one of the greatest challenges that confront Lagos as a mega city, apart from security, is the issue of accommodation.
The situation is becoming daunting as a result of the high influx of people from other parts of the country into Lagos on a daily basis, thus, stretching the existing accommodations beyond limit.
However, in realising the dangers inherent in such situation, the Lagos State Ministry for Housing, has unveiled its plans to address the issue.
Speaking recently on the matter at an event organised by the Institute of Directors, (IOD), the Commissioner for Housing in Lagos, Prince Gbolahan Lawal, stated that the duties and challenges of a government and indeed a ruling class, which include captains of industry and directors of entrepreneurial ventures, is to identify and manage certain factors of production, supply and maintenance of housing.
According to Lawal, the situation and challenges the government is facing include a continuously increasing population, limited availability of land, high prices of building materials, lack of skilled labour force and low access to finance.
To overcome these challenges, he said the government had decided to focus on certain areas which include “redevelopment of old and dilapidated housing estates to achieve effective space utilisation by going vertical, with the existing allottees to be temporarily relocated and re-accommodated in the new development on completion; promotion of the ‘live where you work’ initiative by encouraging the development of housing estates around employment centres.”
If done, this he said would enhance productivity, reduce travel time and commuting cost, as well as improve disposable income and health.
Others are redevelopment of brown field sites to take advantage of existing infrastructure such as roads, sewage, power and water, among others, which will lead to reduction in cost of construction, thereby making public housing more readily affordable.
In addition to this, the commissioner said there would also be “Transit- Oriented Development,” which he said would be geared towards encouraging development of estates along the transit corridors (Blue and Red Line Stations, BRT corridors and Ferry Terminals) in the metropolis; unlock under-utilised government land and regenerate existing slums in collaboration with other MDAs.
“Deployment of system building to facilitate speedy construction and reduced cost that would be accosted with another initiative that would be known as ‘Master Craftsman Project is also being considered,” he said.
He also noted that one of the identified challenges in the area of housing delivery in Nigeria was the dearth of skilled workforce in the built environment.
The master craftsman project, he said, was an initiative intended to create a platform through which artisans and the workers in the built environment would be trained and retained to acquire 21st century skill and be certified, saying that 4,000 persons expected to benefit from it within the next four years.
The objectives, according to him are to bridge the skill and ethical gap to acceptable professional standard; Boost market share of local craftsman and Implement qualification, certification and create remuneration structure.
However, according to the commissioner, the most ambitious among the plan is the ‘Rent–To–Own,’ which he said was the new policy introduced to make housing more readily affordable for low and middle income earners in Lagos State.
“This policy is to ensure that more people that would not have been home owners can come on the housing ladder. It is a scheme whereby prospective home owners make a five per cent commitment fee, take possession and pay up the remaining balance as rent towards the ownership of the property over a period of 10 years at six per cent interest rate which is in response to the prevailing national economy downturn and the inclusive growth policy of Governor Akinwunmi Ambode’s administration on affordable homes for all, especially the income earners at the bottom of the pyramid,” he added.
Besides, he added that the Ministry of Housing, after several stakeholders’ engagements had also come up with the Micro-finance Housing Scheme, which is aimed at expanding the accessibility to housing for those who may be unable to pay the five percent commitment fee which qualifies them for the Rent – To – Own programme.
The MFHS intends to leverage on the Pension Contribution, Micro – Finance and Cooperative Societies platform.
The delivery of the project shall be through industrialised methods using 21st century technology that will be quick and of high quality.
This will be in collaboration with construction and building materials manufacturing companies to take advantage of economies of scale thereby reducing cost with 5,000 housing units plan in the next three years.
Plan for Implementation
The Ministry has identified three (3) sites to take off the project, they are Imota, Ikorodu,
Badagry Division, Ibeju – Lekki.
The structures are to be 2-Bedroom bungalows of shell construction with a cost of not more than N3.5m per unit. The allottees will be responsible for the internal finishes of the units.
He stated that allottees could source the funds for completing the units from pension contribution, Micro finance and Cooperatives Society.
On completion of the units, they would now align with the Rent – To – Own programme without the payment of five percent commitment fee. Applicants without the guarantee of completion fund is not qualified for the scheme.
“Much as government can try this monumental task cannot be done, we are determined to work with the private sector in a bid to achieve a sustainable and affordable public housing delivery through public private partnership (PPP).
“We therefore need to go to the capital market to raise housing bond. The bond will be used to fund private sector participants under PPP” he said, adding that government will be able to guarantee funding for private sector to support PPP initiatives whereby government provides land, design and cost estimate and issues guarantees to the private sector.
Besides, government will also issue off-take agreement to private sector immediately they are off site and that because government budget cannot be applied for this purpose, we can raise N25billion to N35billion annually via securitisation of the existing real estate asset and thereby create a revolving fund that continue producing houses to be bought by primary mortgage institutions.
The primary mortgage institutions will be refinanced by mortgage refinance companies apart from direct sales to the private and public sector.
This approach brings total transparency and the cash flows will be going to a sinking fund.
The mortgage bond will be linked to the existing estates.
Sales / rental proceeds from the estate will be used continually to build up the sinking fund to wind down the bond. Over time, with a build-up of assets in value government will be able to relinquish housing construction to the private sector by only issuing off take agreements with the backing of the fund.