Real Estate

Experts urge private sector partnership on affordable housing

by ETHEL WATEMI

December 8, 2017 | 12:08 pm
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There is need for a formal relationship between the Federal Government and private sector for the provision of affordable houses for Nigerians, in order to bridge the country’s housing deficit, experts in the housing sector say.
The experts believe that this is the only way the housing challenge in the country can be tackled because there is not much each can do on its own.
“It is not government’s responsibility to provide affordable houses, but they need to partner with the private sector on this by providing enabling environment for the private sector in form of tax holiday, providing critical infrastructure, etc,” Yemi Stephens, an estate surveyor and valuer at Estatelinks Limited, said.
Stephens, who spoke in an interview with BusinessDay on the sideline of the West African Property Investment (WAPI) summit in Lagos, also advised the government to give developers other incentives such as free land with the conditions that it must be used for affordable housing development.
The housing sector in Nigeria, for a long time, has seen a wide gap between demand and supply – a deficit estimated at 17 million as of August 2012, by National Bureau of Statistic (NBS). To make the situation worse, budget provision for this sector has always been inadequate.
The 2018 budget proposal provides paltry N3.5 billion for construction and housing out of the N590 billion allocated to the Ministry of Power, Works and Housing.
According to World Bank estimates, Nigeria needs to produce about 850,000 housing units annually for the next 20 years to be able to close the housing gap in the country. Presently, Nigeria’s housing production is approximately 100,000 housing units per year, which is inadequate considering the estimated 17 million housing units deficit in the country.
Babatunde Fashola, minister of power works and housing, during the commissioning of the Federal Mortgage Bank of Nigeria (FMBN) estate in Abuja, said “Nigeria needs about 720,000 housing units per annum to reduce the gap due to the large population number of about 180 million, and an average growth rate of about 3 percent per annum.”
In order to bridge this gap, some states have evolved initiatives to encourage more people to become homeowners. In Lagos State, for instance, housing has always been a challenge in view of rapid urbanisation, which has led to an increase in its population to over 20 million people and an estimated number of 86 people relocating to the state every hour.
The current housing deficit in the state is about 3 million, and in order to reduce this gap, there has been a number of initiatives in the state’s housing sector including the ‘rent-to-own’ scheme, which is aimed at making houses more readily affordable and accessible to residence who are not qualified under the Lagos Home Ownership Mortgage Scheme (LagosHOMS).
One of the downsides of the mortgage scheme is the high equity contribution of about 30 percent demanded from subscribers. But the scheme, since inception, has produced about 2,500 new homeowners in the state.
Due to the urgent need to close this gap, Lagos has also signed a memorandum of understanding with developers, mortgage banks and the Nigeria Mortgage Refinancing Company (NMRC). The government has also moved to provide land to developers on joint venture basis to enable them build affordable houses without incurring any cost on land acquisition.
 
 
 
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by ETHEL WATEMI

December 8, 2017 | 12:08 pm
  |     |     |   Start Conversation

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