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Tackling vacant property crisis

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Tackling vacant property crisis

Fresh concerns on how to resolve the huge number of vacant houses in Nigerian cities are dominating the polity. Dayo Ayeyemi reports

 

A lot of luxury properties, built between four and six years ago, are still vacant in the property market, after one and half years Nigeria came out of economic recession.
The empty houses are dominant in high-brow neighborhoods of Ikoyi and Lekki, Lagos; Government Reserve Area (GRA) 1,2,3 in Port Harcourt; and Asokoro, Maitama, Abuja.
Some of these luxury properties came with high price tags, which have kept buyers away from them, in addition to economic challenges in the country.
While some industry experts have blamed corruption, greed and other factors for their vacancies, some professionals and government are looking for ways to resolve the issue.
This must have been bothering the Minister of Power, Works and Housing, Mr Babatunde Fashola, who challenged members of the Estate Surveyors and Valuers Registration Board of Nigeria (ESVARBON) on the need to create a baseline data for all empty houses with information for sale or rental value about two months ago.
The minister, who was convinced that those empty houses could be livable, said they were not being factored into the computation of Nigeria’s housing deficit of million units.
“There are so many vacant houses across major city of Nigeria, but we have not been putting all this factors into the computation of housing shortage in the country; we just give figures, like 17million housing deficit without considering all the vacant houses,” the minister said.
He tasked the board to embark on data collation across the country so as to ascertain the actual figure of housing deficit in the country to aid planning.

Experts’ views
Speaking on ways to resolve the crisis, President, Nigerian Institute of Building (NIOB), Mr. Kenneth Nduka, said the crisis could not be wished away, but required specific and desirable actions.
“Specific and desirable actions, whenever not taken, would always precipitate calamitous outcomes,” he noted.
He explained that the issue of vacant properties could be prevented if planned procedures and processes are situated within the coordinated and supervised paradigms of safe, functional designs, good quality workmanship, responsive cost effectiveness and operational timeliness.
Chatting on the Affordable Housing Development Group platform, Managing Director, Rock of Ages Investments, Mr. Francis Onwuemele, pointed out that empty houses concept was a reflection of the poverty to riches ratio, adding that the equation was heavily skewed in favour of the rich.
According to him, the rich have acquired so much without really creating any wealth, noting that one smart way to hide most of the illicit wealth was to buy houses and build mansions.
“Not because they needed the mansions to live in, never, but to either show off, and as a store of wealth. They never built or acquired for habitation, but to hide stolen funds, a store of value, and hopefully, it could be sold to others who found wealth either via legitimate means or illegal means,” Onwuemele said.
He, however, pointed out that not all mansions were from stolen funds, and that these classes of the rich also would need to buy and store their wealth.
On the way out, the real estate professional canvassed for a situation where each luxury house would be converted to affordable housing for the generality of Nigerians.
He said: “Now, note the irony, each of the houses, when translated to affordable house, for each mansion you could easily make 200 to 350 affordable homes. So imagine 50 of such mansions, that could have given us 350x 50=17,500 affordable homes. Now the paradox is getting clearer.
“Remember, the aim and aspirations of the mansions. There are no commensurate investments in affordable. So, occupancy of the mansions keeps dropping while affordability keeps looking impossible.”
He noted that those who could have occupied or buy the houses no longer had access to cheap funds, hence the emptiness continues.
He suggested that each house recovered should be sold to build affordable ones.
“Remember the ratio 50:17,500. Finally, I believe if FHF is driven with same passion as am seeing now, we may crack the nuts,” he said.
On his part, President, Real Estate Developers Association of Nigeria (REDAN) , Mr. Ugochukwu Chime, said there were many other factors responsible for vacant houses crisis.
He listed paucity of socio-economic data, lack of strategic skillset, pauperisation of the middle class, and inefficient policies/regulations among others, as part of the challenges.
He pointed out that a proper research would give varying weights to each of the causative factors, and enable practitioners align solutions appropriately.
Rather than adducing unproven cause for high vacancy rates in Nigerian cities of Lagos, Abuja and Port Harcourt, Director, Centre for Housing and Sustainable Development, University of Lagos, Professor Olugbenga Nubi, said that lack of pre-investment market research to determine class of properties with effective demand had been discovered to be the major factor.
According to him, it is dangerous and counter-productive to draw a conclusion on reasons for vacant properties without scientific research.
He pointed out that most property investors were just building four bedroom duplexes where the need was for studio and two bedroom apartments.
“People who need just a room ended up renting houses that they do not really need,” he said, adding that in developed economies, the advent of Airbnb has helped resolve this problem.
Besides, the professor stated that it had been established that in most part of Lagos and Abuja, properties have been used as a means of preserving ill-gotten wealth.
He said: “Since both local and foreign banks are no longer a good option for money laundering, properties were bought with the intention of future sales.
“Our recommendation to government should be balanced with strong research support.”
He pointed out that all over the world, tenants were vulnerable and were often protected.
According to him, government must change policy that makes land to be as expensive as N100 million and high cost of construction.
He said: “If we reduce cost of procurement to less than N75 million for a building of six flats – which is possible in Abuja with it’s stable and high load bearing capacity soil, rent will drop and default will disappear.”
Nubi urged institutions to sponsor researches, pointing out that the future was for nations driven by knowledge (information), technology and competition.
According to him, if developers were encouraged to do pre-investment studies, they would become more relevant and respected.
“We will have few failed projects,” he said.
Corroborating Nubi, another professional, Dr. Joshua Egbagbe, said government and stakeholders should start taking decisions and formulating policies using well researched information that are timely, adequate and concise.

Last line
Government must collaborate with the built environment stakeholders by putting policies in place to revamp the economy and discourage vacant houses syndrome.

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1 Comment

1 Comment

  1. Like

    February 26, 2019 at 4:12 pm

    Like!! Thank you for publishing this awesome article.

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