The housing sector and Nigeria’s 21st century economy 

People and institutions determine the scope and dimension of socioeconomic development in every economy. The projections for improved living conditions in our society are made by human beings (from both civil society and the government) through visionary initiatives that continuously evolve generational trendy aesthetic outcomes with a touch of professionalism that are visible, and actualised either through short term or long term developmental strategic planning. Shelter is a basic need for man’s sustainable living. However, living standards in the society is involuntarily scaled on time value strata that manifest unavoidable social inequality, which is also inevitably linked directly to natural phenomenal realities of our socioeconomic times; for different categories and levels of income earning groups in the society (vis-a-viz the oligarchs, the rich and the poor). This social segmentation and social classification significantly swings everyone to matching levels of social class in determining the rightful social worth that becomes natural (based on income level) for shelter off-taking. Shelter, therefore, varies according to the financial strengths and structures of those living in opulence by the worth of edifices they develop and live in; to houses that are merely constructed to have a roof over the heads of the inmates, without much comfort.

Modern living standards in society are naturally attractive, admired, liked, and wanted by every normal individual that has a means of livelihood in our contemporary society; particularly for those educated ones and the socially exposed citizens (whether they are poor or low income earners). Improved living standards have become popular in our society today; with a constantly growing consciousness, the general desire of every off-taker to own a home and behold economic prosperity is on the increase. This ever rising desire by aspiring homeowners or off-takers, either as rented occupants or housing product consumers, increasingly creates housing demand pressure in the society (obviously based on social awareness). This is the scenario that is manifesting in the current housing deficit gap in the Nigerian economy; more so with urbanisation and population explosion in the cities with elitist clustering. This particular socio-economic outlook in the housing sector has varying components with implications in the nation’s macroeconomic space. Such variables are very pronounced in our understanding of sustainability of environmental, social and governance (ESG) issues and challenges that are factored into the investment principles of the built industry. It, therefore, rests majorly on the investors and the developers in the industry to proactively and practically provide adequate management of housing construction and provision of high standard shelters (that are readily made available), in a most efficient manner to fill up the deficit gap within the economy. 

The most important aspect of all in achieving the aspirational high taste for trending smart housing projects therefore, rests on finance and the processes of “housing affordability” for the prospective homeowners and various off-takers who are mostly youngsters and start-ups (economically). This brings to the fore that housing developers, primarily, should be at hand to readily construct (physical infrastructure), and physically provide shelters (housing development) for different social classes of off-takers who are at the ready to occupy and consume these housing products. The financial flexibility and its economic dimension is, of course, a completely different ball game involving mortgage arrangement for shelter affordability. The simple truth is that modern living comes with appreciable costs that are tailored to match different financial strengths; an average consumer may not have the purchasing power, unless the credit facility is secured and the payment terms are effectively worked out. This is actually the essence of mortgage arrangement, for home owners to be able to occupy available shelters and gradually amortize the housing loans borrowed through a conveniently structured housing bill that protects foreclosure experiences.

Mortgage loans are presently viewed as a major determinant for successful realisation of adequate provisions of readily available shelters. An initiative to create easy access to such a loan shall significantly fill the housing deficit gap and reduce all other challenges in the housing sector of the economy. A lot of other factors can be placed on the table to dialogue on for proper planning and execution of the housing projects in the economy. This is where ESG issues can be fully deliberated upon and considered; not to violate the climate change extant rules, or manifest any tendencies of non compliance with existing multilateral agreements in the global battle for the mitigation of global warming. The process of accessing mortgage loans for affordable housing in the economy needs to align with and support the United Nations’ Sustainable Development Goal (SDG) 11 by 2030; for cities and human settlements to be inclusive, safe, resilient and sustainable. The SDG 11 could perfectly be realised by 2030 in this economy; for provision of affordable housing (modern, smart, safe, green homes) and other social needs, especially for vulnerable women, startups in the civil service, persons with disabilities, older retired persons and pensioners; if and only if the operators and fully registered members of the Real Estate Developers Association of Nigeria (REDAN) are fully and effectively engaged by mortgage banks in the economy (in partnership with state governments for land allocations) to construct and create affordable sweet modern homes in Nigeria’s 21st century economy.

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