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Ispy
Apr 4, 2009, 09:21 AM
As rent skyrockets across Nigeria: Houses everywhere, no occupants

Written by Abdullahi Yahaya Bello & Musa Umar Bologi, Abuja, Zakariyya Adaramola, Lagos, Uboks Gabs, Port-Harco
Saturday, 04 April 2009

Ordinarily, Odamu Gbulafor, a final-year student of FCT College of Education, Zuba is supposed to be attending lectures and putting final touches to his project. Instead, Weekly Trust met him on the roof of an uncompleted building frantically struggling to fix its zinc so that he and some of his schoolmates could convert it to a temporary accommodation pending the completion of the renovation on their hostel. Gbulafor like most of his mates caught in the accommodation crisis cannot afford the exorbitant cost of renting a house in Zuba, a satellite town in Abuja, nor the services of artisans like carpenters hence they resort to self-help. Welcome to the world of the latest victims of ever-rising cost of rent in Abuja.

Many students of the college have chosen the option of completing abandoned houses or shops to ease their accommodation problem in the school. "We are really facing very difficult situation in terms of accommodation. The school has asked us to resume, but we don't have a place to stay," said Gbulafor.

The students have devised a kind of symbiotic relationship with the owners of abandoned properties in Zuba to allow them to stay in the houses while they (students) complete them. "We don't have any option than to go into this kind of arrangement, because we can't afford the high rent," Aminu Ibrahim, an NCE II student, said. "And as you can see the project that is going on there," pointing to the direction of Gbulafor, "anybody that cannot afford the cost of hiring a carpenter has to do the job himself," he said.

When Weekly Trust went round Zuba, students were seen completing the construction of abandoned houses. At an abandoned shopping complex with 25 shops near Zuba Police Station, students were busy remaking the shops into a temporary hostel. While some of them hire carpenters, many of them were doing the work themselves.

"I am not a man, so I can't do the job", said Esther Jacob, a final-year student. "I got a carpenter that will roof it for me at the rate of N5,000, while the bricklayer that is creating the window and plastering is collecting N11,000. In fact, I have spent about N15,000 on the house," she said.

Since the establishment of COE, Zuba over a decade ago, it has not met the accommodation demands of its ever increasing students. This has always left the students with the option of seeking for accommodation outside the campus. However, while it was easy in the past for students to secure accommodation in Zuba village at a low rate, the situation has changed. The high demand for houses partially because of increased demand from students has resulted in the increase in house rent. Hence, a room that once cost N18,000 is now N30,000.

"What we do is to go around the town to see any abandoned project," Ibrahim said. "We then locate the owner and plead with him/her to allow us to complete it. Some of the landlords ask for N30,000 for a room, while some say we should go and complete it and bring the bill which they will deduct from the rent you're supposed to pay."

While they still continue to look for a place to stay, students have blamed the college authorities for not taking them into consideration before coming up with their decisions.

"I have just resumed today and see what I'm faced with. The school did not communicate with us that there would be no hostel; this would have made us to prepare. We could even come and look for accommodation before the resumption date. Now, I don't have a place to stay," Ezekiel Eze, NCE II student, said.

But the Provost of the College, Professor Tijjani Ismail, said the school is not denying the students accommodation; rather, it is trying to put it in proper shape.

"For eleven years since the college was established, this is the first time it is undergoing a major renovation, which started towards the tail end of last year. It is unfortunate that we could not complete it. When we found that we were running out of time, we asked them to resume, so that we could start lecture, and when the hostels are ready, they can come in," he said. He explained further that although the school has over 4,000 students, the hostel can only accommodate 650 students.

"We are awaiting the 2009 budget for FCT, which may allow the FCT administration to give us money for the contractors to complete the projects after which a committee would be set up to look at how many students we can accommodate on campus," he concluded.

Apart from some of the students that are passing through difficult accommodation situation right now, the generality of Nigerians are groaning daily under the high cost of accommodation, especially in Abuja, Lagos and Port-Harcourt. The situation is not too different in other cities across the country. An estate agent/speculator, Oluwole Oluwaseyi, told Weekly Trust that government's policy on land use is responsible for the rising cost of houses in Abuja. "The cause of the increase in rent on a yearly basis in Abuja is the prevailing government policies on the use of land. One of the policies is the issue of ground rent, which is as a result of the Land Use Act of 1973, which vested the ownership of land on the government. It states that government being the owner of the land is leasing it to a developer for a period of 99 years. So the developer will pay for using the land and the money he pays is called the ground rent. It is only when this is reviewed that we can begin to think of low house rents in Abuja," he explained.

He said a situation where people pay N2, 000 per square meter as ground rent as presently obtains and in some cases some landlords pay as high as six million naira, the logical thing is to transfer the burden to tenants. Oluseyi added that in other states, most lands belong to the community. He said this makes it easy for people to build houses without much government intervention. He called on the FCT authorities to complete the phase two of Abuja to ease the housing needs of residents.

Investigations showed that in the highbrow areas of Asokoro and Maitama, a self-contained room is now between N350,000 to N400,000, a one-bedroom flat is going for N700,000 and two-bedroom flat is N1.3 million respectively per year. In some cases, one is required to pay for two years. In Wuse and Garki, a self-contained apartment is N250,000, a one-bedroom flat is N300,000 and two-bedroom flat is N700,000 and payment is for two years. A three-bedroom flat goes for N1.2 million.

Even in the satellite towns where the bulk of Abuja residents reside, houses are currently being priced beyond the reach of much richer rent seekers. In Karu, a two-bedroom flat now goes for N450,000-N550,000, a self-contained room goes for N150,000-N180,000, a one-bedroom flat goes for N250,000-N280,000 while a three-bedroom flat goes for N700,000-N800,000. In Kubwa, one of the more densely-populated satellite towns, a two-bedroom flat goes for N350,000-N450,000 per annum and a tenant in most cases is required to pay for two years.

A three-bedroom flat goes for N700,000-N800,000, one-bedroom flat goes for N250,000-N300,000 and a room self-contained goes for N150,000-N180,000. At Mararaba, a neighbouring town in Nasarawa State mostly inhabited by Abuja civil servants and businessmen, accommodation has gone up. It was a relatively cheap settlement before Malam Nasir el-Rufai, the former FCT Minister, began his famous demolition exercise that pushed most Abuja residents to Mararaba. A one-bedroom flat that used to be N80,000 is now N150,000-N250,000, a two-bedroom flat that was N170,000-N180,000 is now N300,000-N400,000. A three-bedroom flat that used to be N250,000 is now N500,000 while a self-contained room that used to be N60,000-N70,000 is now N100,000-N120,000.

Sa'eed Adegoke, a civil servant, told Weekly Trust that the high rate is not peculiar to Abuja, saying the rate of increase is the problem. "Landlords increase the cost of houses in Abuja every year. For instance, in 1998, I paid N30,000 for a room self-contained in Dutse Alhaji, but the following year, the landlord increased the rent to N50,000 and the year after that, it was N75,000. This was despite the fact that when I first got to the house, I was the one that completed it. The landlord just did the roofing.

"It is not that many of us living outside the city cannot live inside, but the question is if you pay the first rent, will you be able to continue?" he explained.

Suleiman Nura, an Abuja-based businessman, said "I paid N750,000 two years ago for a two-bedroom flat in the city. Last year, the rent was increased to N1.2 million, and this year, I paid N2 million.

I think the problem is that there is no rent regulation in Nigeria. This is why landlords just wake up one morning and increase their rents. I think the government must do something about".

Andrew Johnson, an agent, said the escalating cost of accommodation is caused by greedy agents and landlords. "I have been doing this business for the past five years. There are landlords that have not increased their rent for the past five years. Ever since el-Rufai demolished most of the illegal settlements, some emergency landlords and agents capitalised on the people's misery to exploit them. Agents convince landlords to make their rent two years, so that the agents will get fat commission. Government must do something about it," he emphasised.

While the accommodation situation is not getting better, the FCT administration is thinking of introducing property tax. It would be recalled that the Minister of the Federal Capital Administration, Adamu Aliero, had in a recent interactive session with some senators who paid him a solidarity visit stated that the Ministry of the Federal Capital Territory would present to the National Assembly a bill for the introduction of property tax in the FCT with effect from this fiscal year just as he appealed to the legislators to help in processing the bill on time. The minister had stated thus: "There is no city in the world where property tax is not collected except in Abuja".

But Human Rights Writers Association of Nigeria swiftly reacted against the move. HURIWA kicked against the idea of introducing property tax in Abuja now even when hundreds of thousands of residents who were recently internally-displaced from the capital city as a result of the demolition exercises carried out by the two previous ministers - Nasir el-Rufai and Aliyu Modibbo Umar - are yet to get alternative housing facilities or compensation for the human rights violations inflicted on them. The Rights Group further stated that "the introduction of property tax will obviously affect only the middle income earners working in the various ministries in the public sector and even workers in the private sector resident in Abuja and the neighbouring Federal Capital Territory satellite towns because landlords will definitely transfer the cost of the property tax to the end users who are the tenants".

Efforts by Weekly Trust to speak with the Director of Finance, FCDA, Alhaji Ibrahim Bomoi, over the property tax issue were not successful. Our correspondent dialled his number which rang several times without response. He could not also reply to the text message sent to him before press time.

Mr Tunde Ipinmisho, the head of Corporate Communication, Federal Housing Authority (FHA), said the FHA as the statutory agency charged with the responsibility of providing housing, has over the years been devising ways to actualise their mandate. "We have realised that our traditional method alone will not deliver housing. We have gone into public private partnership model where we cede some of our land holdings to private sector operators who then use their expertise and funds to deliver housing to Nigerians. This will help to accelerate our housing objective. We have already started with a project in Owerri and Abuja. Very soon, we will be advertising for other projects across the six geopolitical zones". He also informed Weekly Trust that the FHA is almost completing 240 housing units at the moment in Lugbe and has put out an advertorial for pre-qualification for the construction of 60 units three-bedroom duplexes at Gwarinpa housing estate.

Ipinmisho further explained that FHA is aware that only a virile mortgage system can effectively solve the housing needs of Nigerians. "Anyone conversant with our industry worldwide knows that it is only through mortgage that housing crisis is addressed. We canvassed for mortgage as the solution to housing during the sitting of the Presidential Committee on Affordable Housing. We believe in mortgage and that is why we have our own called FHA Homes Savings and Loans."

The situation in Lagos has taken a new dimension. Apart from the general high cost of accommodation, there are some houses which rent is paid in dollars. Kassim Awe, the manager of Step by Step Properties, told Weekly Trust that the accommodation situation has forced most Lagosians to relocate to Ogun State. "The rate at which Lagosians are now moving to Ogun State will very soon make the prices of houses to fall. Most Lagosians migrating to Ogun State are trying to build their houses there. There is even a relative stability in the prices because of the economic meltdown".

According to Lagos-Nigeria-Real Estate.com, a luxury three-bedroom flat at Omole Phase II goes for between N900,000 and N1.2m per annum. In nearby Ogba, it goes for between N400,000 and N500,000 per annum. At Magodo GRA, a three-bedroom flat goes for between N1.1m and N1.2m per annum. In Ikeja, a three-bedroom flat goes for between N950,000 and N1.5m.

In Surulere, a three-bedroom flat goes for between N600,000 and N800,000 per annum. In Lekki, a three-bedroom flat at Agungi goes for N1.8m per annum while a two-bedroom flat in the same area goes for N1.3m. For Osapa London, also in Lekki, a three-bedroom flat goes for N1.2m. In Lekki Phase I, a two-bedroom flat attracts N2m. In Ikoyi, a two-bedroom flat goes for N3.5m per annum with a service charge of N500,000 per annum. A three-bedroom flat goes for as high as N5m per annum.

At Ifako Gbagada, a four-bedroom flat goes for N900,000 while a three-bedroom flat at Mangoro (Guinness side) goes for N500,000 per annum. A three-bedroom flat at Egbeda including boys quarters goes for N500,000 per annum while a three-bedroom flat at LASPOTECH Estate, Ikosi Ketu goes for N600,000 per annum. Rents are also charged in dollars. For example, a four-bedroom serviced luxury flat at Happy Haven Estate, Banana Island, goes for $120,000 per annum while a tastefully-furnished, fully-serviced luxury penthouse at Ocean Parade Towers, Banana Island, goes for $250,000 per annum.

In the slum areas of Ajegunle, Okokomaiko, Agbado Ijaiye, standard three-bedroom flats can go for between N90,000 and N180,000 per annum. It is also in these places that one can get single rooms and room-and-parlour for prices that range between N18,000 and N70,000 per annum.

A general survey by our correspondent within the city of Port Harcourt and Obio Apkor local government areas of Rivers State, two dominant Ikwerre-speaking LGAs that have joined Port-Harcourt to make it a mega metropolitan capital city, shows that the cost of housing and accommodation keeps going high by the seasons. The owners of estate management agencies who spoke to Weekly Trust were alarmed by the astronomical rate at which the cost of accommodation has skyrocketed in the city and neighbouring local government areas like Eleme, Oyigbo and Ikwere. They said areas like Bori, Ahoada and Etche are gradually sharing in the high cost of houses in Rivers State.

Pastor Abraham Macdonald, the managing director of MacBaulah Estate Company, told our reporter that the cost of a standard duplex in choice areas like Odili Road, Amadiama, Town (Borokiri) through Diobu and other developed parts of Port Harcourt is now N1.5 to N2 million annually. In areas with lesser public infrastructures like good roads, electricity and other facilities like borehole water, accommodation is now N800,000 per year. And usually, new occupants are made to pay for two years up front before a tenant can have access to the apartment. The same, according to him, applies to GRAs where houses go for a little higher. Like the above, a standard five-bedroom flat now goes for N600,000 and N700,000 while a substandard type with lesser facilities is given out to prospective tenants at the rate of N500,000 each.

Another agent, Mr Michael Ibianya of Unique Home and Estate, attributed the cost of astronomic rent in the city to the cost of land acquisition. According to him, a plot of land around Abuluma and Odili Road goes for N3 million, while in places like Ada George and NTA Roads where undeveloped plots of land could be found, a single plot is sold at N5m to N6 million. All the estate agents were unanimous that the large influx of people from rural communities of the state and those coming from outside the state are contributing factors to the high cost of houses and properties in the city.

Other residents who spoke said the cost of rents skyrocketed this year more than before. This, they said, is due to the demolition of structures considered by the present administration as illegal. The demolition had rendered many homeless, a situation they said led to scramble for accommodation within Port Harcourt metropolis.

One resident and property owner in Bundu water front, Mr Nathaniel Otikor, told Weekly Trust that house rents will become higher if the Amaechi government executes its proposed demolition of water fronts in the state.

Water fronts, according Otikor, takes care of the accommodation needs of over 80% of the total population of low-income earners that are not indigenes like Ikwerre and Okrika dwelling in the city. In an interview with the Rivers State Commissioner for Information, Mr Ogbonna Nwuke, the present administration has packaged a lot of housing programmes that will help to cushion the effects of urbanising pressure on the available infrastructures in the state.

He said on Friday, April 2, 2009, the state government would be presenting the master plan for the new Port Harcourt city to stakeholders in the state for their imputes and critical assessment. Besides the new city being proposed, the Information boss hinted that in its private public partnership (PPP) programme, the present government is working in conjunction with First Bank to build high-rise houses in Rainbow Town for the well-to-do and another set designed for Ikuku, which will be for low-income earners, adding that traders currently using Ikoku would be relocated to other places

In Kano, survey shows that the cost of houses has increased by 20 to 30 percent in the last four months. Weekly Trust investigations at the highbrow areas of Nassarawa, Bompai and Tarauni showed that rents have increased.

A three-bedroom bungalow that was rented at the cost of N400.000 last year now costs N500.000 in Nassarawa, Bompai and Tarauni government reserved areas. In other parts of the city like Kabuga, BUK road and along the higher institutions areas, rents have increased by between 20 percent and 25 percent.

Business premises buildings are most affected by the increase due largely to growing business activities in the city. Alhaji Bashir Gwale, the managing director of Muhalli Estate Agency, informed Weekly Trust that the high cost of building materials and fall in economic fortunes are responsible for the increase in residential buildings.

"Although it is not supposed to be so because people have no money, but the high cost of building materials occasioned by the fall in naira value have contributed a lot," he added. In Fagge, Brigade and other lowbrow areas, the story is the same with landlords increasing the costs of rent despite the economic hardship. Malam Sani Brigade told our reporter that the situation is getting out of hand as landlords now increase rent with impunity.

In Kaduna, our correspondent found out that the high cost of rent is tied to the influx of displaced people from Abuja and cost of building a house generally. Alhaji Abdulrahman Ahmed, the chairman of Kaduna State chapter of the National Institute of Estate Surveyors and Valuers, said, "The high cost of accommodation is a function of demand and supply. The demand for housing outstrips the supply and this more so in the last few years that demolition has been taking place in Abuja. The influx of displaced persons has affected the price of renting houses". Weekly Trust findings revealed that a three-bedroom bungalow at Kaduna GRA goes for N350,000-N500,000. In medium-density areas, you can get it for N300,000 while it can go for N150,000 in high-density areas.

Another estate surveyor, Alhaji Mohammed Garba of Idi and Idi Partners, said the scarcity of houses is responsible for the high cost of rents in Kaduna. "People are no longer building houses. They are not building because of high interest rates, high cost of building materials and high cost of land. Government can assist by opening up more lands, providing sites and services scheme; in other words, it should put infrastructures like roads and electricity. Government should also build more houses; this will bring down the cost of rents," he asserted.

For most people living as tenants in Maiduguri, the Borno State capital, they cannot understand why houses are so expensive because apart from commercial activities, it is not an industrial centre. Findings by our correspondent showed that a three or four-bedroom flat around GRA, Damboa Road, Polo, amongst others costs N400,000-N500,000 or more depending on location, while a two-bedroom goes for between N250,000 and N300,000. Worse still, in places like Damboa Road, tenants despite paying huge sums buy water from vendors.

Mallam Modu Bukar, an estate manager and property agent based in Damboa Road, Maiduguri attributed the cost of houses to the influx of people who want to reside in the place because of the peace enjoyed in the city. He also said that landlords are rich people who are mainly into estate development and are very ambitious, maintaining that they can allow their houses to remain empty for four years if their demands for houses are not met.

In Jos, the Plateau State capital, our correspondent found out that the recent crisis affected the cost of accommodation. Muslims and Christians are now moving to areas where they are predominant for safety and the landlords are capitalising on this to increase house rent. Bolaji Folorunsho, the manager of Diya, Fatimilehin & Co. said "There is high demand for houses, especially in Jos South. Depending on the area, a self-contained could cost N40,000-N60,000. In Ray Field, GRA or Millionaires Quarters, it could range from N60,000 to N100,000."

Yakubu Musa, an agent in Jos metropolis, said a room-and-parlour now goes N15,000-30,000, and in most cases, the tenant will have to share bathroom and toilet with other tenants, adding that the landlord always demands for payment of two years.

According to experts, the country requires at least N400 billion to fund the housing needs of Nigerians. This amount is for an estimated 400,000 housing units at a mere N1 million apiece. How the government will do this remains to be seen.

http://www.dailytrust.com/index.php?option=com_content&task=view&id=7360&Itemid=87

george29
May 28, 2009, 10:22 AM
Hi,

It was interesting to read this. However, I'm getting error while trying to open resource link.

__________________
Real Estate Buyers Agent (http://www.buyersagent.net)

Ranter
May 28, 2009, 12:40 PM
"According to experts, the country requires at least N400 billion to fund the housing needs of Nigerians. This amount is for an estimated 400,000 housing units at a mere N1 million apiece. How the government will do this remains to be seen".



In that country,N1 million is not mere to at least 80% of the population.

So out of touch.

Mikky jaga
May 29, 2009, 03:35 PM
Nigerians go survive!

Unfortunately, in PH there are not enough overhead bridges like in Lagos where homeless people can take shelter. Some are under construction presently, though.

AmazingG
May 31, 2009, 02:25 AM
This is a very pathetic situation in Nigeria, how will the poor and the middle class survive remain a misery to me, with this kind of rents, even graduates will not be able to afford it.
May the Lord have mercy on us.

Solid
May 31, 2009, 05:40 PM
GREED when fully blown, creates multiple fronts. Oil rush was first, and now the diversification process is beginning to touch families and communities!...the war against Federal government demonic policies should not be waged only in Niger Delta....!

Thanks,

SOLID