Rent Hike Frustrates Tenants, Homeowners Tie Increments To Hard times, Costly Building Materials

TOPE OMOGBOLAGUN writes about the frustration faced by Nigerians living in rented apartments  

Twenty-seven-year-old Tade Shoyebi, who is a customer service officer, needed an apartment near his office to escape the stress of journeying every day to his parents’ house at Odogunyan in the Ikorodu area of Lagos State.

After a few months of working, he saved up and got a mini flat in the Ojodu-Berger area of the state.

He said, “It was a long search before getting an apartment. I was frustrated when I saw the kind of houses agents showed me. When I eventually got one that I liked, I was happy though it wasn’t the best of what I envisaged. It’s detached from the main house. For a bachelor that I am without much property, it’s manageable. The total annual rent is N210,000 and I paid N310,000 including agreement and commission.”

Shoyebi stated that he eventually fixed many things in the house and was shocked when he learnt that hewould also be paying for water.

He said, “After fixing some things at the apartment, I was told that the borehole was not part of what I paid for. Our landlady sold water to us from the borehole.’’

He stated that the landlady was fond of increasing rent without bothering about fixing faulty things in the house.

Shoyebi added, “The first two years, she increased the rent from N210,000 to N300,000. It wasn’t easy but I had to pay. This year, she informed me that the rent had been increased from N300, 000 to N450, 000; a mini flat which she never renovated once except.’’

He noted that his salary had not been increased in three years, yet house rent continued to rise.

He stated, “I can’t afford the rent. My landlady makes sure that those who cannot afford a new increment are served notices to quit. When they move out, she renovates the vacated apartment partly and lets it out at a high cost; a rent charged by owners of new houses.’’

Costly rents amid economic challenges

Like Shoyebi, a corporate service manager at a popular hotel, Mrs Florence Ogechi, who lives around Ketu, CMD road, also noted that the rents required for many houses didn’t match the state of the dwellings.

Ogechi said his family moved into a three-bedroom apartment in the area for N1.2m about four years ago. She stated that they were searching for a bigger apartment as her family increased.

She said, “We were on that when we got a letter, indicating N400,000 increase on the apartment. We are salary earners. It’s tough to add that to rent at this period in the country.’’

From tenants on the mainland to those on the Lagos island and other states, the situation appears to be the same.

One of the tenants on the island, Mr Japeth Okonkwo, decried the activities of estate agents who he identified as drivers of exorbitant house rents.

He lamented that he had to face the stress of three rent increases in six years, noting that he had considered buying an apartment if he had enough money.

He said, “We got in this apartment (three-bedroom ensuite apartment) on a rent of N2.7m. It was increased to N3m after the addition of N300,000. My wife wasn’t comfortable with the increase at the time.

“Apparently, the house owner assumed we were rich. Now, we pay close to N3.5m for the same apartment we rented for N2.7m six years ago. The issue is that if we move out, there are others willing to pay the money,’’

Those living in rented apartments in the Federal Capital Territory, Abuja, also have their stories of dissatisfaction arising from exorbitant rents and increase.

A computer engineer, Yomi Balogun, who lives in  a self-contaied aprtment in Iyanya, one of the city’s sub-urban areas, said he started paying N200,000 annually when he moved into a house about three years ago. He stated that the rent was increased within two years.

He said, “I was worried that I might not be able to continue with the rent but little did I know that in a matter of two years, I would be paying another N150,000 extra.

“This has caused me a lot because to be able to pay the rent, I had to forgo many things. The certainty that I will be able to pay the next rent isn’t there. I might have to squat with someone till I find a place within my economic capacity.’’

 Recent increase in house rents

Mrs. Bola Shosanya living around Herbert Macaulay area of Yaba, Lagos, stated that she wanted a change of apartment because she was tired of the old house where her family stayed.

She said that she was surprised that she couldn’t get a house in her area where she was paying N700,000 annually for a three-bedroom apartment, adding that a similar apartment in neighbouring areas cost between N1.2m and N1.5m.

She said, “The recent hike in rent in Lagos is quite alarming as it is not the best time to increase rent due to the country’s economic situation. I wanted to leave the apartment I occupied and after encountering difficulties to secure a befitting accommodation, the rent of the one I saw was almost three times my previous rent.

“It’s difficult for a landlord to charge N1.2m for a three-bedroom apartment in the area. It’s terrible especially when the landlords and agents see that a tenant is desperate.”

A comedian and content creator Damilare Osundare, who said he paid N4.7m for a three-bedroom at Magodo Phase 2, lamented that the cost of housing was unbearable and urged the government to intervene in the housing sector before things got out of hand.

He said, “I needed to leave my former apartment because my wedding was close and I was running out of time. I got a three-bedroom that was decent enough and I had to cough up N4.7m.

“My current house costs N4.7m for the total package, including LAWMA fees, security, service charge and others. I paid for two and a half years’ rent. I later found out that the estate agent inflated the price of the apartment by N300,000. I pay more for the same apartment than my neighbour.”

Osundare stressed the need for the government’s intervention in regulating housing in Lagos and across the country.

He said, “If housing was regulated in Nigeria, one would get something beautiful at affordable prices. There are excesses on the part of house owners; everyone seems to have their rule. It is unthinkable to demand two years’ rent, even paying for a year at once isn’t fair.”

Also, a resident of Delta State and a medical practitioner, Mofe Oritsegbemi, said he got tired after searching for an apartment and paying high rent.

Oritsegbemi said, “It’s only God that can save the poor man at the rate house rent increases. It’s becoming harder to live in Nigeria. When I got an apartment, in Delta State, a two bedroom-apartment was N250,000 but not anymore. I now pay N450, 000. It started with a N50,000 increase, then N100,000 was added. I now pay N450,000.

“The painful thing is the lackadaisical attitude of the landlords. They feel if one cannot pay, one can move out.’’

A teacher and a single mother, Abeis Osaron, who lives in Edo State, told Sunday PUNCH that she now pays about four times what she initially paid when she moved into an apartment about seven years ago.

She said, “I started paying N40,000 annually for an apartment but now I pay N200,000 yearly. I feel my landlord is deliberately increasing the rent, so that I can leave. Honestly, with the way things are going, if he increases the rent any further, I might not be able to afford it.”

Nigeria’s housing deficit

A World Bank report estimated that 75 per cent of the housing deficit in Nigeria affected families who earned less than three times the minimum wage. It noted that some of these people have to spend as much as 60 per cent of their average disposable income on rented apartments. This figure is higher than the 20 to 30 per cent recommended by the United Nations.

Similarly, a report by the Central Bank of Nigeria showed that in 1991, the country’s housing deficit was about seven million units but by 2007, the figure rose to 12 million units and currently sits at about staggering 17 million units. The World Bank estimated that about N59.5tn was needed to tackle the country’s housing deficit.

In 2018, the World Bank further noted that to solve Nigeria’s housing deficit problem, about 700,000 housing units were required to be built annually over 20 years to accommodate the increasing population.

In 2019, the Minister of Works and Housing, Mr Babatunde Fashola, picked holes in the 17 million often quoted as the country’s housing deficit figure.

He stated that there was no Nigerian city where there were no empty and unoccupied houses. He added that valuers owed the country the responsibility of explaining why the houses were empty, for how long they had been empty and what could be done to make them habitable.

Since independence in 1960, many administrations had embarked on many housing policies. Some of these housing policies included the National Development Plan 1, 2, 3, and 4, the National Housing Policy and the National Housing Programme. Unfortunately, the policies were unable to effectively tackle the housing deficit.

Redesigning old houses

Several landlords who own old houses now renovate and convert them to two- or three-bedroom apartments to attract tenants and benefit from the new wave for accommodation demand.

A worker, Abimbola Oyebo, recently moved into a mini flat at the Costain area of Lagos. The apartment was recently renovated by her landlord. The living room can accommodate only a two-seater chair, a television and a standing fan, a four by six inches bed and a rechargeable standing fan.

Oyebo said, “I searched hard before I got this. I couldn’t resist it because my work wouldn’t permit me to go house hunting, so, I had to settle for this. It’s small but the only decent one I got for N400,000.

Another tenant living in Ikeja who spoke to our correspondent on condition of anonymity, said the rent for a three-bedroom flat was increased from N700,000 to N1.6m after the landlord reportedly ejected tenants and carried out minor renovations.

The tenant said, “After the renovation, the rent for the flats was increased. For instance, the rent for a mini flat was increased from N350,000 to N650,000 and a two-bedroom flat was moved from N600,000 to N1.1m. Some prospective tenants have been checking the flats but the general complaint is that the rent is high.’’

Also speaking, an entrepreneur, Uche Emmanuel, said he was shocked when his landlord increased his rent by 100 per cent, indicating that he had to pay double his previous rent in a studio apartment.

Emmanuel said, “My home is a self-contained apartment derived from a previous two-bedroom apartment. I moved in two years ago and I paid N350,000 with N250,000 as the yearly rent.  Towards the end of last year, my landlord called me to say that the rent would increase. I discovered this year that the increase doubled the former rent. I don’t comprehend the rationale behind paying N500,000 for a sub-standard room self-contained. I don’t have such an amount to pay.’’

Why we increase rents, say landlords

Some landlords in Lagos, who spoke with our correspondent, explained the reasons behind the recent increase in rents.

A septuagenarian and owner of a block of four three-bedroom apartments in Lagos, Mrs Adeola Babalayo, said coronavirus affected many people including homeowners.

She said, “No doubt, many of us and even the economy had been affected by COVID-19 and for some of us who do not have other means of income, we also have to live. The cost of living is on the rise daily and this is what we rely on.

“We understand that some of the tenants have truly been thrown into a bad financial state due to COVID-19, some prefer to use their money for something else knowing that we also depend on our houses to survive.”

Another landlord, Mr Tony Ejiofor, who owns a duplex and a block of flat at Yetunde Brown in Gbagada, Lagos, said living the cost of housing materials had increased, noting that sometimes they deliberately increased rents to scare away some types of accommodation- seekers.

He said, “As a landlord, we meet a lot of tenants. Some would use the house as if it wasn’t built with money. Others would just want to deliberately owe one. I am usually particular about the kind of people that come to my house. When I meet some, I deliberately call a higher amount for them, so they don’t come. I want people who value others and have respect for good things.”

Another homeowner, Mrs Nonye Omokhomo, said six blocks of two and three-bedroom apartments with two boy’s quarters had been her family’s source of income after her husband’s death.

Omokhomo said, “My children were young when my husband died and I had been funding their education. As they grow, expenses also increase. I have two of them in tertiary institutions and the other two in secondary schools.

“We all know that everything is expensive now, so I have also recently increased rents. It’s something I do every three years and I don’t add so much. This last time, I only added N50,000 on the rent. My tenants know I am not a difficult person.

Mr Segun Oshinuga who is a landlord supported the position of other homeowners, saying everyone was aware of the state of the country’s economy and there was a need for rent hike.

Oshinuga, who owns a three-storey building at Yaba area of Lagos, noted that accommodation was on-demand around the area particularly because it’s an area inhabited by students.

He said, “Houses in this area are in high demand especially by students at the University of Lagos. The demand is high sometimes to get the best tenant, I use the highest bidder strategy to get them to stay in the house. Houses are a scarce commodity in this area. Also, it’s close to the Island, so workers who can’t afford houses on the Island will choose houses around Yaba.

“I have another house. I don’t live with my tenants; I live with my family while the other one is for tenants. It’s a mix of both students and workers.’’

 Cost of living versus minimum wage

The minimum wage is N30,000, indicating that employed Nigerians would have to save for over six months to get a  fairly decent accommodation of N200,000 in a place like Lagos and could compromise other expenses including feeding, health care and utility bills.

Recently, the housing ministry completed a housing scheme for the National Mass Housing Programme and announced that a house would cost from N7.2m. This indicates that a low-income earner cannot afford the houses under the Federal Government housing scheme. This scenario is not different in states where the touted low-income houses are beyond the reach of most Nigerians.

A report by the National Bureau of Statistics indicated that the population of unemployed persons in Nigeria during the last quarter of 2020 was 33.3 per cent. The data showed an increase of 6.2 per cent compared with the 27.1 per cent of Quarter 2, 2020.

 Also, according to data from the World Poverty Clock, an organisation that monitors progress against ending extreme poverty globally, the number of people living in extreme poverty in Nigeria rose from 86.9 million in 2018 to 93.7 million in 2019. Thus, Nigeria stands as the nation with the highest number of people living in extreme poverty in the world. This unemployment and poverty trend was projected to worsen, as the World Data Lab stated that the outlook for poverty alleviation in Nigeria was weak and that an estimated 120 million Nigerians would likely slip into extreme poverty by 2030.

Experts suggest way out

Commenting on the issue, a political economist, Prof. Pat Utomi, at an event by the Nigeria Institution of Building in Lagos described the housing sector as a key driver of economic growth.

Utomi said, “The bottom line is that we have a huge housing deficit. This shows that housing and building are too important to leave to builders. All of us must be involved in it.

“It shows how much building and the housing sector can play a transforming role for the economic fortunes of Nigeria, so we cannot take it for granted. But can we have the value it takes, can we ensure that the contributions it makes to GDP crystallise?”

He further said that homeownership must be democratised so that anybody who could vote should be able to own a house.

Utomi said, “The strategy is being able to construct houses so that at 18-21, there is a kind of housing one can afford. That trajectory is what we have not engaged in. If houses are dear and so important, we must be doing an important job of providing them.’’

Commenting, ex-president, Nigerian Institute of Building, Kunle Awobodu, said that when interest of the masses was put in mind, that there would be worry about house rent.

He said, “It is a matter of which side of the divide one belongs. Everybody now is looking for how to overcome the general inflation. Food and every other thing have become inflated and everyone is using what they have to generate more income to cope with the inflation.’’

Awobodu said that the tenants were as disgruntled as the homeowners especially for employees who do not have control over a salary increase.

He said, “On the part of the tenants, it is painful when the rents increase and one’s income does not increase. For example, in the case of the minimum wage, how many states have adopted the N30,000? And what can the minimum wage buy? The common man is punched on every side, facing difficulty at all levels as everything is increasing at the moment.

“Unfortunately, workers cannot force their employers to increase their income, so there’s an issue.  For menial workers, they can now increase what they charge for labour.’’

Awobodu further stated that the landlords’ only assets were their houses serving as their source of income.

He added, “Those landlords who own property, that is all they have, so considering that everything has increased, they also use what they have to get what they want.  Prices of building materials are also on a high side as every other thing.

 “In a place where demand for house rent is high, it’s easier for landlords to increase their house rent but where there are many empty houses, it would be difficult to increase house rent.  So, demand for houses is a factor.

“You’d realise that even these landlords do not have a uniformed body or association where they decided to increase their rent. They were simply responding to market forces.  If they had an association, one could have said they met and agreed that they all increase rent by a certain rate. “

On the proposed regulation of house rent in the Lagos State government, Awobodu said that it might be a difficult task to carry out.

Awobodu said, “Now, it might be difficult for any government to regulate any house rent.  Although it’s a welcome idea, it might be difficult in the sense that what you don’t own might be difficult for you to have direct control over.

“In Lagos, during his regime, General Mobolaji Johnson tried to regulate house rent; it was then that we saw how difficult human beings are. Some were bypassing the control of house rent.”

Awobodu noted that the issue of house rent was mostly subject to demand and supply forces.

In an earlier interview with Sunday PUNCH, President, Nigerian Institution of Estate Surveyors and Valuers, Emmanuel Wike, urged the government to address the housing deficit in the country by reviewing the current housing policy and adopt a more realistic one.

He noted that the current policy favoured middle-income earners and not low-income earners.

Wike stated that the land Use Act which invested lands in the hands of state governors also impeded housing growth in the country.

Recently, Governor Babajide Sanwo-Olu signed a bill regulating real estate transactions in the state.

Sanwo-Olu said the law to regulate the real estate transactions in the state would help to protect the citizens; the unsuspecting Lagosians who fall prey to many real estate professionals, adding that the law would also help players in the real estate sector to know what was expected of them and for government to be able to track who was doing what in the sector.

He said, “It is really about ease of doing business and ensuring that we can continue to attract private sector investments into the real estate space. We believe this law will be the first in the country that has taken a deep dive into what is happening in that space and it further strengthens our intervention in housing through the Ministry of Housing.’’

The governor stated that the government could set up a robust mortgage system to ensure that a person could own a house and spread payment for as long as 10 to 15 years.

He added that if the government could set up a working mortgage system, there would be more homeowners in the country as low and middle-income earners could comfortably spread their house payment loans over some time.

Speaking during the event, Special Adviser to the Governor on Works and Infrastructure, Aramide Adeyoye, harped on the need to address the huge housing deficit in the state and the country in general.

She said as the government or private investors, the government was desirous of the provision of mass housing.

Adeyoye stated that issues relating to the high cost of construction and high cost of land, reflecting in the cost of the sale price should be addressed.

Source: punchng

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