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MEETING THE HOUSING NEEDS OF CO-OPERATORS

THIS PAPER EXAMINES THE ROLE CO-OPERATIVE SOCIETIES PLAY IN POVERTY ALLEVIATION AMONGST LOW INCOME PEOPLE IN LAGOS, NIGERIA. IT ALSO SHOWS THE CURRENT PLAY IN HOUSING SUPPLY IN THE STATE.

BOyalowo
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MEETING THE HOUSING NEEDS OF CO-OPERATORS

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  1. MEETING THE HOUSING NEEDS OF CO-OPERATORS BASIRAT A. OYALOWO DEPT OF ESTATE MANAGEMENT, UNIVERSITY OF LAGOS, AKOKA, LAGOS NIGERIA Paper presented at the 2014 Annual Seminar of the Ikoyi/Victoria Island Co-operative Union on Saturday, September 20, 2014 at the Nigerian Institute of International Affairs, Victoria Island, Lagos, Nigeria

  2. Over 17 million housing deficit, • 80.2% of households in urban areas in Nigeria are poor (NBS 2013) • Families in SW Nigeria spend a greater part of their income on rentals than in other parts of the country • 75% to 80% of Nigerians are low-income earners and 57% of urban workers operate in the informal sector • However, market for about 69% of the population who are not owner-occupiers Nigeria’s housing need….

  3. Formal housing finance providers target only a particular segment of the society. • approximately 5 million families belong to one or more of these co-operatives (Federal Ministry of Agriculture and Rural Development FMARD, 2002) • more than 50,000 registered co-operatives credited with contributing towards the production of export crops, minimization of exploitation by middlemen and traders and the mobilization of enormous financial resources from small savers in thrift and credit systems. • Why not housing supply? Nigeria’s housing need

  4. The Government • The private sector Housing provision for co-operators: By whom?

  5. Needs to address both qualitative and quantitative housing need • Through the three tiers of government • Through ministries, departments and agencies The Government

  6. Pre-independence: Government Reserved Areas • Second National Development Plan 1970-74 • National Housing Scheme, 54,000units in 2 years • Nigerian Building Society for mortgage loans • State housing corporations • Targets not achieved. • Third National Development Planning Period 1975-1980 • 19% (8500 units) Lagos and 29% (National) met The Government (C’ntd…)

  7. Fourth National Development Plan • Only 50% of 20,000 units met • Site and services scheme • Core housing The Government (C’ntd…)

  8. National Housing policy, • Establishment of several PMIs • Involvement of the private sector • Shift of focus from direct provision by the government • Mortgage finance and contributory schemes The Government (C’ntd…)

  9. Controls over 70% of total housing stock • Informal housing sector: • Finance: personal savings, informal loans, remittances from abroad. • Long period of construction, tendency for substandard builds etc. • The organized housing sector. • Real estate developers (REDAN): bank loans, off-takers’ payments, PPPs. • Corporate Builders from the Government sector • Ready for mass housing to satisfy the needs of co-operators/ The Private Sector

  10. As at 2008 • 31% of Nigerians are owner-occupiers • 19.2% are squatters • 24.1% pay subsidized rent • 43.3% cannot afford a home • 26% can afford to pay rent Government + Private Sector

  11. The availability of mortgageable housing stock with good legal title • Ahighly developed home building industry with capacities for adding to the stock and retrofitting old stock • Strength of legal rights of lenders • Strength of Credit information systems • Adequate legal, tax and accounting framework, • Macro-economic stability, • Property registration systems, • Urban planning policies and • Financial market depth. Challenges in Mortgage financing

  12. Regular income • Credit history • Collateral • Cost of Housing 20-30% mortgage finance in developed countries cf. 80% in developing countries Challenges in Mortgage financing Cnt’d

  13. …The need for a revolutionary and radical strategy involving non-market and non-profit making measures and cooperative housing provides this alternative (Danmole 2004). Co-operative Societies: The Third Way

  14. Principles of co-operative societies • Mobilization of funds • Disbursement of funds • Capacity to devolve into other pursuits Co-operative Societies: The Third Way

  15. Sweden • Denmark • Australia • Norway Co-operative Societies: The Third Way

  16. What we can learn • Co-operatives taking the first step • Government Support • Various forms of intervention • Co-ownership • Investor-Developer • Site and services Co-operative Societies: The Third Way

  17. Risks associated with… • Site Selection • Development appraisal • Development finance • Building design • Construction management • Disposal of housing Co-operatives as Real Estate Developers

  18. CAN/SHOULD CO-OPERATIVE SOCIEITES PROVIDE HOUSING FOR THEIR MEMBERS?

  19. Strengths • Access to the credit history of members: crucial for any intervention from financial institutions • Access to steady stream of income from member’s contribution • Ability to enforce repayment of loans • Large membership base, committed to the savings culture • Organization: constitutions, leadership, governance framework, etc. • Critical mass and voice S.W.O.T ANALYSIS FOR CO-OPERATIVE’S PARTICIPATION IN THE HOUSING INDUSTRY

  20. Weaknesses • Information gathering and sharing between co-operatives and the potential supporting agencies • Experience /Knowledge base about the real estate development sector • Orientation of co-operatives towards real estate development • Lack of definitive commitment of co-operatives in tackling the nation’s housing problems S.W.O.T ANALYSIS FOR CO-OPERATIVE’S PARTICIPATION IN THE HOUSING INDUSTRY

  21. Opportunities • Vibrant rental markets in various urban areas in Nigeria (the future is in rentals?) • Housing Provision: a national problem to solve? • Access to professional support • Access to member’s individual experience in the sector • Access to member’s professional experience and skill set • Changes in banking practices, opening up new opportunities for finance • Access to international support and experience S.W.O.T ANALYSIS FOR CO-OPERATIVE’S PARTICIPATION IN THE HOUSING INDUSTRY

  22. Threats • Lack of experience in housing provision • Preparedness of the formal sector to disburse gap financing to co-operative societies • Administrative bottlenecks in land assembly, land registration and titling • Performance in previous loans from the financial institutions • Perception of co-operatives as ‘self-help’ and the stigma this brings • Co-operation from members • Leadership-followership issues S.W.O.T ANALYSIS FOR CO-OPERATIVE’S PARTICIPATION IN THE HOUSING INDUSTRY

  23. PROVIDING SUPPORT FOR CO-OPERATIVE HOUSING: INTRODUCING THE UNILAG CENTRE FOR HOUSING STUDIES.

  24. Thank You for Listening!

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