The Oniru of Iru-land, Oba Abdulwasiu Omogbolahan Lawal, a foremost traditional ruler in Lagos Island, has noted that Nigerians can have access to affordable housing through innovative schemes.
The traditional ruler noted that players in the housing market should be able to provide affordable housing for the citizens through innovative financing mechanisms.
He argued that if govenment and other stakeholders in the housing industry are serious about alleviating the sufferings of the masses, as far as housing is concerned, there should be drastic and urgent change in the nation’s housing policies.
The Oniru who was the special guest of honour at an interactive session with stakeholders in the housing industry at the 17TH Arica International Housing Show, Abuja, pointed out that government should look at various ways to achieve the Millennium Development Goals, with housing, food and and adequate national security as priorities.
Oniru who was a three-time commissioner in Lagos State, under, former governors Raji Fasola, Akinwunmi Ambode and the present governor Babajide Sanwolu, before he was installed the Oniru of Iru-land, spoke on the theme, “Current Trends In The Housing Market And Providing Affordable Housing for the Citizens, through Innovative Financing Mechanism”
According to him “it was imperative for government to get things right; I do know that we all see the urgency of the situation and I believe that the new administration will tackle the issues militating against adequate and affordable housing, particularly for the teaming masses”.
He said “Current trends in the housing market is providing affordable housing for the citizens through innovative financing mechanism.”
“The housing market in the nation is fast evolving and despite this, affordability remains limited to a certain strata of society, especially the white collar middle class employees and certain categories of public sector workers with relatively decent income. Others are small business owners and diaspora buyers. These are the current main drivers of the real estate market which delivers an average of 5000 homes annually through government direct intervention and private sector initiative”.
“Unfortunately, these interventions are like a drop in the ocean when it comes to addressing the housing deficit which arguably stands at around 20 million shortfalls. The implication is that those in the lower rung of the pyramid like housing demand are left to their fate. Major fallout is the fast growing volume of unregulated developments which results in sprawling slums in the suburbs and fringes where the average worker can find cheap and perhaps untitled land and struggle to build.
“This presents a challenge as the assets being illegal risk demolition. Many of such properties have practically no infrastructure and also can’t be effectively incorporated in the nation’s electricity, water, transport or even security systems. Consequently, governments at all levels are unable to take advantage of such wasting assets to generate income from properties taxes and tenement towards providing more social services to the people. The biggest losses and instability to nation electricity grid occur at this level.”
The Monarch stressed that “Worse still is the impact of long hours of commuting from further out of employment centres by residents of those communities thereby adversely impacting on their general and mental health as many spend hours travelling daily. This also impacts on their monthly emoluments as they spend a large part of their wages on transportation. At the end of the day, low productivity and life expectancy of work force impact on the national GDP.”
Oniru however emphasised that to address these challenges, Nigerians must find innovative ways of catalyzing the housing market which is a very major contributor to national GDP and productivity, saying this has been a recurring line in many workshops and seminars over the years without any government belling the cat because of over reliance on weak mortgage architecture in the system.
He contended that the Lagos State Government pioneered a Home Ownership Mortgage Scheme which is still evolving and as Commissioner for Housing, he was able to see first-hand the lacuna and that is part of what emboldens me to make these proposals.
He pointed out that “I believe it’s time for bolder action and to do something unconventional in the short term whilst trying to fix the mortgage architecture that will develop our mortgage banking landscape, including the regulatory agencies.”
The Monarch stressed that Home ownership and revolution in the housing market when done on a large scale will kick start the Industrial Revolution we’ve often talked about.
Continue he remarked “The feeder industries for the raw materials for home production on industrial scale, ranging from development of local capacity in iron and steel production, aluminum production from ore to finished product, local glass industry, tile production, paint industry, sanitary, electrical fixtures and fittings, doors etc are some of the biggest employers of skilled and unskilled labour off site.”
Oniru stressed the positions of the summit that as part of the palliatives government is proposing to cushion effects of subsidy removal an others, an audacious and ambitious housing initiative should be launched by government driven by reputable private sector players.
He emphasised that under the initiative of 1 million homes a year, the government working with say 100 developers on pilot phase will issue a Bank guarantee to each for 10,000 homes each in batches of face value of 1000 unit per time.
He noted “Each of these developers for pilot phase will provide land with good title and in some case government will yield some of its land in urban areas and fringe suburbs with good road network and easy access to employment centers, like existing barracks.”
He was of the view that government will open new layouts and build world class connecting roads and rail to access these areas in less than 2 hours as well as service them.
He said “Depending on the set cost of homes say N10m average, the face value of each guarantee is N10 billion. The guarantee crystallizes for every 250 units delivered and upon completion of the 1000 units, the homes are aggregated and placed with an asset management entity; say ministry of finance incorporated (MOFI). They are then securitized and rolled over to performing entities to continue delivery cycle.”
“With these pool of assets produced in well-structured settings in preferably centers of employment and metropolis, the landscape of cities and suburbs will change and homes retailed to end users on rent to own basis with an initial 10% deposit and balance over 15 to 20 years. Imagine the impact on the well-being of citizens. The initiative will create reverse flow of capital and the industry servicing this behemoth will build capacity to compete in the export market as local demand is being satisfied as well as create highly trained work force.”