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.
http://www.vanguardngr.com/2015/03/rising-rent-vacant-houses-homeless-tenants/
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