*Experts caution FG, State Governments on lack of social housing plans
Minister for Housing, Power and Works have announced that the housing plan of the Buhari administration will be announced this Monday but Pundits in the housing sector have expressed concern at the seemingly lack of a workable social housing plan from the Federal Government and all State Governments in the country. While speaking with EKOCITY MAGAZINE, professionals in the brick and mortar business say Nigeria still does not have a realistic solution to the problem of the 17million housing deficit across the country especially amongst the low-income earners.
It will be recalled that recently, the Minister of Power, Works and Housing, Mr. Babatunde Fashola had disclosed that the federal government has concluded on how it plans to build more houses for Nigerians in its mass housing programme and would soon launch the implementation strategies. Mr. Fashola represented by his Special Adviser on Housing and Urban Development, Mr. Abiodun Oki, while speaking at the 46th annual conference of the Nigerian Institute of Estate Surveyors (NIESV) in Abuja stated that it was no secret that Nigeria has a huge housing deficit and that the government has designed clear steps to quickly begin to close the gap.
Fashola had in December 2015 announced during his inaugural press briefing that the Federal Government would be partnering with State Governments in a new housing model that would yield up to N10 billion annual funding for 17,760 flats to be built across the country in one year. The Minister said it was a departure from the Obasanjo administration policy on housing that upturned the policy of Shagari’s administration by declaring that government would no longer build houses for people to occupy and then subsequently sold off all government houses built during Shagari’s era.
While explaining that the same policy direction was replicated by both Ya’Adua and Jonathan governments, Fashola said Buhari’s administration agenda in the housing sector would review the existing policy in the housing sector to address housing deficit in the country. He said; “The Housing sector presents an enormous opportunity for positively impacting the economy to promote not only growth but inclusion. “There have been a couple of National Housing policies and we intend to appraise the most current one to make changes only if necessary. “Government will lead the aggressive intervention to increase supply, by undertaking construction of public housing and formulate policies that will invariably lead to private sector participation and ownership to reduce our housing deficit.”
Fashola maintained that the government would understudy ‘Jakande and Shagari’s housing estates model to develop an affordable housing unit for the masses, by building 40 blocks in each state. He noted that the immediate past administration budgeted less in housing sector of the economy, the trends that would be reversed. “So for us, consistency is key, annual spending is an imperative. We must change the budget for national housing from N1.8 Billion in 2015 to something in the hundreds of billions of Naira that matches our ambition. “If we can spend N10 billion in each state and the FCT on housing alone every year subject to the capacity to raise the money and the capacity to utilize the funds having regards to our current construction methods and the time it takes to complete construction, which our ministry intends to change by research and industrialization of housing,” he said.
The minister explained that the government would embark on seminars and conferences to ensure proper capacity building for stakeholders in the sector to drive the new agenda. According to him, “If we achieve this, we will move from where we are now, start construction in all 36 States and the FCT and sustain this as we go along. “In the housing sector, if we complete our on-going projects, and we get land from the Governors in all states and the FCT to start what we know, using the Lagos Home model, we should start 40 Blocks of Housing in each state and FCT. While the drive to build reasonable housing units across the Federation has been described as laudable, housing experts believe the government is yet to come clear on what it really mean by affordable housing and how really it wants to make the homes accessible to the poor and vulnerable Nigerians which were the hallmarks of the Shagari and Jakande housing programmes. “If former Governor Fashola is thinking of adopting the same model he adopted for the Lagos State Home Ownership Scheme (Lagos HOMS), then he is already on a path to failure as far as housing is concerned”, says Segun Fatade a Chattered Town Planner. According to Fatade the pricing for the houses developed by Fashola when he was Governor of Lagos State was entirely unfortunate and that made it very difficult for those who really needed the homes to get them. “Under the Lagos HOMS of Fashola, a Room and Parlor apartment in Epe for example was priced at over N6million. That is totally outrageous considering the fact that if the buyer were to build a 3bedroom bungalow by himself he would not spend more than N3.5million which was the initial payment that was needed to secure the room and parlour”, Fatade explained.
Adeyinka Ademola a Fellow of the Nigerian Institution of Estate Surveyors and Valuers says apart from the poor pricing of homes under the Fashola Lagos HOMS, the criteria and conditions by which the homes would be accessed did not show that the homes were built for the poor and vulnerable in the society. “The Mortgage Scheme was like any other one operated by the commercial mortgage banks in Nigeria. 50% down payment, repayment over ten years at 15% interest rate is clearly not a Mortgage Plan for the less privileged”, Ademola explained.
In a clear advice to Minister Fashola, both housing experts say the Minister should not just think about the number of homes that will be built across the Federation but be ready to make the homes easily accessible to the most vulnerable in the society. “Social housing cannot be another form of money making venture for the government. In the developed parts of the World, housing like other basic needs of life are heavily subsidized by the Government. The Government cannot be building homes and pricing them to make profit like a private developer”, both pundits reiterate.
Still on what should be done for the Minister to succeed in the area of housing, they advised Fashola to start to think like Governor Akinwunmi Ambode who recently announced a more people-friendly housing plan. It will be recalled that, the Lagos State Government recently said it had introduced the Rent-to-Own Policy to support the Lagos Mortgage Scheme. The Commissioner for Housing, Mr Gbolahan Lawal in a ministerial news conference in Ikeja recently said that the scheme had already become effective.
Lawal who said that the policy was aimed at making housing more accessible and affordable, particularly to medium and low income earners in both informal and formal sectors, explained that individuals, under the arrangement, are required to pay 5% of the value of the housing unit as commitment fee. He said that the remaining payment would be spread over 10 years at 6% interest rate.
While both pundits believe the Ambode housing plan is the way to go and should now also be emulated by the Federal Government, they advised that since the government will not be able to build all the homes needed to fight the 17million deficit, private developers with proven reputation should be encouraged to also contribute to the housing stock. “To make sure what the homes by the private developers are also affordable and also within the reach of the low-income earners, government should consider incentives like tax exclusions and rebates, free land allocation arrangements, partnerships as well as reduced payments for building and land approvals”, they advised.