By Jumu’ah Abiodun
In its bold step to tackling the problem of housing deficit in Lagos, the State Government on Monday unveiled the Lagos State Home Ownership Mortgage Scheme (HOMs) and also inaugurated the State Mortgage Board that will administer the management of the scheme and proper allocation of the houses to would-be winners.
The Governor who inaugurated the scheme at the Banquet Hall of the Lagos House, Ikeja also inaugurated the Lagos HOMS website before a gathering which included his Deputy, Hon (Mrs) Adejoke Orelope- Adefulire; former Governor, Alhaji Lateef Jakande; Deputy Speaker of the state House of Assembly, Hon Kolawole Taiwo; and other dignitaries.
He informed that as the scheme is being flagged off, a total of 4,260 homes made up of 1,104 completed homes and 3,156 at various stages of construction are up for allocation on open draws.
He explained that the houses would be allocated to lucky winners from next month on the basis of 200 allotees per month to start with, stating that such winners would have satisfied the conditions of registering with the Lagos State Residents Registration Agency (LASRRA) and paid his taxes up to date in the last five years among other conditions.
The scheme is such that revived the mortgage culture, as winners will have to pay for the houses for a period of at least ten years after making the initial deposit of 30 percent of the cost of the choice home.
The Governor explained that the state has had to embark on massive housing construction to meet the objectives of the scheme, saying it has built houses in Ikorodu, Ogba, Epe, Badagry, Lekki, Agege, Alimosho and other areas for people to have choices on where they wish to reside.
He added that, “we are starting another 132 units in Iponri, 720 units in Ibeshe in Ikorodu, 420 units in Ajara, Badagry, 648 units in Sangotedo Phase II, 216 units in Obele, 36 units in Akerele Phase II, 48 units in Oyingbo, 1,254 units in Ilubirin and 1,080 units in Ijora- Badia and this would give us an estimated 4,554 units when completed”.
He stated that in terms of pricing, the policy is about affordability and accessibility because the state have not yet found cheap or low cost cement, neither has it found low cost iron rod or low cost labour.
“The continuity and sustainability of the entire project depends on our ability to build more at break-even cost without profit, in a market where there is increasing inflation; fluctuating exchange and interest rates and a high dependence on housing inputs that are imported and priced in US Dollars against a struggling local currency”, he added.
He informed that the state has accordingly applied an across the board discount of 25 percent to the total actual cost of land, infrastructure and building which is the total cost of the home.
“The homes become more competitive against what is available on the open market because there is a minimum period of 10 years to pay for it and the mortgage payment will attract a maximum interest of 9.5 percent per annum. There is no other payment plan superior to this in the country today and this is our starting point, from where we hope to get better”.
“Indeed I have commissioned a study on the total number of mortgage loans in the portfolio of all banks in our country and result is that there are approximately 200,000 mortgages for a population of about 160 million people. The lowest interest rates are about 11 percent while there are higher regions of 25 percent or above. Similarly, there are tenures of repayment as little as four years to as long as 30 years, but none of them is as low as 9.5percent, which is our maximum interest payment”, the Governor added.
Governor Fashola added that the easiest thing to do for the government would have been to simply sell all the houses, collect the cash and wait for the next batch and do the same, but that the government never regarded that as its way.
On what will qualify one to be a home owner, the Governor affirmed that only those who have never owned a home whether acquired privately or bought from government will be eligible as the applicants would be required to swear an affidavit to effect.
“Applicants would be required to swear an affidavit to this effect, which is already part of the documents we have prepared, within a contract that entitles us to repossess the house anytime, even in the 10th year, if we have proof that you owned another home when you applied to this scheme”, he stated.
“Accordingly, we will match house choices to applicants’ proven income sources to determine eligibility and it is only eligible applicants, whose forms will go into the ballot from which successful applicants will be picked. We already have trained mortgage counselors to deal with this process”, he stressed.
Fashola added that in the first instance, 200 houses would be allotted per month and would be increased to 300 per month and beyond as the number of completed homes increased and sustainability is guaranteed.
“Accordingly, from the 4th March when the first draws will hold in public for the first 200 homes, I expect that subject to the ability of our contractors to keep building quickly and qualitatively and that all things being equal, there should be a minimum of 200 new home owners in Lagos every month even beyond my tenure of office, with a capacity to increase the monthly number until we strike a decisive blow at the housing deficit”, he said.
He reiterated that the State would not allow any successful applicant to rent out the houses and will only allow such a home to be rented out after 10 years when the allotte has fully paid for the house.
The Governor added that the prompt repayment of monthly mortgages will be rigorously enforced because default of payment and difficulty of re-possessing houses from defaulters has a been a major disincentive to investment in the property sector by the private sector developers, whose participation in housing development is critical.
He stressed that the State has therefore resolved to quicken recovery by using Arbitration Rules which have been drafted into the contract of sale and the mortgage agreement and the Arbitration proceedings that are expected to be completed in 21 days.
He added that government has also taken pains to design the flats such that they have more space than most of what is available in the open market as the one bedroom flat is 60.22 square meters while the 2 bedroom is 75.79 square meters and the 3 bedroom is 123.88 square meters.
“We have not borrowed money to fund any of the housing projects; our progress so far is a result of rigorous planning, financial discipline, savings and commitment. It has been fully funded from the taxes that our people have paid as monthly Internally Generated Revenue”.
“We started saving N200 million monthly, whether the internally generated revenue increased or decreased; and today, we are now saving N500 million monthly and it is possible to increase this as more people pay their taxes”, the Governor reiterated.
He informed that the ultimate plan is to be the guaranteed purchasers to developers who will acquire their own land, build to the government specification and agreed prices, adding that this way many more houses can come on stream because of private sector participation and government will use the IGR from tax payers’ money to buy from the developers and sell to the citizens on a 10 year mortgage payment.
Explained that several jobs were created on construction sites that have benefited 134 construction companies, 459 sub-contractors employing over 1,168 persons, seven consultancy companies and 5,442 suppliers, artisans, labourers and numerous citizens who are employed in the supply chain of sand, gravel, wood and fittings, as well as food vendors and transports.
Members of the State Mortgage Board to be led by the Finance Commissioner, Mr Ayo Gbeleyi include Commissioner for Housing, Mrs Bosun Jeje, Mr Akinola Kojo-Sagoe, Mrs Bola Fashola and Mr Bayo Forsythe who would act as the Executive Secretary.
The Governor said the members of the Mortgage board will act as the new landlords for the Lagos homes and would have all the legal titles to the homes located in different parts of the State vested in them.
He also singled out for commendation members of the Lagos HOMS committee within and outside the government like Mr Olasupo Shasore (SAN),Mr Ben Akabueze, Mr Ade Ipaiye, Mr Tokunboh Abiru, Mr Bosun Jeje, Mr Olutoyin Ayinde, Mr Jimoh Ajao,, Mr Sonnie Ayere, Mrs Felicia Awofisayo, Arc. Yetunde Ajayi, Mr Hakeem Muri-Okunola, Mr Kunle Awofeso, Alhaji S.A.Yussuf, Mr Taofeek Oki, Mr Tunde Jinadu, Mr Tayo Gbajabiamila-Olamona, Mr Bello Salihu, Dr Yemi Isiba, Ms Iyabode Oshodi and Ms Keji Onabolu among others.
Earlier in a welcome address, the state Commissioner for Housing, Mr Bosun Jeje commended the present administration in Lagos for adopting the scientific method of resolving the housing challenge in the State, an action that has culminated in the creation of the Home Ownership Mortgage Scheme.
He also reminded all those who have not registered under the State Residents Registration Agency to immediately do so as the possession of the residency card represents one of the conditions for benefiting from the Lagos HOMS scheme.
The event attracted dignitaries including members of the State Executive Council like Secretary to the State Government, Mrs Ranti Adebule; state Commissioner for Information and Strategy, Mr Lateef Ibirogba; Chairman of the state House of Assembly Committee on Lands and Housing, Hon Bayo Oshinowo; leaders of the All Progressives Congress (APC), Prince Tajudeen Olusi and Chief Bushura Alebioshu, media executives like the President of the Nigerian Guild of Editors and Managing Director of the Sun Newspapers, Mr Femi Adesina, his predecessor in office and Editor-in-Chief of Vanguard Newspapers, Mr Gbenga Adefaye and stakeholders in the buildings sector.