Challenges of the FCT Mass Housing Delivery Programme

Despite the good and laudable intention of the mass housing scheme, a lot of challenges has affected it from the inception which in turn affected the delivery of the much needed housing in the FCT.

1.      Institutional, regulatory and management challenge.

The existing institutional framework for the implementation of mass housing programme in FCT is weak. Transformational leadership is needed to tune minds and hearts towards PPPs housing delivery. The public sector thus requires adequate capacity to realign itself towards PPP arrangement. A lot of training in PPPs and transformational leadership would help to improve public sector skills. Inadequacy of up-to-date and detailed records has been the bane of housing provision in Nigeria.

 

Meeting the challenge of mass housing in Abuja requires taking stock of the present state in quantitative and qualitative terms.

The public sector has the authority and regulatory powers as well as the political will to implement PPPs mass housing. The management challenge is particularly in situation where there is a paradigm shift in stakeholder’s roles from provider to enabler. To begin with, there is the need to conduct capacity needs assessment for key stakeholders to identify strengths and weaknesses and gaps in technical and functional competencies.

2.      Infrastructural challenge.

Physical and social infrastructure is essential for housing estates to function properly. Access roads, water and sanitation, electricity and other services shape the spatial structure of cities. Both primary and secondary infrastructure need to be coordinated as part of the urban planning and development process to ensure all residents access to livelihood and service. The State on its part has often failed to fulfill its own side of the bargain. It has failed to provide the primary infrastructure to most of this district as agreed in the development lease agreement signed by the two parties.

3.       Inadequate planning and supervision.

There were a lot of violations of the provisions of the Master Plan. The Master Plan is based on the ‘Neighborhood Concept’. Each neighborhood has a thresh hold population about 5,000 people. To service this thresh hold population a neighborhood center is normally provided which in turn provides the following facilities:- shopping center, clinic, police post, school, public library, fire station, public hall, post office, recreational park(s) and many others. Unfortunately, the rush with which this Scheme was started, led to the omission of most of these facilities. It evident that most developers were not interested in providing these secondary and tertiary infrastructures for the benefit of the end users. It was simply not their priority because of the notion of developing only residential apartments where there is a ready market because of the ever increasing high demand from the public. It simply does not make any economic sense to develop either a fire station or a police post. This is seen as the State responsibility.

4.      Land parceling by developers.

Another challenge is the habit of some Developers of parceling the plots set aside for them, into single plots and selling same to individuals. The buyers would then build using a proto type design obtained from the ‘Developer’ and posing as ‘subcontractors’.

One of the terms for the grant to a Developer is to prepare the parcel of land obtained from the government, provide the necessary infrastructure, and develop the houses and then sale to the public. On this premise they were exempted from the payment of the initial land charges. This was deferred until at the point of transfer to the purchaser, who is then expected to pay to the Land Authorities and obtain a secured title document. This outright sale of the bare land has effectively deprived the State from taxes that would have been paid if the developer had actually developed and sell the built houses. In short the Developer has gotten a parcel of land free of any rent or charges and sold same at a very high rate without the State benefiting from the transaction.

Operational Challenge

The operational constraints which could derail the formulation and implementation of potential PPPs are access to land, high cost of building materials, and poor quality of housing environment. One cross cutting constraint is poor contract negotiation skills on the part of both the public and private partners. These challenges have culminated in lack of confidence to pursue and promote PPPs mass housing delivery in the study area.

1. Access to mass housing Land

Access to land particularly serviced land for housing is one of the major challenges faced by developers. Land is fundamental to housing development in the FCT and therefore important to successful mass housing delivery. Access to land in this context goes beyond paper allocation to the actual possession of the land by developers for housing purposes. The study revealed that about 256 developers that were allocated land are yet to mobilize to site for various reasons. This shows that they have not actually taken possession of land granted to them by the FCT authority. It is evident from the study that majority of the developers who benefited from the mass housing land allocation in FCT have not mobilized to site to fulfill their obligation as contained in the development lease agreement signed. The following reasons were given for not have mobilized to site after land have been allocated to them.

-          Delay in getting building plan approval from relevant government authority

-          Relocation, resettlement and compensation of both indigenes and nonindigenes found on the mass housing sites.

-          Lack of infrastructure and disbursement of funds form mortgage and commercial banks.

2. High cost of building materials.

It has been established that on the average more than half of total housing expenditure goes for purchasing of building materials in Nigeria (Onibokun, 1988). However, the high cost of materials for building houses in FCT is a serious challenge militating against delivery of decent mass housing. Other challenge with building materials arises because most housing developers insist on the use of conventional building materials and technologies. These standards and regulations prevent the use of readily available local building materials and also the use of cost effective and environmentally friendly construction technologies. The cost of imported materials thus become too expensive when converted to the value of local currency at such ridiculous exchange rates.

3. Poor Quality of Housing Environment.

Housing is a totality of the environment within which the physical structure is located, and then the occupants of a house require and will make use of other elements in the immediate and general environment. Such elements include access roads, shopping, recreational educational and health facilities and other community services. In FCT, most mass housing estate suffers one form of environmental challenge or the other because the public sector has not provided the necessary infrastructure for effective development and delivery of housing units.

 

Financial Challenge

The most critical challenge confronting housing delivery in Nigeria is financial. This is significant because the capital-intensive nature of housing provision requires the availability of a large pool of long term savings. Funds are needed for both routine operational needs of the estates, and new development to increase the supply of additional housing. This situation is compounded by the nature of housing finance in Nigeria, which is characterized by: structural weakness in the capital markets, distortions in the legal and regulatory frameworks.

 

Further, housing finance is one of the most important factors in mass housing development and improvement in the FCT. It enables households to access financial resources that they otherwise do not have to purchase an asset which will represent their largest single investment. Finance is important to pay for key housing inputs, such as land, building materials and labour for mass housing developers. Majority of developers especially those in mass development complained of stringent conditions that the loans attract which are often difficult to meet. The ability of a developer to mobilize enough funds for the housing project determines largely the success of the project.

1.       High Interest Rate

The Central Bank of Nigeria owes a duty to the Nigeria public to ensure that interest rates for mass housing falls below the monthly rent receivable on real estate investment. The era of negative equity should end in the interest of reducing the housing deficit in Nigeria and in Abuja in particular. The interest rates on loans are generally very high which makes it impossible for them to deliver the houses on time schedule. Housing finance can be extended to more people and, in particular the low income through government-led legal, regulatory, institutional and administrative measures and reforms (e.g., reducing interest rates, easing collateral requirements and flexible repayment schedules), and the creation of innovative housing finance mechanisms.