Nigeria’s Unrealistic Affordable Housing Scheme

Nigeria’s Unrealistic Affordable Housing Scheme

As the Nigerian housing deficit spirals, birthing unaffordable housing on its way. The federal government, under President Muhammadu Buhari, has repeatedly promised to tackle the challenge by building affordable houses for Nigerians across states of the country.

In November, in a bid to make the promise come true, the federal government launched the National Housing Programme (NHP), as a vehicle to facilitate an affordable housing scheme. It also created a portal for the sale of completed houses under the scheme, to make it easier for individuals to acquire homes without the involvement of middlemen.

The NHP offers three choices to intending home owners; mortgage, rent and outright purchase. These, are believed to make home ownership easier – but there is just a little problem – the cost.

Last week, the Minister for Works, Housing and Urban Development, Babatunde Fashola, told the Senate Committee on Housing that the cost of the houses under the NHP has been varied according to states. He explained that the reason is due to the cost of building and topography – and then he let out the scary part that has contradicted everything affordable housing stands for.

Fashola said the costs of the so-called affordable housing is between “N7.2 million and about N16 million, depending on what a person wants”.

But according to the prices available on the NHP portal, a one-bedroom bungalow has a unified cost of N9,268,751, across every state where it is available. On the other hand, the cost of a two-bedroom bungalow is N12,398,460, while that of a three-bedroom costs 16,491,155.

A one-bedroom flat in a condominium available in southern states goes for N7,222,404, two-bedroom apartment costs N9,148,378, while a three-bedroom unit costs N13,241,074.

While these prices are affordable to many, it is unreachable high for its target audience.

As of last year, the cheapest house under the federal government’s Family Homes Fund, was a one-bedroom house in Delta State, at the cost of N4 million. Although much cheaper than the houses under NHP, it’s considered unaffordable. This is because Nigerians’ earning power falls significantly short of the cost.

Half of urban households (13 million) in Nigeria earn less than N100,000 a month, according to data from the Centre for Affordable Housing Finance. This means, using a mortgage that requires 20% down payment, the average Nigerian can only afford housing units cheaper than N2 million.

This worrisome reality is borne out of Nigeria’s state of penury. The most populated African country is the world’s poverty capital, where more than 40 percent of the population live below the poverty line (less than $2 per day).

With the cost of the houses far above the earning power of Nigerians, many have been asking if the federal government meant what is written on the NHP portal which reads: “It is a programme borne out of the government’s desire to provide affordable housing for its citizenry.”

Although Fashola said that over 7,000 persons have indicated interest in purchasing the apartments, the majority of Nigerians considered the houses unaffordable. Moreover, many believe they can build better houses on their own with the same amounts set as the housing costs.

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