Corruption, defiance to laws cost investors N1tr in property loss
06 November 2023 |
4:35 am
Official corruption, lax enforcement of extant building regulations, and poor monitoring by government officials contributed heavily to the over N1 trillion worth of property investment loss, which investors in Lagos State are suffering presently.
• More than N300b worth of structures may still go down
• Demolition, a huge economic waste, say experts
• Obey physical planning laws, govt tells developers, residents
Official corruption, lax enforcement of extant building regulations, and poor monitoring by government officials contributed heavily to the over N1 trillion worth of property investment loss, which investors in Lagos State are suffering presently.
An investigation by The Guardian revealed that property worth more than N800 billion alleged to have been erected without due authorisation have so far been brought down by the government in the last 14 months.
While the ruins of these buildings are strewn across parts of the state, fears are palpable that more buildings worth about N300 billion may still go down in the next phase of the demolition exercise.
Many of such structures that have contravened building and town planning laws in Lekki, as well as, those on setbacks in Jankara, LSDPC compounds, and Bombata among other locations have been marked for demolition.
Lagos is home to some of the most expensive property on the continent. This much was confirmed not long ago by a leading expert and Director of Turner & Townsend, Austria, Bruce Haswell, who ranked Lagos State as the most expensive city on the continent for the development of real estate.
Townsend explained that Lagos is the most expensive place to build in Africa at $2,056 per m2, compared to Kampala, where it costs less than half of this per square metre.
Checks showed that the average price of land in Lekki, which boasts over 100 housing estates, is about N86 million per plot, with the cheapest being within the range of N50 million to N60 million, while the most expensive starts from N120 million or thereabouts.
At one of the popular estates in Ikota, blocks of terrace comprising about 20 buildings (each worth N85 million) were demolished recently by the government.
Conservatively speaking, over 8,000 structures comprising those owned by high, middle, and low-income earners have been pulled down within the last one and a half years.
Last September, residents of the Oluwa community in Ibeju-Lekki staged a protest after officials of the Ministry of Physical Planning and Urban Development marked their houses for demolition.
The structures worth over N400 billion were subsequently demolished by the Lagos State Environmental Task Force and Special Offences Unit. The residents, who claimed to have a court judgment over the 358 hectares of land, said that they were in shock when policemen and task force officers, including street urchins, stormed the area with four excavators and destroyed over 50 uncompleted buildings in the community.
The Baale of the community, Olawale Oluwa, who lamented the rate of destruction, said that the losses incurred amounted to billions of Naira.
In Oworonshoki, Kosofe Local Council, about 7,000 homes were destroyed last August, by the state government, which claimed that the communities illegally converted the wetland into their residence. Over 40,000 households in the area were affected by the demolition, which took place after the Ministry of Environment issued an enforcement notice on July 18, 2023, to residents of Lekan Oyebade Street, Oworo, and others, for disobeying the Environmental Management and Protection Law 2017.
The most recent demolition exercise, which started on October 9, 2023, impacted many locations, including Nigeria’s most expensive residential estate- Banana Island, and Lagos Island. It also featured the partial removal of blocks of unapproved buildings in Odunlami, Upper-Campos, Tokunbo, Oshodi, Ita-Faaji, and Pasi Square.
Other locations where properties were demolished include Ikota in Eti-Osa; Victoria Garden City (VGC) Lekki; Gedegede Community; Venux Homes Phase 1, Ikota Government Reserved Area (GRA), Megamound Estate, Lekki Phase II; Lekki Phase II –Mobil Road and others.
Several semi-detached and one-storey buildings, including duplexes, terraces, and bungalows within the price range of N85 million to N150 million were demolished in Ikota Villa Estate, where a single property owner in the area lost about three buildings worth N200 million.
With the current surge in the cost of property triggered by inflation-induced cost of building materials and volatility of exchange rate, the huge investments lost constitute a dampener.
Additionally, the cost of development has doubled within the last year as the price of materials rose by almost 100 percent. The state government has been consistent in its argument that many state-of-the-art structures pulled down in Ikota, Eti-Osa, Victoria Garden City (VGC) Lekki, Ikoyi, Gedegede community, and Lekki Phase II –Mobil road were built on the canal path, failed to adhere to the required building setback, lacked planning permits, blocked water canal thereby worsening flooding in the location.
The state government has also insisted that the enforcement of environmental laws via demolition exercises was for the public good, and without any form of compensation for affected persons for engaging in illegality and flagrant disregard for the state’s planning laws and regulations.
A drone picture published by the state government, which The Guardian also obtained, revealed the extent to which developers have abused the six-metre rule in property development around canals. Some of these breaches by developers are committed in sync with government officials.
While some affected homeowners whose property in Lekki were leveled by the state government told The Guardian that they don’t know the whereabouts of their developers since the demolition started, the state Commissioner for the Environment and Water Resources, Tokunbo Wahab, said that the demolition exercise underscored the government’s resolve to restore law and order.
Wahab, who spoke through the Director of Drainage Enforcement and Compliance, Mahmood Adegbite, said that the state started serving contravention notices on defaulting property owners in the year 2000 when all the structures were at foundation levels.
According to him, they proved recalcitrant and rebuffed all measures suggested by the state government to prevent flooding, and went ahead to sand-fill setbacks of the channel preparatory to constructing more structures.
He said: “We cannot write the story of Lagos without the unfortunate incident of a flash flood. We are all aware that flooding is caused by natural forces as well as anthropogenic factors, one of which is building on flood plains and right of way of drainages.”
However, the President of the Association of Town Planning Consultants of Nigeria (ATOPCON), Adebisi Adedire, is worried by the huge amount of investment lost to the demolition considering the high cost of land acquisition, preparation of plans, cost of construction, and others.
While further deploring the huge “economic waste” occasioned by the collateral damage, he advised developers to play by the rules to avoid waste of resources.
“By the time a building is demolished, your time, money, and other things are lost. So, why invest in a white elephant venture? There is nothing bad in investing in Lagos, but the only thing is to take caution and ensure that the acquired land is free from government acquisition, has adequate planning information, and the uses have been designated. Regrettably, developers are in a hurry to develop the moment they see a vacant land, even though they may later face unpleasant consequences,” he said.
He continued: “We know that the population in Lagos is growing every day, but at the same time, people who are saddled with various responsibilities through government agencies must carry out their duties diligently. Somebody will sit down somewhere and give a developer the confidence to build even without the developer having the necessary papers. Why must you embark on such development? To avoid being a victim of circumstance, we developers and property buyers need to seek information.”
He appealed to the state government to make planning permit rates reasonable for developers and prospective homeowners as the economy is in a poor state.
“I think there is a need for the government to embark on regular information dissemination and awareness creation exercises. Buildings are not completed in a day; it is a gradual process. So, those agencies that are in charge of monitoring should be able to stop projects even before they are completed and occupied… Some government officials even lie to developers by claiming that plots of land that fall under government acquisition are from acquisition,’’ he said.
A past chairman of the Nigerian Institute of Quantity Surveyors (NIQS), Lagos Chapter, Mr. Jide Oke, argued that the government must come clean by ensuring that its officials discharge their assignments diligently through the Ministry of Physical Planning and Urban Development, which has all powers to ensure compliance with building laws.
“Government officials must do their jobs as expected instead of destroying property that has been erected. If I must ask, what were government officials looking at before those buildings were erected? They should look inward to see if some officials are compromising. All the affected structures were not built in one day. So, did the people get approval to build? If they didn’t, what was the government doing when the buildings were erected? If the buildings were marked, they should have been marked. If they were marked, why was the construction work not stopped? He asked.
Oke said what is happening in the state is a caution to would-be genuine property investors in Lagos never to invest their money without getting the state government building approval.
Also, a past chairman of the Nigerian Institution of Estate Surveyors and Valuers (NIESV), Adedotun Bamigbola, said there is a need for planning officers who are approving development projects to regularly check ongoing developments to avoid a situation where people continue to lose their investments.
“It is very sad that some developers are claiming to even have approvals for their demolished structures. I wish the government had other options than demolition. But if they say that is the only option; there is hardly anything anyone can do as long the government is not embarking on a vendetta, or out to witch-hunt anybody. The whole thing points to the fact that if you want to invest in Lagos, don’t ever try to cut corners, but do your investigations thoroughly before putting your money down,” he said.
Human rights lawyer, Mr. Femi Falana, who said that there are no laws that allow the government to demolish buildings without due process, including the issuance of notices to whoever has defaulted or trespassed, cautioned residents to follow the law strictly before and during building developments.
He stressed the need for stakeholders to unite and stamp out violations of building laws and codes. Also speaking on the development, the State Attorney General and Commissioner for Justice, Mr. Lawal Pedro, insisted that the government adheres strictly to due process before any demolition exercise is carried out in the state. He expressed worries that people disregard warnings despite serving contravention notices.
Pedro said: “The governor, Babajide Sanwo-Olu, has given a go-ahead on enforcement of our laws. But people will go and break laws on sites and rush to court to get injunctions. For now, it is rigorous enforcement of our laws; the building regulations, environmental laws, transportation law, and others.”
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