Despite the overwhelming gap in housing provision in the country, the Federal Government’s 2,870 houses in different states are beyond the reach of low-income earners.

The houses were constructed by President Muhammadu Buhari administration through the former minister, Babatunde Fashola, under the National Housing Programme (NHP). The government commenced 6,068 homes in 46 sites in 35 states, while 2,870 units were completed; others are at various stages of completion.

Among the NHP projects are 83 units of two and three-bedroom bungalows completed in Makurdi, Benue State, of which N712m was expended out of the N768m set aside for the project.
Others are 80 units of various house types and associated infrastructure in Yenagoa, where N342 million was spent out of the budgeted N2.28bn; while 86 units of two and three-bedroom bungalow house types and associated infrastructure in Cross Rivers State that N570.35m was released out of N830.12 million.

The ongoing construction of various housing projects in states across Nigeria, including Anambra, Kaduna, Kano, Oyo, Akwa Ibom, Niger, Imo, Taraba, and others, is a positive development in addressing the country’s severe housing crisis. These projects are essential in providing affordable housing options and improving living conditions, particularly in major cities where housing costs have been a significant challenge.

Nigeria has been grappling with a housing crisis characterized by high property costs, low vacancy rates, and soaring rents, making access to decent and affordable housing difficult for many residents. The reasons for this crisis include a lack of new construction, inflated property prices, a lack of an efficient mortgage system, poverty, rising construction costs, high inflation, and declining household income.

The ongoing housing projects, if completed and managed effectively, have the potential to alleviate some of these challenges by increasing the housing supply, offering affordable options, and improving the overall housing situation for Nigerians. These initiatives should be part of a comprehensive approach to address the housing crisis, including policy reforms, infrastructure development, and urban planning to ensure sustainable and inclusive housing solutions.

Rural-urban migration has also contributed to the shortfall of housing in urban centers. The unresolved tenure arrangements, access to infrastructure, deficiency of housing finance arrangements, encumbrances in the process of legal documents, and inadequate government housing policies are also major issues affecting housing delivery.

Nigeria’s housing deficit is a longstanding and severe issue that has persisted despite various efforts by successive governments. The country is estimated to have a housing deficit of between 20 to 22 million homes, and this deficit is expected to continue growing due to population growth and urbanization.

The implications of this high housing deficit are significant, as tenants in rented apartments often pay a substantial portion of their disposable income on housing costs, well above the recommended percentage by international standards.

To address this deficit, the Nigerian government has set ambitious targets to build one million homes per year. However, even if these targets are met, it would take decades to bridge the current gap. Estimates suggest that it would cost billions of dollars to address the deficit, and this number is expected to rise over time.

The housing sector has the potential to contribute significantly to the country’s economy, as seen in more advanced economies like the United States, Great Britain, and Canada, where the sector contributes a substantial portion of the GDP. In Nigeria, despite challenges such as high interest rates, inflation, and the cost of building materials, the real estate sector’s contribution to the GDP has been growing, indicating its importance to the national economy.

Solving the housing deficit in Nigeria will require a multi-faceted approach, including policy reforms, increased investment, improved access to financing, and infrastructure development. It’s a complex issue that requires concerted efforts from both the public and private sectors to provide affordable and sustainable housing solutions for the growing population.

Specifically, one of the setbacks for the NHP scheme is the introduction of costly housing prices, which private developers said is not affordable and justifiable as it is beyond the low-income earners and may breed corruption among civil servants.

Under the scheme, buildings come with variations in prices as a result of the cost of building and topography. The units range from one, two to three-bedroom bungalows and blocks of flats across 34 states and the Federal Capital Territory.

For instance, the one-bedroom house type costs between N7,222,404 and N9,268,751; a two-bedroom bungalow sells for N9,148,378 and N12,398,460, while that of a three-bedroom ranges between N13,241,074 and 16,491,155.

Currently, the mortgage system remains a treacherous path for prospective homeowners. There are concerns by contributors to the National Housing Fund (NHF) on the impact of the scheme in providing leeway for home ownership, especially for low-income earners.

The government has promoted mortgage support schemes to would-be beneficiaries, but unfortunately, most of the NHF contributors could not afford the schemes.

The challenges in Nigeria’s housing sector are multi-faceted and complex, making it difficult for many employees to access affordable housing. Despite efforts such as the reduction in equity contributions for mortgage loans, the gap between housing demand and supply remains significant.

Several factors contribute to these challenges:

1. High Poverty Rate: The World Bank reported that the number of poor people in Nigeria reached 95.1 million by the end of 2022. High poverty rates make it challenging for many Nigerians to afford housing, even with reduced equity contributions.
2. Limited Access to Financing: The Central Bank of Nigeria (CBN) noted that only 10 percent of Nigerians who desire to own homes can afford it. This is primarily due to the high interest rates in the banking sector and limited access to affordable long-term mortgages.
3. Inadequate Housing Supply: Nigeria’s housing supply falls far short of demand. The National Housing Fund (NHF) and the Federal Mortgage Bank of Nigeria (FMBN) are the primary sources of long-term mortgages, but their capacity and reach are limited. Other sources of financing are often characterized by high interest rates and complex application processes.
4. Government Performance: Experts and housing developers have criticized the Nigerian government’s performance in the provision of houses. Some argue that there has been a lack of commitment to mitigating the housing deficit, and government agencies like the Federal Housing Authority (FHA) have faced challenges in providing mass housing.
5. Lack of Policy Implementation: The housing sector has faced challenges in policy implementation, with some administrations neglecting their roles in providing an enabling environment for the sector to thrive. This lack of direction and commitment has hindered progress in addressing the housing deficit.

To effectively address these challenges, a multi-pronged approach is needed. This includes policy reforms to make housing more affordable, greater investment in the housing sector, improved access to financing, and support for both public and private sector initiatives in providing affordable housing. Addressing Nigeria’s housing deficit requires sustained efforts and commitment from all stakeholders, including the government, developers, and financial institutions.

President, of the Real Estate Developers Association of Nigeria (REDAN), Dr. Aliyu Wamakko, said most of the houses built by the past administration are unaffordable and in obscure locations. He wondered who would pay for the houses and how the ministry plans to recoup money spent on constructing the buildings. “The prices are high, nobody can afford it and the environment is not conducive for families,” he said.

According to him, if the government is serious about housing development, the private sector should be the best to drive it, while the government provides an enabling environment and loans with single-digit interest rates.

Minister of Housing and Urban Development, Ahmed Dangiwa, told The Guardian that he is aware of the challenges that the latest version of the NHP faces in terms of selling houses that have been constructed and delivered.

“The prices are beyond the reach of the target market – low to medium income earners, and the locations are inaccessible. This situation has tied up significant government funds, and without swift action, these houses could begin to deteriorate.

“I will prioritize affordability in house design and delivery. In the case of this specific project, we will carefully study and review the factors that led to the current pricing and determine the best approach to make these houses accessible to Nigerians. The goal is to promote affordability, attract potential buyers, and ultimately ensure that these housing units benefit Nigerians.”

AHCN wants a commitment to policy formulation and enhancements that will attract investment into the sector, which should be driven by an attractive mortgage system with foreclosure that will create a vicious cycle, attract funding, and recycle the same for easy recouping of invested funds into the sector.

Eniola said: “State housing corporations should be empowered to carry out their statutory responsibility as facilitators of mass housing provision and usurpation of this noble role by ministries should be discontinued. The ministries should concentrate on providing an enabling environment for housing corporations.

“Housing corporations should focus on mass production of houses both for outright sales and for rental, while the ministry on the other hand should encourage development of the mortgage market, facilitate the development of vibrant housing cooperatives to create systemic off-takers for houses developed by housing corporations and support housing agencies in accessing funding in terms of securing guarantee for development.

The Managing Director, of NISH Affordable Housing Limited, Dr. Saheed Adelakun, urged the government to institute a marshal plan for sustainable provision of houses to Nigerians, saying the plan should be aimed at improving the living conditions of Nigerians, creating employment, and catalyzing the economy through the multiplier effect of housing development.

He also said, there should be a demand approach to affordable housing and the creation of a revolving intervention fund for financing housing off-takers directly or through their cooperatives at single-digit interest rates. The government may also explore housing vouchers and other financial instruments as vehicles to finance off-takers for immediate impact with limited intermediaries and processes.

“In turn and based on the off-takers fund, the government should facilitate the issuance of bankable off-takers guarantees to attract domestic and global construction companies with proprietary technologies and finance for rapid, large scale, cost-effective and efficient delivery of affordable housing, while prequalified contractors with proven technological and financial capacity should be made to construct pre-designed houses at negotiated prices in exchange for bankable off-takers guarantees,” Adelakun added.