Perturbed by the severe housing shortage that has left tens of millions of Nigeria’s citizens homeless, international housing finance specialist, Mr Kunle Faleti, has suggested few things President Bola Tinubu can do to address the country’s housing affordability crisis.
In his article, entitled Back to Work: Solving Nigeria’s Housing Unaffordability crisis,” which was made available to Nigerian Tribune, the expert and social housing advocate listed ease of supply constraints, promotion of rental market, investment in infrastructure and use of abundant natural resources as some of the solutions to the housing crisis.
The United States of America—based expert identified main causes of the crisis to include depleted labour market, shortages of construction materials and worsening effects of climate change.
“The ever increasing housing costs are threatening the competitiveness of Nigerian cities,” he said.
To address the situation, Faleti said there is the need to ease supply constraints with the hope of lowering housing prices, pointing out that housing prices are high because the rapid increase in demand meets a sluggish supply response.
He said “Not everyone can own a home. Government should and must promote the rental market.
“The focus of housing policies has often been on enhancing home ownership. While homeownership offers certain advantages such as the accumulation of a physical asset, it also carries risks, such as over-borrowing and lower labour mobility.”
He called on President Tinubu and state governors to invest in infrastructure by providing affordable and efficient public transportation.
According to him, an efficient and affordable within-city transportation system allows people to move quickly within the city and expands the potential area for commuting to jobs.
“It thereby alleviates the need to live in urban centers and eases the housing demand,” he said.
The expert echoed the importance of data, pointing out that having accurate data means better policies.
“Housing price is critical to urban development. Data is not collected systematically in cities.
“Policy makers, therefore, struggle to assess the magnitude of the problem and are unable to assess the impact of existing housing policies.
“Having robust data can offer relatively inexpensive options to improve the understanding of the housing and labour market.”
The affordable housing expert explained that the solution to material shortages is to go back to the basics.
According to him, instead of relying on a plethora of different materials, the nation can use abundant natural resources like wood and stone to build affordable housing.
He noted that simplifying residential construction would clear up supply chain backlogs and increase the availability of precious materials.
Expressing optimism, Faleti is of the opinion that Nigeria’s housing shortage can be fixed.
He said “Even though statistics may appear to be bleak, Nigerians should still have hope. The housing shortage is fixable despite its high numbers. Progress may be slow, but if we take incremental steps to combat climate change, rebuild the labour force and simplify residential construction, we can continue to provide affordable housing for more and more displaced people.”
Describing the present housing crisis, he said “The poor and middle class are struggling to find affordable housing across the nation’s region and the big question is: are there some basic steps the Federal Government and state governments can take to improve the situation?
“Most cities in Nigeria face a severe housing unaffordability crisis. Home prices as a portion of income have reached levels that prevent most urban dwellers from realising their dream of becoming a homeowner. And as cities continue to grow, that does not look set to change.
“The implications of the housing unaffordability crisis go beyond the individual household and impact the entire economy. As housing becomes very expensive, people become reluctant to move and spend longer hours commuting.”
These, he said, also meant companies would focus more in real estate instead of more productive investments while financial institutions will favor firms that have large real estate portfolios instead of those with the best business models.
Consequently, Faleti said that housing prices thus resulted in the mis-allocation of labour and capital and undermine the competitiveness of cities.
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