NIGERIAN TRIBUNE - Property and Environment

NIGERIAN TRIBUNE - Property and Environment

Why private developers cannot build for low income groupDayo Ayeyemi, Lagos
A luxury apartment in Port HarcourtHousing in its entire ramification is more than mere shelter according to different scholars who have expressed concerns over the shortage of housing industry in the country.
As stated by them, housing encompasses all the necessary facilities such as circulation, infrastructure such as electricity, water and paved roads that make life enjoyable and that it must be close to workplace.
Despite the enormous contribution of the private developers who have constructed different housing units across the state following the current housing policy that encourages such, investigation by Nigerian Tribune revealed that most of the houses constructed by the private developers are geared towards the high income earners in Nigeria. In a twist, Chairman, Grant Properties Limited, Reverend Olajide Awosedo, in a brief interview stated that construction of housing units for the high income earners in Nigeria would continue if government fails to create an enabling environment for the private sector to thrive.
Speaking exclusively to Nigerian Tribune in Lagos, the developer, whose firm pioneered the popular Goshen Beach estate, Victory Park, Havillah Vila estate among others, said he had no apology for concentrating on the development of housing units for the high networth in the society.
He pointed out that he operated in a system that has no sympathy for people who want to provide service at cheaper rate, saying that some of the problems facing the housing industry in the country ranged from financial, environmental, institutional to societal problems.
He listed high cost of borrowing and interest rate; high cost of land, bureaucratic bottlenecks, corruption in the system, and lack of long-term fund among other factors that limits private developers to built low income houses in the country.
“This is a capitalist society and I am a private sector man, I operate within a system that has no sympathy for people who want to provide this service at cheaper rate. There is no encouragement, nor concession from government and banks when I borrowed the money. When I built Goshen estate I borrowed money at 39 percent interest rate. The cheapest money I had when I built Goshen was at 35 percent. There is no way I will borrow money at these rates and build for the low income class of the society. I have to look for the people who can buy the houses at a rate that I will make my profit. I borrowed money just like any other person, just like an importer in Alaba or Aba. There is no preferential rate giving to me and my entire loans are not of long terms, they are of short terms,” he declared. He said he is ready to build low income houses if government could give him free land and exempt him from paying tax for five years and stipulated the amount he must sell the house for him to recoup his investment.
He added, “The truth of the matter is that the way we are going, in years to come we still may not be able to meet the housing needs of Nigerians. For example the World Health Organization report in 1999 put the housing need of Lagos alone as 170,000 units per annum. Same goes for other cities like Port Harcourt, Abuja, Kano ,kaduna and Ibadan. So we are not there and that means as long as you have a good vision and you do it right, your house will always be sold.”Despite the challenges, he expressed optimism for the housing and mortgage industry, saying the potentials of housing industry in the country are huge. He stated that there has been some elements of improvement in the mortgage sector, saying some banks that could give mortgage for 10, 15 and 20 years owing to the consolidation exercise.
“The interest rate is still in double digit but it has been improved. Yes, they still expect you to pay interest of about 30 and 35 percent but we never had that before. It would get better and that shows that the future of mortgage and housing in the country is bright,” the estate developer said.
To house the low income people, the developer challenged the local government to live up to expectations by constructing housing for the low cadres within their community.
Expressing disgust over the local government administration in the country, he stated, “I dare say that we don’t have a local government system in this country, anytime I see the contest for local government chairmanship, I say to myself that the only reason for the contest is selfishness and not service. Local government system is the government of the people and as a government of the people; I see no reason why they cannot have local government housing”.
He also urged the state governments to provide houses in a mass nature for the people.

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