Against the backdrop of the widening housing deficit in the country resulting from unfriendly policies, the need for governments at the federal and state level to see the issue of housing as a matter of concern and priority has been stressed.
The Group Managing Director and Chief Executive Officer of Le’Venue Property Co. Ltd, Mr. Jemine Adollo, who spoke to Vanguard Homes & Property in an interview on the need by both the federal and state governments to direct their focus on housing as much as it is being done in oil and power sectors, said this is the only way Nigeria’s low income earners can have roofs over their heads with their meagre income.
Meagre income
Lamenting that there is no clear direction for housing by the federal and state governments after 100 days of the new administration in Nigeria, the chief executive officer of the Lagos-based real estate firm noted that “In the area of housing, this present government has not really shown us a clear direction of where they want to go. We had hoped that on coming in, they will give us a clear chart of what they want to do in terms of housing.
“We all know that the housing deficit in Nigeria which is put at 17 million is even understated. It is beyond this figure. We had thought that when a new government comes into place, housing for the Nigerian people will be something major on their development plan. But in the past 100 days, we have not seen that. Rather, all we have been hearing is probes. Fine, we need to probe, but we also need to know where we are going. I am not sure the current government in Delta state, my home state has any plan in terms of housing. Same with the government at the federal level. They have no plan for housing”, Adollo stated.
According to him, “It will be good for us the professionals to let them know on time what needs to be done, if they have the thought. If they do have the thought, they need to inform us on what they want to do, so that we can advise them appropriately. Over the years, what has happened in the industry is that many governments have come with ideas that they have not been able to implement.
“Several times, they have made people who are not experts or know nothing about housing as Ministers of Lands, Housing and Urban Development, or Managing Director of Federal Housing Authority. Then, they also engage people that know nothing about construction or social housing. That is what has been happening over the years. So, we need to question the government about how they intend to take care of us, the citizens of this nation when it comes to housing.
“Housing is not a luxury, but a necessity. The minute you give a man shelter, it is assumed that 80 per cent of his problems is solved. Then he can concentrate on other things that are of importance to him, and you will see that that person will become an asset to the society. For me, I need my governor to make housing a priority in Delta state. That is the easiest way the people can feel or get the dividends of democracy. He needs to concentrate on infrastructure and housing.
“Provide housing at a give-away price to the people of Delta State. Immediately that is done, our people will focus more on how to build the state, rather than thinking of how to go and burst pipelines and engage in other illicit activities. So, even the government at the centre should make sure this housing thing is a major focus for them as well.
“The President was on BBC recently, promising that by 30th September, there will be a cabinet in place. We are hoping that someone who will be appointed as minister of Lands, Housing and Urban Development will be somebody from the industry that has the technical know-how of the industry. The Delta State governor and the President should bring in technocrats, people that understand the industry. Pick them from the private sector and let them show how housing problem of the country can be checkmated. So, that is the idea that we have, that we want to sell to the federal and state governments”, Adollo said.
Reacting to the policy of the government that it should not involve itself in construction of houses, but to provide enabling environment for developers to build, Adollo said “We are not saying the government should go into actual construction of houses for the people. What we the developers are saying is that there is the Federal Mortgage Bank of Nigeria (FMBN). If you are lucky, it takes one year or more to access funding from FMBN. This is not encouraging to developers.
“Even the houses to be purchased with funds from FMBN are not available. Remember that lands belong to the governments whether at the federal or state level. The cost of acquisition of land is very high. So, if you are acquiring land at a very exorbitant price and the interest rates are also very high because you are not able to access funds from FMBN, where does that leave us?, We are back to square one.
“Then all the houses that developers have built become out of the reach of the common man. Right now, the maximum fund you can access from any of the primary mortgage institutions (PMIs) is N15million, formerly it was N5million for decades.
But you are not able to access the fund because of so many impediments associated with accessing it. So, if you are 30 years today, and the tenure you will pay back is also 30 years, and they are also telling you to go and bring 20 to 30 percent of the cost of the house being bought, the question is, how many Nigerians can afford that 20 to 30 percent for instance, you are buying a 3-bedroom bungalow for N7.5 million?. How many Nigerians can afford that? Is it people that are on a minimum wage of N18, 000 per month?”, he queried.
On what should be done, he said the first thing is to review Land Use Act and let it be radically amended. “When I say radically amended, we all understand why governments rely so much on Land Use Act. It is because of the assets in the land.
Now, you can amend that Act to suit social or mass housing. Mass Housing and Social Housing are however, two different things. Social Housing is what you get from government like what we have in the UK.
Government build the houses for its people at next to nothing. So, what should be done is that we need to sit down and look at that Land Use Act again.
“For the 21st century, that Act is old. We learnt in economics that land is one of the factors of production and it should be free-hold. A factor of production is not supposed to be held by government. Now, if you make land available at next to nothing to the people that are in the business of providing housing, and with some level of regulation, the problem of housing will become a thing of the past in Nigeria.
So, if for every state, you want to provide mass housing or social housing for the people, then, you need to make the process of acquiring land accessing funds a lot more easier.
“The bottlenecks are too many. The government needs to streamline the process. For example, if you go to the Federal mortgage bank today, I can tell you that over 15 million people are already pre-qualified to access these funds, but there are no houses. And before these people got qualified, it took them one or two years, depending on which mortgage bank you are using. Imagine if you have stayed that long and the next thing they are telling you is that there are no houses.
“Then the government needs to stop engaging people who know nothing about housing development. A company will be registered today, and that same company will be given a contract, without prior knowledge of the person’s pedigree or projects he has done before. We always hear that the government is building houses across the federation but we don’t see these houses. “Developers are there. Give them access to funds at good rate. Give them access to lands at good rates, and also streamline the process of accessing these funds. We don’t need to put so much bottlenecks in doing things for our own people. The government should ensure that the mortgage loan is fixed. It should not be more than N7.5 million, the interest on it should be reduced from between 20 and 30 per cent, and repayment period should not be less than 50 years depending on your age.
“For somebody buying let’s say a N3.5 million house, and that person earns N18, 000 or N20, 000, per month, how do you expect such a person to pay 20 to 30 percent interest rate? So, there is still a lot the government could do. For the state governors, they may not agree that the Land Use Act should be reviewed in a way that it will suit the people, because that’s where they derive their powers from. But if they have the interest of their people at heart, they have to lessen the burden of land acquisition in their states.
