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Low-Income Owners Worst Hit By Dearth Of Affordable Housing –Stakeholders

Stories: Edward Nnachi

With the Nigerian housing shortfall estimated to be over 17 million units, building experts are of the view that the worst hit group in our society is the low-income earners. To avert a revolution in the sector, these experts proffer that there is need for the government to take urgent steps in delivering affordable housing to Nigerians. Already Nigeria, Africa’s most populous country with more than 170 million people, is making strategic housing investment moves to expand access to housing finance to help cut down a deficit of 17 million houses.

According to the Managing Director/ Chief Executive Officer of the Nigerian Mortgage Refinance Company (NMRC), Prof. Charles Inyangete in a recent interview , the continent’s largest economy needs investment of N3.5 trillion to build 780,000 housing units yearly to help meet rising demand. With the Nigerian real estate market currently valued at $41 billion, representing about 8 percent of gross domestic products, stakeholders wondered why affordable housing provisioning in the country is still at its lowest ebb.

They therefore, appealed to the government to unbundle processes that are capable of unlocking the potentials in the sector. Reacting on this issue, Mr. Segun Ajanlekoko, a construction cost engineer told The UNION that major reason for the pronounced affordable housing crisis among low-income earners is there is currently in the country, no coordinated and concerted effort to actually warehouse a structured programme for building for the masses. While stressing that the responsibility of providing housing for citizens rests mainly with government to undertake, Ajanlekoko, who is the President, Commonwealth Association of Surveying and Land Economy (CASLE), reiterated that housing for the poor is indeed the prerogative of government.

He urged the president administration to make housing a priority. “On the other hand, if government wants active private sector participation, then it should provide the necessary infrastructure and allow the private sector to build for the masses. That way, the cost of building will be considerably reduced and indeed affordable for low income earners”, he said. To the National President, Building Collapse Prevention Guild (BCPG), and 1st Vice President of Nigerian Institute of Building (NIOB), Bldr. Kunle Awobodu, lack of a well controlled mortgage system is the bane of the housing sector in Nigeria.

Awobodu told The UNION that aside from the bottlenecks encountered by Nigerians while accessing loans in banks, corruption in the system and high interest rate would practically continue to render unrealistic the dream of low-income earners to own their houses in the country, adding that “Nigeria still has a cumbersome mortgage market/system compared to advanced economies (for instance in the United Kingdom and the U.S), where interest rate is still as low as 3 per cent.

Canvassing for the institution of arrangements specifically for the poor masses, by government to engender them own their homes, Bldr. Awobodu stressed that in doing this, attention should equally be paid to alternative methods of building which are cheaper and time efficient; thus, “taking away our attention from the traditional system of building construction which is currently too expensive”.

“Until this is done, housing for all will forever be a mirage and difficult to realise. And for us as professionals, there is need for us to continue to research more on building materials that are less expensive and viable in building construction”, he added. Another factor believed to be worsening lack of affordable housing crisis among low-income earners in Nigeria is the manner in which the National Housing Fund is being managed, which according to a contributor who spoke to The UNION on condition of anonymity, has made it cumbersome to access the fund.

The source said, “I keep on contributing to the fund, without knowing how to derive the benefits. I don’t even know where the fund is domiciled. But I think it is under the management of a federal government agency”. The NHF is managed by the Federal Mortgage Bank of Nigeria (FMBN). Another source, would not want his name mentioned, said the scheme has become less attractive to people because, the FMBN has been poorly understood, poorly published, aside from low patronage and poor implementation.

He added that the bank needed a credible process, experienced management that would make it to function. However, hope seems to be on the way of low-income earners in the country desiring to own their houses, going by the activities kick-started recently by NMRC. The state-backed mortgage refinance firm plans to sell a total of N440 billion ($2.5 billion) of bonds as it seeks to enhance admittance to housing funds in Nigeria, this week. The 15-year bonds will be used to refinance existing mortgages that meets specific underwriting requirements. While the NMRC has been able to provide a uniform underwriting standard for the country’s mortgage market, the absence of foreclose law is hindering quicker expansion, its Chief Executive has said.

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