Good news for low income workers as new initiatives drive housing affordability

Hope of owning their own homes is, increasingly, rising for public sector workers as governments at both state and federal levels are coming out with new housing initiatives aimed at making home-ownership easy,  convenient and affordable.

These initiatives are part of governments’ responses to the housing challenges faced by low income workers who, because of their income level, find it very difficult and, in some cases, impossible to build or buy houses of their own. Majority of them live in rented accommodation.

In the past, civil servants were given staff quarters for their accommodation on which they paid little rents deducted directly from their monthly salaries. But the monetization policy introduced in 2006 by the federal government under former President Olusegun Obasanjo put an end to these benefits, leaving the civil servants with the challenge of sorting out their accommodation by themselves.

Concerned about high house prices in the country which are not only unrealistic, but also unaffordable to the low-income earning civil servants, the federal government recently launched what it calls Federal Integrated Staff Housing (FISH) initiative with the sole purpose of delivering affordable housing to federal civil servants.

By this initiative, homes will be built within affordable range of N0-5 million for which no equity contribution will be required from buyers while homes within N5-10 million range require equity contribution of 10 percent and the balance paid from direct deduction from salaries.

“This is a double pronged scheme because it also aims to check corrupt tendencies among civil servants”, said Emmanuel Obire, MD/CEO, Multi-purpose Infrastructure Development Company (MIDC), in an interview. He explained that the head of civil service has realized that part of the corrupt practices at  the civil service level stems from workers inability to build or buy from their ‘meagre’ salaries homes  which they will retire into.

Babatunde Fashola had also explained at the launch of the initiative in Abuja that it was aimed to deliver affordable housing to Nigerian workers based on the National Housing Policy which seeks to provide decent and affordable accommodation for every adult Nigerian.

“This is part of government’s efforts at creating value chain and economic activities in the housing sector with the aim of empowering Nigerians all over the country”, the minister added, hoping that by this initiative, workers would be happy getting paid by contractors and will be able to take care of their families.

Nigeria’s housing challenge has always revolved around pricing, demand  and supply and the imbalance between demand and supply remains the elephant in China shop for the country. To solve the supply side of the problem, Obire revealed that the government has set the ball rolling.

“The federal government has contracted a company called Eco-stone which is to build 2,000 housing units for the government using a building system called Solar Light Weight Concrete which produces a house in seven days. For the 2,000 units, they are going to produce them in just six months. Agreement on this has been signed and the company is expected to deploy to work in June this year”, he assured.

In Lagos, what the state government  has done to address its housing challenge is the adoption of the Rent-to-Own scheme which allows civil servants to own homes from government’s stock of houses by just paying normal rent for 10 years after paying 5 percent of the value of the houses as equity contribution.

“These rents are paid through deductions from the monthly salaries of applicants and this has the advantage of reducing default rate to almost zero. As for the private sector workers, what the state has done is to work with the Human Resources departments of various organizations to ensure that the rents are deducted from the salaries of their staff who apply for the scheme”, Obire explained.

At the launching of the scheme, the state government disclosed that about 4,355 housing units were available for the scheme. Gbolahan Lawal, the state’s Commissioner for Housing, explained that the scheme was put in place to increase the number of Lagos residents that have their feet on home ownership ladder.

“Under this scheme, individuals are required to pay 5 percent of the value of the housing unit as commitment fee and the balance is spread over 10 years; this programme allows the tenant to live in the property while paying towards its ownership at a fixed rent within the period of 10 years”, Lawal said.