Major stakeholders in the nation’s housing sector that can ensure the availability of affordable housing are not practicing what they preach, Dele Martins, Managing Director of HFP Construction Company, has said.

“To be honest the topic of affordable housing is one that has been much talked about in Nigeria but when it comes to implementation is shrouded in extreme hypocrisy by the main stakeholders who can make it happen, whether they are from the private or public sector or indeed the financial sector.”

Mr. ‘Dele Martins, Chief Executive Officer, HFP Construction company stated this in a keynote address on provision of affordable housing delivered at the new corporate identity launch of Knightstone Properties Ltd and its ambassador unveiling event in Lagos, recently

Martins said, “In my humble opinion the challenges of providing affordable housing in Nigeria are very well known and have been rehearsed over and over again to the extent that I rather doubt there is anything new to add.

The challenges highlighted below are therefore not original to me and are listed more by way of reminder of the issues that need to be addressed with sincerity if we are serious about tackling the massive housing deficit we have in Nigeria and in particular the provision of affordable housing.

“The latest figures available indicate that Nigeria has an estimated population of 170 million people which is growing by approximately 2.8% per annum (source: World Bank).

It is also estimated that there is an 18-million-unit deficit in housing stock and that Nigeria needs to build approximately 700,000 housing units annually if we are to make a noticeable impact on the deficit. Presently, we are barely building a 100,000 housing units annually.

“The true scale of the housing deficit challenge can be gleaned from the fact that it is estimated that 108 million Nigerians are ‘homeless’ based on an average family of six people per housing unit. “

Several factors, he said have been adduced by analysts and experts in the real estate and allied sectors for the absence of affordable housing in Nigeria, including: Unfavourable government policies, lack of mortgages for potential buyers and unstable investment environment; Difficulties and lack of transparency associated with acquiring affordable land for the development of affordable housing, as well as, the bureaucracy associated with obtaining title documents to acquired or transferred land; and Exorbitant cost of consent and other fees associated with the transfer of Land.

He said other factors included, unavailability and difficulty of accessing affordable mortgages for the purchase of houses by individuals; bureaucracy and difficulties associated with obtaining building and other regulatory approvals for the construction of affordable housing; the high and escalating cost of building materials and over dependence on imported building materials.

Non-alignment of the interests of the various stakeholders particularly the developers, commercial and mortgage banks on the one hand and the intended beneficiaries of affordable housing on the other.

The former wants to maximize profit whilst the latter wants housing that is cheap, decent and affordable; Unstable and unfavourable exchange rate policies; Absence of fiscal incentives by Government to make affordable housing development attractive; Lack of provision by Government of the primary infrastructure required to support the development of affordable estates including roads as well as access to water and electricity; and Indiscipline and corruption in the implementation of affordable housing schemes.

“I have no doubt that more items can be added to the above list but for present purposes it gives us an idea of what issues need to be tackled,” he said.

According to him, the importance of housing to the citizenry is underscored by the fact that it is mentioned immediately after Food on the list of needs of man.

“If we are to succeed in our claimed quest for the provision of affordable housing to the citizens of Nigeria and in particular low income earners there is an urgent need for governments at all levels to approach the subject holistically, sincerely and a great deal of commitment.

“Governments at all levels need to lead the formulation of a comprehensive policy designed with the input of all stakeholders, and implemented with zeal and vigour at all levels. At the heart of every policy must be the interests of the target beneficiaries of affordable housing.

“In essence there is a need to work to a predetermined answer starting from a clear definition of what constitutes affordable housing not only in Nigeria as a whole but in each sub-region or division of Nigeria. What is affordable in Lagos State may constitute luxury in Oyo State and what is affordable in Badagry will differ from what is affordable in Ikorodu and each case depends on the prevailing socio-economic conditions in each locality or sub-division.

“After determining what is affordable for each locality or region an appropriate design of house should now be made to fit the benchmark for the relevant area.

As much as possible the construction materials to be used should come from the locality or region in which the affordable housing is to be constructed so that employment is generated for the local people and cost of construction fits the relevant local profile.

In fact, local artisans and contractors should be encouraged to form themselves into cooperatives to bid for the supply of local construction materials.”

He said the design of house should start from prevailing living conditions and without transforming the prevailing culture or way of living simply aim to put in more order, structure and functionality, as well as, the basic facilities which any dwelling unit should have.

An individual whose income level can only support a bedsit or face me I face you, would not be able to afford a one bedroom flat and an affordable housing scheme based around one bedroom flats would simply disenfranchise him.

On the other hand, an individual can start from a decent bedsit or face me I face you and gradually move up the ladder as his economic condition improves.

He said, “Once we have a tailor made design of house that links affordability to prevailing income and earning capacity all stakeholders on the supply side including banks, mortgage institutions and developers led and galvanized by Government should work towards delivering housing that is within the predetermined budget that is affordable to the target beneficiary.

“Government has the lion share of the responsibility not in building the houses but in setting and enforcing the necessary policies that ensure that the desired goal is achieved.

The fact that Government controls all Land within its jurisdiction should make it easy to knock practically all other stakeholders on the supply side into line and ensure that they deliver a product that is affordable to the ultimate target beneficiary.

“Government is also responsible for providing primary infrastructure or creating an enabling environment for the private sector to do so and charge a predetermined price that is affordable to those who will use the infrastructure by way of toll for roads and charges for water and electricity. The important thing is that there must be no room for profit maximization.

The charges must reflect transparent cost plus a reasonable margin to ensure that investment is recouped over a reasonable long term period. In fact, once the infrastructure is constructed “Government should facilitate its sale to long term investors desiring a steady and regular income stream so that the developer can take its money and move to the next project.

“Government is also responsible for ensuring that there is extreme transparency in the process of allocating land for the development of affordable housing in each locality. The price payable for such land should obviously reflect the earning capacity of the people who live or are targeted to move there. “The payment of such price should be deferred till after completion of the project and should be collected in affordable installments directly from the ultimate beneficiary over a long term period.”

He said there were huge untapped and idle funds in the Country which Government should harness and find a way of channeling into the development of affordable housing by giving the necessary backing and guarantees to the owners of such funds especially those who desire a steady income stream over a long term period.

He said, “It must not be possible to acquire outright ownership of any house within the affordable housing scheme in less than 15-20 years and any person desiring to acquire it in a shorter period should be penalized.

This and other measures need to be put in place to checkmate speculators and shylock Landlords. There should be a very strictly enforced policy of forfeiture whenever it is proved that an individual who is not entitled to do so has acquired an affordable home.

“Similarly, loans and mortgages acquired to facilitate acquisition of an affordable home must have a tenor of between 15-20 years with penalties for early termination.

Financial institutions should be made to bid for the provision of such loans on a project by project basis based on pre-agreed criteria including interest rate and loan eligibility and tenor criteria jointly set with government.
“Finally, Government should streamline and standardize the process for obtaining approval to construct affordable housing.

The essence of a keynote address is to stimulate thought and provoke discussion and it is my hope that I have been able to do that in the time allocated to me.”

He said success in the provision of affordable housing in the final analysis depends on the seriousness and commitment of all stakeholders but Government in particular.

It is not a subject on which policy can be formulated or schemes introduced and left to run by themselves in the hope that the desired result will be achieved. It requires a hands on monitoring and tweaking approach every step of the way. Any default in sticking to the rules must be met with stiff and widely publicized penalties.

The corrupt process whereby what starts as an affordable housing scheme metamorphoses into a land grabbing exercise for friends and cronies of Government must stop.

“Government does not need to build or provide funds. All it needs to do is create an enabling environment and ensure that everybody plays by fair and transparent rules.”


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