Affordable Housing Institute : US

So used are we in the developed world to the presence, even omnipresence, of a capital-enabling environment – of governmental and legal infrastructure that supports capital’s movement and wealth’s generation and accumulation – that we take it for granted.  Yet for much of the world, these basics are not only lacking, their emergence is blocked. 

 

Why aren’t he and his countrymen rich?

 

That struck me forcibly when I read a recent article from The Guardian, Nigeria which, in its matter-of-fact depiction of the housing challenges, provides a horrifyingly clinical depiction of a governmental disabling environment:

 

2008: A deafening silence in works as housing crisis lingers

By Joe Adiorho

 

Mr. Adiorho is a courageous man, to excoriate his government so.

 

With a population exceeding 145,000,000, it’s the largest country in Africa

 

With vast oil deposits, it could be one of the richest … but it isn’t

 

It is thumbs down to the works and housing sector as there was nothing of any significance attained in the year. The roads still remained as death traps while housing crisis still persist.

 

As I’ve previously written, relative to affordable housing, government should play four roles:

 

 

 

Then too, government should directly invest in infrastructure – which Nigeria’s government evidently is not:

 

WHEN the erstwhile Minister of Transportation, Mrs. Diezani Alison-Madueke was in a fit of temper at the Lagos- Benin Expressway, many had thought the roads will be fixed and the ministry will get serious for once, but all that was in vain.

 

If this article is any guide, the challenges are almost unbelievable. 

 

Starting with traffic in Lagos …

 

The need is enormous

 

Going by the estimates of the Federal Housing Authority, new housing construction in Nigeria is about 10,000 units a year. To meet ever-growing demand, the country needs ten times more or at least 100,000 new housing units annually.

 

Undoubtedly more than that.  A country of 145,000,000 with a 2.0% annual population growth rate will add 2,900,000 people a year, and even if we assume a typical Sub-Saharan-Africa household of 6 people, that’s 480,000 new households, nearly fifty times as much as the current production.

 

For some, there is quality housing – a Nigerian family before their house

 

This is a guarantee of burgeoning slums.

 

Slum in Lagos

 

Existing housing stock in Nigeria is so dismal, yet studies show a direct correlation between affordable housing and better living standard. Recent pronouncement by the Institute of Architects that Nigeria could achieve a housing target of 40,000 units annually is quite realistic, but actualization of this goal is yet another matter.

 

‘Could.’  Lots of things ‘could’ happen.

 

Hey, it could happen!

 

Without intending to be exhaustive, the article is a short encyclopedic listing of Nigeria’s disabling environment:

 

1. Rule of law

We will not invest in property unless we can defend it from marauders.

In the year 2008, silence in the sector was deafening, the roads turned to death traps. It was a night of long knife for many motorists and commuters. Many lives were lost and armed robbers hold sway, as the potholes become den of thieves at day and night in different parts of the country.

 

In the mid-eighteenth century, highwaymen held sway in rural England.  

 

“Stand and deliver!”

 

Highwayman appear, I suspect, at a particular moment in a nation’s urbanization and technological network.  For highway robbery to be a worthwhile business, there have to be rich people going to and fro between large cities, carrying valuables; a limited number of available routes (along which to lurk); inadequate or corrupt policing; and a multiplicity of nearby bolt holes into which the highwayman may dart to spend legally his ill-gotten gains. 

 

We’ve already seen how the eighteenth-century corsairs are revived off the coast of Somalia; now we have highwaymen in Nigeria.

 

Ajegunle slum in Lagos

 

2. Lack of political context

 

When you have no experience of a beneficent government, you have only experience with a negligent one:

 

[Mr. Kunle Awobodu, the chairman of the Lagos chapter of the Nigerian Institute of Building (NIOB)] said:” the burden of housing provision on the private sector should be lessened by the government. Many Nigerians are aspiring to be house owners this coming year. This ambition should not remain a dream.”

 

Street children

 

Unfortunately, like many African nations, Nigeria’s had a very rough late twentieth century, falling into dictatorship discouragingly soon after independence from Britain.  As the CIA fact book puts it:

 

Following nearly 16 years of military rule, a new constitution was adopted in 1999, and a peaceful transition to civilian government was completed. The government continues to face the daunting task of reforming a petroleum-based economy, whose revenues have been squandered through corruption and mismanagement, and institutionalizing democracy. In addition, Nigeria continues to experience longstanding ethnic and religious tensions. Although both the 2003 and 2007 presidential elections were marred by significant irregularities and violence, Nigeria is currently experiencing its longest period of civilian rule since independence.

 

Baby steps, baby steps.

 

The general elections of April 2007 marked the first civilian-to-civilian transfer of power in the country’s history.

 

It means something

 

A government that can barely manage a peaceful transition of power will be hard pressed to deliver housing finance, which as we’ve seen requires a highly complex financial ecosystem.

 

Chief Chuka Odom, the minister of Federal Capital Territory (FCT) who was the minister of state in charge of housing agreed that there was such a deficit, but stated that it did not translate into inactivity in 2008.

 

The minister alluded to the fact that the 2008 was devoted to planning. 

 

Planning or stalling?  Political will or political vaporware?

 

To execute a complete about-face, stall first

 

According to him, “we have the potential. What we do not have is the framework to exploit it and that framework is the seven point agenda especially as it affects land reforms.”

 

Despite my skepticism a second earlier, this rings true.  But it’s no consolation to Nigeria.

 

3. Lack of funding

 

As we’ve demonstrated, urbanization drives up rents.

 

Indeed, housing had continued to pose problems in major cities, especially in Lagos, Abuja, Port Harcourt, where the rents have hit roof. Many Nigerians have now taken up the gauntlet to live in the out skirts.

 

New construction housing in Abuja, Nigeria’s capital

 

As a result, sustainable affordable housing always costs money.

 

In the 2009 budget, housing recorded zero allocation. Housing sector stakeholders were at a loss on why the Federal Government could have left out the housing sector without any allocation in the N2.87 trillion budget for next year.

 

Proposed King’s town Development: To turn this from CAD-CAM to reality, add money

 

An estate surveyor, Mr. Peter Okolo, said it was obvious that housing, which is one of the items on the administration’s Seven-Point Agenda, is being pushed out of relevance with the zero allocation.

 

Okolo said the budget did not reflect any allocation to the housing sector, either under the Public-Private-Participation (PPP) or through direct construction.

 

Without money, quality affordable housing will not grow.  Why isn’t there money?

 

[Continued tomorrow in Part 2.]

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