Nigerians still burdened by huge housing deficit 63 years after

Since independence, Nigerians have not seen the best of times in housing, as demand consistently outweighs supply, while prices are far beyond the reach of many citizens. Efforts of governments remain a drop in the ocean and private interventions lack an enabling environment to drive down costs, Victor Gbonegun writes.

The nation’s housing sector is not out of the woods yet, as Nigerians continue to live in poorly built, unsafe shelters and struggle to secure affordable homes over six decades after the country’s independence.

The nation’s housing deficit is estimated at 28 million units as of 2023, while the population is expected to reach 223.8 million this year, according to the United Nations. An estimated N21 trillion is required to provide housing units and bridge existing deficits.

The Guardian checks show that on the average, the level of housing delivery stands at a paltry two dwelling units per 1,000 people, which is quite poor when compared with the United Nations’ recommended figure of 10 units per thousand people. Total yearly housing production is below 100,000 units, while home ownership is below 50 per cent.

Governments across levels have not given the housing industry required attention with the private sector still leading the role in providing accommodation for Nigerians, which oftentimes does not come at a cheaper price.

A studio apartment still costs about N43 million, while rent for the same property can be as high as N1 million in a strategic location. Many Nigerians earning a living wage of N30, 000 can’t secure such apartments even as they resort to remote locations for cheaper living. Prices of land and building materials also continue to rise due to inflation and foreign exchange rate volatility.

Currently, the country’s housing industry faces unresolved tenure arrangements, high materials cost, lack of access to good infrastructure, building collapse with over 461 cases in the last four decades, lack of affordable mortgage, deficient housing finance arrangements, high interest loan conditions from banks, delay in processing legal documents and poor housing policies.

Other initiatives through the National Housing Fund (NHF), Federal Mortgage Bank of Nigeria (FMBN), Family Homes Funds (FHF), Association of Housing Corporation of Nigeria (AHCN), and Federal Housing Authority (FHA) have not met the needs of most Nigerians.

Stakeholders argued that Nigeria needs a strong and feasible housing policy as the current policy is outdated. They noted that governments’ deliberate policy to encourage provision of social housing through attractive tax rebates and incentives is lacking.

The President, Nigerian Institute of Town Planners (NITP), Mr. Nathaniel Atebije, said Nigerians have only been battling with the provision of shelter, while housing receives only lip service.

He argued that housing has been deficient in quantity and quality to meet the aspirations of Nigerians, while good housing has been reserved for the rich.

Atebije explained that housing only makes sense when other attributes for quality living accompany it such as engineering and social infrastructure. Some of the interventions of the government, he noted, have been arbitrary because decisions on where to build houses have been based on political considerations.

The NITP president wants governments to always plan for settlements, indicate locations for housing development, collect data on housing needs, prepare the layout for housing projects in a suitable location, as well as provide infrastructure before commencement of the houses.

“Nigeria needs a strong and feasible housing policy. The current policy is outdated. A new policy should encourage the participation of the private sector through affordable mortgage arrangements. Such a policy should also encourage the advantage of vertical development and discourage low-rise buildings,” he added.

AHCN President, Dr. Victor Onukwugha, said the nation needs pragmatic approaches and appropriate strategies to tackle housing deficit and affordable mass housing production with a view to utilising housing as a veritable tool for economic recovery, thereby empowering the people to reduce unemployment in the society.

He said: “We can only achieve this onerous task through renewed government’s commitment to social housing. One of such incentives is a specially crafted housing finance backed and supported by appropriate laws that will regulate the process both on the supply and demand sides at a single digit interest rate.

“The use of local building materials should be deliberately encouraged and promoted to arouse acceptability by the general public, who have developed apathy for its use. The federal and state Ministries of Housing should concentrate on providing the enabling environment and supervision for the housing agencies to fulfill statutory mandates.”

According to him, with the rapid population growth in the country lies an opportunity for rising demand that can be converted to gain by the government if properly activated and harmonised.

Onukwugha said: “Until a deliberate attempt is made to address housing challenges of low- and medium-income groups, the housing deficit gap will continue to widen.”

He said the government should create an enabling environment for the development and promotion of the Real Estate Investment Trusts (REITs) market to build an off-takers’ base to attract investors and fund the housing and construction sector, as well as stimulate the mortgage market.

However, the Chairman, Council of Registered Builders of Nigeria (CORBON), Dr. Samson Opaluwah, said the construction sector of the country has fared well in terms of local control of the construction industry, adding that most of the construction companies presently are Nigerian owned and or registered companies, which was not the case in 1960.

According to him, the challenges range from high cost of building materials to poor quality of works across the entire industry from roads, to rails and buildings. He observed that poor construction, coupled with poor or lack of maintenance has resulted in so much national resources expended without commensurate returns.

The President, Nigerian Institute of Architects (NIA), Enyi Ben-Eboh, argued that the story of housing has not been too different from the nations’ performance in key areas of the economy and can be traced to inability to match population growth with available housing stock, which have been growing at inverse proportions.

He noted that since independence, effort have been made by successive governments to address the housing needs of the populace through direct construction of houses by government using various special purpose vehicles such as FHA and housing corporations in the states before the private sector came on board albeit for the middle- and upper-class segment of the market and at the detriment of the low-income cadre of society.

Ben-Eboh said available policies had merely scratched the surface of the problem, which can be attributed to several factors, such as poverty and dwindling finances, which is closely tied to the inadequate stock of mortgages, infrastructure deficit, land title challenges and the dearth of appropriate technology to drive down production cost.

For him, the government should create an enabling environment to address the needs of various segments of the population through a combination of provision of mortgages for a large segment of the population, improve infrastructure provision, ease the process of land title acquisition, enact foreclosure laws to encourage private investment in mortgages, encourage private sector investment in local building products for sustainability and cost reduction, as well as encourage research in alternative construction methodologies that will drive cost down in the long run.

He also said the government should partner with professional bodies in the built environment and research institutes to work out modalities for home-grown solutions that are efficient and sustainable.