The Lagos State government is pushing to contain the crisis in the state’s rental market, where the scramble for shelter has become a bruising contest between shrinking pay packets and soaring rents.
From the tenements in low-income settlements such as Okokomaiko, Mushin and Ajegunle to the glassy estates of Ikoyi, Victoria Island and Lekki, landlords are raising house rents, issuing fresh invoices that read like ransom notes.
This means that the rental situation in the city is completely indifferent to location, which is why there has been a crisscross movement showing mid-income tenants moving to areas that are traditionally inhabited by low-income earners who are now pushed farther into the suburbs.
“The market has seen increases in rent for new buildings of up to 100 percent or more, depending on location. One bedroom is now about N2.5 million while a two-bedroom flat is around N3.5 million, up from N1.8 million and N2.3 million respectively in the Lekki axis,” MKO Balogun, CEO of Global PFI, confirmed to BusinessDay.
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In other locations too, rents have gone by over 100 percent as a two-bedroom apartment that was previously renting for between N450,000 and N700,000 now goes for N1 million – N1.2 million, while a three-bedroom flat that was previously rented for between N800,000 and N1 million is now rented out for N2.5 million -N3 million and above, depending on the age of the house. New houses attract N3.5 million and above per annum.
Because of its expanding population, which is made worse by fast-paced urbanisation, Lagos has been at the forefront of interventions in the rental market. The state, a couple of years ago, joined forces with the National Assembly to come up with a legislation to control excessive rent hike by landlords across the various states of the federation.
The state’s effort at containing rising house rent dates back to August 2012 when the state government, under former Governor Babatunde Fashola, enacted what it called ‘Lagos Tenancy Law.’
The law prohibits landlords from collecting rents in advance, arguing that tenants are paid salaries monthly and even in arrears.
The law is applicable to all premises within the state, including business and residential premises. It states that “it shall be unlawful for a landlord or his agent to demand or receive from a sitting tenant rent in excess of three months in respect of any premises.”
It also provides that “it shall be unlawful for a sitting tenant to offer or pay rent in excess of three months in respect of any premises, and recommended that “any person who receives or pays rent in excess of what is prescribed in this section shall be guilty of an offence and shall be liable to a fine of one hundred thousand naira (N100,000.00) or to three months imprisonment or any other non-custodial disposition.”
As well-intentioned as this law is, enforcing it has been difficult, which explains why the impact has not been felt among renters. Landlords have continued to hike their rents in spite of the law, raising concerns among analysts as to whether the law exists only in principle.
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Sola Enitan, an estate surveyor and valuer, attributed the ‘failure’ of the law to a number of factors, saying, “you cannot legislate on what you don’t have control over. The properties are not government’s properties. They belong to private developers.”
But not resting in this effort and moved by the sky-rocking rent and the arbitrary increases by the landlords, the state recently convened an inter-agency stakeholder meeting with real estate agents.
The meeting was jointly chaired by Moruf Akinderu-Fatai, commissioner for housing, and Barakat Odunuga-Bakare, special adviser to the governor on housing.
There were also estate agency-related associations at the meeting.
These included: Estate Rent and Commission Association of Nigeria led by the chairman, Godwin Alenke; Female Lawyers on Real Estate Practitioners led by the president, Peace Anomneze; Nigeria Bar Association, Ikeja Branch, represented by Adeyemi Abijo; and Gordon Charles, state chairman, Association of Property Investment and Commission Agents in Nigeria.
The meeting agreed to convey another all-inclusive meeting of all stakeholders before taking a final decision on the way forward, with a view resolving all issues surrounding arbitrary rent increase and illegal charges.
Lagos has a disturbing housing situation. Available records show that the state has about three to four million housing units’ deficit. About 80 percent of its estimated 20 million population are said to be living in rented accommodation.
Akinderu-Fatai, who confirmed this at a real estate forum in the state, blamed the high rental level in the state to rural-urban drift, estimating the number of daily immigrants to the state from other parts of the country at 6,000, 50 percent of whom settle permanently in the state.
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Besides partnering with private estate developers to provide homes for its surging population, the state government also gets involved in direct development of houses that are sold to the citizens at various rates with special consideration for various classes of buyers/home seekers.
The commissioner disclosed at a ministerial briefing on Tuesday that the state has made significant strides in addressing the housing deficit, delivering a total of 9,970 housing units to residents over the past six years, and aiming to complete 14,022 affordable homes by 2027.
“Our administration is committed to bridging the housing gap. Under Governor Sanwo-Olu’s leadership, a comprehensive strategy focused on affordable housing for low-income residents has been implemented. This approach includes budgetary allocations for housing construction, public-private partnerships (PPPs), and the creation of a conducive business environment for real estate developers,” the commissioner revealed.
