Maduka Nweke; [email protected] 08034207864, 08118879331
Expectations of Nigerians for development in the real estate sector seem to be dampened by the lackadaisical approach by government to giving the citizens shelter.
Private sector development in the sector seems not to be enough considering the fact that whatever efforts one makes in providing accommodation, once it is for sale or rent, the price will always be on the high side. This is because land, which is a major factor in providing shelter, is not at the reach of those that can use it to make meaning in terms of price and rate.
The implication of the above analysis is that those estate developers make the estates so sophisticated such that the rich who may have penchant for luxury accommodation may have reasons to be attracted. Ironically, most of the rich have their private homes. The fact that the developed estates are made to suit the taste of the rich, means that the low income earners who are hit by the deficits in housing, but who cannot afford to pay the price for the houses in the estates, keep the deficits rising despite a number of houses that are built but unoccupied. This is mostly the case in urban centres where there is population explosion.
Housing demand in urban centre is a reflection of different households’ desires to live in urban centres. The desire of people to live in urban centres is increasing at an alarming rate and this has been attributed to various reasons including employment opportunities, urban amenities and utilities consumption opportunities. This situation has consequently led to housing shortage and most people are also found living in non-decent building apartments due to their socio-economic background, which cannot cope with the ever increasing price of decent housing.
Shelter represents one of the most basic human needs and has no doubt a profound impact on the health, welfare and productivity of the individual. The importance of shelter to man cannot be overemphasised. Apart from giving protection from elements of nature, shelter, in accordance with contemporary modern standards, must offer such infrastructure and services that would make dwellings conducive. Housing, particularly urban housing, remains an intractable problem in the developing countries of the world, Nigeria inclusive. The acute shortage of housing in the developing world was the subject of a World Bank Report that “the urban poor, typically housed in slums or squatters’ settlements, often have to contend with appalling overcrowding, bad sanitation and contaminated water.”
But those who are rushing to urban centres unfortunately do not maintain the living standards they keep back in the villages they come from. You can agree that life is more costly in the villages than in the urban centres. The reason is because, in the village, there is not much pressure for land and so, one can make use of any expanse of land because these lands are not in hot demand. But in the cities, because of the pressure for residential quarters, industrial settlements, religious and recreational and social reasons, government regulates land and puts caveat emptor where necessary. This, therefore, makes demand for land so high that it becomes the highest sought after item by the rich. This is why land poses the greatest problem facing most developers, hence the need to review and take it out of government’s hand to enable it play more of a regulatory role so that developers will take advantage of the market. What we currently have is a situation where government and developers are competing among themselves. The developers are restrained by the current Land Use Act and so they are not able to achieve their own objectives, hence it needs to be changed for Nigerians to move forward.
Housing demand can be explained as the willingness and ability of housing consumer to pay for a particular dwelling depending on such consumer’s incomes, house type, location preferences and local prices (Welsh, 2002). Demand is the quantity of good or service that consumers are willing and able to buy at a given price and at a given time. Demand for housing at certain price refers to the value placed on a house linked with the satisfaction derived in such house. In economics, this is termed as utility. Housing need relates to social housing while housing demand is related to private housing.
Effective housing demand is different from desire housing demand. Effective housing demand can be explained as a desire to buy a house that is backed up with an ability to pay for it. On the other hand, desire housing demand can be termed to be willingness to buy a house but the consumer lacks the purchasing power to buy the house. Until there is purchasing power in terms of money to buy the housing unit, such housing demand has not become effective housing demand. So since some developers develop houses that are not affordable to the poor masses, the housing deficits will continue because the law that will give the poor man the access to own land cannot be procured by him.
The 1978 Land Use Act, which seeks to regulate land ownership, is unarguably one of the most contentious legislations in Nigeria today. The law, the brainchild of Chief Olusegun Obasanjo when he first presided over Nigeria as a military dictator, was “smuggled” into the 1979 Constitution by the then Supreme Military Council. Acquiring land in Nigeria is tough and one of the biggest challenges stems from the activities of land grabbers, scam agents and the sheer number of professionals needed to legitimately and successfully acquire one. This brings us to the question, what is Land Use Act?
According to Chapter 202 of the Laws of the Federation of Nigeria 1990, “the Land Use Act is an Act to vest all land compromised in the territory of each state (except land vested in the Federal Government or its agencies) solely in the governor of the state, who would hold such land in trust for the people and would henceforth be responsible for allocation of land in all urban areas to individuals resident in the state and to organisations for residential, agriculture, commercial and other purposes while similar powers, with respect to non-urban areas, are conferred on local governments. (March 27, 1978) commencement.”
The Land Use Act has a lot of problems that retard the development of housing in the country, some of which include the fact that in Nigeria, the government can seize your land or property without any form of compensation if you do not have a Certificate of Occupancy (C of O).