Getting to the root of Nigeria’s housing deficit

For too long, Nigeria has been burdened with a housing deficit estimated at 17 million units and it is not certain that, in the next five years or more, a new figure would be established to replace the existing one.

The deficit figure persists in spite of many houses that have been destroyed through disasters—fire, flood, erosion, communal clashes, collapses and lately terrorist activities—since it was foisted on the housing sector about a decade ago.

The figure has also continued to hold sway despite the numerous new houses built by individuals, institutions and estate developers who periodically deliver quite a significant number of houses into the property market.

There’s no gainsaying that something is fundamentally wrong somewhere but those who are in the position to know and at the same time act are either losing sight of it or are pretending and shirking their responsibility.

It beats the imagination that, as a country, Nigeria has no dependable data on its housing stock that would have provided insights into the nature and character of the deficit that is bandied year in year out without showing area of emphasis.

Perhaps, we are not as worried with the absence of data as we are with the apparent contradiction between what stays with us now as deficit and the many empty buildings in the villages and the cities that are looking for occupiers.

In our view, the root of this subsisting deficit lies in the cause or causes of this contradiction and getting to it will only require identifying and addressing these causes through a comprehensive housing policy.

Arguably, whether as a status symbol or social need, owning a decent home is the dream of every adult human, especially men, but this dream hardly materializes for everybody in Nigeria because of a number of factors that conspire to frustrate efforts at realizing that dream.

High interest rates that make mortgages prohibitive, where available; absence of a secondary mortgage market to provide liquidity to mortgage providers; high cost of building materials; Land Use Act and its mode of implementation and administration; the judicial system which elongates commercial dispute resolution, and large scale poverty, are some of the obstacles to homeownership.

These could be seen as obstacles at the primary level of the dream. At the secondary level are cases of house owners and land owners wanting to collect rents two or three years in advance- a system that is really incongruous considering that the tenant from whom this rented is demanded collects salary on a monthly basis.

Added to this are the large costs involved in property transactions due to the demand for 10 percent legal fees and agency fees as well as high valuation rates, all of which combine to keep would-be tenants away, leaving houses empty.

As a way out of the deficit, the Power, Works and Housing Minister, Babatunde Fashola, advocated recently a tripartite system involving the tenant, tenant’s employer and their bankers issuing guarantees or standing orders in favour of the landlord, thus guaranteeing the monthly payment of rent and assuring the landlord of a steady and consistent stream of income. We cannot agree more.

No matter what government thinks or how it feels about the ‘homelessness’ in the country, we are of the opinion that it has a big role to play and that comes in handy in terms of a comprehensive policy that will make access to housing finance, land and building materials easy and cheap.

Again, government should increase access to housing by reducing cost of construction through infrastructure development and giving incentives to developers by way of tax holiday and special interest rates on housing finance.