Plan for affordable housing in the FCT

The discussion for affordable housing will continue to occupy the centre stage so long as available houses continue to remain unaffordable, while housing demand and deficit are constantly rising. The projection of IPA could not have been more accurate when it foretold the ultimate population of Abuja City to be 3.1 million, and the entire territory with the regional areas inclusive to be 5.7 million. That was because at the time of the anticipated population limit in 2006, 1.4 million inhabitants were recorded for the FCT, while the population of total commuters to the city on daily basis was deduced at 4.5 million.

The expectation was for the FCT to attract and accommodate the population. Unfortunately, it actually attracted, but failed to accommodate almost three-quarter of the attracted population. The population of daily commuters to the city far outnumber the resident population in the whole territory for the simple obvious reason; unaffordability of housing in the FCT. Hence, the working population finds it more economically viable to live outside the city where accommodation is fairly affordable and commute to the city for work daily.

In the anticipation of the capital city being an administrative city, the IPA took into consideration the prevailing average income of the civil servants in the late 1970’s as the basis for making recommendation for ensuring affordable housing. Due to the wide gap between the individuals’ average income and the housing cost, it observed that, “Even with interest-free mortgage financing and with 25 per cent of income devoted to housing, higher than recommended by federal policy, 90 per cent of the civil servants cannot afford to buy houses as it is currently being constructed.”

In line with the plan’s analysis at the time the value of the naira was more than the dollar, a somewhat “modern” smaller house of 60 square meters was estimated at N10,000. That is the equivalent, if not more than $10,000.00 of today. This amount will translate to at least N3.5m at the prevailing situation. Considering monthly wage of N60,000, which is twice the prevailing minimum wage of N30,000 in the country, it will take at least 20 years interest-free to pay for the smaller house referred in the Abuja Master Plan.

Considering the income projection, IPA further observed that the cost to the government for providing this type of houses to a large segment of the population of the new Federal Capital City would require substantial direct subsidy. However, subsidy programme, if not carefully applied, can result in large losses in revenue to development institutions and impair their ability to continue housing programmes.

Thus, the identification and treatment of major requirements for ensuring housing affordability in the FCT becomes highly imperative. The observation made by the IPA in the Abuja Master Plan is that, “Many housing programmes fail because they are not tailored to target population’s income level and the household’s ability to pay. Housing programmes have met with little success when based on “needs” translated into arbitrary and unaffordable standards rather than on affordability and willingness to pay. FCDA must develop a housing policy and programme tailored to the needs of the capital’s population.

The primary components of residential construction costs IPA analysed were land, infrastructure, shelter and construction management. These were when the Land Use Decree was at its infancy, the Federal Mortgage Bank (FMB) was yet to be established and the National Housing Policy and National Housing Fund policies were yet to be in instituted.

The basic approach used to develop the preliminary housing programme for the capital city has been to investigate the implications of alternative mixes and level of many factors. These are plot size per person and per household, housing area per person and per household, households per dwelling, type of construction and unit costs including finishing, quality of utilities, sharing of services, quality/quantity of roads, implications of industrialisation of building, indigenous materials, self-help approaches, cross subsidies from land leases and subsidised infrastructure.

These factors were combined into a number of prototype housing programmes aimed at providing a range of size/quality/type/infrastructure/finance options for each income level. For each prototype, different combinations of housing and infrastructure standards and subsidies were mixed to bring monthly payments for individual house types within the affordable limits of each income group.

Furthermore, for each income group, a range of housing sub-options at varying standards and repayment terms were developed to meet the needs of income sub-groups and to provide varieties of housing types.

Whatever are the prevailing challenges on housing affordability could be traced to the lack of abiding by the plan proposal.