Concerned by the widening supply-demand imbalance in the housing sector, a Real Estate professional, Engr. Femi Akintunde, Group Managing Director, Alpha Mead has proposed a land swap model between developers and the Government, as a more realistic and sustainable approach to bridge the country’s huge housing gap.
The model which is currently being explored in some developing countries is a system where Government and a Real Estate developer signs off a deal that the former will offer a defined portion of high valued land to the latter at no cost, while such developer will in return construct an agreed units of social housing for the government to allocate to low-income earners who cannot afford to buy or build homes.
Engr. Akintunde who proposed this new idea while speaking on; ‘Co-Production In Action: Towards Developing Equal Sustainable Urban Cities’ at the Real Estate Speakers Series organized by Tolet Property Group in Lagos explained that with this model the Government would be able to meet the housing needs of a sizeable chunk of the population who cannot get on the property ladder.
Akintunde whose Real Estate subsidiary, Alpha Mead Development Company (AMDC) is championing building with technology in Nigeria, however acknowledged that while Government might be constrained by the lack of requisite data to determine citizens who truly have little or no income to acquire houses. He therefore advised that a pre-qualification process can be instituted to ensure that such housing units are not hijacked by the political class to enrich themselves.
“The housing gap in most cities such as Lagos will continue to widen, if we do not adopt a more sustainable approach to housing provision,” he said, noting that the current effective demand for housing by low, mid and high income earners is in the range of 40%, 50% and 10% respectively.
According to him, meeting the housing need of each of these categories requires a holistic plan, practical execution strategy and a measurement tracker that must ensure housing supply in both urban and rural settlements meets the effective demand at all times.
Collaborating Akintunde’s claim, Kayode Omotosho, Executive secretary/CEO, Mortgage banking Association of Nigeria said that the supply and demand imbalance that defines Nigeria’s housing sector will persist until the Government sees housing as a wealth creation vehicle with multiple effect on the economy.
“Nigeria’s current housing woes is similar to what Canada faced in the 1980’s. However, Canada was very pragmatic is overcoming its challenges, because it dimensioned its issues in line with prevailing economic realities and implemented practicable solutions unlike Nigeria is currently doing,” he said.
He further stated that that there is a need for a drastic change in the approach to homeownership in Nigeria. He expressed concern over the poor utilization of mortgage opportunity to homeownership especially by the mid-income earners, adding that only five percent of properties in Nigeria are acquired through mortgage.
To him, the private sector will play a major role in bridging the housing gap, if Government quits competing with Real Estate developers on the provision of affordable housing solutions for mid-income earners, and become a regulator.
Analysts have often argued that Government needs withdraw its interest in constructing residential estates and focus on tasks such as city and urban planning and provision of an enabling environment for Private developers to thrive.
One such private developers is Alpha Mead Development Company (AMDC), a strategic Business Unit of the Alpha Mead Group, which will in next few months unveil a new initiative using its Cast – in situ technology system to deliver shell unit of a building in 10 days for prospective homebuyers even without requesting the customary 30 percent equity contribution.