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Cohousing: Driving housing innovation by changing the way we live

A shared desire to live more communally could encourage greater housing diversity, according to Adam Haddow. Here, he looks to student housing, “build-to-rent” models, and the new WeLive project in the USA for cues on how to conjure an alternative, more versatile Australian housing market.

Cohousing is defined by the Cohousing Association of the United States as “an intentional community of private homes clustered around shared space” – where the dwellings themselves are much the same as any other and the shared space constitutes anything from a common room to a kitchen, laundry or recreational area. Less obvious in this description is the essential ingredient – intent. That which turns a simple group of dwellings into cohousing is the desire to share not only part of your physical space but part of your daily activities. Sharing may encompass simple things, such as tools and lawnmowers, or more complex things, such as caring for the young and elderly. Often an important element involves meals – it is not uncommon for cohousing projects to host weekly dinners where each of the residents has a role.

Cohousing is housing supported by an ongoing management structure that facilitates a connected community – to a certain extent, imagine a small country town with an active and well-funded council. There are virtually no edges to what can be considered cohousing from a typology perspective, the only constant being a desire by the inhabitants to live more communally. Emotionally, cohousing could be understood as the dense, inner-city version of the 70s suburban cul-de-sac. In my memory the great suburban cul-de-sac experiments existed when everyone’s backyards, swimming pools, swings or BMX jumps were shared. It seemed as if parents made personal investments in their backyard environs with a view to what else was within walking distance for their kids. Cohousing is perhaps just the urban cousin.

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While this type of housing is able to accommodate both bottom-up and top-down procurement processes, it is not a housing form that has gained much ground in Australia. I would suggest this is partly because we don’t have funding, governance or taxation systems in place to support developer involvement and partly because land costs (inflated due to the housing crisis) prohibit the participation of community-based organizations.

The flood of new private sector student housing offerings is an example of the delivery of cohousing. The days of getting together with your mates to sign a lease with the elderly owner of a terrace house seem to be long gone, mostly as a result of the abandonment of the traditional student suburbs by the students themselves, who rejected their parents’ idea of suburban nirvana to live closer to the action. The free market economy came into play and private student cohousing projects have popped up to fill the void – a top-down development model owned and managed by investors. The benefit to the student of this new model is a high level of flexibility and amenity coupled with a low level of risk. So could the model of cohousing leveraged to provide student housing offer a solution for broader housing challenges of supply and affordability?

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Imagine that the average two- bedroom apartment in Australia is seventy- five square metres and the average occupation of a two-bedroom apartment is two people – sometimes friends, sometimes lovers, sometimes a parent and a child. Each of these groups has different spatial needs. The friends need more privacy, with split bedrooms and separate bathrooms, but hardly use the living and dining room during the week – they’re too busy at work building their careers or living in the city with dinners and movie dates.

The lovers really only use the second bedroom when a relative or friend occasionally comes to stay or when they work from home once a month – the rest of the time it’s the additional robe space they crave. The parent and child could really do with a bit more living space at the expense of a much smaller second bedroom – what five-year-old needs a room that fits a king-size bed anyway? Then imagine this. Instead of each group getting the same apartment, they each get one a little more tailored, and this tailoring comes about by reducing the space within their apartment walls – pushing it down to fifty square metres, and investing some of the difference, say ten square metres per apartment, into common space.

This then enables an awesome play space for kids that is continually observed, a visitors’ apartment you can book for guests, a meals area with a commercial kitchen so you can live out your MasterChef ambitions or just a really great laundry so you never have to buy a bloody washing machine again! But where does the additional fifteen square metres per apartment we saved go? This saving goes towards the overall management of the building and residents, so that there is always someone there to accept your Amazon purchase or organize the washing machine repairer – without you ever knowing that it broke in the first place.

This is the latest cohousing model popping up in the United States, with one such example called WeLive. It’s a kind of student housing for adults, complete with a doorperson, a concierge, a cleaner and the occasional yoga instructor.

Our industry has been awash over the last few months with ideas about the potential of cohousing projects. The name being used is “build-to-rent,” but in essence it’s the same thing. There are developers jumping in headfirst and there are others who are cautiously optimistic, waiting for the right economic conditions.

Either way, build-to-rent looks to become a player in the rental market. Build-to-rent is in direct contrast to our national preoccupation with build-to-sell, which has fuelled the property market over the past decade, with particular help from specific tax incentives. Build-to-rent takes a longer-term view on housing, with institutional investors such as industry super funds or private equity stumping up the dollars and ultimately owning and operating the asset. It’s not such a bad idea – if you own the building you’re probably going to be more interested in the longevity of both the product and the community, which has the potential to deliver better buildings and to enable more active, engaged and happy residents.

This model is also perhaps evidence that as a society we are changing, that a significant number of us, given the right building, location and management structure, would be happy to rent. WeLive comes to you from the owners of coworking company WeWork and is based on a similar plan – provide high-quality housing with all of the “add-ons” that cohousing relies on to build a community, along with a heavy overlay of management. On a recent visit to the New York WeLive, I was seduced by the quirky apartments, the generous communal spaces and the opportunity to meet and connect with people in a city not renowned for its friendliness.

While we are only scratching the surface of cohousing in this country, and indeed it will take time for it to make any real dent in the housing market, it is an interesting model that has the scope to influence the way we live and to provide an alternative living environment. Our current housing choices are much like the Australia of the 50s – it makes us long for a great espresso. Thankfully, we are maturing and as a result getting more options. In my mind diversity is key – the more the better. Perhaps one day our housing choices might match our multiculturalism.

Adam Haddow

China’s President Xi pledges $60 BILLION for Africa’s development over the next three years

Don’t call it colonialism: African leaders welcome China’s $60BILLION investment and President Xi tells conference ‘there are no strings’ – despite warnings Beijing is burying continent’s countries in debt to control them

  • Development aid was announced at a two-day China-Africa Cooperation summit
  • Xi said the investments on the continent have ‘no political strings attached’ 
  • Beijing has been increasingly criticised over its debt-heavy projects overseas 

Africa’s leaders have denied that a Chinese investment package is ‘a new form of colonialism’ after Xi Jinping pledged $60 billion worth of funding to several nations on Monday.

Xi told African leaders at a summit that China’s investments on the continent have ‘no political strings attached’, even as Beijing is increasingly criticised over its debt-heavy projects abroad.

Following Xi’s pledge, South African President Cyril Ramaphosa delivered a stinging rebuttal to criticism of China’s development aid in Africa.

Ramaphosa defended China’s involvement, saying that the meeting ‘refutes the view that a new colonialism is taking hold in Africa as our detractors would have us believe’.

Rwandan President Paul Kagame, current chairman of the African Union, also rallied behind China’s involvement in Africa.

‘Africa is not a zero sum game. Our growing ties with China do not come at anyone’s expense,’ he told the summit.

Xi offered the funding at the start of a two-day China-Africa summit that focused on his cherished Belt and Road initiative. The money – to be spent over the next three years – comes on top of US$60 billion Beijing offered in 2015.

The figure includes US$15 billion in grants, interest-free loans and concessional loans, US$20 billion in credit lines, US$10 billion for ‘development financing’ and US$5 billion to buy imports from Africa.

In addition, Xi said China will encourage companies to invest at least US$10 billion in Africa over the next three years.

The massive scheme is aimed at improving Chinese access to foreign markets and resources, and boosting Beijing’s influence abroad.

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It has already seen China loan billions of dollars to countries in Asia and Africa for roads, railways, ports and other major infrastructure projects.

But critics warn that the Chinese leader’s pet project is burying some countries under massive debt.

‘China’s investment in Africa comes with no political strings attached,’ Xi told a high-level dialogue with African leaders and business representatives ahead of the summit.

‘China’s cooperation with Africa is clearly targeted at the major bottlenecks to development. Resources for our cooperation are not to be spent on any vanity projects, but in places where they count the most.’

But Xi admitted there was a need to look at the commercial viability of projects and make sure preparations are made to lower investment risks and make cooperation ‘more sustainable’.

Belt and Road, Xi said, ‘is not a scheme to form an exclusive club or bloc against others. Rather it is about greater openness, sharing and mutual benefit.’

Later, at the start of the Forum on China-Africa Cooperation (FOCAC), Xi announced US$60 billion in funds for eight initiatives over the next three years, in areas ranging from industrial promotion, infrastructure construction and scholarships for young Africans.

He added that Africa’s least developed, heavily indebted and poor countries will be exempt from debt they have incurred in the form of interest-free Chinese loans due to mature by the end of 2018.

A study by the Center for Global Development, a US think-tank, found ‘serious concerns’ about the sustainability of sovereign debt in eight Asian, European and African countries receiving Belt and Road funds.

During a visit to China last month, Malaysian prime minister Mahathir Mohamed warned against ‘a new version of colonialism,’ as he cancelled a series of Chinese-backed infrastructure projects worth US$22 billion.

Ahead of FOCAC, Rwandan President Paul Kagame, currently the chair of the African Union, also dismissed the concerns, telling the official Xinhua news agency talk of ‘debt traps’ were attempts to discourage African-Chinese interactions.

At the last three-yearly gathering in Johannesburg in 2015, Xi announced US$60 billion of assistance and loans for Africa.

Nations across Africa are hoping that China’s enthusiasm for infrastructure investment will help promote industrialisation on the continent.

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Nigerian President Muhammadu Buhari will oversee the signing of a telecommunication infrastructure deal backed by a US$328-million loan facility from China’s Exim bank during his visit, his office said.

Xi said Belt and Road complies with international norms, and China ‘welcomes the participation of other capable and willing countries for mutually beneficial third-party cooperation’.

China has provided aid to Africa since the Cold War, but Beijing’s presence in the region has grown exponentially with its emergence as a global trading power.

Chinese state-owned companies have aggressively pursued large investments in Africa, whose vast resources have helped fuel China’s transformation into an economic powerhouse.

While relations between China and African nations are broadly positive, concerns have intensified about the impact of some of China’s deals in the region.

Djibouti has become heavily dependent on Chinese financing after China opened its first overseas military base in the Horn of Africa country last year, a powerful signal of the continent’s strategic importance to Beijing.

Locals in other countries have complained about the practice of using Chinese labour for building projects and what are perceived as sweetheart deals for Chinese companies.

The concerns are likely to grow as countries in other parts of the world — especially Southeast Asia — begin to question whether Chinese aid comes at too high a price.

‘Time has come for African leaders to critically interrogate their relationship with China,’ an editorial in Kenya’s Daily Nation said Monday.

African leaders, ‘should use the summit to ask tough questions. What are the benefits in this relationship? Is China unfairly exploiting Africa like the others before it?’

KELSEY CHENG and GEORGE MARTIN

Construction, real estate among Nigeria’s biggest GDP contributors – Data

The construction and real estate sectors have picked up massively from the economic meltdown that hit the country in 2016 to become a key contributors to the country’s economic recovery, an analysis of data has shown.

The National Bureau of Statistics (NBS) recently released Gross Domestic Product (GDP) figures for the second quarter of 2018 indicating that for the first time since the country’s exit from recession in 2017, economic growth was driven by the non-oil sector.

According to the report, the non-oil sector expanded by 2.05 per cent and contributed 91.45 per cent to the nation’s Gross Domestic Product (GDP), compared to 90.96 per cent recorded in Q2 2017.

Among the sectors that led the expansion in real term were the construction and slightly real estate sectors, including cement and wood product manufacturing.

According to the report, the construction sector grew by 7.66 per cent in Q2 2018 from -1.54 per cent in Q1 2018 and 4.14 per cent in Q4 2017.

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Although, the real estate sector contracted by -3.88 per cent in Q2 2018 from -9.40 per cent in Q1 2018, it was higher than the 5.87 per cent reported in the preceding quarter.

The cement manufacturing sector grew by 3.84 per cent in Q2 2018 from 5.28 per cent in Q1 2018 and -1.92 per cent in Q4 2017, as well as wood and wood products by 2.23 per cent in Q2 2018 from 1.53 per cent in Q1 2018.

The analysis showed that the growth in the sectors could be attributed partly to the availability of foreign exchange and the improving economic climate which has encouraged investment in the country generally.

Also, findings showed that there has been a flurry of road construction and rehabilitation, rail, infrastructure and other capital projects this year which has seen the Federal Government pumping billions into them.

The Federal Government said around N1 trillion capital vote was released last year, the highest ever budgetary releases in Nigeria’s annual funding, for capital projects, with a promise to do more this year based on the current stability in oil price and the return of normalcy in the Niger Delta.

Findings also showed that over 20 road construction and rehabilitation projects across the country are to be funded in the 2018 budget.

The roads ministry is also said to have received proceeds from Sukuk bonds subscription worth N100 billion to fund repairs of 25 key economic road projects across the six geo-political zones of the country.

Government recently commenced the rehabilitation of the 30.4km Ikorodu-Sagamu road, the Lagos-Abeokuta Expressway as well as the reconstruction of the road from Apapa to the Toll Gate on Lagos-Ibadan Expressway.

Some other construction projects listed in the budget for this year include the outstanding sections of Apapa-Oshodi Expressway in Lagos; rehabilitation of Gombe-Biu road in Gombe and Borno states; construction of Ukana Akpa Utong/Iket Ntueu road in Akwa Ibom and construction of Umuerogha-Umuelema Nbubo road in Amasa Nsulu in Isiala Ngwa North LGA, Abia State among numerous others.

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Rail projects have also moved on speedily with the launch of the Abuja Rail Mass Transit project. Work on other rail projects in Lagos, Ibadan, Kano and other states have kept activities in the construction sector eventful.

On real estate and housing delivery, a number of strategic collaboration between the private sector and government aimed at addressing the housing requirements of the country have been seen this year.

In a matter of months, the Federal Housing Authority (FHA) will perform the ground breaking ceremony of one of its new flagship projects called the Diaspora City which will be constructed in seven states. A 700 hectare of land has been acquired at Abuja’s Maitama Extension for the Abuja section of the project.

Similarly, the Federal Mortgage Bank of Nigeria (FMBN) in conjunction with labour and trade unions will later this month perform the ground-breaking ceremony of the first phase of an affordable housing scheme for workers that will deliver 2,800 housing units in 14 sites across the country.

The private sector has been active in the market with the resumption of work at one of the most anticipated high end developments in Abuja.

Promoters of the Abuja City Centre project recently said construction work had started at the project site two years after the economic downturn in the country affected the project.

Located at the Central Area of Abuja, the project is designed to be a mix-use development with 28 high rise towers encompassing residences, hotels, high-end business school hub, shopping arcades, malls as well as hospitals and medical suites.

By Daniel Adugbo

China struggles to heed Xi’s call to develop rental housing

China’s drive to develop a well-functioning rental housing market as an antidote to sky-high property prices is foundering, as rental agencies resort to debt-fuelled expansion amid weak profitability.

President Xi Jinping’s frequent refrain that “houses are for living in, not for speculation” has been seen as a call to increase the supply of rental housing and discourage investors from holding flats empty. Beijing, Shanghai and Shenzhen are among the world’s most expensive places as measured by the ratio of house price to median income.

At the country’s yearly economic planning meeting in December, leaders pledged to promote rental housing and “support the development of professional and institutional housing rental enterprises”. But that effort is off to a bumpy start.

Since the beginning of 2017, at least eight operators of long-term rental housing have failed, according to the China Real Estate Information Corporation, a research group, and analysts say a sustainable business model for rental housing remains elusive. “I don’t advise you to do long-term rental apartments,” Pan Shiyi, chairman of Soho China, a major property developer, told a forum in August. “It’s a lossmaking business.” Mr Pan estimated that buying flats would require bank loans with an interest rate of at least 5-6 per cent, while rental yields were only 1 per cent.

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This month, Dwell You, an operator based in the prosperous east coastal city of Hangzhou, announced on August 20 that it was ceasing operations, leaving 1,700 tenants and their landlords scrambling. Dwell You and other rental operators obtained “rental loans” in tenants’ names from banks or online lenders, sometimes without their knowledge. The tenant’s monthly “rent” payments were, in fact, loan repayments. “If I knew it was a rental loan, I would never have signed the contract.

After all, it will affect my credit score,” said Lei Wenqi, a 24-year-old product manager at an internet company in Beijing who rented a flat from Danke, an operator with rental properties in nine cities. “Since the loan is applied in my name, why is the money not given to me but given to Danke directly?” asked Mr Lei. Operators received a year of rent from the loan, while paying landlords only monthly.

This maturity mismatch allowed the operators to use the excess cash to seek new rental flats and expand their business. And because tenants, not landlords, were paying loan interest, this growth capital was essentially free for the operators. Danke raised $100m in February from a consortium of Chinese and foreign VC groups including the Asia private equity arm of German media group Bertelsmann.

Danke did not answer a request for comment. “This shows yet again that as soon as rental apartments groups verge into finance, it creates all kinds of new problems,” said Yan Yuejin, research director of E-House China R&D Institute in Shanghai.  Despite doubts over profitability, venture capital has flooded into the sector on expectations of policy support and growth. China’s rental market housed 190m people last year and generated Rmb1.3tn ($190bn) in revenue.

Those figures will rise to 270m people and Rmb4.2tn by 2030, according to Oriental Securities. Financial regulators are also working on policies to encourage the creation of real estate investment trusts — portfolios of rental property that trade like a stock. Tax breaks for such structures would increase their profitability.  “Right now everyone is rushing to scale up by gobbling up housing resources.

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The logic of the industry is ‘whoever rules housing inventories rules heaven and earth’,” said Hu Jinghui, chairman of the China Alliance of Real Estate Agencies, an industry association. “A lot of companies have very high costs, but they’re more focused on impressing VCs than serving customers.”

Financial Times

Pandemonium as 100-year-old Delta church collapses

There was pandemonium in Adagbrasa-Ugolo community, in the Okpe Local Government Area of Delta State on Sunday after  a church, St. Paul Catholic Church, collapsed.

While an 11-year-old boy was confirmed dead, no fewer than 15 others reportedly sustained varying degrees of injury.

Our correspondent, who visited the scene of the incident, gathered that the walls of the 100-year-old church started falling while parishioners were waiting for the priest to commence mass around 7am.

The deceased, identified as Jeffrey Jackson, who had successfully escaped from the church hall, was later trapped while reportedly fleeing to a safer place.

The injured, among which were octogenarians, were said to have been rushed to the Orerokpe General Hospital and another private hospital in the headquarters of the council.

They were all said to be in good condition when our correspondent visited both hospitals with the state Commissioner for Works, Chief James Augoye, who led a government delegation to the scene of the collapse on Sunday.

A witness and vice chairman of the church, Mr Daniel Agiri, said the incident occurred after the foundation of a new structure to expand the church gave way.

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Agiri noted that worshippers had concluded rosary and morning prayers before the incident happened, adding that over 100 persons were inside the church at the time.

He said, “We were about to commence mass when we noticed a crack on the wall of the building from the altar. The incident happened rapidly. We are happy that the seminarian, who was to conduct mass, had not started. The moment the building started falling, everyone ran to safety. We lost one person and 15 persons got injured.

“We have recovered the deceased’s body from the rubble. Jeffery was a primary four pupil. My son’s leg was also broken. Some of the injured persons are in their 80s. A doctor told us that they were in stable condition.”

Agiri pleaded with the state government and the Warri Catholic Diocese to erect a new building for them to worship, adding that they were planning for the centenary celebration of the church when tragedy struck.

Augoye, who said he was representing the state Governor, Dr Ifeanyi Okowa, told PUNCH Metro after paying a condolence visit to the father of the deceased that the state government would investigate the cause of the incident.

The commissioner, after making a cash donation at the Orerokpe General Hospital, assured the victims that the government would also settle their medical bills.

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He directed the hospital management to give prompt treatment to the injured.

The state governor, Okowa, while reacting to the building collapse in a statement signed by his Chief Press Secretary, Charles Aniagwu, described the incident as “sad and unfortunate.”

He said, “The church is a 100-year-old building and, in an attempt to rebuild and expand the church, the old church building collapsed as a result of heavily soaked water occasioned by the weight of worshippers who leaned against the walls while the early morning mass was on.

“While we pledge to pay the cost of treatment of the injured, people must ensure they seek necessary approvals before construction of buildings, particularly public structures, to avoid incidents like this.

“On behalf of the government and people of Delta State, I commiserate with the family of the deceased; the injured; the Speaker of the Delta State House of Assembly; the Chairman of the Okpe Local Government Area, Chief Julius Scott; the Orodje of Okpe, HRM Orhue 1, Major Gen. Felix Mujakperuo (retd.); and the entire Ugolo community in Okpe Kingdom, on the unfortunate incident.

“It is our prayer that the soul of the deceased will rest in peace, and that the injured will experience quick recovery. Our thoughts and prayers will continue to be with the people of Ugolo in Okpe Kingdom over this tragedy.”

The state Commissioner of Police, Muhammad Mustafa, said the dead and the injured had been evacuated from the scene of the incident.

Punch

Our woes, pains by housing corporations

Dreams of Nigerians to own homes through housing agencies may have dimmed, following inadequate funding, political tinkering orchestrated by greed and corruption of the leadership in states.

The state housing agencies say, the option for their becoming the engine room of economic development is restructuring by way of organizational and financial structural changes.

The creation of these housing corporations by the then regional governments prior to independence marked the beginning of the creation of modern housing estates throughout the country.

The effect of the housing corporations were further widened with the establishment in 1964 of the Association of Housing Corporations of Nigeria (AHCN), whose main objective is to ensure the increased availability of dwelling houses and the development of housing industry.

This structure ultimately became a focal point within which the first housing policy of 1990 was formulated and subsequent policies are being implemented.

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These housing agencies located in each state of the federation, were statutorily created to execute public housing programmes for each state of the federation based on the formulated housing policies.

Essentially, they are to undertake the development of estates by acquiring, developing, holding, managing, selling, leasing or letting any property movable or unmovable in their respective states.

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They were also charged with providing a home ownership saving scheme in respect of any housing estate or building owned, constructed and managed by them with a view to enabling members of the public purchase or build their own houses as well as sites and services scheme for residential, commercial and industrial purposes for the people of their respective states.

AHCN also construct and maintain modern dwelling houses at reasonable costs for sales to members of the public; undertake the construction of offices, commercial and industrial buildings for letting out to members of the public among other things and engage in other investment activities and opportunities as may be determined by the respective state governments.

But since its creation, a lot have changed.

The Guardian investigations revealed that most of the state housing agencies are under-utilized, rendered redundant and could hardly carry out their primary responsibility as elaborated in the respective laws setting up these agencies.

The challenges, it was gathered are ONE: Usurpation of the statutory responsibility of housing corporations in housing construction and development by supervising ministries who engage in direct construction instead of their primary role to formulate policy and monitor its parastatals to ensure policy compliance and accomplishment.

With this, housing corporations are neglected and starved of funds.  

When these housing corporations decide to source funds, the required backing from the state government is not always there as laws establishing the corporations require executive government backing with approval of the state house of assembly.

In some cases, parallel organizations are set up under the governor’s office to package public private partnership on behalf of the state and when housing corporations come up with such package, they would be denied all necessary support to make such PPP to work.

And where support was granted, there were usually over-pricing of such projects to take care of the interest of the political leaders as well as diversion of funds, which make final product of the project unaffordable.

TWO: In states where housing corporations are utilized for housing production, Political interference with activities of the agencies usually result in their ineffectiveness which grossly in most cases affect on-going projects.

THREE: Lack of total independence to execute projects professionally and most housing corporations even collect their salaries from the state ministries and the introduction of Treasury Single Account has rendered most of these corporation redundant.

FOUR: In virtually all the housing corporations, there are no financial support in terms of seed funding to assist state Housing Corporations to take off project execution.

FIVE: Lack of government support in terms of provision of infrastructural facilities in most housing estates, which often increase the cost of completed housing units.

 

SIX: Withdrawal of some state governments from the National Housing Fund contribution which put Housing Corporations of such States at disadvantage in accessing estate development loans from the Federal Mortgage Bank of Nigeria (FMBN).

“Today, most of these housing corporations merely exist by names. In some states, they are rendered irrelevant in their special field while state ministries have taken over construction and in some states they have been merged with the ministries.

This situation has relegated housing development to the background and hardly can we see any state government today that categorize housing as priority and major cardinal focus unlike in the second republic, according to AHCN immediate past president, Dr. Ifenna Chukwujekwu.

He said: “The recent shift of housing provision through government policy of total withdrawal from direct construction introduced by the Obasanjo regime did not help matter as the private developers were unable to meet the housing demand of the people.

This situation has further widened the rising housing shortage in Nigeria.”

Chukwujekwu explained that all the edict that established most of the housing corporations are outdated.

“For these corporations to be effective, these outdated laws and edicts require urgent and immediate amendments.”

He said: “Provision should be made to commercialize these housing corporations with full autonomy to make them more dynamic and productive.”

AHCN Executive Secretary, Toye Eniola told The Guardian that the housing corporations remain the only body that can solve Nigerian housing deficit.

“The public and private sector driven mass housing provision have been experimented and tested over years and it has been proven that public sector driven housing provision through housing corporations are equal to the task of developing mass housing given the right atmosphere,” he said

According to him, “housing challenge of most of our state capitals,especially during creation of new states were effectively resolved by housing corporations and it is most evident in most state capitals with popular and established housing estates.

“Housing corporations are government parastatals with access to government land, which place them at vantage position to execute government housing scheme.

He stated that private developers are high profit driven and they prefer middle and high-income housing projects, which are easier to dispose to recoup their investment in a short while, which invariably does not favour the low income group because of affordability question.

Chinedum Uwaegbulam

What Will Lower Housing Prices?

In late 2017, Congress and the President wanted to make the $1.5 trillion plus cuts in corporate and other taxes not look so big. So they raised taxes for some people by drastically limiting the deductions for state and local property and income taxes (SALT), capping the deductability of mortgage interest, and increasing the standard deduction (which makes itemizing less valuable).

Of course, these tax hikes affect people with houses and mortgages, especially those living in states with high real estate and income taxes.  Before this change, they could write off those SALT taxes when they paid federal income tax. The National Association of Realtors (NAR) led the scare, predicting house values would generally fall, and especially in California, New York, Massachusetts, and New Jersey.

But housing prices generally have not fallen.  In the first half of 2018, the Federal Housing Finance Agency’s house price index rose by 3.8 percent.  Even in California, housing demand is strong.  The chief economist for the Relators  said, “We thought there would be some impact…but the market is saying, so far, there is not an impact.”

But don’t tax deductions affect housing values? Generally, economists would not expect the change in the tax deductibility to have a major impact on house prices because several other factors have larger effects on home values than government tax breaks. Of course, those tax breaks can be a factor in buying a home or willingness to bid up the price–they just aren’t the biggest factor.

Let’s look at the big picture. We might want to say good riddance to special deductions for owning a home. Mortgage deductions and other tax subsidies for home ownership may in fact be bad policy.  They tell society that the government wants you to own a single-family house. But home ownership could be bad for you financially and inefficient for the larger economy.  Not only is renting a perfectly decent decision but housing tax breaks may steer too much investment capital into housing debt and away from productive investments and diversified household portfolios.

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Harvard economist Edward Glaeser has argued that tax subsidies and related policies result in “the government…essentially bribing Americans to live in suburban, detached homes.”  And the 2007 financial and economic crash was caused in significant part by too much housing debt, especially for lower and middle income households.  That rise in debt, amplified significantly by risky Wall Street financial manipulation, ended up putting the entire economy at risk.

So why aren’t the loss of the SALT deductions for some taxpayers and the mortgage deduction cap suppressing housing prices?

First, the tax bill also contained a large increase in the standard deduction, which is a significant gain for most households.  Using the standard deduction means less itemizing overall, so the value of the mortgage and tax deductions fell for many taxpayers.  Relatively few taxpayers will be deducting their state and local property taxes so they are untouched–in fact, they are probably a bit better off.  So they may want to buy a house, pushing up demand and keeping prices high.  Only high tax payers in states with both high income and property taxes may feel a pinch from losing the SALT and mortgage deductions.

Second, housing prices are what economists describe as “sticky downwards.”  Homeowners are notoriously prone to overvalue their house and reluctant to lower the asking price until faced with continuing bad news – and, of course, no offers.

Third, buyers, especially higher-income consumers, are wealthier because of the legislation’s other windfall tax breaks, especially lower rates. And they feel wealthier because of the run-up in the stock market.  The psychological effect of both may be bidding up the price of the better houses they want to buy.

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Does this mean we shouldn’t worry about house prices?  No.  Prices could fall as the Federal Reserve continues to raise interest rates, although some fear that could tip the economy into recession which of course would lower house prices.  And there are some signs of weakness in housing markets.  For example, new private housing starts have barely reached the levels of just before the 2007 economic collapse.  There seems to be some slowing of price increases in places where the tax bill has its largest negative impacts. And slow income growth for many American households means that buying a house is moving beyond their reach.  A recent report concluded that in twenty large metropolitan areas, middle-class families are increasingly unable to afford a house.

Like many other aspects of today’s economy, we may see housing prices favoring the rich over the middle class and below. House prices for higher income families may be rising, which might in turn nudge more and more middle-class families with stagnant incomes out of the housing market and also put upward pressure on rents.  If that megatrend continues, it may swamp whatever effects the tax legislation is having and housing prices will fall.

Teresa Ghilarducci

A new U.S. city tops the list as hottest housing market

Las Vegas is the hottest housing market in the country.

The monthly Case-Shiller home price index released on Tuesday showed Las Vegas overtook Seattle to become the hottest housing market in the nation.

Las Vegas had a 13 percent increase in single-family home prices in June compared to last year.

“Population and employment growth often drive homes prices,” David M. Blitzer, managing director and chairman of the Index Committee at S&P Dow Jones Indices, said in a release. “Las Vegas is among the fastest growing U.S. cities based on both employment and population, with its unemployment rate dropping below the national average in the last year.”

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Seattle, which was dethroned, saw a 12.8 percent increase, according to The Seattle Times.

“The Case-Shiller numbers don’t reflect the full scope of the slowdown yet: Partially because it includes a three-month moving average through June (things have cooled even more since then), and also because it reflects the entire metro area,” according to The Seattle Times.

Meanwhile, San Francisco, which landed as the third-highest price gain, saw a 10.7 percent increase, according to King5 News.

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Before the recent turn of events, Seattle topped the country for 21 months straight, which was the second-longest streak in the report’s 31-year history.

Portland, Oregon, topped the list for 23 months in the early ‘90s.

Herb Scribner

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Dangers Of Abandoned Buildings In FCT

Two weeks ago, the Federal Capital Territory (FCT) experienced another incident of building collapse, leading to the death of three persons, while several others sustained degrees of injuries. DAVID ADUGE-ANI writes on the incident and the issue of abandoned buildings in the territory.

Recently, the FCT department of development control had reasons to warn owners of abandoned structures in Abuja to complete them or risk demolition. Deputy Director, building inspectorate division of the Abuja Metropolitan Management Council (AMMC), who disclosed this to newsmen, added that the threat is based on the dangers posed by abandoned structures scattered in various parts of the territory. According to recent statistics, it is estimated that there are about 436 abandoned buildings in the Federal Capital City (FC) alone.

It was gathered that these abandoned buildings have become nuisances to neighbours and even passersby, because apart from the risk of collapsing and injuring people, some them have been converted into residential houses, hotels, clubs and drinking joints. A fortnight ago, a three-storey shopping complex, under construction, in Jabi district of FCT collapsed, killing three persons, while others sustained various degrees of injuries.

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Our reporter gathered that the building had been abandoned for over 15 years by the owner who recently mobilised workers to continue the construction of the structure. In its response to the incident, the Abuja Metropolitan Management Council (AMMC), an arm of the Federal Capital Territory Administration (FCTA), said that it would soon commence investigation to ascertain the circumstances surrounding the collapse of the three-storey building in Jabi district.

Speaking after touring the site of the collapsed building, the coordinator of AMMC, Tpl Umar Shuaibu, explained that the outcome of the investigation would be made public, while necessary measures would also be taken to prevent future occurrences. “We are going to commence our investigation now and where there is any lapse, you are going to be informed and we are going to take adequate measures in order to prevent future occurrence.” Shuaibu however, advised the general public to stay away from the site of the collapsed building, warning that security agencies have been instructed to arrest those who flout the directive. He continued: “What happened is an unfortunate incident.

This incident of building collapse happens all over the world not only in Nigeria. No matter how perfect you think you are, it is only God that is perfect. But there is still room for improvement.” Speaking with LEADERSHIP Friday few weeks before the incident, the director, department of development control, Mukhtar Usman Galadima, had disclosed that the department would soon commence massive integrity tests on buildings in parts of the FCT to ascertain their integrity status.

Speaking during the demolition of a three-storey building under construction, at 3rd Avenue in Gwarinpa district, Galadima expressed the fear that many buildings, both completed and under construction, in the FCT have integrity questions. “In fact, as we speak, the department has decided to embark on massive integrity tests on buildings. This is because we have observed that a lot of buildings in the FCT lack integrity to the point that even when you stand outside such buildings, you can see that their integrity is questionable.” Galadima disclosed that the exercise would be conducted in collaboration with Council of Registered Engineers of Nigeria (COREN) and other agencies to reduce likely cases of building collapse in the FCT.

He also advised developers in the FCT to always engage real professionals, not quacks, in their designs and to obtain their development permits before commencing constructions. In an interview, a fellow of Nigerian Society of Engineers (NSE), Engr Yakubu Ali Garba, revealed that the Council of Registered Engineers of Nigeria (COREN) is seeking an approval from the national assembly and other relevant government agencies to enable it arrest and prosecute non professionals in building construction in the Nigeria.

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Garba disclosed that the council had sent a bill to the national assembly to allow COREN prosecute non-engineers involved in building construction, adding that the council has equally signed a MoU with the Economic and Financial Crimes Commission (EFCC) and the Independent Corrupt Practices Commission (ICPC) to arrest and prosecute nonprofessional involved in building construction.

He noted that the act, establishing COREN, mandates it to penalise members, involved in unprofessional duties, adding that the act also allows the council to arrest or prosecute quacks, infiltrating the profession. Garba, who is also a member, engineering regulatory and monitoring committee, Abuja inspectorate, also observed that many developers prefer to use quacks in their building constructions and warned that buildings would continue to collapse, as long as Nigerians don’t adhere to the use of professionals in building constructions.

“Many Nigerians don’t even know how to erect buildings. They prefer to engage quacks in their building projects. We have a lot of engineers roaming the streets, without jobs. We believe that the quacks are more concerned with the money they are getting and not doing the job.” Reacting to the incident, the Architects Registration Council of Nigeria (ARCON), called for the arrest and prosecution of those who are directly involved in the Jabi building collapse.

ARCON president, Arc (Sir) Dipo Ajayi, who made the call, observed that the incident clearly shows that developers and various institutions, hire unregistered persons posing to be architects/consultants and foreigners to carry out projects in Nigeria thereby subjecting the unsuspecting public to great risk of loss of life and property.

Ajayi stated that in order to mitigate such an incident, the council has set up the ARCON Projects Registration Number (APRN) system, which is a mandatory registration number to be issued to all architects practising in Nigeria, for each of their projects, to certify that these projects are designed, handled and executed by Nigerian citizens fully registered to practice in Nigeria. He explained that APRN is intended to combat the scourge of building failure and collapse through the elimination of quackery, adding that it would also ensure that only fully registered and financially current architects/ architectural firms prepare, produce and submit designs for planning/implementation approval and receive such approvals when they are given.

The ARCON president also stated that architects and architectural firms, who are registered with the council, are to submit architectural building plans for approval/ implementation and are responsible for the supervision of their designs. Ajayi disclosed that the council would soon set up an enforcement and compliance unit, to ensure that only registered architects handle architectural projects in the Federal Republic of Nigeria in consonance with the extant laws.

The measures, according to him, are meant to complement the content and spirit of the National Building Codes, which stipulates that only professionals with the requisite knowledge and expertise of the building process are engaged to carry out building projects. He added, in a statement, that the council is equally working in concert with other interest groups to get the built environment properly policed to avoid or reduce to the barest minimum, the issue of building collapse and its attendant effect on the developer and the national psyche.

DAVID ADUGE-ANI

MORTGAGE: 12 MISTAKES YOU SHOULDN’T MAKE

Introduction: In today’s civilized world the average rich Nigerian or person in the world does not have to own his/her whole housing plan (or burden)all by him or herself, he can choose to exercise options, leverage on his equity or share of ownership and to do this, he or she requires an enabling mortgage system in place, which is working, up and doing.

It is always easy for people to jump towards anywhere there seems to be free money, but what about the catch, is there any trap?

Do you understand the terms and conditions properly?

It is always wise to know what to expect, don’t be fooled by the terminologies financial experts use to confuse novice(s) the legal framework and bottlenecks, you will need to know the obstacles you will face and how to remove them.

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Here now we have two sides of the story, the financial aspect (mortgage) and the legal aspect (which involves the law and a lawyer) we would now however expose you to those mistakes commonly made by the simple:-

1. Make sure you do a careful search through an estate surveyor and valuer who knows his onion well so you are not sold duds as some simple people fall into the hand of fraudster in their pursuit of owning or purchasing land property.

2. Find out why the property you are interested in is been sold, you don’t want to purchase what other people are trying to dispose off. Check very well tosecure a mortgage, set a timeframe, and know the procedures and the right steps to take.

3. Stay away from banks who will tell or trick you to open a mortgage account before they hand you capital to buy or build your house.

4. Talk to one, two or more banks to have comfortable comparative analysis that will give you an advantage in the course of your goal setting and getting it.

5. Consider the penalty clause to redeeem your mortgage. This should give you a flexible plan option to pay off your mortgage or negotiate interest charges with your bank.

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6. Be wise about the documentation and processes, protocols, due diligence the check list and all other criteria such as property description,aerial photographs, if it is an existing property in hard and soft copy, Architectural drawings, bill of quantity, etc the application process, information to the bank about your earning ability or capacity, expenditures and pattern. The bank will ask you this before they tell you how much they can advance you.

7. Do a cash flow analysis of yourself, your profit and loss account and your personal balance sheet.

8. Take good cognizance while inspecting your choice property, protocols of sale& negotiation, research, investigate sales. Establish a good relationship with your broker/ agent or seller; observe very well the regulatory side of property acquisition or purchase.

9. Understand and review clauses banks imposing their estate surveyor & valuer or agents to search value or other services. Be settled about the payment options i.e. down payment to keep seller happy.

10. Deed of assignment transfer from seller to buyer and the proceedings for final payment.

11. Governor’s Consent after transfer of property will take 4-6 months under the land use Act (1992) ownership by leasehold and freehold is 75-99 years as the case maybe if the land does not have a state C of O the head of the district has a jurisdiction that is binding and ultimately the local government area chairman is an authority too.We also have the state and urban development authority.

12. Pay all the fees at once because the quicker the better the process goes don’t make mistakes in any of the above highlight. Never be ashamed or slow to ask questions. Fees include cost of certified true copy of the deed, stamp duties, endorsement fee, survey and facilitation fee, charting and registration fee, administration and consent fee, deed of lease or sublease.

Oluwafemi Amujo

 

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