Housing is one of the greatest problems confronting the developing nations generally, Nigeria in particular. Housing has been generally accepted as the second most essential need after food and is one of the basic needs of every individual, family and community in general (Aribigbola 2006). Stone (1993) succinctly observed that housing is not only a necessity of life, it has a pervasive impact on aspects of our existence, if it is adequate it tend to provide privacy and security against intrusions, both physical and emotional. It is the principal locus of personal and family life. It defines the community and determines access to jobs, to services, to stores, and other significant things to our lives. It contains not only our material possessions, but our dreams and despair.
Furthermore, real estate/housing affordability is defined as the notion of reasonable costs in relation to income: that is housing costs that leave households with sufficient income to meet other basic needs such as food, clothing, transport, medical care and education. It is also the ability of households to rent or purchase housing in an area of choice at a reasonable price, the capacity to meet ongoing costs and the degree that discretionary income is available to achieve an acceptable standard of living. Housing affordability is a key factor in determining a family’s access to economic and educational opportunities, exposure to violence and environmental hazards, and ability to accumulate financial assets. However the importance of housing affordability considerations goes much beyond the personal troubles experienced by individual households. According to Gabriel, et al. (2005) housing affordability has implications not just for housing but also for employment, health, labour market, aged care, finance, community, sustainability, economic development and urban and regional development.
The problem of housing affordability is enormous and as a matter of great concern. It is present both in the rural and urban centres. In the urban centres, due to inconsistent governmental policies, inaccessibility to lands and high cost of building materials there has been problems in providing affordable shelter for the people. At the level of household, the problem of affordability could force a household down the housing ladder or indeed trap such a household in a poor housing environment indefinitely. This exposes such households to all the danger and undesirable physical, health, emotional and mental consequences often associated with living in sub-standard, overcrowded and derelict environment.
Stone (1993) argued that there is a clear pattern of association between substandard living conditions and reduced performance in school and at workplace, which limits employment, career potential and opportunities within such affected households. These situations further serve to undermine and weaken the often fragile income base and tenure security of households with destabilizing effects on normal family life. These frustrations and backlashes could find expression in antisocial behavior and violence in homes, and family breakdowns. High housing costs in a city could frustrate and turn away creative workers (at the beginning of their careers) who actually drive innovation at workplaces. Thus, this critical innovative workforce could be forced to move away from such areas in search of more favourable housing market elsewhere (Communities and Local Government 2011).
Nigeria’s urban housing problems manifest in overcrowding, growth of slums and the development of shanties in virtually every major city. Housing problems vary from inadequacy to the attendant impact on the psychological, social, environmental and cultural aspects. Housing is capital-intensive; the cost of adequate housing is currently beyond the reach of most Nigerians. This brings the financial dimension – the question of affordability of housing. The challenge becomes not only to provide the houses but to make the houses affordable and convenient to the average Nigerian worker/citizen. It has been observed that the present economic condition of Nigeria has contributed to households earning low income to find it difficult to pay for housing services. Nigeria, a country with a Gross Domestic Product (GDP) of $797 in 2006 (Microsoft Encarta, 2009) is one of the lowest in the world. With increasing unemployment, the expenditure on housing services has made it seem “unaffordable”. In Nigeria, explicit consideration has not been given to the need for justification in the affordability of housing services over the years.
Factors Affecting Real Estate/Housing Affordability
Socio-economic characteristic, housing types and condition, level of housing satisfaction and residents perception of housing affordability are the common indicators of real estate affordability problems in Nigeria. These are however discussed below:
- Socio Economic Characteristics; income of household, occupation of household, household size and education are the chief socio economic factors that affect household’s ability to command desired housing choice. Hence, the importance of socio economic characteristics of households’ cannot be under estimated in the formulation real estate policy programs.
- Housing Types & Conditions; Tenement, compound and block of flat housing types/apartments are the dominant housing options available to households in Nigeria. Also, majority of rental and ownership households are concentrated in buildings considered old fashioned while few number of ownership household’s occupied block of flat buildings accompanied with modern facilities and services and these types are commonly found in high class neighborhoods of Lagos, Abuja and Portharcourt. Most buildings occupied by higher proportion of households in Nigeria are considered to be over aged and some are in need of renovation and timely maintenance. Governments have low impact on housing provision in Nigeria as majority of buildings are owned by individual, family, cooperative groups/societies, Multinational real estate companies etc.
- Housing Satisfaction; researches revealed that longer housing distance to place of work without effective means of transportation, Functional desirability of buildings, adequacy and efficiency of housing services, housing expenses and service charges are considered not satisfactory to majority of households in Nigeria.
- Housing Affordability; Major burdens of housing expenses in this country are considered to be paid by household heads and majority experience challenges in meeting other family financial demand after the payment of basic housing expenses. Majority of households perceive their housing expenses unaffordable when compared along with their monthly income. Investigation revealed that most of households’ source housing expenses through salary income considered too low for sustainable family living. Hence housing cost is perceived to exceed what could be afforded by majority of rental and ownership households in Nigeria
Final Conclusion and Recommendations
The underlying rationale for this write up is concerned with assessing households’ ability to afford housing costs in Nigeria. I have come to conclude that majority of households earn reasonably low wages, paid higher rents and trading and farming are the chief occupation in this country. Majority of the households are concentrated in face-me-i-face-you (Tenement/Brazilian) housing apartments characterized by unsatisfactory conditions and physical dissatisfaction. Therefore Housing is generally perceived not affordable to majority of Nigerians.
- Government should provide mortgage loans at low interest rates to private developers and individuals in order to build habitable and affordable residential structures in various part of the country. This should comply with the National Housing Policy of the Federal Government of Nigeria.
- Natural growth increase within urban centres themselves demands additional dwelling units to house the growing population. Hence, government should embark on massive low cost housing scheme through public/private partnership initiatives accompanied with government’s site and services scheme. This should be done in such a way that rental and ownership housing is affordable to low income and middle income groups in the country.
- Provision of adequate and equitable urban land market that will foster of accessibility, ownership and use of land. The chronic difficulties in making urban land easily accessible to potential developers have entrenched systemic urban land speculation, which often drives up land and housing prices beyond the reach of an average household. Hence if government could provide equitable land market the problem of affordability will be reduced to some extent.
- Provision of affordable building materials by the government; this will ensure that construction materials are affordable to an average Nigerian and prevent speculators from exploiting average citizen by skyrocketed prices. Hence, government should encourage other players in the delivery of building materials and frown at existing monopoly in the building material industry. The need to develop affordable local building materials should not be neglected by the government.
- Review and effective implementation of existing National Housing Policy in such a way that it recognizes the need to encourage a multiplicity of other actors (corporate private sectors, civil society organizations, and individuals) in housing delivery and improvement process and also ensure provision of favourable investment climate for the private sector through reforming the housing finance structure, tax incentives, financial grants, redefinition of institutional roles, advocating vital legislative instruments and reforms, and encouragement of site and service schemes.
- There is need for provision of legislation that will regulate building standards and ensure that over aged and other buildings with poor housing facilities and services are properly maintained and renovated for basic human habitation on timely bases.
- Rent control panel should be set up by the government in collaboration with members of the community in order to prevent landlords from exploiting tenants and ensure that home lessees have access to rental loan facilities at lower interest rates simply because demand for housing outruns the supply, these increased housing cost beyond what a low income earner could afford. It should also be ensured that 1-2 years advanced rent payment by tenants is reduced to what can be afforded by the tenants.
- There is need for the Federal Government’s introduction of Alternative Dispute Resolution (ADR) through State’s Citizen mediation Centers or Multi-Door courts to other parts of the country by taking Lagos State Government as a suitable example. It is the in-thing in the modern world for solving landlord/tenants disputes that may arise from rental charges, service charges and related property maintenance charges. Instead of both parties resolving property disputes through exchange of abusive words and spending money and time going to court, many landlord/tenant related cases will be disposed off by the ADR. This will ensure that property related disputes are resolved without dissolving landlords/tenants relationship.