Industry operators are elated with the Central Bank of Nigeria’s (CBN’s) N200 billion Housing Intervention Fund. But they say affordable housing requires a comprehensive bouquet of funding and other incentives. Okwy Iroegbu-ChikeziE reports.
The Central Bank of Nigeria’s (CBN’s) N200 billion for the Family Homes Fund Limited (FHFL) has been lauded by operators, who say the fund will go a long way in bridging the housing gap if judiciously applied.
The fund is to facilitate the building of 300,000 homes in 36 states and the Federal Capital Territory (FCT) with each house costing N2 million. It is also expected to create about 1.5 million jobs in five years, with the potential to create further one million jobs through its supply chain.
According to a circular by the CBN, the financing initiative is to be implemented, in collaboration with the Family Homes Fund (FHF) Limited as the lead developer to support the Federal Government’s economic sustainability programme.
“The programme will house up to 900,000 children and adults, at an average of three persons per home, on a low income with direct impact on health, education and economic outcomes. Most of these would currently live in informal settlements with shared facilities in unsanitary environments. It is targeted at people on low-income level across the country,’’ CBN stated.
But are these objectives attainable? Experts said they were, but noted the importance of other factors.
The Chairman, Real Estate Developers Association of Nigeria (REDAN), Southwest, Bamidele Onalaja, said the N2 million housing unit might work in some states, such as Gombe and Jigawa, but only as a one-bedroom apartment, excluding the cost of land.
Onalaja, who is the managing director of RevolutionPlus, praised the CBN’s N200 billion intervention programme, adding that if sincerely applied, it would achieve the dream of affordable housing.
Speaking in Abeokuta, the Ogun State capital, on the sidelines of the unveiling of Manchester Park & Garden, Oxford Park and the launch of his corporate office at Tinubu Street, Onalaja commended the Federal Government for not channelling the fund through the Federal Mortgage Bank of Nigeria (FMBN), but rather to the Family Home Funds (FHF) on a project basis, subject to the cumulative maximum limit of N200 billion.
He said his association was elated because the facility was structured as term loan to FHF finance to construct social housing units for low-income earners for a three-year tenor from the date of disbursement.
However, he said though N2 million per unit might work in some places, it is difficult to see how achievable that could be in others.
He advised Family Homes Fund Limited to ensure that it gave funding to only those qualified and with a track record of providing affordable housing.
“It is difficult to have a house of N2 million but N5 million is possible. Land acquisition is a major issue but it is not impossible. In states such as Jigawa, Gombe, a one-bedroom may be possible, excluding land. In that regard, the programme will deliberately aim to revitalise local manufacturing of construction materials, including doors and windows, iron rods, sanitary fittings and concrete products. The programme is estimated to require up to 1.7 million doors, seven million door hinges and locks designed to utilise at least 90 per cent locally manufactured input to conserve foreign exchange. If the government is able to effectively handle their side of the bargain, then the whole programme will run through,” Onalaja said.
However, Onalaja said it was good that the government channelled the funds through FHF managed by a former Managing Director of Shelter Afrique, Femi Awodewole. Shelter Afrique funded the building of houses in several African countries. If it were channelled through FMBN it would have been bogged down by bureaucracy, thus limiting the success of the project, he said.
On the criteria for qualification, he said a developer must have land with title while the CBN would provide a consultant. He, however, expressed fears on the transparency of the selection process to ensure that genuine developers with sincere intentions benefitted from the fund in the interest of the public.
According to him, the nation is never in short supply of policies but implementation is where it has drawbacks.
He noted that the facility, which was expected to be repaid in not more than three instalments, within its tenor, has an interest rate of not more than five per cent per annum.
Institution of Estate Surveyors & Valuers (NIESV), Bode Adedeji, said it was possible to build a house for N2 million but added that it depended on a wide range of parameters. According to him, one parameter is that the government can persuade or drag millions of unemployed youths and give them crash training and deploy them to housing construction sites at little or next to nothing.
He said: “Also, recycled materials can be used. However, without a declared housing revolution, rolling out affordable housing policy and programme in Nigeria will remain a mirage,” he stated.
Also Chairman, Society for Professional Valuation (SPV), Olusola Solomon Enitan, noted that the key element of housing was land which, he said, had become the most problematic aspect of housing itself.
He argued that even if somebody wanted to convert a container to a home, he would still need to put it on land. He accused governors of hindering home ownership by their administration and management of the resource in form of laws that inhibit the development of the sector in the interest of the public but rather in preference to making revenue. He hailed the planned programme of delivering housing units for N2 million. According to him, it may sound impossible but the truth is that it is possible.
Analysing the cost factor, he said for a house to cost N2 million, It should cost a subscriber between N22,000 and 24,000 per annum. He said: “We are looking at studio flats, one-bedroom flat and, in some case, two-bedroom flats. The bulk of the housing demand is within this segment. The President’s strategy of fabricating blocks, doors, windows and every other thing on site is the key to its successful delivery. A lot of profit will be cut out and this will enable the government to deliver social housing. Profit on social housing is not supposed to be above 10 per cent. The government in this scenario will likely deliver the houses at between N1.8 million and N1.9 million with a profit of about N200,000 per unit. All the people engaged will get between N100,000 to N200,000 per unit profit if you spread it across the spectrum of 300,000 units, government would have put money in the pockets of artisans and builders”.
Enitan said the project had the capacity to employ millions and put food on the table of the real segment of the population that was adversely affected by Covid -19.
He said his association was ready to support the project and the government in both management, coordination and quality management.
“We have been campaigning for social housing for the large percentage of Nigerians. State governors should make land available to this project to bring meaningful development all around the country.”
The SPV boss advised against giving land that is remote from development by governors, stating that it would compound the problems of the poor the project is for, he stated.
According to him, if somebody needs to travel to his place of business or office for two hours from his house, the aim of the programme would have been defeated.
He canvassed the need to add logistics and transport management to the process in the area of rail and good public transportation to add fillip to the programme. “The government should refrain from creating slums, a good environmental impact assessment should be undertaken to ensure the public have access to good water, sanitation, roads and a well-planned environment.” According to Enitan, except this is done the idea of social housing would not be achieved. There must be an end to the needless suffering of the public.
He said: “Government can push the idea further by ensuring that the scheme is delivered on the basis of ‘rent to own.” He said this was crucial for the success of the programme as it would enable people who cannot afford to pay upfront to stagger their payment for at least 25 years.
According to him, this set of people can be made to repay between N30,000 to N36,000 per annum which sums up to about N3,000 or N4,000 monthly payment.
He said this singular programme would open up investible bouquet. Furthermore, he called for a national real estate investment trust (REITS). To him, the government should have a programme where the Pension Fund can be invested into Bonds and REITS that will be repaid over time. The whole idea of the 300,000 housing units is a fantastic opportunity provided the government has the will to push it through, he stated.
He said: “If government finds it convenient to give subsidies, home ownership should top the chart. The monies that will be saved from fuel and electricity subsidies should be ploughed into housing development. This will in the overall improve the quality of education, access to finance, quality of life and also go a long way in eradicating poverty in the nation,” he stated.
To past Chairman, Nigeria Institute of Quantity Surveyors ( NIQS), Jide Oke, housing construction is a function of many parameters, among them are location and design. He said: “For a basic room and parlour, self contained or a small 2-bedroom basic housing on a firm ground, where you do a simple strip foundation. It is very possible. My only advice is that they should ensure that infrastructure is provided so as not to blight the environment with slum.”
He advised government to provide an enabling environment for private sector participation instead of dabbling into direct construction.
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