Lagos State Governor, Mr Babajide Sanwo-Olu, and minister for Works and Housing, Mr Babatunde Fashola, SAN, have picked holes in the nation’s rental system, saying a situation where someone is asked to bring three years advanced rent of what he earns monthly in arrears is creating a huge mismatch.
The duo spoke at the just-concluded 10th meeting of the National Council on Lands, Housing and Urban Development held in Lagos.
Sanwo-Olu said the current rental model in which people remit yearly rent in advance to property owners had become inadequate to address contemporary realities in the housing sector, especially in cities where demand for properties is high and expensive.
The Governor advocated for a monthly rental system, which, he said, would be affordable to low- and middle-income earners who are pressured by yearly rent obligations.
He said: “In building homes, we do not only enhance the family ecosystem by providing a decent setting for raising future leaders, but we also strengthen the economy through the provision of economic engagements for professionals, artisans, suppliers, home decorators. In delivering decent shelters, we must care for both low-income and high-earners because housing is such a basic human need for everyone.
“In Lagos, we operate a very robust Rent-to-Own programme of five per cent down payment and six per cent simple interest rate payable over a period of 10 years. We are working on another product, which is a purely rental system, where residents will pay monthly. This is to accommodate those who are not keen on homeownership and address current realities. In doing this, we believe that no one would be excluded from our intervention in this critical sector.”
Corroborating the Lagos Governor’s position in his submission, the minister for Works and Housing, Mr Babatunde Fashola, SAN stressed that the yearly rental system had created inequality in housing supply and widened the affordability gap for low-income earners.
Fashola, a former governor of Lagos, said the monthly rental model may not translate to making all Nigerians homeowners, but it would help reduce the number of citizens who lack decent shelters and live on the edge.
The minister said advanced payment of rent had created a mismatch in wealth distribution by putting more money in the hands of the rich at the expense of low-income earners.