Being part of the speech by Lagos State Governor, Mr. Babatunde Fashola, at the launching of the Lagos State Home Ownership Mortgage Scheme on February 3, 2014
For many years, our people have had to acquire houses; often times being required to pay cash once and for all, as if they were buying a shirt or a pair of shoes in a shop.
This approach in part explains the reason why a large number of ordinary middle class and working people cannot afford to acquire homes on the basis of the their legitimate income derived from hard work that rewards the dignity of their labour.
In Lagos State, we have taken the view that a home is not something you buy in one day but over time, in a way that your ability to acquire it is tied to your income and continued prosperity.
Our view of a home is that it is something you pay for gradually and it is a place of safety, well built, safe and sound, to protect you and your family from the hazards of nature such as rain and heat; a place that will not flood or suddenly collapse. An asset that outlives you.
Lagos HOMS is the acronym we have created from the Lagos Home Ownership Mortgage Scheme. It is a process by which Lagosians will be given a fair and transparent opportunity to pay for their homes over a period of not less than 10 years under a mortgage scheme.
Today as we flag off this Scheme there are 1,104 completed homes while another 3,156 units are various stages of construction, and we intend to start more.
We are starting 132 units in Iponri, 720 units in Ibeshe Ikorodu, 420 units in Ajara Badagry, 648 units in Sangotedo Phase II, 216 units in Obele, 36 units in Akerele Phase II, 48 units in Oyingbo, 1254 units in Ilubirin and 1080 units in Ijora Badia.
The easiest thing to do would have been to simply sell all the houses today, collect the cash and wait for the next batch and do the same; but this is not our way. That is the simplistic way that does not solve the problem of housing. For us, sustainability is the key and I have personally benefitted from previous initiatives by my esteemed predecessors in this regard.
I am happy that we took the decision to confront this problem and I hope that the solution we offer today will be the long term solution. Part of the pride I have about this project is that we have not had to borrow money to fund any of these housing units. Our progress so far is the result of rigorous planning and financial discipline, savings and commitment. These projects have been fully funded from the taxes that our people have paid as monthly internally generated revenue (IGR).
About 3 years ago, when we took the view that the Lagos State Ministry of Housing on its own cannot deliver all the houses that Lagosians require without the active support and participation of private sector developers, this Scheme was born in my mind.
The next hurdle was how to deliver it. We started saving N200million monthly, whether the internally generated revenue increased or decreased; and today, we are now saving N500million monthly, and it is possible to increase this as more people pay their taxes.
The role of the Ministry of Housing will increasingly be that of a regulatory one, facilitating private sector housing development and enforcing housing regulations, leading research into systems building and cost saving initiatives that increase the affordability of homes and the speed of construction.
Our ultimate plan is to be the guaranteed purchasers to developers who will acquire their own land, build to our specification and to our agreed prices. This way, many more houses can come on stream because of private sector participation, and Government will use the IGR from tax payers’ money to buy from the developers and sell to the citizens on a 10 year mortgage payment.
When I signed the Landlord and Tenant Bill into law, I explained that it was the beginning of a housing plan for Lagos. Many commentators who either did not listen to me or did not understand me reasoned that I should have provided houses first. The truth is that there are empty houses. People simply cannot afford them.
While the Tenancy Law represents our moral intervention to protect citizens who earn monthly income from landlords who demand multiple year advance payments, the Lagos HOMS represents our leadership intervention to increase the stock of affordable housing on convenient payment terms.
After experimenting with a few designs of bungalows, room and parlour and block of flats, we have settled on two designs. A block of four floors, containing 12 flats of 1, 2, and 3 bedroom on each floor and a block of 12 flats of two units of 2 bedroom flats; and 1 unit of a 3 bedroom flat.
In each case, each block will have 12 flats and in this way we can optimize the use of our limited land space. We are still working on a design of a block of 18 flats with lifts while we are looking for ways to power the lifts without increasing the cost unreasonably. We have also taken pains to design the flats such that they have more space than most of what is available in the open market.
For example, our one bedroom flat is 60.22 square meters while the 2 bedroom is 75.79 square meters and the 3 bedroom is 123.88 square meters. They all contain more living area than many of the standard 1, 2, and 3 bedrooms in the market, which are ordinarily available to middle and low income bracket people who are out target under this project.
In terms of pricing, our policy is about affordability and accessibility. This is so because we have not yet found cheap or low cost cement, neither have we found low cost iron rod or low cost labour.