Amongst other factors, lack of affordable housing is caused by the imbalance between supply and demand, and the insufficient construction of new housing units to provide enough supply to meet that demand.
With several intentions, efforts, initiatives, projections, and developments launched towards making Lagos a Smart City, questions and doubts have been raised on the state of affordable housing in the next 5 years. So many Smart and Mega cities across the globe have been tagged “unaffordable”. Hong Kong, for instance, with a population of 7.5 million people, has been ranked as the world’s least affordable city for 10 consecutive years due to its steep housing prices.
“The idea of affordable housing in Lagos is a mirage.”
This much was said by Victor Madekwe, Principal Consultant of Home Edge, an estate surveyor and consultancy firm in Lagos.
So what is affordable housing? What’s the yardstick for measurement? How do we define affordability knowing that the term is subjective?
“Housing itself goes beyond the building but also has to do with facilities and infrastructure. Government makes money from land transactions, land use charge etc. The cost of cement, iron rods, sand etc. are subject to market conditions and are on the increase. So how can housing be affordable if the cost of building and providing the facilities/ infrastructure is high?”
“Even when the government builds, they prefer to sell rather than rent out the housing units at subsidized rate. Housing cannot be affordable without the legal framework to make it so in place.”
Rental and capital values are based on location and demand. A third factor is the cost of construction. It is expected that rental/capital values of new constructions will be high. This will continue for as long as construction cost keep rising.
“If demand continues to outweigh supply like we presently have, it’s expected that values will rise.”
If the value of the Naira continues to decline; inflation is not checked, unemployment rate keep rising and purchasing power drops the more, many Nigerians would not be able to afford decent housing even by 2025.
Presently, many cannot even meet up with paying their current rent as at when due. Housing affordability is therefore tied to many factors which the average Nigerian has no control over but is directly impacted. For instance, there are people in Lagos who stay in tenement buildings where 20 tenants share a toilet/ bath. There are people that stay in shanties where there are no toilets/ baths. There are those who stay in glorified flats with cubicle sized kitchens and rooms. There are houses without parking spaces etc. All these people desire better housing but they can’t afford them so they make do with what they have.
“We don’t see much difference by 2025.”