Are shipping containers the future of affordable housing?

Millions of people need homes. Millions of shipping containers are going unused. Could this be an answer to the global housing crisis? Cleveland Containers explore further

England is facing a housing crisis. According to housing charity Shelter, more than 50,000 households a year are being forced out of their homes, and there are more than 9 million renters in unsecure rented accommodation. The situation is shaky even for those who own their own homes. 28,900 homes were repossessed across the UK in 2013.

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But this situation isn’t unique to England. House prices are soaring across the world, which is placing home ownership out of reach for millions. And that’s just in the developed world. Around 850 million people are currently living in “informal settlements”. In numerous rapidly urbanising cities, the average housing costs can be up to 200% of the net monthly income.

There is no single explanation as to why the world’s facing a housing crisis, and there’s no easy answers for how to solve it. But one major factor is a general dearth of good quality, affordable housing. Many developments in the housing market are focused on constructing high-end units that are expensive to build and out of the price range of most. This needs to change.

Desperate times often call for radical solutions. One thing the world isn’t lacking is shipping containers. There may be up to 40 million shipping containers in the world right now, and experts believe that only six million are currently in use.

Who’d live in a shipping container?

Shipping containers are built to be strong, secure, and practical. These are all sound benefits for storage and mass transit, but do they make for comfortable accommodation?

The idea of living in a shipping container might strike some as odd – unfeasible, impractical, and maybe even a little unappealing. But it’s important to think of shipping containers not as finished products, but as raw materials – as exoskeletons for future homes.

Because really, there’s no end to what you can do with a shipping container. They can easily be insulated and fitted with windows, doors, indoor partitions, electricity and running water – everything that’s needed for human inhabitation. A single shipping container can be transformed into a cosy dwelling in no time at all. But if more space is needed, you can just stack multiple containers on top of each other.

And if you’re really wondering whether people would be comfortable living in converted shipping containers, just consider the great reaction that greets shipping containers converted for retail use. They’re thought of as cool, hip, quirky. When used as affordable housing, it’s no stretch to say that many won’t think of shipping containers as a last resort, so much as actively desirable.

Urbanisation that leaves nobody behind

Using shipping containers for accommodation is a form of modular construction. Most of the work can be done offsite, and then it’s simply a case of transporting the containers to location for installation. Because of this, it’s possible to completely transform areas in a very short timeframe.

There are numerous examples of shipping container villages that have been rapidly constructed on brownfield sites to create a hip new urban developments for work, rest and play. Though most of these “villages” have been built with shopping, dining or entertainment in mind, it’s easy to picture a village created just for accommodation.

In a matter of months, you could transform an unused piece of land into a thriving new community, a brand new village where the quality of life is high but the cost of living is low. For an example of how this might work, look to Richardson’s Yard in Brighton.

Compared to more standard accommodation, it does not cost much at all to convert a shipping container into a home. And once the conversion is complete, running costs are minimal; one American-based manufacturer claims that all-electric modular shipping container homes can be run for less than $50 a month.

Shipping containers address more than one crisis

Beyond providing high-quality affordable housing, converting shipping containers for human use addresses another major problem facing the world right now – global warming.

Why are there so many unused containers in the world? It’s because it can be prohibitively expensive to ship empty containers back to their origin. Many shipping firms, therefore, choose to use brand new containers for each shipment. The end result is a hugely inefficient system, and millions of unused containers left to rust around the world.

Of course, you could recycle these containers, but melting them down uses around 8,000 kWh of energy. Converting them, however, can use as little as 400 kWh.

This is just one reason why converted shipping containers are considerably greener than other building types. The cement industry is one of the biggest producers of carbon dioxide in the world. As well as cutting the emissions that would come from a more traditional build, shipping containers make very good use of existing materials that would have otherwise cost the Earth to break down.

A cure for the global housing crisis?

The lack of affordable housing is just one factor contributing to the global housing crisis. This is an extremely complex issue with no quick fix. In many countries, the problem is one of attitude – too much emphasis is put on home ownership, and far too many treat property as a tradeable asset rather than a fundamental requirement.

Building more affordable homes won’t solve the global housing crisis overnight. But the situation’s getting critical, and desperate times call for a creative approach to problem-solving. There are many millions of unused containers in the world, and many millions of people who need homes.

So are shipping containers the future of affordable housing? At the very least, they’re a great place to start in our search for a solution.


King’s dream of affordable housing is still unfulfilled

“We propose the development of a vastly increased supply of decent low and middle cost housing throughout the area.” — program of the Chicago Freedom Movement, by the Rev. Martin Luther King Jr., July 10, 1966.

More than 50 years after King wrote these words, with New Orleanians again demanding decent housing they can afford, the New Orleans City Council must start making it a reality.

When King arrived in Chicago in 1966, he found a city where African-Americans were living with little hope of escaping poverty caused mainly by a lack of decent affordable housing. In order to illuminate the conditions, King moved his family into a Chicago slum apartment, while rallying the community and demanding that City Hall commit to housing reforms. While marching with thousands of Chicagoans on a sweltering July day, King taped the housing reform demands to the City Hall door.

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Like Chicago, New Orleans is in the grips of an affordable housing crisis that has been building for many years. This crisis continues unabated with each new luxury development that fails to include any units affordable to the average worker. The lack of affordable housing is one of the biggest issues facing our city, and a recent poll revealed that 78 percent of residents feel the city must address it by mandating that all new developments include affordable units.

Considering that half of all New Orleans households are already cost burdened, paying 30 percent or more of their income for housing — with many paying more than half of their income on housing — time is running out.

It is the hardworking people and families that have called New Orleans home for many generations that are being priced out. African-Americans are largely responsible for the culture New Orleans sells to the world, but our neighborhoods are losing black people faster than any other group. Neighborhoods like Treme, Bywater, Mid-City and Freret have suffered dramatic drops in the black population, and many of these longtime residents are the teachers, hotel workers, musicians and culture bearers who make New Orleans one of the country’s most welcoming and unique cities.

A recent report from the Louisiana Association of United Ways pointed out that 53 percent of New Orleans households are living below the poverty line or struggling to pay their monthly bills, and the largest monthly cost is housing.

Danira Ford, a single mother with five children, knows what it’s like to struggle. Ford has lived most of her life in the Gentilly neighborhood, sends her children to the nearby Morris Jeff Community School, and wants to continue raising her family in New Orleans. Despite working multiple jobs, she can’t find housing she can afford, leaving her family of six to share a single bedroom in her mother’s house.

After several months of sharing a single room with her family, Ford has begun to feel that her only option is joining the many other families who have been priced out and left New Orleans to find housing and more opportunities for their families.

The New Orleans City Council can halt this exodus by passing the Smart Housing Mix ordinance. The ordinance would fight displacement and rising rents by ensuring that new developments include units that are affordable to the average resident. City Council has researched this proposal for many years, and in 2017 the City Planning Commission issued a study that concluded the Smart Housing Mix was critical for the city’s future and was necessary to preserve what makes New Orleans special.

When we reflect on Martin Luther King’s civil rights work, our thoughts are usually centered on his efforts to end segregation, fighting for voting rights, and his dream for a better world. But King knew that one of the bedrocks of civil rights was the right to equitable housing and opportunity, and his Chicago Freedom Movement eventually led to the passage of the Fair Housing Act.

Now is the time for action. We must continue to demand the City Council pass the Smart Housing Mix, because it will allow us all the freedom to continue calling New Orleans home.

Cashauna Hill is executive director of Greater New Orleans fair Housing Action Centre.

7 Lessons from New York’s New Affordable Housing Design Guide

When we think of public housing architecture in the United States, we often think of boxes: big, brick buildings without much aesthetic character. But the implications of standardized, florescent-lit high-rises can be far more than aesthetic for the people who live there. Geographer Rashad Shabazz, for one, recalls in his book spatializing Blackness how the housing project in Chicago where he grew up—replete with chain link fencing, video surveillance, and metal detectors—felt more like a prison than a home. Accounts of isolation, confinement, and poor maintenance are echoed by public housing residents nationwide.

But American public housing doesn’t have to be desolate. A new set of design standards from the New York City Public Design Commission (PDC)—in collaboration with The Fine Arts Federation of New York and the American Institute of Architects, New York Chapter —hopes to turn over a new leaf in affordable housing architecture.Released earlier this month, Designing New York: Quality Affordable Housing” discusses general best practices in planning affordable housing and provides case studies of successful affordable housing projects already completed in New York.While the document serves as “a reference for New York City agencies and their applicants seeking guidance on affordable housing design,” it’s written in language accessible to people outside of design professions and has been publicly released with the goal of empowering “citizens and community organizations to demand design excellence in affordable housing projects in their neighborhoods.”

The report comes six months after Mayor Bill de Blasio announced  that he would build and preserve 300,000 affordable housing units by 2026. His plan—which is an updated version of a 2014 plan set to be finished ahead of schedule—will “preserve the affordability of 180,000 units of existing apartments and build 120,000 new ones.”

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Architects designing those new units over the next few years will take cues from the design guide. But architects worldwide can learn from the document, too. Here are some key takeaways from Designing New York:

1. Be creative with massing and respectful with scale

Deviating from big-block high-rises that dominated American public housing for decades, Designing New York recommends breaking up massing within a building to allow variation in units and creativity within the zoning code. The Creston Avenue Residence in the Bronx uses unconventional massing to match neighborhood scale (mostly five-story apartments buildings) while maximizing the number of units offered. In that project by Magnusson Architecture & Planning,street frontages “align with adjacent older residences and echo their smaller scale, while the center portion, clad in metal panels, pulls back to create a generous covered entrance.”

2. Design with the neighborhood in mind by integrating absent services

When low-income neighborhoods lack supermarkets with healthy options and venues for physical activity (like parks and gyms), consciously-designed public housing can fill in some of these gaps to improve the health of building residents. At Arbor House in the Morrisania neighborhood of the Bronx, wide stairwells are designed with natural light to encourage use; likewise, an on-site hydroponic rooftop garden meets residents’ produce needs.

3. Don’t make affordable housing “look” like affordable housing

Too often, the divisions between public housing and market-rate housing are made clear by visually differentiated structures. When affordable housing is marked with pejorative architecture, residents can become stigmatized or ostracized from the broader neighborhood. Les Bluestone, an advocate of innovative affordable housing and co-founder of Blue Sea Development Company says, “The best role that design can play is to not define buildings as affordable housing. Anything that we can do to get away from that helps the community.”

4. Structural innovation can overcome a difficult site for the benefit of residents

In a city as built-out as New York, many new affordable housing projects occupy odd parcels of city land. Frost Street Apartments in Williamsburg, Brooklyn, for example, sits adjacent to the Brooklyn-Queens Expressway, a six-lane highway. In order to mitigate noise disturbance in the apartments, Curtis +Ginsberg Architects employed “high-performance windows and a heavy masonry and concrete structure.”

The Schermerhorn in Brooklyn’s Boerum Hill offered similarly difficult conditions, sitting atop two subway lines. According to Designing New York, “building…over the two subway lines that run below the site required a truss and cantilever structure that took up the majority of the construction budget.” The result of building on a difficult site, though, is 109 units for formerly homeless people and people living with HIV/AIDS.

5. Green building is about more than just sustainability

Reminiscent of the vernacular courtyard apartment, Navy Green employs varied building forms (townhouses and high rises of varying sizes) around a central courtyard. Residents, in turn, have access to fresh air, natural light, and green space outside their window, regardless of their unit’s location in the complex.

6. Design won’t solve everything

The Designing New York report offers a promising paradigm shift away from confining architecture and towards community-building architecture, but it’s important to remember, in all of this, that well-designed public housing will help, not solve New York City’s housing crisis. The city continues to struggle with its definition of affordability, which relies on skewed median incomes for the New York area. The Department of Housing Preservation and Development has also come under scrutiny this month for their policy on resident selection. And as low-income New York City residents are pushed out of their homes every day, even a substantial commitment from the city to build new units will likely be unable to keep pace with displacement.

7. Different cities (and countries) need their own design solutions

While we should admire New York City’s attempt to provide dignified housing for low-income residents, architectural history shows us that public housing can’t follow a one-size-fits-all model. If the success of Le Corbusier’s Unite d’ habitation in Marseille, France in contrast with the similar (but failed) Pruitt-Igoe Housing Project  in St. Louis, Missouri is any indication, different regions need different kinds of public housing. The Designing New York report is conscious of this fact, encouraging site-specific, resident-specific projects. Let’s remember that even if the Frost Street Apartments are great for Brooklyn, they shouldn’t be plopped down anywhere in the world. The lessons we learn from these projects’ attention to residential needs, however, should be broadly applied.


Financing Faith-Based Affordable Housing

Faith-based, specifically African-American church-based affordable housing development in Oakland, “requires a holistic approach,” says The Reverend Dr. Kenneth Anderson, Senior Pastor of Williams Chapel Baptist Church, currently building 88 apartments and a community center at 10th Avenue and International Boulevard in Central East Oakland.

Mentored and inspired by Pastor Emeritus J. Alfred Smith, Sr., Dr. Anderson quotes from “For the Facing of the Hour – A Call to Action,” by Dr. Smith who said, “I accepted my conviction that the city at large must be our turf.”

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Dr. Anderson accepts the same commitment and said, “My biggest desire – is building the community center component of the project as a gathering place for the neighboring community.”

So, how do faith-based organizations finance affordable housing in changing political times, especially when there is rampant gentrification?

Veteran housing development attorney and Allen Temple Deacon John Harrison, says, “There are two categories of development – housing built in the 1970s that needs rehab, and new projects being built for increasing needs in the community.”

However, there have been changes in federal law and the disappearance of California Redevelopment Agency funding initiated by Governor Jerry Brown, makes financing a more complicated puzzle to assemble.

The Federal Government’s HUD funding was the core source of money decades ago. With the disappearance of Section 202 funds (senior housing) and Section 811 (disabled housing) funds at the federal level, the available financing is now called LIHTC (Low Income Housing Tax Credits).

Dr. Anderson says the total cost of his project is $52 million. The LITHC program will provide $35 million dollars and Dr. Anderson will fill the gap in financing needs from a combination of local funding sources.

Those local sources include funds from Alameda County Measure A1, Affordable Housing Sustainable Communities Program, Federal Home Loan Bank’s Affordable Housing Program, the City of Oakland Measure KK, and the “deferred developer fee.”

A two-year planning effort that started April 16, 2015, brings Williams Chapel to the point of applying for funding this year.“Our church made a commitment to build affordable, lowincome senior housing as a first step,” said Dr. Anderson.

“Then we put our ‘dream team’ of builders and architects together before we approached Beacon Communities to be our developer. I wanted a diverse team consisting of MWA Architects and Nibbi Brothers/Baines Group as our general contractor,” said Dr. Anderson.

Dr. Anderson said Beacon Communities will guide the funding application process. Federal LIHTC applications are opened twice a year and Williams Chapel is targeting the March application window for their project.

Property ownership or acquisition is also a major piece of the complicated development puzzle.Attorney John Harrison states that the simplest and most desirable situation is that a church already owns the property to be developed, which is the case for Williams Chapel.

He added that the rehabilitation for older development projects is more difficult because ownership must be transferred to a limited partnership to attract financing, and “regaining ownership can be difficult.”

Dr. Anderson’s advice to other churches and non-profit organizations is to not rush in to try to do things in a hurry. He advises any potential faith-based developer to remember that ownership of the land is vital and the ability to arrange for mutual assistance from government agencies is also key to successful developments.

Dr. Anderson credits his success so far to the relationships he has established with city and county officials.


Brooklyn Church Secures $1.5M Funding For Affordable Housing Project

The Evangelical Crusade of Fishers of Men, in partnership with community leaders and residents, broke ground for a new low-income senior housing development project in East Flatbush.

In communities throughout the City of New York, longtime residents are being displaced from their homes due to rising rents, tenant harassment and rapid gentrification. Seniors who live in apartments that are not rent-regulated on a fixed income are at greater risk for eviction through their landlord’s predatory practices.

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Due to the unprecedented need for affordable housing in Brooklyn, one of the epicenters of gentrification, this longstanding congregation is expanding their forty-five-year ministry by providing shelter that would enable seniors to age in place.

The construction of this $45 million project has been financed through discretionary capital allocations from Brooklyn Borough President Eric L. Adams of $1,000,000 and Council member Jumaane D. Williams of $500,000, the Senior Affordable Rental Apartment (SARA) program of the NYC Department of Housing Preservation and Development, Bank of America’s debt and equity financing programs.

“The Bishop Philius and Helene Nicolas Senior Residence Project is our answer to God’s call to serve the community and meet a fundamental human need – shelter. God has rewarded our faith by bringing to fruition a project that we’ve been speaking about for the past 12 years. This building will enable us to expand our capacity to help our neighbors live a better life. We are grateful for the opportunity to fulfill our mission on this earth and work with great partners to strengthen the East Flatbush community,” said Rev. Dr. Samuel Nicolas, Senior Pastor.

The Bishop Philius and Helene Nicolas Senior Residence Project (BPHN), named in honor of the church’s founding bishop and first lady, is an 89-unit apartment building for seniors ages 62 and older earning less than 50 percent of the Area Median Income (AMI). The residence, located at 1488 New York Avenue, will consist of 88 studio rental units and 1 one-bedroom super’s unit. It will also include a community room, common area space, laundry facilities and on-site social services. Additionally, there will be a 10,575-sq.-ft. community service facility located on the first and cellar levels that the congregation has envisioned as a medical office suite for geriatric primary care.

This project was conceived and shall serve as an equitable, socially responsible and economically sustainable development model for faith-based and community development organizations throughout the city. The Bishop Philius and Helen Nicolas Senior Residence illustrates that successful affordable housing and economic development partnerships can be initiated by faith-based institutions for the long-term benefit and stability of the communities within which they are established,” said Rodney Leon, AIA, NOM.



Mixta Nigeria lists N5.28bn bond on NSE

Mixta Nigeria has listed a 5.28billion naira bond on the Nigerian Stock Exchange. The real estate firm noted that the funds from the bonds will be directed towards the creation of affordable housing. Kola Ashiru-Balogun, Managing Director at Mixta Nigeria joins CNBC Africa to discuss the details.


Key Development Considerations-Affordable Housing

Apart from being one of the items that absorb a large portion of household expenses, housing plays a special role in the social, political and economic discourse of most societies. As a matter of fact, housing has been known to be a major component of creating stable and healthy communities.

The Nigeria National Housing Policy defines ‘Housing’ as the process of providing functional shelter in a proper setting in a neighbourhood, supported by sustainable maintenance of the built environment for the day-to-day living and activities of individual and families within the communities. Quite fundamental to the attainment of affordable housing goals in any nation is for stable housing policy, presence of political will and proper implementation of sustainable housing policies.

For a country to meet its affordable housing expectations, there must be a stable macroeconomic environment. In Nigeria, the situation is not helped by high inflation rates and nominal interest rates. Not only does a volatile economy like Nigeria reduce affordability of mortgages but also affects the supply of funds and the types of mortgages offered by lenders. In a volatile economic environment, lenders are more concerned about liquidity risk and are reluctant to offer long term loans. Arguably, the volatility of the Nigerian Economy affects the supply of funds available to house developers and this inhibits the growth of the housing sector. Lenders, more often than not, are concerned about liquidity risk and are reluctant to offer long term loans.

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Over the years, construction costs have risen due to the relentless inflationary pressure on building materials and increased demand for labour. Discontinuity of the previous government policies on affordable housing has also not helped matters. The challenges associated with securing and perfecting land titles have also militated against the delivery of efficient and sustainable housing delivery in Nigeria.

The Nigerian Housing Sector The inability of various policies and programmes between 2006 and 2017 to adequately resolve the backlog of housing problems in the country reveals the need for more pragmatic solutions. Given the importance of housing in the national economy, the federal government of Nigeria has continued to develop policies to aid housing delivery.

The Affordable Housing Initiatives by the present administration include the following:

  • The Federal Integrated Staff Housing (FISH) Programme (2016); and
  • My Own Home scheme (2017)

The Federal Integrated Staff Housing (FISH) Programme

The FISH Programme is an initiative of the Head of the Civil Service of the Federation (HOS) in line with the Federal Government’s housing policy. It is designed to provide affordable housing for Federal Civil Servants through an integrated strategy involving group land allocation, site services, infrastructure development, inter-ministerial collaboration and utilization of expertise residual in the Service.

The federal government has in the regard of providing housing loan to the Federal Civil Servant across the Country signed many Memoranda of Understanding (MoU) enabling direct participation of the private sector in the provision of houses as well as with ministries, agencies and departments. It has equally entered into partnership with developers to build moderate and affordable houses for its staff. One of such MOUs was the N13 billion mortgages refinancing under the government backed Federal Integrated Staff Housing (FISH) progamme signed to facilitate approval of loan to some civil servants to facilitate their purchase houses under the programme.

The mortgage refinance agreement was signed at the FISH Summit between Federal Government Staff Housing Loan Board (FGSHLB) and Nigeria Mortgage Refinancing Company, while the second MoU was entered between Family Homes Funds, which is another government institution meant to provide affordable housing, and the Federal Mortgage Bank of Nigeria.

 My Own Home scheme

The federal government had signed an MoU with Shelter Afrique and the Real Estate Developers Association of Nigeria for the construction of about 100,000 housing units across the country for N610 billion. That came under the National Housing Programme and each state is entitled to certain units of houses. Part of the agreement is that a total of $200m would be used for the construction of about 10,000 houses nationwide on a yearly basis and that the project would span some 10 years, thus making a total of 100,000 housing units and has a cost profile of $2bn. The scheme, which has the World Bank and AFDB as contributors to the fund, affords real estate developers focused on social housing development, the opportunity to borrow 80 per cent of cost of project and source the remaining 20 per cent.

 Key Issues affecting affordable housing in Nigeria

  1. Property Registration and Title Documentation Uncertainties regarding the status of land documentation and delays in the process slowed the development of land and property markets and made the development of lending difficult to advance or sustain. It was for theses reasons that the growth component began to work with a number of registries. Nigeria’s reforms have led to a reduction in the time required to complete the process of property registration from 274 to 80 days, but a lot still needs to be done because it takes only 1 day in some other countries such as Norway and Singapore. It is worth noting that part of the reduction in time is can be attributed to improvements in property registration which has been implemented in Abuja and Lagos. Other state governments will do well to replicate the improvements achieved in the Abuja Geographic Information System (AGIS) and Lagos State in their various states. Investors are generally comfortable in environments where registration is automated and procedures are minimal.
  2. Land Use Act The Land Use Act of 1978 (LUA) has become an obstacle to making land available for housing development. The LUA meant to make land easily available to all Nigerians has indeed become a major constraint to home ownership in Nigeria. The process of obtaining a Certificate of Occupancy and the consent provisions of the LUA makes transaction in land tedious, time consuming and expensive.
  3. Infrastructural Inadequacy Another major challenge to providing affordable housing is the lack of primary infrastructure such as roads, water, electricity etc, which accounts for about 30 percent of housing costs. In most cases, developers have to provide the infrastructure which invariably increases the cost of the houses they produce. This ultimately results in such houses becoming unaffordable. There is a lot to be done by both the private and public sector in the provision of primary infrastructure if the goal of providing affordable housing is to be achieved. Lack of access roads still remains a major challenge and explains why the suburbs and hinterland are not attractive and while land prices in the cities are quite high. According to the Infrastructure Concession Regulatory Commission (ICRC), Nigeria has only 195,500km of roads of which 135,000km are in disrepair. Compare this with India 3.4m km of roads. Today, Indian road network is still expanding at the rate of 9 km of new roads daily.
  4. Paucity of Long Term Funds Presently, the prime lending rate in the banking sector remains as high as 17.5% (CIA World Factbook) and it is impossible to use such funds for housing development. It is pertinent to note that the government has realized this and is reviewing the entire process of accessing mortgages, so as to bring it within reach of beneficiaries.
  5. High Cost of Building Materials Due to the high import dependence of the sector and the over reliance of our construction sector on imported materials, the construction cost if far exorbitant than normal and has made housing unaffordable. A key factor that has led to the high construction cost in Nigeria has been the high cost of cement which by account constitutes about 40 percent of building materials. Various reasons have been adduced for the high cost of cement, with cement manufactures arguing that the harsh operating environment such as lack of constant electricity, high cost of fuel, bad road network. Also, the devaluation of the naira, scarcity of foreign exchange, multiple tax, and inconsistent government policies are additional reasons which are affecting the cost of cement. The price of cement has continued to rise steadily, hitting an all time high of N2, 700 from per 50kg bag in 2017.
  6. Enforcing Foreclosure The absence of a foreclosure law has been cited by some investors and local banks as the reason for not investing in the housing sector. Though the incidence of foreclosure in most countries (especially with regard to low-and middleincome families) is generally quite low, it is important for investors to know that they can take possession of their collateral and recover their loans as quickly as possible. Investors can even live with a lengthy foreclosure process, but they must have confidence that the laws will be enforced fairly and in a transparent manner. Land Use Act and the Lagos.
  7. Nigeria Taxation System One of the greatest barriers to large-scale provision of affordable housing is the tax burden. The imposition of value added tax (VAT) at various levels of the housing-development process adds significant costs as much as 35 percent to the cost of a house, even before title fees and stamp duties are taken into consideration. Tax holidays, deferrals or tax exemptions on materials or home sales, or similar tax-related provisions have been used successfully in other countries for low- and moderate-income families. These incentives can be used successfully in attracting investors into the housing sector. Other countries have proven that when they reduce the tax burden on housing, the number of transactions increases, and total housing related fiscal revenues either increase or remain the same.
  8. Construction methods Reliance on the traditional methods of construction has also not helped the sector. Industrialized building systems, which are very cost and time efficient for mass housing projects is still not common in Nigeria. Industrial construction products include: Panellised units produced in a factory and assembled on-site to produce a three dimensional structure; Volumetric construction to produce three-dimensional modular units in controlled factory conditions prior to transport to site; Hybrid techniques that combine both panellised and volumetric approaches; Floor or roof cassettes, pre-cast concrete foundation assemblies, pre-formed wiring looms, mechanical engineering composites.
  9. Construction Permits Issue There are usually delays in receiving permits for construction. The procedures are complex and expensive. The complexity and cost of regulatory processes in dealing with construction permits is also a key criterion that entrepreneurs consider in making investment decisions. Jigawa State, a North Western state, provides the best platform (i.e. ranks first) in dealing with construction permits in Nigeria. Lagos State, a South Western state, is the most difficult place to deal with construction permits in Nigeria (ranks 36th, requires 18 procedures that may be completed within 106 days, and could cost 53,504.9 per cent of the per capita income).

Reforming licensing requirements in Nigeria – particularly by reducing the processing time as well as decreasing the costs – would not only increase the size of the formal construction sector but also reduce the costs of housing construction, thereby increasing the availability of homes to a broader segment of Nigerian society. 10. Household income and wealth. Income is the primary factor—not price and availability, that determines housing affordability. In a market economy the distribution of income is the key determinant of the quantity and quality of housing obtained. Therefore, understanding affordable housing challenges requires understanding trends and disparities in income and wealth. Housing is often the single biggest expenditure of low and middle income families. For low and middle income families, their house is also the greatest source of wealth. The most common approach to measure the affordability of housing has been to consider the percentage of income that a household spends on housing expenditures. Another method of studying affordability looks at the regular hourly wage of full-time workers who are paid only the minimum wage (as set by their local, regional, or national government). The hope is that full-time workers will be able to afford at least a small apartment in the area where they work. The income level of most Nigerians could not sustain the present housing delivery model.


Four reasons to consider co-housing for alternative living

As lifestyles in the UK have become more stressful and pressurized, people have started to look at alternative ways to live. Some are now seeking out more of a community feel to their home lives, exploring the option of joining an “intentional community”.

Intentional communities come in many different shapes and sizes. They are, simply put, groups of people who choose to share their lives and live communally with others. This is more than just, say, people who share a block of flats, but on the other hand they have moved on from being stereotypical hippy communes. Intentional communities can be as broad as a group of people squatting together as a protest community,or a group coming together to self-build.They are places where people “live together or share common facilities and … regularly associate with each other on the basis of explicit common values”.

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Co-housing in particular – where people buy a “share” of the property and land – is gaining popularity in the UK, and has recently benefited from government funding.There are currently more than 60 groups in the process of developing new co-housing projects, with more on the horizon.

At the same time, other forms of intentional community such as housing co-ops (individuals join for a nominal fee a cooperative which owns the property, and are then both in charge of the property and a co-op tenant) are also becoming more sought after as the cost of renting becomes prohibitive.

There are countless other benefits to living in an intentional community – here are just four more reasons why it may be for you.

1. Collective ownership can give you more

Living in a grand house with its own boating lake is out of reach for many – but not for members of the Dol-lys community, who live near Lllanidloes in mid-Wales. Dol-Llys was originally a regency house owned by the county council, but was bought by six families in 1992. The families all share the 14 acres of land which includes a man-made boating lake.

Thundercliffe Grange just outside Rotherham, meanwhile, boasts its own woodland, a walled garden and a stable block.

The collective nature of intentional communities often means that when a group pools its resources, the members can significantly increase their buying power. The community of Cannon Frome share a Georgian manor in Herefordshire with its own banqueting hall, while those at Laurieston Hall,in Scotland, reside in an impressive Victorian mansion with 135 acres of woods, pastures and marshland.

Although not all intentional communities are this grand, collective ownership enables groups to share other resources, too, such as meeting spaces, and communal tool sheds.

2. It can be good for the environment

Many housing cooperatives and co-housing projects share not just space, but also resources. In fact, researchers have found that communal cooking and eating saves on both energy use and food waste. In addition, intentional communities are more likely to participate in pro-environmental activities such as car pooling, collective laundry facilities and, in some cases, are self sufficient.

At Old Hall in rural Suffolk,the community of over 40 adults manages more than 70 acres of land, and has its own cows, chickens, sheep, pigs, bees and vegetable gardens. All meals are eaten communally and a large proportion of their food is grown or produced on site.

3. It’s good for well-being

There is evidence that communal living, and in particular eating regularly with others, can enhance well-being and may reduce feelings of loneliness,too.

Some communities – such as the Older Womens Co-Housing project in north London – have been set up specifically as an alternative to living alone. Maria Brenton, a longstanding spokesperson for the London project, and advocate for senior co-housing, has carried out extensive research into the well-being aspects of community living and suggests that co-housing has potential to “keep older people active, healthy and engaged, and reduces demand for health and social care services”.

Custom built co-housing projects like the one in north London often favour community interaction, and have this factor built into the very design of the site. For example, the homes at Lancaster Co-Housing all face a shared pedestrian path, increasing social interactions and the feeling of community.

4. Communities aspire to be inclusive

Although they are well populated with graduates and even university lecturers, many intentional communities consider inclusivity to be a key principle, and work hard to be affordable to a diverse range of members.


Freddie Mac Securitization Could Help the Affordable Housing Challenge

Freddie Mac has upped the ante on its securitization programs. In June 2018,the company issued hundreds of millions of dollars in bonds secured by loans to affordable housing properties.

“That means lower transaction costs and interest rates for long-term financing,” says David Leopold, vice president of targeted affordable sales and investments for Freddie Mac. “Because the securitization was so successful, we will be able to drive down costs.”

Freddie Mac’s securitization program could also have implications for Freddie’s lending to other kinds of apartment properties. “Will this open the door to doing the same thing with other quirky assets?” says Leopold. “It demonstrates that we continue to innovate.”

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Some welcome relief for affordable housing projects

Every little bit helps for affordable housing developments, which have been hit with a double whallop of bad news this year.Investors are paying less to buy low-income housing tax credits (LIHTCs), which are the most important source of financing for new affordable housing projects. Tax credits suddenly became worth less to investors as a comprehensive reform of the U.S. tax code seemed more likely to be completed after the November election.

At the same time, long-term interest rates began to rise, along with the cost of many construction materials, digging a hole in the construction budgets of new projects. Projects that rely on tax-exempt bond financing and the 4 percent LIHTCs have been hit especially hard, because those tax credits provide a thinner stream of subsidy.

Freddie Mac’s securitization was its first securitization of tax-exempt loans made by state or local housing agencies and secured by affordable rental housing.

The inaugural issuance includes approximately $292 million in ML Certificates backed by tax-exempt loans on 25 affordable housing properties and approximately $18.5 million in ML Certificates backed by taxable subordinate loans on three of the same properties.

The bond sold well. The $292 million issuance scored a yield of 50 basis points over the one-month LIBOR rate.

“Eight years after our first modern K-Deal, Freddie Mac Multifamily continues to expand our securitization series and offload risk to private investors,” says Robert Koontz, vice president of multifamily capital markets for Freddie Mac. “Most importantly, we are bringing increased liquidity to the affordable housing market, a key focus that is at the heart of our mission.”

Freddie Mac remains committed to its affordable housing lending business, which is not constrained by the limits set on its lending by the Federal Housing Finance Agency.

This year, Freddie Mac plan to lend the same amount as it did in 2016—about $6 billion—through its targeted affordable programs to apartment properties that have formal restrictions on the rents of at least some of their apartments.

“We are aggressively seeking affordable housing deals,” says Leopold.

City council looks at how $50M affordable housing bond will be spent

Voters approved a $50 million bond for affordable housing in November’s elections, and now, the Charlotte City Council is starting to take a look at how that money is going to be spent.

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The city of Charlotte’s Housing and Neighborhood Services director said there is already more than $50 million in proposed projects.Of that money, $22.1 million is being requested by developers to put projects on city-owned land.

If the council provides all of the funding to those projects on city land, 620 units would be able to be built —  116 of them would be for the lowest income residents.

Not all of these projects will be approved, and it is likely more developers will seek funding.Residents continue to go to council members to say that affordable housing is a priority issue, which they are watching closely.

“Someone who is making minimum wage, they can work here, but they can’t live here,” Charlotte resident Darlene Green said.

The city of Charlotte is also anticipating at least $75 million more for affordable housing — $50 million could come from private companies. Three companies are expected to announce donations Tuesday morning.

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