Eco-Stone, a foreign firm with expertise in mass production of affordable housing using a building system called Solar Light Weight Concrete, will soon be in Lagos to drive the state’s civil servants-focused Lagos Affordable Public Housing (LAPH) initiative, the state’s commissioner for housing, Gbolahan Lawal, says.
The firm has capacity to deliver a house in just seven days, which is why the state government considers it a good ally in the implementation of the LAPH initiative, which targets 20,000 housing units to be delivered in the next four years.
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The company has already signed an agreement with the Federal Government to deliver 2,000 housing units under the government’s Federal Integrated Staff Housing (FISH) programme.
“The LAPH initiative is part of our efforts at addressing the supply side of the state’s housing challenge; we have about eight other partners with whom we have memorandum of understanding to deliver housing,” the commissioner said, pointing out that a 2014 survey carried out by the state revealed about 3 million housing units deficit.
To address the housing demand side, he said apart from their rent-to-own homeownership scheme, which is a modification of the Lagos Homeownership Mortgage Scheme (LagosHOMS), the state had also partnered the Nigerian Mortgage Refinance Company (NMRC), to provide access to housing finance through its-member primary mortgage banks (PMBs).
The state is also working with the pension commission with a view to creating a fifth fund—pension contributors’ housing fund—that will be 20 percent of present and future contribution. “It is proposed that this should be lent out at 5 percent interest rate to enable the mortgage banks create mortgages at 8.5 percent for home seekers as opposed to the current 22.5 percent,” he assured.
Apart from commending this move, analysts also see these partnerships and funding arrangements enabling more Lagos residents to own homes, especially through the Rent-to-Own scheme, which allows tenants to pay rents on the houses they live in consistently for five to 10 years, and at the end of that period, own the houses.
But there are concerns too. Given the state government’s antecedents, these partnerships may collapse mid-way into implementation.
The termination of the state’s partnership agreement with the Lekki Concession Company (LCC) which was to reconstruct the Lekki-Epe Expressway on build, operate and transfer (BOT) lease agreement is, in the opinion of analysts, a big drawback on PPP as a vehicle for delivering infrastructure.
The concession agreement for the reconstruction of the Falomo Shopping Complex, which was concessioned to Afriland Properties was also terminated by the state government under Governor Akinwunmi Ambode who argued that the concession was against the interest of Lagosians.
The state’s attitude to partnership arrangements have continued to be a disincentive to investors, especially property investors, who are attracted to the state because of its huge market.
Lagos has a large population estimated at 20 million. Its housing market can be likened to a pyramid in which supply is concentrated at the top pointed end while the base, which harbours the chunk of the population, suffers huge housing demand-supply gap.
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A recent report by on the state’s housing market says about 65 percent of the state’s population lives in rented accommodation, spending over 50 percent of their monthly income on paying house rents. This underscores the level of housing affordability among the residents.