role of housing devt from cooperative societies in lagos state

8/19/2019 Role of Housing Devt From Cooperative Societies in Lagos State

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HOUSING DEVT IN LAGOS STATE (THE ROLE OF THE COOPERATIVE SOCIETIES)

1

S/N NAME OF

COOPERATIVE

SOCIETY

NAME OF

EXECUTIVE

INTERVIEWED

DESIGNATION NAME OF

INTERVIEWER

1 Cogency Staff Ikj CMSLTDAddress: 3, Obafemi

Awolowo Way, Ikeja

Mr. Adelaja T. President

ODILIDAMILOLA E.

130405021

2 Lagos Airport HotelCMS LTD (Ikeja)Address: 111, ObafemiAwolowo Way, Ikeja

Mr. Kayode Adeleye President

3 X3m Ikeja CMS LTDAddress: 6a, FolusoAlade Street, AwuseEstate, Opebi Ikeja

Mrs. Esthella Edward FinancialSecretary

4 VAP Staff CMSAddress: 35, MobolajiJohnson Avenue,Alausa Ikeja

Mr. Olawunmi Olatunji President

OBAFEMI NOAH OLUJIMI

140405516

5 Vanni InternationalSecurity Systems CMSAddress: 1, VanniClose, Off AdeniyiJones, Ogba-Ikeja

Mr. Omoh Anthony President

6 LARA DAY School(Ikeja) CMS LTDAddress: 19, Adeniyi

Jones, Ikeja

Mrs. Ebong S.NFinancial

Secretary/ Ex-Officio

7 SKG Pharma CMS LTDAddress: 7/9 SaparaStreet, Off Oba AkranAvenue, Ikeja

Mr. Charles M. Treasurer

ODERINDEOLAOLUWA M.

130405006

8 Vitafoam CMS NigeriaLTDAddress: Oba-AkranAvenue, Ikeja

Mr. Bola Oniyinde President

9 BEL-PAPYRUS CMSLTD

Address: Plot 6,Kudirat Abiola Way,Ikeja

Mr. Julius Olowookere President

10 Irewola Unique CMSLTDAddress: 8, JamiuOgunbewonu Street,Oniyedi Estate Isheri,Alimosho-Lagos

Mr. Onigbinde M.S President

UDOMEMMANUEL A.

110405057

11 Winners (Ikotun) CTCSAddress: TechnicalCollege, Ikotun Lagos

Mr. Ogundipe President




2

A. INTRODUCTION

WHAT IS A HOUSE?

The Oxford advanced dictionary defines house as a building made for people to live in

usually for one family or a family and lodgers {Hornby et al 1984}. Technically, a house can be

defined as a building or structural edifice comprising of walls with foundation, floors, roofs etc.

in which man lives thereby sheltering himself from the harsh effects of weather, wild animals

and the element.

Houses are for different uses but the most common ones are;

i. Residential

ii.

Commercial

iii.

Industrial

iv.

Institutional

v.

Recreational

A house is basically built on a piece of land commonly known as a plot. With respect

to size of the plot and the planning regulations of the area the building is located, houses

generally have spaces around them and this spaces include:

i.

setbacks,

ii.

space around the building,

iii.

parking lot,

iv.

flower gardens, and

v.

Undeveloped parcels of land.

Most of these spaces are usually utilized as green belts or area flower garden or buffer belts

shielding noise from one house to the other.

WHAT IS DEVELOPMENT?

Development is a term that economists, politicians, and others have used frequently in the

20th century. The concept, however, has been in existence in the West for centuries.

Modernization, Westernization, and especially Industrialization are other terms people have

used while discussing economic development. Economic development has a direct

relationship with the environment and environmental issues.

https://en.wikipedia.org/wiki/Westernization

https://en.wikipedia.org/wiki/Industrialization

https://en.wikipedia.org/wiki/Environment_%28biophysical%29

https://en.wikipedia.org/wiki/Environmental_issues

https://en.wikipedia.org/wiki/Environmental_issues

https://en.wikipedia.org/wiki/Environment_%28biophysical%29

https://en.wikipedia.org/wiki/Industrialization

https://en.wikipedia.org/wiki/Westernization




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Now, what is HOUSING DEVELOPMENT?

Housing Development is a structured real estate development of residential buildings. Popular

throughout the United States and the United Kingdom, they are often areas of high-density,

low-impact residences of single-family detached homes, and often allow for separate

ownership of each housing unit, for example through subdivision.

Housing encompasses all social services and utilities that make life meaningful and the

environment habitable. The problems that affect readily housing delivery in Nigeria are

enormous and very complex. These problems in most of our urban cities in Nigeria

encompasses the availability of housing units both in quality and the number available which

in turn has resulted into congested homes and community and the resultant of this is the ever

increasing pressure on the infrastructural facilities which will rapidly deteriorate. The situation

in the rural area is even worse where the quality of housing is very poor and very low in

quantity. Infrastructure like power, roads, water, drainage and every other constituent of

housing is readily unavailable.

In Nigeria today, over 7 out of every 10 people live below the minimum poverty level and 9

of every 10 are in the low income group therefore these people cannot provide housing for

themselves; they then are rendered homeless or live in poor housing. The government had in

place various policies as regarding housing delivery to the public but poor implementation has

made it impossible to meet up with the 12-14 million housing units needed.

Housing market: This is described as general market of houses being purchased and sold

between buyers and sellers either directly by owners or indirectly through brokers

(Investorworld, 2011). It is also defined as the supply and demand for houses, usually in a

particular country or region (Housingmarket, 2008). The Real estate marketing involves the

sales of the property.

Property development: There is no how a good discussion will be done on housing without

taking a look at Property development. This concept according to Ojo (2006) is an economic

activity which involves developing a bare but a ripe site or re development (refurbishment,

conversion or alteration) of a developed site. Nuhu (2007) saw the provision of

accommodation for occupation of the person carrying out the development or for someone else

as the basic reason for property development. Sangosanya (1987) considered the objectives of property development to include:

https://en.wikipedia.org/wiki/Real_estate_development

https://en.wikipedia.org/wiki/United_States

https://en.wikipedia.org/wiki/United_Kingdom

https://en.wikipedia.org/wiki/Single-family_detached_home

https://en.wikipedia.org/wiki/Housing_unit

https://en.wikipedia.org/wiki/Subdivision_%28land%29

https://en.wikipedia.org/wiki/Subdivision_%28land%29

https://en.wikipedia.org/wiki/Housing_unit

https://en.wikipedia.org/wiki/Single-family_detached_home

https://en.wikipedia.org/wiki/United_Kingdom

https://en.wikipedia.org/wiki/United_States

https://en.wikipedia.org/wiki/Real_estate_development




4

An occupier: This is done by Institution to suite its need and image.

A property company: The Company builds for profit.

An Investment: This like the above company is interested in the financial gains from

the development.

A local authority: This may not be for financial gain but for social benefits accruing

to the community it serves.

COOPERATIVES BODIES: The idea of Cooperatives housing have started long time ago

when individuals planning to own a house seek help from relatives, in-laws, neighbours and

friends (Wahab, 1988). This concept has been successfully tested and certified in countries

like Italy, United Kingdom, Zambia, Sweden and Philippines (Daramola, 2006). It is suited tomeet the needs of low income earners who constitute the vast majority of Nigerians. The

members of the Cooperatives are able to enjoy housing loans for the construction of their own

housing units. The Cooperatives are also engage in land acquisition, processing of land title

documents and building materials acquisitions for its members (Olotuah, 2006).

Housing Cooperatives according to International Cooperative Alliance (1995) is a “legal

association formed for the purpose of providing housing to its members on a continuing basis”.

It is also defined as “the cooperation of people or families organized as a group to provide

housing to its members” (Ogunnubi, 1997). According to Agbola (1998), housing cooperatives

are usually organized as social associations but are more committed to the financial activities

of individuals and thus the collective interest of their members”.

These associations have been playing significant role in the delivery and provision of housing

services in urban cities in order to meet up with the attendant increasing demands for housing

requirements. They are becoming more popular and viable in the development of housing

market in Nigeria. It has brought an all-round improvement in the standard of living of the

people (Diacon, 1994; Daramola, 2006). The associations are not catering for the needs of

their members alone but also that of non-members as well.

They are engaged in building hostels for students, residential houses, shops and estate houses

for the people most of which are low income earners; at affordable price compared with that

of Private estate developers. However, the Cooperative Societies are facing challenge of high




5

inflation rate, which to certain extent is affecting their performance in the real estate market

development (Olotuah, 2006).

The Federal Government of Nigeria in realizing that it cannot solve the housing problem alone

has involved the corporate bodies to contribute their own quotas towards achieving thisobjective of housing for all. It was evident that most of these companies have total neglect for

the housing needs of their workers. This consequently made the Government came to the

rescue of these workers through the Promulgation of Employee housing Scheme (Special

Provision) decree 54 of 1979, thus compelling any employer of 500 employees to provide a

minimum housing of 50 units of which 75% should be available for non-executive staff (Nubi,

2000).

This would have been the best way to solving the employee’s problems but this program is

faced with serious challenge of intermediaries who increase cost and there is also problem of

ownership after retirement. However, the program still offers better prospect for the

Private employees because the end users of housing can easily be reached (Nubi, 2000).

Estate developers/agents: The private developers or estate agents activities were concentrated

in Lagos in early 1990 and they play significant role in the development of the Nigerian

housing market (EFin A and FinMark Trust, 2010). They ensure adequate shelter is providedto meet the demands of the increasing number of people having housing needs. They often

employ various finance techniques such as Turnkey, Pre-letting and Joint finance to construct

housing units for the people (Nubi, 2000). These finance methods are briefly discussed

below:

Turnkey: This is a form of contract whereby the contractor has total responsibility for

building and probably commissioning the housing units before handing it over to the

buyer. The housing units are designed to meet particular specifications at fixed price.

Pre-letting: The Private developers build the housing units for renting or hire purposes

and oversee to the management of the property.

Joint finance: The housing project is funded by both the private developer and

mortgage or a finance institution, ownership is later transferred to individual acquiring

the property. In case of rented property the developer supervises the management of the

property.




6

B. STATEMENT OF THE PROBLEM

It has been observed that majority of the people are living in poor housing or totally homeless

even in urban centre to talk of the rural areas where the housing there is generally poor and

very low in quantity despite all governmental policies to provide housing to the public.

C. AIM & OBJECTIVE

The aim of this research is to provide a critique of existing sources of supply and make findings

from our fieldwork to decide whether social societies should be supported as housing suppliers

and how this can be achieved.

D. RESEARCH METHODOLOGY

This research was carried out in February/March 2016 at Ikeja, Lagos State Nigeria. The

method of data collection was Survey, using Questionnaire Instrument for the study.

There are three types of questionnaire designed for the study:

Cooperatives without Land or Housing Project

Cooperative with Land for Housing Development Purposes

Cooperatives that have constructed housing units

During the interview, the questionnaire that was used to ask the questions with respect to the

cooperative society was the very one that was in total relations to the position of the particular

cooperative society. The interview apart from the writing down and ticking boxes, we also

recorded the interview so as to recover any point that has been missing during the writing

moments. At the end of the day, it was realised in quick succession that most of the cooperative

society we interview do not currently have any constructed housing project or Lands while

other are still in the process of getting Land.

E. LIMITATIONS

The limitations encountered in performing this research was time constraint, communication

barriers in contacting the presidents and location of some of the cooperatives visited whichwere a little beyond the exact location given to us from the initial database.




7

F. THEORY

In Lagos, the LSDPC (Lagos State Development and Property Cooperation) plays the

role of providing excellent houses and related services with utmost maintenance culture with

a view to its customers’ satisfaction.

The provision of modern housing schemes and the transformation of the slums and ghettos

in Lagos dates back to 1928 when the Lagos Executive Development Board (L.E.D.B.) was

inaugurated. Amongst other things, the L.E.D.B. was charged primarily with the task of

getting rid of the filth and unhealthy living conditions which existed then in Lagos. The Board

was also to transform the slum areas and ghettos into a planned and habitable environment.

Although, the Board was the sole executive authority for planning and development both in

central Lagos and its environs, the maintenance of its constructed roads, drains and open

spaces was the responsibility of the Lagos City Council. The vetting of building plans was also

shared with the City Council, an awkward arrangement which often resulted in the delay of

approval of building plans. The attendant frustration of private developers often times led to

contravention of planning regulations by developers.

However, subsequent expansion of the city necessitated the involvement of the Ikeja Area

Planning Authority (I.A.P.A) in the control of development and provision of public housing

outside the city. The (I.A.P.A) on one hand had full powers to vet building plans and control

private development in its area of jurisdiction but such plans had to be forwarded to relevant

local council for health approval. With the creation of Lagos State in 1967, the need to stem

the lack of proper coordination between the existing planning authorities involved and the

unnecessary dissipation of energy without meaningful results necessitated the formation of a

central body to be charged with the duties of the different bodies. Consequently, in 1972, the

Lagos Executive Development Board (L.E.D.B.), Ikeja Area Planning Authority (I.A.P.A.),

and Epe Town Planning Authority (E.T.P.A.), metamorphosed into what is now known as

Lagos State Development and Property Corporation (L.S.D.P.C). The L.S.D.P.C. Edict

No. 1 of 1972 bestowed legality on this metamorphosis.




8

Upon its creation in 1972, L.S.D.P.C. which inherited the liabilities and assets of its three

predecessors was completely divested of all their development control powers. These were

transferred to the Lagos state Ministry of Works and Planning (L.S.M.W.P.), which became

responsible for planning and development control throughout the State. But after much

persuasion, the power to control development on its estates was transferred back to L.S.D.P.C.

in 1978.

Under the present arrangement; the Corporation has a fully commercialized status with a

Managing Director/Chief Executive Officer at the helm of affairs.

Acting CEO of LSDPC however is Wasiu Adedamola Olasunkanmi Akewusola

FNIQS, RQS., M.ICIArb., B.Sc.(Hons) QS Ife, M.Sc.(Construction Mgt.) Unilag

Housing generally has not ranked high on the scale of priorities for social spending and state

governments have tended to rely upon local authorities to meet the problem. Efforts at

providing low-cost rural housing have been minimal, despite the creation of the Federal

Mortgage Bank of Nigeria in 1977, and shantytowns and slums are common in urban areas.

Overcrowding in urban housing is a serious problem. It has been estimated that about 85% of

the urban population live in single rooms, often with eight to twelve persons per room. Living

conditions are poor. In 1996, only about 27% of urban dwellers had access to piped water.

Less than 10% of urban dwellers had an indoor toilet.

As of 1979, about 37% of all housing units were cement or brick roofed with asbestos or

corrugated iron; 34% were mud plastered with cement and roofed with corrugated iron. In the

same year, 44% of urban dwellings were rented, 37% were owner occupied, 17% were rent

free, and 2% were "quasirented" at below-average rates. The total number of housing units in

1992 was 25,661,000.

HOUSING, POPULATION AND DEVELOPMENT IN LAGOS, NIGERIA

1. POPULATION, DEVELOPMENT AND HOUSING IN LAGOS

The context in this term is to examine the trend of population, its organic growth, the

proportion of housing requirements and response mechanism by various stakeholders.




9

1.2.1

POPULATION AND SETTLEMENT CHARACTERISTICS

Lagos State is the smallest state in Nigeria from a land area of 4km2 on the Island, and an

estimated population of 28, 518 in 1871 to an area of 62.8km2 and population of 126,108

in 1931. Between 1901 and 1950, population growth rate was at 3.3% per annum while it

rose to 18.6% between 1950 and 1963 [George, 2010]. The increment in population is

complimented by vibrant economic status which continued to encourage population

growth, Therefore, in 1963, the total population increased from 1.4 million to 3.5 million

in 1975. In 1978, the population grew from 3.8 million to 4.13 million in 1979 and 5.8

million in 1985. In 1990, the population was 7.7 million, 10.28 million in 1995, 13.42

million in 2000 and 17.55 million in 2006.

Population Trend in Lagos from 1871 to 2006

YEAR POPULATION

(in million)

1871 0.03

1931 0.13

1963 1.41975 3.5

1978 3.8

1979 4.13

1985 5.8

1990 7.7

1995 10.28

2000 13.42

2006 17.56

Currently, the geographical area has expanded to about 356,861 hectares of which about 21%

equivalents to 75,755 hectares are wetlands, yet it has the highest estimated population of 18

million representing 12% out of a national estimate of 150 million with annual growth rate of

between 6% and 8% compared to 4 -5% country growth rate and global 2% growth rate. It is

the second most populous city in Africa after Cairo in Egypt and estimated to be the fastest




10

growing city in Africa and the seventh fastest growing in the world with a population increase

of about 600,000 persons per annum. Lagos population is growing ten times faster than New

York and Los Angeles with grave implication for urban sustainability and housing delivery.

At its present growth rate, the United Nations had estimated that, Lagos state will be the third

largest mega city in the world by the Year 2015 after Tokyo in Japan and Bombay in India.

Over 91% of the total population lives in the metropolis with a population density of about 20,

000 persons per square kilometre in the built-up areas of Metropolitan Lagos. The occupancy

ratio is 8 – 10 persons per room with 72.5% of households occupying one-room apartment

[Lagos State Ministry of Housing, 2010].

Fig 1: Housing units allocated

by the LASG Fashola

administration

Based on its highurbanization rates and

dense population, the

poverty level in the Lagos Metropolis is quite high. The Lagos State Government [2004]

estimates that 51% of men and 54% of women resident in Lagos live below the poverty line.

Urban poverty is the scourge of most cities of the 3rd world countries and Lagos is not an

exemption. This is clearly manifested in the growing number of largely unskilled, unemployed

and homeless migrants from the rural areas of the country into Lagos, who find it convenient

and affordable to live in existing slum communities or create new ones that are not serviced

by basic urban facilities, services and amenities [Abosede, 2006].




11

1.2.2. THE CHALLENGE OF HOUSING

While the growth of the population in the metropolitan Lagos has assumed a geometrical

proportion, the provision of urban infrastructure and housing to meet this demand is, not at

commensurate level. This has resulted in acute shortage of housing to the teeming population

with Lagos alone accounting for about 5 million deficit representing 31% of the estimated

national housing deficit of 18 million [Oshodi, 2010]. The extent of the housing shortage in

Lagos is enormous. The inadequacies are far-reaching and the deficit is both quantitative and

qualitative; even those households with shelter are often subjected to inhabiting woefully

deficient structures as demonstrated in the multiplication of slums from 42 in 1985 to over 100

as at January 2010. The urban poor, who are dominant in Lagos, are transforming the city to

meet their needs, often in conflict with official laws and plans. They reside in the slums and

squatter settlements scattered around the city and are predominantly engaged in informal

economic activities which encompass a wide range of small-scale, largely self-employment

activities. 60% of residents are tenants and have to pay rent as high as 50-70% of their monthly

incomes since most of the existing accommodations are provided by private landlords [Roland

Igbinoba Real Foundation for Housing and Urban Development, 2009]. The concentration of

housing and income levels

has stratified the metropolis

into various neighbourhoods

of low-income/high density,

medium income/medium

density and high income/low

density [Lawanson, 2007].

Fig 2(a): slum settlement in the

Ajegunle axis of Lagos State




12

Fig2(b): slum settlement in Makoko area of Lagos State

To stem the housing crisis, the Lagos State Government had a documented history of housing

provision fr om the days of Lagos Executive Development Board [LEDB] in 1950’s. LEDB

was able to delivered 4, 502 housing units, within 17 years, from 1955 to 1972 when it was

dissolved with the population rising from 1.4 million in 1963 to 3.5 million in 1975.

In 1972, the functions of LEDB were transferred to Lagos State Development and Property

Corporation [LSDPC] as the sole agency responsible for the provision of Housing in Lagos

State. Since its inception in 1972, LSDPC has been saddled with the execution of gigantic low-

cost housing program of the early eighties which yielded close to 10, 000 units. In 1979 under

the leadership of Alhaji L. K. Jakande, LSDPC took a dynamic and elaborate turn with

emphasis on low cost flats to cater for the needs of the low-income earners. Government

realized that only the supply of housing units on a large-scale either through Government or by individuals themselves can reduce the chronic shortages.

By 1992, about 17, 000 units were built in several locations which included Abesan [4, 272

units], Amuwo Odofin [2, 068], Iba [1, 560] Ijaye [812], Ijeh [62], Isolo [3, 632], Ojokoro

[534] [Mayaki 2009].

Thus between 1972 and 1999, LSDPC was able to delivered 20, 120 housing units while 1,

818 housing units were delivered from 2000 to 2010. It is important to note that the population




13

rose from 3.5 million in 1975 to 10.28 million in 1995 and from 13.42 million in 2000 to about

18 million in 2010. The joint venture housing projects yielded 331 units while the ongoing

projects at Lekki Scheme 2 and Apapa GRA will yield combined units of 150. The proposed

residential projects at Victoria Island and Abijo are expected to increase the stock by 236 units.

The total stock from LSDPC excluding the proposed units over the 38 year period is 22, 419

housing units, that is an average of 590 units per annum [LSDPC, 2010]. Lagos State

Government in 1980 also established the New Towns Development Authority [NTDA] which

organ provided site and service schemes for individual middle-income housing. A very

laudable idea but it has not impacted much on the housing delivery in Lagos. Their attempt

has included Lekki scheme 1 and 2, Amuwo Odofin and Isheri North [Mayaki, 2009].

In recent times the Ministry of Housing and Lagos Building and Investment Company [LBIC]

did commence direct construction of houses in Lagos thus compromising the mandate of

LSDPC. The Ministry of Housing till date has constructed 18 No. housing estates with 5 others

under construction. The total units of this strategy are less than 5, 000 units while the LBIC

intervention will yield less than 1, 500 units [Lagos State Ministry of Housing, 2010].

Aside the direct construction approach, the Ministry and other government agencies adoptedother options of delivering houses to the citizens, among which are public private partnership

in housing delivery, urban renewal and regeneration program, establishment of new towns,

provision of site and service scheme. The combined stock of all these strategies is less than 5,

000 units per annum in a state requiring 500, 000 units per annum to bridge the deficit of




14

estimated 5 million over the next 10 years. Even, the recently launched Lagos Cooperative

Home Ownership Incentive Scheme [Lagos – CHOIS], in collaboration with the private sector,

is expected to deliver 10, 000 housing units over the next four years at unaffordable rate of

N11.6 million for a 2 bedroom apartment.

Fig 3(a): A newly built housing estate by the LASG at the evicted slum of Badiya East in Lagos 2015.

All the programs embarked upon by the Lagos State government and its different agencies are

aimed at regenerating the urban fabric, sustaining environmental quality and increasing

housing supply. These efforts are ideal, but they seems not to be proportionally coordinated

within the context of increasing accessibility to homes for the low-income earners and ensuring

security of tenure for the same group. While, the houses for the upper income segment of the

society has never been in short supply, housing for the poor has remained a vexed issue with

various government programs unable to meet the deficit recorded in this segment.

The informal private sector; in Lagos comprising people of different income background

resorted to self-help housing strategy. This sector has taken the risk of buying untitled land

from informal market dominated by cabal popularly referred to as “Omo -Onile’’. After the

purchase of the land, majority of these people will take it upon themselves to construct their

own roads, providing water and extending electricity for kilometers to provide a roof over their

head. Over 90% of housing supply in Lagos is from this sector with the resultant effects of

lack of standardization and distorted urban planning system.

A very good initiative introduced by former governor of Lagos State, Mr Babatunde Raji

Fashola (SAN) in facing the housing issues in the state to an extent was by introducing Lagos

H.O.M.S (Home Ownership Mortgage Scheme), an initiative to encourage and support home

ownership with First-Time Buyer (FTB) residents of Lagos State to




15

Fig 3(b): Housing scheme developed by Lagos HOMS

purchase decent and affordable homes through the provision of accessible mortgage finance.Lagos HOMS is administered by the Lagos Mortgage Board (LMB). The state developed

housing estates in line with the scheme simultaneously in all five (5) divisions of the state in

such places as Igbogbo in Ikorodu, Sangotedo, Mushin, Ilupeju, Omole, Magodo, Lekki and

Badagry.




16

1.2.3. FACTORS AFFECTING HOUSING DELIVERY

At the bottom of housing fiasco in Lagos lies the problem of land accessibility, stunted

financial and mortgage system, exorbitant prices of building materials and disproportional

capacity building in the sector. Land has been described as the fulcrum of all types of

development in any society, the constrain poses by its inaccessibility in Lagos has reduced the

provision of affordable housing for Lagos residents, about 70% of whom live below the

poverty line. Many provisions in the 1978 Land Use Act have denied intending housing

developers from delivering the products in affordable quantity. The Land Regularization

program introduced by the Lagos State Government in 2006 has not demonstrated full capacity

to enhance access to land for the poor and low-income groups. It takes more than 217 days

and at unaffordable cost to procure land title from the Regularization Directorate as against 45

days mentioned in the program document [Oshodi, 2010]. The cost and bureaucracy

discouraged the beneficiaries of the program from massive participation. The land title is a pre

requisite for building permit; hence, many houses sprang up without planning permissions and

are classified as illegal developments by the government.

Housing finance and mortgage system in Lagos cannot be totally ostracized from what is

obtainable in Nigeria. Generally, there is no credit or finance structure available to the low-

income groups for land, housing and basic services in Nigeria. The only window for all

Nigerians to access financial facility for land, housing and basic services is the National

Housing Fund [NHF] established in 1992.

The participants are expected to contribute 2.5% of their monthly income with a primary

mortgage institution, for a period not less than six [6] months in order to qualify for a maximum

loan of N15 million [US$60,000] at 6% annual interest payable over a period of 25 years. The

scheme is operating in all States of the Federation with about 101 Primary Mortgage

Institutions [PMIs] as the primary savings and lending agents. 63 of these PMIs are located in

Lagos while the rest 38 are spread across the remaining 35 states of Nigeria. Federal Mortgage

Bank of Nigeria is the regulator, secondary fund repository and loan approving authority for

the NHF contributors. As at December, 2010, record has shown that a total sum of N50.68

billion was approved out of which N23.89 billion representing 47% was disbursed to 16, 468

applicants through 57 PMIs. The average amount approved is equivalent to N1, 450, 692




17

[US$5, 802] per beneficiary. Significant numbers of Nigerians who are mainly in the informal

sector of the economy were denied participation from this scheme because of low deposit

mobilization, inability to track their monthly income and lack of formal titles to their land

holdings. These, among other factors, account for low rate of disbursement to 16, 468

beneficiaries across the country over a period of 19 years, in the face of estimated 18 million

national housing deficits.

The finance structure is such that neither the builder nor the consumer can readily obtain

finance for housing due to the stringent conditions attached to mortgage loan and high interest

rates at the commercial market. Out of the estimated 10.7 million existing housing units in the

country, statistics have shown that about 88% are self-built with little or no mortgage

attachment. That is why mortgage facilities are of no consequence to the nation’s Gross

Domestic Product [GDP] and the whopping N35 trillion require to finance the 18 million

housing deficit in Nigeria remains elusive [Mortgage Banking Association of Nigeria, 2010].

Since 1986, the prices of building materials have been on the upward trend with significant

effect on the poor families’ home construction. Between 1986 and 1997, marble price

increased by 555% while a ton of mild steel reinforcement increased by 35% over the same

period. The rate of price increase between 1997 and 2005 ranged from [N586 to N750] 27.95%

for emulsion paint and [N2, 300 to N12, 000] 421.7% for sharp sand. Cement, a basic

component of housing construction in Nigeria rose from N23.50 per bag in 1986, N420 in

1997, N1, 150 in 2005 to N1, 800 in 2010, an increment of about 7, 600% over a period of 24

years. During the same period, the purchasing power of average resident in Lagos have

declined with non-commensurate income wage and commitment of over 40% of income to

housing expenditure against the United Nations recommended 20% [Akinmoladun and

Oluwoye, 2007].

The problem of inadequate housing for the citizens in Lagos is further aggravated by the

declining budget for housing by the government. In 2000, N667 million representing 4.05%

of N16 billion budget was earmarked for housing while N776million representing 1.42% was

budgeted in 2005. Of N224.6 billion total budget for the year 2010, only N6 billion

representing 2.7% was earmarked for housing [Lagos State Ministry of Housing, 2010].

Housing problems appear intractable to the government.




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In the absence of any significant affordable housing strategy by the State government, citizens

have continued to explore different approaches to accommodate themselves. In the opinion of

the government, these approaches are in gross violation of town planning principles and mega

city status of the State; hence the response has been forceful eviction and demolition of self-

developed homes.

2. REQUIRED INTERVENTION EFFORTS

It is apparent from the foregoing that the state government is overwhelmed by the housing

quandary and lack the necessary inventiveness to resolve the same. Therefore, the situation

requires the intervention of all stakeholders in land, environment, housing and urban

development towards the resolution of the housing crisis. The roles of civil society in

preventing forced evictions, illegal demolition of houses, creating awareness among the

inhabitants of slums on their housing rights, researching into adaptable and best practice of

housing delivery to the low-income groups, facilitating the institutionalization of affordable

housing policy, and engaging in the development of affordable housing becomes very critical

in achieving sustainable housing delivery framework for the teeming population of the state,

especially the vulnerable groups.

G. RESULT & FINDING ANALYSIS

One important lesson we got from our experiences on the field is that the Federal &

State Governments should not engage in direct housing construction. Studies carried out have

shown that individuals build better and cheaper houses and at faster rate than the government

agencies depending on how deep his/her pocket is. Another lesson is that the government

should encourage the use of local building material for construction so as to reduce building

cost. This has been successfully done in countries like Tanzania, and Sweden. Entrepreneurs

wishing to go into the production of building material should be encourage through tax relief

and incentives. Government should promote alternative strategies for house construction. For

example, the government might acquire land; lay them out and service them with basic

infrastructures before making them available for sale to individual needing them. It is the

opin ion of this group that the adoption of the various suggestions made above the housing

problems in Lagos State could be successfully tackled by leasing out lands for citizens ready

to build on them as this is one factor that hinders housing development in the state as it is the




19

basis for any housing development and more housing units constructed for citizens of the state

that can afford them as they usually turn out to be expensive especially in locations like the

“island”.

About 60-70% of the cooperatives visited fell under the “no land or housing project”

category. Reasons being that they were just recently established or still find lands available for

sale to be quite on the high side as they would rather prefer giving out loans to members to

buy lands and then develop their houses to their taste instead which according to few of the

presidents and executives spoken to felt rather comfortable with. Only a very few of the

cooperatives acquired their land in bulk which dated as far back as more than 15 years ago.

Therefore, we can see that these kind of cooperative societies are old but then the locations of

the land gotten then are either by the boundary of Lagos and Ogun or the undeveloped parts

of Lagos which in these days are just developing via the amiable efforts of the Lagos State

Govt. These cooperatives however had issues with land rustlers popularly known as “Omo-

Onile” in this part of the world claiming parts of their lands due to the expanse of land acquired

(as much as an acre of land or less) which we know would take quite some time, even years to

develop which as a result attracts land rustlers in taking bits by bits of the land before finally

getting out of hand. But then, some of these land rustlers pay some certain amount to the

cooperatives (owners of the land) to lessen the disagreement between both parties.

Hence this implies that most of the Cooperative Societies have made significant contributions

to the development of the Nigerian Housing Market within the period of their existence. The

major problems facing these organizations are lack of finance (38%), High cost of building

materials (21%), Cost of land (17%), Poor economic conditions (11%), Government policy

(7%) and Poor infrastructural facilities (6%).




20

Fig4(a):Housing units constructed and developed by a cooperative society in an unknown location on the

Lagos-Ibadan expressway

Fig 4(b): Land owned by a

cooperative in Isheri-

North part of Lagos.

H. THE DISCUSSION AND STATISTICS

The problem of lack of finance has become prominent because of the fact that most Private

developers have found it difficult to get fund to finance housing projects. This may be as a

result of stringent conditions given by the Banks for granting loans to customers. In Nigeria,

most Banks are not willing to give loans to customers without providing the necessary

collateral securities because of the fear of bad debts and non-recovery of such loans. The cost

of building materials have continued to increase as a result of high inflation in the economy

and dependence on imported materials by the construction industry.




21

The price of Cement which forms the major raw material for the construction industry has

continued to fluctuate and soar up, making it difficult to arrive at correct and reliable cost

estimate for the constructed houses. There is also increase in cost of land, most especially in

the urban areas, despite the fact that there is poor economic condition which affects the

standard of living of the people and purchasing power. This consequently, affects the level of

development in the Nigeria housing market. The average years stayed by tenants in their rented

house fall between 8-10 years (48%) and most of them normally default in their rent payments

(30%).

The tenants in addition, indecently use the property (13%) and exhibited uncooperative attitude

towards the Private developers (12%). Other problems encountered with the tenants are: Lack

of proper maintenance of the property (11%); Illegal transfer of room (10%); Conversion to

other use different from the original agreement (9%); Total abandon without prior notice to

the Private developers (6%); Erection of illegal structures in the Premises (5%); Vandalisation

of property (3%) and total deface of the structure (1%). The average period of stay by tenants

was okay compared with those staying for the period between 11-13 years (9%). It was

observed that the longer the Tenant stays in a rented apartment, the worse they become.

This is in terms of rent payment, indecent use of the house and other problems earliermentioned in the study. It is therefore, good for the Cooperative Society to let out apartment

to those who will be staying for short period like we have in the study: 2-4 years (16%) and 5-

7 years (26%).

The repairs and maintenance works are usually carried out on the property once in a year

(50%); followed by the repairs carried out occasionally or when there is only need for it (26%);

those that are carried out twice in a year (11%); Every two year (8%); no fixed time (4%); and

every three year (1%). The benefit of carrying out repair annually make it a popular option

over others, this is because, and it saves time and cost, compare to twice in a year.

I. CONCLUSION AND RECOMMENDATION

The Private sector (Cooperative Society) has no doubt made significant contributions to the

development of the Lagos State Housing Market despite those constraints that are serving as

challenges to its tangible efforts. There are a lot of opportunities in the Lagos State housing




22

Market if the Private sector is ready to explore and make the best use of them. However, the

following recommendations are offered as a way of bringing about better and effective housing

delivery services to the people:

1. Government should give focus to the problem of poor infrastructural facilities. This is

very essential, for sustainable development to take place most especially in a developing

economy like Nigeria. The poor condition of electricity supply deserves urgent attention,

this is because apart from its domestic use, it is also very essential for its Industrial and

commercial purpose. There are many Small scale businesses and even large ones that

depend on electricity for survival. Therefore, the irregular supply of electricity makes

most of these organizations to operate below optimal level. Government should step up

effort at constructing good roads and provide regular water supply; these are also

necessary for better standard of living to be achieved by the people.

2. The Government policy on housing need to be changed for rapid development to take

place in the real property market. There should be no delay in getting title registration on

land and Government also need to encourage the Cooperative Societies in their bid to

provide more housing delivery services to the people, by making funds available to them.

3.

There is need for a fixed time to be determined for the repairs of the property, for it to be properly and well managed. The situation where repairs are carried out every three year

or occasionally may not be the best option for the proper maintenance of the property.

This definitely affects the quality of such real estate properties.

It can also be deduced from our survey carried out that cooperatives hardly collaborate with

financial inistitutions like the commercial banks and mortgage banks but only depend on the

contributions from its members which we feel delays loans to these members due to its

insufficient funds available. Therfore, cooperative societies should try and endulge certain

commercial banks and even mortage banks for loans to improve its finance and also agree on

certain loan terms.]

Also, in improving the housing development scheme, registered companies without

cooperative societies should endulge in these societies as it would affect positively the lives

of the middle and low income workers in that company.




23

This group has however concluded that cooperative societies play a vital role in housing

development in Lagos state as the housing schemes developed and introduced by the Lagos

State govt is not sufficient enough or rather expensive for some certain class of people to meet,

therefore the societies should be supported and be given the necessary backing from the

government as they have tried in their own little way in providing the necessary fundings for

its members in making their dreams of owning land(s) and house(s) come true as the comfort

of every human on the surface of the earth is having good shelter.

J. REFERENCES

Hornsby A.S (1984) “Oxford Advanced Learner Dictionary” Oxford University Pr ess.

Ogunshakin and Olayiwola L. “The Collapse of Housing Policy in Nigeria Habitat”

International vol. 16, No.1992

http://lspdc.gov.ng

http://lagoshoms.gov.ng

Adeniyi E.O., “The Provision of Housing a Challenge to Urban Planning and

Development in Africa, Ibadan. NISER reprint series.

Adedeji, Y.M.D., 2004. Sustainable housing for low Income Industrial workers in Ikeja- Ilupeju Estate: Materials Initiative options. Paper Presented at the School of

Environmental Technology, Federal University of Technology, Akure. Aderamo, J.O.

and D.F. Ayobola, 2010. Spatial Structure of housing quality in Ilorin Nigeria. Research

Journal of Social Sciences. Res. J. Soc. Sci., 1(5): 12-21.African Independent

Television (AIT), 2007. News report on Nigerian housing Sector. Lagos, Nigeria. In:

Akeju, A.A. (Ed.), Challenges to Providing Affordable Housing in Nigeria. A Paper

Presented at the 2nd Africa International Conference on Housing Finance in Nigeria

held at Sheu Yaradua Center Abuja, 17-19 October.

role of housing devt from cooperative societies in lagos state

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