By NWACHUKWU OBIECHINA

The monopolies enjoyed by some institutions of government are partly constitutional and result of practice over the years. PHCN, the succeeding company of NEPA, enjoys absolute monopoly in the generation, transmission and distribution of power. Similar organisations are the water, boards and solid waste management outfits established by state governments.

Their activities impede housing development in many ways. In the case of PHCN, private estate developers construct power supply network in new estates only to bring-in PHCN to connect to the national grid after the network has been certified okay by the Ministry of Mines and Power.

PHCN usually will demand for the payment of some amount termed capital contribution and from that time start collecting tariff from subscribers. The above development is not fair on the developers who must have committed large funds to provide the networks.

Other actions of government hindering the rapid development of affordable housing are the various exorbitant charges by agencies of government as fees namely building plan approval, taxes, obtaining of C of O before approval of building plans can be granted.

In addition, the property taxes charged and new rent edict enacted by Lagos State also act as disincentive to investors. The cumbersome nature of the processes of obtaining building plan approval and that of estates before any development permit can be granted, all add up to impediments. The sector is not only over-regulated but also the delays encountered throughout the process of obtaining all the necessary approvals to commence development impede progress.

The Supreme Court Judgment of 2003 makes it possible for State governments to frustrate the housing development efforts of the private estate developers, corporate organisation and even agencies of the Federal Government, like FHA, Ministry of Lands, Housing and Urban Development, and others by either delaying approvals or denying same completely.

The multi-charges imposed on residents are another source of worry to developers. The seeming confusion as to who will manage (provide post construction management) of completed estates is another source of concern. The charges, namely the new property taxes, tenement rates, ground rents, service charges and others shall be well defined, as to who shall collect and what services shall be provided to residents.

These not well-defined fees constitute disincentive to property developers.  There is urgent need to bring all stakeholders to a table to agree on the best way forward. The de-regulation of the sector is long overdue as the contribution of the private sector cannot be over-looked. Land is very central to any housing development, without it there can be no housing. So, access to land should not only be guaranteed but also made affordable.

Finance is required in both the provision of housing and in assisting the intendin beneficiaries of housing to be able to purchase them. The problem of developers is mainly the high interest rate of funds and the inability to secure long term funds because banks are more interested in giving out only short tenured funds for a number of reasons, it pays the banks to concentrate on short tenured funds because of the volatile nature of the money market.

Secondly, banks cannot take people’s deposits and give them out long-term, because it will result in investment mismatch. The housing sector is not a very good area of investment because the return on investment is very low and has a very long gestation period, hence the need to give it special concession.

Attempts in the past by government to generate large pool of funds for housing development through the National Housing Fund (NHF), managed by Federal Mortgage Bank of Nigeria (FMBN) have been met with myriads of problems and not much success. Those looking for mortgage to buy houses find it very difficult because of the many requirements, conditionalities and the ceiling on the amount to be granted is not realistic.

The arrangement for funding and provision of mortgage should be re-engineered for better accessibility. The quantum of available funds to be used for funding housing and mortgage should be expanded by tapping other pools of idle funds like that of pension, unclaimed dividends and host of others. Government as a matter of urgency should address the escalating cost of construction materials. The exorbitant costs of these materials are discouraging developers, both private and corporate.

The construction technology used in the production of housing will to a great extent determine the cost. In our environment where labour is very abundant, the use of labour-intensive technologies will generally be more economical and in addition create job opportunities for the large pool of unemployed youth.

There is need for the sector to work in concert with research bodies that specialise in the development of construction materials and techniques. This will make the conversion and integration of research findings into the operations of the sector easy. The ivory towers should also be collaborated with, as the utilisation of the research works will result in cost savings and better performance.

•Concluding part of a paper by OBIECHINA, an engineer with Federal Housing Authority (FHA).