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THE 12th Abuja International Housing Show – FINDING COMMON SOLUTIONS FOR THE HOUSING CRISIS IN NIGERIA THROUGH ADVOCACY, COLLABORATION & ENGAGEMENT.

Nigeria is not short of land or the options to provide more land. What is lacking is a general consensus on where the land should come from. To find more land, we must draw on the collective wisdom of society and recognize the need for compromises and give-and-take, in order to find a solution that benefits people as a whole.

Partnership & collaboration is something that the organizers of the Abujahousingshow are really promoting. In addition, we are committed to promoting greater housing production and more equitable distribution of affordable housing.

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The Abuja Housing Show is a segment platform that brings under one roof major stakeholders engaged in seeking solutions to affordable housing issues and promotes affordable housing as a driver of economic growth.

The forum brings together policy-makers, academics, urban planners, architects, housing sector developers, non-governmental organizations, donor agencies, researchers, advocates, international organizations and others. Since its inception in 2006, the Housing Show has brought together more than 15,000 people from over 20 countries. Many Governors, ministers, senate president,speakers , commissioners for housing, lands, works, urban planning, housing finance experts from world bank, cbn , AUHF, OPIC usa etc and professionals from architecture, Town planning, estate management, building , quantity surveying and engineering

We welcome all who share the passion for the need for decent housing and all voices that further the cause. To learn more about the industry, developer financing & requirements, mortgage options available to Nigerians, and how you can join conversations about smart growth strategies, register to attend the 12th Abuja International Housing Show on www.abujainternationalhousingshow.com or down load abujainternationalhousingshow app from goggle store into your phone.Testimonials from exhibitors, participants and visitors made it the best in Nigeria and Africa at large.Abuja international housing is powered by fesadeb media group owners of housing prog on channels, ait and housing time on Raypower

A Comparative Analysis of Housing Indicators in China and Nigeria

In our previous review of “Nigeria’s journey towards sustainable housing provision”, we highlighted several housing indicators in the areas of housing deficit, mortgage interest rate, mortgage down payment rate and repayment period, policy reforms, cost of housing, which were used to explain the current state of the housing in Nigeria. In this second edition of the review, a simple comparative analysis of housing in China is done to further explain the dire need for the complete overhauling of Nigeria’s housing sector.

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China is a socialist state, with a government with crystal clear vision of its role. China is the most populated country in the world with a population of about 1.4 billion people. Given this population, one would assume that China would suffer from extreme housing deficit, but the numbers in China’s housing sector are fairly good. While Nigeria has a housing deficit of 17 million, 90% of families in China own their homes and 80% of these families acquired the homes outrightly, without mortgages or loans.

China has seven of the world’s top ten most expensive cities for residential property. The prices of houses in China are very high when compared to their income, price-to-income ratio (PIR). This however, does mean that the country is in a severe housing situation, the system can be said to have been managed almost effectively by forces of “government policies” and “way of life”.

The process and qualification for getting mortgages in China is relatively straight forward and low, respectively. At most, the mortgagor will need to have a monthly salary that is at least twice the monthly repayment rate of the loan. The outcome of this is that mortgages perform well in China, and in 2013, default rate was a mere 0.17%. Usually, a down payment of 30% is made on mortgages, which is 5% higher than that of Nigeria. However, interest rate on mortgage in China is about 6%, almost 4 times lesser than Nigeria’s. It is important to recall that mortgages are uncommon in Nigeria due to high interest rate and the arduous process of getting a mortgage.

Majority of the Chinese don’t mortgage, just 18%, as earlier mentioned 80% of homeowners acquire their homes outrightly. Hence, mortgages contributed 15% to China’s GDP in 2012. This is still higher than Nigeria’s 0.5% mortgage contribution to GDP in 2012.

China also has a Housing Provident Fund. In a way, the Fund works like the Nigerian pension system in which employees and employers co-contribute to a pension account. A part of the Housing Fund, included a savings plan initiated by the government in which employees are given the option to contribute a portion of their monthly wages and have it matched by their employer to assist them with buying a house. This has contributed positively to mortgage acquisition in China, as prospective home owners are able to make the required 30% down payment.

Just like Nigeria, China has had several housing policy reforms, but so far, the difference in both countries has been the approach. While Nigeria’s style is for each administration to come up with a policy that can be attributed to the office holder, without good reference to learning points from previous reform(s) as every effective policy reform should do, China has transitioned from one policy reform to another with the soul aim of scaling up successful practices and downscaling non-performing ones. For China, policies have resulted from current realities. Among the latest drive by the government of China, is to regulate the rising rent cost in cities.

The success story of housing in China is as a result of an interplay between culture and systemic and intentional policies driven by its government to ensure sustainable housing provision for its citizenry. The government has largely charted housing in the country onto a sustainable path. Housing policy reform after reform, the government’s aim has simply been to provide adequate housing for its people. As for culture, the Chinese treasure home ownership, to many of them it could be their lifetime’s biggest achievement and they would work diligently towards saving up to buy one. Parents go out their way to support their children in getting their own homes, owning a home is somewhat of a yardstick for being fully prepared for marriage.

We have seen where Nigeria stands from the comparison; we can also deduce who/what the major actors in China’s housing sector have been. The last article in this series will be released in two weeks from today and will basically feature solutions to Nigeria’s housing woes. It will involve a mix of adoptable policies, low cost housing option and many others, till then, please stay tuned.

How People In China Afford Their Outrageously Expensive Homes

I was surprised when the owner of the run-down, 82 square meter apartment outside of the core downtown area of Xiamen that I once rented told me that he was selling it for nearly US$300,000. The apartment was in a well-worn 15 year old building — old in a country where housing only lasts for 25-30 years — and had grime covering the walls, tiles from the kitchen floor that were peeling up, water oozing up from the shower drain, and fixtures that were all mismatched . . . and dilapidated at that. Although at 22,000 RMB per square meter I couldn’t say that this place was priced abnormally high — this is just what people pay for homes in the east of China.

An average 80 square meter apartment within Shanghai’s Inner Ring Road goes for upwards $886,000; while in the city’s hinterlands it sells for around US$200,000. In Beijing, the average cost of a home of this size is roughly US$310,000. This is all in a country were $5 can get you a bulging armful of food from the local market and $70 gets you a bunk on a train that’s going all the way across the country.

According to the IMF ’s house price-to-wage ratio, China has seven of the world’s top ten most expensive cities for residential property. All through the country’s tier-one, tier-two, and even some tier-three cities, housing prices are severely out of proportion with the incomes of the people who live there.

In Xiamen, a coastal city with a perpetually hot property market, $300,000 for an apartment is normal — even though the minimum wage there is hardly $200 per month and the average wage is around $1,000. Even for the city’s middle class residents, who make between $1,200 and $5,000 per month, the price seemed prohibitively high.

However, the people of China can afford to buy these extremely expensive properties. In fact, 90% of families in the country own their home, giving China one of the highest home ownership rates in the world. What’s more is that 80% of these homes are owned outright, without mortgages or any other leans. On top of this, north of 20% of urban households own more than one home, according to Nomura . So with wages so out of whack with real estate prices, how can so many people afford to buy so many houses?

Before we can understand how people in China can afford to frolic in their country’s over-inflated housing market, we must look at where this market came from. Hardly 20 years ago China’s real estate market didn’t exist. It wasn’t until the mid-90s that a series of reforms allowed urban residents to own and sell real estate. People were then given the option to purchase their previously government-owned homes at extremely favorable rates, and most of them made the transition to being property owners. Now with a population provisioned with houses that they could sell at their discretion and the ability to buy homes of their choice, China’s real estate market was set to boom. By 2010, a little over a decade later, it would be the largest such market in the world.

When we talk about how people afford houses in China today, more often than not we’re not talking about individuals going out and buying property on their own — as is the general modus operandi in the West. No, we’re talking about entire familial and friend networks who financially assist each other in the pursuit of housing.

At the inner-circle of this social network is often the home buyer’s parents. When a young individual strikes out on their own, lands a decent job, and begins looking to pursue marriage, getting a house is often an essential part of the conversation. Owning a home is virtually a social necessity for an adult in China, and is often a major part of the criteria for evaluating a potential spouse. As parents tend to move into their children’s homes in old age, this truly is a multi-generational affair. So parents will often fork over a large portion of their savings to provision their children with an adequate house — oftentimes buying it years in advance. If parents are not financially able to buy their kids a house outright, they will generally help with the down payment, or at the very least provide access to their social network to borrow the required funds.

Take for example the case of Ye Qiuqin, a resident of Ordos Kangbashi who owns two houses across the country in Guangdong province, where she is originally from. Together with her fiancé, she makes roughly US$3,200 per month from running a cram school. For her first home she made a down payment of roughly US$20,000; of which $3,300 came from her parents, $10,000 came in the form of loans from her sister and friends, and the rest came from her savings.

To decrease the amount of volatility in China’s often hot property market, there are very strict rules as to how much money people can borrow from the bank for purchasing real estate. Although this slightly varies by city and wavers in response to current economic conditions, for their first home a buyer must lay down a 30% down payment, for the second it’s 60%, and for any property beyond this financing isn’t available. So for people to buy homes in this country they need to step up to the table with a large amount of cash in hand. In fact, 15% of all residential property in China is paid for in full upfront.

Why there is so much liquid cash available for these relatively large down payments is straight forward: the Chinese are some of the best savers in the world. In fact, with a savings rate that equates to 50% of its GDP, China has the third highest such rate in the world. As almost a cultural mandate, the Chinese stash away roughly 30% of their income, which is often called into use for such things as making a down payment on a home — which is the most important financial transaction that many Chinese will ever make.

Another way that Chinese home buyers are able to afford their down payments is via the country’s Housing Provident Fund. This fund began when the country started privatizing urban housing as way to help residents afford to buy their homes. Part of this fund included a government initiated savings plan where employees are given the option to invest a portion of their monthly earnings and have it matched by their employer to assist them with buying a house.

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Once the down payment is accounted for, getting mortgages in China is a relatively straight forward affair, and the standards for qualifying are relatively low. For the most part, a borrower’s monthly salary must be at least twice the monthly repayment rate of the loan. Interest rates hover around 6%. On average, those who have these loans will devote between 30% and 50% of their monthly income towards paying them back.

While there is much talk in China and abroad about the increasing number of Chinese home buyers taking out mortgages, relative statistics should quell the hype. Just 18% of Chinese households have mortgages, compared with half of all home owners in the USA. China’s home mortgage-to-GDP ratio was just 15% in 2012, whereas in the USA it was a staggering 81.4%. Although monthly wages in China tend to be relative low, non-performance on mortgages is virtually unheard of — in 2013 the default rate was a mere 0.17%.

Although we must remember here that China’s banks are fully owned by the Communist Party, and social stability often takes precedence over the raw pursuit of profit, so their lending practices cannot be compared like-for-like against those of Western banks.

Part of China’s boldness when it comes to spending relatively large amounts of money on housing comes from the assumption that wages will continue rising. Nominal income growth in urban China has been going up at a 13% clip annually over the past decade, while annual per-capita disposable income has risen from $1,800 in 2006 to around $4,800 today.

This is to say that the Chinese are able to afford their homes, even though they are extremely expensive.

Nigeria: What The Numbers Say About Her Journey Towards Sustainable Housing Provision

Author ~ Ebuka Onunaiwu
As a social scientist, numbers mean a lot to me, whether these numbers are used to explain trends in the health sector, financial or economic performance, surplus or deficit in infrastructure, sporting analysis, or perhaps behavioral patterns of a specific population, I take numbers seriously and I know that the leaders of our country Nigeria pay similar, if not more attention to numbers, when it relates to oil and politics. However, I strongly believe that it is high time Nigeria paid the needed attention to the troubling numbers in the housing sector. In this article my aim is to quickly shed light on some key figures in Nigeria’s housing sector.

“They say numbers are beautiful, but those of Nigeria’s housing sector are not”, what then does the numbers say about housing in Nigeria?

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Nigeria, a country with a population of about 180 million people, has a housing deficit of 17million, and according to the World Bank, at least 59.50 trillion naira will be needed to bridge this deficit. For the records the needed amount is over 7 times the total national budget of Nigeria. If you over-exaggerate the provision housing units at about 500,000 per year, it would take 34 years to bridge the gap created by the deficit and this is without considering the population growth rate.

Mortgage financing has been an effective tool used in tackling the housing problem in many countries, but Nigeria has not been able to utilise this tool. According to the National Bureau of Statistics, the Real Estate contribution to the Gross Domestic Product was about 7.73 percent in 2012. Of this figure, the mortgage loans and advances contributed 0.5 percent. This minimal contribution by mortgage loans is as a result of the high interest rate between 11 – 29 percent demanded by Mortgage Banks and commercial banks. Even at this high interest rate, many commercial banks demand a down payment of 25 percent of the mortgage value and the repayment period for the mortgage is usually between 10 – 20 years. Also, the housing units built for the poor in Nigeria cost between 5 -20 million naira, which is not affordable to poor people in Nigeria. The case is the same with rented apartments in Nigeria. Families pay through their noses to live in decent apartments in urban areas. Anything lesser than the usual high end rents will mean living in suburbs or city outskirts.

There is also a problem of high cost of land registration and titling. There are about 21 procedures to register and process land titling in Nigeria and the entire process of transfer could last 274 days. This speaks volume of the nature of Nigeria’s land tenure system as well as the ease of doing business in the country.

Political stability is another limiting factor in the housing sector. In 33 years, that is between 1981 – 2014, the country had 5 different National Housing Policy documents. Administration after administration, the National Housing Policy has been reviewed or reproduced, and this has not been to the advantage of the sector. On the contrary it has inhibited growth in the sector and has scared away investors.

However, the case is not all gloomy, there seems to be some light at the end of the tunnel. In 2017, the Federal Government of Nigeria revealed that the sum of N1 trillion would be committed to construction of housing accommodation in the country. The allocated sum will be used to provide 2.5 million housing units. Also, the Society of Real Estate Developers of Nigeria, has committed to assisting the Federal Government in tackling the housing deficit in the country by constructing and delivering 10,000 housing units for each of the 37 states in Nigeria including the FCT. These promises to be somewhat far-reaching if indeed they are actioned. But until the project kicks off they remain mere promises.

Indeed, the numbers predict a bleak future but like I earlier said, there seems to be some light at the end of the tunnel. In about two weeks from now, I will release the second part of this article which will focus of how other countries have gotten it right with regards to housing, this would then be followed by a third edition that would detail possible sustainable solution to the housing problem in Nigeria. See you in two weeks’ time.

The Housing Provident Fund in China

Explanation
In China, different cities have different laws and regulations regarding the social securities and housing fund. All Chinese employees and employers are required to contribute the mandatory social insurance and other social benefits such as housing fund and the social security funds on a monthly basis. The Housing Fund, also known as the Housing Provident Fund. In 1999, Housing Fund was established, for the purpose of helping Chinese employees save money in terms of buying their own properties. By doing so, the social stability and security has been guaranteed in China. Together with other types of social welfare programs, Housing Fund is legislated by the government at a national level, but all the local governments have the authority to set up the contribution rates by their own.

The Housing Fund and other social insurances
The ministry of human resources and social security regulated the welfare and social security system, and there are five social insurance items in the welfare program: the maternity, medical, pension, work-related injury and unemployment insurances.

When it comes to Chinese welfare system, the Housing Fund is generally administrated respectively by the Ministry of Housing or other local Housing Funds offices, but always included inside the system. The core difference between Housing Fund and other social schemes is that there is no social pool for the Housing Fund, because all the amount will go to the employee’s personal account. Moreover, the credits can only be withdrawn for specific situations, such as the down payment, construction, purchase, renovation of the property and paying back a mortgage.

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Contribution
Example: Base and Rate of Publicly Accumulated Housing Fund in Shanghai
Rate:
The rate of publicly accumulated housing fund payment for employee and employer and employer is 7% respectively.

Base:
Contribution Base= the previous year monthly average salary of the employee.

Employees who start new work from January 1st, 2015 shall calculate the housing fund contribution base in accordance with the employee’s second month salary or the actual monthly average salary since the employee start new work.

Employees who joined from January 1st, 2015 shall calculate the housing fund contribution base in accordance with the month salary after joining or the actual average salary.

For 2015 (July 1, 2015-June 30, 2016), the upper limit of publicly accumulated housing fund contribution base is RMB 2,290, the upper limit of small private business and its employees and freelancers is RMB 3,924.

For 2015(July 1, 2015-June 30, 2016), the lower limit of publicly accumulated housing fund contribution base is RMB 254, the lower limits of small private business and its employees and freelancers is according to this standard.

The Amount of Monthly Housing Fund Contribution
The amount of publicly accumulated housing fund monthly payment= contribution Base x (rate of publicly accumulated housing fund payment of employee+ rate of publicly accumulated housing fund payment of employer).

 

How Nigeria Can Address its Housing Crisis

Author ~ Ebuka Onunaiwu
Housing is a bundle of joy. Renters and homeless go through moments of stress, distress and uncertainties – Professor Tunde Agbola, Department of Urban and Regional Planning, University of Ibadan.

In the two preceding editions of this series on Nigeria’s journey towards sustainable housing provision, we analysed the state of housing in Nigeria in edition I and compared what is obtainable with regards to housing in a highly populated country like China in edition II. In this third and final edition the emphasis is on proposing feasible solutions to bridge the housing deficit and forestall the nation’s housing crisis.

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What We Need
A review of how various countries such as Finland, China, the United States of America and the United Kingdom, have managed the housing demands in their countries has shown that in these areas, housing is largely a social service; and that the most successful countries in managing housing are those that have embraced “social housing”. Hence, I would join voices with scholars like Professor Gbenga Nubi of the Faculty of Environmental Sciences, University of Lagos and Prof. Tunde Agbola, to attest that social housing is the antidote to Nigeria’s housing crisis.

Social housing in simple terms refers to housing owned and managed by the state, non-profit organisations or a combination of both, usually with the aim of providing affordable housing. Social housing is usually directed towards low income earners, it focuses on social service delivery and is not motivated by profit-maximiszation. The aim of social housing is to ensure that housing, which is a basic need, is sufficiently provided for all especially those at the bottom of the economic pyramid. You may read ‘social housing in Nigeria’ by Wole Aboderin, who extensively addressed the subject matter.

The first attribute needed to solve any housing crisis issue is strong political will. This is the starting point and the root of any housing drive but has been lacking in Nigeria’s housing sector. Beyond the formulation of new policies to guide the activities of the sector, the decision makers in the sector must determine in earnest that the sector needs radical changes. What is currently needed is the kind of political will that saw to the building of mass housing estates by the Jakande-led administration in Lagos State, Nigeria, in the space of approximately 5 years. The kind of political will that has enabled Finland stand out among other European nations in bringing solution to homelessness using the Housing First strategy.

The Process
There are three critical aspects of a social housing strategy such as the implementation, funding and the models for the housing units. Implementation of social housing for other nations has been driven mainly by partnership between government and organisations from the not-for-profits, private sector and those in the academia to drive research. To solve Nigeria’s housing crisis, there is need to bring together the best brains in the sector, who are willing to work towards the long-term achievement of success in the sector. This has been so in many other regions. For instance: Y-Foundation an NGO with over 16,000 apartments, is a prominent partner in Finland; and Volunteers of America is an active housing partner in the State of Utah, US. In Nigeria, we have credible resource persons like Profs. Nubi and Agbola, another notable resource person is Prof. Fabienne Hoelzel, co-founder of Fabulous Urban, the organisation that developed the Makoko-Iwaya Regeneration Plan. We can bring onboard Chinwe Ohajuruka, whose affordable housing model is used as a case study in the latter part of this article; and, Bolaji Agunbiade, another sustainable building solutions provider whose interview is found in the latter part of this article as well. As it is in every other sector, Nigeria does not suffer from a dearth of human capital in the housing sector.

As one of the basic needs of humans, the housing sector should be funded as much as other critical sectors like education and health. The funding of any social housing scheme is usually a cooperative work, mainly by the government at all levels in collaboration with private sector, not-for-profits and individuals. This would involve increasing the annual allocation to the housing sector, and setting up of a functional housing financing department/scheme. In Finland’s Housing First scheme, the government provides grants for housing advice services (a maximum of 35 percent of the costs). Another adoptable funding model can be seen in China’s housing fund.

In a way, this Fund works like the Nigerian pension fund in which employees and employers co-contribute to a pension account. A part of the Housing Fund, included a savings plan initiated by the government in which employees are given the option to contribute a portion of their monthly wages and have it matched by their employer to assist them with buying a house. This has contributed positively to mortgage acquisition in China, as prospective home owners are able to make the required 30% down payment.

In the same way that the government attempts to attract investors to various sectors of the economy, they should take similar steps in the housing sector. Funding summit for housing should be held in major cities in Nigeria, in collaboration with private sectors, grant givers, impact investors and philanthropists; incorporating transparency and stakeholder participation in the fund management.

Previous studies have found that when housing is not only covering the poorest, there is greater political support and more funds. Hence, social housing in Nigeria need not focus on the poor alone but also on a broader spectrum of people in the middle class. This has been achieved in places like Sweden, Singapore and Hong Kong by encouraging mixed-class tenancy in the housing estates. This has also been found beneficial to intercultural integration in multiethnic regions.

The Models
A very crucial aspect of any social housing discussion is the model of the house. If the government opts for social housing, there is need to answer questions such as: which building materials should be used? Where could the building materials be sourced? What is the cost of building materials? How much (financially and environmentally) does the total building project cost? and which models are sustainable and can produce the highest gains (in terms of quality and quantity) at the cheapest possible cost? To address the above questions, we may need to consider the following two case studies on sustainable and affordable housing models:

Case Study I: Cellular Lightweight Concrete
In an exclusive interview with a Bolaji Agunbiade, the co-founder of Ziegel – a building solutions company, he gave insights into his company’s sustainable building solution. The South Africa based Real Estate firm has been managed by Bolaji for 12 years. The company’s affordable and sustainable building solution is called ‘Cellular lightweight Concrete’ (CLC) (or “Aerated Concrete). The CLC is generated by combining cement with certain additives. The method which has existed for years has now been made easier to deploy with modern technology, whether in single or large sites. The CLC is a better building material as it is lighter than concrete or block, fireproof, waterproof, insulated (both sound and temperature), easier to deploy to site and 60% faster than brick and mortar.

On costing, Bolaji said the CLC method has similar costings to the traditional methods due to the use of similar materials such as (cement, sand/gravel, water, iron rods/mesh and others), and in-place of blocks additives are used. However, it still comes out cheaper using the CLC methods as a lot of savings can be realised from the time saved. According to him, the Governor of Lagos State recently signed a multi-billion-naira contract with Eco-Stone, a Nigerian company proposing to deploy CLC technology sourced from the USA to deliver housing in Lagos State. This he believes will be the first of many.

Bolaji believes that having just the CLC technology is not enough, how it is deployed is key and that is where the problem is and needs to be addressed. A small builder should be able to deploy the technology to site for a single project and that is what Zeigel brings to the table for critical stakeholders. He projected that in the next 10 years, CLC technology will become cheaper to deploy, and self-sustaining as the materials should would be sourced locally.

Case Study II: Passive House Prototype
“Affordable green housing could well be the silver bullet to address the triple bottom line for sustainable [housing] development in Nigeria” – Chinwe Ohajuruka

In 2012, Ms. Chinwe Ohajuruka and a team of sustainable development professionals entered an African Diaspora Business plan competition organised by USAID and Western Union for Africans wanting to do meaningful and innovative development in their home countries. Their entry titled “Renewable Energy through the Vehicle of Affordable Housing” emerged as one of the 17 winners of the competition. The innovation engineered by Chinwe and her team was called “Passive House Prototype” and refers to a rigorous, voluntary standard for energy in a building, reducing its ecological footprint.

However, according to Chinwe and her team, in the Nigerian clime a “Passive House Prototype (PHP)” is “A building that uses 50 – 75% less energy than a similar building in a similar location”. The PHP is an energy-efficient affordable housing, designed as an upgrade to the popular “Face-Me-I-Face-You” housing model in Nigeria. This model is the most affordable in Nigerian urban centres but also hosts some of the most unhealthy and unideal living conditions.

With the support of the funding from the competition and the Rivers State government, in 2013, Chinwe and her team built some PHPs in Port Harcourt, Rivers State, Nigeria. The typical characteristics of the built PHPs include one living room, one bedroom, one kitchen, one bathroom, circulation/storage. Each building could accommodate 4 units for 4 families on a single minimum-sized plot of land. The average construction time and cost for each building is 3 months and N9 million (at N2.25 million per unit) respectively. Although, with economies of scale, 10 or more PHPs could go as low as N7.5million. The PHPs come with added benefits of clean (solar) energy, potable water, and improved sanitation.

Another remarkable aspect of the project is that it follows a Rent-to-Own agreement, hence, the occupants start by renting the homes and work towards full ownership of the homes. Chinwe noted that the success of the project was largely enabled by the collaboration and support of the Rivers State Government, especially the Greater Port Harcourt City Development Authority. She also stated that more opportunities can be provided by the provision of housing microfinance and micro-mortgages even from traditional cooperative like ‘Esusu’, and corporate social responsibility by businesses.

Information for case study II was sourced from Henrich Boll Stiftung Nigeria

From case study II, a comfortable housing unit along with services such as portable water and solar power can be provided for low and middle-income families at N2.25 million. With more research, better and cheaper local housing solutions can emerge but there is need for the right political will to drive other aspects such as the implementation process, funding and models for social housing.

With social and affordable housing, there is a great opportunity to meet the housing deficit in Nigeria if government and private stakeholders can deliberately and collaboratively act to develop the housing sector in the country. There are also opportunities for social entrepreneurs and impact investors that want to align profit with societal good and value creation. By working together, these groups can change the narratives in the housing sector by making long-term investments in the provision of affordable housing in urban centres in Nigeria.

Five key trends for the building industry in 2018

Construction industry expert Saeed Al Abbar, of leading Dubai-based consultancy AESG and Chairman of the Emirates Green Building Council, talks us through what he expects to be the key topics and trends for 2018.

Over $85bn worth of building contracts were handed out across the GCC last year, and with a yearly increase of 7% that upward trend should continue through 2018. There can be no doubt that the Middle East is one one of the key regions, globally, for the construction industry.

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One of the region’s specialist consulting and commissioning firms, AESG, has been a major beneficiary of the GCC building boom, with the company doubling in size over the course of the last calendar year. Some organisations struggle with that scope of change, but AESG seems to have taken the growth in its stride. However, Managing Director Saeed Al Abbar insists that the company isn’t “growing for growth’s sake”, and that growth has been a by-product of success rather than a goal in and of itself.

“We didn’t really set out to double in size in 2017, but it did happen,” he reflects. “I think it’s with the ambition our team has. Everyone wants to strive to be the best at what they do, and naturally with that, you tend to work on bigger projects. I think a testament of that is that 80-85% of our work is repeat work. If we were truly focused purely on growth, we would be spending a lot more time and assets on advertising, but it’s more that if clients grow, we grow with them. So that’s been the path we’ve had.”

Al Abbar is a passionate advocate of sustainable development and green building techniques and has consequently presented at a number of local, regional and international conferences as well as authoring a number of papers on the issue.

Al Abbar recognises that flexibility is paramount to survive in this industry, as is the experience of having been involved in over 300 projects. He outlines what are, in his opinion, the key trends for the building industry in the year ahead.

Zero and near-zero energy buildings

Since the Paris Climate Agreement in 2015, we have started to see a move towards the decarbonisation of the global economy and according to the terms of that, building stock has to reach net-zero by 2050, and preferably a great deal sooner.

The building industry is already having to adapt and this is something that Al Abbar believes is set to continue. In fact, he thinks the idea of zero and near-zero buildings becoming more widespread is something we should expect to happen sooner rather than later.

“It’s something we need to achieve,” he says, passionately. “Under the auspices of the Paris climate change agreement… we need to be, by 2050, effectively getting to net zero. That’s not very far away, so that’s one thing that needs to happen. But I think where there’s a need, the industry is able to innovate to meet that need. I think it’s definitely feasible (that the construction zero and near-zero buildings will become more widespread). We’re working on prototype designs, and we’ve proven it from the technical feasibility perspective. Now we’re trying to optimise it to be cost-effective so we can demonstrate it as commercially feasible as well.”

Fire and life safety

Perhaps one of the most obvious themes is fire safety after a number of high-profile façade fires globally. Al Abbar says it’s vital for developers to manage their liability and safeguard their investments, both when it comes to new projects and existing developments. He also believes it will become increasingly necessary for fire and life safety teams to work together with façade teams to ensure that the façade designs themselves follow best practices for fire safety.

“The façade does present a fire risk for the building,” says Al Abbar. “Now there’s been a number of high-profile unfortunate incidents, it’s come to the fore and created a lot more focus around it. It’s something that can be overcome with good engineering, good materials.

“The cost of insurance is going up because of façade fires. Those developers who haven’t considered fire safety in their façade will stand to pay even higher premiums because there’s a higher risk.

“I think it’s going to be driven into developers that this is something they need to do to safeguard their investment. Likewise, with the codes. Codes internationally are being upgraded to address this risk, so it’s going to become an essential part of design.”

Commissioning

Modern buildings are exceedingly complex and any which are not properly commissioned will use upwards of 25% more energy than they would have used, as well as not functioning to their optimum capacity. For Al Abbar, a mechanical engineering graduate, this is very much a bugbear that is all too prevalent within the industry. He does believe though, that with more companies using third parties which specialise in commissioning, the problem is being mitigated somewhat.

“The historic practices of allowing MEP contractors to carry out their own testing and commissioning is like asking school children to mark their own exam papers, without the teacher verifying that they have marked their work correctly or honestly,” he remarks.

“Take the electromechanical systems in any building, which can be roughly 40% of the cost of the actual project. It can be $400-500mn in terms of equipment. If you don’t commission and test that correctly, it’s almost a wasted investment because things aren’t working as they’re supposed to.

“We see a lot of projects now that have faced issues where things are inadequately commissioned; they’ve got equipment working but not optimally, or not working at all. Most developers, however, are now employing the services of third party commissioning specialists to manage and oversee the commissioning process right from the start of design until handover.

“We’ve definitely seen an improvement in the approaches and professionalism taken to commissioning, which is something we’ve been advocating for a number of years now,” adds Al Abbar.

Value engineering

Within the construction industry, increasing importance has been placed on value engineering and innovation and Al Abbar says that has been reflected by the emergence of consultancy service providers and contractors, whose approach to value engineering is led by technical specialists and supported by cost consultants, rather than the other way around. He strongly believes it will be the companies which integrate value engineering into their processes, able to provide more value at a lower cost to the client, that will be successful over the coming year.

“I think we’ve had value engineering here for a good 10-15 years,” he reflects. “It’s generally driven by cost experts, where they’ve had a schedule of costs and are trying to remove things from it. I think we’ve seen the consequences of that and they’re not very positive.

“Basically, by removing cost, you’re removing value. It’s not really value engineering. What I think we’re going to see, and what we’ve been championing and working with clients on, is value engineering driven through the design, supported by the cost experts. So, we work together to say: ‘okay this facade has this function to achieve… what’s the most cost-effective way of doing that?’, rather than saying: ‘let’s just remove items from the project specifications to save cost.’”

Management of existing assets

The final topic Al Abbar expects to come to the fore this year is the importance of properly managing existing assets. Buildings are always ageing, and he says the demand for recommissioning the mechanical, electrical, fire and life safety and even façade systems of older buildings is becoming more and more common.

To do that properly, he explains, needs “a holistic diagnosis of all systems in the building is required to ensure their proper functionality”, including a thorough review of vital systems such as air conditioning, the building management system (BMS) and fire and life safety systems. Organisations that decide to take this up in 2018 would do well to treat BMS as the starting point,” says Al Abbar. “As this is not only where building systems are orchestrated, but BMS will also help pinpoint where systems are not working in harmony. This validates that the building systems provide a safe and healthy environment for occupants, and also provides significant energy savings.

“I think it’s evolving, but there’s still a long way to go. The leading developers with multiple assets that are around for some time are seeing the importance and value of good asset management. As the maturity kicks into the market, not just here, but globally, I think we’ll see more of it.”

So, what will all this mean?

The main focus for companies this year has to be ensuring they have an awareness of the changes in the industry and the refocusing which has happened in certain areas of the market.

Al Abbar believes that “those who ignore the tides of change will be left behind”.

He concludes: “I think globally, in every industry, we’re seeing the rates of change so fast, faster than it has ever happened before.

“You take the taxi industry, which has been stagnant for years and now it’s been completely disrupted with the challenges of increased competition, increased globalisation, lower liquidity in the market, internal pressures and challenges, alongside the perfect storm of changes to technology and approaches to digitalisation. Every industry is evolving so quickly, and the cycles every two or four years reinvent themselves, and if you’re not able to do that then it’s going to be a struggle. I think it’s something we take quite seriously, not to rest on our laurels. Be aware of what’s coming up around the corner because it comes around a lot quicker than we’ve all been used to.”

Construction to play prominent role in Irish economy

Ireland’s National Planning Framework and National Development Plan was revealed on 16 February.

Both documents heavily feature plans for more investment into construction and infrastructure.

The nation has been neglecting the industry for 10 years, which has landed it at the bottom of the EU’s table, claims the Irish Times.

With the National Planning Framework being backed by legislature, the country may see investment from the government powering its economy.

However, there are concerns that Ireland’s construction industry is not large enough to support the ambitious plans.
EY/DKM consultants and SOLAS predicted in 2016 that the country would require an additional 112,000 employees in the sector by 2020 to meet housing and infrastructure demand.

Following this prediction, the ESRI has forecast an increase of housing output of 30%, rising to 35,000 newly constructed houses per year.

Read More: WHY YOU SHOULD EXHIBIT AT THE 12TH ABUJA INTERNATIONAL HOUSING SHOW

According to the Independent, Ireland is also anticipated to grow in terms of population – the nation is expected to rapidly expand by 150,000 people in 10 years’ time.

DKM expects that by 2026, the population over the age of 60 will reach 1.1mn – in this case, it is predicted that Ireland will require at least three new hospitals to manage the older generations in the country.

LafargeHolcim to invest $213mn into India growth strategy

The Swiss building materials manufacturer, LafargeHolcim, has announced its plans to commit SHF200mn (US$213mn) to Indian investment.

The firm is to construct a new cement plant, locacted in the Rajasthan state in the north of the country.

The plant will serve customers across the North of India, with Delhi anticipated to be a larger consumer.

The plant will be developed by Ambuja Cement, a subsidiary of LafargeHolcim.

The company aims for the facility to have a clinker capacity of 3.1mn tonnes per annum.
“India is the second biggest global cement market and is forecasted to continue to see high growth rates,”remarked Group CEO of LafargeHolcim, Jan Jenisch.

Read More: WHY YOU SHOULD EXHIBIT AT THE 12TH ABUJA INTERNATIONAL HOUSING SHOW

“We are excited to invest in this highly attractive market to further strengthen our footprint and to reinforce our leading building materials position in India.”

LafargeHolcim aims for the plant to be commissioned by the second half of 2020.

The firm has a total cement capacity of more than 60mn tonnes across India through its two subsidiaries – Ambuja Cement and ACC Limited.

The Swiss company have contributed more than CHF8bn ($8.54bn) to it’s Indian operations, becoming one of the nation’s largest foreign investors.

Obtaining Building Permit Is A Must, Lagos Warns Developers

By Kazeem Ugbodaga

The Lagos State Government on Thursday warned that obtaining building permit is a must before anyone can erect a building in the State.

The government vowed that any building found without building permit in any part of the State would be shutdown.

General Manager, Lagos State Building Control Agency, LASBCA, Engr. Olalekan Shodeinde gave the warning during the sensitisation campaign in Ajegunle area of Lagos, Southwest Nigeria, in conjunction with the Ministry of Information and Strategy, to sensitise the people on the need to obtain permit before construction.

He said government would no longer tolerate all forms of illegal development across the State as sanction would be meted out on defaulters.

Shodeinde, who was represented by the Head of Department, Building Administration and Public Enlightenment, LASBCA, Engr. Victoria Ajose, said government had declared zero tolerance to building collapse and non-obtainment of building permit.

Read More: WHY YOU SHOULD EXHIBIT AT THE 12TH ABUJA INTERNATIONAL HOUSING SHOW

“if you don’t comply with our laws, government is ready to prosecute after serving contravention notice for the people to come forward to regularise their documents and obtain necessary permits.

“After all these, if you don’t still comply, we will seal such property,” he said.

Shodeinde lamented that cases of people breaking government seals were on the rampant, warning that there is a consequence for doing that.

He said this was what informed the reason why LASBCA began sensitisation tour twice a month to let the people know that they must follow due process in building construction.

According to him, LASBCA is now moving round to monitor building development across the State to ensure that people did the right thing right from the foundation level.

He said in Ajegunle, many buildings were now old, noting that there was the need for their owners to subject such structures to integrity test to ascertain their durability.

However, areas visited in Ajegunle during the sensitisation campaign included Old Ojo Road, Chidi Street, Market Street, among others. Fliers were distributed to residents during the sensitisation campaign.

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