Can Fed Govt deliver N2m housing unit?

The Federal Government’s plan to deliver 300,000 housing units nationwide with a N2millon price tag per unit may have excited operators in the sector, reports OKWY IROEGBU-CHIKEZIE

The promise by President Muhammadu Buhari to build 300,000 homes across the country as part of his administration’s mass housing programme has brought joy to many Nigerians. Yet,  some fear that the project might fail like similar ones in the past.

At the first Year Ministerial Performance Review Retreat, where he was represented by the Vice President ‘Yemi Osinbajo, Buhari said: “We already have models which have been put up in Borno State by the Family Homes Fund where the figure is at about N2 million. This is the social housing scheme.

“There are two tracks to the housing programme. There is one, which is ongoing by the Federal Ministry of Works and Housing, and the one under the Family Homes Fund, which is also supervised by the Federal Ministry of Works and Housing. The strategy is one that ensures that we use local materials as much as possible on each site. So, on each site, block making is going on. The making of doors, windows, tiles are going on. The whole idea is to make sure that we patronise the local industry and engage many of the young men and women who are at the moment out of work.”

According to him, one of the critical success indicators of his administration will be the number of young engineers and builders who are engaged in these projects.  He explained that the government is opening up space for them and ensuring that they are able to bid for the jobs so that the jobs are not given to big contractors alone. However, he hinted that some big contractors might also be involved in the supervision of the smaller businesses and builders.

He added: “We are looking at funding from the structured loans of the CBN and the expected funding is about N217 billion. We look at the demand, 1.5 million doors, 1.8 million windows, 7.8 million hinges, for 300, 000 homes. This is huge by any standards and if we are able to focus on the local industry, we can actually start a major revolution in building in our own country and patronise local industry and ensure that our people get the jobs and the experience that they require.”

Reacting to this policy, some professionals said it was a move in the right direction but with a proviso that if the government is committed to improving the plight of the common man, the programme would be delivered. They advised that they should shun politics and rhetorics to see to its success.

Chairman, Society for Professional Valuation (SPV), Olusola Solomon Enitan, noted that  the key element of housing is land but that, unfortunately, it has become the most problematic aspect of housing.

He argued that even if somebody wants to convert a container to a home, he would still need land. He accused some governors of hindering home ownership by their administration and management of the resource in form of laws that inhibit the development of the sector in the interest of the public but rather in preference to making revenue.

He hailed the planned programme of delivering housing units for N2million. According to him, it may sound impossible but the truth is that it is possible.

Analysing the cost factor, he said for a house to cost N2million, it means that it should cost a subscriber between N22,000 and N24, 000 yearly.  He said: “We are looking at studio flats, one bedroom flat and in some case  two-bedroom flats.The bulk of the nation’s housing demand is in this segment. The strategy mentioned by the President of fabricating blocks, doors, windows and every thing on site is the key to its successful delivery. A lot of profit will be cut out and this will enable the government to deliver the social housing.

‘’Profit on social housing is not supposed to be above 10 per cent.The government in this scenario will likely deliver the houses at between N1.8million and N1.9million with a profit of about N200, 000 per unit. All the people engaged will get between N100,000   and N200,000 per unit profit. If you spread it across the spectrum of 300,000 units, the government would have put money in the pockets of artisans and builders.”

Enitan said the programme has the capacity to employ thousands of Nigerians and put food on the table of the real segment of the population that was adversely affected by COVID-19 pandemic.

He stressed that his association is ready to support the project and the government in management, coordination and quality management.

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“We have been campaigning on social housing for the large percentage of Nigerians. Governors should make land available to this project to bring meaningful development all around the country,’’ he said.

The SPV boss warned against giving remote land for the project, stating that it would compound the problems of the poor the project is meant for.

According to him, if somebody needs to travel to his place of business or office for two hours from his house, the aim of the programme would have been defeated.

He canvassed the need to add logistics and transport management to the process.

Rail and good public transportation, he said, should add fillip to the programme. ‘’The government should refrain from creating slums, a good environmental impact assessment should be undertaken to ensure that the public has access to good water, sanitation, roads and a well-planned environment,’’ he added.

According to Enitan, except this is done the idea of social housing would not be achieved. There must be an end to the needless suffering of the public, he said.

He said: “The government can push the idea further by ensuring that the scheme is delivered on the basis of   ‘rent-to-own’.’’

He said this was crucial for the success of the programme as it would enable people who could not afford to pay upfront to stagger their payment for at least 25 years.

According to him, such people could be made to repay between N30 and N36,000 yearly, that is, N3,000 monthly payment.

He said this programme would open up investible bouquet. He called for a national real estate investment trust.  According to him, the government should have a programme where the pension fund can be invested into bonds and the real estate investmnet trust that will be repaid over time.

‘’The whole idea of the 300,000 housing units is a fantastic opportunity, provided the government has the will to push it through,’’ he stated.

He added: “If the government finds it convenient to give subsidies, home ownership should top the chart. The monies that will be saved from fuel and electricity subsidies should be ploughed into housing development. This will improve the quality of education, access to finance, quality of life and  also go a long way in eradicating poverty in the nation.’’

Past chairman, Nigeria Institute of Quantity Surveyors (NIQS), Jide Oke said housing construction is a function of many parameters and key among them are the location and design of housing.

He said: “For a basic room and parlour, self-contained or a small two-bedroom basic housing on a firm ground, where you do a simple strip foundation. It is very possible. My only advice is that they should ensure that infrastructure is provided so as not to blight the environment with slum settlement again.”

He, however, advised the government to provide an enabling environment for private sector participation instead of dabbling into direct construction.

Past President, Nigeria Institution of Estate Surveyors &Valuers (NIESV), Bode Adedeji said it was possible to build a house for N2million, but added  that it depends on many parameters.

According to him, one parameter is that the government could deploy unemployed youths, give them a crash training programme and take them to construction sites.

He said: “Also recycled materials can be used. However, without a declared Housing Revolution, rolling out affordable housing policy and programme in Nigeria will remain a mirage.’’