,990,206.18 was deducted from tenants by various Ministries, Department and Agencies (MDAs) but was not remitted to the State Department despite them writing various demand letters to them to remit the said monies.

He said: “It is irregular for an MDA to spend money outside budget and rent being the easiest thing to reconcile because they deduct it directly from employees, we expected 5them to refund the said money but they have not. We have written to both the National Treasury and Head of public service on this.”

Another amount of Sh104 million he said was owed by County Governments while another amount of Sh35.6 million was not collected from 1,714 houses that had been boarded to various Institutions.

Hinga explained that the county governments have been claiming ownership of the said houses on grounds that transfer of function should always be followed by the assets in question.

He explained that the current challenge is because the Inter-Governmental Relation Technical Committee (IGTRC) is yet to unbundle the said function to have them transferred to the counties.

He said: “The unbundling of the housing functions and assets is not yet done. We do agree that if a house is occupied by a nurse working in the county then the rent should be collected by that county government. To deal with this we have been holding so many meetings with the IGTRC because it is clear that the rent belongs to counties but the same houses are still under the state department.”

He also pointed out that a total of Sh42.5 million was not collected from 1,501 houses that were irregularly alienated and thus not attracting rent.

Most of the said houses, he said are subject of ongoing litigations with government investigative agencies such as the Ethics and Anti-Corruption Commission.