The Minister of Power, Works and Housing, Babatunde Fashola, on Tuesday said that unemployed people cannot legitimately expect to own a home. Mr. Fashola spoke in Lagos at the Real Estate Investment Trust, REIT, conference organised by the Nigeria Stock Exchange, NSE, and other partners in the housing sector and capital market.
Represented by Ayo Gbeleyi, a former commisioner in Lagos state, Mr. Fashola said there are huge financial responsibilities attached to maintaining a home, apart from ownership.
He said what the government and society owe unemployed persons is to provide them with jobs and opportunities.
“While much of what I have discussed focuses on home ownership,” the minister said, “there are a sizable number of people who cannot afford to own homes, but who can afford to rent.
“We have received some very useful suggestions about rent-to-own schemes, and the need to revive the culture of public access hostels once made popular by YMCA and YWCA and I think that this is one area where private sector can play a huge role.
“The big elephant in the room of course is affordability, which is a matter we must deal with honestly and frontally,” he said.
He said the first question to ask was what is an affordable home and who can afford to own one.
“My answer is that the price of a house is a function not only of its cost of construction, the land, the facilities it offers, but also its location,” he noted.
“Globally, home ownership or rental is always tied to income. Therefore, we must understand that those who do not have work cannot legitimately expect to own a home.
“This is because, apart from ownership, there are incidents of ownership; and they are huge financial responsibilities such as – payment of rates, mortgage repayment, charges like property tax, maintenance costs, etc.
“Therefore, what society owes such an unemployed person is the opportunity for employment, and thereafter he can get on the property ownership ladder,” he submitted.
Commenting further, Mr. Fashola disclosed that for the first time since 2011, the Federal Mortgage Bank of Nigeria (FMBN) declared a 2016 full year surplus of N2.7 billion against a target of N1.5 billion.
“This is against the backdrop of yearly losses for the prior 5-year period to 2015,” he noted.
Furthermore, he explained that in the intervening period from March 2015 to March 2017, the FMBN within the purview of the National Housing Fund granted 2,044 mortgage loans in the sum of N15.205 billion and facilitated the construction of 1,878 housing units funded with N10.417 billion.
“Clearly the process of change is progressively underway,” he said.
On the role of his ministry, Mr. Fashola noted that he expects the ministry to dwell in pure regulatory interventions in the long run, by strengthening the institutions and providing support for stakeholders in the housing sector.
“In the long term, I see the role of the Ministry as purely regulatory, controlling designs, quality of finish, construction methods and materials, guaranteeing off-take of any house that private sector can deliver, and strengthening the Federal Mortgage Bank to provide finance to developers and end-users,” the minister said.