Concerned about the sufferings encountered by tenants in the country, especially in urban centres like Abuja, Lagos, Kano, Port-Harcourt, among others over accommodation rents, stakeholders are contemplating a legislation that would peg rent to a maximum of one month, instead of one, two or more years that has become the norm.
This decision was being contemplated after the sixth meeting of the National Council on Lands Housing and Urban Development, where it was agreed that a law to enforce monthly rent payments across the country should be enacted and enforced by the council.
Those agreeing with the idea include experts in housing delivery, who have been talking, arguing and pointing the way forward for the initiative.
Unlike other nations of the world, one-month rent payment is strange in Nigeria as many suppliers of housing products charge their rents in advance up to 12-24 months, and in some cases, landlords demand up to five-year rent. This situation, according to the council on housing, is abnormal in an economy where those who pay such rents, mostly workers, get their salaries monthly and even in arrears.
Piqued by the development which he said should be addressed, Minister of Power, Works and Housing, Mr Babatunde Fashola, who spoke at the meeting, noted that in Nigeria, workers were not earning their salaries several years in advance.
“Therefore, it should worry many landlords where their tenants would get such money, the source of funds and its sustainability. When prospective tenants come up with rent pre-payments that are in multiples of their annual income, there is the need and desirability of one-month rent,” said Fashola.
However, it was observed that despite the good intentions of government, it is doubtful that monthly pre-payment of rents can be legislated or forced because house rent payment is a function of demand and supply.
Taking a critical look at the situation, Mr Chudi Ubosi, an estate surveyor and valuer, advised that government should rather focus on the root cause of rent problem in the country than tackle its effects.
“In trying to enforce the law, government might end up creating more problems such as enthroning black market situation, discouraging investment in housing and ultimately reducing the already small annual housing production”, said Ubosi, citing many defects in the Lagos State Rent Control and Recovery of Premises Edict of 2007, which he said failed to correct the anomaly.
According to him, one of the major causes of the high house rent in Nigeria is land which hei said remained a major factor of production for housing. “So, to get it right, access to land must be eased and made cheaper than what it is today and the first step is to amend the Land Use Act.
“The attitude of governments which see land and land related transactions as a goldmine and an opportunity for revenue generation can only serve to drive up the final cost of investment in the production of housing. This cost will always be passed to the end users by way of rent or capital value”, he said, adding that provision of infrastructure and services which remained a major function of government has almost been left to the private developers. To him, these end up driving the cost of housing northwards, advising the opening up and development of our rural areas is key to driving down rents.
Another critical observation is the rural-urban migration that is unlikely to stop. Lagos, for example, has a daily immigrants of estimated at 800 people while Abuja has 400. “This has to be reversed; if government fails to do this, the pressure on available housing stock in the urban areas will continue to increase and so will rents etc”, he observed.