With less than a week left till Lagos’ hotly contended elections between Jimi Agbaje of PDP and Akinwumni Ambode of APC, we would like to embark on a fact presenting exercise to see which candidate may be better for Lagos’ real estate sector based on what was presented in their manifestos and more.
Both Manifesto’s are laid out first, then commentary and analysis follows.
The government Agbaje intends to run plans to deliver sustainable housing units to address the problem of inadequate and unaffordable housing while using it as a means of creating jobs. The flagship policy in this aspect is expected to deliver 150,000 housing units by 2018 by fostering partnerships with the private sector and promoting sustainable and effective building methods.
Planned Reforms include the removal of ‘bureaucratic and regulatory bottlenecks that affect the registration of property title and land availability’ and the creation of a legal and regulatory framework to facilitate the establishment of a housing market in Lagos in a bid to:
- Shorten the enforcement process of mortgage and credit defaulters
- Ease the process of obtaining consent for land transactions
- Create sectional interest in real estate by providing site and services for developers and individuals Increase supply
Jimi Agbaje also wants to partner with the Nigerian Mortgage Refinance Corporation (NMRC), State housing MDAs, Primary Mortgage Institutions (PMIs) and private developers to invest heavily in housing development and mortgage provision.
To lower costs, Agbaje is suggesting the use of industrial-scale house building methods, encouraging standardisation across the building process and the establishment of various housing schemes that would target different income classes.
Finally, Agbaje intends to begin an industrial clustering initiative which will see
- Epe and Ikorodu become a Fishing and fish processing hub
- Ikeja and environs and Ikorodu remain as the primary industrial hub
- Agriculture production and processing hub also in Ikorodu
- Financial Services clustering in Victoria Island
- Aerotropolis in Epe; leveraging proposed airports and developing supporting infrastructure in the area
- Logistics, Shipping and Marine hub in Apapa
- Manufacturing, Oil & Gas and Regional Trade in Badagry
If successful, Akinwunmi Ambode intends to Expand Lagos Home Ownership Mortgage Scheme (HOMS) to target more people in the areas of need and affordability, by using alternative technologies that reduce the cost of housing delivery in the State. He also intends to pursue urban renewal schemes to reduce the menace of slums and enforce housing control laws and other regulations that will make the State attractive for everyone to live in. Ambode expects this to allow for easy access and reduce congestion at the city centers.
Ambode’s government also intends to provide affordable housing schemes by collaborating through Public Private Partnerships (PPP) to increase the available housing stock.
Finally, by developing an integrated transport management system through the mono-rail alternative as a means of mobility (Blue Train Line – CMS to Okokomaiko and eventually the Red Train Line – Ikeja to Agbado), he intends to establish new real estate regions. This would be complimented by commitment to the Lekki Airport project to stimulate growth along the axis.
To begin with, it’s all easier said than done.
Both parties intend to use ‘effective building methods’ and ‘alternative technologies that reduce the cost of housing delivery’ but these are the issues that private and public players in the Nigerian space have been attempting to tackle for decades. These statements are relatively vague and provide no explicit methods that will be used to overcome the problems faced.
Speaking on Agbaje’s policies on easing the land registration process, consolidating and making it less bureaucratic; these are great ideas and policies that have the ability to remove the bottle neck on property investment in the state. However, earlier this year Fashola already begun the process of consolidating the land registration process. On the other hand, shortening approval or title perfection processes may increase non-compliance with standards and also increase title fraud. To curb this, automation of the process can be suggested, to reduce human error/interference as well as non-conformity.
The use of industrial scale building methods and a standardised building process as Agbaje suggests could solve some of the country’s housing problems. In large volumes, this may reduce the cost of construction. The leadership of many established economies across the globe built homes over the 19th and 20th Century. Many, including the Victorian Homes in the United Kingdom built during the reign of Queen Victoria and the Industrial Revolution are still occupied today.
The urban renewal schemes suggested by Ambode are also particularly commendable. Lagos seems to be interested in new cities like Eko Atlantic, Orange Island, Banana Island and more that old regions are often left behind. While new cities are a great opportunity to start afresh and get infrastructure, planning and prime development quality right, it should always be done side by side with regeneration and refurbishment initiatives. Furthermore with Ambode, we already have a good idea of the directions he would take by assessing Fashola; all he needs do is continue the legacy or at best improve it and things should be smooth.
Multiple benefits could also stem from the great industrial clustering initiative suggested by Jimi Agbaje. Advantages of agglomeration (a situation where businesses locate near each other) include the accumulation of information, overall cost reduction and the flow of new and innovative ideas among firms. This typically leads to increasing returns to scale, a situation where a % increase in input leads to a greater % increase in output and this will prove to be very attractive for business in Lagos.
As with most promises made during race for a political seat however, some remain unfulfilled. Fashola has worked hard and has managed to deliver multiple housing units, but even he has noted many of the challenges he has faced in the completely implementing of all the housing promises he has made. So it’s important that promises made by both candidates are taken with a glass of milk.
Based on the facts, who do you think will be better for the real estate market in Lagos?