Executive Director, Housing Development Advocacy Network, Festus Adebayo shares his thoughts with DAMILOLA AINA on why estate developers sell houses in flood-prone areas, among other related issues
There are projections that the country is likely to experience flooding this year. In what way can this natural disaster affect real estate?
To understand the effect of flooding on the Nigerian real estate sector, you have to understand the data released by the metrological agency on the number of houses affected in 2022. In 2022, 82,035 houses were affected by flood in Nigeria. If you juxtapose that with the number of new houses built by the government and private developers within the same period, it is not up to 50,000. This means the effect of flooding is at the level of geometric progression while the contribution to housing delivery is not operating at the same level of arithmetic progression. Nigerians build houses in a conventional way while we are supposed to be manufacturing houses and that is why there is no hope of reducing the housing deficit.
Political will is needed not just to build houses but to make them accessible to those who need shelter. From the record, 332,327 hectares of land were affected, 603 persons died and 2,400 persons got injured last year. I can report to you that flooding this year will negatively impact real estate. The effect will be extremely negative in the number of deaths and land destroyed that ordinarily should be used for housing development. I don’t foresee any positive contribution occasioned by the flood to real estate.
There is apprehension about this issue with the warnings we have been getting already and the government has not faced this issue squarely. For instance, in Abuja, a good number of estate developers have built mass housing projects on waterways despite the fact that we have a Development Control Agency, which is supposed to regulate how houses are built, but because of corruption, they approve houses to be built on waterways and that is why every year, people lose their lives and others displaced.
Data from flooding last year revealed that some persons were displaced. Is that number likely to increase this year?
With the figures from last year on the number of houses destroyed, automatically, there are already homeless persons and that is an issue that must not be disregarded. Looking at the projection for 2023, more warnings have been given by the metrological agency and I am not predicting that we are going to have many houses destroyed because last year, a lot of steps were taken to avert the crisis, but it still happened. It is of less importance because the people affected are the downtrodden and have no publicity space to vent their anger. It is only when big houses are carried away that it is all over the social media.
However, we are not anticipating having as many houses destroyed as last year but I can also say that there will be negative effects. The way forward out of this situation is for Nigerians to listen to warnings and obey instructions of avoiding building homes on waterways and drainages. Don’t block drainages and also the government must be proactive as the rainy season is fast approaching. They know the flood- prone areas and states where flooding is likely to occur. They have to act fast and ensure nobody is in any area which has been pronounced that flooding will happen in order to protect lives and property.
We can’t be facing the current situation of insecurity, and still have people displaced by flood. Prevention is better than cure. Each state must listen to the warnings from the agencies and do the right thing now. The job of the government is to protect lives and we can’t continue to lose houses that are not sufficient to flood every year, especially when we don’t have a government that is so committed to providing low-cost housing. Not everybody can be a homeowner but everybody must live in a basic and decent house.
Developers still sell houses in flood-prone area. Why does this happen and in what ways can we mitigate this?
In recent times, since there are no regulations, the majority of people in estate development are doing everything to get money. It is part of the reason a developer will see the flood-prone area but commence construction, bribing their way in connivance with the development control officer in that area.
The quest for money has made many developers engage in unhealthy practices which include building on waterways. Also, the persons buying those houses are ignorant of landed property. They only convince through ridiculous discounts. The majority of buyers are gullible and it is a serious problem. You won’t give rams to entice people to buy a house if you have gone through the right processes. I think a lot has to be done on housing education.
People are getting scammed based on what they hear on the radio and television. Lack of education among consumers is part of the reasons we are experiencing houses being destroyed by floods. Subscribers are just looking for how to get promos and discounts.
Interest rate is still skyrocketing. How has it affected agencies saddled with mortgage financing?
Nigeria Mortgage Refinance Company is not doing well today because of the double-digit interest by the CBN. Their responsibility is to refinance mortgages and the current interest rate is a problem because they can’t refinance it. So, why will you go there if the only thing you will see is trouble upon trouble? That is why the incoming government has to appoint a CBN governor who will have a bias for housing so that our mortgage system can be developed. We are going nowhere with double digits.
In fact, there is no result we can attribute to a Federal Mortgage Bank of Nigeria policy in 25 years. The interest rate can’t have any positive multiplier effect on the sector because most construction investors take out loans to start businesses and this will continue to push prices of materials up with the end result of inflation. That is why the next CBN governor should not be a banker but an economist.
There are still housing issues; in what ways can they be resolved and how can family homes help in resolving them?
The Family Home Fund should not be involved in the direct construction of houses. It should instead identify and partner with credible developers who have records of achievement. If they decide to do direct construction, it will go the way the Federal Ministry of Works and Housing ended with the high-end cost of houses. That example is the reason why the family home funds should not go there.
The solution is to initiate discussion with manufacturers of building items, including cement, on how to get rebates because the mandate is to provide social housing, which means prices of their homes must be lower than that of the private sector. They should conduct research on alternative building materials and devise a way to interact with professionals.
