Urban regeneration expert and founder, Centre for Housing Studies, University of Lagos, Prof Olugbenga Timothy Nubi, says the solution to high cost of mortgages is for government to start massive housing construction of appropriate buildings that the Nigerian market needs.He stated that government must legislate ‘housing as a right’ for Nigerians and support cooperative housing.
Nigeria mortgage industry has been identified to be underdeveloped and experts have observed that the sector needs a re-engineering. What can authorities do to make it better?
That is a big question. It involves a revolution and a renewal of the way we do things. That is the reason for the last presidential summit where we bring housing to focus.
The nation will not develop until we fix our mortgage sector. You can define developed and developing countries economy with the ratio of their mortgage in the Gross Domestic Product (GDP).
In America, Britain, Australia and Asia, mortgage contributes between 60 and 70per cent of the GDP but in Nigeria, it is less than 5per cent. So, when you want to measure civilization, advancement and prosperity of any nation, look at the mortgage content in their GDP.
In Nigeria, mortgage is still low. Immediately, we begin to develop our mortgage system, then we are becoming civilized.Mortgage means using house to obtain a credit facility, which must collateralized with existing building.
But unfortunately in Nigeria somebody go to the mortgage bank with a survey plan and the certificate of occupancy and they give you mortgage loan, but that is not a mortgage loan but construction loan because mortgage is between 30 and 50 years repayment.
In mortgage, there must be existing structure but we don’t have existing structure because we are just not there.
The FHA as at 2006/2007 has existed for 30 years and for those years, they built just 30,000 houses and majority of the houses are within FESTAC town.
Once you picked a mortgage, you should live in the house that week but you picked a construction loan in Nigeria and they call it mortgage for you and you are still leaving in a rented house, there is no way, you won’t default within three months because you will be paying for rent where you are living and the mortgage at the same time.
In order to have solution to the problem of mortgage, we need to start massive housing constructions of appropriate buildings that people are demanding. What is being built in the country is not what the Nigerian market wants. Basic infrastructure must be in place before mortgage can work.
Nigeria should be preoccupied with how do we do mass housing in the country because housing in Nigeria is expensive. We must crash the cost of building houses to make it affordable. When we make housing affordable, then people will also qualify for mortgage.
Recently, you advocated for enactment of Nigerian Housing Act and government’s active participation in the industry. What would Nigerians benefit from the Act/ such disposition to housing?
The truth is that if we have housing Act, which is an Act, which sees housing as a right, then you can take any government that is not doing it to court as well as any employer violating it.
Few years ago in the western region, you have free choice not to take your child to school but when Late Chief Obafemi Awolowo started Western Education, you have no choice-your child must go to school and it became compulsory that you must have minimum primary education in Nigeria and so it was legislated and once it is legislated, government has to fund it. That is the importance of that Act.
As long as it is still a policy, housing may not be seen as the right of Nigerians. If the Act is legislated and people in government violate the Act, they could be taken to court.
I kept telling people that all over the world, almost 70per cent of what is required for stakeholders in the built environment to operate must be driven by government because according to the law of the land, land is within the purvey of government, and land is a serious legal issue.
Whatever has to do with land must be documented and legislated to enable banks to do mortgages.
The issue of housing depends on government environment. The underlying thing also is that all over the world, not all citizens have access to effective demand, there is always a class of the society that don’t have a say in the market and government has to provide for them.
Fortunately in advance country, that category of people is not more than 30per cent, the 70per cent that are active can care for them because its either they are challenged, disabled or extremely low income and government is taking care of them.
Unfortunately in Nigeria that category of people are more than 70per cent with no one to care for them and that is why we came about the word ‘affordable housing’.
Anyone who is working and has regular income at whatever level, government should give them access to affordable housing.