Unlocking hidden opportunities for financing affordable housing

Some of the housing stakeholders that converged on Lagos in search of solutions to challenges confronting affordable housing finance are of the opinion that collaborations and partnerships would go a long way to unearth the hidden opportunities in the sector. DAYO AYEYEMI reports

Perturbed by the increasing housing shortage and affordability crisis without corresponding actions to match the demand, stakeholders have called   for urgent collaboration among themselves with pragmatic strategies to directly address the housing and employment needs of the people.

The stakeholders, who converged on Lagos, made the call during the workshop organised by the Association of Housing Corporations of Nigeria (AHCN).

They identified the activation of dead assets as tools for funding affordable housing and called on state governments to support their state housing agencies in driving affordable housing across Nigeria.

They also deliberated on the prospects of Real Estate Investment Trusts (REITs) as solutions to affordable housing, partnership synergy in resolving housing deficit, unlocking finance barricades and limitations to affordable mass housing as well challenges of off-takers guarantor in funding affordable housing among others.

The stakeholders at the forum commended the establishment and impact of Family Homes Funds (FHF) and its efforts to make affordable housing available to low income earners through funding development, mortgage and rent to own schemes.

Participants also called state governments to support their housing corporations and make lands available to ensure the success of the FHF programs.

Egg-heads of housing corporations and real estate developers were tasked with the need to take advantage of inherent opportunities in the provision of mass and affordable housing units for the people, especially the low income group.

Themed “Unlocking Hidden Opportunities for Financing Affordable Housing,”  speakers at the forum in Lagos included the Managing Directors of Family Homes Fund and  Federal Mortgage Bank of Nigeria, Mr Femi Adewole and Arc Ahmed Dangiwa, the Managing Director of Eximia Realty Ltd, Mr Hakeem Ogunniran, the Managing Director of Workers Affordable Properties Ltd , Rwanda, Engr Harmony Kunu, the Managing Director of CentreBase Consult, Mr Sesan Obe, the CEO of Oct 5 Holding Ltd, Mr Jide Odusolu and the Managing Director of TrustBanc Arthur, Mr Basheer Oshodi among others

 

Experts’ views

Speaking on ways to explore partnerships in addressing Nigeria’s affordable housing challenges, Managing Director, Family Homes Funds (FHFL), Mr Femi Adewole, said that due to increasing population, over 80 per cent of urban dwellers rented their homes from informal landlords.

Besides, he noted that there were less than 100,000 mortgage loans representing a small per cent of the population, adding that most of the new homes being built were unaffordable to people on low to medium income.

Due to these challenges, he said that developing partnerships was central to all aspects of FHF’s work. “We firmly believe that the challenges in the housing finance market are best addressed through strong partnerships between players across the value chain,” he said.

He disclosed that FHF is partnering housing corporations for rental housing, noting that 70 per cent of Nigerian’s who live in urban areas (about 51.7 million) are renters through informal and unregulated arrangements with amateur landlords.

Apart from the quality implication of the context (unregulated/informal), he stated that large amounts of capital were trapped, saying “It is estimated that annual turnover of rental flows in the market is up to N10 trillion.”

If this cash flow is formalised and properly harnessed, he said it could provide significant depth to housing finance market.

Adewole stated that FHFL has made a start through incubating a partnership with housing corporations, believing that the initiative is a vital partnership towards developing rental housing market.

On the guiding principles of partnership with State Housing Corporations, he said the structure has capacity to quickly scale up 100,000 housing units per annum by 2025 with sufficient independence from political interference.

On the progress to date, Adewole said that three out of six partners have submitted proposals which are under consideration, adding that the funding wallet had been identified through the National Mass Housing Programme

He adduced slow pace, some resistance to rental housing, impatience and inadequate documentation as challenges to the plan

He disclosed that the company is partnering   the Primary Mortgage Banks on Help to Own and Help to Buy Loan initiatives.

In his presentation on: “Exploring Partnership Synergy in Solving Affordable Housing Challenges – The FMBN Option,” the Managing Director, Federal Mortgage Bank of Nigeria, Arc. Ahmed Musa Dangiwa, said it was encouraging that partnerships and collaborations appeared to be developing across the housing sector especially with regards to inter-agency and multi-agency collaborations.

In collaborations between Federal institutions and state governments, he noted that the latter have shown increased readiness to partner with federal institutions by making land available for housing development. He assured that FMBN would remain committed to developing and strengthening partnerships for the development of the housing sector.

The AHCN President, Dr Victor Onukwugha, in his opening address encouraged the state governments to provide and give room for their housing corporations to fulfill their primary mandate of providing affordable housing for their citizens.

He announced that the member organisations have plans underway to start a rental-housing scheme, in conjunction with the Family Home Funds Ltd.

“This is set to take off in six states after which other states will follow. The objective is to create an avenue where people can have access to affordable and decent accommodation,” Onukwugha said.

 

Policy makers

Governor Babajide Sanwo-Olu of Lagos State, in his remarks, recognised the housing deficit in the state, admitting that it would be tough meeting the shortfall given the daily influx of people from other parts of the country and beyond into Lagos.

Sanwo-Olu, who spoke through the Commissioner for Housing, Moruf Akinderu-Fatai, recounted the efforts of his administration in providing housing through the different agencies of government including the LSDPC, direct budgetary allocations, Public-Private Partnership as well as ministerial initiatives.

The governor reminded state civil servants of a 40 per cent rebate granted by his administration for them to purchase units from the state’s stock of homes.

Managing Director/Chief Executive Officer of LSDPC, Dhikrullah Har-Yusup, highlighted the completed and ongoing projects of LSDPC around the state.

Apart from budgetary provisions, the Permanent Secretary in the Lagos State Ministry of Housing, Mr Wasiu Akewusola, said the state is also leveraging on collaboration with private sector investors and private sector investments among other conventional methods to deliver housing to the people.

He suggested some recommendations to solve issues associated with  affordable housing   finance, saying that interest on housing finance  should be redefined , adding that pension fund managers be geared to funding of housing

He also called for the decentralisation of activities of the National Housing Fund (NHF), suggesting to government to give incentives on housing funds

In his presentation on “Digital ECO Solutions and the Future of Real Estate Management,” Managing Director, Oct 5 Holding, Jide Odusolu, noted that the pandemic shut-in has triggered increased deployment of digital solutions across all areas of the real estate sector. He said “This has led to an embrace of technology with smart home systems and incorporating a live, work and play environment. The work from home (wfh) policy has increased the desire for modern conducive living spaces that are also more affordable.

“Business owners and developers were forced to re-strategise and evaluate their business models, payroll, workforce, processes and vision.”

According to him, the combined effect of the stay-home rules, reduced earnings and changing demographics collectively altered demand types.

For service providers in the real estate sector to be relevant, he said the future is digital and green due to changing demographic with the 50 per cent of the population under 21 years

Championing  the need for  the adoption of cutting-edge tools, he stated that innovation and use of  disruptive technology will reduce construction cost, adding that eco-friendly homes have  higher value and lower lifetime cost, and that digitisation increases  transparency and efficiencies.

On the future of residential real estate, he stated that digital is the new normal, noting that the aftermath of COVID 19 has fast-tracked the deployment of social media tools, use of virtual tours and reliance on project management solutions.

He pointed out that the deployment of PropTech is revolutionising real estate, helping to address the issues around due diligence; sales closings and reducing risk of loss/litigation.

”Deployment of PropTech is creating captive verified demand and attract longer term capital homeownership

Justifying the need for technology, he pointed out that real estate has a reputational deficiency due to lack of transparency, saying the deployment of PropTech would reduce this risk significantly through data aggregation; transparent processes; increased efficiency; quality standards and simplified credit.

Besides, he stated that co living and co-working remained an emerging trend, adding that housing for the young demographic is gaining traction. According to him, it is expected that developers would adjust their product offerings to meet rising demand.

“The deployment of technology would make the Nigerian real estate sector more transparent and enable increased liquidity to drive greater homeownership,” he said.

He disclosed that his company, Octo5 has developed an app-enabled demand aggregator called STOW available online www.stow.ng and on android and IOS platforms.

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