Exploiting cooperative platform for housing development
Realising the strength in being together, the Federal Government is exploiting the power of cooperative societies to close housing gap among people in the informal sector of the economy. Dayo Ayeyemi reports
ccording to a popular adage, if you want to go fast, go alone. if you want to go far, go together.
After the failed efforts of the past, operators in the informal sector in Nigerian cities and urban areas are in for good times as the Federal Government is making frantic progress towards reducing housing deficit among them.
People in this category, who constitute about 60 per cent of the productive labour force in Nigeria, are not always captured in government policies as regards housing and mortgage schemes.
To ensure that no segment of the population is left unattended to in a bid to close the nation’s housing gap of estimated 17million units, the Federal Government has flaged off the National Cooperative Housing Development Scheme to reach the informal sector in the country.
Announcing this during the commissioning of AKACARE Cooperative Housing Scheme, the Woodhill Estate, at Kuje, in the Federal Capital Territory and the inauguration of Gombe State Investment Housing Estate financed by the Federal Mortgage Bank of Nigeria, the Minister of Works and Housing, Mr. Babatunde Fashola, said the initiative was basically to encourage people to come into groups to acquire land and build for themselves the type of houses they desire.
Explaining further, he stated that the idea of the housing cooperative was for buyers to determine houses that meet their expectations; remove the middle men contractors and make houses more affordable to low and middle income earners.
Fashola said Federal Government’s choice of cooperative associations as a means to reach the informal sector in its housing development was based on their traditionally proven successes in areas like transportation, agriculture, trade and commerce, market associations and other large groups in the informal sector.
The minister stated that by using cooperatives as anchor, the Federal Government hoped to reach large members of informal sector and scale up construction of houses with its multiplier effects on the economy.
According to him, such multiplier effects on the nation’s economy would include boosting cottage industries, which make up building materials like paints, doors, roofing materials, nails and electrical fittings, to mention a few, adding that the scale of construction by the associations would also ramp up employment and income for artisans who would build the houses.
Fashola said the Ministry of Works and Housing, as the policy making arm of government, had assigned the responsibility of implementing the policy to the Federal Mortgage Bank of Nigeria (FMBN), a parastatal of the ministry, to partner with the cooperatives, adding that the FMBN had also recorded modest successes in its partnerships with some cooperatives.
The minister defined cooperatives as “an autonomous association of persons united voluntarily to meet their common economic, social and cultural needs and aspirations through a jointly-owned enterprise.”
It is the public that FMBN has developed the cooperative window to enable home seekers, especially those in the informal sector, come through their cooperative societies to access the FMBN loan offered through the National Housing Fund (NHF)…
“Once you have a cooperative society either from the formal or informal sector and have your plot of land and Certificate of Ocupancy, and get a donor which can also be your developer, then get your own design that suits you, arrive at the cost that your members can afford, you can approach us,” the CEO of FMBN said.
He said the bank would provide mortgage loans called Cooperative Housing Development Loan to any cooperative society that meets these criteria to build estates for their members.
Once these houses are constructed, he said that mortgages would be created for the members of the cooperative society who are interested and can afford them.
‘’Once mortgages are created, the loans are transferred from the cooperative society to the offtakers who are members of that cooperative society and they start paying over a period of time,’’ he said.
It was gathered that the FMBN had released about N5.4 billion to some cooperative societies to build housing units.
This was made known during the 4th Annual Conference of Federal Civil Service Staff of Nigeria Cooperatives (FEDCOOP) in Abuja.
Dangiwa, represented by the bank’s Deputy General Manager, Usman Osidi, said the fund was being used to finance nine different housing projects.
He explained that the housing projects included the 101 housing units by Connect Coop Investment, 220 units of Nigeria Police Cooperative Society, 81 houses of FUTA cooperative society and Omowumi Ilorin Cooperative society among others.
Dangiwa added that FMBN was committed and ready to give loans to cooperative societies in the country to enable their members own houses.
Abuja, Gombe examples
The affordable housing project, named WoodHill Estate, is a product of FMBN’s N498 million Cooperative Housing Development Loan to Akacare Multipurpose Cooperative Society for the construction of 154 quality, decent and affordable housing units for its members that are registered contributors to the National Housing Fund (NHF) Scheme.
Through a partnership with Akacare Multipurpose cooperative society, 77housing units have been packaged for NHF loan to date.
This comprises of 40 units of two bedroom semi detached bungalows at the selling price of N7.5million and 37 units of 3-bed room detached bungalows at the selling price of N9.5million.
In Gombe State, New Telegraph gathered that it was Gombe State Investment Limited that conceived the plan for the estate and went into partnership with the FMBN, which resulted to the final delivery of the housing estate after many years.
A total number of 150 houses completed out of the 311 conceived for the housing estate. This comprises 82 units detached two bedroom bungalows and 68 units of tbree-bedroom detached bungalows.
Speaking, one of the beneficiaries of the estate, Ayuba Maiyama, apreciated the effort of Gombe State Investment Limited for providing them the opportunity to own their houses.
He also appealed to Fashola and FMBN to complete the remaining 161 houses to make up the 311 earlier conceived for the housing estate.
The selling price is N6 3 million for the two bedroom and N7.5 million for the three bedroom apartments.
On the economy of housing, Fashola stated that many jobs were being created and wealth redistributed through housing contracts. The minister pointed out that food vendors, masons, artisans, labourers, carpenters, tailors, welders were engaged and earn income working at housing project sites.
While urging people to come together to establish housing cooperatives, Fashola congratulated the beneficiaries of the houses.
Affordable housing advocate, Mr. Fonanhami Idris, while commending the initiative, said that intervention and collaboration was actually the winning strategy.
He noted that in 2002, FMBN supported the ministry of housing to deliver Shagari Low Cost Housing Estate, and repeated the gesture in 2004 by supporting the ministry to deliver Gaduwa Housing Estate.
“FMBN has also been there for the Federal Housing Authority, FHA in the past,” he said, adding that synergy and collaboration work better.
Idris said: “FMBN/ FHA/ FHF should see themselves as family members with FMBN.”
Managing Director, Eximia Limited, Hakeem Oguniran, said the newly built housing units in Abuja through the scheme looked great and that the pricing was very much on point. He congratulated the developer for aggregating all resources and pulling this off.
Another affordable housing expert commended Dangiwa, the cooperative and all that made the initiative possible, saying that the country needed more of development, describing the initiative as “panacea to our sectoral growth and development.”
Renowned professor of housing at the University of Lagos, Olugbenga Nubi, listed Cooperative Villa, Badore with over 2000 housing units as an example of cooperative housing.
He stated that there were others in the past such as Owolowo, Happy People, Kings College, NITEL, NEPA as other examples of housing cooperatives, that have acquired lands for members in the past.
He noted that some of the cooperatives acquired land for house building purpose some years ago but could not go beyond the stage.
He listed land accessibility, absence of finance, high cost of construction, lack of sponsoring agency,absence of enabling legislation for formation and operation of housing cooperative as challenges.
The Perfection Real Estate Investors Cooperative Society (PREICS) was also launched in Lagos recently, with its housing estates located both at Ikorodu and Lekki, Lagos State.
Being an independent membership-based real estate club, it aimed at creating wealth through real estate investments for the benefits of its members.
Managing Director, PREICS, Mr. Niyi Adeleye, said in spite of the economic downturn rocking the country, his firm’s initiative was aimed at bridging the housing gap in Nigeria.
PREICS, according to Adeleye, was born out of a passion to tackle the myriad challenges in the real estate sector of the Nigerian economy.
Adeleye, who revealed that their members had been receiving passive income on investment every quarter from wealth created from time to time, urged Nigerians to take advantage of their various products, which guarantee impressive yields.
According to him, the initiative has been generating employment opportunities for professionals like architects, legal consultants, land surveyors, quantity surveyors, and engineers, among others.
Housing finance in Nigeria is troubled by paucity of long term funds for housing/mortgage finance.
Besides, high cost of land acquisition, difficulty in obtaining title, high cost of perfection of legal processes, high cost of building materials as well as enabling legislation challenges should be tackled to encourage cooperative housing.