Built environment professionals have identified reasons for housing unaffordability among home seeking Nigerians and suggested possible solutions. DAYO AYEYEMI, reports.\
Over-dependence on costly foreign building materials, high rate of poverty, lack of government’s will to ensure housing adequacy, corruption and high rate of poverty have been adduced among other reasons for unaffordability of housing in Nigeria.
Other reasons, according to the built environment experts, are restricted access to affordable land, stagnated income of low and moderate workers, high cost of building new houses, unfavourable government’s regulations, complicated/ lengthy building approval processes, multiple tax, underdeveloped mortgage system, infrastructure deficit, and rapid urbanization and population growth
The experts explained that housing unaffordability is getting worse among the citizens, leaving many Nigerians with no option than to sleep under bridges, makeshifts and squat in unsanitary environment.
As at the last count, it was estimated that 22 million Nigerians are in need of houses, and that it would entail the provision of 700,000 per annum in the next 10 years to close the accommodation gap.
Despite the low-income level of an average Nigerian, newly built one and two bedroom apartments cost between N25 million and N100 million in Lagos and Abuja, depending on the finishing.
Lagos-based estate surveying and valuation practitioner, Mr Olufemi Oyedele, argued that going by the huge population of low-income Nigerians without housing, only social housing can ensure adequate housing and ensure housing becomes a right.
He also remarked that high rate of corruption has made infrastructure a scarce commodity.
On why houses are unaffordable to the targeted groups in Nigeria, another expert who identified himself simply as “Miracle” pointed out that the rents and home prices that many households could afford to pay are too low to cover the costs of developing and operating newly constructed housing.
“Some households’ incomes are too low to cover even the costs of maintaining and insuring existing housing,” he said.
“Certain types of government regulations raise production costs and reduce the overall supply of all types of housing
For example, limits on density restrict the number of homes that can be built on available land, and complicated and lengthy approvals processes can slow down the construction process and even cause developers to go elsewhere, making it difficult for the supply of housing to keep pace with increases in demand and rising housing prices throughout the entire housing market,” he added
He argued that there could be good reasons for many government’s regulations, but that it would be important to remember that any increase in development’s cost would be passed on to families.
He canvassed for the government’s subsidies in order to make housing more affordable for the families in need of housing rather than capitalising on the reduction of regulations.
To expand availability of affordable homes, he urged the federal, state and local governments to fund a range of programmes that will successfully house millions of families.
Another real estate practitioner, Nuel Osilama, explained that housing unaffordability and high materials” costs in Nigeria are being driven by volatile foreign exchange rates and supply chain inefficiencies.
According to him, restricted access to affordable land has resulted to complex land acquisition processes, speculation, and inadequate land titling.
“Underdeveloped mortgage system is characterised by limited funding, high interest rates, and stringent lending criteria, adding that infrastructure deficit has led to increasing construction costs and reducing housing development’s viability.
According to him, rapid urbanisation and population growth had exacerbated housing supply and demand imbalances.
He said: ”Income inequality is limiting the purchasing power of a significant portion of the population.
He also blamed regulatory and governance issues including policy formulations, bureaucratic hurdles, corruption, inconsistent policies, and ineffective policy implementation as contributing factors to housing unaffordability in Nigeria.
In addressing housing affordability in Nigeria, Osilama said it would require a multi-pronged approach targeting each of the identified factors.
To tackle high cost of building materials, the expert said that it would entail the promotion of local building materials production by incentivizing local manufacturing of building materials through tax breaks, subsidies, and access to low-interest loans.
According to him, this would involve investment in research and development to improve the quality and affordability of locally sourced materials.
He urged government and all stakeholders to support local industries that utilise local resources.
He also canvassed the stabilisation of foreign exchange, urging the government to implement sound economic policies to stabilise the Naira and reduce reliance on imported materials.
According to the real estate expert, government should diversify the economy to reduce dependence on volatile sectors; improve supply chain efficiency; invest in infrastructure to improve transportation and logistics; streamline customs and import processes to reduce delays and costs; and encourage bulk purchasing and cooperatives for smaller building firms.
To solve the issue of restricted access to affordable land, he wants government to streamline land acquisition; simplify land registration and titling processes; establish transparent and efficient land administration systems; and implement land reforms to reduce speculation and land grabbing.
Besides, he urged the need to review and amend the Land Use Act, to make land acquisition more efficient.
To increase land availability, Osilama suggested the need to release government-owned land for affordable housing development, promote public-private partnerships to develop large-scale housing projects; and implement effective urban planning and zoning regulations.
The experts also advocated increased mortgage funding, calling for the establishment of a national mortgage refinancing corporation to provide liquidity to mortgage lenders.
To enhance affordable mortgage, he said: “There’s need to encourage private sector participation in the mortgage market; explore innovative financing models, such as cooperative housing and micro-mortgages; reduce interest rates;implement policies to lower interest rates and make mortgages more affordable.
“Offer subsidised mortgage rates for low-income earners; relax lending criteria; develop flexible mortgage products tailored to the needs of different income groups; implement credit guarantee schemes to reduce lender risk; and create a more efficient foreclosure process that balances the needs of the lender and the borrower.”
He called for investment in infrastructure development to bridge deficits.
According to him, government should prioritise infrastructure development in areas designated for affordable housing; improve roads, electricity, water supply, and sanitation, and encourage public-private partnerships for infrastructure development.
To reduce infrastructure costs, the estate surveyor and valuer wants government to implement efficient infrastructure planning and management, and promote the use of cost-effective infrastructure technologies.
To manage rapid urbanization and population growth, Osilama urged government to invest in the development of satellite cities to reduce pressure on major urban centres.
He also wants the authorities to create economic opportunities in rural areas to slow down urbanisation.
“Develop comprehensive urban plans that address housing needs; implement zoning regulations to control urban sprawl; invest in mass transit systems.
“Implement a living wage that enables workers to afford decent housing; create job opportunities by promoting economic growth and job creation to increase income levels; and support small and medium-sized enterprises (SMEs).”
To increase housing affordability, he canvassed that government should implement social housing programmes by providing subsidised housing for low-income earners; and implement rental assistance programs.
To enhance ease of doing business, he urged government to improve the regulatory framework by streamlining building permit processes and reduce bureaucratic red tape.
“Implement transparent and accountable governance practices; create and enforce policies that reduce corruption within the housing and land sector; develop long-term housing policies that are consistent and predictable; and ensure effective implementation of housing policies,” the housing expert said.
He wants government to utilise technology to increase transparency in land and housing transactions, and publicise all housing related policies and actions and harmonise them.
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