The city of Redmond is looking to create affordable housing in an unusual way. It’s selling two houses to the nonprofit Housing Works after the police department seized them back in 2012.
The seizure of two houses in southwest Redmond were the result of an investigation where a marijuana grow was discovered. The houses were used only to grow marijuana and ultimately were seized by the police department.
Police Chief Dave Tarbet said Tuesday evening he’s glad to see the homes be put to good use.
“It’s a humanitarian approach, in a sense, which our department tries to be about that and tries to help the community as much as possible,” he said. “And obviously we still enforce the law too, but we do try to help people overcome issues in their lives and make their lives better.”
“So I think the sale of these homes to Housing Works so they can be resold as affordable housing is a great opportunity to help two more families in the community,” he said.
Tarbet said it’s not all that unusual for the department to posses “personal property” as the result of an investigation. But he said it’s pretty uncommon to be in the possession of a house.
The money the Police Department will eventually receive from the sale of the homes will go toward drug enforcement and prevention.
Those houses will also be used for a good cause.
They have been used as part of a Housing Works home ownership tutoring program, where people move in and rent them while working to qualify for a loan to buy their first house.
Now, the agency intends to sell them as affordable housing.
Kelly Fisher of Housing Works said the key to their success is working with the city to create more affordable housing options.
“The partnership between Housing Works and the city of Redmond is critical for what we are trying to do,” Fisher said. “We wouldn’t be able to provide these homes for families that are experiencing low income without that partnership.”
Fisher also said the agreement with the city to buy the two homes include 35-year deed restrictions.
That means the houses will stay affordable for years to come, even if they are sold several times.
Fisher said based on the median income for the area, that means the houses will sell for a maximum of $180,000, at this point in time.
The city will wait another week for public comments on the sale of the homes, and if there are no conflicts, the sale will be made official on June 18.
The modest effort started by nine Moorestown churches on Beech Street in 1969 has led to the development of affordable housing for over 1,300 of South Jersey’s low- to moderate-income residents.
MOORESTOWN — One year before New Jersey Supreme Court’s landmark ruling that all municipalities must provide affordable housing, representatives from nine churches in Moorestown recognized the need and pooled their resources together to begin construction on an 18-unit affordable housing complex along Beech Street.
Five decades later, the effort started by those congregations has led to the development of housing for over 1,300 of South Jersey residents in need of safe, decent and affordable places to live.
The Moorestown Ecumenical Neighborhood Development (MEND) is celebrating its 50th anniversary in 2019, a testament to the foresight of the faith-based organization’s founders that every person deserves the chance to live in a home they can afford, no matter their income.
“This is a very big deal for us,” said MEND President and CEO Matthew Reilly. “For MEND and our founding churches to start in 1969 in Moorestown — not in an impacted urban area, but Moorestown — and just say we need to create some housing in this community so that people who can’t afford to live in the market-rate housing can still live here so we can have a diverse community … is really an amazing accomplishment.”
MEND was founded in 1969 by Boyce M. Adams along with C. Dixon Heyer, Clarence L. Baylor, G.S. Spohn, Warren D. Sawyer, Rev. Fred D. Tennie, Jr., Steward R. Maines and now-retired Superior Court Assignment Judge Harold B. Wells, III, before he was named to the Burlington County bench.
The nonprofit has never strayed far from its original vision and now works to develop, build, manage and maintain housing for low-to-moderate income families, seniors and those with special needs.
In its early days, the organization focused on developing affordable housing solely in Moorestown. From 1969 to the 2000s, it developed nearly 250 affordable housing units across 20 locations throughout the township.
However, when Reilly signed on to lead the nonprofit in 2001, he said, it was struggling financially.
Reilly, who had previously worked for the nonprofit affordable housing developer New Community Corporation in Newark and in commercial real estate lending, wanted to find a way to expand the organization’s portfolio.
The solutions — use the federal Low Income Tax Credit Program to finance more projects and expand MEND’s portfolio to other towns, and form a pioneering joint venture agreement with the for-profit developer Conifer Realty — allowed MEND to develop projects on a larger scale.
“Conifer had larger financial role, and larger ownership, but MEND had meaningful ownership, meaningful control and a meaningful share in the fees that are generated by those projects. That I believe enabled the organization to kick start a new part of its life,” Reilly said.
Since then, MEND has not just developed 770 units across 30 locations throughout Burlington, Gloucester and Atlantic counties, but in the process it has preserved a number of historical buildings by repurposing them into residential complexes — a practice that was in place since its beginning.
MEND has repurposed the old Moorestown Fire Department Hose Company No. 1 building; the former Lenola Elementary School in Moorestown; the old Mitchell School at Springside in Burlington Township; and the 100-year-old Marcella Duffy School in Florence.
“A town being able to take one of these old buildings, save them and repurpose it to make a new contribution to the town, towns generally are really excited about it,” Reilly said.
The Marcella Duffy School is a special place for Melva Gilanyi. It was where she and her late husband graduated from high school in 1949, and where she would call home 46 years later.
“It’s brought good memories back,” Gilanyi said, who moved into MEND’s Duffy Apartments when they opened in 2015. “I’m happy here, it’s a beautiful place. Everybody is nice here, and it’s like a little community.”
MEND has also developed a 104-unit affordable housing complex in Evesham, a development for the elderly and disabled in Medford, along with other projects in Delanco, Deptford and Egg Harbor City. This year it broke ground on its newest project, a 54-unit affordable housing project for seniors at the former site of the Cinnaminson Home in Cinnaminson.
“We’ve been able to expand the mission and help more people, and it’s not easy for nonprofit housing development organizations to not only survive but to stay true to our mission and thrive,” Reilly said. “We’ve been able to do that.”
Gloria Titus, a resident of MEND’s Medford Senior Residence for nine years, moved there after a friend of her mother’s who had lived in another MEND development had praised the organization.
“I knew MEND had a good name behind it,” Titus said. “It’s been wonderful, and I couldn’t ask for a nicer place. It’s small, and you get to know everybody and you make good friends.”
In his time as president and CEO, Reilly has also formed the Friends of MEND — a group of professionals dedicated to fundraising and promoting the nonprofit organization.
“We have a responsibility to make sure people know about MEND and affordable housing and bring awareness to the issue,” said Friends of MEND member Daniel Caldwell, of Stout & Caldwell Engineers.
Caldwell has been a part of the Friends of MEND since its inception around 15 years ago.
“It’s an award-winning organization,” Caldwell said. “It’s a true need in our society, we need affordable housing for everyone. (MEND) is a perfect storm of all the right things: need and leadership that cares and loves what they do.”
Since its start, MEND has earned eight regional and national awards for its projects. Reilly said the key for the nonprofit’s success has been “the steadfast support of our founding churches.”
“The churches have helped maintain the moral compass of the organization,” Reilly said.
He added that as long as it sticks to what has kept it around for 50 years, MEND will continue to provide housing that is very much needed across the state.
“We’ve helped the towns where we are fulfill their obligations to produce and have some affordable housing, and we’ve helped the people in those towns and in the surrounding areas to have the housing that they need. And very unfortunately, the need for the housing that we provide is not diminishing, its growing,” Reilly said.
The number of affordable-housing units coming to the borough will be determined after a fairness hearing in Superior Court in Bergen County on June 20.
That’s when a judge will decide whether the settlement agreement between the borough and the Fair Share Housing Center will satisfy the needs of people seeking low- and moderate-income housing.
The borough of 3,300 people had been in negotiations with the center since 2015 to establish its affordable-housing obligation as mandated by the state under the Mount Laurel Doctrine, which prohibits economic discrimination through land use laws.
Councilman Glenn Pookisian said that if the settlement is found to be “fair and reasonable” to all the parties with a stake in any future affordable housing in town, then the settlement will be approved by Superior Court Judge Christine Farrington. If not, the borough and Fair Share will go back into negotiations.
Under the proposed agreement, the affordable-housing obligation is 287 units, but there’s a “realistic development potential” of 28 units, plus surplus credits of 18, for a total of 46 units. That means the small number of units have a better chance of being built due to existing and soon-to-occur projects in town, such as one at the old Schaefer’s Gardens site and a development by Bergen County United Way.
The units would also be built through policy mechanisms, including the establishment of an accessory apartment program for people in low- and moderate-income brackets and inclusionary zoning.
Pookisian said he’s optimistic. “The state of New Jersey requires us to set aside certain amounts, and we found that it was a balance of satisfying that legal mandate and trying not to change the character of Haworth,” he said.
If the agreement is approved, the borough has four months to amend its affordable-housing ordinance and zoning ordinance, and adopt a Housing Element and Fair Share Plan.
He said the Borough Council had the “unenviable task of responding to the unreasonable demand by Fair Share” for the number of affordable-housing units to be built, before reaching the agreement with the nonprofit. The original number of units, known as the unmet need, was 287.
“We’ve always taken the position that there’s no available buildable properties for any type of significant project, let alone affordable housing,” Pookisian said.
Anthony Campisi, a spokesman for the Fair Share Housing Center, predicted that the agreement will be approved by the judge based on past settlement agreements with other municipalities. Campisi said that since 2015, 285 have entered into settlements with the group.
“We’re really happy to come to a strong agreement that expands opportunities for working families,” Campisi said.
Amazon will donate $3 million to the Arlington Community Foundation to support affordable housing and fight homelessness, and make a $5 million contribution to a similar charity in Seattle, the company announced Tuesday.
Amazon also will match its employees’ contributions to selected local charities that aid housing in the two communities through Sept. 30, up to $5 million.
The initiative addresses concerns in both communities that the company’s robust creation of high-paying jobs — planned in Arlington and well underway in Seattle — drives up housing prices and displaces established residents.
Critics and supporters alike have called on Amazon to do more for local housing. “I want to see Amazon have some skin in the game on affordable housing,” Sen. Mark R. Warner (D-Va.) said Monday.
The donation in Arlington is too small to cover the full cost of more than a handful of new housing units, which cost about $350,000 apiece, according to the Northern Virginia Affordable Housing Alliance. The need for new affordable units in the Virginia suburbs runs in the tens of thousands, according to local governments and housing analysts.
Instead, Amazon’s donation will create a fund that can both subsidize some costs of new affordable housing — still estimated at only a couple of dozen units — plus pay for services for homeless people or others who can’t afford their rent.
“Some of it may be for bricks and mortar, and some of it may be for support services,” said Jennifer Owens, president and chief executive of the Arlington Community Foundation. “The best uses of that $3 million have yet to be determined.”
She called the donation “generous” and “a significant investment in our community,” which will raise the total charitable funds managed by the foundation to $24 million from $21 million.
Since Amazon announced in November that it was building a second headquarters facility in Crystal City, one of the biggest worries has been about the impact on housing costs. (Amazon CEO Jeff Bezos owns The Washington Post.)
The online retailer plans to hire at least 25,000 employees over the next 10 to 12 years with an average annual salary of at least $150,000. The first of 400 to be hired this year began work this month.
Middle- and lower-income residents in neighborhoods near Crystal City fear the Amazon hires will drive up rents and housing prices, and force them to move elsewhere.
“Homelessness and affordable housing are real concerns in Seattle and the Washington, D.C., region,” Amazon Senior Vice President Jay Carney said. “As neighbors in both, we made these donations to [Seattle’s] Plymouth Housing and the Arlington Community Foundation because of their work and progress on housing stability and helping families improve their quality of life.”
Carney said in a May interview with The Washington Post that the company would be able to plan better for its growth in Arlington than in Seattle, and thus would not aggravate housing problems as much. He did not provide details and said it is primarily the government’s responsibility to ensure there is an adequate supply of affordable housing.
Arlington County Board Chair Christian Dorsey (D), who has supported the Amazon project, said he was “pleased to see Amazon’s willingness to work together with other businesses and local community-based organizations to improve outcomes for our residents.”
Owens said Arlington was suffering from a serious housing shortage well before Amazon arrived. The county has lost nearly 90 percent of its market affordable housing over the past 20 years.
She praised Amazon for what she said was a cooperative approach, in which the company sought to work with the foundation to find how to put the money to best use.
“What I’m excited about is that Amazon has come at this as a true partner rather than a prescriber,” she said.
Owens described the financial arithmetic of building affordable housing to illustrate how costly it would be to have a major impact via construction subsidies.
Typically, affordable housing in Arlington is built for households with incomes of about $70,000 a year, she said. To lower the cost so the housing is affordable for households with incomes of about $35,000 a year, a subsidy of $115,000 per unit is needed, Owens said.
So, if the entire $3 million donation from Amazon were used to lower the cost of housing in that way, it would benefit 26 households.
Amazon’s profit in 2018 was $11.2 billion, on which it paid no federal income tax. Asked whether the company’s $3 million donation was enough given the need for affordable housing in Arlington, Owens said, “I don’t think it would be fair to say that anybody in our community is doing enough.”
Now is the time to buy a home in Cape Town, as data from FNB’s latest Cape Town Sub-Regional House Price report shows price decreases in a number of areas across the Mother City.
Those looking to get a property during this prime time will find reduced prices in areas from the Southern Suburbs, City Bowl and the Atlantic Seaboard extending into the Eastern Suburbs like Salt River and Woodstock.
All of these areas showed price declines in the first quarter of 2019 with the Atlantic Seaboard, including Green Point, Sea Point, Clifton, Hout Bay, and Camps Bay, leading the decline.
An average of a 5.1% decline has been experienced by these areas year-on-year, and this is historically the worst noted decrease to date, showing a huge plunge from the previous growth rate of 25.5% in the first quarter of 2016. Taking inflation into consideration, the decline even nears double digits.
Of the areas in the Atlantic Seaboard, according to Private Property only Llandudno still features in the top-ranking suburbs for property growth, coming in at first place.
Area such as Somerset West, Gordon’s Bay and Strand have also experienced a sharp year-on-year price decline, decreasing by 5.3% in the last quarter of 2018 and a further 1.7% in the first quarter of this year.
There seems to be a general trend of upmarket regions in and around Cape Town taking the biggest price knocks this year. Home prices have seen an overall decrease of 1.2% across the city as well as some of the slowest growth rates in the last 10 years.
The Northern Suburbs however have shown particular resilience when compared to other areas in the Cape as well as the Western Seaboard. Area such as Blouberg, Milnerton and Melkbosstrand experience a property price drop from 3.8% last year to 1.8% this year. Area such as Parow, Belville, Durbanville and Brackenfell also experienced growth.
“It is conceivable that the house price deflation we are seeing in some upmarket regions could reverberate throughout the city, resulting in meaningful improvement in affordability. If this happens, any meaningful recovery in national prices would be undermined, which could ultimately prolong the period of subdued house price growth in South Africa. A nominal decline in prices is conceivable at this point,” FNB economist Siphamandla Mkhwanazi told The Citizen.
Legislators criticized the state Department of Public Safety for approving millions in spending on permanent affordable housing developments when lawmakers wanted the money to go to emergency and short-term housing for people looking for places to live after disasters.
A report to a legislative committee on Monday said the department did not follow state law or best practices when it selected the N.C Community Development Initiative to receive state money and gave it up-front, lump-sum payments of $5.35 million.
The Joint Legislative Program Evaluation Oversight Committee voted to refer the report to the attorney general and other committees.
Mike Sprayberry, the state emergency management director, defended the decision to spend the money on permanent housing, but lawmakers said that was not what they wanted.
“People have to be held accountable,” said Rep. Craig Horn, a Weddington Republican and a committee co-chairman. “You didn’t give me the impression that we’re going to hold people accountable.”
In an email, Kimberly Askew, the Community Development Initiative’s senior vice president of operations and administration, said all its work met requirements outlined in its written agreement with the state.
“We used the funds in accordance with that agreement and are very proud of that work and the positive impacts it has had,” Askew wrote.
The legislature appropriated $9 million for emergency and short-term housing for people displaced by Hurricane Matthew in October 2016, western wildfires and tropical storms, said a report from the legislature’s Program Evaluation Division.
The Department of Public Safety let the Community Development Initiative use the money for grants and loans for new construction and land purchases for future development, according to the report.
Sprayberry said not all the $5.3 million was spent on new construction, that some when to fixing homes. By the time the state appropriated funds, months after Hurricane Matthew hit, there was no need for emergency housing and the state couldn’t find anyone to take the money, he said. Meanwhile, communities hit hard by natural disasters had longstanding needs for permanent affordable housing, he said.
If there was no need for emergency or short-term housing, said Rep. Julia Howard, a Mocksville Republican, legislators should have been asked to redirect the money.
“Just to rebuild communities with new development, that was never the intent of the legislature or the directive,” she said. “You took liberties where liberties should not have been taken.”
The program evaluation report said the Community Development Initiative gave loans and grants to develop or redevelop housing in Fayetteville, Wilson, and Rocky Mount that were probably outside the legislature’s directive. The spending includes at least $1.8 million to buy land for future development in Rocky Mount. The grant went to a limited liability corporation affiliated with the Community Development Initiative. The LLC could be considered for-profit, the report said.
Further, more than six months after the agreement with the Community Development Initiative expired, the department has not recovered $1.3 million the organization didn’t spend or that was going to be used after the spending deadline, the report said.
In the email, Askew said the Rocky Mount LLC is a wholly owned subsidiary of the Community Development Initiative, which is a tax-exempt, nonprofit corporation.
In a written response, Sprayberry defended the decision to work with the Community Development Initiative, and called the lack of affordable housing an emergency.
“According to the North Carolina Housing Finance Agency, after Hurricane Matthew there was a shortage of 192,000 affordable housing units in the disaster declared counties,” he wrote. “NCEM (N.C. Emergency Management) determined the Initiative, established in 1993, was a solid vehicle to assist NCEM in providing families with an affordable housing solution. NCEM in partnership with the Initiative worked successfully to provide 433 units in Robeson, Cumberland, Edgecombe and Wayne counties.”
Sprayberry said the department is doing an internal audit, and would get back money left unspent or spent on projects or activities that were not allowed.
He wrote that the Community Development Initiative has been told it must return at least $1.6 million it has not spent and may have to return $1.7 million in disallowable expenses if it cannot justify them. The state may ask for more money back, depending on the results of an internal audit, Sprayberry wrote.
Willie Richardson is one of dozens of property owners who recently triumphed in a lawsuit against New York City when its government attempted to foreclose on six financially troubled apartment buildings.
Richardson owns shares in a city-sponsored housing cooperative, and the story of how he got those shares and why he may still lose them is part of the herculean struggle to preserve affordable housing in one of the world’s most expensive cities, where an apartment in the most affluent borough – Manhattan – costs a median $1m.
A county judge recently issued a blistering condemnation of New York City’s attempt to seize the building where Richardson lives (in Brooklyn, the borough southeast of Manhattan) along with five other buildings in that area and turn them over to a publicly appointed property-management company.
Apartments like Richardson’s home, which is in the rapidly gentrifying Clinton Hill neighbourhood, are attractive to management companies and other real-estate developers because they are often valued at hundreds of thousands of dollars or more depending on the size, location and financial health of the cooperative – or co-op – to which they belong.
Holding onto New York City co-ops – or losing them – can make or break the financial health of low-income people who face the threat that the city government will take these buildings away and sell them to investors. With New York’s average home costing $677,000 and its average monthly rent totalling $3,519, people in the greater metropolitan area devote an average 36 percent of their incomes to housing. That’s 17 percent above the US national norm. But among most low-income renters, reports the Community Service Society, housing eats up more than half of income – 50 percent above the national average.
History of housing help
Richardson’s low-income co-op in a Housing Development Fund Corporation (HDFC) building is among hundreds of thousands of such co-ops that New York City’s government established in the financially beleaguered 1970s and 1980s, when the city’s population was shrinking because crime and economic stress were driving thousands of middle-income people to leave.
At the time of their creation, city-sponsored low-income co-ops – also known as HDFCs – were seen as a way to assist people like Richardson while simultaneously saving buildings from landlords who had abandoned them rather than pay back taxes, unpaid water bills and other arrears.
New York City helped people living in neglected buildings form corporations or co-ops, then sold the buildings to these residents at prices as low as $250 per apartment. As part of the deal, co-op members were required to manage the buildings themselves.
Attaining these properties gave middle- and working-class New Yorkers like Richardson a chance to become homeowners. And in a city where the majority of people are renters that simple change in status not only stabilised housing costs for less-affluent New Yorkers, but also allowed them to build wealth.
HDFC co-op units have been known to trade hands for $500,000 or more – despite the fact that their government-subsidised nature reduces the speed at which their values grow because the city takes a 30 to 50 percent cut of the profit from resales of such apartments.
All told, the return on these investments can be more than two hundred thousand percent.
Building more high-end apartments doesn’t sound like quick fix for the affordable housing crisis. But maybe you just have to look harder.
There’s a fierce argument about housing affordability and supply that’s raging in the urbanist community. The big question: Does building “luxury” (or market rate) housing in wealthy neighborhoods free up more housing for everyone? Advocates in the “Yes In My Backyard” (YIMBY) movement say it does; others are more skeptical.The market-rate-skeptic’s view, as captured in Richard Florida’s write-up of a new paper by Andrés Rodríguez-Pose and Michael Storper, paints a picture like this: Allowing new market-rate housing citywide will only result in high-end units in already-expensive neighborhoods.At best, developers may win big as the wealthy enjoy new homes. At worst, it could exacerbate segregation in wealthy neighborhoods and displacement in low-income neighborhoods.
The pro-market-rate position, championed by YIMBYs, is more optimistic: This view would concede that, though it’s true that new market-rate units will be expensive given the current scarcity of housing, new units will ease up demand for existing housing. Through a process known as filtering, this older housing gradually becomes more affordable to middle- and low-income households. This will ultimately mitigate displacement risk in more vulnerable communities.
A new working paper by economist Evan Mast of the W.E. Upjohn Institute for Employment Research may help move the ball on this issue. Mast’s work suggests that even expensive new units in wealthy areas help relieve pressure on rents across the market, including in less-affluent neighborhoods. And that process doesn’t need to take years to unfold.Until now, the argument for filtering has played out in the long run: Given a steady supply of new housing, older homes and apartments gradually grow more affordable, and households of all income levels gradually move into better housing. But many North American cities are in the grips of an urgent affordability crisis right now: Promises based on “the long run” can feel like cold comfort. What about the short run?Mast looked at 802 new multifamily developments across 12 central cities, from the “Texas doughnuts” of Dallas to luxury high-rises in New York City. Using commercial address data, he found out the moving history of the residents of these new units.
The first round of moves are roughly what you might expect: Approximately 70 percent came from nearby neighborhoods with above-average incomes, with the remaining 30 percent moving from below-average neighborhoods. These aren’t exactly inspiring results for activists focused on helping households at the bottom of the market.
But when a household moves into a new unit, they initiate a kind of housing musical chairs by vacating their existing unit. A second household then moves into that unit, in turn vacating a third unit. For each new market-rate building, Mast follows this trail of movers back through six moves, tracking where residents are moving from, a process he calls the migration chain.
By the sixth link of this chain, Mast finds that approximately half of the movers are moving out of census tracts with below-median incomes. As many as 20 percent of movers are coming from the poorest tracts in the city.
These findings suggest that housing markets aren’t nearly as segregated as some might fear, if you work your way down the migration chain far enough.
His model suggests that for every 100 luxury units built in wealthier neighborhoods, as many as 48 households in moderate-income neighborhoods are able to move into housing that better suits their needs, vacating an existing unit in the process. Somewhere between 10 and 20 of these households are coming from among the city’s lowest-income neighborhoods, vacating units and reducing demand where housing is most likely to be affordable for working families.
This suggests that even pricey new units could free up a lot of existing housing. Accounting for possibilities like units sitting vacant, out-of-town movers filling the units, or units being used as second homes/pied-a-terres/safe deposit boxes in the sky, Mast’s model still indicates that for every 100 new market-rate units built, approximately 65 equivalent units are created by movers vacating existing units.If the migration chain is as robust as this paper finds it to be, as much as half of theses newly vacated units could be in low- and moderate-income neighborhoods. This new supply, combined with less demand, could play a major role in easing pressure on rents in the short run.Source: citylab
Home ownership in the UK is just a pipedream for half of employed people due to high day to day living costs, meaning they cannot afford to get on the property ladder, new research suggests.
It is still an aspiration for 65% of non-home owners but 47% do not think they will be able to afford to buy their own home, according to the financial well-being index from Close Brothers.
Some 27% are spending more than 50% of their monthly income on housing costs, and 10% are spending over 70% while 13% say that their housing costs are unaffordable, rising to 19% for millennials
It points out that official figures published by the Office for National Statistics shows that average house prices in Britain have increased by more than 270% over the past two decades and this has pushed back the age that people become home owners by at least eight years since 1997.
It also says that while there is potential for improvement as house price growth is at the lowest annual rate since September 2012, if growth continues to stagnate while wages improve, home ownership could become a more feasible ambition. But to successfully save for a property, employees must have a financial plan in place.
It believes it is a concern that four in 10 employees said they don’t know where to start when it comes to getting onto the housing ladder and this, more than anything, highlights the importance of offering employees the right advice to help them reach their long term savings goals.
The research also found that 63% of employees would expect to see their housing costs increase in the case of an interest rate rise. Of these, 65% said that this is because they have a variable rate mortgage. Millennials are most exposed as 76% would see housing costs rise in the case of a rate rise.
‘Housing is a key area of financial wellbeing, and it’s heartening to see that employees record a relatively strong score here. However, there seems to be a gap between perception and reality,’ said Jeanette Makings, head of financial education at Close Brothers.
‘While there’s confidence around affordability, a huge proportion of people’s salaries are going on housing costs. This makes saving for the future more difficult and contributes to the scale of uncertainty when it comes to taking the first step onto the property ladder,’ she pointed out.
According to professor Cary Cooper, an expert in workplace well-being at the ALLIANCE Manchester Business School, University of Manchester, being worried about housing affordability can damage a person’s well-being regardless of whether they’re at home or work.
‘Whether it be paying the rent, taking the leap as a first time buyer, or the impact of a variable interest rate in times of economic uncertainty, it’s vital that employees are comfortable and confident in how to approach their finances when it comes to housing,’ he said.
The provision of affordable housing to Nigerians is the responsibility of government at all levels, though assisted by the private sector. However, the absence of special intervention fund for the real estate sector has further worsened the presence of affordable housing especially for low income earners.
Though past governments have enacted policies to boost housing, but it failed to meet the housing needs of Nigerians due to absence of designs that captured diverse cultural delineation as was seen during Shehu Shagari administration in 1979.
The 2000 housing policy tagged, Housing for All by Year 2000 and 2012 national housing policy, aimed at providing affordable housing for Nigerians also failed. With the election of APC- led administration in 2015, the federal government commenced the pilot phase of National Housing Programme (NHP) in 34 states including the Federal Capital Territory (FCT) in 2017, with the exemption of Lagos and Rivers states whose governors failed to donate land for the project.
Though the projects are yet to be commissioned but stakeholders have lamented that it cannot in anyway bridge the expected housing deficit as other pending issues such as access to land, absence of foreclosure law and among others crippling real estate development are yet to be addressed.
To this end, the realtors have pleaded with President Muhammadu Buhari (PMB) to urgently address the issue of special intervention fund, access to land and among others in his second tenure.
The managing director of FESADEB Communications Limited, Barr Festus Adebayo lamented that Nigeria remains one of the worst performing countries in the world where its citizens lacked adequate shelter. He called on PMB to address access to land, which he said remained a major hindrance to housing in Nigeria.
Adebayo noted that the problem associated with Land Use Act has affected access to land, led to land scam and land grabbing. He sought for the review of National Housing Fund (NHF) adding that the National Assembly had transmitted the NHF bill to the President for signing into law, having passed it on February 2019.
He said: “The President had rejected the bill for legal and economic reasons ranging from infractions on extant laws, duplication of responsibilities of existing agencies and financial constraint.’’ Adebayo who is also the convener of Abuja International Housing Show disclosed that President Buhari should initiate policies targeted at providing affordable housing for Nigerians.
He pointed out that PMB should concentrate on economic interventions that could reduce the cost of building materials and encourage local production of building materials. Adebayo added, “The president should enable processes that will make it easier for cooperatives to pull their resources together and contribute to national funds on housing”.
He regretted that Nigeria has the biggest and most promising housing market in Sub-Saharan Africa, but ironically the least developed. The MD wondered why the country is often fraught with challenges like substandard development, incompetency, building collapse, fraud and conflicts.
He sought for the establishment of supra- regulator that would checkmate individuals and organizations that frequently ventured into the sector without meeting any form of training and education.
He said, “There is no entity saddled with the task of handling problems associated with developers and housing finance fraud that is rampant in the sector. “Fraudulent developers and some unscrupulous mortgage banks have swindled a lot of people because the kind of regulation that should have been in place to check their excesses and nip it in the bud is absent.
In addition, there is a need to introduce legal reforms that will enable timely resolution of housing and investment cases in the law courts and the legal reforms should also make it impossible for lawyers to abuse the system”, he added. He suggested the unbundling of Ministry of Power, Works and Housing (PWH), saying that the meagre slowed down activities in the housing sector.
Adebayo hinted that federal government should recapitalize the Federal Mortgage Bank (FMBN) in order to increase its financial base. In his contribution, the chairman of JEDO investment limited, Alhaji Aliyu Oroji Wamakko called on federal government to resolve the absence of special intervention fund in the housing sector, just like it was done in the agriculture sector.
Wamakko believed that the failure of government to provide intervention fund is the reason for high interest rate and high cost of houses in the built sector. He said that with lower interest rate and special intervention fund for housing development, that investors would be able to provide houses at a very cheaper price.
Wamakko who is also the vice president, Real Estate Developers Association of Nigeria (REDAN) requested that federal government should subsidise the prices of its houses for low income earners. He disclosed that REDAN has always advocated for the enactment of closure to safeguard realty investment in case of default by off-takers.
Another stakeholder who spoke on condition of anonymous suggested that to address Nigeria’s housing problems that there should be consolidated efforts to diversify Nigeria’s economy which is largely dependent on crude export. He pointed out that areas like agriculture, education and housing have been identified as possible ways to expand government’s resources through massive investment.
The expert lamented that housing development cannot be possible in an environment smeared by violence, vandalism and terrorism. While requesting for active engagement of stakeholders in resolving the housing deficit, she pointed out that there is a need for the introduction of special intervention fund in the sector as was done in the agriculture sector.
Also, the executive director of Mobilisation, FESADEB communications limited, Flora Anne disclosed that the interest rates, both for public and private mortgage institutions should be affordable and pegged at single digit rate. She said, “While public buildings like the federal secretariats in Zamfara, Bayelsa, Nasarawa and Ekiti and the Zik Mausoleum in Onitsha has been built, and the pilot phase of NHP has kicked off, leading to housing construction in the 34 states where government had received land but there is still a lot more to be done in order to reduce Nigeria’s deficit”.