Each time the high cost of housing in Nigeria is mentioned, the blame is heaped on the Land Use Decree of 1978 (now the Land Use Act) which vests land ownership in the government.
However, Correspondent SAM NWOKORO discovers that other factors contribute to sending many Nigerians, especially those in the cities, into the greedy embrace of developers.
Scene one: Bad building; pack out
On December 15, 2013, Olufunke Silvia was sitting in the front room of her two-room apartment in a tenement building (popularly called face me I face you) in the Orile Iganmu area of Lagos. Her husband, a mechanic, had gone to work on a nearby street.
Three tough looking men, accompanied by an elderly man, came into the room. The elderly man commanded the bouncers to start the job for which they came. In a jiffy, they began throwing everybody and everything out of the room. Within 15 minutes, the task was accomplished.
The woman was dazed. She never envisaged what came to the family. The landlord only informed her that the Lagos State building control agency was coming to seal up the building because it was defective. But the landlord did not inform the tenants ahead of time to get alternative accommodation.
That was how Silvia, a petty trader, and her children ended up squatting with relatives. Since the eviction in 2013, she sees her husband only when it is convenient.
Scene two: Building burnt; pack out
In August last year, a house in Idi Araba, Lagos was razed in a dusk inferno. The fire started from one part of the building, which none of the occupants could identify because most had gone to bed and some were out.
It was passersby who saw the fire that engulfed the 10-room apartment who raised the alarm. The magnanimous landlord had stopped collecting rent from the tenants for months. But they soon realised how tortuous it is for poor folks to get accommodation in a mega city like Lagos when they started scouting for where to relocate.
One of them, Mohammed, recounted: “I have not been able to find a room. It is like impossible to get even a room nowadays. Where I find one, they tell me to pay three years’ advance at N2,500 a month. The least they take from you is two years plus agent fee and agreement fee.
“The rent for a room for one year in this area is about N35,000 or N40,000 for one year with agent fee of 20,000 and agreement fee of another N20,000. Everything comes up to about N80,000 for one year.
“You cannot find any landlord who will collect less than two years’ rent advance for a room. Where you find at all, it is usually three years in advance, that is about N200,000.
“I am only a security man. Where will I find that kind of money? So I have to send my wife and children back to our village in Minna.”
Scene three: Housing form has finished, go
A woman who gave her name simply as Bisi, a caterer in Lagos, has heard about the draw for Lagos Homes, the “mass low income house” scheme Governor Babatunde Fashola has implemented since 2013.
The homes are staggered in densely populated areas of the metropolis, funded entirely by the state government to ameliorate the acute accommodation problem. The aim is to encourage first time buyers to purchase decent and affordable homes.
Bisi learnt about the scheme last year and went to obtain the application form from the Lagos State Mortgage Board. But her endless trips yielded no result.
“Each time I went, they told me the forms for the day had finished, that I should come back. I continued shuttling up to five times a week, and I could not get hold of one.
“Each time I went, either the person with the form was not in the office or the form had finished. You did not know when you arrived on time or earlier than others or later.
“My business started to suffer a lack of attention. I discontinued the chase for the form,” she said.
However, Bisi has not given up completely and will try this year to get the form. She is desperate to win one of the homes.
“I am tired of the landlord eating the gains of my business. They are holding everyone to ransom here. Any gain you make ends up in the landlord’s pocket.”
Population factor
The above case studies confirm the near emergency status of housing in Nigeria, even in the rural and sub urban areas. As the population soars, and school leavers migrate, shelter becomes the problem not just for startup businesses but the primal need of providing accommodation.
To say that Nigeria is just experiencing a housing deficit is to understate the enormity of a social challenge that has far more capacity than insurgents to slow economic growth.
“Those in government know that when you talk about accommodation, you are not just talking about a living room. You are talking about office space where business operations take place,” explained Hassan Kawu, an estate developer in Lagos.
“You are talking about warehouses where goods are stored, whether imported or locally produced. You are talking about industrial estates. You are also talking about undeveloped plots.
“So the accommodation problem today, if you situate it alongside projected plans and expansions that will definitely occur in few years’ time, you will agree with me that we have a huge problem which I think the government, both at state and federal levels, has not even started addressing at all.
“What they are doing for now is just like scratching the surface.”
Nigeria found itself in the present housing deficit due to some avoidable factors plus a lack of planning and foresight.
Kawu noted that “Nigeria has an annual population growth rate of nearly 3 per cent. As of 1990, Nigeria’s population was about 85 million. Yet the same housing policy formulated in 1972, which led to the establishment of the Federal Housing Authority (FHA), a federal government parastatal, is the same policy that has been used by successive government since then.”
He lamented that both federal and state governments have not kept pace with housing demands over the years.
Jide Owololabi, another property developer, added: “Our population has been growing over the years. And with that, the government alone could not provide houses for the masses, and there was no active private sector funding of housing.
“When private developers happen onto the scene, naturally they would exploit the huge demand and build only for high networth buyers such as companies.
“Mass housing died with the Jakande administration in 1983. That is why this deficit grew. Today you hear about state governments promising houses for their people during elections.
“But they know it is a promise they cannot keep because the resources to provide mass housing is not at their disposal.”
State governments fumble
State governments have not helped citizens to cope with the housing problem. Case studies show that most state governments play politics with mass housing.
During military regime, houses built by state governments were sold to military cronies who resold them to relations and friends. And politicians of ruling parties in states benefit mostly from the government housing programmes.
A trader who did not want his name in print said: “All this one they call Lagos Homes is make believe. It cannot solve the accommodation problem in Lagos. You cannot even expect any government to solve the accommodation problem in the state.
“Where do you start? That is where this government failed. The man Fashola did very well in other areas, but when it comes to shelter, his programme is not for the masses.
“The shops are still expensive, considering the kind of traders that those shops were built for. It is only the new Tejuosho market price list that is moderate. All the other ones built around Lagos, whether for residential or commercial, are expensive for the average Lagosian who are the majority.
“How many big people in Nigeria pay taxes? So why not use the revenue you generate from these lowly ones and build houses they can afford, rather than building for rich people?
“Private developers should build for rich people while the government should build mass affordable houses. How can you say that N5 million and N10 million homes are for the poor.”
Expensive housing
Another problem with Nigerians’ quest for roofs over their heads is unregulated cost. Landlords cash in on high demand to hold tenants to ransom. The government has no control over the rapacious behaviour of landlords.
Lagos State is a striking example. It passed a law in 2012 which abolished “agent fee and agreement fee” that compels a prospective tenant to pay double surety in “case of damage that may occur in a building while his tenancy is incumbent.”
Agent fee and agreement fee put together is more than the annual rent. It must be paid whether you are negotiating with the landlord or his agent.
The law in Lagos, like in other states, has not reduced high rent.
Another factor pushing many people out of homes is the expansion of churches, especially in urban areas.
A prospective tenant, Nathaniel Akwashe, complained that “in this Lagos, and I think it is the same everywhere, churches are pushing up the price of accommodation.
“No landlord wants to let his warehouse unless it is to a church. Some churches even monitor warehouses, and if they notice that a warehouse is vacant, even if the tenancy has not expired, they cut you off from the back and settle the landlord. Before you know it, the landlord’s lawyer has served you papers.
“There should be a little form of regulation of churches. But more importantly, the government should encourage individual property developers by way of making credit accessible at very low interest rate.”
Land Use Act
The Land Use Decree of 1978 (now the Land Use Act) laid the foundation for the housing crisis in Nigeria. It denies a person’s inheritance by fiat and makes emergency property owners of those who know little or nothing about the commercial value of land.
The features of the Act include vesting ownership of all land in the government. Only a state governor can determine the usage of land. He determines which land falls within urban area or in a rural area under council jurisdiction.
The Act kills private interest in property development.
Akin Mabogunje, who in 2009 headed the Presidential Technical Committee on the Reform of the Land Use Decree 37 of 1978 noted that “the decree abrogated the right of ownership of land hitherto enjoyed by Nigerians before its promulgation, a plague much observed in the Southern part of Nigeria where there had been rapid urban growth.
“This nationalisation of land ownership is inconsistent with democratic norms and the operation of a free market economy.
“Many governments failed to establish the Land Use and Allocation Committee in their states for many years, thereby hindering continuous delivery of land for building purposes.
“Many governments did not give consent for land assignment or mortgaging, thereby stemming efficient land market and housing finance institutions.
“States imposed heavy charges for granting such consent, thereby obstructing development, while governors exercised their powers arbitrarily, and in some instances declared any piece of land within their domains as urban land.”
Another anomaly the Mabogunje Committee identified as the problem of the Land Use Act is the “inconvenience and delay in processing and getting certificates of occupancy, the exclusion of families in land ownership by the decree, the awkward physical planning problems it created and the arbitrary power of revocation of land title by governors.
“All of which cumulatively frustrated private enterprise in land and property development in the face of government’s inability to provide mass housing for the people.”
Joseph Ndu, an architect, said “that decree must be repealed if Nigeria is serious about its free market economy, not just for the housing sector, but for all sectors of the economy.”
Mortgage sector
The present housing delivery mechanism whereby only private developers bankroll the housing deficit cannot solve the problem.
In October last year, the federal government launched the National Housing Fund (NHF) to empower 66,000 Nigerians to obtain mortgage to build homes.
The new initiative is a good replacement for the ineffective National Housing Policy of 1972 under which an estimated five million homes were meant to be delivered every year, a target that was never met.
The NHF seeks to empower 66,000 developers of various categories through an efficient mortgage scheme for mass housing delivery.
“In housing, we are setting up a mortgage finance company to help bridge the housing gap and boost the number of mortgages in the next few years,” Jonathan declared at the launch.
Housing and Urban Development Minister, Akon Eyakaenyi, added that “my mission is to ensure that I provide affordable houses for Nigerians to be able to buy and call their own, and have a shelter over their heads.”
Finance and Economy Coordinating Minister, Ngozi Okonjo-Iweala, said housing and development of the housing sector “really helps to create jobs, it is something to believe in, because everybody wants their own home.”
The government is in partnership with a pan African housing finance institution, Shelter Afrique, to deliver a 10,000 unit housing programme under the Nigerian Mortgage Refinance Company, a facility meant to fast-track mortgage access for mass housing delivery.
It has also reduced interest rate for building purposes to 5 per cent.
Bad numbers
Nigeria’s population of about 175 million is estimated to rise to 289 million by 2050. Housing deficit rose from seven million in 1991 to between 12 and 15 million in 2008, and between 17 and 18 million in 2012.
The government promises one million new housing units every year.