Owning A Home: The Pipe Dream

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Owning a home has continued to be a mirage to many residents of Abuja as high interest mortgage and rent continues to make affordable housing a mere dream.  Uche Uduma takes a deep analysis into the situation.

Seeing a beautiful and educated young lady coming out from a shanty is an unusual sight that cannot be ignored by onlookers. After a first glance however, Mfon Bassey seems to have developed a tough skin to the querying eyes she gets every morning while leaving her roughly built wooden shack house.

Moving into Abuja could be described as a dream come true for Mfon, who  got a job in one of the firms in the nation’s capital, after being unemployed for several years. She moved in with a cousin, hoping she would be able to save enough money to rent an appartment of her own.

However, her dreams began to take a down-turn, when the Federal Capital Development Agency (FCDA) began demolition in their area. Within a short period the apartment she once shared with her cousin was levelled by bulldozers.

After searching for an alternative accommodation in vain, Mfon and her cousin decided to erect a shanty house, pending when they will be able to pay for a better accommodation.

They paid the sum of N20,000 to a land owner in Life Camp to allow them build a makeshift house and another N35,000 was spent on erecting the structure which became their new home. Mfon’s story is not too different from what is experienced by residents in parts of Abuja as high cost of housing has remained a nightmare to many, despite efforts of several public and private developers to check the spiralling costs.

The FCT by its original plan was designed  for the administrative sectors, however, the unparalleled development in the capital territory, which is incomparable to what is obtainable in the 36 states across the country, led to an unprecedented influx of people into the nation’s capital in search of greener pastures.

The differences in the status of the residents in the FCT are quite sharp and are reflected in their occupancy of residential areas. The well-heeled individuals in the city reside in the highbrow areas at the heart of the town such as Maitama, Asokoro and Gwarimpa, where palatial buildings with very beautiful architectural designs and state-of-the-art infrastructures make up the bulk of the stock.

The prices of houses in these highbrow areas do not come cheap; some houses cost as much as N300 million, while renting a flat in such posh areas goes for as high as N1.7 million to N3million. The average income earners reside in the outskirts of the city, in areas such as Lugbe, Gwagwa and Karimo, where housing is a bit affordable, compared to what is obtainable in the city centre.

However, the public utilities in these areas remain limited. While a two-bedroom bungalow in Lugbe goes for N700,000 per annum, a three-bedroom detached bungalow in the same vicinity could be rented with N750,000 as against a  range of between N350,000 and N450,000 per annum for a two bedroom flat in Apo mechanic village.

Low income earners who cannot afford the high cost of accommodation in the outskirts, move further away from the city into areas in the neighbouring  states such as Mararaba and Masaka in Nasarawa State and Suleja in Niger state, where accommodation is considerably cheaper although they still have high cost of transportation to battle with.

Those who can’t stand the twin- devil of high cost of housing and the high cost of transportation from the suburbs to their places of work in the FCT, resort to erecting shanties in hidden areas of the city.

IfeanyiUkaegbu, a civil servant resides at Mararaba in Nasarawa State. He decries the high cost of accommodation for workers in the FCT saying: “An average civil servant with a family cannot afford the expensive rent paid for flats in Abuja, the high cost of housing in the heart of town is not encouraging, on a good day I would not have any business in slum like this in Mararaba, but not being able to afford a better accommodation has forced me to stay here”.

Afolabi Okeh, a Real Estate developer in the FCT points to high interest mortgage rate and hidden charges as factors that contribute to the high cost of housing in Abuja.  According to him: “Most people interested in some of these available housing units still shy away from the offer by developers due to the high interest rate and the hidden charges that come with the mortgages.

Many units remained vacant because they were overpriced or subject to various legal restrictions and other bureaucratic obstacles Developers are also scared of the high interest they get from mortgage banks as some banks charge up to 23 per cent interest for loans, when you calculate it, you discover you are paying three times what you are supposed to pay, if you had used your own money. That is why we rent or sell the houses at high prices and maximise profit.

Although there have been considerable concerns over the housing problem in Abuja , the Federal Mortgage Bank of Nigeria (FMBN), recently initiated the Informal Sector Co-operative Housing Loan scheme to make housing affordable  to Nigerians  especially the non-salaried workers as well as the low income earners.

Speaking with LEADERSHIP SUNDAY, the Assistant General Manager Federal Mortgage Bank, Mr. Simeon Agada explained that the Informal Sector Co-operative Housing Loan Scheme was initiated in order to meet the growing demand for accommodation by the non-salaried workers.

Said he: “We are quite aware that so many Nigerians are in need of affordable housing. We are aware of the fact that so many of these people are not earning salary, which is they are not in formal employment. They are what we call the informal sector operators.

They operate in the informal sector of the economy, many of them are motor mechanics, Okada riders, Akara sellers, and the hair dressers, these are people that earn income on daily basis but they are not necessarily collecting salary at the end of each month.

And because of the fact that these people are not in the organised private sector, they find it difficult to have access to proper financing from the banks. This prompted the federal mortgage bank of Nigeria’s decision to launch a scheme aimed at assisting them to own houses. The scheme is called the Informal Sector Co-operative Housing Loan Scheme and was launched in December 2011, by the Minister of Land, Housing and Urban Development.

The essence of this is to try to organise these people and enable them have access to loans, to own houses that the cost will not be more than N5 million. “We are organising these people so that they will be accessing this loan through the co-operative societies.

We expect them to form cooperative societies that will stand as a guarantee, or collateral so that they can access this loan, buy houses or use the co-operative to develop houses for them, then they pay back over a period of 10-20 years or more depending on their age.

The informal sector co-operative housing scheme  is actually a window of the National housing fund aimed at addressing people  in this informal sector that form the bulk of the working class in Nigeria, they are not less than 85 percent of the working population, so, that problem is being addressed”.

In : Abuja