N8.7bn Approved For Road Construction in Yobe State

The Yobe State Executive Council, has approved the sum of N8, 701, 157, 489.00 for the execution of various new road projects within and outside Damaturu metropolis.

The Commissioner of Home Affairs, Information and Culture Alhaji Mala Musti revealed shortly after the exco  meeting at the State House,  Damaturu

The road projects approved for execution include 2.8 km road and 5.6km concrete drainage construction at Ali Marami Housing Estate, Damaturu at the cost of N560, 909, 854.30.

Other  approved  projects by the include a 2.4 km road and 4.8 km long concrete drainage at Anguwar Karo, Damaturu at the cost of N474, 029, 415.56;  1.5 km road and 3.0 km drainage line at Nayinawa Ward at the cost of N317, 433, 275.51 and the construction of 1.6 km road and 3.2 km long concrete drainage at Abbari Ward, also in Damaturu metropolis at the cost of N360, 111, 576.00.

“The residents of Don Etiebet Housing Estate, Damaturu will also have a 5.7 km road and 11.4 km drainage built for them at the cost of N1, 060, 536, 098.93”.

“As construction of the Damaturu International Cargo airport makes more progress, the State exco has approved N4, 999, 905, 407.38 for the construction of a new dual carriageway from Damaturu to Kalallawa Town to link the cargo airport with the state capital.

Souurce: Mohammed Abubakar

DMO floats 2nd N100bn sukuk bond to fund road infrastructure

The Federal Government through the Debt Management Office (DMO) has announced the sale of its second tranche seven-year N100 billion sovereign Sukuk, with the offer expected to close on December 17, 2018.

The bond, which is aimed at funding road infrastructure across the six geo-political zones, is payable semi-annually for seven years and is at a rental rate of 15.74 per cent to be due in 2025.

Speaking at the sovereign sukuk public offer-investor forum at the weekend in Lagos, Director General, DMO, Patience Oniha, said the success of the first N100 billion Sukuk bond launched in 2017 is down to the fact that the Nigerian financial market as well as its investors is getting more sophisticated and interested in new things, while calling for more participation on the part of the private sector.

She further added that the main objective of the second Sukuk issue is to sustain the rehabilitation and construction works on 25 key economic roads in the six-geopolitical zones with three roads now added for more reach.

“The success of the issuance of the first N100 billion Sukuk bond shows that the current administration is currently working round the clock to revamp the economy. The government is still spending a lot of capital, though we are not yet in the best place, we are in a good place. We want to see much more enthusiasm from the private sector as well as retail participation which stood at five per cent.

Borrowing is still going on but we want to have a stable portfolio but beyond borrowing, funds from the Sukuk bonds are strictly for capital projects especially road infrastructure. “

Oniha said debt levels remain moderate; adding that the increasing debt service is being managed by growth in revenue through the government’s efforts in engaging revenue mobilization initiatives aimed at encouraging tax payers to regularise their tax status.

According to her, the 2017 N100 billion Sukuk which was 5.8 per cent over-subscribed, ensured execution of road projects across all regions of the country, affirmed investors’ confidence and created jobs around the country.

She further added that the main objective of the second Sukuk issue is to sustain the rehabilitation and construction works on 25 key economic roads in the six-geopolitical zones with three roads now added for more reach.

Also speaking on the issuance of the Sukuk II offer, Deputy Managing Director, FBNQuest Merchant Bank Limited said Mr Taiwo Okeowo said, ‘‘we are happy to be participating in this initiative which will contribute to narrowing the country’s infrastructure deficit. With the issuance of the first Sukuk offer, we were able champion a robust investment drive – a demonstration of FBNQuest Merchant Bank’s strong distribution capacity.”

Subscribers could purchase N1,000 per unit subject to a minimum subscription of N10,000 and in multiples of N1,000 thereafter with FBNQuest and Islamic wealth manager, Lotus Capital managing the sale.

The DMO said it qualified as securities in which trustees could invest under the Trustee Investment Act and as government securities within the meaning of Company Income Tax Act (CITA) and Personal Income Tax Act (PITA) for Tax Exemption for Pension Funds. It will also be listed on the Nigerian Stock Exchange (NSE) and on FMDQ Over-The-Counter (OTC) platform and be classified as liquid asset by the Central Bank of Nigeria (CBN).

Source: Kehinde Akinsehinde-Jayeoba

Block makers laud Dangote on new cement

Block Moulders Association of Nigeria has commended the Dangote Group for its new cement, BlocMaster.

The Chairman of the block moulders in Suleja, Niger State, Chief Patrick Markuche, who described the new product as Dangote’s best in terms of quality, said it had helped improve the association’s members’ revenue.

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He said members of the association had passed a vote of confidence on the cement as well as the company.

“This is the best product from Dangote so far. We have tested it and we are very happy with the result we got so far. Even in the rain, this cement is the best for the purpose,” he said.

In a statement on Sunday, Dangote Cement said a distributor, Alhaji Mukhtar Moriki of Albabelo Company, said block makers now demand for more of the cement.

Dangote’s National Sales and Distribution Director, Adeyemi Fajobi, said the new cement was carefully made as part of the company’s improvement on innovation.

He said, “Our customers, and key distributors are happy because of the strength and quality of this product. It is also very affordable and it gives them far more yields than all other cements in the market. It is currently the highest grade of cement in Nigeria.”

“It is by far the strongest cement, bagged in the Nigerian market. This cement is 50 per cent stronger after one day and up to 15 per cent stronger after 28 days when the cement finally sets, so that explains the excitement displayed by our retailers and key distributors across the country.”

Fajobi said BlocMaster was a product of years of research, created with high quality to give users value for money by eliminating loss.

A new study says an overwhelming majority of millennials want to be homeowners, but student loans are holding them back

For many millennials, the idea of homeownership is still a big picture dream, with a new study saying 89 percent plan to purchase a home in the future — but simply can’t because of student debt.

According to a recent study released by Apartment List, 6,400 millennial renters nationwide were surveyed in regards to their plan for owning a home. Despite the majority of young people wanting to migrate away from renting, 48 percent have nothing saved for a down payment.

One of the leading reasons, according to Apartment List, is because of the staggering amount of student loan debt many millennials carry.

“Student debt is keeping homeownership out of reach for many millennials,” the authors of the study wrote. “We estimate that 23 percent of college graduates without student debt can save enough for a down payment within the next five years, compared to just 12 percent of college graduates who are currently paying off student loans.”

For millennials without a college degree, the odds of having enough money to purchase a home are even lower. Just six percent say they’re able to save enough for a down payment in five years, the study revealed.

Apartment List’s findings echoed separate studies illustrating how the student debt overhang is reverberating across the economy. A study released last year by the Federal Reserve Bank of New York showed that over the past decade, student loan debt in the U.S. has increased by 170 percent. Today, the average borrower has $34,000 in loans.

The Fed study also estimated that the average monthly payment on a student loan increased from $227 in 2005 to $393 in 2016. This means that with the rising cost of education, more young people are having an increasingly harder time saving for a traditional 20 percent down payment on a home.

As a solution, 19.4 percent of millennials surveyed said they are relying on financial assistance from a family member in order to make home ownership more attainable. However, the amount of assistance that a young person receives varies greatly based on income.

For millennials who make $100,000 or more, Apartment List found they expect to receive over $50,000 in financial assistance from a family member, which is more than the down payment needed for an average U.S. condo that costs $224,100. This number is also more than twice the amount of assistance individuals who make between $50,000 and $75,000 expect to receive from family — and it’s over 10 times the assistance that individuals who make less than $25,000 expect to receive.

Source: Courtney Coonley

U.S. Mortgage Rates Dip in Early December

According to Freddie Mac’s latest Primary Mortgage Market Survey, U.S. mortgage rates dropped in early December 2018, after weeks of moderating.

Sam Khater, Freddie Mac’s chief economist, says, “Mortgage rates declined this week amid a steep sell-off in U.S. stocks. This week’s rate reaction to the volatile stock market is a welcome relief to prospective homebuyers who have recently experienced rising rates and rising home prices.”

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Freddie Mac News Facts

  • 30-year fixed-rate mortgage (FRM) averaged 4.75 percent with an average 0.5 point for the week ending December 6, 2018, down from last week when it averaged 4.81. A year ago at this time, the 30-year FRM averaged 3.94 percent.
  • 15-year FRM this week averaged 4.21 percent with an average 0.4 point, down from last week when it averaged 4.25 percent. A year ago at this time, the 15-year FRM averaged 3.36 percent.
  • 5-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) averaged 4.07 percent with an average 0.3 point, down from last week when it averaged 4.12. A year ago at this time, the 5-year ARM averaged 3.36 percent.
PMMS Dec 2018.png
Source: Monsef Rachid

FCA finds some lenders could manage long term mortgage arrears better

Homeowners in the UK who find themselves in arrears should contact their lender sooner rather than later but those providing mortgages could manage some situations better, according to the financial watchdog.

The Finance Conduct Authority says that its latest review has found some inconsistencies in how lenders manage arrears and has re-iterated that repossession should always be a last resort.

It had previously identifies a trend of increasing long term arrears but also pointed out that homes being repossessed have been falling. The FCA wanted to find out if owners with long term mortgage arrears were experiencing harms from extended forbearance.

Examples of harm could include forbearance arrangements which were unaffordable, with severe consequences for the overall financial situation of customers, or where the debt continues to grow. It could also ultimately result in a repossession with considerably reduced equity in their homes.

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Overall, the FCA did not identify widespread harm to customers from extended forbearance but did find inconsistencies in firms’ arrears management practices.

But it pointed out that this is against a backdrop of low interest rates where the interest on arrears balances was relatively low. ‘It’s important that customers who are already in long term arrears, and mortgage customers who might go into arrears with an increase in interest rates, or a change to their personal circumstances are aware of what actions they should be taking,’ says the report.

It advises anyone in difficulties to speak to their mortgage provider at the first sign of financial difficulty, or a change in circumstances, so they can discuss their circumstances together and identify potential solutions.

The advice is to not delay or ignore the situation as speaking with their mortgage provider early may prevent the situation from worsening as their provider may be able to discuss a wider range of options.

This may also give them more time to make a difference and additional support and free, independent guidance is available from organisations such as the Money Advice Service.

‘We know that many customers remain hesitant to contact their lender to discuss their mortgage arrears for a variety of reasons. We encourage customers to talk to their lender as early as possible as this may give them more time and options when it comes to the steps they can take,’ said Jonathan Davidson, executive director of supervision.

The FCA encourages customers with arrears to engage with their mortgage provider about mortgage arrears and the options that are available to them. The FCA has also provided the feedback to firms in the sample and is considering where in some cases further regulatory action in necessary. Under the FCA’s rules, firms may only consider repossession as a last resort.

Jackie Bennett, director of mortgages at UK Finance, said it is encouraging that overall the FCA did not identify widespread harm to customers from extended forbearance but added that the industry acknowledges the regulator’s findings of some inconsistencies in firms’ arrears management practices.

‘Anyone with concerns about making their mortgage repayments should contact their lender as soon as possible to discuss the support and options available to them, a message echoed by the FCA,’ she explained.

‘UK Finance will continue to engage closely with the regulator, lenders and administrators to deliver fair outcomes for those customers in financial difficulty,’ she added.

Source: PropertyWire

Leveraging private sector funding for infrastructure development

One of the targets of the Federal Government, as contained in the Economic Recovery and Growth Plan, is to use infrastructure development to build a competitive economy for Nigeria. IFEANYI ONUBAexamines the need to attract private sector funding for critical road and power projects across the country

Nigeria’s strong fundamentals such as natural resources, large market, and young population make it an attractive destination for private sector investment.

However, Nigeria is considered a challenging place to do business because of the difficulties in accessing finance, inefficient bureaucracy, ambiguous and inconsistent regulations, corruption and poor infrastructure.

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The Economic Recovery and Growth Plan intends to tackle these issues in two main ways – by accelerating infrastructure development, specifically power, roads, rail, ports and broadband; and making it easier to do business in Nigeria by improving the legal and regulatory environment, and related processes.

Based on official statistics, the value of Nigeria’ total infrastructure stock (road, rail, power, airports, water, telecoms, and seaports) represents only 35 per cent of the country’s Gross Domestic Product. This is far below the level of peer emerging market countries where the average is 70 per cent.

To optimise the contribution of the sector, Nigeria needs to invest $3tn in infrastructure over the next 30 years according to the National Integrated Infrastructure Master Plan.

The Federal Government cannot provide the resources all by itself. It will be leveraging private sector capital in a variety of ways such as public-private partnerships, special purpose vehicles, investment funds, and various guaranty arrangements.

In these arrangements, government does have a key role to play. One of the plans of the Federal Government is to make strategic use of the Nigerian Sovereign Investment Authority, which manages the national sovereign wealth fund.

In a bid to eliminate the risks of project funding, cost variation and completion that have plagued the development of the nation’s critical infrastructure assets, the Presidential Infrastructure Development Fund was established by the Federal Government for five critical road and power projects across the country.

The PIDF currently being managed by the NSIA with a seed funding of $650m was targeted to catalyse funding for second Niger Bridge, Lagos-Ibadan expressway, East-West road, Abuja-Kano road, and Mambilla Hydroelectric Power.

As of December 5, a total amount of N33bn had been released for the implementation of the second Niger bridge project.

The Managing Director, Nigerian Sovereign Investment Authority, Mr Uche Orji, confirmed the figure while speaking shortly after an inspection of the project.

Orji visited the site with the Obi of Onitsha, Igwe Nnaemeka Achebe, who was accompanied by some of his chiefs.

The second Niger bridge project which is being handled by Julius Berger Plc was awarded in 2014 by the administration of former President, Dr Goodluck Jonathan.

The project which is estimated to gulp about N220bn had been experiencing delays as politicians find it easy to play politics with the implementation of the project, pretending to move to site as elections approach.

It involves the construction of an 11.9km, three lane Greenfield highways as an alternative connection between Asaba (Delta State) and Onitsha (Anambra State), within reasonable distance from the existing Niger Bridge.

The project scope also includes the construction of a full clover-leaf interchange at the Onitsha-Owerri Expressway and additional secondary bridges at the Amakom Village (Delta side) and the Atani Road (Anambra side).

The NSIA’s involvement with the project started in 2014 through its wholly owned subsidiary, NSIA Motorways Investment Company Limited.

However, Orji said the NSIA’s role in the project had evolved with the establishment of the PIDF in 2018. He expressed optimism that the project would not experience further delay.

He said that the private sector funding for the project was being planned to be raised by 2020 through a combination of bond and equity.

The NSIA boss said that the PIDF would eliminate the risks of project funding, cost variation and completion that have plagued the development of the nation’s critical infrastructure assets.

He added that the PIDF programme was an initiative of President Muhammadu Buhari designed to facilitate the rapid completion of key infrastructure projects that had been stalled for years.

According to him, the bridge and roads will be tolled on completion to recoup the money spent in building them.

He said the PIDF with a seed funding of $650m was targeted to catalyse funding for the second Niger Bridge, Lagos-Ibadan expressway, East-West road, Abuja-Kano road, and Mambilla Hydroelectric Power.

According to him, the funding sources for the PIDF include: N585bn from the Nigerian Federation (Federal, State and Local Governments), N97bn from NSIA, N1.5bn from export credit agencies, and N372bn from private investors.

Orji noted that NSIA was working closely with the Federal Ministry of Finance and the Federal Ministry of Power, Housing and Works to ensure proper financing and completion of the projects.

He said, “The PIDF is an initiative of the Presidency conceived to accelerate the execution of critical, strategic infrastructure projects essential to the rapid growth and modernisation of Nigeria’s economy.

“Already, three projects are in construction: Second Niger Bridge: A greenfield construction of an 11.9km, 2×3 lane Greenfield highway connecting Asaba (Delta State) and Onitsha (Anambra State). The project is vital for the development of the region.

“The Lagos – Ibadan Expressway involves the rehabilitation, reconstruction and expansion of that corridor.

“The 127 km highway links the city of Lagos with Ibadan and proceeding onwards to connect the northern region of the country. It is among Africa’s most important roadways.”

On the Abuja-Kano expressway, he said the project entails the modernisation of 370 kilometres of road.

“It is a critical part of the A2, which is a main artery within Nigeria’s transportation grid, enabling the movement of people and products from the north to the south and vice versa,” he said.

On the Mambilla Hydro-Power Project, Orji said it entails a 3050 MW Hydroelectric Power facility located in Sardauna Local Government of Taraba State.

He added, “On East-West road, the Project entails the construction of a 30km dual-carriage way spanning from Oron in Akwa Ibom State through to Calabar in Cross River state. The road will serve as a transit corridor for the movement of heavy equipment for oil exploration and production in the Chad Basin.

“These projects are expected to greatly enhance the prospects of Nigeria’s economic growth and will be undertaken using international best-practices.

“The approach for financing the programme is designed to eliminate risks attributable to funding, cost variation and project completion.

“At completion, it is expected that the investments in these projects will yield returns, which will diversify revenues to States, improve the fiscal sustainability profile of the Federation and ensure Nigeria benefit from modernised Infrastructure for decades to come.”

He said the Authority was pleased with the progress recorded so far on the projects.

The NSIA said, “Leveraging the financing model adopted by government under PIDF, completion-related risks on account of funding have been eliminated.

“Further, the model affords efficiency on project delivery and fund performance while allowing for value engineering which ensures completion at a reasonable cost and within the planned project timeline. It is expected that in the long-run, these investments would help improve Nigeria’s economic growth forecast.”

The PIDF, according to him, is aimed at delivering these five projects that have been stalled for several years.

He said, “Take the second Niger Bridge out of the equation for a minute and look at Mambilla power project which is 40 years in planning. Take a look at the East-West road and quite a number of things.

“It’s a matter of saying let’s have a programme that will go into the heart of these five projects and I think the NSIA is managing that programme and we are very confident that they will come to fruition.”

The Obi of Onitsha in his comments called on the government to ensure the timely completion of the project.

He said the project was strategic to the country as it would further boost economic activities in the region.

He said, “The project has been long in coming. The bridge will transform the way businesses are conducted here. It’s a big thing for Nigeria to complete the project.

“On our part, we will make sure that there is peace all along the routes for the project and if there are any problems, let us know.

“We want to make sure that nothing impedes the project. We will do our part and we hope the government does its own part too.”

He said when completed, the economic impact of the project would be massive in the area of job and wealth creation.

He said, “Compensation for the land acquired should be done. Some people have been dispossessed of their ancestral lands and there is need for them to be settled. But that should not slow down the work.

“The second point is that in terms of opportunities, we want you as much as possible to employ our young men and women in all the areas that are affected who are professionally qualified to perform the jobs.

“This will give them a sense of inclusion because the economic impact will be massive. It will help them support the project and protect it for it to be successful.

He added, “This is a bridge that connects all the parts of the country because it’s a national project. We in Onitsha will benefit because it will reduce traffic in this axis. The project will open up activities for the country.”

The Project Director, Mr Friedrich Weiser, said that the second Niger Bridge was now 15 per cent completed.

He expressed optimism that the project would be delivered by February 28, 2022.

He said about 800 people were currently working on the project with 50 per cent of them employed from the local community

Source: Punch


If there is any problem the nation is facing today, it is how to gainfully employ her youth population; which are in the millions. The problem of unemployment, which has led to increase in social vices, is becoming monstrous. It is like sitting on a keg of gun powder. Unemployment was the root cause of Arab spring. When Mr President was asked a few weeks ago when his government will start the implementation of the promised N5,000.00 for unemployed graduates, he simply told them that, this was not his government priority; that he planned to concentrate on Power, Agriculture, Infrastructure development and Solid mineral. These areas had always been the area of concentration of successive governments at the expense of housing. There is urgent need for thinking outside the box. The democracy day garden meeting with the learned Vice-President and the road map for economic recovery and development he presented were not pragmatic enough considering the enormity of our challenges.

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Most governments for lack of understanding always put Housing at the end of their shopping list. They tend to believe that it can always be attended to after other needs had been met or when the state can afford it. What a big mistake! Housing is the “gbogbonse” of a depressed economy. A catalyst for growth! When housing is made a priority, other things will fall in line. It is the engine of economic growth. It is the surest basis for the nation’s industrial take off.

No other sector can generate massive employment as housing. An average 3 bedroom flat acquires 10 windows and 10 doors. 10,000 housing units will therefore require 100,000 windows, 100,000 doors and about 50 million blocks. Can anyone imagine the labour requirement to mould 50 million blocks and fabricate these doors and window, including painting, roofing and furnishing? No wonder David Cameron promised to build UK out of recession in 2010. He planned to embark on 270,000 housing units across UK per annum. Milton Keynes – a new town near London; is a living testimony of this radical approach. When there are many construction projects going on, local resources from near and far are mobilised and wealth is created: Infrastructural development will follow automatically. Men and women are busy, poverty and crime are alleviated.

Housing cannot and should not wait. It is now! It should therefore be part of the priority areas in the current budget. The projected 7 (seven) thousand units to be developed this year is very inadequate but a step in a right direction. Please ensure its delivery. It should not be empty promises or business as usual. At the end of this budget year, Government should tell us where these houses were built. Try these and we will begin to witness true recovery. I will equally encourage the Honorable Minister of Works, Power & Housing – Mr Babatunde Fashola to revisit the policy that our team put in place for the nation in 2007; when former President Obasanjo appointed seven of us into the Technical Board of Federal Housing Authority.

A continued neglect of housing sector is already manifesting in the emergence of the militant groups across the country. Nigeria should know that unemployment and poverty were the origin of the Arab Spring.

Source: Professor Timothy Nubi

23 Different Green Building Materials

The aim of using green building materials is to construct energy-efficient structures and to build those structures one should be aware of different green building materials, their properties and how they contribute into saving energy.

Green Building Materials used in Construction

Following is the list of Green building materials used in construction :

  1. Earthen Materials
  2. Wood
  3. Bamboo
  4. SIPs
  5. Insulated Concrete Forms
  6. Cordwood
  7. Straw Bale
  8. Earth Bags
  9. Slate/ Stone Roofing
  10. Steel
  11. Thatch
  12. Composites
  13. Natural Fiber
  14. Polyurethane
  15. Fiber Glass
  16. Cellulose
  17. Cork
  18. Polystyrene and isocyanurate
  19. Natural Clay
  20. Non- VOC paints
  21. Natural Fiber Floor
  22. Fiber Cement
  23. Stone

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1. Earthen Materials

  • Earthen materials like adobe, cob, and rammed earth are being used for construction purposes since yore.
  • For good strength and durability- chopped straw, grass and other fibrous materials etc. are added to earth.
  • Even today, structures built with adobe or cob can be seen in some remote areas.
Adobe made Structure
Fig 1: Adobe made Structure

2. Engineered Wood

  • Wood is one of the most famous building materials used around the world.
  • But in the process of conversion of raw timber to wood boards and planks, most percentage of wood may get wasted.
  • This wastage can also be used to make structural parts like walls, boards, doors etc. in the form of engineered wood.
  • Unlike solid wood, engineered wood contains different layers of wood, usually the middle layers are made of wood scraps, softwoods, wood fibers etc.
Engineered Wood Board
Fig 2: Engineered Wood Board over Solid Wood Board

3. Bamboo

  • Bamboo is one of the most used multipurpose and durable materials used in construction.
  • These trees grow faster irrespective of climatic conditions. So, it makes it economical as well.
  • They can be used to construct frames or supports, walls, floors etc.
  • They provide a good appearance to the structures.
Bamboo Structure
Fig 3: Bamboo Structure

4. SIPs

  • Structural insulated panels (SIPs) consist of two sheets of oriented strand boards or flake board with a foam layer between them.
  • They are generally available in larger sizes and are used as walls for the structure.
  • Because of their large size, they need heavy equipment to install however, they provide good insulation.
Structural Insulated Panel (SIP)
Fig 4: Structural Insulated Panel (SIP)

5. Insulated Concrete Forms

  • Insulated concrete forms contain two insulation layers with some space in between them. This space contains some arrangement for holding reinforcement bars, after placing reinforcement, concrete is poured into this space.
  • They are light in weight, fire resistant, low dense and have good thermal and sound insulation properties.
Insulated Concrete Forms
Fig 5: Insulated Concrete Forms

6. Cordwood

  • If wood is abundantly available and easily accessible to the site of construction, cordwood construction is recommended.
  • It requires short and round pieces of wood which are laid one above the other, width wise, and are bonded together by special mortar mix.
  • They are strong, environmental friendly and also give good appearance to the structure.
Cordwood Wall
Fig 6: Cordwood Wall

7. Straw Bale

  • Straw bale is another green building material which can be used as framing material for building because of good insulating properties. They can also act as soundproof materials.
  • Non-load bearing walls of straw bale can be used as fill material in between columns and, in beams framework is recommended.
  • Since air cannot pass through them, straw bales also have some resistance to fire.
Straw Bale Wall
Fig 7: Straw Bale Wall

8. Earth Bags

  • Earth bags or sand bags are also used to construct walls of a structure.
  • These types of structures can be seen in military bases, near banks of water resources etc.
  • Generally, bags made of burlap are recommended but they may rot very easily and hence, polypropylene bags are used nowadays.
Earth Bag Walls
Fig 8: Earth Bag Walls

9. Slate Roofing

  • Slate is naturally formed rock which is used to make tiles.
  • Slate tiles have high durability and they are used as roofing materials.
  • Slate roofing is preferred when it is locally or cheaply available.
Slate Roofing
Fig 9: Slate Roofing

10. Steel

  • Steel roof panels and shingles are highly durable and they can be recycled again and again. So, these are the best choices for green roofing materials.
Steel Roofing
Fig 10: Steel Roofing

11. Thatch

  • Thatch is nothing but dry straw, dry water reed, dried rushes etc. These are the oldest roofing materials which are still in use in some remote locations of the world and even in cities for aesthetic attractions.
  • It is cheaply available for roofing and a good insulator too.
Thatch Roofing
Fig 11: Thatch Roofing

12. Composites

  • Roof panels made of composite materials such as foam or cellulose layer sandwiched between two metal sheets or two plastic sheets also come under green building materials.
  • They are light in weight, inexpensive and provide good insulation for the structure and save energy.
Composite Roof Panels
Fig 12: Composite Roof Panels

13. Natural Fiber

  • Natural fibers like cotton, wool can also be used as insulation materials.
  • Recycled cotton fibers or wool fibers are converted into a batt and installed in preformed wooden frame sections.
Cotton Insulation
Fig 13: Cotton Insulation

14. Polyurethane

  • Polyurethane foam is available in the form of spray bottles. They are directly sprayed onto the surface or wall or to which part insulation is required.
  • After spraying it expands and forms a thick layer which hardens later on.
  • They offer excellent insulation and prevent leakage of air.
Polyurethane Foam Spray
Fig 14: Polyurethane Foam Spray

15. Fiberglass

  • Fiberglass is also used for insulation purposes in the form of fiberglass batts.
  • Even though it contains some toxic binding agents, because of its super insulation property at low cost it can be considered as a green building material.
Fibergalss batt
Fig 15: Fibreglass batt

16. Cellulose

  • Cellulose is a recycled product of paper waste and it is widely used around the world for insulation purposes in structure.
  • It acts as good sound insulator and available for cheap prices in the market.
Cellulose Insulation
Fig 16: Installing Cellulose Insulation

17. Cork

  • Cork is also a good insulator. Boards or panels made of cork are available in markets.
  • A great amount of electrical energy can be saved by corkboard insulation in winter.
  • These cork boards are also good for sound insulation.
Installing Cork Boards
Fig 17: Installing Cork Boards

18. Polystyrene and isocyanurate

  • Polystyrene and isocyanurate foam sheets are another type of insulation materials which are available in the form of boards or sheets.
  • These are generally provided as insulators on exterior sides of a structure, below the grade etc.
Polystyrene Foam Sheets
Fig 18: Installation of Polystyrene Foam Sheets

19. Natural Clay

  • Plastering of walls can be done using natural clay rather than other gypsum-based plasters.
  • Natural clay plaster with proper workmanship gives a beautiful appearance to the interior.
Natural Clay Plastered Walls
Fig 19: Natural Clay Plastered Wall

20. Non-VOC paints

  • Non-VOC paint or green paint is recommended over VOC containing paints.
  • Presence of Volatile Organic Compounds (VOC) in paint reacts with sunlight and nitrogen oxide resulting in the formation of ozone which can cause severe health problems for the occupants.
  • If non-VOC paint is not available then try the paint with very low-VOC content in it.
Non-VOC Paint
Fig 20: Non-VOC Paint

21. Natural Fiber Floor

  • Naturally occurring materials like bamboo, wool and cotton fiber carpets, cork etc. can be used for flooring purposes.
Natural Fiber Flooring Rugs
Fig 21: Natural Fiber Flooring Rugs

22. Fiber Cement

  • Fiber cement boards are made of cement, sand and wood fibers.
  • For exterior siding, fiber cement boards are good choice because of their cheap price, good durability and good resistance against fire.
Fiber Cement Boards
Fig 22: Exterior Siding with Fiber Cement Boards

23. Stone

  • Stone is a naturally occurring and a long-lasting building material. Some Stone structures built hundreds of years ago are still in existence without much abrasion.
  • Stones are good against weathering hence they can be used to construct exterior walls, steps, exterior flooring etc.
Natural Stone Wall


The Major Challenge of Inadequate US Housing Supply

In the last 10 years, since the Great Recession, the economy has expanded greatly, but the housing market still has not recovered. Since 2011, residential housing construction has increased, but only gradually – and not enough to meet demand.

Consider this: from 1968 to 2008, a span of 40 years, there was only one year in which fewer new housing units were built than in 2017 (Exhibit 1)—and this despite rising demand in a growing economy.

In a recent Insight, we examined the demand side of the housing market, focusing particularly on the experiences of young adults. Our research shows that housing costs have been the most significant factor preventing young adults from forming their own households as well as buying a house. Robust demand but weak supply has driven up housing prices rapidly, which in turn is acting as a force to balance demand against supply. Facing higher home prices and rents, many young people are doubling up in shared living arrangements or living at home with their parents.

Click here to watch weekly episodes of Housing Development Programme on AIT

In our earlier Forecast, we discussed two main reasons for the lower levels of housing production (relative to population): increase in development costs and shortage of skilled labor.

Home building costs encompass the cost of land and regulatory costs. Since 2010, the cost of land has averaged about 23 percent of total home building expenses.1 But in some markets like San Jose, Santa Ana, Oakland, and Los Angeles, land can cost upward of 70 percent of the cost of building a home. Laws and regulations such as local zoning restrictions on lot sizes and building height and open space designations also increase the cost of building a home, in turn reducing the supply of new homes. Regulatory costs increased 29 percent between 2011 and 2016, the National Association of Home Builders (NAHB) estimates.

On the labor side, the U.S. construction industry is suffering from a shortage of skilled workers. The count of unfilled jobs in the construction industry reached post-Great Recession highs in 2018, the NAHB reports. (See our previous Forecast).

However, other factors are constraining the supply of housing, as well. Opposition to new developments near homes and communities by residents—so-called NIMBYism (Not In My Back Yard)—is restricting new construction in some locales. With young adults flocking to urban areas from suburban or rural areas, housing demand in urban areas is growing, but it takes time to construct housing to accommodate the growing demand

After nearly a decade of low levels of building, housing stock is well short of what the United States needs. In this Insight, we focus on the consequences, rather than the causes. Our analysis shows that 370,000 fewer units were built in 2017 than needed to satisfy demand. Overall, the shortfall ranges from a low of 0.9 million to a high of 4.0 million housing units, as of the second quarter of 2018, depending on the assumptions (see discussion later in this Insight). If supply continues to fall short of demand, home prices and rents are likely to outpace income and household formation will fail to reach potential. The inadequate level of U.S. housing supply is a major challenge facing the housing market in 2018 and likely for years to come.

The current pace of building is not enough to meet demand

In 2017, the United States added 1.25 million additional housing units, which includes homes, apartments, and manufactured homes. But the country needs far more units to meet demand. Adding up all the gross additions to the housing supply and comparing that to the replacement of depreciating stock and the fundamentals of housing demand reveals a large and persistent shortfall in recent years. We estimate that the current rate of demand is approximately 1.62 million housing units per year—370,000 units more per year than the current rate of supply.

Three factors drive the need for housing construction: growing demand from a growing population; the need to replenish existing stock; and the need for vacant units in a well-functioning market. We examine each factor in turn next.

A growing population boosts housing demand

The U.S. population of first-time homebuyers has become younger in recent years. Nearly 90 million residents were between 15 and 34 years old in the United States in 2016, 6 million more than those aged 35 to 54, the U.S. Census Bureau reports. With the age of the median first-time home buyer now at 31 years, these young adults comprise a large share of the first-time home buyer population and therefore drive demand higher.

The result of young adults returning home to live with parents or roommates is pent-up demand for housing. Our research shows that despite demographic shifts and other long-run trends that may reduce household formation rates for the young adult population, the key factors suppressing household formation are associated with housing costs and the labor market. If the economy remains strong and housing costs moderate, then household formation for young adults could significantly increase. We estimated that over the next decade young adults (those aged 15 to 34 in 2016) will add about 20 million households. And those households will need a place to live.

Conceivably, young adults could buy homes vacated by older Americans, but as our February 2017 Insight explains, seniors aged 55+ overwhelmingly prefer to age in place. Better health and education has boosted and extended housing demand from seniors, who are now much slower to transition out of homeownership than prior generations.2 Altogether, we estimate that U.S. net household growth needs to average around 1.1 million households over the next few years to meet the needs of a growing population. Eventually as the Boomers age out of the housing market and young adults are replaced by the smaller Generation Z, the growth in households will moderate somewhat, though the date for that moderation is well into the next decade.

Depreciating stock must be replenished

Over time, housing stock gradually depreciates and therefore must be replaced. The U.S. Census Bureau3 computes the loss rate for U.S. houses, apartments, and manufactured homes based on the age and location of the unit. Estimates from the Census Bureau indicate that the U.S. housing market needs to add approximately 350,000 units per year to replace lost units.4

A well-functioning market needs vacant units

In addition to catering to the growing population and replacing lost units, a well-functioning housing market requires some vacant properties for sale and for rent (classified as “year-round vacant” by the U.S. Census Bureau). Vacant homes increase liquidity in the market, enable prospective buyers to find a match, and give prospective sellers confidence to list their home for sale. Vacancy rates are an important indicator of housing market vitality. Too high of a vacancy rate reflects a moribund

market, while too low of a rate reduces the efficiency of the marketplace. Exhibit 2 shows trends in the vacancy rate for U.S. housing stock. The vacancy rate has declined sharply since 2010, mostly due to lack of inventory.

Growing seasonally vacant units

Many vacant homes in the United States are seasonal units, or vacation homes. About 3 percent of the U.S. housing stock is seasonally vacant. As the housing stock expands, so will the demand for second homes. Second home demand adds up to approximately 100,000 units per year. The National Association of Home Builders has estimated that the stock of second homes increased by 120,000 units per year from 2009 to 2014. With the overall economy continuing to grow and wealthier households doing especially well, we anticipate the demand for second homes to continue at a similar pace in years to come.

Growing year-round vacant units

The trend of year-round vacant properties that are not on the market for sale or rent has also been growing. Part of the reason why year-round vacancies have risen is due to geographic variations in housing demand. Structures are long-lived and can outlast their demand. As the population of the United States has drifted south and west, the populations of many legacy cities in the Midwest and Northeast that once boasted large populations have now declined sharply. If the overall year-round vacancy rate was to remain constant at around 10 percent, then for each 1 million additional households, 111,000 vacant units would need to be added to keep the vacancy rate fixed.

Annual U.S. housing need

Altogether, we estimate that 1.62 million units are needed annually to meet the housing demand: 1.1 million to accommodate household growth; 300,000 units to replace depreciated existing stock; 100,000 to meet the demand for second homes; and 120,000 units to provide enough vacant homes to maintain an efficient marketplace. This estimate is our baseline. Exhibit 3 also presents estimates based on low and high scenarios. There is considerable uncertainty around each assumption and each estimate. Thus, the true level of long-run housing demand is uncertain. However, even the low estimate (1.30 million units per year) exceeds the current rate of housing construction (1.25 million units in 2017)—meaning even under a low estimate, at least 50,000 American households each year can’t buy or rent a home because it hasn’t been built.

How many housing units are needed to match long-term demand?

The preceding analysis accounts for a one-year shortfall, but as noted, residential construction in the United States has been historically weak for almost a decade. If we compare trends over this century, how does the current housing supply compare to our estimates of housing demand? As of the second quarter of 2018, we estimate that the U.S. economy is about 2.5 million housing units below what is needed to match long-term demand.

The U.S. economy is about 2.5 million housing units below what is needed to match long-term demand.

First, we need an estimate of the long-term housing vacancy rate. Based on the previous discussion, we estimate that this vacancy rate should be around 13 percent. The vacancy rate for the United States is 12.3 percent, according to the latest U.S. Census Bureau Housing Vacancy Survey (HVS) (second quarter of 2018). Given a target vacancy rate of 13 percent, it may appear that the housing market is roughly balanced, or perhaps only a little undersupplied. However, this analysis only considers current market conditions and does not account for pent-up housing demand.

The number of U.S. households as of the second quarter of 2018 is about 121 million, according to the Housing Vacancy Survey. To understand the target/ideal numbers of households,5 we need to identify the factors that affect the formation of households (See previous Insight). As discussed in our previous Insight, the following factors impact household formation: housing costs, income, employment, education, marriage and children, race, and geography. Of these factors, our study identified housing costs to be the biggest impediment to household formation, followed by labor market outcomes. The target number of households would be the number of households when we assume there are no constraints from housing costs, or income, or employment. The unconstrained number of households could range between 122.5 million in the baseline scenario and 123.8 million in the high scenario.6

To accommodate a larger number of households and keep the vacancy rate at 13 percent, the housing supply would need to increase by 2.5 million units, expanding from 138.3 million units to 140.8 million units in our baseline, or increase as much as 4.0 million units to 142.3 million units in our high scenario (Exhibit 4). In our low scenario, vacancy rates fall to 12 percent as year-round vacancies fall by 1 percentage point and the housing supply only needs to expand by 900,000 units to 139.2 million units.

To bridge the gap between the current housing supply and future demand, housing construction will need to accelerate. First, the annual gap of 370,000 units currently being undersupplied relative to long-term demand must be filled. Then, the housing market will need to supply excess units for some time to bring the housing stock up to its target level.

Part of the reason the U.S. housing market is so undersupplied is because the areas of the country where employment has grown robustly are also areas where the housing stock is only inelastically supplied (See previous Insight). Even in areas with strong employment growth and long-run elastic housing supply—Texas, for example—shortfalls in skilled construction workers and available lots have prevented the housing supply from expanding rapidly enough in the short run to meet demand. Even in traditionally elastic housing markets, home prices are rising well above long-run averages.

In other parts of the country, particularly in the Midwest and Northeast where population has declined, hypervacancy rates have soared (Mallach 2018; Molloy 2014) and year-round vacancy rates exceed 20 percent.7 These struggling communities have little prospect of an immediate turnaround and contribute to our nation’s long-lasting upward shift in year-round vacancy rates.

Over time, the housing supply in high-growth but elastically supplied areas will expand, but in the interim, housing cost pressures may result in movement toward areas with lower housing costs. If housing demand shifts toward lower-cost housing markets that currently have available housing supply, the long-term vacancy rate could also begin to decline.


The United States is not building enough housing to meet demand. The current annual rate of construction is about 370,000 units below the level required by long-term housing demand. And after years of low levels of building, a significant shortfall has developed, with between 0.9 and 4.0 million too few housing units to accommodate long-term housing demand.

In our latest Forecast, we forecast housing construction to pick up gradually. However, it will still be a year or more before the level of building matches incremental annual long-term housing demand. To bridge the shortfall of total units, the U.S. housing market may need to supply more than 1.6 million units per year.

Until construction ramps up, housing costs will likely continue rising above income, constricting household formation and preventing homeownership for millions of potential households.

Appendix A.1 Calculating the target household level

We estimate the target number of households based on population and headship rates (the number of head of households/total households) using the following equation (eq. A.1.1):

where i = 5-year population age groups from 15-19 to 65+

and hri* = target headship rate of age group i.

We obtain the headship rates for 1994−2018 from the Current Population Survey–Annual Social and Economic Supplement (CPS-ASEC) using the Integrated Public Use Microdata Series (IPUMS) (Flood et al. 2017).

To estimate the target households, we need the target headship rate. We then adjust this headship rate( hr * ) based on the following factors: housing costs, income, and employment (Household Formation Insight). To obtain the contribution of these factors to household formation, we run the Oaxaca-Blinder decomposition on the factors affecting household formation. Based on the contribution of the factors, we add back the factors related to economic conditions such as income, employment, and housing costs because these factors can be considered temporary. Factors associated with sociological changes such as increase in life expectancy, delay in marriage age, and change in educational attainment are considered permanent. Therefore, we exclude them from the calculation of the target headship rate.

Factors associated with sociological changes such as increase in life expectancy, delay in marriage age, and change in educational attainment are considered permanent. Therefore, we exclude them from the calculation of the target headship rate.

For the baseline scenario, we add back housing costs assuming that housing costs become more favorable for household formation. The target headship rate would then be (eq. A.1.2)

where αhousingcost, i is the contribution of housing costs to the total headship rate.

For the high scenario, we assume that housing costs and labor market outcomes both become more favorable and that would improve the prospects of household formation (eq. A.1.3)

where αincome and employment, i is the contribution of labor market outcomes to the total headship rate.

Using the new headship rate, we compute the target households based on the population using eq. A.1.1, arriving at a CPS-ASEC based target household number for the second quarter of 2018.

However, household estimates vary considerably based on the source. Because we use the Housing Vacancy Survey for our analysis of housing supply, we must convert households based on the CPS-ASEC to a series consistent with the estimates from the HVS. To do so, we compute the gap in households between the target and the latest estimate from the CPS-ASEC. Then we apply a multiplier to this gap that is proportional to the gap between the CPS-ASEC and HVS household counts. The CPS-ASEC household estimate for March 2018 was 127.6 million. The HVS estimate for that month was 120.7 million. We deflate our target households by a factor equal to 120.7/127.6, or 0.95.

Based on the target households and the target vacancy rate of 13 percent, we estimate the target housing stock (k*) needed as (eq. A.1.4)

The difference between the current housing stock and the target housing stock k and k* gives us an estimate of the shortfall in terms of housing units to match long-term demand.

Source: FreddieMac

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