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The Role of Private Sector in the Provision of Affordable
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years of creating the Federal Housing Authority it has only succeeded in building. about 40 000 housing units nationwide Adediji 2009 which translate to 1 000. units per annum Although the history of housing development in the country is. that of the private sector driven it has also failed to provide affordable housing to. the public The key elements lacking in the private sector initiatives are that of. affordability end user driven and value management. Housing constitutes one of the fundamental human rights as enshrined in the. 1999 Constitution of the Federal Republic of Nigeria but more visible in its. violation than in compliance The essential elements of the right to housing. however have a number of components including the right not to be evicted. without due legal process Olatubara 2007 In fact Nigeria is the worst violator. of the housing rights in the world For instance over 2 million people have been. forcibly evicted from their houses in different parts of the country since 2000. Adejumo 2008 through bulldozer approach This has also help in compounding. housing problem in the country, A viable housing market exists in the country considering the abysmal under. performance of the housing sector There is a tremendous opportunities waiting. to be tapped It is a fact that the government alone cannot fill this gap hence. need for the private sector to take active role in housing the people Hence the. focus of the presentation is to evaluate the role of the private sector in. affordable housing delivery to the public through cost reduction value. management Specifically the paper is structured into three main sections In. the first section an overview of the Nigerian housing market is presented This is. followed by discussion on the rationale for involving the private sector in. affordable housing delivery In the last section implications of private sector. involvement through value management are proposed,The Nigerian Housing Market. The housing market in Nigeria is composed of two distinct markets the private. sector market and the public sector market The market is differentiated by. tenure such as private owner occupation private rented accommodation and. public sector housing The housing market in Nigeria could be equally. differentiated by structural design bungalow flat duplex etc by density high. medium and low or by specialty hostels quarters barracks Conventionally. housing market is divided according to certain key characteristics such as income. type of structure types of rights or tenure price or rental quality size of. household social class Agbola Olatubara 2007 It is important to understand. the housing market classifications so as to know which of these submarkets do. the private sector operates We all talk about the poor who cannot buy build. rent or borrow money for housing development Can the private sector cater for. this category of sub market What is the total housing need of the Nigerian. populace by categories How many of these are being produced by the private. The housing market in Nigeria is dominated by the private sector stock of. buildings As at 2002 it was noted that the formal and informal private sectors. have been consistently providing over 90 per cent of the housing stock in the. country FGN 2002 but according to Olatubara 2007 the private sector. contribution is put at about 80 per cent of the total supply of housing It is. observed that the housing units produced by the private sectors are usually out of. the reach of the low income families Although this has prompted the incursion. of the government into the housing market the performance of the government. has been a monumental failure as noted in this paper It should be noted that the. housing market is made up of the two distinct activities and they are the. production and allocation of housing units The production of housing comes. from both the private and public sectors while the allocation process differs. widely between the private and the public sectors Access to the housing units. produced by the public sector is influenced by the government allocation policy. which often discriminates against the low income households On the other hand. access to housing units produced by the private sector is left entirely to the price. system working through the interaction of demand supply to allocate housing. between competing users In the private sector housing market where the price. is the determinant of access it has automatically excludes the low income earners. Agbola Adegoke 2007, There is a wide gap between the housing need and supply This is due to slow. response of supply to demand According to Rottenburg Edel 1972 the. housing market often suffers from lags in supply adjustment This is so because it. takes a long time to complete building a new house The question is how do we. measure supply of housing Do we take inventory of approved building plans. from the local planning authority in the area How reliable would that be as. many approved building plans never translates to completed building Moreso as. so many new houses in the market are without approvals In short housing. market is always at disequilibrium since so much of aggregate stock is not of. recent construction, Housing market is unique for it has a number of features that distinguishes it. from other markets The features are, Immobility of housing units this makes housing site specific that is the.
supply in one location can only meet the demand in such a location alone. Durability The durable nature of housing makes supply to be relatively. fixed over a long period of time and prices of the standing stock and its. allocation are determined by changes in demand condition Balchin. Kieve 1977, Heterogeneity Housing is heterogeneous since it comes in different types. shapes size and structural designs, Huge capital outlay which in most cases cannot be purchased in smaller. units like stocks and shares and the cost cannot be incurred from one s. own pocket, Capital appreciation Housing investment is an hedge against inflation for. its value increases as the cost of living increases. Externalities Housing investment always leads to spill over effect such as. overcrowding traffic congestion slums and blighted environment. The filtering process where houses are vacated by those in higher income. groups they are made available to those in the lower income groups. Newell 1977, The Rationale for Private Sector involvement in Housing Delivery. In this section it shall be necessary to examine the following a why should the. private sector be involved in housing delivery b what are the factors that. militate against private sector level of performance in housing delivery. The history of housing development in Nigeria is that of the private sector driven. In short the private sector contributes a larger proportion of housing stock in the. country The private sector in the housing delivery consists of the individuals and. corporate organizations The sector provides houses for their direct use their. staff for rental or sale The sector has been more efficient in the production of. housing That is why scholars have suggested that the government should only. create the enabling environment for the private sector to meet the housing need. of the people For instance the UN 1976 observes that if the national housing. goals are to be met government should encourage orient and if necessary. supervise the private housing sector In the same vain Freedman 1969 suggests. that housing delivery should be left to the private sector to manage The private. sector involvement goes beyond direct housing construction to manufacturing of. all types of building materials supply of labour and capital Windapo 2007 What. is the involvement of the Nigerian Society of Engineers in housing delivery in. Contemporary developments worldwide seem to favour the private sector driven. housing development The argument in favour of private sector is hinged on the. efficiency and effectiveness of the private sector as well as the corruption and. inefficiency of the public sector The Nigerian government has identified with this. view and has in recent times introduced a number of reforms aimed at. stimulating and assisting the private sector to play the leading roles in housing. production and delivery The reforms are in the establishment of Real Estate. Developers Association of Nigeria REDAN Building Materials Producers. Association of Nigeria BUMPAN the reduction of interest rates on national. housing fund loan to members of REDAN and restructuring of the housing finance. sub sector to include the introduction of secondary mortgage market Generally. in most countries of the world the housing sector is a blend of private enterprises. and government activities The point of emphasis in this presentation is that. policy on private sector participation in housing delivery has to involve identifying. the factors that militate against effective private sector performance. In assessing the performance of the private sector in housing provisions it is. necessary to look at the following,i Cost of labour.
ii Accessibility to land,iii Cost of building materials. iv Accessibility to housing finance facilities, v Hindrances posed by government policies regulations and bye laws. vi Poor infrastructural provision, vii Inflation during the life of a project Okupe 2000 and. viii Corruption greed, Implications of Private Sector Involvement in Housing Delivery. The key elements that should guide the private sector in housing delivery to the. public are,Affordability, The main determinants of affordability are household income and price of.
housing In the case of home ownership or rental affordability is defined as. owning a house with a value equal to slightly more than twice the household. annual income or renting a house not more than 30 per cent of the household. gross monthly income Babade 2007 The erroneous impression of the. private sector is that poor the low income households cannot pay for. accommodation but researches have shown a high level correlation between. low income earners and affordable housing Olatubara Agbola 1992 What. is the situation in this country with regards to low income earners and the rent. they pay on their accommodation What are the impediments constraining. the private sector from providing affordable housing to the low income. End User Driven Initiatives, The private sector should encourage and support end user driven initiatives in. housing delivery through the use of cooperatives or organizations Such. organizations include the Nigerian Society of Engineers NSE the Nigerian. Institution of Estate Surveyors and Valuers NIESV other professional bodies. social clubs trade associations etc,Target Group, The private sector should target the low and the middle income groups in its. housing provisions These groups constitute the masses of this country and. form about 90 per cent of the country s population FGN 2004. House Ownership Rental Option, Houses should be developed on both owner occupied and rental basis so as to. promote a vibrant housing market in the country It is erroneous and. unthinkable that all households need housing in owner occupier basis The. point is that rental housing sector has been and shall continue to be the major. provider of the bulk of housing for the low income households Hence the. private sector should take initiative Nay the N S E Nigeria Society of. Design Construction, A realistic and functional design that minimize cost and enhance utility should. be adhered to by the private sector,Value Management.
The objective of private sector involvement in housing development is to. achieve value maximization in relation to the cost Value maximization in. projects such as housing could be achieved by, completing the housing project within the estimated budget. completing the housing project within the estimated time frame and. completing the housing project according to specifications or standards. required Otegbulu 2007, It should be noted that value management is all about cost consciousness and. has two aspects value analysis and value engineering Value analysis involves. a critical examination or consideration of the design or of the evaluation of. procedures and materials involved to produce the same value for less cost or. better value at the same cost or even less cost It is quite different from cost. reduction which involves performing a given function at a lower cost by. altering the material or methods without relating it to the value derived Value. engineering applies to value analysis and involves examining the costs. methods or construction and marketing at the early stage of the project so as. to identify and eliminates unnecessary cost without reducing quality This. involves a team work of professionals in the building industry. The private sector should apply the concept of value management in all. aspects of housing development such as,Site selection access to land. Design specification,Choice of material and equipment. Funds required access to finance,Labour required,Conclusion.
The numerous and monumental problems that bedevil public sector housing. delivery has led to a paradigm shift of involving the private sector in housing. delivery while the government should create the enabling environment The. private sector such as the Nigerian Society of Engineers must take up the. challenge and justify the incentives and confidence that the public repose on it A. wise application of value management concept will reduce the cost of housing. construction create more utility reduce running cost and above all leads to. affordable housing provision to the public by the private sector. References, Adediji Bode 2009 International Housing Finance and World Economic Meltdown. vis vis Nigeria s Housing Delivery System A paper presented at MCPD Workshop. organized by the Akwa Ibom State Branch of the Nigerian Institution of Estate. Surveyors and Valuers Uyo, Adejumo Akintokumbo 2008 Social Housing in Nigeria An Imminent Mass. Housing Revolution Retrieved on March 18 2010 from. http www nigerianmuse com 2008110114261325 articles social housing in. Nigeria an iminent mass housing revolution, Agbola Tunde Olatubara C O 2007 Private Sector Driven Housing in Nigeria. Issues Constraints Challenges and Prospects in Timothy lugbenga Nubi Modupe. Moronke Omirin Akintade Samuel Afolayan eds Private Sector Driven Housing. Delivery Issues Challenges and Prospects Lagos Department of Estate. Management University of Lagos, Agbola Tunde Adegoke S A 2007 Economics of Housing in Tunde Agbola Layi. Egunjobi and C O Olatubara eds Housing Development and Management A Book of. Readings Ibandan Department of Urban and Regional Planning University of Ibadan. Babade Tope 2007 Affordable Housing Programme as Agenda for the Federal. Ministry of Housing in Timothy Olugbenga Nubi Modupe Moronke Omirin. Akintade Samuel Afolayan eds Private Sector Driven Housing Delivery Issues. Challenges and Prospects Lagos Department of Estate Management University of. Balchin Paul N Kieve Jeffrey L 1977 Urban Land Economics London The. Macmillan Press Ltd, Federal Government of Nigeria 2002 Government White Paper on the Report of.
the Presidential Committee on Urban Development and Housing Lagos. Government Printing Press, Federal Government of Nigeria 2004 National Housing Policy for Nigeria. Government Printing Press, Freedman L 1969 Public Housing The Politics of Poverty New York Holt Rinehart. Winston Inc, Newell Martin 1977 An Introduction to the Economics of Urban Land Use. London The Estate Gazette Limited, Okupe L 2000 The Role of the Private Sector in Housing Delivery in. Nigeria Paper presented at the 2 Day National Seminar of the NIOB at Premier. Hotel Ibadan on 29 30 March, Olatubara C O Agbola S B 1992 Cost Recovery in Nigeria Public Housing.
Habitat International 16 1 83 94, Olatubara C O 2007 Fundamentals of Housing in Tunde Agbola Layi Egunjobi ad. C O Olatubara eds Housing Development and Management A Book of Readings. Ibadan Department of Urban and Regional Planning University of Ibadan. Oluwaluyi A 2008 Workable Housing Delivery Strategies in a Developing Economy. A paper presented at Lagos International Housing Conference organized by Lagos. State Branch of the Nigerian Institution of Estate Surveyors Valuers Lagos. Otegbulu Austin C 2007 Improving Private Sector Constitution in Housing Delivery. through Tero Value Technology in Timothy Olugbenga Nubi. Modupe Moronke Omirin Akintade Samuel Afolayon eds Private Sector Driven. Housing Delivery Issues Challenges and Prospects Lagos Department of Estate. Management University of Lagos, Rottenburg J Edel M 1972 Readings in Urban Economics London MacMillan. Publishing Co, United Nations 1976 Housing Policy Guidelines for Developing Countries Nairobi. STIESA SA Department of Economics and Social Affairs New York. Windapo A O 2007 Evaluation of the Roles of Private Developers in the Housing. Delivery System in Lagos State in Timothy Olugbenga Nubi Modupe Moronke. Omirin Akintade Samuel Afolayan eds Private Sector Driven Housing Delivery. Issues Challenges and Prospects Lagos Department of Estate Management.

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