The over 28 million Nigerians living without decent and affordable houses reflect the dire state of the country’s real estate sector.
A recent report from the Central Bank of Nigeria states that Nigeria’s housing deficit which stood at 7 million units in 1991 has worsened to 28 million units as of March this year.
Poor funding, regulations and rising inflation have been largely blamed for the country’s huge housing gap. The CBN projected N21tn was needed to finance this deficit.
As the President-elect takes over the leadership of the country, real estate stakeholders are full of expectation that he would pay special attention to the sector and tackle the challenges that stifled its growth.
Partnership with private sector
The outgoing Minister of Works and Housing, Babatunde Fashola, recently said the government only cannot meet the housing needs of Nigerians. He stressed the need to create an enabling environment for private sector involvement in housing provision
He stated that despite the numerous housing programmes initiated by the current administration for affordable housing, the private sector still dominated the real estate sector.
According to him, the private sector remains the real driver of housing solutions, adding that the right framework would unleash the power of private capital in the sector.
He added, “There is nothing the government does in the housing sector that exceeds and provides more than what the private sector can do. Whether it is a state government building or the Federal Government, the real drivers at the end of the day are the capacity of private capital for providing more houses.
“When you look at the scope of land holding, apart from the state government that owns the bulk of the land, the Federal Government does not have as much land as the collective land holding in the hands of the private sector.”
In the same vein, the Co-founder of Dukiya Investments, Lukman Shobowale, said the incoming government must prioritise the housing sector.
He said, “In addition to the emphasis on mortgage and optimising the Land Use Act, a Tinubu presidency must boost private sector participation through incentives such as tax concessions, and provide the infrastructure that can support investment in the sector.”
Reviewing Land Use Act
The Treasurer of the Nigerian Institute of Building, Philips Ayotunde, said the new administrator as a matter of urgency should either review or repeal the Land Use Act.
He added, “It is obvious the government needs the private sector to invest in the real estate sector and one way to get the private sector to do this is by winning its trust. Let investors know that their investments are secured and that they will get maximum returns on their investments without fear and uncertainties.
“It takes a lot of courage to do this because the state governments have been using the Act to enrich themselves, and it will be difficult for them to just let go like that.”
Implementing town planning guidelines
A former President of the Association of Town Planning Consultants of Nigeria, Moses Ogunleye, said the government should re-introduce the sites and services scheme in states of the federation.
He said, “This was done during the Shagari era. By this, the Federal Government will secure or acquire land from the state government, get sites properly laid out or planned, and provide the infrastructures like roads, power and water supply, and sewage/wastewater facilities, among others.
“In addition, plots will be offered for sale to individuals who will build houses as they can afford but within town planning guidelines. Let the Federal Government continue to provide technical support for the preparation of master plans or physical development plans for cities and towns, and the plans already prepared by the Federal Government through the Federal Ministry of Works and Housing, should be effectively funded.”
Also, the President of the Nigerian Institute of Town Planners, Nathaniel Atebije, said no state in the country had implemented a good town planning mechanism.
He said, “If a state was not well planned from the beginning, the government can take remedial measures to ensure that they are able to address the challenges of the moment. There are some other states just moving in circles because no serious effort is actually being made.
“Planning is a legal issue. As of today, it is only Lagos State that has effectively domesticated the Nigerian Urban and Regional Planning Law. Other states have done nothing about it. Their best effort is to make a whitewash law that is of no effect”.
The Kaduna State Governor, Nasir el-Rufai, recently said for Nigeria to solve its housing deficit, it requires a favourable mortgage policy.
He disclosed that the mortgage system would enable buyers to spread payment over a 25-year period, stressing that the incoming administration under President-elect Bola Tinubu would ensure single-digit interest.
He said, “The steps taken by Gombe are the right steps, which is partnering with the private sector and other investors to build houses. But the problem of the housing deficit will never be addressed until we have a national mortgage system. People cannot buy houses by paying N10m-N50m at a go. No one does that at a go. We need to design a system that enables people to buy houses and pay in 25 years at low-interest rates. That means we need a national mortgage system.