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World Bank

We’ve spent $11bn in Nigeria- World Bank

The World Bank has declared that it has so far spent around $11billion over the years on projects across the country.

Country Director of the World Bank in Nigeria Mr Rachid Benmessaoudade made this disclosure in Abuja on Thursday at the maiden edition of the Nigeria Portfolio Performance Award.

He said the projects which this huge sum of money was spent on over the years are targeted at alleviating poverty and improving the lives of Nigerians.

He described the World Bank’s financial commitment in Nigeria as being among the largest in the entire Africa continent with over 30 operational projects.

The projects he said are spread across health, education, agriculture, social protection, energy, infrastructure, governance among others, in all 36 states of Nigeria, and the FCT.

He said that 60 percent of the bank’s programmes were implemented at the state level and another 40 percent at the Federal level

Benmessaoudade also revealed that the bank was working on a new country partnership framework “that would outline the new reform challenges that the government faces and how it could support it in implementing solutions to the challenges.”

According to him, “the country partnership strategy is always anchored on the economic reform plan of the government and in this case we have used the Economic Recovery and Growth Plan (ERGP), which is the medium-term programme of the government on which we are anchoring our country partnership framework.”

He said the bank feels that “the world bank can play a catalytic role in creating a conducive environment for private sector to finance infrastructure so that we can create the fiscal space for the government to put more money in human capital and in social spending.”

Permanent Secretary, Ministry of Finance, Dr. Mahmud Isa-Dutse, assured the World Bank of the ministry’s commitment to build an enabling environment to manage its portfolio in Nigeria and assist the bank deliver on all its projects implementation.

Kaduna State Governor, Nasir El-Rufai, said “one of the things I found upon taking office about four years ago was that most governors do not know what is going on as far as world bank-financed projects are concerned. Often you find large amounts of money sitting idle that can be used for the benefit of the state that the governors are not aware of. The more the states carry out their projects, the more impact they will have on social sectors because most of the projects financed by the world bank are targeted at social sectors like education, health care, nutrition and so on.”

El-Rufai said that the Nigerian Governor’s Forum (NGF) was currently more aware of the bank’s projects because of the bank’s constant briefings, but that some governors engaged more than others as some were hands-on while some were a bit disconnected.

Source: thenationonlineng

Single-Digit Interest Rate on the Way for First Home Buyers Seeking N5m Mortgage Loan

Access to housing finance is getting increasingly less stressful and ‘cheaper’ for home buyers as both public and private sector operators are working on reviewing high interest rate which is a major challenge to mortgage affordability in Nigeria.

While the Federal Government through the Federal Mortgage Bank of Nigeria (FMBN) is now offering zero equity on loans below N5 million to all contributors to the National Housing Fund (NHF), plans are in progress for primary mortgage banks (PMBs) to offer mortgage loans at 9.9 percent interest rate to any first-time home buyer seeking N5 million loan for the purpose of owning a home.

A mortgage banking operator who disclosed this to BusinessDay on condition of anonymity explained that the 9.9 percent interest rate is being perfected by the Central Bank of Nigeria (CBN) which, he said, will be subsidising the rate in favour of home buyers.

“The Nigeria Mortgage Refinance Company (NMRC) will continue to go to the capital market to raise funds and will also continue to refinance our loans,” the operator explained. “What is going to happen is that if, for instance, we get our funds from either the NMRC or CBN at 15 percent interest rate, we will be required to lend to first-home buyers at 9.9 percent and CBN will off-set the balance.”

The operator admitted that 9.9 percent, which is an upper single-digit rate, is still very high, but noted that it was a good start on the journey towards addressing the affordability issue in the mortgage system which constitutes a huge golf between many Nigerians and homeownership.
To the operator, what the mortgage industry needs today is reduction in interest rate and not recapitalisation as is being considered by the CBN.

“Capital adequacy is not the problem of the industry today. If the industry is not growing, it is not because of capital, because we have enough capital from the earlier recapitalisation and refinancing by the NMRC. The interest rate needs to be reduced so that more people will take loans. That way, the industry will grow,” the operator said.

Other industry operators and real estate stakeholders see the problem of the industry beyond recapitalisation.

Whereas Paul Onwuanibe, CEO, Landmark Group, blames lack of clarity for the industry’s slow growth, Adeniyi Akinlusi, CEO, Trustbond Mortgage Bank, looks at the structure of the industry.

“The structure of the mortgage industry is a problem; there is high interest rate and this is coming on the back of economic condition,” noted Akinlusi, who is also president of Mortgage Bankers Association of Nigeria (MBAN).

He stressed that “recapitalisation is not the main challenge, considering that mortgage banks do not give loans from shareholders’ funds but funds from deposits”.

Kehinde Ogundimu, MD/CEO of NMRC, shares the view that recapitalisation is not the main challenge of the mortgage industry, recalling that his company, as at December 2018, had refinanced mortgage loans originated by the lending institutions totalling N18 billion.

He explained that refinancing was in line with the company’s mandate to promote affordable home-ownership in the country by leveraging funding from the capital market to deepen liquidity in the primary and secondary mortgage markets.

Typically, mortgage interest rate in Nigeria hovers between 7 percent and 10 percent for FMBN mortgages and 15-25 percent for commercial mortgage institutions, making the country one of the highest in the world.

In advanced economies, the mortgage industry makes significant contribution to economic development with single-digit interest rates. But high inflation rate and the attendant high mortgage rate help to reduce housing demand and developers’ investment appetite.

This explains why Nigeria has one of the world’s lowest mortgage to Gross Domestic Product (GDP) rate at about 0.6 percent, which is far behind Ghana’s 2 percent, South Africa’s 30 percent and US and UK’s rates of 60 percent and 70 percent, respectively.

Source: businessdayng

Mortgage Refinance Applications Rise as Trade Issues Cause Rate Drop

The economic tensions between the U.S. and China drove interest rates down last week, leading to a surge in refinance applications, according to the Mortgage Bankers Association.

And with the benchmark 10-year Treasury yield falling under 1.6% at one point Wednesday morning, more declines in mortgage rates are likely in the near term.

Mortgage application volume increased 5.3% on a seasonally adjusted basis from one week earlier, according to the MBA’s Weekly Mortgage Applications Survey for the week ending Aug. 2.

This was driven by an increase in the refinance Index of 12% from the previous week.Refi application volume was 116% higher than the same week one year ago. The refinance share of mortgage activity increased to 53.9% of total applications from 50.5% the previous week.

The seasonally adjusted purchase Index decreased 2% from one week earlier, while the unadjusted purchase index decreased 2% compared with the previous week and was 7% higher than the same week one year ago.

“The Federal Reserve cut rates as expected last week, but the bigger influence on the financial markets was the beginning of a trade war with China. The result was a sharp drop in mortgage rates, which will likely draw many refinance borrowers into the market in the coming weeks,” Mike Fratantoni, the MBA senior vice president and chief economist, said in a press release.

“The 30-year fixed-rate mortgage fell to its lowest level since November 2016, and the drop resulted in an almost 12% increase in refinance application volume, bringing the index to a reading over 2,000 — its highest over the same time period. We fully expect that refinance volume will jump even higher this week given the further drop in rates. Lower mortgage rates did not pull more homebuyers into the market, as purchase volume slipped a bit last week.”

Adjustable-rate mortgage activity remained unchanged at 4.7% of total applications and the share of Federal Housing Administration-insured loan applications decreased to 11% from 11.3% the week prior.

The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($484,350 or less) decreased 7 basis points to 4.01%. For 30-year fixed-rate mortgages with jumbo loan balances (greater than $484,350), the average contract rate decreased 8 basis points to 3.96%.

The average contract interest rate for 30-year fixed-rate mortgages backed by the FHA decreased 8 basis points to 3.86%. For 15-year fixed-rate mortgages, the average decreased 11 basis points to 3.37%. The average contract interest rate for 5/1 ARMs decreased to 3.36% from 3.52%.

Source: nationalmortgagenews

Mortgage Borrowing Rise Signals Stabilisation in UK House Market

6 UK mortgage borrowing picked up slightly in June, suggesting the housing market may be regaining some stability after stalling in the run-up to the original March Brexit deadline.

Figures released by the Bank of England on Monday showed mortgage approvals for house purchases — an indicator of future lending — increased by about 800 to 66,400 in June, slightly higher than analysts had expected and above the monthly rate of 60,000 projected by the BoE in its May inflation report.

Households’ net mortgage borrowing of £3.7bn was also higher than in May, although the annual growth rate of mortgage lending remained stable at 3.1 per cent — around the level it has been at since the vote to leave the EU in 2016. Brexit-related uncertainty and political turmoil has weighed on UK property markets, with house price growth slowing across the country and prices falling sharply over the past year in London.

However, the most recent data have pointed to a modest improvement, with surveyors polled by RICS, the industry association, becoming less pessimistic about market dynamics.

Howard Archer, economist at the consultancy EY Item Club, said the reprieve from a disruptive Brexit in March, together with better consumer purchasing power and strong jobs growth, had helped, although “the overall benefit has been relatively limited”. The BoE data also showed a slight increase in consumer credit growth, which rose by £1bn in June, compared with £0.9bn in May.

However, the annual growth rate — which has fallen steadily since 2016 — continued to slow, falling to 5.5 per cent in June from 5.7 per cent a month earlier. Within this, the annual rate of growth in credit card lending has also slowed. Consumers’ apparent restraint could be a worrying sign, since household spending has been the main driver of economic growth in recent months.


Businesses have been reporting slowing activity and recent data suggest the economy may have flatlined in the second quarter, but households have benefited from record employment, modest tax cuts, a lift in public sector pay and the latest rise in the national minimum wage. Samuel Tombs at Pantheon Macroeconomics consultancy said that since lenders no longer planned to reduce the supply of consumer credit, the data were “consistent with the economy retaining momentum ahead of the Brexit deadline”.

The BoE data also showed a pick-up in borrowing by non-financial companies — largely in the form of bank loans and corporate bonds. Mr Tombs saw this as positive, arguing that demand for external finance would be falling if the slump in business investment was worsening. He also noted that net issuance of commercial paper — a way to raise short-term funds — was falling, after a spike in the first quarter of the year, when companies were struggling to find cash for pre-Brexit stockpiling.

Source: ft

13th AIHS: Prof Inyangete Charge Built-Environment on Financing Sustainable Buildings

While speaking at the 13th Abuja International Housing Show (AIHS) which held from 23rd to 26th July 2019 in Abuja, Professor Charles Inyangete, Chairman and Chief Executive Officer of Innovative Risk & Investment Solutions (IRIS) Limited, charged stakeholders in the built-environment to finance sustainable buildings in order to grapple with the present and imminent challenges of climate change.

While delivering a paper titled, ‘Financing Sustainable Buildings:  Impact of Built Environment on Climate Change,’ Inyangete said that climate action offers a major opportunity to ensure sustainable global development and boost economic growth. According to him, it is already delivering real results in terms of new jobs, economic savings, competitiveness and market opportunities, and improved wellbeing for people worldwide with even greater investment, innovation, and growth potential ahead.

He said that population growth and urbanization, especially in Africa and Asia, are putting pressure on housing delivery systems, which are often informal or rely on the state. By 2030 Africa, he said, will have more than 50 percent of its population living in cities.

‘’Where formal housing can’t be supplied, informal housing quickly fills the gaps and slums proliferate, creating new development challenges.

‘’While developing countries have made great progress in improving the framework for housing and housing finance, a significant gap remains to access to affordable housing.

‘’Green buildings represent the low hanging fruits in fighting energy crises. One of the cheapest way of cutting GHG emission is to make buildings more energy efficient with low ecological footprint. This is done through retrofitting existing buildings and planning and design of green buildings.

‘’It is estimated that, by adopting green building practices, the world will reduce an estimated 30 % of the global energy demand by 2030.

‘’Green buildings are not rocket science: we find passive architectural elements in vernacular architecture and in most ancient buildings. These buildings rely mostly on passive/natural means for cooling, heating and lighting.

‘’Green buildings are designed to reduce the demand for resources such as: energy, water, land etc. They are also designed to generate much of the energy they consume, using alternative sources of energy such as solar and wind. Excess energy is feed into the national/local electric grid.’’

Sustainability, according to him is development that meets the needs of the present generation, without compromising the ability of future generations to meet their needs. This sustainability, he said, is based upon three components: economic growth, social progress and environmental protection.

Speaking further, he said. ‘’Over 50% of Nigerians already live in cities, 34% below the poverty line and 68% below the empowerment line.

‘’By 2050 Nigeria will be home to 295m people, equivalent to half Europe’s urban population, and only just falling short of U.S. figures. This momentous shift which will bring nearly 200m new people into cities, create over 20 new middle-tier cities, and ensuring Lagos will rival Beijing, Mexico City and Sao Paolo in size.

‘’With cities accounting for est. 75% of greenhouse gas emissions globally, and 53% highly vulnerable to serious and near-term climate change effects,

‘’Nigeria’s cities will be a vital nexus for mitigation and adaptation initiatives. Not only this, but as the country is yet to build the majority of its urban infrastructure, it has the opportunity to leapfrog developed nations by adopting clean technologies and economic strategies early.

“When we have more efficient buildings, we will have less demand on power. Green building is the best way forward. It is a good thing that we now have certification for IFC Edge for green building. We need to encourage regreening in the environment. We need to build the capabilities of our financing and investors to be able to manage climate change risks.”

“We need to collect data because what gets collected is what gets managed. Town planners need to consider the environment while planning. In 2016, Nigeria incurred N351 billion cost for gas flaring,’’ he said.

With a memorable quip, he said, “climate change is not the biggest issue of our time, it is the only issue.”

By Ojonugwa Felix Ugboja

Britain’s Housing Market Needs a Rebuild

Report a mispronounced word The FT’s report on the Taylor Wimpey chief executive’s view of the UK’s Help to Buy scheme records just one more criticism of a scheme that would be better described as “help to profit” . The chief impact has been to inject billions into the bottom line of mass housebuilders.

That this money might have been better spent elsewhere is now a statement of the obvious. Successive governments’ housing policies have been disastrous, failing to provide the genuinely affordable, well-built, appropriately located, secure homes that so many desperately need and want.

It is time that we rethought Britain’s whole approach to housing. A place to live is a human right, like clean air and water. Local governments should play a major role in guaranteeing that, with their potential access to land, ability to borrow long term and cheaply, and democratic accountability.

The homes need to be built to the highest standards of energy efficiency, for the benefit of both the residents and the planet in this age of climate emergency.

And households need secure homes, ones in which they can become part of the local community, give their children steady progress through schooling, where older citizens can build friendships that combat loneliness. We are seeing slow changes, with political pressure forcing modest increases in renters’ rights, taxation changes limiting landlords’ profits and councils allowed to borrow for building homes.

This all needs to move much faster. This is crucial for people and communities, but also our economy. Capital needs to go into productive assets, into an economy reshaped by the green new deal, rather than ever-rising house prices.

Source: ft

First-Time Buyers ‘Underestimate Size of Deposit’

Aspiring homeowners are substantially underestimating the size of the deposit they need to get on the housing ladder, while women save half as much as men, according to research underlining the barriers facing first-time buyers. In a survey of about 5,000 UK adults aged between 18 and 40 — treated as a sample of potential first-time buyers — Santander Mortgages found two-fifths (42 per cent) of respondents had saved nothing towards their first home. The average pot saved towards a deposit among other respondents was £8,300, with men saving an average £11,600 and women £5,620.

When asked what they were targeting as a total saving for a deposit, participants’ responses averaged £24,816 — significantly below the average deposit of £44,000 put down by first-time buyers in figures published in March by the Office for National Statistics. Santander said the aim of home ownership was moving out of reach even for middle earners.

“With the majority of mortgage borrowing limited to 4.5 times gross salary, the deposit amount buyers in each region say they are looking to save would price individuals, or households relying on a single middle income, out of every region in the UK,” the lender said.

The proportion of middle earners — those bringing in between £20,000-£30,000 in 2019 — who own their own a home has declined from 65 per cent in 1996 to 27 per cent today, the report said.

Today, buying is increasingly restricted to those with higher levels of household income and dual-income couples. Some 64 per cent of first-time buyers have household incomes of more than £40,000 and 16 per cent are individual buyers. Miguel Sard, managing director of Santander Mortgages, said the situation was likely to worsen unless the government took further action.

“Without change, home ownership in the UK is at risk of becoming the preserve of only the wealthiest young buyers over the next decade.” The warning comes at a time of intense competition between mortgage lenders, with many offering low rates and other deals, and growth in the number of home loan deals at loan-to-value rates above 90 per cent. Yet high house prices in many areas and tight mortgage regulations have still left many buyers struggling to pass lenders’ affordability tests.

The survey also quizzed people on what they would like to see the government do to help first-time buyers. Top of the list, with 37 per cent in favour, was a call to extend Help to Buy, the government’s popular equity loan scheme that is due to end in 2023. Thirty-five per cent would support rent caps; while 33 per cent were in favour of stamp duty land tax being cut for buyers of homes under £500,000 — a proposal floated by Boris Johnson during his campaign for the leadership of the Conservative party.

Santander did not lend its support to those proposals but used the survey as an opportunity to sound its own call to action. Noting that the inability to raise a deposit was seen as the biggest barrier to ownership among aspiring buyers, it suggested an extension of the current Forces Help to Buy scheme, which allows those in the armed forces to take an interest-free loan of 50 per cent of their annual salary towards the purchase of a home, to a maximum of £25,000. This scheme could be extended to public sector workers such as nurses and police, Santander said.

It also questioned the “stress rate” that regulators require lenders to use when judging whether a mortgage is affordable. Borrowers must be able to afford the loan under a notional interest rate that is 3 percentage points higher than the rate customers revert to at the end of a fixed rate period. Graham Sellar, Santander head of mortgage business development, said the stress rate was originally based on a five-year projection of interest rates by the Bank of England.

Today, similar projections look much flatter in the medium to long term. “It’s a call to look at that figure and to make affordability better for customers, especially first-time buyers.” The research also underscored the role of the Bank of Mum and Dad in supporting first-time buyers. Forty per cent of those interviewed said they were relying on an inheritance to boost their deposit — much higher than the 10 per cent recorded in government statistics who used an inheritance for this purpose in 2017-18.

The authors warned that the role of housing equity in providing a stepping stone for the next generation was limited. “As life expectancy increases, we can expect the number of people in care to increase and the wealth they have built up through property ownership quickly diminished,” the report said.

Source: ft

Is For-Profit Investment in Social Housing a good or a bad thing?

The two-bedroom brick house in the village of Dunchurch in central England looks much like any other freshly built home in the UK: newly turfed garden, mullioned windows, magnolia-painted walls waiting for pictures to be hung.

But the buyer of the semi-detached house, a short stroll from the Dun Cow pub, will share ownership of their home with an unlikely partner: one of the world’s largest private equity firms, headquartered on New York’s Park Avenue. The home is among those recently made available, in this case under a shared ownership deal, by Sage Housing, a fast-growing provider of affordable homes that is majority-owned by the US real estate giant Blackstone. Similar deals are quietly being conducted worldwide.

Blackstone is among hundreds of companies — including private equity groups, fund managers, institutions, listed real estate groups and others — that see big business in affordable housing. Public-sector housing providers in the UK, as in many countries, have struggled to keep pace with demand for homes for middle and lower-income workers in areas where employment growth is strong.

Increasingly, heavyweight profit making groups are seeking to fill the gap, pledging to generate commercial returns for investors while fulfilling housing need. But opponents of the trend, including social housing groups and the UN’s special rapporteur on the right to housing, see trouble ahead.

The National Housing Federation, a group for UK social housing providers, has fought back against for-profit groups seeking to call themselves “housing associations”. “If you are a for-profit organisation, are you there for the long term?” asks Kate Henderson, NHF chief executive. “The question of accountability is a key one . . . will they add value in a sector that desperately needs investment, rather than being there to extract value? Housing associations are known for being not-for-profit and they exist to deliver long-term value to their communities.

They can do this because they don’t have to return value to shareholders.” Leilani Farha, the UN special rapporteur on the right to housing, goes further. In March, she wrote an open letter to the chief executive of Blackstone attacking the company’s housing investments as “inconsistent with international human rights law and norms”.

Recommended UK social housing Blackstone under fire over push into UK social housing “Unprecedented amounts of global capital are being invested in housing as security for financial instruments and traded on global markets, which is having devastating consequences for people,” she said. Farha cited evictions, charges to tenants and rent increases among the problems she had found; she also attacked Blackstone for lobbying to defeat a rent control proposal in California. Blackstone fought back. In a reply to Farha, the group’s co-heads of real estate said they were “bringing significant capital and expertise” to a sector that badly needed it.

“We share your concern about the chronic undersupply of housing in major metropolitan centres around the world,” they added. The company pointed to examples such as Hembla in Sweden, a listed rental landlord which it says has reinvested all its income in the properties it owns since Blackstone acquired a controlling stake. It also has a development pipeline of 5,000 new homes and says evictions cannot be a problem, since Swedish tenancies are indefinite by law.

A development in Sweden owned by Hembla The company’s UK housing business, Sage, has its roots in buying up affordable homes that developers are obliged to build as a condition of planning permission, a strategy that has irked non-profit groups, which say it has encroached on their turf.

The private equity giant is keen to show it is also adding to the stock of homes being built: it has begun partnering with developers to fund new sites, contributing to a goal of 20,000 new homes in five years. The homes are designated “affordable” under UK planning law, meaning they operate with rent controls or under shared-ownership deals. Blackstone owns its housing assets within a series of different funds, ranging from “permanent capital” vehicles to private equity-type funds with shorter time horizons.

Sage is owned within its Real Estate Partners Europe V fund, an opportunistic fund, and could ultimately be sold or listed. Others are joining the fray: CBRE Global Investors, the fund management arm of the world’s largest property services group, this year launched a UK affordable housing fund, seeking annual returns of 6 per cent from investing in a range of homes, from homeless accommodation to rented homes for “key workers” such as nurses or teachers.

An open-ended fund with an indefinite lifespan and social impact aims, the product aims to generate its returns by working in partnership with non-profit providers and without significant borrowing; it will fund developments as well as buying existing homes.

Hannah Marshall, head of UK funds at CBRE GI, says it will share the risk attached to changes in regulated rents with its partners, including the impact of a series of rent cuts currently under way. Legal & General, the UK insurance company, registered a social housing provider late last year as part of a broader push into housing, investing from its own balance sheet.

The insurer says it expects to hold assets for the long term, adding that the sector needs to move away from its reliance on debt funding: “An equity model where institutional investors are the long-term holders of assets represents a much-needed shift away from the current debt-only funding model that [cannot] scale up at the speed that is needed to address the affordable housing shortfall.”


Recommended Property sector Housing associations call for £42bn to build social homes For all residential landlords, failures in services to tenants can result in a public outcry, tarnishing a property owner’s image and forcing changes in strategy. Non-profit UK housing associations have had to contend with blots on their own reputation.

This year, L&Q, one of the largest, apologised for maintenance problems on one of its London estates, including serious damage from water and sewage leaks. “We got it wrong, we didn’t fix things when we should have, and as a result we let down our residents,” the group’s chief executive wrote in an industry magazine, Inside Housing.

The NHF’s Henderson acknowledges that housing associations need to improve to maintain their reputation. “This is about differentiating ourselves from other sectors,” she says. Private investors moving into affordable housing can look to Germany as a cautionary tale. Indebted states and municipalities sold off swaths of housing in the early 2000s to private equity groups, which quickly became known as “locusts”.

Will [for-profits] add value, rather than being there to extract value? Kate Henderson, NHF chief executive According to an account by Vonovia, a listed housing group, the private equity owners “came under financial pressure, with the effect that maintenance and investment in the housing stock had to be largely cut back.

This was at the expense of serious housing defects.” Many of those portfolios have now found stability as listed housing groups, including Vonovia itself, but suspicion still hangs over private equity’s role in housing in Germany. Jan Crosby, UK head of housing at business advisers KPMG, says prospective investors need to “get under the skin of the economic model” when considering an investment in affordable housing.

“It is important that there is enough disclosure when people are making investment decisions,” he adds. “Is it building new housing or is it taking existing housing? Who are the tenants going to be? Who is paying the rents, in a rental model? Is it regulated or unregulated? How long will the property be targeted at affordable or social tenants? They should understand how the returns are driven. “From that, people can make a judgment as to whether it is a social impact investment or just an investment in residential.”

Source: ft

Smart Cities Still Need a Human Touch

This is a tale of two cities — Toronto and Barcelona — that may hold important lessons for others around the world. Both have big ambitions to change the way they operate but reflect very different visions of how smart cities should be run.

In Toronto, citizens have just submitted their initial reactions to Sidewalk Labs’ Master Innovation and Development Plan to develop a 12-acre waterfront district known as Quayside. This offshoot of Google promises to use innovative design and the latest digital technologies to create a radically new kind of urban community that it hopes to replicate elsewhere.

Born in the realm of bits, Google has been taking an increasing interest in the world of atoms. It recently announced a separate $1bn contribution to help develop 20,000 new homes in Silicon Valley over the next 10 years. Dan Doctoroff, the former deputy mayor of New York who is now Sidewalk Labs’ chief executive, says: “Our mission is to deliver dramatic improvements in urban life.”

In Toronto, the focus is on creating jobs, building cheaper housing and using technology to develop the first “climate positive” urban community in North America. The mass adoption of connected devices and sensors and the introduction of superfast 5G networks, enabling the creation of “digital twins” of real-world infrastructure, have energised technology companies and urban planners.

They believe that real-time data flows can be used to optimise cities’ “central nervous” systems, promising big improvements in transport, services, the environment and land use. Smart cities can be built from the internet up, as they say. Sidewalk promises some imaginative innovations, such as subterranean delivery systems and the extensive use of mass timber, that have won the support of prominent local politicians and business leaders.

But its plans have also triggered a fierce backlash from some academics and activists, who fear that Google may infringe citizens’ data rights and subvert democracy. An unelected private company, they argue, should not usurp the traditional functions of municipal government.

“What Sidewalk has provided is a vision where its own upper-hand in platform control, data governance, intellectual property, procurement and access has at each turn an obvious and legitimate alternative: the city itself,” wrote Ellen Goodman and Julia Powles, professors from Rutgers Law School and the University of Western Australia Law School, respectively

. Barcelona city government is pursuing a different approach, explicitly aiming to assert its citizens’ “digital sovereignty” by emphasising civic participation, social impact and public return. Francesca Bria, Barcelona’s chief technology and digital innovation officer, says her city has inverted the paradigm used by Sidewalk Toronto.

Rather than designing the technological infrastructure first and then figuring out how best to use it, Barcelona is applying existing technologies to solving everyday problems like pollution, affordable housing and transport. Central to Barcelona’s vision is the use of Decidim, an online platform that enables citizens to participate in decision making. Some 40,000 people use this “civic alternative to Facebook”, allowing them to initiate and shape policy.

“We need a new social contract for the digital age,” says Ms Bria. As part of this deal, the city’s data should belong to the citizens themselves. By opening up data sets in a secure way, Barcelona aims to stimulate local businesses and civic initiatives. “We regard data as a utility like water, electricity or roads,” Ms Bria says.

How the Toronto and Barcelona experiments fare over the next few years will inform policymakers around the world as rapid urbanisation emerges as one of the biggest policy challenges of our time. The number of people living in cities has exploded over the past few decades, from 751m in 1950 to 4.2bn today.

The UN is forecasting it will hit 6.7bn by 2050. There is no doubt that the latest technologies can offer huge improvements in the way that cities are run. In the cases of Toronto and Barcelona, there is also a big difference between invention and reinvention, between building something afresh and reimagining existing institutions.

But as Mr Doctoroff acknowledges, cities are always going to be immensely complex human organisms to manage, likening the challenge to trying to solve a “50-sided Rubik’s cube”. No matter how good the technology, smart cities will only ever be as clever as the people who design them.

Source: ft

Reasons There’s no More Equity Demand on Housing loans Below N5m

For too long, the demand for equity contribution as a prerequisite for accessing housing loan facility from mortgage and other deposit banks has denied many Nigerians opportunities to own homes, leading to the widening housing demand-supply gap in the country.

But that narrative is changing significantly by reason of one of the recent initiatives by the Federal Mortgage Bank of Nigeria (FMBN), which has scrapped equity contribution on housing loans below N5 million and 10 percent flat rate for housing loans beginning from N5 million to N15 million.

Zero equity on housing loans targeted at federal civil servants means those of them earning low salaries and are subscribers to the National Housing Fund (NHF) can now access N5 million mortgage with which they can start the journey to homeownership without the usual fear and difficulty in repaying the principal and the interest.

“We have removed equity contribution on all loans below N5 million in order to ease access to the National Housing Funds (NHF) in the country,” Ahmed Dangiwa, FMBN’s managing director, explained at an international housing conference in Abuja recently.

Equity contribution is a financial contribution calculated as a percentage of the loan, usually as high as 30 percent, which mortgage lenders demand from borrowers to serve as a hedge against loan default and also as a means of reducing the borrower’s risk exposure.

Mortgage banking operators say equity contribution is fundamental to mortgage lending just as a regular flow of income is. “Equity contribution is fundamental because there are institutional and regulatory developments that are still being expected in the industry.

“There is no dependable data-base of Nigerians yet; the national ID card remains largely unreliable and foreclosure laws are still not strong,” Eniola Bamidele, a mortgage operator, explained to BusinessDay.

This has been a major impediment to owning homes in Nigeria where house prices are extremely high. It is the reason homeownership level in the country is a little above 10 percent as against Singapore’s 65 percent, UK’s 72 percent, and over 80 percent in the US.

Equity contribution also validates a report compiled by Pison Housing Company which says that about 80 percent of the Nigerian population lives in rented accommodation, spending 50 percent of their income on paying house rent.

The Lagos State Home Ownership Mortgage Scheme (LagosHOMS) was an innovative and pace-setting initiative with which the state government under the Babatunde Fashola administration wanted to increase homeownership level in the state through increased access to mortgage.

The laudable scheme could not go far because of the 30 percent equity contribution, which the scheme demanded from the subscribers. The downward review of the equity contribution to as ‘low’ as 5 percent did not strike a loud chord among the state’s civil servants, which the scheme was targeted at.

This, along with other extraneous factors, is reason the state still struggles with enormous housing challenge. Roland Igbinoba, CEO, Pison Housing Company, noted in their revised State of the Lagos Housing Market report that the state has an estimated three million housing deficit and over 60 percent of its residents living in rented accommodation.

There is, however, hope for federal civil servants as Dangiwa disclosed that the apex mortgage bank has, besides the zero equity on housing loans below N5 million, introduced other new initiatives to ease access and improve affordability of houses in the country.

The bank is collaborating with national labour centres for targeted housing delivery under the National Affordable Workers Housing Scheme (NAWHS). It is also collaborating with the Head of Civil Service of the Federation for housing delivery for federal public servants, paramilitary organisations and cooperative societies for the informal sector.

Source: businessdayng

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