How restructuring of housing corporations can boost economic development

A housing estate in Lagos, Nigeria. Image source findnigeriaproperty

A housing estate in Lagos, Nigeria. Image source findnigeriaproperty

THE development of a nation is measured by the overall contribution of every segment of human endeavours to the growth of the economy.

Development is a general word that encompasses all aspects of human life, segments and disciplines, which give direction to the state of an economy. Various sectors of the economy that constitute the major determinant of the national development include health sector, educational sector, communication, agriculture, energy, commerce and industry, science and technology, housing and construction among others.

Some of these sectors however are interrelated as happenings in one sector have a multiplying effect on the other and such is the housing and construction sector which most often is referred to as the real estate sector. Globally, real estate sector is one of the most profitable ventures of every economy and one of the indices of measuring economic growth of a society. It is a sector that mirrors the economic viability and sustainability of an economy and its poverty level.

Though there was no accurate data about housing shortage in Nigeria, it was however estimated that the shortage has risen to over 17 million. Successive governments over the years have attempted to resolve these shortages with various policies but rather than reducing, the shortages kept increasing year in year out. One of the institutional structures created to solve the housing debacle which has being in existence since 1927 (LEDB days) as well as in the pre-independence era and which is still very relevant today is the idea of housing corporations specially created to engage in mass housing. The creation of these housing corporations by the then regional governments prior to independence marked the beginning of the creation of modern housing estates throughout Nigeria. The effect of the housing corporations were further widened with the establishment in 1964 of the Association of Housing Corporations of Nigeria (AHCN), whose main objective is to ensure the increased availability of dwelling houses and the development of housing industry. This structure ultimately became a focal point within which the first housing policy of 1990 was formulated and subsequent policies are being implemented.

These housing agencies located in each state of the federation, were statutorily created to execute public housing programmes for each state of the federation based on the formulated housing policies. Specifically they are to :
Undertake the development of estates by acquiring, developing, holding, managing, selling, leasing or letting any property movable or unmovable in their respective states;

Provide a home ownership saving scheme in respect of any housing estate or building owned, constructed and managed by them with a view to enabling members of the public purchase or build their own houses;

Provide sites and services scheme for residential, commercial and industrial purposes for the people of their respective states;

Construct and maintain modern dwelling houses at reasonable costs for sales to members of the public
Undertake the construction of offices, commercial and industrial buildings for letting out to members of the public among other things;
Engage in other investment activities and opportunities as may be determined by the respective state governments.

Challenges Of Housing Corporations As Tool Of Mass Housing
At this juncture therefore, it is important to mention here that these housing agencies are paramount to any successful mass housing programme. While opinions differ on whether it is possible to execute mass housing without the involvement of the state housing agencies who are statutorily set up for the purpose, it is important to note that if the mass housing programme targets affordable and low income group, such programme will not appeal to private developers and it is virtually impossible to do away with these specialized housing agencies. Unfortunately however, most of the state housing agencies are under-utilized and have been rendered redundant and could hardly carry out their primary responsibility as elaborated in the respective laws setting up these agencies. Basically, the problems of housing delivery in Nigeria are rooted in three major factors namely lack of finance, escalating cost of building materials and infrastructural development cost. These three problems are however peculiar to all housing delivery agencies and somewhat make affordable and mass housing difficult but most Housing Corporations are in addition to the above constrained with one or all of the followings.

• Political interference in the activities of the agencies which grossly in most cases affect on-going projects
•Lack of total independence to execute projects professionally.

Usurpation of the statutory responsibility of housing corporations in housing construction and development for the state by the ministry who are supposed to formulate policy and monitor its parastatals to ensure policy compliance and accomplishment.

•Inadequate financial support in terms of seed funding to assist state Housing Corporations to take off project execution

•Inadequate moral support and backing in terms of loan guarantee for state housing corporation when seeking housing loan and politicking with such funds when released which usually put such corporation in trouble servicing the loans.

•Non-availability of Primary Mortgage Institution (PMI) to assist some state housing corporations in disposing some of their housing units.

•Lack of government support in terms of provision of infrastructural facilities in most housing estates, which often increase the cost of completed housing units.

•Inadequate funding of research efforts into the use of local building materials to ascertain its suitability for peculiarity of the state.

•Withdrawal of some state governments from the National Housing Fund contribution which put the Housing Corporations of such States at disadvantage in accessing estate development loans from the Federal Mortgage Bank of Nigeria.

•Establishment of politically motivated parallel housing organization in the same state thereby duplicating the responsibility of the state Housing Corporation or agency.

Structurally in most of the states, the Housing Corporations are still regarded as departments in the ministries therefore, the CEO have little or no approval authority.

Furthermore, the frequency of CEO burn out is a challenge coupled with the fact that CEOs are not appointed from within even when professionally qualified people are there. In most of the states, the enabling laws are outdated therefore require review.

Today, most of these housing corporations merely exist by names. In some states, they are rendered irrelevant in their special field while state ministries have taken over construction and in some states they have been merged with the ministries.

This situation has relegated housing development to the background and hardly can we see any state government today that categorize housing as priority and major cardinal focus unlike in the second republic. The recent shift of housing provision through government policy of total withdrawal from direct construction introduced by the Obasanjo regime did not help matter as the private developers were unable to meet the housing demand of the people.

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