Lagos Housing Commissioner, Hon. Gbolahan Lawal hardly grants interviews. But recently, he spoke to City People SEYE KEHINDE and ISAAC ABIMBADE about the Housing problem in Lagos and how Gov. Ambode is facing it head long.
Every state has its Housing deficit. What is the housing deficit in Lagos?
The deficit that exists in Lagos is about 3 million. The national deficit is about 17 million. If we still go via the route of Conventional Construction, we may not be able to bridge the gap. We did a survey, and that survey told us that we would need to continue to be constructing 187,500 housing units yearly for the next 5 years, for us to be able to meet up that 3 million housing deficit.
We know we cannot do it alone. Conventional way cannot solve it. Government cannot do it alone. So, we are open to private developers to come in, whether local or foreign; to come and partner with us and the role of government is to ensure that we make Land available, because land is key. When you are talking about Housing, you are talking of like 4 key components.
There is the availability of land and this is very, very important. (2) the provision of infrastructure, especially road network, transportation, water, power and sanitation. Where you have roads there must be that connectivity. As government, we understand that fact. So, Ministry of Housing is working in collaboration with other relevant ministries like Physical Planning, Transportation, Works and Energy to ensure that Lagosians have access to affordable homes.
Its a lot of work. The schedules that we have to follow is tough. Don’t forget this is just the Construction/supply side of it. Federal Government is also coming up with policies whereby more Nigerians will have access to affordable housing.
Are you doing anything about the mortgage?
The construction, the infrastructural provision, all that will take care of the supply side of housing. The demand side is the mortgage side. It is not enough to say oh you have 20,000 units, etc. But do they (the buyers) have the ability to pay? Can they afford those your units? Can they afford the 2 bed apartments. Where they can’t afford, is there connectivity? All those will make the homes to be affordable. So we need to be innovative with the mortgage scheme in Nigeria. The last time we checked, the Mortgage Scheme contributes less than 1% to the National GDP.
That is ridiculously low. How many people can afford to build houses with the high interest rates at over 25%. What is even the interest rate they are charging now? How high is it? Can they bring it down? What are the commercial banks doing?
The interest rate of the mortgage industry is above 30. It can go as high as 32.
Yes, we have Nigeria Mortgage Refinance Company but the percentage is still ridiculously high. There must be an innovative way whereby more Nigerians have access to mortgage. If you go to more advanced economies, the mortgage are like 30 years mortgage. In some places, all they want to know is you have a job. If you have a job, they will let you have mortgage; provided they know that you have a job. In some places, they ask you to pay 5% or 10%. In Singapore it is 10%.
In Lagos, we are talking of 5%.
All you need to show us is you are working, that you have a credible and steady source of income. Once you can prove that you will fit into our mortgage scheme. So, the Rent To Home model that we have today is our own way of showing that the demand side is favourable, so that more people can actually come into the home ownership ladder and the idea is, it is a ladder to home ownership. There is no product that is as sweet as our Rent To Home Product.
So, whether you are talking of Mortgage, or Rent To Home, government must be very innovative, government intervention is very, very important. You also have the cost of land. Are you going to add the cost of land to what you are producing.
For us in Lagos, we are putting in our land as our own equity contribution. All the building permits will also come in as our own contribution, in other to ensure that more people can afford our units. As a matter of fact, when Mr. Ambode came on board, the prices of the existing homes that we had, which were in different state of completion, he had to reduce those prices. In Epe, you can buy a room and parlour for N1.5 million. In Agbowa, a 3 bedroom apartment goes for N5 million. We also have all those facilities that will make you want to stay in our estates.
We have roads, water, security, attractive facilities. Then, we also noticed that in the past government estates by that I mean, public estates they have the challenge of maintenance. We don’t want that too and we have introduced facility management to it, working with the private sector. Our estates now have facility managers, working with the residents, and government. So, that we can have good value for those our estates, that the value will continue to appreciate. We don’t want our estates to depreciate in value.
Many people see home ownership as if its only about Shelter, where I live. But it goes beyond that. Our own estate goes beyond that.
We will get for you all the legal titles, that is marketable. It will also support Collateral.
So, you can always say I have a collateral for 3 bedroom apartment. You can take that collateral to your bank to secure facilities and with that facility you will be able to do other things, if you are an entrepreneur, or to add up to your business.
To us, Home ownership goes beyond provision of shelter; it has a lot of socio-economic impact. If you live in our estate you will like it.
It’s a formal building. So your kids can sit down and do their own home work. You are guaranteed sanitation.
You are guaranteed a whole lot. We have studies that show that kids that live in formal houses, have the capacity to do better, academically, than kids that live in informal or slum areas. Even adults that are in formal housing have ability to attract formal jobs; that are well paid jobs.
But people that are living in the areas that are not okay will always be exposed to jobs that are marginal in terms of earnings. For us as government, we would continue to encourage people to come into formal housing and discourage informal housing, because those informal housing do not even have infrastructural facilities.
They always have the issue of sanitation, the issue of road and power. As government, we would continue to work at it, to ensure that more Lagosians have a formal building above their heads, so that the socio-economic impact is going to be huge. That is what we are encouraging as government. We, as government, will continue to ensure that our estates are attractive. And for private estate people, we would continue to support them as government, and for people that are in the real estate value chain, we would also see to it that they don’t have issues because we want more people to have a better life in Lagos.
What are you doing about the labour force in the built environment?
The labour force is one critical segment of the built environment. We did a survey. And this is empirically based; From our own government contractors, more than 60% of their workforce are imported: The Labour, the masons, the tilers; they are not our local artisans.
As government, our own job is to ensure that we build the capacity of our work force. By doing that, it will reduce poverty in our society. But in a situation whereby more than 60% of our own contractors, their labour are not from this part of the country, it can’t help us to tackle poverty and unemployment. In as much as we believe in Free and Fair Trade, we want to see how we can upgrade the skill set of our own local artisans.
That is why we started The Master Crafts Man Project. This is a project through which we train our artisans. We give them 21st century skill sets; working with Nigerian Institute of Building, and Council of Registered Builders. You know Lagos State Education Ministry has Lagos State Vocational and Technical Education and there are 5 centres with instructors. So we work with them to retrain our existing artisans; those Baba Mukaila, Plumbers, masons. We have trained 200. Its is an intervention project. The intention is to train 4,000 artisans. And those 4,000 artisans will now retrain their own apprentices. So, more people will have the 21st century skill set. We are also working with private sector people so that more people will be involved in the training and retraining of artisans. Lagos and indeed Nigeria will be better for it. That will reduce poverty in our society.
It will also create wealth because we also plan to have them in our data base, so that if you are in Alimosho and you need a plumber who is a master craftsman, who is based in Alimosho you can just go to our site and contact that mastercraftsman; that you need two carpenters or plumbers. We are already developing the sit. We are working in collaboration with the Ministry of Wealth Creation Science & Tech.
It is a seamless way of getting those already trained artisans. They are also going to be given jobs in our estates. How did we get them? We got them from their own associations. They gave us the names of the people we train. We also train the executives of these associations.
That is what we are doing. So the entire value-chain of artisans is being developed from Construction, the Supply Side to the Demand Side to the essence of the maintenance, which is key. We are covering the entire value chain. I believe we should be able to say that in the nearest future, Lagos and Nigeria will be better for it in the Built environment.