Affordable Housing in Nigeria: What Needs to Change?

Nigeria, Africa's most populous nation, faces a housing crisis that threatens the stability and well-being of millions. The staggering shortfall of over 20 million housing units, as estimated by various authorities, paints a grim picture of an unmet basic need. For many Nigerians, owning or even renting a home is increasingly out of reach. The call for affordable housing has never been more urgent, yet systemic barriers persist. Addressing these challenges demands a comprehensive overhaul of policies, practices, and perceptions in Nigeria’s housing sector.

The Root Causes of Nigeria's Housing Crisis

1. High Construction Costs
   Building materials in Nigeria are prohibitively expensive due to limited local production and reliance on imports. For instance, cement prices are significantly higher compared to other African countries. The lack of cost-effective, locally sourced alternatives compounds the issue, making even low-income housing projects financially unviable.

2. Land Ownership Bottlenecks
   The Land Use Act of 1978 centralizes land ownership under state governors, creating bureaucratic hurdles that inflate costs and delay projects. Acquiring land in urban areas is not only costly but also fraught with legal ambiguities, leaving developers and prospective homeowners at the mercy of middlemen and corrupt officials.

3. Limited Access to Financing
   Mortgages and housing loans are a luxury for most Nigerians. With interest rates as high as 20–30%, accessing credit to buy or build homes is unattainable for the majority. The National Housing Fund (NHF), designed to assist low- and middle-income earners, has fallen short of its mandate, hindered by inefficiency and poor transparency.

4. Urbanization and Population Growth
   With over half of the population living in urban centers, Nigeria’s cities are ill-equipped to handle the demand for housing. Rapid urbanization has outpaced infrastructure development, resulting in slums and informal settlements that lack basic amenities.

What Needs to Change?

1. Revamping the Land Use Act
   Modernizing the Land Use Act is critical. Simplifying the process of land acquisition, introducing land banks for affordable housing, and decentralizing land management can attract investors and ease the burden on developers. States must implement transparent land allocation policies to curb corruption.

2. Promoting Local Production of Materials
   Nigeria must prioritize the development of its construction material industry. Policies that encourage local manufacturing of cement, steel, and other essential materials will drive down costs and reduce dependency on imports. Investments in alternative materials such as bamboo, laterite, or recycled materials should also be incentivized.

3. Expanding Access to Affordable Financing
   Financial institutions need to create innovative products tailored for low-income earners. Government-backed incentives such as subsidies, tax breaks, or low-interest housing bonds can encourage banks to lend more inclusively. Microfinance institutions can also play a role in offering accessible loans for incremental home-building projects.

4. Public-Private Partnerships (PPPs)
   PPPs have proven successful in other sectors and could revolutionize housing in Nigeria. By collaborating with private developers, the government can initiate affordable housing projects with shared financial and operational responsibilities. Incentivizing developers with tax breaks, fast-tracked permits, and access to subsidized materials can ensure affordability.

5. Leveraging Technology and Innovation
   Embracing modern construction techniques like prefabrication and 3D printing can cut costs and speed up housing delivery. Digital platforms can also streamline processes such as land registration, loan applications, and project approvals, reducing time and opportunities for corruption.

6. Enforcing Housing Regulations and Standards
   Informal settlements often thrive due to lax enforcement of zoning and building codes. Governments must commit to relocating slum dwellers into affordable housing units while ensuring compliance with standards to prevent further degradation of urban spaces.

7. Creating a Culture of Affordable Housing
   The Nigerian government and private sector need to redefine affordable housing beyond charity. Viewing it as an economic growth driver will shift the narrative and attract investments. Educating the public about the importance of owning smaller, sustainable homes over luxury apartments is equally vital.

The Role of Real Estate Professionals

Real estate professionals have a significant role to play in bridging the gap. By advocating for affordable housing policies, leveraging technology for property listings, and guiding developers toward cost-efficient practices, they can champion a more inclusive housing market. Moreover, fostering collaboration between stakeholders—developers, policymakers, and financiers—can create a cohesive strategy for addressing the housing deficit.