The housing sector is grappling with a surge in fraudulent activities that disproportionately affect low-income earners. Experts agree that without urgent action through digitisation, regulation, enforcement, and consumer protection, sharp practices in the housing sector will continue to exploit low-income earners, deepen inequality, and obstruct Nigeria’s broader housing development goals, CORNELIUS ESSEN reports.
NIGERIA’S housing crisis, long defined by shortages, rising construction costs, and widening inequality, is being worsened by a growing wave of racketeering that is pushing low-income earners deeper into desperation.
In Nigeria’s major cities, from Lagos to Abuja, Port Harcourt to Kano, illegal middlemen, unscrupulous estate agents, and informal “area boys” now dominate the marketing and allocation of affordable housing, distorting prices and blocking access for those who need homes the most.
What began as a side hustle in overcrowded urban centres has grown into a shadow industry worth billions of naira yearly, operating parallel to, and often in defiance of, formal regulatory frameworks.
The result is a swelling population of Nigerians who are paying more for less, navigating opaque processes, or being entirely shut out of decent shelter.
An industry of exploitation
At the heart of the problem is the short supply of quality, affordable housing. For every available unit, multiple bidders, including agents, speculators, informal brokers, and desperate tenants, compete fiercely, creating a vacuum for exploitation.
In many cities, illegal agents now act as gatekeepers to low-cost units, imposing arbitrary charges such as consultation fees, inspection fees, administrative levies, and even “community development” fees. Some demand as much as N10,000 simply for viewing an apartment, with no guarantee the property is genuine or available.
The situation is even more dire in government-funded housing estates intended for low- and middle-income earners. Investigations reveal that racketeering syndicates have taken over allocations, selling slots far above official prices. Houses meant to be distributed through transparent balloting processes are instead cornered by insiders within housing agencies, who resell them at inflated rates.
Government schemes hijacked
Several federal and state housing schemes have been marred by bribery, insider dealings, and diversion of units. Civil servants in charge of allocation often collude with private agents to sell forms or reserve spaces for favoured buyers. In some cases, beneficiaries discover that units they legitimately obtained have been reallocated to new buyers after they paid additional fees under the table.
For instance, a Lagos tenant who applied for a low-cost housing unit in 2023 recalls being asked to pay facilitation charges twice the cost of the application form. “If you don’t settle them, they say your file will not move,” she said. “Meanwhile, these houses are built with public money.”
Private sector abuse
The private real estate market is not spared. As rents surge, sometimes by 50 to 100 per cent year-on-year, racketeering manifests in the form of fake agents collecting multiple payments for the same apartment, speculators withholding units to force price increases, and landlords demanding two or three years’ rent upfront in violation of tenancy laws.
Estate valuers warn that many “to-let” signs are controlled by cartels rather than professional firms. In some high-demand areas, prospective tenants are required to negotiate with touts before meeting property owners. Failure to pay these illegal tolls can result in harassment or outright denial of access.
Low-income earners hit the hardest
For Nigerians earning below N100, 000 monthly, the crisis has reached breaking point. Many spend over 60 per cent of their income on rent, far above the 30 per cent benchmark recommended by the UN. The rise of racketeering means they pay more for accommodation that is often substandard, overcrowded, or unsafe.
Single mothers, young workers, students, and informal-sector earners are especially vulnerable. With no rent control, no subsidies, and weak enforcement of tenancy laws, they depend on informal networks that are easily manipulated.
According to the House of Representatives’ ad hoc committee, the Federal Capital Territory (FCT) loses approximately N800 billion yearly due to fraudulent activities by real estate developers, including scamming unsuspecting subscribers and depriving the government of revenue through unregistered transactions.
A notable case is the Petroleum and Natural Gas Senior Staff Association of Nigeria, which paid over N4.2 billion to a developer since 2019 and has yet to receive a single house.
A 2023 investigation by the Economic and Financial Crimes Commission (EFCC) uncovered over 60 “phantom estates” advertised by companies with no construction track record or legal approval.
Victims are lured by glossy brochures, influencer endorsements, and “early bird” discounts. The EFCC recently urged Abuja residents to avoid itinerant land vendors after arresting Nwobo Chibuike, who allegedly defrauded members of the public of between N3.5 million and N60 million through the sale of non-existent plots in the FCT.
Since its establishment in 2020, the Lagos State Real Estate Regulatory Authority (LASRERA) has received over 1,577 petitions related to real estate fraud. Of these, 1,027 cases have been resolved, and eight are pending in court. One high-profile case involved a landlord in Gbagada who collected over N16 million from prospective tenants for five flats that were never delivered. Between 2020 and 2024, LASRERA recovered approximately N478.13 million and 18 properties from fraudulent practitioners, returning them to rightful owners.
Despite having over 100,000 individuals practising real estate in Lagos State, fewer than 1,000 are registered with LASRERA, indicating a significant number of unregulated operators.
Experts raise alarm
Urban planning experts, estate surveyors, and tenant-rights advocates warn that the unchecked rise of racketeering undermines Nigeria’s broader housing targets.
According to the Nigerian Institution of Estate Surveyors and Valuers (NIESV), fake agents and illegal brokers now account for a significant percentage of rental transactions in major urban centres. The association has repeatedly called on state governments to prosecute offenders and enforce existing laws, including the Lagos State Tenancy Law and Estate Agency Regulatory Authority Law.
Housing economists note that racketeering inflates urban rents by as much as 25 per cent, worsens homelessness, and pushes low-income earners into slums, where they face risks of eviction, fire outbreaks, and health hazards.
Several factors fuel the rise of racketeering in the housing sector. Weak regulation and enforcement, chronic housing deficits estimated between 17 and 28 million units, rapid urbanisation, flourishing informal markets, and corruption within housing institutions all contribute.
Attempts by state governments to digitise land records have made limited progress. Online registries in Lagos and Ogun are often outdated or poorly maintained, leaving room for forgeries.
For victims, justice is rare and expensive. Court cases over disputed land titles or tenancy fraud can drag on for years, and many simply give up or settle informally, losing their life savings.
Analysts said addressing housing racketeering requires a multi-pronged approach: nationwide digitisation of land and housing records, strict licensing and regulation of estate developers and agents, criminal prosecution of fraudulent developers and complicit officials, and a national tenants’ protection framework.
The Managing Director of Shelter Initiative, Mrs Morenike Babalola, said racketeering, particularly land racketeering, delays housing delivery, drives up mortgage costs, erodes public trust, and sometimes endangers developers.
“In most cases, planning permits are forged to deceive potential off-takers. People pay for land or houses, and agents disappear with their money,” she said.
She explained that low-income earners are particularly vulnerable, as they often lose their income to fraudulent agents and are priced out of the market. Babalola stressed that illegal developers also encroach on genuine developments, sometimes using armed guards or law enforcement manipulation to halt construction.
Estate surveyor and valuer, Mr Zuwendu Sanni of System Property Development & Realty Limited, described various forms of racketeering, including land grabbing, illegal sales, inflated prices, fraudulent contractors, abandoned projects, and unscrupulous agents.
He warned that these practices inflate prices, lower trust, and reduce housing quality, especially in slums. Governments, he said, must enforce regulations, strengthen laws on land ownership and construction, make information public, monitor fraudulent activities, and educate stakeholders on risks.
Civil servant, Festus Ibiang, said online property platforms, while helpful, have complicated access for low-income earners, as fraudsters manipulate listings. Building contractor Seth Williams added that widespread racketeering has given fraudsters the upper hand in land grabbing, and weak oversight makes it difficult to operate in the private sector. Racketeering, he said, has also driven up the prices of government housing units, resulting in unoccupied apartments across cities.
House of Representatives member Esosa Iyawe recently called for investigations into unprofessional practices by officials of federal housing agencies, which led to deviations from approved housing plans.
He accused authorities of converting spaces designated for essential infrastructure into residential plots and selling them at a profit. “There is a need to investigate the deviation of government agencies from approved housing estates for excessive profiteering,” he said.
