By Toye Eniola,Executive Secretary, AHCN
The plan of the federal government to develop 300,000 housing units annually as unfolded by the Nigeria Economic Sustainability plan to mitigate the effect of covid-19 pandemic have been greeted with mixed feelings by stakeholders in the sector. While some of the stakeholders commended the plan and the proposed annual target, many are of the opinion that proper strategies and modalities were not put in place for the execution of the proposed plan. This therefore raises a question about the relevance of the major stakeholders in actualization of this lofty plan especially in the proposed creation of 1.8 million jobs. The delivery project elements propose working with the state governments to identify land for housing construction in all Local Government Areas and identify and select delivery partners formed by groups of professionals and artisanal builders as primary delivery channels.
One institutional structure that deserves specific mentioning in the delivery channels of this Economic Sustainability Plan if state governments are to be involved in the execution strategy is the Association of Housing Corporations of Nigeria, AHCN. Much as the housing needs of the people continued unabated over the years, one institutional structure which stood out with housing policies implementation was the establishment of state housing corporations by the then regional governments prior to independence. The creation of these housing corporations then marked the beginning of the creation of modern housing estates throughout Nigeria. The effect of the housing corporations were further widened with the establishment in 1964 of the Association of Housing Corporations of Nigeria, AHCN whose main objective is to ensure the increased availability of dwelling houses and the development of the housing industry.
Without any doubt, the Association has over the years contributed immensely to the Gross Domestic Product and National Economy until recently when most state housing corporations were neglected by their state governments without needed support. The outbreak of Covid-19 pandemic however has brought to the fore the years of neglect and lack of commitment to reducing widening housing shortage by successive governments both at the federal and state levels. To adequately use mass housing as agent of job creation through Economic Sustainability Plan, the involvement of the AHCN is inevitable if government hope to achieve the targeted 300,000 housing units. These state housing agencies were created to execute public housing programmes for each state of the federation based on the formulated housing policy and programmes of each state within the overall framework of the national housing policy. It is on record that the pedigrees of these housing corporations in the past were most evident in all the state capitals especially when states were newly created. This, they demonstrated over the last three decades that they were able to rise up to the challenges of housing provision for the teeming Nigerian masses with estates scattered in major cities and towns until recently when these statutory responsibilities were ignorantly being usurped gradually from them by some state government ministries.
ROLES AND CONSTRAINTS OF HOUSING CORPORATIONS
The primary role of housing corporations, which were located in all states of the federation was to undertake the development of estates by acquiring, developing, holding, managing, selling, leasing or letting any property movable or unmovable in their respective states. Generally, housing provision was viewed as government social responsibility but with Covid-19, it is obvious that government could no longer shy away from this responsibility especially in provision of social housing for the low income group and the poor despite the housing reform which centred on the withdrawal of government from direct construction of housing. Housing corporations are best positioned to undertake this task. However, prevailing challenges confronting most housing corporations in overall housing provision especially for low cost housing include but not limited to the following:
Lack of political will by successive governments to face and tackle the housing problem head on.
Inaccessibility to low and cheap housing finance for construction to developers.
Poor remuneration and low purchasing power of the general public especially low-income earners and
Inadequate support to state housing agencies by state government in execution of their statutory mandates.
THE WAY FORWARD
With Covid-19 intervention funds and the Economic Sustainability plan, AHCN and all state housing corporations are best positioned to bring back the old trade of affordable mass housing provision. One critical area that has been neglected over the years is the provision of rental housing which ought to take care of those who are unable to afford outright purchase. The Association with her members is poised to focus more in this aspect of housing to help reduce the impact of homelessness in our nation. With the low purchasing power of the low income group and the poor, the best intervention to mitigate the effect of Covid-19 for this group of people is to provide rental housing in decent, excellent and healthy environment for these categories of people who could hardly afford outright sale. This is not to say that housing corporations will not embark on development for outright sales but for the post Covid-19 intervention, emphasis would be geared towards providing roofs over the most vulnerable people who were mostly affected by the pandemic and those who really need housing. Medium and high income housing which in most cases are high profit oriented could be executed through the usual commercial channel and could even be incorporated in rental scheme and well laid out.
Why is state housing corporations relevant in this ‘Bouncing Back Nigeria Economic Sustainability Plan?
1. State governments are custodians of large expanse of land in the state and it is easier for state governments to allocate land for their state agencies. Moreover, most of the housing corporations already have land bank that could be used.
2. Housing corporations are government parastatals with access to government land which place them at vantage position to execute affordable housing scheme in all the states of the federation
3. It is easier for state housing corporations to secure land documentations for such lands allocated to them.
4. State Housing Corporations are trusted by people as government agency with assurances that their properties are devoid of any discrepancies.
5. Housing corporations are equipped with many experience professionals in the built environment.
6. It is easier for funders to deal with government agencies than some private developers who were not tested.
7. It is easier to package civil servants in the state as off-takers for the purpose of repayment which can be deducted from source which will guarantee prompt rent payment
8. Incidences of default would be reduced which will give room for good planning and future development.
9. It is easier for state Housing Corporation in each of the state will assist in speedy generation of data base for the off-takers from the state civil service to provide an exit point for the occupation of the rental.
The Association is already finalizing collaborative arrangements with state governments to assist their state housing corporations to collaborate with the Association in all states of the federation to initiate this rental housing and to achieve the desired objectives.
To achieve this, there is a need for creation of a Special seed fund under CBN Intervention Fund for State Housing Corporations and Federal Housing Authority (FHA) under the umbrella of AHCN for rental housing
1. Under this proposed arrangement, the development fund that could be named “Housing Development Fund” should be created like Housing Cooperative Development Fund product of FMBN to fund rental housing for housing corporations and Federal Housing Authority (FHA) for outright rent and rent to own for the vulnerable poor. The fund should be solely managed by a Special Project Vehicle in collaboration with the CBN while state housing corporations will be responsible for the construction.
2. All the existing landed properties of FHA and abandoned estates in all the states of the federation should be converted to rental housing and funded from the proposed Housing Development Fund. For those land and estate at the outskirt of the city, arrangements should be made for development of all the infrastructures especially roads to open up such estates to attract patronage and such development should be funded from the intervention fund. Alternatively, some of those commercial oriented estates in major city could be traded as equity contribution by the FHA for immediate development of housing estates for outright sale for middle and high-income earners. Under this arrangement, housing corporations or private developers that can provide at least 70% bridging finance to develop and complete the estate to provide an exit point through the funds available to FHA or through NHF contributions to recoup their investment.
3. The proposed Housing Development Fund should only be made available for rental housing for low cost housing scheme while the state governments should provide landed property and the infrastructural facilities through state housing corporations for such construction as their social responsibility to the people.
4. To ensure continuous flow of funds into the rental housing, the FMBN and Family Homes Funds Limited should be co-opted into the administration of the proposed special fund from the CBN Intervention Fund to service both the demand and supply end of the rental housing.
5. To prevent default of tenancy of the rental housing, AHCN will be deeply involved in sponsoring appropriate foreclosure laws to be enacted as part of the Covid-19 intervention fund to limit unnecessary legal issues.
6. To ensure proper compliance to the administration of “Housing Development Fund”, an independent special task force should be set up to monitor the progress of project development by the fund to prevent diversion of funds that can lead to abandonment of such project.
7. To assist in tackling the challenges of affordability questions, government should look into alternative local building materials technology especially Hydraform interlocking technology as a way of reducing costs of housing units. To achieve this, the Association is looking at creating fabrication gallery in every construction site where all local building materials would be fabricated for use in the site.
CONCLUSION
It is obvious from the current myriads of problems confronting the housing sector that a holistic approach is urgently required to salvage the sector from total collapse. With the effect of Covid-19 which has paralyzed most of the income generating sectors, it is pertinent to recognize that housing sector possess the most viable platform to rescue the nation from sliding into recession if approach pragmatically. The involvement of state housing corporations is definitely inevitable if the Economic Sustainability Plan hope to achieve its lofty objective of creating jobs for the people and contribute to GDP and economic development. For instance, unemployment rate is projected by NECA to hit 33.5% in 2020 from the current 23.1% and this necessitate an urgent action to address the effect of this pandemic. In a recent Fortune 500 CEOs survey conducted recently on when will the economic activity return to the level it was before the pandemic, 14.3% said first quarter of 2021, 25% said first quarter of 2023 while 52.4% said first quarter of 2022. Only 8.3% were undecided. These results of this survey simply imply that the effect of Covid-19 will remain for a long time and this will definitely engender many job losses. However, housing sector is about the only sector outside agricultural sector that has potential to generate employment and contribute to economic growth. Housing sector has great multiply effect on job creation and it has been tested and proven over time that a three bed room unit has potential to engage at least about 25 skilled and unskilled labours ranging from Architect, Engineer, builder, bricklayers, masonry, carpenter, food vendors etc. The roles of Housing corporations in all of these cannot be under estimated.
Therefore, if all the enumerated recommendations stated above could be carried out, housing sector will certainly play a pivotal role in economic recovery of Nigeria amidst total global fall of accruable income from crude oil.
