AHCN forum: Stakeholders advocate creation of Housing Trust Fund

Experts in state housing agencies under the umbrella body of Association of Housing Corporations of Nigeria, AHCN, gathered in Owerri, Imo State, last week to find lasting solutions to the problems of housing shortage and paucity of funds confronting the industry. After prolonged deliberations, they canvassed for the establishment of Housing Trust Fund, among other resolutions. DAYO AYEYEMI, reports.

In order to reduce shortage of affordable housing in Nigeria, the Association of Housing Corporations of Nigeria (AHCN), has called for the creation of Housing Trust Fund (HTF), so that untapped funds lying fallow in pension and insurance funds, unclaimed dividends and other related instruments could be harnessed for the real estate sector.

This was one of the resolutions of stakeholders as contained in a communiqué issued at the end of the association’s 2-day National Workshop on, “Effective Housing Provision in Post Global Economic Meltdown,” held in Oweri, Imo State last week.

The communiqué was signed by the association’s President, Dr. Ifenna Chukwujekwu; and its Secretary General, Mr. D.A Har-Yusuph, an architect.

The workshop was combined with the 41st Annual General Meeting/90h Council Meeting of AHCN. The stakeholders lamented that the existing funding arrangements for the provision of housing in Nigeria was grossly inadequate, pointing out that when HTF is created, it would complement the National Housing Fund (NHF) to fast track housing development.

The workshop identified Public Private Partnership (PPP), as a veritable tool of qualitative, efficient and effective mass housing delivery in a global economic recession, enjoining the three tiers of government to be proactive and take advantage of the PPP to increase housing stock in Nigeria.

They tasked the government to provide the enabling and conducive environment for a private sector driven housing provision through the concept for the success of the ongoing housing reforms.

While making case for sustainable strategies that would increase the housing stock for affordable home ownership for the people, stakeholders at the workshop identified the major problems of housing as rooted in lack of political will, lack of commitment to invest in housing and lack of holistic approach to housing matter which give rise to lack of finance, high cost of building materials and high infrastructural development cost.

The association also noted the challenges of cash based economy and outright sales which affect the expansion of real estate development in Nigeria, calling for re-engineering of the nation’s mortgage system for effective and liberal mortgage loans administration for home acquisition for the people. Besides, the association also canvassed increased funding into the mortgage market through long term financing from local capital market and external group.

With the availability of cooperative housing finance window in Federal Mortgage Bank of Nigeria(FMBN) for provision of mass housing, the association urged all stakeholders in the real estate sector to take advantage of the window to provide affordable housing for the people.

The communiqué read, “The workshop notes the inherent advantages of Real Estate Investment Trusts (REITs) in creating mass housing delivery for the people all over the world and implore government to fully develop REITs market for expansion of real estate development in Nigeria.

“The workshop notes the availability of offshore funding for housing delivery and its attendant challenges and calls on government to support their housing agencies to provide government guarantee to access offshore funding for housing development.”

Stakeholders at the forum identified collateral and bank guarantee as the main issue affecting smooth access to offshore funding in the recent past, imploring all housing agencies to explore the usage of instruments such as bond, stocks, mutual funds, insurance policies, Gold certificates, corporate guarantee which are accepted by some lenders to secure offshore funding.

The meeting commended the Lagos State Government initiative of mortgage scheme, the Lagos Homs which gives room for the state housing agencies to create stock of houses for mortgage sale for eligible resident of the state.

It enjoined other state governments to emulate Lagos State in developing alternative and complimentary housing delivery platform for the people. Apart, they also commended the efforts of the Federal Housing Authority for its active public private partnership (PPP) venture with property developers in its quest to increasing housing stock in Nigeria, calling all state governments to support their state housing corporations to take advantage of the partnership drive with FHA and Federal Ministry of Land, Housing and urban Development to provide housing for the citizenry.

“The workshop commends the efforts of Nigerian Building and Road Research Institute (NBRRI) for their breakthrough in material development bringing about reduction in cost of housing production through the use of local building materials and calls on government to create awareness, sensitize and encourage people to embrace NBRRI technology in housing production especially among rural dwellers,” the communiqué read.

The association noted that infrastructural cost constitutes about 30 percent of total housing production cost, calling government to set aside certain percentage of the annual budget as infrastructural fund for the development of infrastructural facilities in green areas across Nigeria to bring about development of estate to such areas.

The meeting recommended and called on the National Assembly to fast track the review of the Land Use Act of 1978 to make the procurement of the Certificate of Occupancy more readily obtainable as non-availability of this document was discovered to be responsible for the non-accessibility of housing finance at all levels.

In his speech , AHCN president, Dr. Ifenna Chukwujekwu, remarked that one of the efforts to ensure provision of affordable houses for the people was the reason behind the gathering in Owerri, saying, “ It is no longer news that there are housing problems in Nigeria. It is also not a controversy that various housing policies have been evolved to address the problems in time past but most of those policies failed to address the myriad of problems facing the sector.”

He stated that appropriate blending of sustainable mortgage market, the development of local building materials and effective implementation of the Public Private Partnership in housing provision is very paramount in solving housing crisis in the country. He decried what he called a disturbing trend in the current contributory pension funds investment profile where pension funds worth over N3 trillion is only restricted for investment into equities, government bonds and bank deposits without provision for housing investment. “Certainly, workers need to retire to their own houses after a successful working career services to the nation.

There is no doubt, therefore, that a pool of long term funds easily accessible through the vast pension funds and the long term requirement of mortgage financing would surely enhance long term investment in the mortgage sector.” he said.

To come out of the wood, the AHCN president stated that every barrier towards a sustainable housing delivery and home ownership process must be confronted headlong to concretise the efforts of the association, adding that the Land Use Act of 1978 must be overhauled to make land available for housing. Besides, he stated that laws on securitisation and foreclosures should be enacted to attract investors, canvassing immediate development of a credible secondary mortgage market, sound corporate governance of the mortgage sector and linking our mortgage finance to the capital market.

Chief Executive Officer of GTI Group, Mr. Emeka Okoye, an architect, while speaking on, “ The Key Issues, Challenges and Prospects of Off-shore Funding for Property Development and Infrastructure,” identified lack of funds in the developed economies; inflexibility of the Nigerian developer to the alchemical nature of the global economy; lack of track record and knowledge in the complex nature of major estate project funding dynamics and methodology in the global market place; lack of willingness and expertise in the banking sector for the industry, absence of mortgage funds or pension funds; and none existence of secondary markets for the mortgages generated in the country as challenges of offshore funding in the real estate sector of the economy after the global economic meltdown;

Also speaking, the Managing Director of Lagos State Development and Property Corporation, Mr. Biodun Oki, explained that Lagos State Government is set to radicalise home ownership via mortgage.

According to him, many government agencies are already building to create a stock of housing which would be offered for sale via mortgage under Lagos Home Ownership & Mortgage Scheme (Lagos HOMS).

The scheme, he said has been designed for working class citizens of the state who desperately need mortgage since they could not muster the huge cash required to acquire a home.

He said, “A consortium of banks have been put together to provide mortgage for would-be allottees who would be expected to come up with an amount not likely to be more than 30 per cent of the actual price at inception.

“The loan granted will be paid to the Lagos Homes management agency while the allottee takes possession and repays the bank over the period of the term of the loan

. “This scheme is quite appropriate as it addressed the issue of housing finance both from the point of provision of houses and also from the standpoint of homeownership.”

He explained that the involvement of mortgage would ensure that “there is a revolving fund for the continuous provision of houses while at the same time guaranteeing that the home seeker immediately comes into possession with only a 30 per cent down-payment thereby solving the problem of affordability.”

On way forward, he stated that the success of the Lagos Homs should naturally prompt an expansion of the scheme to include private corporate developers.

According to him, land being allocated to developers in the scheme should be tied to development of the Lagos Homs designs so as to ensure uniformity in price. “Since government alone cannot provide adequately for the housing need of the state, the private sector should be encouraged to participate within a framework that will ensure that the objective of affordability for the working class is met,” Oki stated.

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