The policy of government toward housing drives the entire process and dictates the extent delivery of affordable housing in diverse nature, quantum and quality, argues NWACHUKWU OBIECHINA, an engineer with Federal Housing Authority. He advised that arrangement for funding and provision of mortgage should be re-engineered for better accessibility.IN the advanced western economies, housing development is used as a good indicator of the state of health of the economy. It is also used to create employment and generate wealth because of the multiplier effect it has on the economy as a whole.Housing can only be developed when land is available, it cannot be done in the air, and it is key to any housing development. Major concerns will be the availability, accessibility, suitability and affordability. Some issues have been militating against the full realisation of the potential of the housing sub-sector contributing to the massive growth of the economy, wealth and job creation.Finance is needed for both funding the housing development and for empowering the intending beneficiaries to be able to purchase them. The procurement of funding at reasonable interest rate for both will dictate the delivery and affordability.The availability, suitability, affordability and durability of the construction materials will influence the cost of construction and therefore the overall cost. The construction technology and techniques in use affect the affordability and the quality of housing to be delivered.The most known and widely discussed is the Land Use Law/Act. Promulgated by the military, incorporated into the 1979 constitution and brought forward in the 1999 constitution. This was intended to make acquisition of land both easy and affordable but presently it has become a cog in the wheel of progress.In the law, the governor of the state holds land in trust for the people. No transaction can be valid unless he issues a C. of O. or his consent is required.This is not only true for individuals and body corporate but also for agencies of Federal Government, with the exception of land for prospecting for oil and gas and those with well spelt out areas, like Inland Waterways Authority.These requirements of governor's consent and C. of O. have made it very cumbersome for owners of land to use their assets in transactions. This has affected negatively individuals, corporate bodies and even agencies of Federal Government.State Governments (SG) has used the act in different political party with the government at the centre (federal) to deprive her citizens from benefitting maximally from project of the FG. A case in point is the action of the then Oyo State Governor, late Bola Ige of the UPN against the FG of NPN in 1980.There are many cases of such, most recently, FHA called for partnership bids for the development of 2nd Phase of Festac Town in the Guardian Newspaper of Monday, April 3rd, 2012, only for an agency of Lagos State Government (LSG) to publish a caveat emptor in the Nations Newspaper of Wednesday, May 9th, 2012 telling the public to beware.These anomalies shall be corrected through constitutional amendment. The second issue has to do with the provisions of Fourth Schedule of the 1999 Constitution. It vested the maintenance of municipal services in the Local Government Council (LGC).On the face of it, it appears okay, but when and where a private organisation develops an estate, conflict arises as to who is to maintain these services, bearing in mind that in some cases the LGC may not have the expertise and manpower to carry out these functions.This section of the constitution should be amended to accommodate and recognise the role private estate developers' play in maintaining estates they developed. In this era of globalisation, there is the urgent need to de-regulate the maintenance of municipal services, so that the expertise and prudence of the private sector can be utilised to provide well-managed environment through the application of best practices.The third issue has to do with the Supreme Court Judgment of 2003; the highlight of the judgment is that it buried the Town and Regional Planning Act by vesting Development Control functions on the state government.The judgment did not take into consideration the present threat of climate change as a result of global warming, which can best be addressed through bilateral agreements not only between nations but regions, like the ECOWAS community. Development control is a major tool for addressing climate change.Some State Governments are using this judgment to stifle the activities of agencies of FG within their jurisdiction in many ways. A case in point is Lagos State Government agencies that opine that land is their oil and should do what they deem necessary to maximise returns from land transactions.If development is looked at from the broader sense as defined by estate surveyors, there will be total chaos in the country as indigenes of the oil-producing areas can stop oil companies from operating in their territory until they obtain their approvals.The Federal Government shall request for further clarification and interpretation of the judgment from the Supreme Court. If the present impasse still subsists, she shall move for constitutional amendment to save the country from chaos.Finally, the discussions above reveal that there are provisions in different parts of the constitution that militate against the provision of affordable housing, in order to overcome them, there is need to reform, harmonise them and bring all of them under a single bill.The monopolies enjoyed by some institutions of government are partly constitutional and result of practice over the years. PHCN, the succeeding company of NEPA, enjoys absolute monopoly in the generation, transmission and distribution of power. Similar organisations are the water, boards and solid waste management outfits established by state governments.Their activities impede housing development in many ways. In the case of PHCN, private estate developers construct power supply network in new estates only to bring-in PHCN to connect to the national grid after the network has been certified okay by the Ministry of Mines and Power. PHCN usually will demand for the payment of some amount termed capital contribution and from that time start collecting tariff from subscribers.The above development is not fair on the developers who must have committed large funds to provide the networks.Other actions of government hinder the rapid development of affordable housing are the various exorbitant charges by agencies of government as fees namely building plan approval, taxes, obtaining of C of O before approval of building plans can be granted.In addition, the property taxes charged and new rent edict enacted by Lagos State also act as disincentive to investors. The cumbersome nature of the processes of obtaining building plan approval and that of estates before any development permit can be granted, all add up to impediments.The sector is not only over-regulated but also the delays encountered throughout the process of obtaining all the necessary approvals to commence development impede progress.The escalating cost of building materials due to combination of factors, like inflation, falling value of the Naira and the lack of the necessary infrastructure for their production locally. Compounding the problem is the proliferation of sub-standard construction materials in the markets.The Supreme Court Judgment of 2003 makes it possible for SG to frustrate the housing development efforts of the private estate developers, corporate organisation and even agencies of the Federal Government, like FHA, Ministry of Lands, Housing and Urban Development, and others by either delaying approvals or denying same completely.The multi-charges imposed on residents are another source of worry to developers. The seeming confusion as to who will manage (provide post construction management) of completed estates is another source of concern. The charges, namely the new property taxes, tenement rates, ground rents, service charges and others shall be well defined, as to who shall collect and what services shall be provided to residents. These not well-defined fees constitute disincentive to property developers.There is urgent need to bring all stakeholders to a table to agree on the best way forward. The paper is of the opinion that the de-regulation of the sector is long overdue as the contribution of the private sector cannot be over-looked.Way forwardThe greatest problems of the sector are not the lack of policy but that of policy somersaults and inconsistency, and the lack of the will power to pursue the policies formulated to logical conclusion.Government policy on housing shall be un-ambiguous and skewed in favour of the low-income group, as they are mostly affected by homelessness and least equipped to provide for themselves. The policies shall be well articulated, pursued with vigour and fine-tuned to ensure the delivery of affordable housing.Land is very central to any housing development, without it there can be no housing. So, access to land shall not only be guaranteed but also made affordable. That is why the late President, Umaru Musa Ya'Ardua made Land Reform one of his seven point agenda.The regime before, that of President Obasanjo, set up the Mabogunje Committee to fashion out ways of overcoming the problems surrounding land acquisition and utilisation. It shall be stated that the effort of the committee has not yielded visible results as no new bills have been sent to the National Assembly to canvass land reform.The transformation agenda of the present administration shall address the Land Use Act with the view of making land accessible, in a timely manner and affordable.Finance is required in both the provision of housing and in assisting the intending beneficiaries of housing to be able to purchase them. The problem of developers is mainly the high interest rate of funds and the inability to secure long term funds because banks are more interested in giving out only short tenured funds for a number of reasons, it pays the banks to concentrate on short tenured funds because of the volatile nature of the money market. Secondly, banks cannot take peoples deposits and give them out long-term, because it will result in investment mis-match.The housing sector is not a very good area of investment because the return on investment is very low and has a very long gestation period, hence the need to give it special concession.Attempts in the past by government to generate large pool of funds for housing development through the National Housing Fund, managed by Federal Mortgage Bank of Nigeria (FMBN) have been met with myriads of problems and not much success.Those looking for mortgage to buy houses find it very difficult because of the many requirements, conditionalities and the ceiling on the amount to be granted is not realistic.The arrangement for funding and provision of mortgage shall be re-engineered for better accessibility. The quantum of available funds to be used for funding housing and mortgage shall be expanded by tapping other pools of idle funds like that of pension unclaimed dividends and host of others. Even if this involves tinkering with the laws governing the operations of the FMBN and other organisations where funds can easily be mobilised.Government as a matter of urgency shall address the escalating cost of construction materials. The effort in the manufacture of cement is laudable and this shall be extended to other materials, like reinforcement, aluminum roofing sheets, ceramic tiles etc. The exorbitant costs of these materials are discouraging developers, both private and corporate.The construction technology used in the production of housing will to a great extent determine the cost. In our environment where labour is very abundant, the use of labour-intensive technologies will generally be more economical and in addition create job opportunities for the large pool of un-employed youth.There is need for the sector to work in concert with research bodies that specialize in the development of construction materials and techniques. This will make the conversion and integration of research findings into the operations of the sector easy. The ivory towers shall also be collaborated with, as the utilisation of the research works will result in cost savings and better performance.
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