PAPER PRESENTED TO THE HOUSING FACULTY OF THE NIGERIAN INSTITUTION OF ESTATE SURVEYORS AND VALUERS AT A MINI SUMMIT ON LOW INCOME HOUSING ORGANISED BY THE PROFESSIONAL BODY ON THE 25TH OF OCTOBER 2011

1. Paper presented at Mini-Housing Summit
organized by Nigerian Institution of Estate
Surveyors and Valuers, Lagos State Branch, on
Tuesday October 25, 2011.
By Sola Enitan ANIVS, RSV.,
CRO/Managing
Cromwell Center for Housing and Urban
Development Ltd GTE
Principal Partner, Sola Enitan and Co, Lagos.

2. Introduction
 Housing Facts:
 The World Bank, in its 2010 report, estimated Nigeria’s housing
deficit to be about 17 million units .
 According to the 2006 census, Nigeria has a population of over
140 million people.
 At an average of 4 dwellers per household according to United
Nations Organisation’s (UNO’s) figure, about 35 million housing
units will be required to house about 140 million people. Current
indicators show that Nigerian population lives in about 18
million housing units home to about 72 million people.
 Housing has two parameters: quantity and quality. The above
analyses only discuss the quantity of housing in Nigeria. The
quality of this housing will be discussed in another discuss.

3. HOUSING FACTS CONTD.
 Presently in Nigeria, the World Bank estimates that Nigeria requires the
production of about 720,000 housing units annually for the next 20 years in
order to solve the housing needs of the country. Not less than 30% of this,
about 220,000 housing units is needed to stem the tide of homelessness in
Lagos State alone, annually,
 We are equally aware that about 58% of all commercial activities in Nigeria
happen in Lagos, so the housing requirement annually in Lagos could well
surpass 300,000. Moreover, the household Survey 2010 of the Lagos State
Government reveals that 91% of Nigerians live below the poverty line of $1.25-
$2.0 i.e 18.2million Lagosians earning between N72,000 PA- N216,000 PA. they
consist of the poor and the minimum wagers.
 Housing goes beyond simple shelter to include utilities and community
services such as water supply, energy, access road, sewage and refuse disposal
facilities. It is a complex factor determining the general well being of the
society. Hence it is not surprising to notice that housing has received attention
from responsible organisations like NIESV.

4. housing facts! Housing stats!.
 The World Bank estimates the cost of bridging Nigeria’s 17
million housing deficit as N59.5 trillion against a Gross Domestic
Product (GDP) in 2010 of $374.3 billion (NBS, 2011).
 Others infrastructure deficit include, roads, water, hospitals,
schools, markets, airports, recreation and so on.
WHO IS A MINIMUM WAGER;
 A minimum wager in Nigeria: Is somebody earning minimum
wage of N18,000 per month. This is N216,000 per annum.
 Employers and governments therefore, must come to terms with
workable designs that will empower minimum wagers to home
ownership over a period of 30 years.

5. Demand Indicators: Lagos state
 Lagos currently provides socio-economic expression for 20 million people in
various social classes, according to the Lagos Household survey 2010, 18.2
million Lagosians earn about N6,000.00 per month while the rest about
1.2million are somewhat above the waters of poverty with a larger percentage
earning minimum wage .
 For any reasonable housing plan therefore, that must attend to the needs of
the masses , about 50 percent of every housing project must attend to the
needs of the poor while the rest can be provided on commercial basis with a
variety of financial packages to make accessibility less cumbersome.
 Of the 50% housing provision for minimum wagers by government 65% MUST
be made available on rent to own basis while the rest 35% will be allotted to
direct owning minimum wagers.
 Design types must conform to the indicated demands which is largely studio
apartment, 1 and 2-bedroom flats .

6. DEMAND INDICATORS CONTD.
 The World Bank at a recent interactive session with national
officers and real estate stakeholding members of the Real Estate
Developers Association of Nigeria lends support for any
programme of housing activity that focuses on the mid level of
the housing pyramid providing housing at prices not exceeding
$20-25,000.00 USD.
 This is the challenge that stares us in the face concerning the
problem of mass housing deficit in Lagos State and by extension
in Nigeria. Concerted efforts must be made therefore to ensure
that the development funding available for this initiative can
be adequately tapped in the interest of the Lagos public and
Nigerians at large.

7. What is Housing?
 “Housing is a bundle of joy” (Agbola, 2003). Every human
being aspires to have his or her own house. “Housing is a
house, a structure or an enclosure used for habitation by
people, which generally has walls, openings and a roof to
shelter its enclosed space from inclement weather, that is,
precipitation, wind and heat (hotness or coldness).
 Housing is the combination of residential, commercial and
industrial buildings, agricultural land, transportation,
health, education, recreation, parks, services centres (water
and electricity), waste management centres, cemeteries,
markets, religious centres etc in a ratio that will sustain the
development of an area” (Oyedele, 2011).

8. What is Housing? Contd.
 Housing is an abode where people reside. It is an enclosure for resting,
strategising, storage and safety against intruders. Housing is a status-
booster. It improves the status of owners as “landlords and landladies”.
It is a form of investment and store of value. It is a basic need after
food.
 Housing is a land use as well as a structure. It is not completed without
the environment which surrounds it. It is not only the enclosure that
shields the occupiers, it includes the auxiliary services like lightning,
water, security, fire-prevention, sewerage, waste management,
greenery, etc.
 Mass Housing refers to housing provided by public authorities and
private corporations on a large scale at highly subsidised rental and
sales rates for the benefit of society while affordable housing is income
determined housing that tracks one-third to one-quarter of monthly
take home of the middle class and the poor.

9. Challenges of Mass-Housing
Minimum Wagers in Nigeria
 According to Windapo (2000) and Okupe (2000), the
gap between income and shelter cost in Nigeria is very
wide making housing unaffordable for the minimum
wagers. The income given to the lower cadre of
workers in Nigeria is not a living wage.
 Considering the fact also that the percentage of
Nigerians in meaningful employment is 21%
(35million), it means that an average worker has about
four (4) dependants. This makes it very difficult for an
average minimum wager to save for his or her own
house.

10. Challenges of Mass-Housing
Minimum Wagers in Nigeria
Contd.
 According to Nubi (2006), “Prior to the colonial period, many methods
of housing finance were adopted in different parts of the country.
Amongst these are Esusu and Ajo, Age grade association, Village
development scheme, and Town unions of people living outside their
place of birth.
 Traditional loans sources: revolving loan association, traditional
moneylenders, Social club contributions, Aaro or Owe where members
contribute in kind by providing labour on members’ site until the cycle
is completed.
 All of these methods were successful in the provision of finance for
housing and its delivery in the traditional setting. But with the
complexity in economic activities, these methods faded away and are
“to be replaced” by modern methods”.
 The modern method of construction sees housing as economic good
and has monetized all processes thereby leaving housing at exorbitant
level.

11. Challenges of Mass-Housing
Minimum Wagers in Nigeria
Contd.
 The cost of housing provision is enormous. The World
Bank puts it at N3.5 million for a 3bedroom apartment,
when it says that N59.5 trillion will be enough to produce
17 million housing units. This rate is definitely devoid of
cost of land and/or has considered the lowest building
materials.
 Housing is an asset which is a store of value. The legal title
to it must be efficient. Unfortunately, the Land Use Act of
1978 has not helped matters. The governors are the
custodians of state lands and can give title to it at their own
discretion. The cost of procuring title to land and of getting
approval to build is exorbitant.

12. Challenges of Mass-Housing
Minimum Wagers in Nigeria
Contd.
 Right from 1957 when local production of cement
commenced at the premier cement factory,
Nigercem, Nkalagu, local production has never been
able to meet demand for construction even in the mid-
80s when demand for cement was declining.
 Local production remained at less than 50 per cent of
total installed capacity, which was largely concentrated
in just two plants. Of the annual demand estimated at
18-million tons, local production could only supply
between 6 and 6.5 million tons of cement yearly.

13. Challenges of Mass-Housing
Minimum Wagers in Nigeria
Contd.
 This informed the Backward Integration Policy of
Government in 2001 wherein importers were encouraged to
open local plants aimed at bridging the deficit of 11.5
million tons in the supply of cement, and temporarily
reduce price which was considered high at that time –
N800 per bag.
 However as of today, in spite of various good intentions of
the Federal Government, the annual demand of 25 million
MT leaves a yawning deficit of 12 million MT, price of
cement has continued to increase (N2,400 in February, 2011
and N2,000 in October). There is no need saying the fact
that the cement industry in many ways contribute to
economic growth.

14. Challenges contd.
 HIGH COST OF COMPLIANCE AND DOCUMENTATION: This is
another major sore thumb, in that what the investors find painful gives
pleasure to government. A meeting point need to be found to make
physical planning for mass housing possible in Lagos State.

 HIGH COST OF BUILDING MATERIAL: Government must find it
convenient to assist developers in cutting cost by supporting bulk
buying and importation where necessary for mass housing programs.
 HIGH INTEREST RATES: The CBN owes a duty to the Nigerian public
to ensure that interest rates for mass housing falls below the monthly
rent receivable on real estate investment. The era of negative equity
should end in the interest of reducing the housing deficit in Nigeria
and in Lagos in particular.


15. CHALLENGES CONTD
 FINANCE: Finance is a key bane of housing in Lagos state, with an
impoverished population and a government saddled with all facets of
problems of a mega city, finance is a major consideration for all
government and the public. Government’s commitment needs to
match the desires of the public while it will be foolhardy for
government to build houses that its teeming masses cannot afford.
 ACCESS TO LAND: Government has tried in so many ways in making
land available to its citizens but a lot still needs to be done in this
regard. No doubt land in Lagos occupies a principal role in the internal
revenue drive of the state. It has been said that land in Lagos is its Oil,
however, a lot of the lands currently lies in the hands of land bankers
and speculators who have positioned themselves to exploit the state in
so many ways. Government, in order to advance its mass housing drive,
must make land available to the development of mass housing all over
the state. Transparency in allocation must become the norm.

16. THE FINAL HURDLE….
 SUBSIDY POACHING AND DIVERSION: Regulations, monitoring and
enforcement are required to ensure that subsidies granted to mass housing
developers does not find its way back into the commercial market through
subsidy poaching and benefit diversion that continues to increase the basket of
corrupt practices while reducing the delivery of mass housing. Culprits should
be prosecuted to show the path to best housing practices. The World Bank and
other multilaterals are of the opinion that subsidy poaching continues to be an
albatross on healthy fiscal administration in Nigeria. Current financing subsidy
for mass housing ,which is in the region of 13%, is under threat of being
removed totally.
 INADEQUATE GOVT INTERVENTIONS: Recently the Federal government
intervened into the mass housing funding basket by injecting 200 Billion
Naira into the Federal Mortgage Bank, this is grossly inadequate for a country
that needs an intervention of about $5 billion USD over the next 3 years for any
meaningful progress to be made in the mass housing deliverables.

17. Strategy for Mass-Housing
Minimum Wagers
 To mass-house the minimum wagers in our society, housing
must be seen as both economic and social goods. Infrastructure,
without which life cannot be complete. It must be categorised in
the same class as roads which are the prerogative of the people
but provided by government.
 Mass Housing must not only be subsidised, it must be directly
provided by agencies of the government for the low income
earners in association with responsible organisations like NIESV
and REDAN due to the zero- low profit margin. Government
cannot and should not be allowed to divulge itself of these
responsibility at these time.
 Sustainable Residential Housing Development must become the
norm in areas within 20 minutes driving distance of our city
centres. This will help in making affordable housing available.

18. Design must reflect cost!
 Majority of housing designs have yet to conform with the
reflected needs of the market. With available demand
indicators, Nigerians need studio apartments and 1-bedroom
flats. The highest design applicable to the needs of minimum
wagers is 2-bedroom flats. The Nigerian Institute of Architects
and The Nigerian Institute of Quantity Surveyors need to further
grapple with this peculiar issue in conjunction with the NIESV,
the custodian of the housing realm.
 Design scale is proposed as follows, for all public developments
and other mass housing initiatives;
45% studio apartments, 35% 1-bedroom apartments, and 20% 2-
bedroom apartments.

19. Subsidy! Subsidy!! Subsidy !!!
 Land Subsidy; The Federal and Lagos State governments needs to make land available,
either at no cost to the project, free from source or the cost back-loaded with repayment
over the tenure of title. This may look a somewhat impossible task but it is the cost that
must be paid for public housing in Nigeria, particularly in Lagos State.
 Stamp Duty Subsidy; The area in which mass housing is built must be supported with
stamp duty free regulations in order to aid investment and incentivize public housing
development. Ease of exit and entry should be guaranteed.
 Developers’ Tax Holiday; Government should look seriously at financial incentives in
the mode of tax holidays for developers who invest in mass housing over a period of years
without taking out their profit from the sector.
 Bulk Material Procurement; economies of scale can be greatly achieved on an industry
level with governments involvement, leveraging on import duty freedom and waivers
would go a long way in making mass housing possible in Nigeria and Lagos State. A joint
collaboration with the Federal Ministry of Finance will achieve this to a large extent and
help reduce the supply deficit on cement.

20. Ppp: partnering on policy and
processes
 Expedited Building Approval; all applications for housing
programs in excess of 4 units should receive same week
treatment and fast tracked to ensure speedy project takeoff and
cost saving. Estates providing housing for more than 20
householders should be treated on a fast track such that project
approval is done within 30 days. All unnecessary proofs of
ownership that hamper efficiency should be discarded.
 Pre-approved Proto-Plans; the housing ministry in
conjunction with the Ministry of Physical Planning and the
NIA should look at the possibility of selling pre-approved proto-
plans that enables quick take-off of mass housing initiatives. All
estate planning could be subsidized through the pre-approval of
prototype plans which can be procured from the ministries.

21. Backbone support
 Sovereign Guarantees; the Federal Government and the State governments
must urgently explore ways by which it could provide sovereign guarantees for
mass housing projects taking off across the country which will depend on any
of its subsidies and attend itself to satisfying the needy public at government
rental rates.
 The provision of guarantees by deploying off-taker mandates in favor of a
certain percentage of all mass housing projects in , e.g, Lagos State will aid
speedy provision of housing to the teeming masses. Government need not
commit cash in this instance but will provide leverage for developer
associations across the states of the federation.
 Zero Interest loans; this is another area where government’s impact could be
largely felt. Especially where developers get stuck with completed units and
need speedy exit due to commercial loan burdens, government would come in
by loan pay-off and project assumption at zero-interest with a guarantee that
the project will devote a larger percentage of its units to housing government
tenants. The peculiarities of this will need to be closely explained .

22. INT. RATE GRADUATION, NEED
SURVEY AND HEAD TITLING...
 INTEREST RATE GRADUATION: In the developed countries, house-owners
are categorised into first-on the ladder and buy-to-letters. The interest rate of
first-timers who are just climbing the property ladder is different from the
interest rate of second-timer who is buying the second home for investment.
 CONSISTENT NEED SURVEYS: Housing provision should be directly related
to housing need. A spinster or bachelor who needs a studio apartment or at
most, one bedroom flat should be provided exactly what he or she needs. This
can only be possible with regular “Housing Needs Survey”. Such a survey is long
overdue and a pre requisite to accessing development funding and aid available
through multilateral agencies.
 HEAD TITLING: Housing cooperatives among low-income owners should be
encouraged. Collective pursuance of head-title of a cooperative estate will
make things cheaper and easier.
 TRUST BUILDING: We need to advance our social causes through trust
building and rapport.

23. SUPPORT ACCROSS BOARD...
 STAFF HOUSING INITIATIVES: Workers villages should be encouraged and
there should be enforcement of all laws mandating organisations with more
than 20 workers to provide workers village or quarters in an area not far from
the office.
 GOVT ADOPTION OF LOW COST LOCAL MATERIALS: Alternative building
materials like timber and clay roofing members or galvanised sheets that will
make housing cheaper should be considered. Government needs to deploy the
use of cheaper building materials in the construction of public housing on a
large scale. Innovations developed by NBRRI and other technology oriented
initiatives should receive patronage for development.
 NIESV NATIONAL HOUSING INTERVENTION PLAN: We must not continue
whistle blowing alone, we must also progressively engage practical solutions by
instituting a N7 BILLION HOUSING INTERVENTION PLAN over a 5 year
period. The financing can be contributed by members at 200,000 naira per
annum in order to enable us tap multilateral development funding of about $1
billion USD into the mass housing sector. NIESV HOUSING FACULTY will
manage the fund.

24. What can be done now!!!
 Designs to cost objectives
 Cost Subsidy
 Price Subsidies
 Off-taker Mandates
 Public Guarantees
 Tax Holidays
 Adoption of low cost local materials
 Subsidy policing
 Interest rate graduation and zero interest where bailouts are required.
 Removal of negative equity syndrome
 Stamp duty and Import duty Waivers
 Expedited approval processes
 Head Titling
 Need Surveys
 Easy access to land and land subsidies
 Cooperation with Staff Associations, Unions , professional bodies etc
 NIESV MASS HOUSING INTERVENTION PLAN
 Sustainable Housing Development and Affordable housing principles
All of these and more are required to deliver affordable homes for minimum wagers.

25. Minimum wage housing plan
 Annual gross pay: N216,000
 Monthly equivalent: N18,000
 Affordable house plan: N1,944,000
 Monthly repayment: N5,401
 Annual repayment: N64,800
 Payment in years: 30 YEARS
 Number of payment per year: 1
 Interest applied: 9%
 Type of property affordable: 2 Bedroom apt.
 For informal groups, initial deposit of N240,000 will be pd in 3
installments over one yr. Monthly repayment will commence after a 3
month gap to last 28 years.
 Age applicable: 27 yrs or 2 yrs post graduation w/exp to 40 yrs age max.
Other age brackets will have to pay over shorter term plans.

26. References
 Agbola, T. (2003). Lecture notes on Principles of Housing, Department of
Urban and Regional Planning, Faculty of the Social Science, University of
Ibadan, Nigeria. 2002/2003 Session.
 NBS (2011). Information on Demand. Available at
http://www.nigerianstat.gov.ng/. Accessed on October 23, 2011.
 Nigerian News (2011). World Bank sees N60trn investment potential in housing
market. Nigeria News Services, Sunday 23, October, 2011. Available at
http://www.nigeriannewsservice.com/nns-news-archive/news-blocks/world-
bank-sees-n60trn-investment-potential-in-housing-market. Accessed on
Sunday, October 23, 2011.
 Oyedele, O. (2011). Real Estate Investment Trust (REIT) as Impetus for
Adequate Housing Delivery in Nigeria. Available at
http://www.scitopics.com/Real_Estate_Investment_Trust_REIT_as_Impetus_f
or_Adequate_Housing_Delivery_in_Nigeria.html. Accessed on October 22,
2011.
 Cromwell Center for Research strategic unit on housing finance. October 2011
 Cromwell Real Estate Academy mass housing strategic papers. October 2011