Although housing is one of the basic needs of mankind, the inability of successive governments in Nigeria to effectively tackle the problem of housing has cast a huge question mark on their capabilty to deliver, even if they fared fairly in other sectors. In this report, GEORGE OKOJIE examines the challenges in the sector.
The issue of housing is one of the numerous problems confronting the country.
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A recent estimate puts the figure of housing deficit in the country at 16-17 million housing units. What it implies is that if there is sincerity of purpose between the government and relevant stakeholders to deliver the housing units at an average cost of N2.5million per housing unit, Nigeria would require N35trillion to fund a housing deficit of 14 million housing units.
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Experts have traced the problem of inadequate housing in the country to so many factors, which range from long years of neglect, undeveloped housing finance system, limited supply of long- term funds, low household income levels, high unemployment, high inflation rate, high interest rate on mortgages, high cost of land and building materials, poor planning and poor implementation of housing policies and programmes, among others.
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The existence of administrative bottlenecks that make the processing and securing of approvals for building plans, certificates of occupancy and other necessary government permits very difficult, and the corruption in the allocation of government land within the framework of the Land Use Act have not helped matters either.
The experts are of the view that the problem has continued to defy solutions since the 1920s when government’s intervention in housing began in Lagos simply because various arms of government have continued to recycle past mistakes.
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It is on record in the nation’s housing history, whether in the colonial or post-colonial era, that government at various times in the past embarked on mass housing development. Notable developments during the colonial era were the establishment of the Nigeria Building Society (NBS) in 1956 and the creation of some housing corporations.
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Unfortunately, the NBS did not achieve much owing to poor funding which hampered the housing corporation’s ability to extend its services to the teeming low-income earners in dire need of shelter.
The setback recorded during this period failed to serve as lesson for the government which, in 1960-1979, embarked on a major land reform aimed at improving land availability for development. This move brought about the Land Use Decree of 1978, now Act, which failed to achieve the main objective of making land available to encourage mass housing development in the country.
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Among other past efforts was the establishment of the Federal Housing Authority (FHA) under Decree No. 40 of 1973 to implement housing programmes approved by the federal government. At present, it is on record that the housing authority could only complete 30,000 housing units in 35 years.
As the problem of housing continued unsolved in Nigeria, not even the civilian administrations that laid claim to democratic credentials could salvage the situation. Thus, the international index on housing reveals that Nigeria is currently put at 10 percent compared to 72 percent in USA, 78 percent in UK, 60 percent in China, 54 percent in Korea and 92 percent in Singapore, and outstanding mortgage loans at just 0.5 percent of GDP compared to 77 percent in the US, 80 in UK, 50 in Hong Kong, 33 in Malaysia and 61 percent in Singapore.
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For Nigeria to approach the standards achieved in the developed world, an estate surveyor, Chief Biodun Olapade told LEADERSHIP SUNDAY that the National Assembly needs to come up with a legislation that would make housing a right for the nation’s citizenry.
The chief executive officer and senior partner of Biodun Olapade and co. said a lot had gone wrong in the sector.
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According to him, “Our leaders do not have the political will to make housing a right. The various Houses of Assembly and the National Assembly should enact a law that makes housing a right and not just privilege. There are so many policies on ground, but they have not been approved. Housing as rental or as owner-occupier is not a right; it is a privilege, so the people are subjected to the sentiment of those in government. But if it is a law, the policy of government will follow the law; the other things which are indices of housing will be in place.”
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Olapade noted that housing actualisation indices, such as land, finance, labour and building materials should be critically appraised by the government with a view to ensuring that the right policies are formulated to make them germane for mass housing production.
“For instance, land is not accessible; neither is it affordable irrespective of the enactment of the Land Use Act of No 6 of 1978 which vests all land on state governors – it is just on paper. The governors are not in control of it. There are some land allocation you get from the government – you pay to the government and at the same time they tell you to go and settle the ‘Omo-oniles’ (natives).
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“Again the various sites acquired, there is no sincerity of purpose on the part of those that acquired them. They just rob Peter to pay Paul without giving Peter anything. So, when they acquire from the people who own the land from ancestral times, they allocate it to those in the corridors of power. The poor and commoners are neglected. The low income earners are not considered. So, land should not only be accessible, it should be affordable,” he said.
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The estate manager, who called for a total overhaul of the nation’s mortgage system, noted that there was nothing that qualified as mortgage in the country Nigeria, and said that there should be a single digit mortgage loan where the younger generation of Nigerians – aged 25 years and above – could take a mortgage for 25 years.
“The kind of money people pay as rents to landlords can be used to amortize the mortgage loan; you know that at the end of the day the house belongs to you. So until there is an effective mortgage system on a single digit, home ownership will not be achieved by a majority of the people.
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“The same thing applies to the issue of building materials. Building materials are so expensive and there is so much over dependence on imported building materials, when our Naira is so weak. So it ends up in people’s hands at exorbitant prices. So, let us encourage the use of locally produced materials, like burnt bricks that can be easily produced from the raw materials in abundance. A lot of things are wrong in the building materials sector,” he said
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The president, Association of Professional Bodies of Nigeria (APBN), Olusegun Ajalenkoko, a quantity surveyor, equally observed that it was saddening and disturbing that a country that blessed with enormous resources had devoted very little of her earnings to boost the fortune of housing.
According to him, “ The industry should have seen a lot more activity and government support, in large scale development schemes, and improvement, and providing of infrastructure, provision of large scale social housing, and creating and expanding new towns.
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“A cursory look at the present state of the housing provision tells a glaring tale of a huge paradox – A paradox of achieving so little with so much endowment. An indictment of the government that ought to provide the lead. And so today the housing provision is comatose, neither dying nor living.”
He noted that housing finance, by its very nature, was a capital-intensive venture which, if financed through personal financial resources, would require slow and tedious accumulation of savings, and argued that since housing provided benefits over many years, long-term credit financing was a more logical option.
“It will spread the repayment burden. But this requires the availability of long-term funding, and for which there must be institutional capacity, structure and mechanism that will allow a convenient and effective linkage between the savers/investors and the consumers of such funds. Without an effective finance system, no housing policy can be effectively implemented.
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“In Nigeria, housing is typically financed through a number of institutional sources: budgetary appropriations, commercial/merchant banks, insurance companies, state housing corporations, the Federal Mortgage Bank of Nigeria (FMBN) and now the newly established Mortgage Institutions – all these constitute the formal institutions.
“Informal institutions such as thrift and credit societies, and money lenders have contributed and are still contributing substantially to the finance of housing construction also persists.?The impact of these informal institutions, however, cannot be properly quantified.”
For the chairman of publicity forn the Real Estate Developers Association (REDAN), Ahmed Abubakar Goringo, the housing situation in Nigeria is still alarming given the yawning housing deficit in the country.
Goringo told LEADERSHIP SUNDAY that the housing issue in the country could be adequately tackled if the executive and the legislature agreed to amend certain Acts and laws inimical to the development of mass housing in the country.
“I would appeal to the state governments to try to look at ways of easing titles to developers. That is why I said the housing Act should be adjusted because it would solve the issuance of title documents to land owners since builders cannot build houses without using and a genuine papers. The housing community would pick up if the Act is looked into,” he said.
The managing director of Hortigraph, a firm, tasked the Goodluck Jonathan-led administration to look beyond the idea of making housing units available only in the Federal Capital Territory, and urged other state governments to emulate the entrenched practice of issuing title documents to developers within 48 hours.
“If other governors in the country would open such arrangement, housing would be available. It is not the responsibility of President Goodluck Jonathan to provide housing for the people. It is the responsibility of the governors to ensure that housing is available.
“To achieve this, they can partner with the private sector. If they provide us with land and secondary infrastructure, it would reduce the cost of building,” he said.
Meanwhile, more state governments seem to have woken up from their slumber to address the issue of housing to meet the yearnings of their people. For instance, to make the process of certificate acquisition faster in the housing and property ownership, the Lagos State governor, Babatunde Fashola, recently gave authority to commissioners to sign occupancy documents on behalf of government to fast-track the delivery of certificates of occupancy (C of O).
The state government, apart from direct intervention through agencies like Lagos State Development and Property Corporation and New Town Development Authority, is also looking in the direction of partnering with the private sector and providing mortgage facility for its citizenry.
Until the synergy between the government and relevant stakeholders in the sector translates into adequate housing units within the reach of many Nigerians, promises from governments across the country would be taken with a pinch of salt by teeming Nigerians who dream of having a roof over their heads.
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