Each state should have a masterplan to handle flood, environmental challenges — Afolabi

Mr. Timi Afolabi, an estate surveyor and valuer, is the Vice-Chairman of the Association of Professional Bodies of Nigeria, Delta State chapter. In this interview with DAYO AYEYEMI, the property consultant speaks about the real estate market in the state, housing situation in the urban centres, the need for government’s intervention in the provision of low-income houses, and total overhauling of the mortgage system to enhance home ownership among the citizens.

I learnt that Agbor and Asaba axis are now becoming haven for real estate’s investment. What is the driving force?

I wouldn’t know probably the attraction for the development of real estate along that axis. It is most likely being the state capital and the massive investments the immediate past government did along that axis in terms of roads, drainages’ construction and many others in Asaba. Also, its closeness to Onitsha may have also been a factor for the drive along that direction. I have not really taken time to find out what could have been, but I noticed that each time you go to Asaba, you see billboards. So that could be a drive. The economic development in the state, especially the state capital, may have been the reason for such attraction. Another point is the insecurity in the South East. People now prefer to put their investment in Asaba. That’s what I’m saying, the closeness to Asaba, the closeness to Onitsha, people migrating, crossing over, wanting to do business where there is safety may be a contributing factor.

But, I must tell you that the massive infrastructural development of the immediate past governor along that axis may have been a major reason for such an investment. If there is no infrastructure, people will not be attracted to carry out investment along that line.

How is the business of real estate generally in Delta and other states within the South-South region?

Real estate development is still taking place, but not massive. You are not seeing that kind of mass development here and there, but pockets of development springing up. As you travel along the axis, you see a lot of development. The sustaining factor or the sustaining power of such development, we cannot really articulate because the sector that used to be very strong is the oil and gas. And the major companies that hold the oil and gas sector are Chevron and Shell. Shell has not been so active on the shore. So we do not know what are the driving forces behind such development, and there is no real cash flow within the system. Probably, the money is circulated among some few persons who have the money to be able to carry out the development. They say the real estate is always a place to hide illicit money.

Let’s look at the housing situation in the South-South in general. Can you say that the people are properly housed?

In the South-South region, housing crisis is in the urban centres. A state like Delta is highly urbanised. Virtually all the local governments in Delta State are urbanised. Due to the urbanised nature of the local governments in Delta State, there is a housing crisis because the population is increasing. As a result of that, rents have skyrocketed. We used to have three-bedroom apartments going for N500,000; now it’s going for N1.5 million. We are not talking of new houses, but old houses.

This happening is putting pressure on tenants looking for another accommodation, which is not available. It’s like if you leave, another person will take over your accommodation. So there’s definitely this pressure in the urban centres. The rural areas may not have such pressure, but the urban centres of the state are having heavy pressure on housing.

So what we are advising is that the government should begin to go into site and serviced schemes. They should go into massive acquisition of land and invest in infrastructural development of sites and services, where people can buy those plots and begin to develop. Government should open up new areas for people to be able to access. Whatever government can do, we need government to get involved in housing.

Government can also encourage private individuals to establish layouts; give them an accelerated approval of their layout so that people can build their houses. Government should fast-track the process of building houses so that civil servants can be able to build houses of their own. Government should encourage home ownership to reduce the pressure. The pressure on housing is terrible in Delta State.

We have been told that even the low-income housing is no longer popular among the developers. What are the reasons for this?

The reason is the high cost of construction. The cost of land is also exorbitant. The atmosphere for construction is making low-income housing not attractive. The money you have to pay for the land and do all the legal obligations you are supposed to do is not adding up. You pay money at the foundation stage, lintel stage, roofing stage, and at every stage that is critical to building construction. You pay something for you to be able to advance to the next stage. This discourages investment in housing.

Besides, the cost of construction is uncontrollable. Nobody is controlling the price of cement, the price of sand, the price of granite and the price of rocks. Materials are expensive, the economy is expensive. No investor wants to go into housing investment with a loan that is collected from the bank at two digits. It’s not possible. You cannot run socialism under a capitalist atmosphere. It doesn’t work. So that’s why it is discouraging for people to go into that kind of mass housing.

Are you saying there’s no hope for the low-income earners?

There could be hope if the government decides to intervene. You need government’s intervention, but government itself is not intervening. The few ones that were done by the government, you saw the prices. Some of us routinely objected to those prices. If government’s housing units can be so expensive, what do you expect of a private investor? Government is not buying land. Government gets land almost at no cost, yet their own apartment that is just a one-bedroom is going for as high as N7.5 million. So what do you expect a private individual to do?

Government must be intentional about housing. It must be intentional the way Jakande was intentional. It was not as if the economy was so rosy under Jakande, but he was intentional in solving housing problems in Lagos State. So government must be intentional to ensure that housing is made available for the general public to be able to acquire.

Another thing I want to say is that luxurious housing should be taxed heavily to discourage people. It’s not adding value to the overall economy. Some of these luxurious houses will go into a period of void for so long that criminals will begin to occupy them. They will not be able to complete them; they become a beehive for armed robbers and kidnappers to stay. So this is one of the things the government should discourage. Government should encourage people to put such money into mass housing where they will solve problems in the society. Such investors can be given tax rebate or tax holiday. Whatever the government can do to encourage people to invest in mass housing, let it be done.

Are there vacant houses in your area?

Yes, people cannot take those houses because they cannot pay for them. That’s the truth. This may be due to high building materials’ cost.

What is the way out of this?

The way out of high building materials’ costs is that, number one, we must encourage local materials that are available for construction. We must encourage local industries.

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How do we encourage this?

Government tariff for quarry should be reduced. Government is increasing tariff for those who are into quarry business. When you increase tariff for people into quarry business, they will also increase their products, they will increase the sand, they will increase the granite.

Remember, the cost of petrol is on the high side; the cost of energy, which is diesel and petrol to run these vehicles, is on the high side. So the cost of transporting these materials to the construction site is also on the high side.

What are the major components of a simple housing estate?

It is sand, it is cement, it is granite, it is aluminium roofing, aluminium door, aluminium window, glasses. What can we do to encourage companies that are into aluminium roofing construction? What can we do to ensure that the cost of those materials is cheaper for them to be able to be in production, to be able to produce the roof materials, the wood itself? Cost of producing wood is getting on the high side.

So all these local materials that you thought were cheap, mostly are affected by cost of transportation, which is connected to price. So, whatever the government can do to influence the drop in the price of the product, it should do it. We are not talking about subsidy now, we are talking about local production of petroleum product in such a way that the prices will come down so that cost of transporting these things to sites will be lesser on the part of those who are making them available.

Nigerians deserve better mortgage sector to enhance home ownership. Don’t you think so?

We have talked about the issue of mortgage over and over. We do not have a working mortgage system in Nigeria. We do not have it because the will power on the part of government is not there. That is the truth. The will on the part of government is not there in the sense of the ability to allow for civil servants to genuinely access this loan, or those who are banking or doing savings, to genuinely access it.