Chucks Omeife, a Past President of the Nigeria Institute of Building (NIOB) and former member of the Council of Registered Builders of Nigeria (CORBON), is the Managing Director/ Chief Executive Officer, Build Consult Limited. In this interview with DAYO AYEYEMI, he shares his opinion about the rising cost of major building components and its negative implications on housing affordability; the roles of government in the provision of housing for the low-income group. He also spoke on the proposed mandatory monthly collection of rents, maintaining that the masses would be at the receiving end as house owners will insist on maintaining the status quo by asking tenants to go to the government’s property.
If we talk about housing policies rolled out in the country, Nigerians should have been the most housed in the world by now. What is happening that the nation is still having many of its citizens – over 20 million –  without roofs over their heads?

The deficit in housing stock in Nigeria is due to the government not prioritizing affordable housing as a policy for the people. Nigeria has a very beautiful and well-articulated housing policy in place, which implementation would have seen Nigeria reducing the housing deficit to a large extent. One major policy direction of the national housing policy is that government should not be directly involved in a housing development but should provide enabling environment for developers and other stakeholders to handle the issue of housing provision. This has been one of the major reasons why targeted national housing provision has not been able to achieve the anticipated target.

We also discovered that price tags on houses targeted at the low-income earners are beyond their reach, hence homelessness continues. What is happening?

Obviously, with the spiralling inflation in the country, the housing sector has been worst affected as the prices of major building components have hit the roof. This has made the provision of affordable housing a big task for stakeholders. If a developer has to buy land, provide site services like roads and drainage, water and electricity and other required infrastructure and then build the houses; no doubt such houses will be unaffordable to a majority of the people because of the salary structure and anticipated year of payment if mortgage is provided.

How can the issues affecting housing affordability be resolved?
The only way to resolve this issue of housing is for the government to consider housing provision as a social responsibility to the people and thus provide the necessary enabling environment and required infrastructure for developers to build and be able to negotiate affordable prices for the people. This is one of the ways that housing provision can be affordable.
What should be the roles of government in the provision of housing for the low-income group?

Just as submitted above, the government can compel the developers to provide houses only if they are prepared to provide land and necessary infrastructure for such development in partnership. In a country like Malaysia, the government provides land at almost zero cost to developers but compel that 30 per cent of such land is used to provide houses for the low-income group. A quick analysis of this initiative shows that the cost of the land is used to provide housing for the low-income group while the developer makes a profit from the houses provided for the high-income group. In such a situation, it becomes a win-win situation for both government and the developer and the people.

Both the Federal and  Lagos State Governments are planning to mandate a monthly collection of rents. What are your opinions.? What is the global best standards?

The idea of monthly rent payment is a very good initiative as obtainable in civilized climes but the question to ask is: what is the percentage of government ownership in the national housing stock. This will determine the success or failure of the good intention by the government as one cannot control what it does not possess or own. The masses will be at the receiving end as house owners will insist on maintaining the status quo asking tenants to go to government properties that are in short supply. Tenants in their desperation will go along with the house owners in compromising the government’s intention.

Prices of cement and others building materials have doubled in less than one year. What are the implications of this on housing affordability?

The major challenge this country has been faced with is the issue of power. The lack of power has negatively affected all strata of Nigeria and especially the manufacturing sector making the cost of production to be very high. This cost of production is spread on the unit cost of items produced to achieve a break-even point and allow for some returns on investment. It is very sad that this power issue has held the country comatose for a very long time and the thought and hope of it abating in the nearest future is very dim.

The current increases in building materials and components are regrettably understandable. There doesn’t seem to be anything the government can do as business organizations are set up to provide services and make a profit. It is an unfortunate situation as the cost increases are transferred to the people who are the end users.

Your general view about the real estate sector.

The real estate sector is ever opportunity full at all times irrespective of the prevailing economic or global circumstances, especially in countries where there is a high deficit of housing stock. The observation of the Nigerian economy has shown that the normal economic parameters do not hold compared to other countries. The reasons are very obvious, the majority of the housing stock is privately provided. Despite this, there is still ever-increasing demand for housing, especially residential accommodations.

Due to this situation, individuals will continue to strive to access the limited housing stock available.

The opportunities that exist in real estate is to be found in the middle class/mass housing provisions as this is in very high demand, especially in urban areas with a high population.

Investors must concentrate effort on the provision of middle class/mass housing which is affordable. This period is not the time for the type of luxurious and high-class housing priced at millions of naira as those who could afford such will rather start small on their own due to economic unpredictability.

Real estate holds the aces depending on the clients and groups being targeted and the housing type is provided.

I think real estate is a serious contender for best returns on investment if investors will employ strategic planning in their operations to assess the current situation and market requirements and direction for optimum results and good returns on investment.

Source : Nigerian Tribune