The Lagos Home Ownership Mortgage Schemes (Lagos-HOMS) left in limbo for close to a year, will rebound this year on the back of N25.3 billion earmarked by the state government to drive home ownership.
This is as stakeholders in the property and mortgage industry have lauded a Public Private Partnership (PPP) proposal by the government in the 2016 budget towards increasing housing stock in the state.
Lagos is said to be in a housing deficit of about two million with several millions of its estimated 20 million population living in slum and sub-standard houses. The government however said it was taking practical steps this year to address the challenge of urban slums in specific areas of the state with N16 billion set aside for this purpose.
“We have budgeted N16.3billion to cover continuous upgrading of slum areas in Badiya, Amukoko, Bariga. We shall equally focus on deployment of issuance of e-planning approval, development of Ikorodu and Epe master plans among others, said Akinyemi Ashade, the commissioner for Budget and Economic Planning.
Gbolahan Lawal, the state commissioner for Housing, told BusinessDay that work will resume at different locations of the Lagos-HOMS this year and that the state looks to partnering reputable private developers to increase the housing stock.
“The government is committed to the policy of providing affordable housing for our citizens. The N25.3 billion earmarked will cover work on various on-going Lagos H.O.M.S. Estates. We also intend to partner with reputable private sector developers on the provision of housing to our people.”
According to Lawal, government is also to pay compensation on properties taken in public interest and N3.978 billion will be used for this in 2016 while keeping faith with the land reforms electronic certificate of occupancy, title recertification project.
Housing industry stakeholders have lauded the state government for its ambitious projections for the housing sector, advising however that as much as possible, government should distance itself from going into direct housing construction.
“Government partnering with the private sector operators to provide houses is a welcome development; going into direct housing construction may be counter-productive because that is not the business of government to do”, Adetokunbo Ajayi, MD/CEO, Propertygate Investment and Development Company Plc, said in his reaction to the budgetary provision.
According to Ajayi, rather than using the money allocated to housing construction, it could be used in subsidising the cost of housing for public servants in form of mortgage and also for providing social infrastructure that would enable the private sector to deliver housing at cheaper rates.
Azubike Unigwe, an estate surveyor and valuer, shares this view, saying, “what I think government should first concentrate on is to provide an enabling environment and use the private sector to provide those houses at relatively cheaper cost. When government is competing with every other person, it is not likely you will have mass housing”.
Unigwe recalled that the houses provided by the past administration in the state were too expensive for the ordinary man because the cost of providing those houses was quite high in this environment, pointing out that “it is only when one is providing mass housing that he will be talking about low cost. But if you are going with the kind of template that the past administration had, where it had to sell and make profit, then you have to provide for the high income buyers which the lowly people cannot afford”.
BusinessDay recalls that the Lagos-HOMS which came into effect in February 2014 was designed by the immediate past administration in the state as a way of bridging the deficit in housing.
The initiative was to put 200 homes of three-bedroom, two-bedroom and one-bedroom flats into the Lagos housing stock every month through a mortgage scheme. It however suffered a setback due to perceived overpricing, as a three-bedroom block of flats in some locations was offered for as high as N25 million with a subscriber required to make an upfront payment of 30 percent, leading to a general public apathy as home seekers stayed away.
JOSHUA BASSEY & CHUKA UROKO
