Lagos: Still grappling with affordable housing for low-income earners
![](https://guardian.ng/wp-content/plugins/ventra-lazy-load/images/1x1.trans.gif)
Govt: We Are Reviewing The Mortgage Scheme
Housing is a basic necessity of mankind. Perhaps that is why issues around it are taken seriously globally.
According to the United Nations Habitat, 30 per cent of the world’s urban population resides in slums, with deplorable conditions, where people suffer from several deficiencies, including lack of access to improved water, absence of sewage facilities, living in overcrowded conditions, and in buildings that are structurally unsound.
There are conflicting figures about Nigeria’s housing deficit, but experts often quote between 17 and 21 million.
According to the Lagos State government, about 187, 500 new homes are needed over the next five years to reduce housing deficit in the state.
Owning a home in the urban part of Lagos, does not come cheap and this is the reason for the constant outcry for government’s intervention in the provision of housing, especially for the poor and the not-too-poor in the society, who cannot afford hefty fees charged by private sector estate developers.
Lagos State has over the years been doing its bit regarding the provision of affordable housing. Specifically, during the tenure of Alhaji Lateef Jakande, one project many won’t forget in a hurry is the massive housing units built across the state. The over 30,000 housing units were built in Amuwo-Odofin, Ijaiye, Dolphin, Oke-Afa, Ilasan-Lekki, Abesan, Iponri, Ipaja, Abule Nla, Epe, Anikantamo, Surulere, Iba, Ikorodu and Badagry.
The houses were for the poor within the society, and that explains why they were called low-cost housing estates.
Jakande also ensured that a larger chunk of those allotted the flats were those it was meant for. Since then, no government in the state or outside of the state has matched that feat.
Under the immediate past administration of Babatunde Fashola, efforts were made to provide some housing units. Even though direct government intervention in housing should necessarily impact the poor and average citizens positively, many questioned whether Fashola’s housing intervention was for these classes of people, considering the rate each unit went for.
For instance, some of those units constructed in Igando, Mushin, Amuwo Odofin, Epe, Ikorodu and Ikeja among others went for between N17m and N18m, especially the three-bedroom flats. These are figures clearly beyond the reach of low-income earners.
While the estates in Ilupeju and Mushin have been completed, those of Amuwo-Odofin and Igando have been taken over by grasses, even though a section of the Igando Estate is nearing completion.
The Epe Housing Estate, which plays host to bungalows, unlike the others, which are storey buildings, also requires finishing touches before they can be habited.
Generally speaking, these estates are predominantly in the state they were when Fashola handed over to the incumbent administration, even as all contractors have left site.
However, the state government has reviewed downwards, the price of each of the units, with the new rates ranging from N1.5m (for a room and parlour) in Epe, but three-bedroom flat in Iponri remains at N25m.
Figures from the state government indicate that those interested in two-bedroom flats in Igando, Iponri and Sangotedo, other than paying the five per cent down payment, are also expected to make a monthly payment of N68, 555; N210, 938 and N105, 469 respectively.
For Esther Oromidayo Thontteh, a lecturer in the Department of Estate Management, University of Lagos, after Jakande’s era, there has not been housing projects targeted at the low-income earners, if the rates the units are sold for are taken into consideration.
“And because we run a capitalist economy, housing projects are executed with profit as the ultimate goal, which should not be,” she stated.
She noted that when the present governor came into office, he promised to consolidate on Fashola’s efforts, so it is expected that he would consolidate on the Lagos HOMS Project initiated by his predecessor.
The university teacher, however, maintained that with the price tags placed on the units, the Lagos HOMS Project is not for low-income earners, especially when considered from the United Nations standpoint, where an adult is not expected to spend more than 30 per cent of his/her income on housing.
“Let us take the N4.3m apartment as an example. You are expected to pay the 30 per cent down payment and the rest over 20 years. The minimum wage is N18, 000 and the annual cumulative is N216, 000.
“Thirty per cent of the N4.3m apartment is N1.29 million and monthly payment would be N25, 083.00, which is higher than the basic salary. Since the United Nations said you should not spend more than 30 per cent of your income on housing, the 30 per cent of the basic annual income is N64, 000.
“It means a Level One officer should not spend more that N65, 000 annually on housing, because it is assumed that from his earnings he would make provisions for transportation, school fees and feeding. So, you know he cannot even afford it and it is not affordable.”
Thontteh disclosed that an analysis of Level One to Level 15 officers in the public service was conducted, and surprisingly, workers on Grade Level 14 cannot afford the two-bedroom flat at Ogba, which is about N14 million.
“When you add the interest rate of about 9.5 per cent, the total sum goes to about N17m to N18m to be paid over 10 years. So, it is obvious you are not also planning for middle-income earners. So, the Lagos HOMS is still feeding the high-income earners.
“A Level 14 officer should have put in an average of 10 years of service, but in spite of that, he cannot key into the state housing project. If such officer cannot, then whom are they planning for? Things like this kill motivation among the workforce.
“For instance, someone is earning N150, 000 per month, minus 30 per cent present accommodation need, minus other needs, including school fees and feeding. What would be left that would serve as disposable income that can be put into housing programme? So, first and foremost, I cannot afford the 30 per cent down payment from my salary. It becomes a burden and I begin to wonder how long it would take to own a house in Lagos.”
Thontteh said though the state government is trying, it is not taking the poor masses, that is low-income earners into consideration, and this is the particular group that is truly in need of housing units through government’s intervention.
“Until we are able to provide housing that artisans can afford, that is when the people would say that government thinks about them,” she added.
Still ruing the skyrocketing cost of getting a personal accommodation in Lagos by low-income earners, she said: “Lets say we want to buy a plot land in the Ilupeju or Gbagada area of the state. Averagely, a plot land in these locations goes for between N15m and N25m. If I get one for N25m, it would take me about 10 years savings, as a lecturer to make the payment, and if it takes 10 years to buy a plot of land, how long will it take to build the house?
“So, this is the pressure the working classes are actually facing. And if one’s savings cannot buy a plot of land within three years, it means there is a problem. And most workers’ savings cannot buy them land within three years,” she lamented.
Thontteh called on governments to make deliberate efforts to factor in the poor and low-income earners in subsequent housing programmes they embark on.
“With that, low-income earners would have some housing units targeted at them. It could be a policy of the government and it could really work, as it has worked in other climes.”
According to the state Commissioner for Housing, Gbolahan Lawal, the Ambode-led administration met the different housing projects at different stages of completion. Some were as low as 10 per cent and others as high as over 85 per cent, but the government decided to complete those above 85 per cent and give them out, as quickly as possible.
He stressed that the present administration also decided to recreate the entire mortgage scheme, taking into cognizance, the demography of the residents.
“And with the demographic report by the Ministry of Budget and Economic Planning, we were able to see that the ability of residents to pay had reduced.
“Another reason we decided to review the mortgage scheme is because of the economic downturn, as we looked at the ability to pay including those within the scheme, who were struggling to meet up with their monthly payment. This was why we came up with the rent-to-own policy, whereby an applicant pays five per cent of the cost of the unit and spreads the balance across ten years. And we felt that would be the best with six per cent interest rate.
“We also introduced rental services where a tenant comes in with a deposit of an extra month, and renews his monthly rent. So, we have rent-to-own policy for those who want to own a house and rental services for those who could not pay the five per cent. The outright payment we retained for those who want to go ahead with it.”
Lawal also informed that the recession battering the country made the government to look at the prevailing market prices and to reduce it for some of the housing units, especially those that the prices had already been fixed, and not those still under construction.
“Among units that we reduced the prices are the two-bedroom houses that were going for N7.2m and the one-bedroom facility, which went for N4.3m. Now, the one room and a parlour facility goes for N1.5, while the two-bedroom goes for N3. 5m and the one-bedroom for N2.3m.”
On claims by some that the Ambode-led administration has done little in the area of provision of accommodation for low-income earners, as well as the alleged discontinuation of construction work at the estates, the commissioner said: “It is not true. You are not a builder, so you cannot determine whether it was the last administration that worked there last. This administration has done 18 months, yes. But you saw the estates from the outside, did you go inside to see the kind of work we have done. And that was why I told you that we met some at advanced stage of completion and we completed them.
“The Ilubirin Housing Project is a different ball game, as it is now a Public-Private-Partnership project. What we had before the private developer came in is the equity contribution of government and the developer is adding about N200 billion to be executed in five years. It is going to be residential and commercial.
“Work is ongoing at the Amuwo Odofin Housing Project. When we came, it was below 35 per cent completion, but we decided to complete those that were about 65 per cent completed. The economic situation did not allow the government to complete those that were below 50 per cent, as we had to weigh our options.”
Lawal said the state government will continue to intervene in these projects and was doing all it could to bridge the housing gap.
![](https://guardian.ng/wp-content/themes/guardian2021/img/newsletter_icon.png)
Get the latest news delivered straight to your inbox every day of the week. Stay informed with the Guardian’s leading coverage of Nigerian and world news, business, technology and sports.
0 Comments
We will review and take appropriate action.