On June 5, 2013 at 11:48pm, I came up with a post on the · IBB SOCIAL MEDIA CENTER FOR GOVERNANCE, STRATEGY AND POLICIES on how to make affordable housing a possibility for all in Nigeria. With the enactment of the Tenancy Law in Lagos State, many would have expected many states, if not all the 36 states to adopt it, and also eliminate exploitation of Lagosians by both the Landlord and Estate Agents. This brought about a sharp increase in rent/accommodation cost, and agents now charge 20% as commission, damages, etc.... Or a fixed rate of N50,000 each for other related charges. Basic rent of a house will be N350,000, one will be coughing out almost N200,000 as additional payment for charges. Im coming up with this post once again.....hoping.....praying and believing someone somewhere is reading...... Just to help Lagosians...just to help Nigerians and make affordable housing a possibilitiy for Nigerians... AFFORDABLE HOUSING FOR ALL IN NIGERIA: A POSSIBILITY IF ONLY...... In line with my resolve and in strict compliance with the core values of this group, Im coming up with a template which I believe can, and will eliminate the housing problem confronting us as a nation. It is a widely acknowledged fact that the unavailability of affordable housing for Nigerians is responsible for the high cost of living in major cities, urban-rural drift, poverty, destitution, an incomplete biometric database, and a non existent social security. We can not take a/any thing away from the the Federal Government in their quest to provide affordable houses and homes for all. It was in a bid to achieve that the Federal Government of Nigeria established the Federal Housing Authority was in 1973. It was established with a vision of it to be the leading provider of housing and facilitator of access to sustainable housing solution in Nigeria and to become a model government agency. Its set agenda was it to be the leader in the provision of sustainable housing in Nigeria and to facilitate home ownership for all Nigerians, and also be a government institution which place premium value on Professionalism, Integrity, Innovation, Team Spirit, Enjoyment, Commitment The Federal Housing Authority is was charged to 1. Acquire, hold and manage movable and immovable property; 2. Acquire, construct and maintain dwelling houses, schools, communal and commercial buildings and other structures; 3. Enter into contracts for the construction, maintenance, management or repairs of any property; 4. Purchase or otherwise acquire any assets, business or other property where such purchase or acquisition is necessary for the proper discharge of its functions under this act; 5. Sell, let, lease or otherwise dispose of any property vested in the Authority. These functions were further expanded in the 2006 National Housing Policy to include: 6. Develop and manage real estate on commercial basis in all states of the Federation and the Federal Capital Territory (FCT); 7. Provide sites and services for all income groups with special emphasis on the low income group; 8. Provide low income and rural housing in all states of the Federation and Federal Capital from funds provided by the Federal Government and other sources; 9. Execute such housing programmes as may be approved by the Federal Government. Federal Housing Authority is also expected to develop proposals for national housing programmes for Nigerians of different income groups in major cities and in every state across the nation. At a point in our national life that the housing deficit is put at 17million units, Im of the opinion that the FHA needs to be restructured and repositioned to reduce the such deficit, and not to be commercialized as the National Council on Privatisation (NCP) has just recently approved. The NCP in its wisdom took the decision in a bid to address the huge housing deficit in the country, and the Honourable Minister of Lands, Housing and Urban Development is to chair the steering committee to work out the details of the exercise. I consider this a wrong move bearing in mind the high inflation and unemployment rate, high Exchange rate to the United States dollars and a very low per capita income, affordable housing is taken further away from Nigerians. Any prospective investors into the FHA will not see its primary objective as to provide affordable housing ti Nigerians, but to maximize profit all in the bid to get a huge Return of Investment(ROI). Do note that FHA has been a parastatal under the supervision of the Federal Ministry of Lands, Housing and Urban Development. The FHA has a wholly-owned subsidiary, FHA Homes and Savings Limited, which serves as its Primary Mortgage Institution (PMI) with the mandate to maintain savings and mortgage loan accounts of customers, but we must also acknowledged that the noble objective of the Federal Government to use FHA and its subsidiary as vehicles for bringing affordable housing programmes to the doorsteps of the less privileged and low income earners in Nigeria has yet to be achieved. Since its inception about 40 years ago, the FHA has been able to build only about 37,000 housing units in 80 estates across the country (an average of less than 1000 houses per annum). Though, there are claims that the organisation is handicapped by a number of challenges, including historical operating losses; teeming legacy debts; Poor internally generated revenue (IGR) base and inability to effectively function without government funding. As we speak, theres a Federal Housing Administration (FHA) in the United State of America and it is a United States government agency. It was created as part of the National Housing Act of 1934. It insured loans made by banks and other private lenders for home building and home buying. The goals of this organization are to improve housing standards and conditions, provide an adequate home financing system through insurance of mortgage loans, and to stabilize the mortgage market. Please let us all bear in mind it is different from the Federal Housing Finance Agency (FHFA), which supervises government-sponsored enterprises. The effects of the creation of the Federal Housing Administration in the United States include the successful increase in the size of the housing market. By convincing banks to lend again, as well as changing and standardizing mortgage instruments and procedures, home ownership has increased from 40% in the 1930s to nearly 70% in 2001. By 1938 only four years after the beginning of the Federal Housing Association, a house could be purchased for a down payment of only ten percent of the purchase price. The remaining ninety percent was financed by a 25-year, self-amortizing, FHA-insured mortgage loan. After World War II, the FHA helped finance homes for returning veterans and families of soldiers. It has helped with purchases of both single family and multifamily homes. In the 1950s, 1960s, and 1970s, the FHA helped to spark the production of millions of units of privately owned apartments for elderly, handicapped, and lower-income Americans. When the soaring inflation and energy costs threatened the survival of thousands of private apartment buildings in the 1970s, FHA’s emergency financing kept cash-strapped properties afloat. In the 1980s, when the economy did not support an increase in homeowners, the FHA helped to steady falling prices, making it possible for potential homeowners to finance when private mortgage insurers pulled out of oil-producing states. The greatest effects of the Federal Housing Administration can be seen within minority populations and in cities. Nearly half of FHA’s metropolitan area business is located in central cities, a percentage that is much higher than that of conventional loans. The FHA also lends to a higher percentage of African Americans and Hispanic Americans, as well as younger, credit-constrained borrowers, contributing to the increase in home ownership among these groups. As the capital markets in the United States matured over several decades, the impact of the FHA decreased. Today, FHA now backs over 40 percent of all new mortgages in the United States. Now that the similarities in purpose of the FHAs in both countries have been highlighted, I think we could stick to a similar approach to the Americans, we can achieve the same level of success if not more. Now this brings me to my suggested template/recommendation. It is so disheartening that all the FHA in Nigeria could achieve in 34 years is 34,000 units of houses inspite of a growing population. Nigeria has a total number of 768 local government council areas. Im of the opinion that rather than scrap or commercialize the FHA, or rely on various housing schemes initiated by various states across the federation, the FHA should embark on a building project of 1000 units council apartments simultaneously across the 774 local council areas. The units should comprises of a room, a room and parlour, & a 2 bedroom apartment. This should be a FHA backed project. This on completion will provide 774000 affordable housing units. Since we have our peculiarity as a nation which involves a growing economy amid widespread poverty, insecurity and unemployment, these units is not to be put up for outright sale or any form of mortgage. They should be put up for rental and monthly rent should be paid into the FHAs account domiciled in any bank or office in each council area. I am not oblivious to and of the fact that there are some local government council areas which are solely industrial areas and exquisitely reserved for elites. For such council areas, adjourning or nearest council area with enough land will take up its quota. This is a total departure from building models on large expanse of land. This is a project that will not only be driven by quality, but quantity as well. A 10-12 floor building which will have this various categories is recommended. It could be erected across the local government council area to evenly distribute the strain on social amenities in the council area. This will be good for sanitation as well. Allocation of the units should be devoid of racketeering, nepotism, bureaucracy and graft. The effect of this project if and when embarked upon is enormous. It will not only curb rural-urban migration, it will promote urban-rural drift. Imagine someone working in Dutse in Jigawa, if he can not get a unit in Dutse, he can relocate to Hadejia if he is sure of getting one there. Economic development, and integration is also promoted. The high cost of living will be effectively tackled since the bulk of the victims of exploitation have been saved the torment of paying huge sum as house rent on a yearly basis. This is more effective than any rent edict or law as nature and common sense takes over. Many private property owners will either be force to bring down their yearly rent, or go on the monthly basis to keep their apartments occupied. Bearing in mind the inconsistency and difference in demography across the country, and also because Its not just a type/model I am recommending, the average rent only for the essence of the post is N6,000. Each FHA domiciled office at every local government, or payment made from each local government council area will be the sum of N6,000, 000. Across the federation, from the 774,000 units, the FHA will recoup N40,644, 800, 000 in a month. In a year after the completion of the project, the FHA will earn from the project N557, 280,0, 00,000(approximately N5. 5728trn. For 10 years, the FHA will receive N5tr. Lets assume and earmark the N572b for maintenance and service cost for 10yrs, getting N5trn back in 10years is not a bad margin for investing into such project with enormous impact on the lives of Nigerians. If God could create Adam and later Eve, and put them in the Garden of Eden. God was being providential. It was not for Adam and Eve to build themselves a garden, all that was required of them was to tend it.. So the Federal Government of Nigeria who is the god in charge of our resources and custodian of our national destiny should be providential as well by providing Nigerians affordable housing. We dont have any business building houses...ours is to tend it...better still, maintain it I dont care at whatever cost, the Federal Government needs to provide affordable housing for all. The FHA should sustain this project by embarking on more of such periodically. Some might see this suggestion as been elementary or too terrestrial. Some might see it very plausible, trust me, I do as well... Some with doubt it successful execution citing Nigerian factor, I have my fears... Im not saying this is the best solution.... Im not forcing it on the government or Nigerians, its just a suggestion.... A suggestion which gives me the conviction that affordable housing for all in Nigeria; a possibility if this suggestion is considered, looked into, and improved upon. Pls do help me with the maths... My calculating device is acting up. God Bless Nigeria
Posted on: Wed, 03 Dec 2014 06:08:59 +0000
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