8th March, 2016
The Minister of Works, Power and Housing, Mr. Babatunde Fashola SAN, Tuesday advocated a change of unhelpful attitudes in the real estate sector and willingness to accept home ownership responsibilities like payment of rates, levies and property taxes as some of the viable means to rebuild the nation’s economy through the real estate sector.
Fashola, who spoke as Special Guest of Honour at the Oriental Hotel, Lekki Expressway venue of the Nigerian-British Chamber of Commerce Advocacy Business Roundtable, said in order to enhance the enormous opportunities offered by the nation’s housing challenges to rebuild her economy, there must be willingness among Nigerians to change their attitudes towards such home ownership responsibilities.
Represented at the Roundtable with the theme, “The Nigerian Real Estate Sector: A Reform Agenda”, by his Special Adviser on Housing and Urban Development, Mr. Abiodun Oki, Fashola said the willingness to change attitude towards the sector had become expedient in order to enhance the quality of life of the citizens as exemplified in economies where there is credit in the real estate sector.
According to the Minister, there is need for landlords to embrace the attitude of rent collection weekly or monthly in arrears instead of yearly in advance while there should be easy access to low interest mortgage loans where the mortgage schemes exist.
Urging the Association of Estate Agents to look in the mirror and see their own contribution to the access of real estate acquisition while landlords should step up to offer credit to Housing as their private sector contribution to increasing access to housing and shelter by agreeing to collect their rents monthly in arrears and not in multiples of yearly rent paid in advance, Fashola also focused on the responsibilities of tenants.
Tenants, the Minister said, must dutifully discharge their rent obligation when these credits are offered so that landlords don’t have to seek eviction orders in court while lawyers must refrain from seeking injunctions against eviction and possession on behalf of debtor tenants adding, “These are some of the habits I spoke of which we must consider, and change”.
“It is not an accident that the quality of life is better in economies where there is credit in the real estate sector by way of rent payment weekly or monthly in arrears instead of yearly in advance, and also where there is easy access to low interest mortgage loans”, he reiterated.
Promising, as Minister responsible for Housing, to confront the challenges facing the nation’s Housing Sector, the Minister said he was greatly inspired by the enormous opportunities in the sector adding, however, that the key to the opportunities lay in the identified attitude change.
He declared, “Our housing challenge offers an enormous opportunity to rebuild our economy, but we must answer serious questions honestly, change unhelpful attitudes, be willing to accept responsibilities that come with home ownership such as payment of rates, levies and property taxes, if we are desirous of seizing the opportunities”.
Fashola said in order to achieve real growth in the nation’s Housing Sector and solve her housing deficiency, the Private Sector must be fully involved in housing delivery in order to maintain consistency in both provision and maintenance of houses.
According to him, if Government alone is the provider of housing as has been the case in the country, the supply and access would not be enough adding that “if Government starts, and allows private sector to play a more active role, supply will improve, opportunities for ownership and access will expand, and then we can achieve some consistency of housing provision”.
“In this way, we can then be able to say that we are on our way to sustainable housing delivery”, the Minister said citing the example of Lagos State Home Ownership Mortgage Scheme which his administration initiated and operated when he was Governor of the State.
He recalled, “In the latter part of my tenure of service as Governor of Lagos, between March 2014 and April 2015, the State Government was able to deliver 200 homes every month by mortgage to Lagosians , and had put in place a programme of construction in about 20 sites across Lagos to sustain the monthly supply of 200 homes under the Lagos HOMS scheme.”
“200 homes a month may appear insufficient, but I do not recall any Government in Africa that made a commitment equal to that, not to talk of delivering on it. This is why I spoke of consistency. And this is why I spoke of the importance of private sector participation”, Fashola said.
According to him, “This observation is important because it leads to the question whether Government can truly provide a home for everybody and whether it is a legitimate expectation for everybody to expect to own a home provided by Government? It helps to define and manage expectation, performance and accountability in terms of what is possible to deliver and over what period”.
Posing series of questions ranging from who could legitimately afford to own a home? Should Government provide a home for those who do not have jobs and therefore cannot pay? Or should Government provide a robust economy that provides jobs and leave people to seek their mortgages?, Fashola also advanced reasons why the Private Sector should be involved in the nation’s housing delivery.
“Most of us can recall the Jakande Housing Programme, the Shagari Housing Programme and the Gemade Housing Programme, all of which ran for only a few years, while those officers served. Let us ask ourselves which other housing programme we remember apart from Otedola’s Jubilee Scheme in a Government of very short tenure”, he asked, noting that the reason many of those schemes won’t be remembered was “not because they were not undertaken, it is because they did not continue; a lack of consistency”.
Fashola also noted that housing delivery involved a long term plan and programme which, according to him, could only be successful if pursued consistently citing Britain and Singapore as examples where housing provision targets of 50,000 and 100,000 per annum were set respectively with the production of doors, steel, tiles, toilet ware and the other components.
Still on consistency, the Minister recalled that in 1918, after the First World War, Britain embarked on a national public housing programme which it has continued with till date adding that by 2018, that programme would have run for 100 years consistently.
“The success of that programme will show not only the results of consistency, but also the difficulties of housing. When the housing programme started in 1918, 77% of the population rented their houses, while 23% owned their homes. In 2001 a study showed that 69% of the population had become home owners, while 31% rented (this was after 83 years of consistency)”, the Minister said, adding, “All of these in a population of about 53 Million people in England and Wales”.
He also noted that in Singapore, the Housing and Development Board was inaugurated in 1960 adding that between 1960 and 1965, they built 54, 430 homes; (Approximately 10,886 homes a year) and started with flats and did not start to build Executive condominiums until 1999 (39 years later).
“In 2013, home ownership was 80%, in a country of 3 million people”, he said adding, “If highly industrialized economies like Britain and Singapore set housing provision targets of 50,000 and 10,000 per annum and produce doors, steel, tiles, toilet ware and the other components, what realistic targets can we set given our level of industrialization?”
Drawing attention to the cultural differences in housing in the country, the Minister also tasked the Chamber and other stakeholders in the housing sector to make input into the sector to help his Ministry arrive at an agreeable Housing Policy as it concludes work on the design and cost of the National Public Housing scheme billed to be made public later this year.
“What kind of house can we adopt as the Nigerian House, that is acceptable in the North, East, South and West of Nigeria, and which fits all cultural settings? What kind of cultural attitudes or behaviour will impede this objective? And are we ready to give them up in order to get a housing plan that we can implement across board?”, he asked.
Thanking the Chamber for the invitation as Guest Speaker, the Minister described the theme of the Roundtable as viable, adding that the focus of the discussions should be on the role of the private sector in Housing delivery as would be done by the Guest Speaker at the event, the Managing Director of UACN Property Development Company PLC, Mr Hakeem Ogunniran, “because that is where, in my view, the road to consistency lies”.
The Minister who opted to deliver his interventions at the Roundtable by way of questions as a “Keynote questioner”, subsequently shed insights into critical issues affecting the real estate sector which later provided the focal points for discussion at the forum organised to provide a platform for stakeholders to discuss the challenges, policies and opportunities in the nation’s real estate sector.