The effort, coming at the instance of the 11th Abuja Housing Show organised by Fesadeb Limited yielded a lot of dividends. The stakeholders agreed that there is the urgent need to create National Housing Council, where operators and professionals generate viable solutions as interest rates of 27-30 per cent cannot build houses for rent or for affordable long term outright sale.
The three- day parley attended by the Minister of Power, Works and Housing, Mr. Babatunde Fashola, who led discussions, noted the urgency in critical reform in the housing sector to tackle shortage of skills, lack of artisans, and create jobs opportunities as well as bringing down interest rates, ensuring government incentives to both individual and corporate interests as it is practiced across the world.
According to the participants, the government can and need to intervene in critical sectors like housing because of its potentials to generate employment and kerb corruption. “Affordability is not cheapness; it is a system that allows one to buy what he would not be able to purchase at the moment and conveniently pay later.“We need appropriateness of innovative finance and infrastructure in order to address the country’s housing deficit of over 17 million units. That, there is the need to build at least one million housing units per year in spite the problems of high cost and high-interest finance, through appropriate government policies.”
They noted that housing for the poor or social housing programme needs at least N1 Trillion through the private sector, but mainly public sources to also stimulate economic growth for the entire country. Hence, federal government should contribute N100billion and mobilizing business and private sectors to also partake in the programme. The Federal Mortgage Bank of Nigeria (FMBN) needs to be recapitalized to provide decent houses for people in line with the provisions of the programme.
The stakeholders observed that multi-finance approach to housing programmes also requires critical evaluation to enable partners, like the Nigeria Mortgage Refinancing Company (NMRC) play their roles effectively. The contributory pension scheme should be explored to make available funds for investment in stable outlets like housing.
The innovations in the sector can create jobs even through informal markets feeding housing construction value chain and other related sub sectors. Instituting innovative solutions could also tackle housing infrastructure problems. “We need to identify our responsibilities and assign them efficiently.Construction of houses should reflect the culture and not destroy traditional architecture that also relates efficiently with other areas like roads, recreational and open spaces.”
Accordingly, the summit said that experts’ attention is needed to address deficit issues by examining the increasing phenomenon of vacant houses in Abuja in order to be made affordable to those in need. Affordability test, for example, can determine those in need and can afford to house, because salary alone cannot fund the mortgage, resulting into housing units not been affordable by the contributors because salaries could not service present mortgage arrangements.
In the communique issued after the summit, they advocated for full involvement of public sector as exemplified by Lagos and Bauchi states in funding more infrastructure resulting in housing delivery and job creation. They agreed that subsidies must reach single digit lending rates by banks and mortgage companies.
Attention was drawn to the fact that there are problems of housing shortages, but, the size of the problem should not dampen our enthusiasm to find solutions. Although, adequate housing provision is a global problem,
“We need to build between 700,000 and 800,000 housing units annually in order to manage the present crisis, yet, less than 100,000 units are built every year. To achieve this, we need to extend the frontiers of affordability by including cooperatives, the self-employed and the unemployed that provide wide opportunities to our economy and families.”
If the right attention had been given to housing, the country would not have been in regression today. Issues of equity contributions, loans to construction companies, and high-interest bank guarantees, often faced by financiers can be tackled if government can fixed limits to their demand.
The government need to leverage land acquisition, titling processes and charges in addition to providing durable infrastructure. This will bring the needed vibrancy to the sector, allow the private sector to do and achieve high results.
There is the need to have uniform underwriting standards for the self-employed, non-interest, and foreclosure laws. Mortgage banks are to be encouraged to give out more loans.”
And different approaches like rent-to-own, can be used to provide affordable housing to the people.For wider innovative solutions, we need to get other parties in the business of housing and real estate development involved for affordability, availability, and acceptability of housing and housing infrastructure.