Following expectations that the much-needed bailout fund for the revival of the stalled real estate or housing projects is likely to fail without a blueprint, the University of Lagos Centre for Housing and Sustainable Development (CHSD), an urban policy think tank, has proposed a multi-integrated approach to housing provision across the country.
The financially viable model, tagged National Housing Initiative (NHI) would deliver four million housing units over the course of four years. Under the strategy, housing supply is anchored on regeneration rather than new build and recognises the importance of a rental housing strategy.
Experts estimate that more than N250 trillion is required to fund the national housing deficit. A four million housing programme (at a conservative N5million/unit) based on the direct provision by the Federal Government requires about N20 trillion budget. In this strategy, State housing corporations, local governments and cooperatives would be enabled to support the housing delivery programme.
Under the National Housing Policy of 1991, the Federal Government set a target to deliver eight million houses by the year 2,000 and to deliver at least 700,000 houses yearly. The White Paper of 2002 recommended the implementation of a programme of constructing 40,000 housing units yearly nation-wide with at least 1,000 units in each state.
These targets have not been met to any reasonable extent. The government has tried to involve the private sector in meeting the nation’s housing need and demand, but limited success has also been achieved; as close to 70 per cent of the Nigerians live in substandard housing.
Essentially, the core strategies in the 56-page document submitted to the presidency by founding Director of the centre, Prof. Timothy Nubi are home completion loan scheme such as co-operative home completion loan scheme and individual developers’ home completion loan scheme.
Other proposed measures are regeneration through slum improvement programmes, while New Build will include co-operative housing scheme, Federal Government’s social housing programme for workers, State housing corporation building programme, local government housing programme and private sector delivery concessionary projects.
Apart from the fresh emergency fund for the real estate sector expected from the Central Bank of Nigeria (CBN), the document recommends the use of Housing Development Fund (HDF) as a funding model, which will be harnessed through the capital markets, revenue from sale of Federal Government landed property, redevelopment of Federal Government prime property revenue and N25 billion government seed fund investment in housing.
In the implementation framework, the NHI plans to adopt Co-operative Housing Development Scheme (CoHDS) and integrate cooperative societies into the mass housing delivery market, as co-operatives are means to reach out to the informal sector workers and source of mobilizing these categories of Nigerians into the formal housing market.
Statistics show that approximately five million families belong to a co-operative society in Nigeria and there are more than 500,000 registered co-operatives. With their strong membership base, co-operatives will be the basis for fund release for housing stock replenishment and
loan mobilisation.
CoHDS is expected to deliver homes through:
• Co-operative home completion schemes: co-operative societies are enabled to provide their members with specific loans for home completion and improvement.
• Co-operative Housing Programmes: co-operatives are enabled to go into direct home construction like their counterparts in other parts of the world.
They would deliver 40 per cent of States’ governments housing delivery activities; the Federal Government’s mandate; and 30 per cent of the states’ housing delivery mandate while funding would come from microfinance institutions, Federal Housing Authority programmes, Federal government revolving funds, state governments revolving funds as well as co-operative funds.
“Co-operatives participation in the housing sector has been weak, and this is because there is no specific framework for their involvement in the development and financing of housing delivery market,” according to Prof Nubi.
The scheme recommends that 40 per cent of the four million homes to be built should be for slum regeneration. It reveals an urgent need to intervene in these communities through the provision of housing and infrastructure as well as the use of public-private partnership arrangement to fund the programme.
Due to the capital intensive nature of housing and the lack of effective coordination of funds, incremental mode of construction has been the norm in Nigerian cities, the programme is also recommending Home Completion Loan Scheme, designed to empower individuals to complete their homes in the short to medium term.
This would release several thousand home in the short term. The scheme would deliver 25 per cent of the target and based on co-operative societies’ participation. Funding would be through the co-operative societies and the micro-finance sector.
Prof. Nubi told The Guardian that the potential impacts of giving small incremental loans for key stages of the construction process have never been tapped. “In the 70s, a roof loan was given out by the government to enable people to complete their homes in the short run, allowing owners to live in them or use them for rental purposes.
“Regeneration programmes, home completion loan services will be the fulcrum of government’s policy for releasing uncompleted housing stock to the market, while the private sector would be enabled to provide accessible housing solutions to the general populace.”
The centre also noted that its proposed Federal Government Social Housing Projects will be targeted a specific cadre of people: Armed Forces, Civil Defence, internally displaced people, key workers like teachers, health workers, lower cadre public civil servants, widows and students.
According to the document, the Federal Government will supply 10 per cent of the targeted homes under the social housing scheme over the course of four years while funding will be drawn from Federal Government revolving funds that would be linked to the states and local government projects.