In spite of the huge housing deficit in Nigeria, there are increasing cases of unoccupied houses in major cities across the country. Experts blamed this mostly on soaring cost of renting houses in places such as Lagos, Port Harcourt and Abuja, which are beyond the reach of potential tenants.
Other reasons fingered for this paradoxical situation, especially in high brow and middle brow areas of the cities, are high cost of building material, land, lack of infrastructure facilities, inability to access fund, among other reasons. Findings reveal that annual house rents range from N500,000 to N1 million for 2/3 bedroom flats in such places as FESTAC, Surulere and other middle income areas of Lagos. In FCT, it costs between N2.5 million and N3 million to rent a two-bed bungalow in areas such as Maitama, Asokoro, Wuse and Garki, while it costs between N400,000 and N700,000 to rent a two-bed room apartment in the satellite towns such as Kubwa, Lugbe and Karu areas per annum. Port Harcourt, one-bedroom flat costs N250, 000 to N350, 000 per annum, depending on the location in the oil city, a two-bedroom flat goes for between N400, 000 and N650, 000 per annum, while a three-bedroom flat and four-bedroom bungalow cost between N800, 000 and N1.3 million per annum, respectively.
Prof. Timothy Nubi of the Department of Estate Management, University of Lagos, noted that by UN standard, a worker should not spend more than 30 percent of his/her income on rent. “By the time a civil servant pays 60 percent of his income on house, it definitely affects his general well being. The UN standard is that nobody should pay more than 30 per cent of his income on rent. By the time you pay more than 30 percent it means that the houses are not affordable,” he said. Emeka Okoro, who has been searching for accommodation through an estate agent for the past six months in Lagos, lamented the astronomical fee being demanded as rent. “You see lots of beautiful buildings that have been completed but with no occupants because of the outrageous prices they are tagged, either for rent or sale,” he lamented. Analysts believe that lack of property tax regime is partly responsible for the increasing cases of unoccupied buildings littering the cities.
They posited that property tax will provide a check on greedy property owners and alleviate the sufferings of tenants who can’t afford the high cost of accommodation being demanded. As a way of redressing the trend, the Nigerian Institution of Estate Surveyors and Valuers (NIESV) has called for imposition of special taxes on unoccupied buildings. According to Mr. Rowland Abonta, 2nd Vice-President of the institute, imposition of taxes on properties that are vacant for years continuously would force owners of such buildings to reduce the cost of rent to attract tenants. “There are quite a number of vacant houses around but the rent is high. Many of these houses are built by very rich people who didn’t suffer much for the money and so when they build the houses and fix the prices, they can afford to lock up the houses if people don’t rent them.
But there is a way out – government should start imposing taxes on such accommodation when these houses are built. They should be able to pay government such taxes and this could be used to put pressure on them to rent out the houses,” he said.
Indeed, the Federal Capital Territory Administration (FCTA) said it had mapped out measures to check the activities of owners of housing estates that remained unoccupied for more than six months after completion. Mr Dominic Odenigbo, Head of Aesthetics and Amenities, Department of Development Control of the Administration, noted the reason for constructing a house is habitation, adding that the initiative would have been defeated if after completion such houses remain unoccupied for years. He said that some owners of such unoccupied estates were not eager to allow tenants into their houses and estates because their sources of funds could be questionable. “Part of our condition for granting building approval is for that construction to commence not later than six months after approval and completed, at most, two years after.
But we have observed that several of the houses in the city and in some mass housing estates are not occupied for several years after construction and that is not acceptable. Some builders acquire these structures as a way to tie down illegally acquired wealth so, they might not be eager to rent them out. To stop this trend, we plan to include a clause in the approval that would compel builders to rent or occupy such houses not later than six months after completion,” he stated.
The Central Bank Cash Transaction limit policy makes it impossible to lodge certain amount of money without drawing attention. So, people who embezzle money invest in property with pseudo names with no plans to rent or make the rents unaffordable. The introduction of property tax, whereby anyone who has more than two houses, or owners of houses unoccupied for upwards of six months, would be made to pay higher tax on such properties will not be out of place.
By Yinka Kolawole