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New York’s Plan to Make 50,000 Buildings Super-Efficient

The Climate Mobilization Act is the city’s effort to abide by the Paris climate-change agreement even after the Trump administration withdrew the U.S. from the global accords. Before its abrupt about-face, America’s plan had been to cut carbon emissions by 80 percent by the year 2050. New York is taking up that pledge by introducing new regulations to address the energy performance of buildings.

Buildings contribute a huge share of New York’s carbon emissions—nearly 70 percent, thanks to normal everyday use, but exacerbated by inefficient heating and cooling systems—so they’re an obvious target for regulation. But it’s less obvious how the building sector will answer this charge.

There’s a fundamental mismatch in expertise: The people who know how old buildings really work aren’t the same people designing energy-efficient retrofits. Only a big push will get them in the same room (at great expense to landlords).

The city’s new “80-by-50” law prescribes several benchmarks along the way to the ultimate goal in 2050. Some buildings will need to produce real results soon; different types of buildings will be subject to specific targets.
The city’s first big milestone arrives in 2030: By then, New York buildings will need to have collectively cut their carbon emissions by 40 percent. Any buildings larger than 25,000 square feet will be subject to the cap (with some key exceptions), which means around 50,000 buildings in total. For landlords and building owners, this is an enormous lift in just over 11 years.
That’s by design.“There’s still a lot of details to figure out as to how this gets implemented,” says Lindsay Robbins, a director for strategy and implementation at the Natural Resources Defense Council, which hashed out this policy’s compromises with the Real Estate Board of New York. “I don’t think any city has done this on this scale before.”The hope is that New York’s climate law is awesomely burdensome. No, that doesn’t mean a ban on glass skyscrapers. But a law that turns over the everyday dealings of real estate in New York has a great deal of promise for upsetting how buildings work everywhere. That’s what this represents, according to supporters like John Mandyck, CEO of the Urban Green Council, a nonprofit devoted to making New York buildings sustainable. “This law could possibly be the largest disruption in our lifetime for the real-estate industry in New York City,” he says.

New York’s new law is an effort to make the road by walking: It’s not something anyone knows how to do until everyone commits to doing it. The fact that this legislation is sweeping in its scope is why it stands a chance of succeeding, its supporters say. It’s the first plank in the suite of legislation that Mayor Bill de Blasio describes as the city’s own Green New Deal.
The idea is to build a durable industry in energy retrofitting, one that benefits everyone involved—and by doing so, establishing a model for other cities around the world. And the city can’t get there with a measure that asks building owners to simply swap out light bulbs.

“New York City is going to spend billions and billions of dollars to meet this new law. When we do that, New York Harbor is still going to flood if the rest of the world doesn’t enact aggressive climate reduction strategies as well,” Mandyck says. “Our point all along has been that if we’re going to spend the billions of dollars, let’s make sure we come up with policies that are exportable.”

New York is going it alone here

Other cities are looking at building performance, to be sure. Every city has an incentive to level up the energy efficiency of buildings: In New York, buildings alone account for 95 percent of electricity use for the city, according to the Urban Green Council. But most cities have not taken steps beyond tracking and disclosure.

More than 25 U.S. cities have adopted various energy-benchmarking policies, as have the states of California and Washington. These laws make it mandatory for building owners to report their energy use (namely their electric and gas bills). Disclosure laws have guided net-zero building codes and voluntary agreements. Philadelphia and Washington, D.C., were early signers.

It’s worth noting the limits of disclosure. Building owners who don’t meet voluntary standards don’t pay any price. Importantly, disclosure is not supposed to be a shaming tool: Benchmarking in New York might show a range in energy consumption by hotels, for example, with usage calculated per square foot so as to compare big hotels with small ones, without naming any specific buildings.

What New York is doing is more strident: It’s the first city to attach a dollar value to these disclosure figures. Washington, D.C., passed a building-energy performance standard in December for buildings over 50,000 square feet, and when buildings in the District fall out of compliance, those landlords will be moved into an advisory lane to get back on track. San Francisco passed a law this month requiring big buildings to switch to renewable electricity, an easier goal for a city with a forgiving climate located in a state with a cleaner grid.

In New York, building owners who don’t meet their carbon reduction requirements will pay fines. Potentially very large fines: The statute calls for a penalty of $268 per every assessed ton of carbon over the cap. For landlords just over the line, the fine will be nominal. But the city’s worst offenders could be looking at annual penalties of more than $1 million.

It’s a policy with teeth, in other words. Fortunately for landlords, there’s a lot of room for buildings to improve, according to Vivian Loftness, professor at Carnegie Mellon University and the Paul Mellon chair architecture.“Buildings in the U.S., and certainly commercial buildings, have been incredibly sloppy in their energy use,” Loftness says.
“We’ve got [older] mechanical systems that are running at 50 percent efficiency, where there’s things on the market that will run at 95 percent efficiency. We’ve got a lot of room for upgrades for boilers and chillers, air-handling units, control systems—there’s so much room in just the hardware of buildings.”New York’s strict standard may work for landlords. 

The Climate Mobilization Act sets deep reduction targets over a fairly short period. Since the law establishes 2005 as the benchmark year—meaning building energy consumption needs to fall 40 percent below 2005 levels by 2030—landlords who have made some strides in energy reduction will get credit for their work.

The poorest performers will need to show improvement sooner, by 2024, but about one-quarter of buildings won’t require substantial changes. Taking the progress already made into consideration, New York will need to level up its building-energy-performance game by 26 percent over the next 11 years.

Still, it’s significant, especially for New York landlords with multiple buildings in their portfolio. The Real Estate Board of New York, which represents many large developers, has vocally opposed the legislation. The legislation “does not take a comprehensive, city-wide approach needed to solve this complex issue,” said John H. Banks, the board’s president, in a statement. The group objects in particular to exemptions that they say put a greater strain on the building owners subject to this regulation.

 

“A coalition of stakeholders including environmental organizations, labor, engineering professionals, housing advocates and real estate owners came together and proposed comprehensive and balanced reforms that would have achieved these goals,” Banks said.
“The bill that passed today, however, will fall short of achieving the 40 x 30 reduction by only including half of the city’s building stock.”Douglas Durst, the chairman of the Durst Organization, wrote in a letter to Crain’s New York Business that under this legislation, “empty buildings score better than occupied ones, and hundreds of thousands of inefficient and energy-intensive smaller, city-owned and [New York City Housing Authority] buildings have significantly less stringent standards.”“To get down to even 20 percent from where I am today, with the technology that exists, there’s nothing more that I can do,” Ed Ermler, the board president for a group of condo buildings in Queens, told The New York Times. “It’s not like there’s this magic wand.”

It will take work, no question, says Lane Burt, managing principal for Ember Strategies, a consultancy and strategy firm. But it will not take a wizard. For starters, not every individual building needs to make the 40 percent mark: That’s an aggregate goal. And buildings don’t need to hit their target tomorrow.

“If you’re a building owner and your engineers are telling you, it’s impossible to get 20 percent carbon reduction or 30 percent carbon reduction, really, you need better engineers,” Burt says. “What I interpret from that concern is that the owners are saying, ‘It’s financially impossible for me to do this right now.’ And that I believe completely.” He adds, “The good news is, it might be financially impossible for them to do right now, but we’re not necessarily talking about right now. We’re talking about three decades.”

Over a long enough time span, in fact, the heavier lift makes it more likely that landlords will succeed, not less so, according to supporters of the bill.“What’s smart about this bill is it doesn’t ask for a small increase. It asks for a big increase,” says Greg Kats, president of Capital-E, a clean-energy consultancy and capital firm.
“It’s the kind of thing where if you’re going to do something, you should do quite a lot of it, because the transaction costs [for landlords] to set it up, to engage with tenants, are substantial fixed costs.”Switching to solar might show gains in kilowatt hours fast. But often, measuring energy efficiency is trickier. It means achieving a negative outcome, a reduction in energy consumption, usually by introducing additive systems that contribute to an overall decrease. Buildings are complex systems: Higher-efficiency windows lead to lower air leakage, which reduces heat loss, which lowers heating bills. Buildings are all different, though, so figuring out the suite of improvements suited to a particular building is complicated.

After all, the work involved is interruptive, whether it means overhauling HVAC processes or considering more costly improvements to a building’s roof or facade. While tenants see the benefit of this work once it’s done, they hate it while it’s happening. With a long-enough runway, landlords can plan around the natural business cycle of a lease (around 10 years, generally) to find the lowest-cost window for this work. And given a tall order, building owners have an incentive to spend in order to achieve big savings.

The hassle of getting to a 10 or 15 percent reduction is not that different from reaching 40 percent, Kats says. Either way, a landlord needs to capture data, engage with landlords and utilities, meet with vendors and consultants, and buy new equipment. These transaction costs are high, but many of these costs are the same whether the goal is 15 percent or 40 percent.

A bad bill—something that asked landlords to make smaller changes more gradually, or with less certainty about future benchmarks or timing—might encourage landlords to look for the low-hanging fruit, the barest improvements necessary to meet the regulatory burden. But big asks translate into benefits that landlords can show to tenants. A law firm may not love an interruption from building management—but replacing office lighting with LED lamps that improve visual acuity? A promise against freezing-cold workspaces that landlords can actually keep? Tenants want those changes!

“If you go deep on [energy efficiency], there are some real economies of scale,” Kats says. Landlords can make changes “that save on capital costs or create more space for you that’s rentable space. It’s that kind of systems approach which deep upgrades allow that makes it much more cost effective.”

How will building owners come up with the capital? Deep upgrades require capital, of course. Improvements for buildings are expensive, and the payback is long. Most investors don’t think of the building sector as a 50-year investment or even a 30-year investment.

 

It’s rare for a building owner to weigh upfront investments against long-term operating costs, because the capital comes from different pockets, and the savings may variable or may not be guaranteed, according to Loftness. Building improvements ought to pay out within the lifetime of the equipment or materials, but not within, say, 5 years—so there’s a mismatch between up-front costs and long-term savings.

Owners who also occupy their buildings tend to have longer views about costs, she says, but they may not share the same long-term economics. The question is academic for a building owner who doesn’t have the capital to pay for building upgrades. So it’s good news, for both investors and owner-occupants alike, that the market has an answer to help New York meet this new burden.The solution comes from California.
When the state passed energy-conservation laws 30 years ago, it made utilities responsible for achieving those savings, with the idea being that utilities can bear to wait 30 or 50 years to see a gain. So California utilities have actively promoted investments, financed by the utilities themselves, as a way to meet the regulatory burden. A similar approach is likely to be popular in New York to meet the new energy benchmarks.“Rather than you, the building owner, having to come up with the money, the utility is coming up with the money, and basically taking the payback through the energy savings,” Loftness says. “Your bill stays the same, but 10 years later, you’ve paid back the ‘loan’ of what they invested in the building.”

The most common category of energy-efficiency financing are negotiated payments known as energy service performance contracts (ESPCs). Under this arrangement, a third party finances the upgrade, sharing the savings with the property owner and making a profit.

Third parties that develop, design, build, and fund these improvements are called energy service contract organizations (ESCOs). When utilities are directly involved, as in the California model, the savings-backed arrangements are called utility energy service performance contracts (UESPCs or USPCs), to complete the acronym soup of energy-efficiency financing.

Whether it’s Con Edison or Siemens, these organizations play an important function, as lenders, consultants, or engineers who help building owners bridge the gap for their capital needs.The federal government, for example, can literally print the money it needs to invest in its own energy retrofits. But federal agencies have a hard time getting Congress to actually allocate the funds to meet these standards (namely set by the Energy Policy Act of 1992).
So the government relies on ESCOs to finance and perform this work for federal buildings. As silly as it sounds, the federal government pays private entities to finance this work, through anticipated future savings, even though it’s a safe bet that the U.S. Department of Energy will still be here 50 years down the road.
State and local governments offer their own avenue for financing energy retrofits. Known as property assessed clean energy (PACE) programs, these municipal assessments are effectively loans that are attached to the property. PACE programs, such as the one that New York is introducing with the Climate Mobilization Act, offer long-term financing for little or no money down, with an alternative approach to underwriting that opens up access to these loans to a greater number of consumers than private lenders might.

 

By attaching a loan to a property (and not the property owner who takes out the loan), PACE assessments can transfer with the property when the title changes—meaning that a building’s former owner is not stuck with the tab.

Loftness says that she expects that this meta-industry around energy efficiency financing will be a much bigger part of the New York landscape by 2030 and beyond. “It makes financial sense,” Loftness says. “They make more money on the savings than they do on the expense to upgrade the building.”

An industry may emerge to fully support the changes coming to New York buildings. That doesn’t mean it won’t be a challenge. The city will need to help building operators and owners—the people who know the most about their buildings—talk with the people who can design the solutions to improve them over time. Operations and design engineering aren’t the same skill sets. It may take the full three decades between now and 2050 to find all the answers.

“The reality is, this is difficult. This is the engineering challenge of our time,” Burt says. “There’s not a lot of folks around who really understand how big buildings work, especially the way they were designed 50 or 60 years ago.”

This problem is not specific to New York. The knowledge gap between operating buildings in St. Louis and boosting building performance in St. Louis is just as wide. But if New York can figure out a solution that touches all the buildings in New York, then it will have necessarily developed the knowledge, the expertise, and the specialization that can serve the entire country. Or the world.

Saving the climate through better bureaucracy. New York’s law aims to put officials and experts in an optimal position to answer the questions that haven’t even come up yet. To that end, it creates a new sub-department under the New York Department of Buildings. While its precise mandate is still to be determined, this department will be outside the mayor’s office and fully integrated into the function of the city. “That’s the city sending a signal to building owners that this is something you need to manage, just like vacancy or rent,” Burt says.

The law also establishes an advisory board, with members appointed by the mayor and the city council, to evaluate several issues on an ongoing basis. The board will at times reconsider the per-square-foot carbon reduction goals for each of 10 building category types, from residential to hospitals to retail.
While the legislation has set standards for the first compliance period, there are still a lot of details to determine for the next phase (2030–2034), and the fine print will fall to the Department of Buildings, the advisory board, and the Mayor’s Office of Sustainability.

“For this [policy], the Department of Buildings is also the same department that has administered the benchmarking legislation and the audit requirements that have been in place, so I think that’s they were also chosen to administer this,” Robbins says. “Since this is a whole other level of oversight and decision-making, and paperwork and processes, that’s why they decided to create a whole new division and a new person to head that up, to make sure this legislation is successfully implemented.”

 

The city’s forthcoming Office of Building Energy and Emissions Performance will be headed up by a registered design professional, the legislation stipulates. No director has been named yet.

Still to come: Carbon cap-and-trade for buildings. One of the most formidable policy ideas in the bill also falls in the TBD category: It sets the stage for a carbon-trading market between buildings. It authorizes a study and guidelines for implementing a real-estate carbon market by 2021. If and when carbon trading comes to town, building owners could trade carbon-emissions credits in order to meet the cap. Owners of large portfolios could trade between their buildings to meet targets.

If New York’s policy is done right, carbon trading could serve low-income neighborhoods in particular. Extra credit could be given to upgrades performed in distressed areas, creating an incentive in areas that lack access to capital, whether the factor is 2-to-1, 3-to-1, or 10-to-1. Picture an ESCO—a Siemens or a FirstEnergy—meeting with building owners in low-income neighborhoods and offering do the building upgrades in exchange for the credits.“This creates an entirely different source of capital to finance efficiency upgrades in low-income neighborhoods,” Mandyck says.
 

“The overall importance of trading is that it’s globally relevant,” he adds. “It doesn’t matter what political system you have, what climate you’re in, what your building stock is. Building carbon trading can work anywhere in the world.”

There are still lingering questions that the Climate Mobilization Act hasn’t addressed. Some involve the carbon trading market: how those low-resource neighborhoods will engage in the carbon market shaping up around them, for example. Robbins notes that New York State has committed to a number of energy-efficiency investments; it’s unclear whether buildings owners can apply for these grants in order to meet New York City goals, or whether the state will deem them “free riders” for whatever political reasons.

Robbins also notes that an enormous chunk of New York City buildings were exempted from the guidelines. Any building with more than one rent-regulated housing unit will face a different regulatory path. If buildings with affordable housing—and this means buildings with any affordable housing—don’t comply with the carbon caps, they’ll face a list of “pre-set prescriptive measures,” Robbins says. A slap on the wrist compared to fines.

Residential buildings over 25,000 square feet with affordable units represent half the large buildings in New York. This means half of the applicable buildings won’t be required to meet the energy standards, which also means the other half will need to work that much harder to get to 40 percent by 2030 and 80 percent the following decade. New York lawmakers feared that the cost would be passed on to renters, or that rents on buildings might be raised to the point at which units are no longer considered rent stabilized.
“We understand the constraints and the reasons why rent-regulated housing was dealt with the way that it was,” Robbins says. “But that is such a huge swath of the multi-family buildings in this city, and it is a sector that we really want to see get the benefits of energy efficiency.”
There are other features of the bill that could produce big changes in industry. Mandyck notes that the law enables building owners to switch to renewable energy sources in order to get to compliance; currently, 70 percent of all electric energy use in New York City is generated through fossil fuels. He says that a renewable-energy credit will create a much higher demand for renewable energy in New York.
There are drawbacks to be addressed, too. Laurie Kerr, president of LK Policy Lab, a research and design institute for energy efficiency, says that it might be a mistake to set a single target for compliance in 2030. Rather than asking owners of half of New York’s buildings to hit a single deadline, the city might consider cascading annual targets for different building typologies.
But she praises the potential of a building-to-building carbon-trading market as a “least-cost path” for a bill that otherwise sets stringent targets for buildings. She points to a similar, smaller ordinance in Tokyo as a model for carbon trading.
New York’s bill is strict, she says; any degree of freedom for building owners is going to help.While the long runway and high benchmarks for success set by New York’s climate law makes it worth the trouble for building owners—and tenants, and providers, and consultants—it will still mark a huge shift for the city. The Real Estate Board of New York is joining forces with the Institute for Market Transformation, an energy-efficiency nonprofit, to provide training sessions to help the real-estate industry adjust.It could fail—it could fall to corruption, incompetence, or politics. Sweeping climate answers such as the Paris accords have demonstrated that they are vulnerable to populism and the slow-moving wheel of democratic consensus.

But if New York real estate and New York regulators can get it right? If a climate bill can work in New York, it can work anywhere.

“There was a time before cities had departments of sanitation. There was a time before cities had departments of health,” Kerr says. “These were all game-changers in the histories of cities. This is another turning point.”

By Kriston Capps

REDAN Building Expo Begins on 7th May with Launching of National Real Estate Data

The Real Estate Developers Association of Nigeria (REDAN) will begin this year’s Expo from 7th to 8th May at Shehu Musa Yaradua Centre, Abuja.

One of the major events at the Expo’s opening on the 7th will be the highly anticipated launch of the National Real Estate Data Collation and Management Programme (NRE-DCMP), which is designed to help tackle housing problems in Nigeria, including housing deficit.

NRE-DCMP was initiated by REDAN and Central Bank of Nigeria (CBN) to collate property price index nationwide to solve housing problems in the country.

According to the body’s President, Rev. Ugochukwu Chime, the data, collated from national land administrators on pre-construction, construction and post construction activities nationwide would be hoisted on the Nigeria Mortgage Refinance Company (NMRC)’s website for public usage.

“We are going to hoist the data on the website of the NMRC who actually is the key party and has done so much in the area of structural improvement to the mortgage process in Nigeria by keying into mortgage laws which they brought about.”

Chime bemoaned how before now there was a big misrepresentation of housing data in the country which has not really helped the sector.

“I have been in different fora where ministers representing different various ministries in Nigeria outside this country were giving different data about the same issue, which is embarrassing.

“We need data for planning; we need to know where we need those houses, so we organised it in such a way that the CBN agreed to work with us to tackle housing sector crisis.

“The data emerged from developers profile and capacity, demand and affordability profile of the market within a given locality and household condition survey.

“We went a step further to ensure that all the parties who are involved in the planning of various aspects have data for it.

He said that the association collaborated with CBN, World Bank, Ministry of Power, Works and Housing, Federal Mortgage Bank of Nigeria (FMBN) , NMRC , Value Chain, NpopC, and other stakeholders.

“We also collaborated with the National Bureau of Statistic (NBS), National Population Commission (NPC) to be able to have the NRE-DCMP which is a novel thing that has never happened before,” he added.

He further noted that the data had input on land administration and the 37 land administration entities in Nigeria including the improvement that could be brought to bear on them.

He added that the collated data included issues of mortgage law and foreclosure law as well as how to standardise operations of various institutions to ensure a developer received a standardise allocation letter.

Chime explained that the collated data would also dwell on how to standardise the deed of legal mortgage and deed of assignments in various registries to ensure it’s financial acceptance.

“On affordability we want to know the numbers and the people in the 774 LGAs who need the houses and their affordability reach so that we will stop the issues of having duplexes everywhere or building houses people cannot buy.

“So we can now do targeted construction that can only happen when we have the data on affordability and business data to know the people who are developing the houses.

“We also have housing condition which is the baseline to ascertain the condition of existing houses in the 774 local government or the 37 entities we have in 36 states and FCT.

“These components are what we have gone on to do by organising the NREDCMP,” he said.

According to him, the association has been able to ensure the various stakeholders have understanding of how all the data they want to work upon were collated, gathered and analyse.

Why 2019 Expo Will Be Best Ever

In an interview granted Housing News, the President of Real Estate Developers Association of Nigeria (REDAN), Rev Ugo Chime (UC), reveals why this year’s Expo will be the most improved and anticipated.

This year’s theme is, ‘’REAL ESTATE DEVELOPERS: THE BEDROCK FOR NATIONAL ECONOMIC STABILITY.”

According to him, the REDAN 2019 Expo is the third edition and it is aimed among other things to bring to floor the professional developers in the real estate and housing industry, and discuss how best they can serve as a catalyst in the development of the Nigeria economy.

Other Key Activities

Activities lined up includes mandatory continued professional development for participants; opportunities for the players in the industry to showcase their products; and the programme will also feature exhibition of building materials and corporate presentation of new products. This year’s expo will feature many exhibitions of real estate projects across the country, it will also feature display of new building technologies, innovations in home interiors and design.

The Guests of Honor

The guest of honor for this year’s REDAN EXPO is no other person than the Minister of Power works and housing, Mr Babatunde Raji Fashola. He will be the one to officially declare open the EXPO on the 7th of May.

The Speakers at This Year’s Expo?

This year’s lead guest speaker is no other person than Mr. Hakeen Ogunniran, who is the present Managing Director of Exima Realities. He was the former Managing Director of UBDC. He will be speaking on ““Harnessing Real Estate For Economic Development in Nigeria: Issues, Challenges and Solutions” and proposing a reform agenda.

Other guest speakers include Mr. Femi Adewole, the chief Executive managing director of family home funds.

Mr Akinwumi of ADB Abuja will also be delving into and speaking to us on a number of issues that will help unlock the potentials in our sector.

Standard Organisation of Nigeria(SON) will also be there to educate and inform

Expected benefits of attending this Expo

The 2019 REDAN Expo will create an unparalleled network opportunity for stakeholders who will be participating; it will be an avenue for stakeholders and other members who are looking for opportunities to relate with Family Homes Fund — a new establishment of federal government, to meet with the MD and get to know how they can benefit from Family Homes fund. For the first time, REDAN is collaborating with CBN and six other agencies which will be launching Real Estate Data at the opening ceremony. This year’s Expo will also be attended by all the Chief Executives from Federal Mortgage Banks in Nigeria, Mortgage Finance, Family Homes Funds and others including the Federal Ministry of power works and housing.

Also there will be the commencement of REDAN Initiative on Estate Endorsement, and Building Materials Endorsement, aimed at stemming quality challenges in the process and products on offer.

Family Homes Funds will also be there to unveil the array of novel and innovative real estate financing products they have.

Many Firms will also have their products and services on display.

REDAN Expo Set to Go

With the responses from people, stakeholders and partners, REDAN has assured that they are ready and good to go. The necessary logistics have been put in place and all expected participants have registered.

“This year’s REDAN EXPO is going to be greater and better than the previous ones. In that line, we are calling all stakeholders to give us their full support as always,” Chime said.

REDAN is an umbrella body of all real estate developers in the country. They’re the ones handling the supply side of the housing and construction industry. While people make demands, REDAN supplies.

NISH, Family Homes Funds Advice Cooperatives on How to Raise Funds

NISH Affordable Housing Limited and Family Homes Funds have advised cooperatives in Nigeria housing project on how they can raise capital for themselves and ensure corporate governance.

This was made known by the organisations at the first edition of their quarterly workshop on cooperative housing in Nigeria at the Shehu Musa Yaradua Centre, Abuja, from 2nd to 3rd May 2019.

While speaking at the 2-day event, the MD/CEO of Family Homes Funds, Femi Adewole stated that one of the major challenges to affordable housing in Nigeria is shortage of capital, and that it will be impossible for the government to bear alone the task of solving this key problem.

The way forward according to him is for all functional cooperatives in the country to pool themselves together under a bigger national and international platform that will enable them meet their goals and raise their own capital.

‘’Because of shortage of capital, there is need to have a fundraising scheme through social housing. Cooperatives can raise capital through house rule self-help without depending too much on external sources.

‘’They can find means of aggregating resources to meet their joint needs. And one of these means can be through a flexible members’ construction system,’’ he said.

To make this happen, he also mentioned the need for corporate governance among the cooperatives in order to bring about good management that will ensure consumer protection; trust and confidence – both from internal and external stakeholders.

He also stressed on the need for them to come under a parent body. ‘’There should be no fears that cooperatives will lose their power by coming under a parent body, no. the importance of that is that it will help them negotiate better as a collective force and it will be easier for them to navigate through arising legal issues

Some of the representatives of the cooperatives who spoke at the workshop stressed on the need for collective action in order to address age-long problems like land titling, need for unified data, affordable lending rates and general transparency.

To have the best out of cooperatives in Nigeria, Femi Ajulo, Mortgage Bank Consultant, stated that there is need for cooperatives in Nigeria to really define their purpose. ‘’We don’t have real cooperatives, we only have multi-purpose cooperatives where people go to borrow money to pay their children school fees. It shouldn’t be so. Going forward, these structural problems should be addressed,’’ he advised.

By Ojonugwa Felix Ugboja

National Workshop On Housing Cooperatives Organized By NISH & FHF In Pictures

NISH Affordable Housing Limited and Family Homes Funds have convened the first edition of their quarterly workshop on cooperative housing in Nigeria.

The event which took place today at the Shehu Musa Yaradua Centre in Abuja was well attended by representatives of a number of cooperatives in housing from across the country.

According to the MD/CEO of NISH, S K Yemi Adelakun;

“the objectives are to organise, empower, and acquaint cooperative leaders with Innovative Cooperative Housing Principles and sensitise them on how to aggregate members’ equity contributions through savings scheme towards effective and sustainable delivery of affordable housing to Cooperators. The workshop is also designed to strengthen the governance capacity, transparency and accountability of housing Cooperatives through information and communications technology,’’ he said.

Below are picture coverage of the event:

 

Family homes funds set to boost cooperative housing market -MD

Abuja, May 2, 2019 (NAN) The Managing Director of Family Homes Fund, Mr Femi Adewole has said that the programme was set to boost cooperative housing through its rolled out funds.

Adewole made this known at a cooperative housing workshop organised by the Nigeria Integrated Social Housing (NISH), Affordable Housing Ltd in collaboration with Family Homes Funds, on Thursday in Abuja.

The News Agency of Nigeria (NAN) reports that the Family Homes Funds is a Social Housing Programme initiated by the Federal Government to provide inexpensive mortgages for low-income individuals and families across the country.

Under the Family Home Fund scheme, which is domiciled in the Ministry of Finance, civil servants who earn salary of 30,000 and above can have access to mortgages to own a home.

Adewole said that Family Homes Funds which was a special purpose vehicle for financial institutions was primarily to facilitate the production of about 500, 000 homes and over 1.5 million job creation.

“It is a very new fund and has been running effectively in the past nine months.

He said that the programme had four pillars of funds to achieve home ownership namely Affordable Housing Fund, Home Loans Assistance Funds, Rental Housing Fund and Land and Infrastructure Fund.

He said that the objectives of cooperative housing could be achieved by developing capabilities of the market with workshops to identify support for capacity base for set of cooperatives with set goals.

According to him, cooperatives in an organised sector can be transformational enablers of affordable housing delivery particularly to people on low and middle income.

“We can also achieve our objectives by identifying the capacity gaps that hinders cooperatives from playing central role in affordable housing delivery then strive to bridge them.

Adewole said that Nigeria could replicate what other housing cooperatives in other parts of the world were doing adding that Urban Housing Cooperative in India owned about 4.5 million homes between them over the last 10 years

We must make the cooperatives very strong vehicles for reliable and affordable housing delivery in the country.

He further said that there were about 2,600 Housing Cooperatives in Pakistan with inception since 1972 produced about 27 million homes strong membership while there were 5,700 housing cooperatives in Zimbabwe of with significant number of members as women.

According to him, the housing cooperative is only responsible for almost 80 per cent of housing delivery in Zimbabwe

Speaking on the consistent failure in meeting the housing needs target, he said that any housing policy before the Shagari 1979 housing policy has failed to deliver anything more than10 per cent of the intended policy.
Mr Benson Iyohmere, Former Managing Director, Police Mortgage Bank in an address also underscored the role of cooperatives in affordable housing delivery.
Iyohmere said that since government could not adequately provide direct housing to people in need of shelter, cooperative housing should be the alternative means.
He said that one of the reasons why Federal Mortgage Bank of Nigeria (FMBN) could not reach out to many workers was because of non-remittance of the National Housing Fund (NHF) contributions by some employers.

Iyohmere added that FMBN was presently dwelling on Cooperative Development Loan and had seized dwelling on Estate Development Loan due to defaulters.

According to him, Nigerians should come together to pool resources through cooperative means to achieve affordable housing.

He listed some challenges of housing cooperatives in housing delivery as low income, high interest rate, lack of access to land and government mortgage documentation requirement.

He further said that dearth of long-term funding and high cost of land titling and acquisition including government consent hindered development adding that without these there would be no development.

“These are major issues that affect construction and governments need to make the process seamless for development by developers. For every mortgage documentation there must also be an underwriting standard.

Iyohmere however listed key cooperative principles which Family Home Funds would use to appraise request of cooperative societies.

He listed the seven key principles as voluntary and open membership, democratic member control, economic participation, autonomy and independence, education, training and information, coperation among cooperatives and a concern for community.

Dr Peter Kuroshi, Registrar, Council of Registered Builders of Nigeria (CORBON) decried the challenges hindering housing delivery in the country hence underscored the need for regulation in the sector.

Kuroshi said that apart from affordability quality and standardisation should be encouraged in housing construction value chain.
“Most cooperatives are committed to housing projects not knowing precisely what it entails in terms of standardisation in building process and cooperative profit management,’’ he said.
“After procuring, you will incur cost to get them to the level you will be satisfied with. Get involve in project inspection too in order to get the value of your money.

Source: By Emmanuella Anokam New Agnecy of Nigeria (NAN)

Affordable houses: NISH seeks establishment of Cooperative Housing Federation of Nigeria

The organisation also called for the establishment of Cooperative Housing Fund (CHF) and Cooperative Housing Information System (CHIS).

Mr S.K Yemi Adelakun, Managing Director, NISH Affordable Housing Ltd., made the call at the opening of a 2-day cooperative housing workshop organised by NISH in collaboration with Family Homes Funds, on Thursday in Abuja.

Adelakun said that the CHF would unite off-takers aggregate savings and equity contributions to improve their collective chances of renting or owning affordable houses at minimal costs and to actively invest in various housing value chains.

According to him, Cooperative housing should afford off-takers a better negotiating platform with other stakeholders.

“Housing cooperatives in other countries like Kenya play the role of developers, financiers, guarantors, bankers, asset aggregators and managers.

‘‘They are able to attract domestic and international donors and equity funds due to the volume of savings from members,’’ he said..

He explained that cooperative housing would also facilitate procurement of bankable off-takers guarantees required to attract to Nigeria global construction companies with technologies and finance for large scale and cost effective housing delivery.

The managing director explained that the workshop was designed to preach the gospel of synergy in togetherness and to encourage formation of cooperative housing association across the country which would culminate in formation of CHFN.

‘‘The workshop will be made a quarterly event and at the end of this 2-day workshop we will hopefully set in motion action plans towards establishing Cooperative Housing Fund (CHF) and Cooperative Housing Information System (CHIS).’’

He urged the Federal Director of Cooperatives to help in facilitating the registration of cooperative housing associations across the country and particularly the proposed CHFN.

‘‘We count on our partnering banks to initiate financial products or instruments in support of these initiatives; we also count on GIZ and Africa Development Bank for technical support.

‘‘This will enhance governance of these cooperative housing organisations especially in the area of data management,’’ he said.

He stated that for Nigeria to achieve sustainable delivery of affordable houses, housing off-takers financing must be at single digit interest rate.

Adelakun commended the government and its agencies like the Federal Mortgage Bank of Nigeria (FMBN), Family Homes Funds and Federal Government Staff Housing Board, which offered six, five and three per cent interest rates respectively.

He observed that these institutions were limited in their capacities to finance construction of affordable houses, given the existing level of housing deficit such that only few Nigerians could qualify and secure mortgages through them.

‘‘While one may be hoping for enhanced capitalisation in the future and special intervention Fund by government, off-takers must engage in self help through innovative principles of cooperative housing,’’ he stressed.

In his address, Alhaji Sani Idris, Federal Director of Cooperatives, praised the idea of the cooperative housing approach.

He said the initiatives involving viable cooperatives were sustainable because the institutions were owned by person whose vested interest initiated their creation.

Represented by Amano Emal of the Federal Department of Cooperatives, Idris said registered cooperatives should be treated as competent entities that are able to take decisions on any matters concerning them as autonomous legal persons.

‘‘It is the choice of the cooperatives to decide the mode of its operations, and this is documented in their Bye-Laws registered along with their names by the Director of Cooperatives, who is the statutory Registrar of cooperatives at the appropriate jurisdiction.’’

News Agency of Nigeria reports that the workshop with the theme: ‘‘Financing Affordable Housing Through Cooperatives,’’ had in attendance executive members of housing cooperatives, off-takers, developers and finance experts among others.

Source: News Agency Of Nigeria (NAN)

Cooperative Housing: NISH, Family Homes Funds Hold First Edition of Quarterly Workshop

NISH Affordable Housing Limited and Family Homes Funds have convened the first edition of their quarterly workshop on cooperative housing in Nigeria.

The event which took place today at the Shehu Musa Yaradua Centre in Abuja was well attended by representatives of a number of cooperatives in housing from across the country.

According to the MD/CEO of NISH, S K Yemi Adelakun, the theme of this first edition is, ‘’Financing Affordable Housing through Cooperatives.’’

‘’The objectives are to organise, empower, and acquaint cooperative leaders with Innovative Cooperative Housing Principles and sensitise them on how to aggregate members’ equity contributions through savings scheme towards effective and sustainable delivery of affordable housing to Cooperators. The workshop is also designed to strengthen the governance capacity, transparency and accountability of housing Cooperatives through information and communications technology,’’ he said.

According to him, it is common knowledge that there is a huge housing deficit in Nigeria especially in the low and medium income range that must be addressed deliberately and systematically if we are to achieve significant and sustainable success in delivering affordable housing to the teeming population of Nigeria. Housing, as we all know and as popularised by the Maslow Hierarchy of Needs, is one of the most basic needs of humanity.

In the same vein, the MD/CEO of Family Homes Funds, Femi Adewole stated that the workshop is a developmental engagement. ‘’The objective is to develop the capacity of cooperatives around those four platforms. So after this session, we expect to have another one in July, a third one in September, and a fourth one in December,’’ he said.

According to him, Family Homes Funds and NISH are keen to use this method to ensure that they develop a very strong and effective housing cooperatives system in Nigeria.

The attending representatives of the cooperatives spoke about their challenges and how the organisers of the workshop can aid them.

The two-day workshop is billed to reconvene tomorrow and agree on positions that will advance the cause of cooperatives in Nigeria.

By Ojonugwa Felix Ugboja

Who Will Lead the Revolutionary Development in Nigerian Housing Sector

Conversations are raging over how to finally establish a lasting and realistic solution to Nigeria’s age-long housing deficit. Nigeria’s housing deficit of up to about 17 million is a constant cause for concern and even embarrassment for housing sector stakeholders, especially those who are committed to making a difference.

There are a lot of stakeholders’ forums in Nigeria. Prominent among them is the Affordable Housing Development Group, established by FESADEB Media, a company with significant impact on the Nigerian housing sector, including the annual Abuja International Housing Show, Housing Development Programs on major TVs and radio stations. On these platforms, stakeholders engage in passionate discussions about the way forward for housing in Nigeria and Africa.

But beyond these discussions, some members have tasked the group and other stakeholders’ groups in the country to move from advocacy to action. There is a new emphasis for the stakeholders to entrench their own ‘Next Level’ of ideas and implementation.

While speaking with Housing News, Fola Alade, CEO of Rapid Shelter Nigeria, charged all stakeholders to not only begin an agenda setting campaign for the government, but to also convert their passion to a portfolio of housing projects across Nigeria.

‘’Through housing, we must change the narrative of Nigeria being the poverty capital of the world. Organisations like FESADEB have over 12 years’ experience in addressing the problem of housing through their recognizable platforms, but we need a collaborative effort to hasten the pace. Housing can be a great catalyst to ending poverty in Nigeria. 75% of Nigeria’s total population live in poverty. Any policy tailored to addressing the problems of these set of people which are the majority will go a long way to tackle poverty. 75% of our budget should go into solving the problems of low income people and those living in extreme poverty,’’ he said.

Speaking further, he stated that president Buhari needs to redeem his commitment to the poor by making them the focus of his administration. But Mr Alade was quick to add that the whole buck doesn’t stop at the president’s table.

‘’He is only one man. We need to support with our own policies and projects to compliment whatever he is doing or going to do with regards to the NEXT LEVEL agenda. The only NEXT LEVEL we should clamour for is the one that will lift the poor people from their current level of poverty to a better position where they can have access to basic needs like housing, healthcare, food and education.’’

According to him, if housing is what brings humans their dignity, then it is time for Nigeria to truly step up as the giant of Africa she professes to be and provide adequate and affordable housing for its huge population.

Critical Options for Providing Affordable Housing in Nigeria

According to Alade, there are two key strategies in meeting the housing demand in Nigeria. ‘’We either decide to build for people in their poverty or create a ladder through which they can climb out of poverty into relative prosperity. So, we choose to do the later. We are going to create employment, business and industrial opportunities that will enable the poorest people in our country be productively engaged, where they will use their sweat equity to get a house. We have to be realistic and think out of the box at this critical time,’’ he stated.

For him, the unemployment and poverty situation in Nigeria can be converted into an amazing opportunity. Through their sweat equity, poor people can use what they have to get what they want.

‘’That is why we are proffering a cashless housing solution, where you don’t need to pay to get the house, but you’d rather work to get it. You can work on the farm, construction site or whatever kind of legal labour to get a house. Site labourers earn minimum of N1500 daily. In 30 days, they will earn at least N40, 000 – N45, 000. So if you are deducting N15, 000 or N20, 000 monthly, at the end of the year, they can save up to N200, 000 to N24, 0000. And that is already 20 – 25% equity contribution to a N1million house.

Corroborating his views, Festus Adebayo, the promoter of Housing Television Programs in Nigeria, also stressed that every stakeholder should recognise their areas of comparative advantage, and offer self for project enrolment.

‘’There are options of what they can do. From land contributions to providing an off-takers network, to mortgages, to building materials at wholesale prices, there are a lot of ways everyone can come in. It is not enough to complain about the government’s inefficiency. As a people we can decide to take actions. When we mobilise ourselves en masse and see our efforts begin to yield, then government can follow suit and give the necessary support. As at today, we have sample houses of 1 bedroom at N1.6m to 2 bedroom for N3m by Hydraform. With more hands on deck, we can achieve more of this,’’ he said.

According to him, Individual and collective effort is what will set the agenda even for the new government before they come-in in May

Exploiting the Minimum Wage for Housing

According to Mr Alade, the real question now is how workers can get a house from the new 30, 000 minimum wage. He said that with a monthly deduction of N10 000, which is one-third of the N30, 000, it is possible to achieve.

‘’We can deduct N300 per day, which adds up to become N10, 000 per month. In one year, a worker can save up to N120 000. This can be called a ‘per day billing’ mortgage system. Even a couple can have a combine daily payment of N750 per day,’’ he said.

Cooperatives Strategy to Generate Off-takers

Another key strategy is unlocking the off-takers option through cooperatives and unions. Once these cooperatives can come together, rally themselves to fund a mass housing project, Alade said it will be easy for the building stakeholders to act on their demands and provide more houses.

‘’We cannot continue to wait for the Federal Mortgage Bank or Family Homes Fund because it will take a lot more time before their efforts are appreciable, especially with regards to the amount of deficit that needs to be bridged.’’

To make this work, he also harped on the need for accountability and transparency in the whole processes involved in ensuring that everyone including the poorest of the poor in Nigeria have their own home. If everyone can realise their place in changing Nigeria, it is his believe that a lot can be done in the shortest time.

By Ojonugwa Felix Ugboja

Uhuru’s Housing Project Scores Big as 11 Chinese Firms Bid to Invest

President Uhuru Kenyatta‘s affordable housing project won big during the joint Kenya-China business forum held in Beijing, China on Friday morning.

Cabinet Secretary (CS) for Transport, Infrastructure, Housing and Urban Development, James Macharia, revealed that 11 Chinese companies were jostling to get a piece of the pie in terms of investing in the project.

“So far, more than 11 Chinese companies have expressed interest in investing more than Ksh1.9 trillion to build more than 721,000 affordable housing units,” read an excerpt of a tweet by CS Macharia.

Mr Macharia affirmed that the potential investment would go a long way in bridging the current deficit of about 200,000 units annually within the country.

He went on to reveal that the country had set up special economic zones in Dongo Kundu, Kisumu, Nairobi, Naivasha to ensure that business people were accorded an opportunity to invest in different parts of the country.

Uhuru had earlier on delivered a presentation in a bid to woo Chinese investors present at the forum to look at Kenya as a highly valuable investment opportunity.

“We are not asking you to do Kenya any favours, we want you to come and invest in Kenya because when you make money, we will make money, this is what shared prosperity is all about,” Uhuru asserted.

President Uhuru informed the various delegates and major players in the Chinese industry that investing in Kenya offered a unique opportunity as it provided any potential investors greater access to a wider African market.

The affordable housing program is part of the Jubilee government’s efforts to reduce the housing backlog that currently stands at two million units.

Uhuru’s government had pledged to provide 500,000 decent and affordable houses by 2022 as part of his big 4 agenda, and the new potential investment would go a long way in helping them to fulfill their promise.

By EDDY MWANZA

Labour pledges to end ‘slum’ office housing

Labour says it would scrap a government scheme that allows offices and industrial buildings to be converted into homes without planning permission.

The party said changes to permitted development rules in England had led to the creation of “slum housing and rabbit hutch flats”.

It also said developers had been able to avoid building affordable homes.

The Conservatives said the plans would “cut house building and put a stop to people achieving home ownership”.

In 2013, the government changed planning rules to allow developers to turn offices, warehouses and industrial buildings into residential blocks without getting permission from the local council, in a bid to boost house building.

Barnet House
                                       House in North London is being converted to 254 flats

The rules have since been further relaxed, leading to 42,000 new dwellings being created from former offices in the last few years.

However, permitted development schemes are exempt from official space standards and also from any requirement to provide affordable homes.

Labour said the policy had seen the loss of more than 10,000 affordable homes, and meant that flats “just a few feet wide” were now counted in official statistics as new homes.

It said its policy was still to build 250,000 new homes a year in England with 100,000 being “genuinely affordable”.

“This Conservative housing free-for-all gives developers a free hand to build what they want but ignore what local communities need,” said John Healey, Labour’s shadow housing secretary.

“Labour will give local people control over the housing that gets built in their area and ensure developers build the low-cost, high-quality homes that the country needs.”

Terminus House
Image captionPolice figures show crime recorded at Terminus House, and the car park which sits beneath the housing, rose 45% in the first 10 months of it opening

In one permitted development scheme at Newbury House in Ilford, an office block has been turned into 60 flats measuring as little as 13 sq metres each.

According to national space standards, the minimum floor area for a new one-bedroom one-person home is 37 sq metres.

Critics say the schemes can be damaging to residents’ mental wellbeing, as well as being miles from amenities and conducive to crime.

At Terminus House – a converted office block in Harlow – crime jumped 45% in the first 10 months after people moved in and by 20% within that part of the town centre.

Tackling the housing crisis?

But some developers warn that without permitted development many office to residential schemes would no longer be viable.

The government says the rules are helping tackle the housing crisis and allowing people to get on the housing ladder.

Of the 13,526 homes delivered under permitted development last year, more than three quarters were built outside of London

Marcus Jones, Conservative vice-chair for Local Government, said: “Labour’s plans would cut house building and put a stop to people achieving homeownership.

“We are backing permitted development rights, which are converting dormant offices into places families can call home.

“Whilst Labour put politics before our families, the Conservatives are delivering the houses this country needs so every family has a place to call home.”

Source: BBC NEWS

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