Calls for rent control in Nigeria are growing louder, particularly among young people struggling with soaring rental costs. However, experts warn that such measures are ill-advised—except in cases of public housing, which remains woefully inadequate.
With an over 28 million-unit housing deficit, Nigeria’s real challenge lies in low supply, creating both a crisis and investment opportunities. Additionally, the lack of comprehensive rental market data makes rent regulation difficult to implement effectively.
Many tenants have seen their rent skyrocket by 40 to 150 per cent in a short period.
Modupe Odele, an attorney, shares her frustrating experience. “I can’t speak for the rest of Nigeria, but rent in Lagos is outrageous—people are being priced out, and there needs to be some form of rent control, especially since we pay annually. I moved into a house, and just nine months into my lease—three months before renewal—I was hit with a 150 percent rent increase,” she said.
This is just one of many voices crying out for intervention. Landlords, however, argue that rising costs justify rent hikes. A report by Financial Derivatives Company (FDC) highlights that the cost of key building materials, including cement, has surged by 120 to 400 percent since 2018, driven by Nigeria’s import dependency and the naira’s depreciation.
Lawmakers’ attempts at intervention
Public outcry has prompted some lawmakers to take action. The Enugu State House of Assembly recently moved to curb excessive rent hikes and review landlord-tenant laws. The Nigerian House of Representatives in May 2024 also urged the Federal Capital Territory Administration (FCTA) to regulate house rents and landlord activities in Abuja.
Even Lagos, Nigeria’s economic hub, has an existing Tenancy Law (2011) regulating the landlord-tenant relationship. This law limits rent increases to once per year with at least three months’ notice. However, it does not cap the percentage of rent increase, unlike in Canada, where landlords cannot raise rent by more than 2.4 per cent annually for homes built before 2018. The law also prohibits landlords from demanding more than one year’s rent upfront for yearly tenants or six months for monthly tenants.
Yet, while these regulations exist, enforcement remains a major issue.
The history of failed price controls
Despite the frustrations over skyrocketing rent, history suggests that price controls often backfire. Nigeria has repeatedly attempted to regulate key activities through subsidies, only for these policies to collapse under financial strain and corruption.
Rafiq Raji, an economist, pointed out. “Fuel subsidy, electricity subsidy, and exchange rate subsidy—all price control—failed. They were riddled with corruption and unjustly empowered a meagre middle class at the expense of the masses. We are all now paying for the profligacy of that erroneous past.”
Similarly, rent control could lead to unintended consequences, such as landlords withdrawing properties from the rental market or increasing discrimination in tenant selection, particularly against women and non-Yoruba renters in Lagos, and tribal biases in other states. Rather than imposing new laws, Raji suggests the government should focus on enforcing existing tenancy regulations to prevent exploitative practices.
Why rent control may be impractical
Beyond the risk of backfiring, implementing rent control in Nigeria would be a logistical nightmare. Uche Amatokwu, MD/CEO of Gibraltar Properties and Marketing Ltd, outlines the fundamental challenges. “Most of the houses we have are privately owned. How many homes does the government control that they want to put under regulation? The private sector dominates the housing market, and with a deficit of over 28 million housing units, demand already outstrips supply,” she said.
Enforcement is another major hurdle. Uche recalls a past policy where the government attempted to mandate monthly rent payments instead of yearly, but it failed.
“The government introduced a policy for landlords to collect rent monthly, but it was never implemented. Without accurate housing data, how will rent control be enforced? Will it apply to houses in Ikorodu, Ajah, Eleko, or Abuja? Without data, regulation will remain ineffective,” Amatokwu affirmed.
This raises a fundamental issue—Nigeria lacks comprehensive rental market data. Without a clear picture of rental trends, any attempt to regulate prices risks being arbitrary, misapplied, or impossible to enforce.
A more sustainable approach
Instead of price controls, experts argue that addressing Nigeria’s housing deficit and improving market transparency would be more effective. Rent control, in Amatokwu’s view, would not only be difficult to enforce but could also discourage private investment in housing, worsening the affordability crisis.
The government must step up its game in providing affordable housing for the masses. However, this must be done without opening the door to rent-seeking civil servants, who have historically exploited public housing schemes for personal gain.
Ultimately, while rent control may seem like a quick fix, it risks deepening Nigeria’s housing crisis rather than solving it. Stabilising key macroeconomic indicators will propel a market-driven approach to housing supply. A stronger enforcement of existing tenancy laws and incentives for private sector development remain a more viable path forward.
