Experts seek off-takers financing for affordable housing
Flustered by the need to cushion effect of housing deficit, experts have advocated sustainable delivery of affordable housing through off-takers financing at single digit interest rate.
Off-taking provides a wider set of possibilities for tenants willing to forego immediate occupancy in return for buildings that tick the right boxes in terms of location and finishing. It involves an agreement normally negotiated prior to the construction of building or production of a facility.
The Managing Director, Affordable Housing Ltd, Yemi Adelakun, who led the call at a housing workshop in Abuja, said a recent UN Habitat conference identified 11 critical success factors for delivering affordable housing. These, he said that include, land, technology, expert knowledge and skilled manpower, building materials, infrastructure and finance. However, he stated that the most critical and most elusive success factor that affects all other factors identified, is finance.
He, therefore said there was the need for a change of focus from the prevailing approach which is to provide construction finance without making adequate provision for off-takers’ finance to buy or rent the completed houses from developers.
To him, “This is why there are so many houses in locations nobody wants to live and at prices nobody can afford. Without finance to give off-takers, the purchasing power to buy houses, housing deficit figure remains a mere want or wish. We need to turn the want for housing to effective housing demand through adequate access to housing finance at affordable prices.”
Adelakun reinforced that by financing off-takers, ‘we will indirectly be financing the developers’ stressing that the approach will encourage developers to be competitive in price, quality and speedy delivery of affordable housing on a large scale.
He said, “Housing, as we all know is one of the most basic needs of humanity. Beside satisfying basic shelter needs of the populace, decent housing has multiplier effects of enhancing economic development, improving standards of living and well being of the people, reducing poverty, creating jobs, reducing incidence of diseases, poverty and insecurity as well as beautifying and sustaining the environment.”
“It’s common knowledge that there is a huge housing deficit in Nigeria especially in the low and medium income range. Housing deficit in Nigeria is estimated to be between 17 to 22 million. The challenges leading to housing deficit in Nigeria must be addressed deliberately and systematically if we are to achieve significant and sustainable success in delivering affordable housing to the teeming population of Nigeria.”
The expert posited that effort of government and its agencies like, the Federal Mortgage Bank of Nigeria, Family Homes Fund and Federal Government Staff Housing Board offering 6percent; 5percent and 3percent interest rates respectively are appreciated.
However, he said it was clear that these institutions are limited in their funding capacity to finance affordable housing given the existing level of housing deficit such that only a small percentage of Nigerians can qualify and secure mortgages through these institutions.
“We may be hoping for enhanced capitalization of these institutions in the future and possible special intervention fund by government, off-takers must engage in self help through innovative principles of Cooperative Housing”, he said.
On his part, the Executive Secretary, Mortgage Banking Association of Nigeria (MBAN), Mr. Kayode Omotosho lamented that the majority of Nigerians currently lacked quality and affordable homes due to the fact the available homes are those developed for the high end of the market. According to him, awareness on the various platforms/windows through which low-income earners could access opportunities for funds are not made available by the major stakeholders.
Omotosho said improve funding initiatives are needed for the developers and other professionals in the industry to boost the citizen’s ability to access affordable homes options.