A proposed Kenyan affordable housing tax offers an interesting perspective on human nature and whether precise information on government taxation can be too much information.
Consider the funding of a scheme like Kenya’s: to build 800,000 units of affordable ‘workforce’ housing for the employed and 200,000 social housing units as part of slum clearance.
One route? Increase income tax by a percentage as well as business/corporation taxes to cover the country’s affordable housing needs. Much grumbling happens no doubt, but without specific grievances to focus upon.
Kenya didn’t go this route. Instead, they plan to more clearly inform employers and employees of the taxation by creating special taxes aimed at each to fuel an affordable housing trust fund. Result: a furor of criticism. Read more in Business Daily: Delay Spares Workers Tax To Fund Cheap Housing
Why does this matter elsewhere?
Worried local governments are producing a tsunami of news about affordable housing problems. A regular feature of these stories is the apology of council to irate citizens who do not believe they have been properly consulted. ‘Proper consultation’ it would seem, is shorthand for ‘changing council’s mind. Human nature being as it is, can there possibly be an appropriate time for proper consultation with those who vehemently oppose affordable housing, in THEIR neighbourhood, or paid for out of THEIR pockets.
As the lack of affordable housing passes from crisis, to emergency, how much discussion is wise? At least in representative democracies, the mechanisms exist for streamlining, even ‘black-boxing,’ difficult decisions that a country needs to make.