By Yinka Kolawole

The housing deficit in Nigeria is huge, estimated to be about 16 million housing units by the United Nations Human Settlements Programme (UN-HABITAT), the United Nations agency for human settlements, in 2007.

Recent statistics reveal that about 72 per cent of households in Lagos occupy single-room apartments, with as many as eight people living in one room. And this is believed to be the case in all major cities across the country.

Experts list some of the obstacles to housing development in the country to include inadequate finance, the Land Use Act of 1978, the long-winding process of property registration, lack of mortgage loans, dearth of credit information on individuals, unstable macroeconomic environment, chaotic process of obtaining construction permits or approvals, the tax burden, shortage of skilled manpower, high cost of building materials and poor infrastructure. They contend that in order to effectively tackle the housing problem, a multi-pronged approach is imperative.

Against this background, the Lagos State government has recently embarked on various measures to address the teething housing problems in the state, but stakeholders are wondering how far the measures can really go. In this regard, the government passed the Lagos Tenancy Law to regulate tenancy in the state, the Housing Arbitration Rules to address the issue of foreclosure and mass development of housing to facilitate the smooth take-off of the soon-to-be unveiled Lagos Home Ownership Mortgage Scheme (HOMS).

Governor Babatunde Fashola recently launched the Housing Arbitration Rules, to support HOMS, which according to him, is designed to provide equity funding in mortgage financing for residents of the state who are first time house buyers. At present, a typical home buyer will have to make a down payment that ranges between 20 percent to 50 percent of the purchase price and then pay off the loan balance within 5 years.

One of the reasons adduced for the near absence of mortgage financing in the country is the lack of strong provision for foreclosure in the Nigerian constitution, which creates incentive to lend on long-term basis. This has made recovery of property in case of default very difficult and has discouraged mortgage lending by banks in the country.

Fashola noted that the Arbitration Rules will ease the problems of recovery of possession of houses acquired under mortgage and serve as a critical incentive to bankers and financial institutions to attract them to finance mortgages, adding that this would be the critical driver of home ownership.

The governor further noted that the Arbitration Rules will provide an alternative platform for the recovery of premises from recalcitrant tenants as against the former policy, which made some landlords resort to mitigating their recovery risks by demanding multiple years’ rent in advance.

On funding, Fashola said: “Government has designed a structure whereby it would collaborate with partner banks for the provision of funds to support applicants in the acquisition of homes as well as the management of the pre-qualification procedures.”

The governor also said the state government is embarking on mass development of housing as part of the concerted effort to tackle the housing problem in the state. He said this at the commissioning of two housing estates at Ojokoro phase II in Ojokoro, just a few weeks after commissioning the Sir Michael Otedola Housing Estate in Odoguranshin, Epe.

Lagosians who spoke to Vanguard, commended the initiatives by the state government, but a number of them are still not convinced that they will solve the housing problems in the state.

Some mortgage operators agreed that the arbitration rules will go a long way in addressing the issue of foreclosure, but noted that the cost of funds still needs to be addressed, calling for an intervention fund to be set aside for mortgage providers. According to them, it is not just about spreading payment over a long period, but attention also needs to be paid to the interest rate, adding that this can only be guaranteed through intervention fund.

On the tenancy law, stakeholders in the housing sector have continued to differ in their opinions on the law. While low income tenants see government’s action as the best to happen in their time, agents those who think that the law may have removed food from their table are crying foul.

President, Nigerian Institution of Estate Surveyors and Valuers (NIESV), Mr. Bode Adediji, noted that the law is one document that would have tremendous impact on the housing landscape in the state in particular and Nigeria as a whole. He, however, contended that unless the housing shortage is confronted by way of addressing all the factors which are responsible for the pathetic situation, the tenancy law would merely turn out to be a waste of time.

The consensus is that the Lagos State government is on the right path to making sure that majority of people resident in the state have easier access to housing with all the initiatives. They, however, noted that there are still a lot more to do.