Stakeholders to Fashola: Rent control not practicable, outdated

BUILT environment experts, including estate surveyors, real estate developers, mortgage finance providers and property lawyers, among others have kicked against  rent control’s proposal by the Minister of Work and Housing, Mr Babatunde Fashola.

According to them, efforts to control rents in the past had never worked, adding that such request is outdated

Recalled that the Minister of Works and Housing, at a forum recently, had identified exorbitant amounts of rent, ranging from one to three years demanded by landlords and property owners before they let out their properties as the major cause of housing challenges in Nigeria.

Fashola also dismissed the 17 million housing deficit figures being brandished in Nigeria, stressing that the claim had no scientific proof.

Fashola, then, proposed monthly rent by property owners in order to make houses affordable for Nigerians in urban centres.

He urged states to intervene in the management of rent, explaining that “as long as people have to pay three years rent from salaries that are earned monthly in arrears, there will be the problem of house affordability but if you brought it to like three months in advance, there is something still called salary advance in the private sector,” then people will be able to afford it.

Reacting to the issue on the social media platform of Housing Development Advocacy Network (HEDAN), Founder/Chief Executive Officer, Eximia Realty Company Limited, Mr Hakeem Oguniran, said that rent control is “the best way to destroy a city, other than bombing,” quoting Swedish economist, Assar Lindbeck, who he said chaired the Nobel Prize committee for many years.

According to him, various rent control regimes in the country had never worked, pointing out that the laws were honored more in breach than in observance.

“There are several rent control regimes all over the country at the moment. They’ve never worked.”

Oguniran tasked the government on the need to understand the right levers to pull to begin to solve housing problems.

“Rent control is anachronistic and often creates more problems for the society,” he said.

The CEO of eximia realty explained that rent could be better determined by the forces of demand and supply, pointing out that this factor had once compelled landlords to reduce rents on commercial and retail properties in 2017 during the nation’s economic recession.

“In 2016 – 2017, the government didn’t have to legislate to compel commercial and retail landlords to reduce their rents and charge monthly, quarterly and half yearly. Tenants were even offered fit out allowances and rent free periods. It was a function of demand and supply simpliciter. Clearly, this government doesn’t understand the issues,” he said.

Former Chief Executive Officer Nigeria Mortgage Refinance Company (NMRC), Professor Charles Inyangete, stated that providing social housing was part of the solution to avoiding confounding the market with rent control.

Corroborating Oguniran, he is of the opinion that the message needed to be put across repeatedly until it is understood.

He pointed out that rent control would confound the market and create friction in the pricing process.

President of the Nigerian Institution of Estate Surveyors and Valuers (NIESV)’s President, Emmanuel Wike, stated that surveyors viewed Fashola’s position on monthly rent collection differently, and promised that leadership of the group would still meet the minister on the matter.

As a major stakeholder in the housing sector, Wike said “The institution intends to visit him as soon as possible to deliberate and harmonise positions on the matter.”

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