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Lagos and the challenge of housing delivery

IN eight years, between 2011 and 2018, Lagos State government through budgetary allocations to Housing and Community services, had committed about N390 billion public fund, to different housing projects in the state. From the official statistics obtained N26.761 billion went into housing provision in 2011, N42.812 billion in 2012, N46.149 billion in 2013, N50.537 billion in 2014, N49.03 billion in 2015, N62.713 billion in 2016, N50.290 billion in 2017 and N59.90 billion in 2018.

Despite the huge financial commitment by the last two administrations in the state, poor accommodation provision has remained a major deficit in the performances of both the immediate past government of Babatunde Fashola, the current Minister of Works, Power and Housing of the federation and his successor in the state, Akinwunmi Ambode. To the credit of Fashola as Lagos State governor, his housing project known as LagosHoms stands shoulder above others, after the Lateef Jakande era between 1979 and 1984, which is generally seen as the golden moment of public housing project in the state.

Beyond the usual challenges of civil servants’ crooked involvement and allocation bias, one major poser regarding the LagosHoms project is, success at what cost? This brings out the question, why many housing estates, without occupants?

The common refrain at different fora where issue of housing deficit in Nigeria is being discussed is”17 million  deficit”. However, questions are always arising, who carried out the census; how was the data arrived at, et al?

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Beyond the figures, an incontestable fact  is that accommodation shortage is more pronounced in Lagos.

However, findings revealed a “glut” in the commodity, begging for occupants. contrary to  expectations. In essence, the situation is like the proverbial “water water everywhere and none to drink”.

From the available data provided by those in the housing industry, close to 35 housing estates are in Lagos, with more than 154,000 units of different house types provided by private developers, yet to be occupied, with almost 60 percent located in Lekki-Victoria-Ajah axis, while others are scattered around Ikeja, Magodo, Ilupeju, Ojodu-Berger-Omole axis respectively.

While many of the developers collaborate with state government, others simply rely on loan from banks, to finance their projects.

Along the Badagry Expressway are a few of such projects that belongs to government institutions, such as the Nigerian Central Bank, amongst others.

For government schemes, findings revealed that most of the estates have vacant apartments, some reserved for political leaders, to serve as means for patronage. A typical example is the LagosHoms, in Gbagada Housing Estate, where six units of apartments consisting of four flats each, were reliably said to belong to an influential political leader in Lagos state.

“These apartments are specifically reserved for our leader. Not here alone, but virtually, in all locations where you can find government schemes. Not that alone, most of political leaders are usually the beneficiaries of this largesse”, a retired senior official in the Housing Ministry, who spoke on the condition of strict anonymity, confided in Nigerian Tribune.

Developers’ nightmare.

While the exact number of private developers operating in the state, are yet to be ascertained as of press time, at least there are 35 major ones who have contributed inmmensely, one way or the other, to housing delivery, with majority of them having as many as 10 locations of different house types.

However, there is a growing murmur among them, even the most notable ones, of ‘bad market’.

Expressing his frustration to the Nigerian Tribune, a developer, whose estate is located in Sangotedo area, along Lekki-Epe expressway, said he was so desperate to sell the entire estate as a result of dearth of clients.

“To tell you the truth, I’m desperately in need of buyer. I prefer to sell the whole thing and offset the loan that keeps mounting every month”, he said, adding that the prices for renting-out, were just too ridiculous.

He said he would not meet his financial obligations to the banks where he obtained loans in the next 15 years, “not to talk of making profit”.

Prices of three-bedroom apartment range from N30million to N50million for outright purchase, while similar apartment for rent, is between N500,000 and N600,000 per annum, excluding other charges.

Beyond pricing, another factor making business difficult for some of the estate developers, is the terrain of their locations, where infrastructure, especially, access roads and drainage system, are usually poor. This has manifested glaringly in the Lekki axis, where anytime it rains, it’s usually difficult to get to one’s destination. \“In Lekki, there were many houses that remain unoccupied. Indeed, owners of such houses left for Island where they were once tenants, as a result of lack of infrastructure.

“Go to government’s New Town Development Scheme, managed by NTDA, most of the allottees are yet to take possession of their lands. This is government estate where one expects things to be in order, but the opposite is the case”, said an Estate Manager, Mr. Yemi Oguntola, who spoke with visible frustration on his face.  Intervention by successive administrations:

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Dolphin Estate, model or tokenism?

For many Lagos residents, the name Dolphin Estate Ikoyi rings a bell as one of the abodes of the affluent in the nation’s “Centre of Excellence”.

Dolphin Estate was developed by Messrs HFP Engineering Nigeria Limited in the early 1990s, for the Lagos State Development and Property Corporation, LSDPC. To make way for the construction of the estate, the dilapidated Jakande Housing Estate at Ijeh was demolished because it had become an eyesore and degrading to the neighbourhood. .

 

 Ambode’s Rent-To-Own

The Rent-To-Own and Rental Housing policies of Governor Akinwunmi Ambode’s administration is aimed at making housing more readily affordable and accessible for Lagosians, so says the current administration.

Commissioner for Housing, Prince Gbolahan Lawal, at the inauguration of the scheme in December 2016, said the schemes listed for the programme include Sir Michael Otedola Estate, Odoragunshin-Epe; CHOIS City, Agbowa; Alhaji Adetoun Mustapha Estate, Ojokoro and Oba Adeboruwa Estate, Igbogbo-Ikorodu, (all put in place by the immediate past administration of Governor Fashola). Lawal said accessing housing units in the state had been largely on cash and carry basis which ended up excluding majority of the citizenry, which the Mortgage Scheme, introduced,  by the administration, was reportedly programmed to address.

“Even though the Mortgage Scheme was able to accommodate more people on the home ownership ladder, a large number can still not afford to become home owners as they are unable to meet the requirement of 30 per cent equity contribution which the mortgage scheme demands”, he analysed.

According to him, the rent-to-own policy targets the low and medium income earners in both the formal and informal sectors. Under this arrangement, individuals are required to pay just 5 per cent of the value of the housing unit as commitment fee and the balance is spread over 10 years.

“But the extent at which the programme is succeeding is yet to be quantified, because there has never been a visible addition to the existing ones met on ground by the current administration”, claimed Dotun Adetoye, another commentator, who stated that Ambode is “just fine tuning” what he met on ground.

 

Why we aren’t building for  masses- Developers

Chief David Olayemi, CEO, Golding Rule Estate, sees the clamour for mass housing by private developers as a mirage. “We are not philatrophists, but rather business people. The argument that we should look for where land is cheap to build houses doesn’t jell at all. Is land the only factor? What of building materials? What of labour? What of charges for land documentation? Or are we to talk of double-digit payment for bank loans, not to talk of inflation that causes unstable price of building materials?”, argued Chief Olayemi.

The Chairman, Righteous Builder, Chief Lanre Rasaq, also listed why mass housing was difficult for private developers.

According to him, factors of housing production like land, building materials, labour and difficulties in accessing loan in Nigeria are enormous.

“It’s only those that built for rent that can venture into mass housing with location in high density areas, where purchasing power of their targeted clients is low. But even at that, no sensible developer can do that except he or she is into philanthropic venture. It’s only government that has the luxury of such venture”, said Chief Rasaq, adding that with sincerity of purpose, government can successfully partner with private investors.

 Our woes–accommodation seekers.

Respondents who are desperately in need of accommodation have a lot of stories to tell.

Seye, Tunde and Niyi are friends whose families are not in Lagos. Because they work in the same organisation, they decided to team up and get a flat in Ilupeju. The accommodation, a 2-bedroom apartment attracted N500,000 per annum, which they shared among themselves.converting the sitting into a room, so that all of them would have their privacy.

“Suddenly, Tunde lost his job as a result of reorganisation at his work- place, while Niyi was transferred to Abuja, living me in a limbo. I was forced to go and team up with a friend because I can’t afford outrageous amount placed on many vacancies avilable!”, Seye concluded.

Mr Tunji Ademola’s case is a bit fair. His words:”I got an accommodation in one of the government housing estates in Ojokoro. Although, the apartment was said to attract N7.2million. But going by Governor Akinwunmi Ambode’s “Rent-To-Own” scheme, the apartment cost N5miilion plus. But the bonafide beneficiary gave it out to us for the original price, which I’m happy with because the place is close to where I’m working”, he said gleefully.

Another resident in Parafa Area, Ikorodu North, Mr. Jacob Ajobiewe, an accountant, whose office is in Ketu, also narrated his personal experience, which he said was recent. “The problem is not solely on the price for housing, but rather, the commission and other charges. I would want government to build more low cost houses, from which working class group, the artisans, petty traders, and others in that categories would benefit. If the feat could be performed in 1979-1983, by Alhaji Jakande, when Lagos revenue was so paltry, what stops the successive administration from doing more, regardless of rising population the city is witnessing today?

Samuel Nwosu, who operates provision stores in Idumota, Lagos Island also shared his experience on how he got an apartment in one of Jakande Estate, Isolo.

“ it was when my friend relocated to abroad and he learnt how I was duped by estate agents that he told his sister to sublet his apartment for me. Though, an old building, one would say, but paying N250,000 annually for a 3-bedroom flat in Isolo is a big relief”, he said.

These and many were the traumatic experiences by many accommodation seekers in Lagos, a situation forcing many people either back to their villages, or relocating to the suburbs, where things are not that easy, particularly, economic-wise. .

 A developer’s crisis.

Negative publicity that attracted an unfortunate building collapse of a popular developer almost two years ago, was considered a great setback for affordable housing drive in Lagos.

According to a developer who is suffering from the bug of lack of willing tenants, “ what happened to (names withheld) is unfortunate. This is a firm that succeeded in bringing people of different financial background to be landlords/tenants from high density locations to highbrow Lekki, among other places.

“But see how a singular event of building collapse destroyed all the good things the firm has done for accommodation seekers? See the kind of politics that accompanied the development?”, he quipped.

Sharing his own experience, he said he committed N650million on a 24 units of 3-bedroom and 2-bedroom apartments, six duplexes and two semi-detached apartments, in Sangotedo area in Lekki.

“It’s more than two years now that we had completed the project, but unfortunately, we are yet to fill the vacancy. While some prospective tenants or buyers are complaining of high price, others are complaining about the terrain.

“With all these, debt is mounting and frustration is setting in”, he complained bitterly, but declined to reveal how much he’s owing the bank.

“No, this is a joint venture, all the partners will bear the burnt, only that it weighed enormously on my credibility, because I’m the driving force of the project”, he said.

 

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