Tag: Housing

The housing challenge has put enoromous pressure on urban areas. Living in these areas does not come cheap, making it difficult for low income earners to get accommodation. What is the way out? MUYIWA LUCAS reports

For Kehinde Ibrahim, a young man in his late 20s from Osun State, coming to live in Lagos was a dream come true. But three months into his Lagos sojourn, Ibrahim has become delusional having been sent out of the house by his friends who initially accommodated him. For now, Ibrahim’s temporary accommodation is a market stall, as his meagre income from hawking cannot get him a decent accommodation. In the case of Musa Ibrahim, a resident of Kaduna State, the desire to enjoy good amenities in a city apartment has made him seek an alternative accommodation in a sprawling area of the metropolis, but not after he paid through his nose for the property located in the Romi extension of the state. And for Uche Eze, who recently got employed in an Abuja branch of a new generation bank, he would remain a squatter with his uncle in the Garki Area 11 region of the Federal Capital Territory (FCT) longer than he thought due to the high cost of renting a house in Abuja.

Ibrahim and Eze are two of the several people who find it tough to afford a decent accommodation in the city due to the rising cost and shortage of houses in most urban areas.

Indeed, for many Nigerians, living in urban places has become a nightmare owing to the high cost of rent being charged by landlords and their estate agents. A survey of rents in some areas was quite revealing. For instance, in Ikeja, a two-bedroom apartment goes for as much as N700, 000 per annum; while the same apartment goes for N800, 000 in some parts of Surulere. In Abuja, it is a different ball game entirely as a two-bedroom apartment goes for as much as N1.2million per annum. Yet, the increase in house rent in the urban areas in Kaduna State is quite alarming.

In places such as Malali, Ungwan Rimi, Rabba road, a standard three-bedroom flat, which was about N250, 000, costs N500, 000, depending on the amenities in the house. A room and parlour self-contained apartment goes for about N170, 000, while a two-bedroom flat is N350, 000.

In Kaduna south, places such as Barnawa have the most expensive houses. In that area, a two-bedroom apartment, which was N180,000, costs between N300,000 and N400,000, while a three-bedroom costs between N500,000 and N700,000. In Romi extension, it is N300, 000 for a two-bedroom flat in the GRA, up from a N150,000; whereas in the “local” sections of Romi extension, houses which cost N80, 000 now goes for as much as N200,000.

Chairman, Faculty of Housing, Nigerian Institute of Estate Surveyors and Valuers, (NIESV), Kola Akomolede, agrees that there is an urban housing challenge in the country. This, he said, is evident by the high rents, street sleeping and squatter settlements. Several factors are said to be responsible for this development. In Kaduna State, for instance, house rents were said to be moderately priced until the Boko Haram insurgency which has made a lot of people migrate from where they felt was insecure to where they consider secured.

A property consultant in Kaduna, Oladipupo Olorundami, told The Nation that this development has affected the cost of rents because many people want to stay in the urban areas because of the presence of security personnel. “The situation is pitiable. Those in urban centres spend more on accommodation, depleting their salary, and making life more difficult for them. Maybe if we had good roads and good transportation system it would have been better since people can live in far places and still make it to the city centres early,” he said.

Akomolede, who put the housing deficit at 17 million, warns that if the trend is not checked, it may lead to a demand for higher rents, demand for more years rent payment in advance, and the emergence of fake agents and dupes. For him, the problem is also not unconnected with the cash liquidity problem prevalent in the country as most people cannot afford to buy a house much less afford the rents.

“Lack of a well-defined mortgage system has contributed seriously to urban housing challenge in the country. Without mortgage, many people cannot buy a house. In civilised countries with responsible governments, nobody buys houses on cash and carry basis,” he said.

But while Nigerians are complaining about the high cost of renting houses, estate agents are gaining and smiling to the bank. Bunmi Omoya-Solomon, a resident of Kaduna, recalls her experience with an estate agent while trying to get a new accommodation. And for her, the agents have constituted themselves into a cult, making things very difficult for people. “Imagine that the estate agent was asking me to pay almost 30 per cent of the rent charged. He gave all sorts of charges which were ridiculous,” Omoya-Solomon said. Besides, she was angry that most times, basic amenities were lacking in most houses in spite of their high cost.

The surrounding suburbs are also benefitting from the development. This is because with the cities becoming too expensive, prospective tenants now look towards nearby areas, especially around border towns. For instance, for Lagosians, areas, such as Ibafo, Akute, Alagbado, Ofada Town, etc, have become their second choice; and following the laws of demand and supply, houses in these areas have become rather more expensive than even what obtains in their capital city like Abeokuta. For instance, in Alagbado, a two-bedroom goes for N400, 000; it is the same thing in Akute, Lagos border town.

Yet, the challenges confronting these cities have its own price. Awobodu said the desire for people to live in urban places at all cost has led to the emergence of slums, as most landlords, in a bid to make more money, have put up makeshift buildings to meet the demand and also make more cash. Also, the government have not been able to put in place adequate infrastructure as a support system for the society. Besides, in spite of the rent edict in Lagos state, The Nation’s investigations show that several landlords have failed to comply, while those that have complied now use other means to extort tenants. For instance, Sanmi Alade, a businessman, disclosed that though he paid one year rent for his apartment in Surulere, where it in the pre edict era, the amount he paid would have conveniently covered two years rent. Similarly, fake estate agents have so far increased in number, taking advantage to swindle inexperienced and unsuspecting tenants.

Akomolede contends that the major solution is for the government to first accept housing, especially for the low income earners, as a social responsibility the same way they do for health and education and vote money for it every year in the yearly budget.

“To address the urban challenge, there is need for mass housing programmes. Government must embark on massive housing development to be sold to low/middle income people at a subsidised price with automatic mortgage to be repaid in twenty to thirty years,” he added.

Kunle Awobodu, a surveyor, toes this line. “When a city has expanded, the government should be proactive by introducing appropriate management in housing; housing in Lagos remains very peculiar because we don’t have enough,” Awobodu said.

When The Nation contacted Olusola Martins, Head, Corporate Affairs and Media Relations, Lagos State Development and Property Corporation (LSDPC) on what is being done to address the issue, he declined to offer any information, saying: “There is a directive that it is only the commissioner for information that can talk on behalf of government.”

He however promised to make available to the writer a list of the corporation’s effort in addressing housing challenge in the state; but one week after, Martins is yet to redeem his promise.

The housing scourge has continued to be a source of concern to even international bodies. The United Nations (UN) in a 2012 report, gave a timely warning that Nigeria on the danger ahead. The body predicted that by 2050, the country’s population would have hit 200 million.

The implication is that except urgent steps are taken, this will pose a great threat to urban housing, amongst others. Perhaps this is what has propelled Kogi State government, in trying to tackle the urban housing challenge, earmarking a part of the N20 billion Bond it planned to raise from the stock market to finance 500 housing units for its civil servants and also a satellite town. The housing estate, which would be sited in Lokoja, would be allocated to civil servants on owner-occupier basis.

Still, to tackle this menace, the Federal Government has approved N28 billion for the provision of engineering infrastructure in Wasa District of the Federal Capital Territory (FCT). The district, with a total land area of 367 hectares, is aimed at providing affordable mass housing to the working class in the FCT.

“This increases the population of towns. It also leads to over population, and especially, the demand for accommodation. The effect of this is that there is always a sharp rise in the cost of housing,” he said.

Some landlords agree that if the government can address the cost of building, there would be a reduction in the rents.

But some tenants do not agree with them. They blame thhe development on the shylock tendencies of the landlords.

The question is, when will urban houses be easily affordable to Nigerians?

By midnight, it will be bye-bye 2013 and welcome 2014. In the construction and built environment sector, the year was full of activities, but little was achieved. Seyi Odewale reports that much needs to be done in 2014.

We recognise that Nigeria’s infrastructure deficit remains one of the binding constraints to growth in the economy. Therefore, our strategy is to prioritise infrastructure investments in the budget, and also to leverage additional external financing for infrastructure investments in the country.”

These were the words of the Coordinating Minister for the Economy and Finance Minister, Dr Ngozi Okonjo-Iweala, while addressing the National Assembly on the 2013 appropriation budget.

With those words, the 2013 fiscal year took off on a promising note, particularly, for the Works and Housing ministries, which deal more on infrastructure and provision of houses. With about 20 per cent of the N4.987 trillion budgeted for the year being allocated to works and its sister ministry, the completion of capital projects and housing delivery were expected to be the priorities of these ministries.

Then, Dr Okonjo-Iweala told the National Assembly that there would be reforms in the housing sector. The reforms, she said, would be accelerated with the planned increase in access to mortgage finance through the establishment of a mortgage refinance company (MRC), promising that the supporting fiscal measures of the last two years would be sustained to support the growth of the real sector.

The former Minister of Lands, Housing and Urban Development, Ms Amal Pepple, said the ministry was constructing six Federal Secretariats in different parts of the country for N15. 28 billion.

With the ministry’s mandate of formulating policies and setting standards; coordinating activities and providing oversight; monitoring the implementation of policies and enforcing compliance with codes, regulations and standards; providing, upgrading and maintaining infrastructure for the house stock, including public buildings of Federal Ministries; promoting sustainable development of liveable, functional and productive towns and cities, the nation expected a substantially successful story about the activities of the ministry in the year under review.

The ministry, with its parastatals, also has the duty of supporting state governments in the realisation of the national strategic goals in the housing and urban development sector; and forging partnerships with key stakeholders, including the organised private sector and development partners, to advance the national agenda on effective land administration and management, affordable housing delivery and sustainable urban development. An assessment of these key roles would let us into how the ministry fared in these regards.

Housing delivery

The 17 million-gap has been a major concern for all. The World Bank has estimated that the cost of bridging the nation’s 17 million housing deficit is N59.5 trillion. This is not too far from the estimated figure of the Federal Mortgage Bank of Nigeria (FMBN) which had put it at about N56 trillion to be able to adequately meet the housing needs of Nigerians.

Its Managing Director, Mr. Gimba Ya’u Kumo, said the figure is based on a conservative cost of construction at N3.5million per unit.

“Fundamentally, the nation needs 16 million housing units to bridge the housing deficits in the country, and providing these houses will cost N56 trillion at a conservative cost of N3.5million per unit. This is a colossal amount which cannot be funded only through the NHF, but requires urgent injection of funds from both the government and the private sector. That is why we are as well exploring offshore funding to boost financing for mass housing which the nation urgently needs,” he said.

But experts have identified the Land Use Act of 1978, which vests ownership of land in state governors, and a cumbersome property registration process as barriers to housing development and home-ownership.

With the little efforts of Amal Pepple, ‘considerable achievements’ were made in housing delivery, although still far from dwarfing the challenges. Before she was relieved of her duties, she said her ministry delivered 8,069 houses and 256 housing units under its prototype housing scheme in 2012, hoping to improve on the figure in the year under review.

She also said about 626 housing units under the ministry’s public private partnership scheme, 850 under the Federal Housing Authority (FHA) and 3, 529 housing units had been developed through loans obtained from the Federal Mortgage Bank (FMBN).

And with the bank’s large scale automation to eliminate inefficiencies of the previous manual mode of operations, there is an expansion in coverage in terms of mortgage services to the informal sector, which constitutes about 85 per cent of the country’s working population.

The Ministry, in collaboration with the ASO Savings and Loans Plc and the FMBN, according to her, was developing144 mixed housing units of 1-3 bedroom apartments at Lugbe, Abuja. The project was, however stalled because of the resolution of some outstanding issues with the Federal Capital Territory Authority and Federal Capital Development Agency.

Real estate sector

Real estate and financial experts, who agreed with the World Bank’s submission, said the real estate sector remained a viable option for investors seeking guaranteed returns on investments.

In the estimation of the World Bank, some of the numerous opportunities available in the sector include private equity partnerships capable of making big investments; financial institutions which can float real estate funds; pension regulators who can build a robust framework for real estate funds investment; adaptive re-use of properties by banks in the form of converting properties and taking stakes in new deals; opportunities for hotels, events and recreational centres, shopping malls, estates, among others.

However, the real estate industry accounts for between four and five per cent of total Gross Domestic Product (GDP), while the mortgage industry, in the estimation of the World Bank, remained underdeveloped with interest rates on mortgage funds unbearably higher. This has made the business unattractive. Not helping the situation is the National Housing Fund (NHF) scheme, which in the past contributed to the deficit.

Established by Act 3 of 1992, the NHF was for a long time almost moribund, but with the present administration efforts at reviving it, it is hoped it will help in the provision of affordable housing for all. However, a proper management and administration of the contributory savings scheme should be enforced.

However, it has been reported that the NHF collection has geometrically risen to almost 300 per cent from the average monthly collection of N730 million to over N2.1 billion. And within 30 months, the NHF has posted over 53 per cent of cumulative collections of N110.79 billion since 1992. Reports also said there has been an unprecedented improvement in NHF refund of contributions, which grew by 196 per cent from N990 million to N1.94billion within 30 months. However, much still needs to be done Nigerians say.

Land Administration

On land administration, about 2,667 applicants were granted Certificates of Occupancy (C of O), 1,651 given consent for transfer of land titles and 3,787 benefitted from the serviced plots created by the ministry. The ministry, it was gathered, was working in partnership with the Presidential Technical Committee on Land Reform, and other stakeholders, to address the plethora of issues in land administration and management. The aim is to ensure that land owners have secured titles and bankable assets.

National Building Code

On National Building Code, a new code was presented to the National Assembly just before the minister was relieved of her duties. She had said: “We are going to present the new code to the public on August 22, and after that, we will go to Federal Executive Council.”

The Building Code, which was published in 2006, was reviewed and updated by the Ministry, in collaboration with the National Building Code Advisory Committee. On approval by the Federal Executive Council, the Ministry would champion the process of ensuring compliance with its provisions through proper enforcement by the three tiers of government, professional and regulatory bodies, and other relevant stakeholders.

The House of Representatives commenced the process of enacting a law to enforce the provisions of the Building Code in the Federal Capital Territory, Abuja and in consonance with Sections 1, 2 and 3 of the Code, all the states of the Federation are expected to domesticate the proposed Act of the National Assembly in their respective states to ensure effective implementation of the Code nationwide. But this regrettably, has not been achieved.

Alternative housing technologies

The ministry made a significant development in the adoption of alternative building technologies in some of the project sites. The light gauge steel construction technology, plasswall and plassmolite technology, hydraform technology, and burnt bricks were some of the ones that helped in housing delivery

The housing units at Kuje, the ministry said, were delivered using the light gauge steel technology, which was facilitated by the establishment of a factory for the production of steel profiles. The factory, according to the ministry, has the capacity to produce the components for two housing units in a day. “During housing construction, 15 people work on a twin block of three-bedroom and built it in 10 days after foundation,” the ministry said.

The loss of the ministry, however, became the gain of the private developers and real estate players. Although they too were not happy with the tempo in the industry, they are still in business especially in major cities where accommodation pose serious problems.

Building collapse

There were instances of building collapse across the nation, which claimed many lives. Some occurred in parts of the Federal Capital Territory (FCT), Abuja while others occured in Kano, Ibadan and many other states across the country killing several people and damaging properties worth millions of naira.

Lagos State had a larger percentage of building collapse involving two-storey, three-storey, four-floor, two-floor and basement, seven-floor cause-level buildings. Several lives were lost to the disaster.

This development has made the state to take stringent measures on owners and developers of collapsed buildings. The measures include ensuring that intending builder or owner of any building should before the erection of any building, secure development permit and approval from the relevant authority in the state before commencing construction work and engage the service of qualified professionals in construction sector such as architects, civil engineers, builders, town planners, surveyors, quantity surveyors and electrical engineers. They must also be registered members of their various professional bodies in the execution of the project.

Premium has also been placed on the usage of standard and quality building materials in the construction work and where the development is above a bungalow, insurance policy should be taken to cover the risk against loss of life, bodily harm and damage to surrounding the property.

With the enforcement of the proposed revived building code, Nigerians believe that sanity would be brought to the construction industry and the built environment across the nation. But sadly, the nation’s National Assembly is yet to pass the bill into law.