Post-Otodo Gbame: Nigeria desperately needs cheaper housing solutions

Everything wrong with Lagos state government’s recent clearance of the riverside community, Otodo Gbame, can be summarised in one sentence – Nigeria does not know how to build houses cheaply.

There is nothing strange about clearing slums and there are very good reasons to do so. President Truman’s 1949 Housing Act provided $1bn in funding to localities across America to clear slums. By 1966, over 400,000 houses had been cleared. Before that, the 1930 Housing Act in the UK compelled local councils to clear slums. It also provided them with subsidies. By 1940, nearly 300,000 homes had been destroyed and well over 1 million people moved. We can go further back – Victor Hugo was inspired to write Les Miserables by slums around Paris known as Cour de miracles. They were cleared as part of Georges Hausmann’s renovation of Paris in the 19th century.

You always get slums when the flow of people in the direction of economic opportunity happens faster than services can be put in place to cater for them. People end up living in terrible unsanitary conditions where they are exposed to all kinds of dangers. Further, it is easier for governments to provide services to people (and tax them) when they are housed in a way that is properly organised.

However, there is more to be done after clearing slums. And that is the point where Nigeria parts ways with other countries.

Let’s go back to America. By 1974, more than 2,100 urban renewal projects had been completed and localities had received $53bn in grants under the Housing Act. The grants were tied to the local authority showing a feasible method by which it would re-house people. And in Britain, 350,000 homes were being built a year in the mid 1930s. Even after Hausmann tore up and rebuilt Paris, the proportion of low income people (42%) who lived in the city did not change. This part of the penny never drops for Nigeria.

In the last 30 years, what improvement in technology or technique has happened in the Nigerian housing construction sector to make building houses cheaper? Even if cost of materials hasn’t come down, what new combinations have become popular that lower the overall cost of building houses? If they exist, they are hard to find. Most construction is still rudimentary with the use of headpans. There is hardly any improvement in density and as a result of deliberate government policy, cost of building houses remains very high. According to the Roland Igbinoba House Price Index, the cheapest 3-bedroom house currently available in Lagos or Abuja, will cost you N11m. And it is in Kubwa. The index does not show 2-bedroom apartments which tells its own story.

A 2013 document from the ministry of finance stated that a 3-bedroom house costs $50,000 to build in Nigeria and $26,000 in India. And that’s before we talk about other factors like, finance and regulatory hurdles. When faced with this kind of challenge, the easy way out is just to build expensive houses and let the problem of mass housing sort itself out, somehow. But it doesn’t; because, according to the Population Reference Bureau, in 2011, 67% of Nigeria’s urban population was living in slums or inadequate housing. The problem is now a principality – last time anyone checked, Nigeria was short of about 17 million homes that it had not built.

You are not going to be able to build houses and sell them to poor people. You will have to rent it to them. In China, a policy called ‘Economic and Comfortable Housing’ was launched in 1994 and has since provided millions of homes for the lower earners across the country, at rents calculated based on their income. The council homes built in the UK were also rented out to the new occupants at cheap rents. This part of the equation is as necessary and important as clearing the slums.

But every time a slum is cleared in Nigeria, what happens next follows a predictable pattern. The arguments always seem to settle around the question of justice and poverty. They are important but they are not enough. We need to advance the debate to hard questions about how we can build houses cheaply. In all the countries that have managed to eliminate slums without leaving people sleeping on the streets, someone somewhere sat down and found a way to make the numbers work. In Britain, house sizes were reduced, weapons factories were converted to make pre-fab homes, ideas were copied from across Europe including the use of steel frames and most of all, density was increased as much as possible to reduce unit costs.

We will need to stop worshipping cement as we currently do with government policies. How can it be that Nigeria has the world’s most profitable cement company and yet it cannot build the homes it needs? At the very least, those who have benefitted from this government policy handout can sponsor research to find ways to build cheaper homes. It will be to their own benefit, too.

Finally, we will have to pin down the definition of affordable housing. No, it does not mean that government should spend N5m to build a house and then sell it to ‘the masses’ for N100k. That cannot last for long. Affordable housing must mean that the cost of the housing is as close to the cost that people pay in rent or purchase price as possible.

Unless we advance this debate forward, the next slum will be cleared. The residents will be left homeless. Expensive houses will be built in place of the slums (because people who don’t know how to build cheaply can logically only build expensive houses). People will go to court. International bodies will get involved. There will be plenty of outrage everywhere. Meanwhile, the evicted residents will quietly move on to the next slum, to wait for the bulldozers to find them again.
Rinse and repeat.