Housing is widely recognized as a human right, yet Nigeria’s low income households in particular struggle when it comes to finding adequate shelter that does not leave them in financial difficulty.
The term affordable housing sometimes also called social housing or mass housing-commonly features in discussion on housing issues, which are also social and economic issues.
Because the perception of what is affordable varies significantly across cities, states and income groups, affordable housing can only be broadly defined. Generally, affordable housing deals with housing solutions that are priced and financed in a way that ensures low-income occupants can also satisfy their other basic needs. Even though the scarcity of affordable housing affects all segments of society, it is notable low-income earners who are most affected.
The Nigeria urban housing market primarily targets high-income earners and thus leaves large parts of the Nigeria population excluded from formal housing provision. In general, low income households face a number of barriers; besides weak individual purchasing power, access to housing finance is lacking; complementary goods, such as land and infrastructure, are unavailable, and housing supply is inadequate to meet the actual needs of the urban poor.
Nigeria is the most populous country in Africa. Despite the fact that Nigeria-a lower middle income country has been growing at stable rates for a decade and has become the largest economy in Africa, living conditions have yet to improve significantly.
The country continues to struggle with poverty, inequality, and infrastructure shortages. It is estimated that around 62% of the Nigerian population lives below the poverty line, most of whom must endure inadequate housing conditions characterized by general disorder, overcrowding, low sanitations standards, the use of unconventional buildings materials, substandard construction techniques, and lacking road and services infrastructure. The sheer size of the housing problem might seem overwhelming and discouraging to companies and government alike.
The housing market in Nigeria is constrained mainly by inadequate access to finance, high cost of land registration and titling, high cost of building materials and lengthy and regulatory procedures.
However, income is not guaranteed for the major part of the population. At the same time the cost of buying or renting a home has spiraled. At present the income required for the cheapest new-build housing offered by a formal developer is above the average annual income earned by urban households.
Speaking for the first time in December 2015 as the new Minister for Power, Works and Housing, Babatunde Fashola outlined his plans to reform the ministry.
On the issue of housing, Fashola noted that “if we complete our ongoing projects and we get land from the governors in all states and the Federal Capital Territory (FCT) to start using the LagosHOMS model, we should begin providing 40 blocks of housing in each state and the FCT.” He also stated that “we see this leading to the potential delivery of 12 flats per block and 480 flats per state, subsequently providing 17,760 flats nationwide, for a start.”
“The Federal Government of Nigeria plan introducing mortgage schemes and we plan adopting the Lagos state model, specifically Lagos Home Ownership Mortgage Scheme (LagosHOMS), to achieve this. The LagosHOMS project, has given about 400 people keys to their apartments in Lagos, since it was introduced in March 2014. This scheme was introduced to battle increasing over-population in Lagos state and the corresponding increase in rent in Lagos state. The scheme appears to be a success, attracting more customers every day. Nigeria would also benefit from the housing scheme, with projections indicating the country will be the fourth most populated country in the world by 2050.”
According to him, “This will translate into a minimum of 4 doors and 2 windows very conservatively per home; a demand for 71,040 Doors and 35,520 Windows nationwide in year one, which we will encourage to be made in Nigeria. The demand for those who will make and fix the doors and window, the hinges, the wood polish and the paint and tiles suggest the onset of jobs and change for our artisans and workers who are the real builders of every economy”.
To kick start action in the Ministry, the Federal Government in 2016 set out targeting the provision of mortgages at single digit interest rates and long tenor as it plans to unveil a new housing finance initiative. Minister of Finance, Kemi Adeosun, revealed this at the 32nd Annual Conference and General Meeting of the African Union for Housing Finance (AUHF) which was held in Abuja.
She said the initiative to finance housing projects is aimed at the construction of over 300,000 affordable houses through mortgage financing and creation of 700,000 new jobs across the housing development value chain. The minister explained that government was also contemplating putting in place foreclosure law and that would expedite legal processes for dispute resolution that is needed to support the development and growth of mortgage institutions in the country.
Governments also need to stop offering false hope. Even though policies such as Federal Mortgage Bank of Nigeria (FMBN) and Federal Housing Authority (FHA) have proved ineffective time after time, they are the centerpieces of the housing plans in Nigeria. Inevitably these are really second home sellers’ incentives: the biggest winners are people who own homes already and property developers with new homes ready to sell.
The Federal and state governments should; Be involved in regulations of housing cost by promulgating a means of subsidizing houses for the low income earners or the average Nigeria, Introduce a new small redevelopment housing code. The code would include the things that worry neighbours the most, such as privacy, height and overshadowing,
And also, allow taller developments of four to eight storeys buildings on major transport corridors, Set housing targets for each local council. The targets should be linked to plans for the growth of the city as a whole. Where councils fail to meet planning targets, independent planning panels should step in.
The best evidence is that building an extra 50,000 homes a year for a decade could leave Nigeria house prices 5-20%
As well as boosting supply, state governments should make renting more attractive by changing residential tenancy laws to increase the security of renters and help renters make their property feel like their home and build more social housing tightly targeting it to people most at risk of becoming homeless for the long term.