Operators in the building industry have called on the government to subsidize social housing to bridge the affordability gap. They made the call at the International Federation of Nigeria’s 50th anniversary celebration themed “Repositioning the Real Estate Industry for the Future: Ethics, Affordability and Sustainability,” in Lagos recently.
Odunayo Ojo, the Managing Director of UACN Property Development Company Plc, said that affordability in the housing sector, which is synonymous with social housing, cannot be delivered by the private sector. He explained that the capital required to deliver social housing is too high for private sector developers, especially given the high cost of cement and other building materials.
“Social housing has to be subsidised, as it is done everywhere in the world that I know,” Ojo said. “The subsidy is not what you go through the private sector to discuss because we in the private sector do not get a subsidy.”
Ojo also pointed out that the definition of minimum wage in Nigeria is N30,000, which is not enough to afford the cheapest house in the country. He said that until the government addresses the structural issues of income level, there will be no affordability in the housing sector.
“Until we deal with the structural issues of income level, there would be no affordability,” Ojo said.
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Lanre Sonubi, the Head of Marketing and Corporate Communications at Knight Frank Nigeria, suggested that the government could invest funds obtained from the removal of fuel subsidy into social housing. He said that the government could also learn from the example of Egypt, where the government is the major driver of social housing. In Egypt, the government provides subsidies for mortgages, low-interest loans, and even the actual cost of housing units.
“Funds obtained from the removal of fuel subsidy could be invested in social housing,” Sonubi said. “What the government is doing in Egypt is a good example, of which they are the major drivers.”
Sonubi also suggested that the government could redirect some of the funds it is currently investing in other areas of the economy into social housing. He said that this would help to solve the problem of housing affordability and enable average income earners to own their own homes. He also called on state governments to take up their own responsibility in providing social housing.
“Some of the funds the government is trying to redirect into some other areas of the economy can be redirected into social housing,” Sonubi said. “This can be put into the housing sector by the government to subsidise homes, hence solving a real problem to the extent that an average income earner is able to own a house. Also, it should not be the Federal Government alone, the state governments also need to take up their own responsibility.”
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Gladstone Opara, the President of FIABCI-Nigeria, said that there is no proper definition of affordable housing in Nigeria. He said that affordable housing means providing houses that are affordable for everybody, and it is not something that the private sector can do alone. He called on the government to see social housing as a social responsibility and subsidize it for both the rich and the poor.
“Affordable housing means providing houses that are affordable for everybody, and it is not what the private sector can do,” Opara said. “The government should see it as a social responsibility.”
Source: Punch Newspaper
