AribigbolaHSA2012 - Housing Studies Association

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Causes and Consequences of Housing

Policy Failure in Nigeria

Afolabi Aribigbola (PhD,

MNITP, RTP

)

Department of Geography & Planning Sciences

Adekunle Ajasin University

Akungba Akoko

Ondo State

Nigeria

E-mail faribs1@yahoo.com

or aribigbola@adekunleajasinuniversity.edu.ng

Outline of Presentation

Introduction

Purpose of Paper

Conceptual Clarifications

Housing Situation in Nigeria

The Study Area and Methods

Housing Policies in Nigeria

Housing policies Failure

Causes of the Failure

Consequences of the failure

Recommendations and Conclusions

Introduction

Deteriorating housing conditions in the urban areas of developing societies

Design of housing policies to combat the problem

-First attempt- 1920s

-Provision of Staff Quarters

-Direct construction of houses etc

-Introduction of National Housing Policy (NHP) in 1991

-New National Housing Policy (NNHP) in 2002.

Purpose of the Paper

Highlights of housing policies in

Nigeria

- Their failures

-Identify its consequences

-Recommendation to improve the housing policy

A Conceptual Framework (Model) For the Study of a Housing Policy

Fundamentality of Housing

Three main motives for housing policy formulation

-Social factors

-Political factors

-Economic consideration

Conceptual Framework Cont’s

Dewar (1979) reveals three common interrelated failings

-Various parts of policies not co-ordinated;

-Housing is only partially and not synoptically perceived

-Policies seen as mechanisms for the generation of physical products

Hindrances in the industry include;

-Accessibility to land

-Cost of building materials,

-Finance,

-Cost of infrastructure,

-Cost of labour

-Uncontrolled inflationary trend.

Housing Situation in Nigeria

Massive housing shortages

Estimates of annual housing unit required vary from 144,000 (Ekueme,

1999 ) to 300,000 units (Nigeria, 1980)

1991 specify 8 million housing units by the year 2000 AD

Recent estimates t 16-17 million units

In 2010 eighty-five percent of the urban population lives in rented accommodation, spending more than 40% of their income on rent7.

Of these, 90% are self-built and this is mainly due to lack of mortgage financing, and less than 5% have formal title registration.

Informal housing is most prevalent as more than 80% of the population lives in settlements that are unplanned with poor living conditions.

In the rural areas, people live mostly in mud buildings

Acute shortage of dwelling units, resulting in overcrowding, high rents, poor urban living conditions, low infrastructure services, deteriorating environment, increasing poverty and rise in urban insecurity

The Study Area

The study location is Nigeria

-Nigeria is located in the West coast of Africa

-A federation of 36 states and A Federal Capital Territory(

Abuja)

-774 Local Government Areas (LGAs).

-250 ethnic groups

- Most populous country in Africa

-Has a population of 30.4 million in 1952

-55.7 million in 1963,

-88.9 million in 1991

-102.3 million in 1996

- Over 140million in 2006

-Estimated to be about 167 million in 2011

-Urban population increased from 10% in 1952 to 48% in

2009

The Study Area Cont’s

-Housing policy is regulated by Federal Ministry of

Lands, Housing and Urban Development.

-Two implementing agencies

-Federal Mortgage Bank of Nigeria (FMBN)

-Federal Housing Authority (FHA)

-36 states State ministry of housing

-Housing corporations focus on the supply of middle-income housing.

-About 10.7 million houses in Nigeria (There is still a dearth of housing)

Data Collection Methods

Quantitative: Secondary data sources from government publications and other documentaries etc.

Housing Policies in Nigeria

Public intervention in housing in Nigeria began in Lagos in the 1920s.

-Between 1900 to 1960 provision of quarters

Housing delivery in two areas

-Federal Low-Cost Housing Project (1972-1979, and 1975-1983)

-Site – and – Services Programme (1984 –1988)

-National Housing Programme based on the concept of affordability and citizen participation in 1980.

The 1991 National Housing

Policy

Ultimate goal of ensuring that all Nigerians owned or had access to decent housing accommodation at affordable cost by the year 2000AD.

Created a two-tier institutional financial structure,

Primary Mortgage Institutions (PMIs)

Federal Mortgage Bank of Nigeria (FMBN)

Workers to contribute 2.5 of their monthly income

Commercial and Merchant Banks FMBN to contribute 10 per cent of its non-life funds and 40 percent of its life funds to FMBN.

Provided for borrowing up to five times of taxable income

Assigned responsibilities to the three tiers of governments

The recognition of the growing housing problems in both the rural and urban areas of Nigeria

New National Housing Policy

(NNHP) of 2002.

Primary goal of ensuring that all Nigerians own or have access to decent, safe and sanitary housing accommodation at affordable cost with secure tenure through private initiative, that is Real Estate

Developers on the basis of mortgage financing.

Transition from government-built to privately developed housing

Estates built in the 1950s and 1960s were sold to private individuals

Emergence of Real Estate Developers Association of Nigeria

Amortization period for NHF loan repayment increased from 25 to30 years,

Loan repayment period for developers is 24 months.

Interest rates to PMIs reduced to 4 % from 5 %

Lending rates to contributors reduced to 6 % from 9%

Permitted gradual withdrawal of contributors

Establishes pilot project -construction of 40,000 housing units per annum

Housing Policies Failure in Nigeria and its

Explanation

Achievement level of the policies has been low.

1991 NHP projected national housing need of 8.2 million

Only one million housing units or about 12 percent were built

Policy envisaged that people should not spend more 20% housing

20% monthly income not adequate for loan repayment in 30 years.

2002 policy is targeted at those on grade levels 13 and above.

Policies focus on contributors to the scheme alone

75 percent of the dwelling units in Nigerian urban centres

No evidence of efforts made to upgrade housing as specified in the policies.

Explanation of Housing Policy failure

Continues

Citizens are expected to access loan housing through the PMIs.

287 PMIs were licensed to operate the N.H.F

232 of are located in Lagos state alone.

No PMIs in several states

46 PMIs accredited to access NHF loan

28 (61percent) of the PMIs are concentrated in

Lagos state alone.

Only 14 states and Abuja have accredited PMIs.

The other 22 states are without PMIs

Many PMIs have collapsed because of wide spread distress in the financial sector

PMI Accredited to Access NHF by States

8

9

6

7

2

3

4

5

S/No.

1

10

11

12

13

14

State

Lagos

Akwa Ibom

Anambra

Enugu

Abuja

Kwara

Oyo

Kano

Ogun

Plateau

Kebbi

Abia

Delta

Sokoto

1

1

1

1

1

1

1

1

1

1

2

3

2

Number of PMIs

28

2.17

2.17

2.17

2.17

2.17

2.17

2.17

2.17

2.17

Percentage (%)

60.87

2.17

4.35

6.52

4.35

3

4

5

1

2

Ta

Table 2: NHF Participation

ble 2: NHF

Participation

S/No 2002 2008

NHF Fund Base # 10.3bn

Registered

Contributors

Average Contribution

1,855,686

#5,550.50

Participatory 3

Av. Contribution/State #3.43bn

#41.96bn

3,427,348

#12,242.70

24

#1.75bn

Causes of the Failures

Weak Mortgage finance System

Inadequate PMIs

Lack of Social Housing

Low participation by both contributors and states

Consequences of the Failures

Lack of basic facilities and infrastructure

Large proportion of urban population remain deprived of basic services

Deteriorating housing quality

Inadequate dwelling units

Growing housing affordability problem

Conclusion

The two housing policies introduced have failed to improve housing.

There is growing problem of affordability, deterioration housing conditions and overcrowding.

The consequence of very grave unless drastic and concerted efforts are made to redress situation.

There is therefore a need to revisit the housing policy to assist the poor who are in the majority.

Introduce social housing and ensure that adequate funds are allocated to the sector with thorough supervision.

Full dependence mortgage financing and unfettered market mechanism cannot be expected to produce the desire outcome of providing adequate housing.

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