Tackling housing deficit in FCT

Affordability is a major issue in house ownership and thus of major concern to government and the citizens. The Federal Ministry of Lands, Housing and Urban Development tasked with the responsibility of providing enabling policies and environment to encourage mass housing in Nigeria has always been in the storm of not doing enough to provide […]

Affordability is a major issue in house ownership and thus of major concern to government and the citizens. The Federal Ministry of Lands, Housing and Urban Development tasked with the responsibility of providing enabling policies and environment to encourage mass housing in Nigeria has always been in the storm of not doing enough to provide housing to majority of Nigerians.
Observers of housing sector in the FCT are of the opinion that the city doesn’t lack housing but rather lacks mass and affordable houses which is in high demand by residents.
Francis David, a resident told Daily Trust that the Ministry of Lands and Housing through its agency, the Federal Housing Authority (FHA) has busied themselves commissioning various estates in the FCT which are far beyond the means of residents. He said mass housing by its context entails mass building of houses that are affordable to the masses.
“I wonder where they got their concept of mass housing from. They have been commissioning estates upon estates which cannot be afforded by an average resident. They should go to the basics and get things right. We are tired of seeing these houses built and bought over by stooges who later sell them at exorbitant prices,” he said.
Another resident, Bright Peter said that corruption has always been the order of the day in the housing sector which he said, should be investigated by the Economic and Financial Crimes Commission (EFCC). “The housing sector has become a billionaires club. You need to belong to get one. Many corrupt leaders are sinking billions into the sector to hide their ill-gotten wealth. EFFC should beam its searchlight on all these estates springing up everywhere without any one occupying them,” Peter said.
 He said the houses are mostly bought over by those who have helped themselves to public treasury, therefore creating an imbalance in the property market indices.“The property market will not crash if some people can buy over estates with billions of naira. They do this with the ill-intent of stashing away their money in fixed assets and feel safe from money laundering charges. The prices of real estate will remain high except this ugly attitude is checkmated,” he said.
Yusuf Kamal, a civil servant observed that most of the estates being built are indeed bought by an individual who might have acquired them at “mass housing rate” and in turn resell them at the actual market rate. “It’s very easy to get land allocation cheaply from government if the concept is to build mass housing for the residents. But what do you get in turn after the acquisition of this land?  A powerful individual buys it over and through land speculation resells it to the people that can buy at the high rate. So it’s a vicious cycle. It moves from one money bag to another. This totally defeats the aim of providing houses to average residents, most especially in the FCT where rent rates remain on the high side,” he lamented.
Sayo Odumosu, an Abuja-based property lawyer said many unoccupied houses in the FCT have made the market saturated. He pointed out that too much money chasing property is doing more harm than good to the economy.
“Unless something is done about it, property and rent by extension will remain high and unaffordable to many Nigerians. Land speculators are having a field day and it’s common knowledge that it’s easy to become a multi millionaire over night if one strikes a juicy estate deal in the FCT. All hands must be on deck to check the excesses of those buying estates without any genuine intention of making them available and affordable to Nigerians. I think we have had enough of seeing magnificent houses without any,” said Odumosu.
Odumosu called for proper screening of estate developers who want to get allocation from government so as to ensure that those with genuine interest get them and not the shylock ones who want a pound of flesh from Nigerians.
“A lot of us want allocation for mass housing but we all know that bureaucratic bottlenecks involved are better left untold. But the wrong people with the right contact can easily get it and for the fact that the interest in the first place is not genuine the end product tends to be exorbitant housing meant for the elite,” he said.
Worried by this, the Quantity Surveyors Registration Board of Nigeria (QSRBN) said that it is developing a Construction Cost Data Base (CCDB) that will assist government and the private sector in the costing and quality cost management of housing construction projects and associated infrastructure to ensure value for money and efficient management of national resources allocated to the housing sector. President of QSRBN Mallam Husaini Dikko made this disclosure at the 4th Building & Construction Economic Round Table held in Abuja.  
Dikko said the vision is to reduce the current trend of profiteering which militates against the provision of housing for Nigerians through over pricing by developers and others assigned with similar responsibilities. He said it will also put check on corrupt practices among major actors in the provision of housing in Nigeria.
He said, “This being the case, reliance on interplay of market forces will not be helpful in resolving the problem of access to home ownership in Nigeria. Therefore, an intervention must come somewhere and somehow. This intervention can come in the form of subsidies and the safety nets to the segment of the citizenry that is most vulnerable to deprivation of access to home ownership. A master plan that will consider the multi-faceted ramifications and the various perspectives to home ownership is required. These perspectives may impel a public-public partnership (PuPuP), Public- Private Partnership (PPP), Private Sector Initiative.”
Speaking on how the prices of housing can be reduced Dikko said, “A fiscal polity regime that will crash the prices of cement and other major building materials to not more than 40 percent of their current market prices will be a good way to start.
He suggested, “We must re-examine our mortgage system and find out why the mortgage system which works very seamlessly in the United Kingdom for example does not work in Nigeria. Access to land for housing should be made easier, less expensive and affordable. It makes little sense in the face of a national effort to bridge the current housing deficit for government or its agencies to impose all manner of levies and fee regimes on developers before they can obtain land for housing development.
“When developers pay so much for land, they definitely pass on the costs to buyers with built in profits and interests and this contributes to the high cost of new homes in Nigeria. State governments should not appropriate undue surplus from land because land has no marginal productivity land which is meant for housing should not be a target for increased internally generated revenue (IGR) by state governments because it is counterproductive and slows down development of the housing sector.
“Housing belongs to the social sector of the economy while commercial developments belong to the economic sector. This distinction should be noted so that land for housing should be treated separately from land for commercial and industrial development which are used for productive and income yielding activities.”  Dikko said that the provision of housing for the low-income and even the no-income citizens of Nigeria should be the direct social responsibility of government because these are the most vulnerable and greatest victims of the high level of income inequalities in Nigeria’s socio-economic landscape.
He said the profit-making motive and mentality of the private real estate developer makes it inadvisable for government to ever contemplate assigning the role of providing homes to low-income and no-income citizens to the private estate developers without strict monitoring and supervision.
“There should be an intervention, fund for the housing sector similar to what was done for the aviation, textile, education and other sectors so that cheap fund can be made available to housing developers at less than five percent interest rate per annum with a condition that the prices of houses sold by the benefiting developers should crash to less than 40 percent of their current offer prices.
“The details should be worked out by the Federal Mortgage Bank of Nigeria which should be the manager of this intervention fund. This will be augmented with the activities and support of the newly established Nigeria Mortgage Refinance Company (NMRC) to accelerate the development of a robust housing sector which is capable of driving productivity in all sectors of the Nigerian,” he said.