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Affordable Housing

Why Nigeria should revert to low-cost housing

The state manages social housing and because it is accessible to low-income earners, it is sometimes called low-cost housing.

Events of the recent past have shown that Nigerians prefer low-cost housing to the conventional housing estates now in vogue. A lot of reasons have been adduced to support the idea of low-cost housing against the conventional or the modern housing estates. One of the reasons is the fact that the houses have the same structure and features, yet, as the name implies, the cost of owning or renting such houses are relatively cheaper compared to what we have now days.

The challenge of housing in terms of quality and quantity appear to be the same all over the world, but in Nigeria, it is more of a complex case. It is the primacy of the housing question that spurred the United Nations to promote the programme of housing for all by the year 2000.

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Good quality housing, as a basic need, is lacking for a sizeable number of Nigerians and so the medium and low income segments of the population, most of who live in urban centres, suffer severe housing crisis. The World Bank, (TWB) had estimated the cost of bridging Nigeria’s then 17 million housing deficit is N59.5 trillion, even though that number is far below the living deficits. This therefore is underlining the vast and untapped investment potential of the country’s real estate sector. One of the continuing challenges posed by unprecedented urbanization in the developing countries is the provision of adequate housing. Over the last three decades, Nigeria, like several developing countries, has emphasised public housing schemes, but with little success. This little success stemmed from the fact that the policy was merely paper tiger that has not been given the serious bite to make impact. This coincides with global paradigm shift from direct public provision of housing to the enablement of private shelter initiatives and housing production.

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An enabling environment, including support of housing initiatives and investments by householders, small-scale providers, and entrepreneurial private firms may suffice if we are to look for ways of developing what we may call social housing in Nigeria. The implications of enabling strategy for housing includes; finance, access to land, residential infrastructure, institutional regulations and building materials and related industry particularly in the light of the need for the private sector to play greater roles in housing. The above draw from the aspects of empirical study by various experts that reviewed of housing policy-related issues.

Most empirical studies on poverty, bypass the messy idea that poverty is not just a result of material deficiency, but also of a host of interconnected societal factors that include but not limited to, systemic lack of access to opportunities and decision-making power structures, physical isolation, discrimination, and entrenched cycle of vulnerabilities. Poverty exists because policymakers often address this social pathology with a quick-fix mindset, driven by cold-hearted empirical research. It is not that empirical knowledge of the poor is unnecessary, rather, without compassion as public policy, big data keeps on classifying the poor as a lowly category. Without any real agency of its own, this category is on perpetual life support. However, the fact that more of the estates built these days are for the rich has increased the number housing deficits even with a great number of houses lying unoccupied. This is because some unnecessary features are included in the houses of the rich just because they have access to free funds. These unnecessary features help to add to the finishing costs of the house thereby making it out of reach to the middle or low income earners.

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Some houses are finished, mostly in branded areas, and are not occupied due to outrageous rents being demanded by the landlords and/or their agents. There is no law in place to tax vacant properties more than the occupied to encourage occupation and market dynamics. A lot of people have more than one house at no extra cost to them. Nigeria has more than her share of abandoned housing projects due to problematic cash flow. In a country with over 911,000 kilometre square of land mass, oceans, rivers and lagoons are being sand-filled to create housing estates. These and many more cause capital sink. The first house of any man is basic and should be assisted or subsidised. Any other one is investment and should be heavily discouraged through taxation. There must be register of property owners in Nigeria to know each person’s holding capacity.

A house is a basic need that shelters people and gives them comfort. It is a place where people strategise, plan their future, and train their children. It also serves as working and resting place. A house is a status booster and the notion of owning a house bestows confidence on its owners irrespective of class. A house is a common good that every adult who is working, either as a businessman or in paid employment should have. Proper housing can reduce health problems and crime. Since health is wealth, effective property taxation and housing development can be used to redistribute wealth and reduce poverty. This was why the gesture of former Governor of Lagos State, Mr. Lateef Kayode Jakande has continued to be a model for successive governments in Nigeria to emulate. It was on this premises that the Nigeria MortgageRefinance Company (NMRC) was set up as a refinancing vehicle to provide mortgage lending institutions with increased access to liquidity and long-term funds. This is because the ability of banks to deliver mortgage services is limited by the fact that 80 per cent of all bank deposits are for 30 days only. But it seems that housing has a longer gestation period than commercial loans can accommodate. The NMRC therefore, in ensuring greater access to finance for tenure of up to 20 years, was given to accelerate the growth of the mortgage market for all income levels.

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Social housing is an umbrella term used to refer to rental housing which may be owned and managed by the state, by non-profit organisations, or by a combination of the two, usually with the aim of making it affordable. Social housing may also be referred to as a public housing which may be a form of housing tenure in which the property is owned by a government authority, be it the Federal, State or Local Government Authority. The state manages it and because it is accessible to low income earners, it is sometimes called low-cost housing. When you talk about social housing for the masses, the words that come to mind are cheap, affordable, non-profit driven, mass produced houses that could be occupied by low income earners, who may wish to save towards eventually buying such houses over time.

Generally, social housing deals with housing solutions that are priced and financed in a way that ensures low-income occupants could satisfy their other basic needs. Even though the scarcity of affordable housing affects all segments of society, it is notably low-income earners who are most affected.

Source: Maduka Nweke


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