Despite the shortage of more than 15 million rental homes affordable and available to extremely low income renter households, International Housing Finance Specialist and Public Speaker, Mr Kunle Faleti, has called for a concrete action to solve the challenges of accommodation shortfall in the country.
According to him, while a lot of talks going on about solving the affordable housing crisis in Nigeria, there seemed not to be a lot of progress towards actually building it.
The housing finance specialist bemoaned the housing situation in Nigeria.
While calling for concrete action instead of stories the sector is known for over the years, Faleti’s concern was that none of the local government in the country has enough of what is deemed to be “affordable housing”.
He expressed that both federal and state governments remained major impediments to providing more affordable housing, adding that their attempts so far had been unsuccessful based on the results.
He said, “Putting aside the human and compassionate aspects, having affordable housing is good for the community and the local economy.
“Not only does the construction of the housing provide jobs and economic activity, but it also frees up money that is not used to pay rent so that they can spend it on a variety of products and services throughout the community.”
While maintaining that provision of housing must be private – driven, he said that the federal government should and must not be in business of building homes, but concentrate on providing the enabling environment.
He said: “The Federal Government should and must not be in the business of building homes; rather its role should be more to get out of the way and provide the private sector incentives to actually build the housing and make it profitable to do so by creating an enabling environment.”
He blamed “Nigeria’s counterproductive” housing policies, as the main impediment to provision of affordable housing.
“In most capital cities in Nigeria, the main impediment to providing affordable housing lies in the counterproductive housing policies that the state governments have in place, such as stringent zoning restrictions, density limitations, and aggressive environmental regulations all of which limit the supply of housing while increasing the cost of construction.
“There is also the state government fees associated with construction, along with delays caused by all the different bureaucracies with overlapping and often conflicting requirements.
“There is a separate fee and separate permit for almost everything from planning, building, environmental impact on schools, green area/parks, transportation, capital improvements, and on and on.
“Government fees on homes alone are often excessive, running into millions, and bigger projects are even more obtrusive,” Faleti said.
On measures to ease affordable housing problems, the housing and mortgage expert suggested density bonuses, tax relief, accelerated permits, land banks and incentives to developers.
On density bonuses, he is of the opinion that developers should be allowed to make room for extra population density if they reserve a portion of the housing for lower earners.
He wants state governments to offer tax cuts for properties that provide low-income housing.
“Many urban areas are subject to high property tax, state governments may offer tax cuts for properties that provide low-income housing,” he said
On accelerated permits, he wants the state governments to expedite building or rehabilitation permits to help supply housing to the market sooner.
He argued that land banks would help developers get financing for land that contains buildings that are scheduled for demolition or renovation.
He also urged the government to show developers that they can make a profit and partner with them instead of hindering them.
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