An evaluation of accessibility of Low-Income earners to housing finance in Nigeria, by Prof. A.O. Olotuah, in a Review, indicates that housing provision in Nigeria is fraught with a plethora of problems especially for low-income earners who incidentally constitute the majority of the population. The report said, fundamental to this is the lack of access to housing finance by this segment of the society. In view of its enormous cost therefore, housing is the item of the highest expenditure of every household and it can rarely be purchased directly from one’s earnings. Access to housing finance is thus imperative in the acquisition of housing, but this has always eluded low-income earners a great deal.
Nigeria is yet to develop an effective and workable mortgage mechanism that will enable citizens to own houses and participate in the housing for all initiative in a more pragmatic way.
Available records indicate that attempts by successive governments since the country’s independence in 1960 to address the housing challenge have not yielded the desired results.
Ironically, gigantic housing programmes initiated by successive administrations since independence have been jettisoned because of what observers describe as policy somersaults.
Statistics showed that between 1973 and 2006, more than 30,000 housing units were constructed by the Federal Housing Authority (FHA) but these houses have also failed to tackle the nation’s housing deficit.
Besides, the sale of Federal Government property, including government-owned staff quarters, to their occupants by former President Olusegun Obasanjo’s administration has also failed to remedy the situation.
As laudable as the sale of the government quarters sounds, analysts insist that the policy ought to have been sustained to enable it to have a lasting impact.
They note that even the public-private partnership in housing delivery, which was introduced by President Goodluck Jonathan’s administration, has equally failed to reduce the housing deficit.
This is because most Nigerians, especially civil servants, still cannot afford the exorbitant cost of buying or renting houses built by private developers.
For instance, it is absolutely difficult for an average civil servant earning N18,000 minimum wage to buy a one-bedroom apartment from private estate developers in Abuja or anywhere in the country.
A market survey shows that a two-bedroom apartment, offered by private estate developers in Abuja, costs between N15 million and N25 million.
This, perhaps, underscores the concern expressed by the World Bank on the widening housing deficit in Nigeria.
Statistics released by the World Bank revealed that Nigeria would require N59.5 trillion to bridge the spiraling housing deficit of 17 million units.
This development aptly highlights the need for the government at all levels to begin to think of how to embark on direct massive construction of houses in major cities and towns across the country, so as to cut down the housing deficit.
However, Dr Omobola Johnson, the Supervising Minister of Science and Technology, urged all stakeholders in the building and construction industry to explore avenues of meeting the growing housing needs of the citizens through innovative strategies.
The minister, who spoke at a recent International Housing Summit in Abuja, said that researchers have argued that Nigeria, with an estimated population of 170 million, required at least additional 820,000 housing units per annum.
Nevertheless, Dr Abiodun Talabi, the Director of Technology Acquisition and Assessment in the ministry, stressed that the provision of affordable housing would entail the active input of the public and private sectors as well as the citizens.
“Achieving affordable housing in Nigeria requires dogged determination on the part of government, private sector and citizenry towards surmounting the challenge,’’ he said.
All the same, Mr Adeyemi Williams, a private property consultant, urged the Federal Government to adopt the social housing scheme in its efforts to address the housing deficit facing the country.
Social housing scheme is the provision of affordable houses by the state or non-profit organisations or by the combination of the two.
Williams said that the key objective of a social housing scheme was to provide accommodation which would be particularly affordable to low-income earners.
He said that rents charged on housing units under the scheme were usually kept low through government subsidy.
“The social housing scheme should be governed by a strictly defined system of rent control to ensure that rents are kept low.
“Unlike the private sector in which rents are dictated by the landlord, houses in a social housing scheme, on the other hand, are allocated according to the needs of the people.
“Each social landlord operates an allocation policy, stating in advance what factors will be taken into account when deciding who gets preference,” he said.
Industry experts, nonetheless, cite the inability of the Federal Government to amend the Land Use Act of 1978, which vests all land in the hands of government, as a major obstacle to the actualisation of the housing for all initiative.
However, Mr Tunde Makanjuola, a property consultant, urged the three tiers of government to reduce the trouble which people often encountered while processing title deeds on landed properties, so as to boost investment in real estate.
He noted that less than three per cent of landlords in the country had valid title deeds on their landed property.
As a result, only about three per cent of property owners were paying taxes on their property, as there was no way of mounting surveillance on the remaining 97 per cent, he added.
“This means that many illegalities were being perpetrated in transactions on landed property, while the government is being short-changed.
“The proceeds from taxes levied on property can be used to address the current housing problems facing the country,’’ he said.
Makanjuola, nonetheless, urged the government to create a database on property owners to ensure their proper registration and regulation.
“This will help the government to keep track of any transaction on landed property, while reducing problems caused by fraudulent property agents and family land owners,’’ he said.
Makanjuola argued that property tax was a more stable way of generating revenue than other forms of taxes.
“If the governments can exploit this avenue of revenue generation, it would be useful in efforts to provide the needed infrastructure.
“Also, property owners will be able to exploit the potential of their property to the fullest because the title can be used as collateral to get loans for other investments,’’ he said.
Besides, Makanjuola called for the establishment of a land commission that would be empowered to formulate policies on land matters, title registration and property development.
Acknowledging the gravity of the housing challenge in Nigeria, the Nigeria Labour Congress (NLC) has initiated plans to construct N960-billion housing estates for workers in all the 36 states, including the FCT.
The project, which involves the construction of affordable houses, is being executed in concert with Kriston Lally EPC Nig. Ltd., a private property developer.
The NLC signed a Memorandum of Understanding (MoU) on the project with the company on April 6, 2013.
“To make the scheme worker-friendly, the interest rate is put at 2 per cent of the total amount of the property per annum; and payment can be spread over five, 10 or 15 years, depending on the choice of each subscriber,’’ Comrade Abdulwahab Omar, the NLC President, said.
The labour leader said that the houses would comprise two and three-bedroom bungalows, semi-detached or fully-detached bungalows; blocks of two and three-bedroom flats; as well as four-bedroom semi-detached and fully-detached duplexes.
Mr Mustapha Madawaki, the Group Managing Director of Kriston Lally EPC Nig. Ltd., said that President Jonathan would perform the groundbreaking ceremony of the housing project.
“All the equipment for block making and materials for the construction of the houses have been imported,’’ he said.
Apart from this, Mr Bobboi Kaigama, the National President, Trade Union Congress (TUC), also said that the union had concluded arrangements to build 100 houses for its members and other citizens in Taraba State.
He said that the houses were the first set of the 500 houses that would be built in the state by the congress.
Kaigama said that the project would be executed in partnership with the Nigeria Mortgage Refinance Company.
He said that contributors to the National Housing Fund across the country would benefit from the scheme.
Kaigama said that the project was aimed at minimising the housing deficit in the state, adding that it would particularly cater for the housing needs of civil servants.
He pledged that the 100 houses would be delivered to the beneficiaries before the end of the year.
All in all, mortgage experts underscore the need to make concerted efforts to ease the process of obtaining mortgage loans in the country.
“If the citizens are given liberal access to mortgage loans with good interest rates; many people will be encouraged to own houses and the current housing deficit in the country will be reduced considerably,’’ some say.