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Nigeria 2019 | REAL ESTATE & CONSTRUCTION | FOCUS: HOUSING DEFICIT

Nigeria is facing a housing shortage of 17-22 million units according to industry leaders, and its fast-growing population requires an effective response.

By 2047, Nigeria's fast-growing population is expected to double, overtaking the US as the third-largest nation in the world with around 390 million people, according to UN projections. Much of the momentum behind the country's explosive growth comes from its remarkably young citizens, more than 40% of whom are currently under 14 years of age.

Such a trend offers exponential opportunities for the country's entrepreneurs, but also brings with it logistical and infrastructural problems that must be addressed for the nation to live up to its much-hyped potential. Though Nigeria remains a young democracy facing growing pains ranging from political transparency to security threats in its northern districts, its lack of urban housing is creating a significant bottleneck on the nation's path to a more prosperous and equitable future.
Government and real estate sector leaders currently estimate the nation needs between 17 and 22 million additional residential units to alleviate a critical housing deficit, which can only worsen if not immediately addressed in the face of the nation's population projections. Former Nigerian President Olusegun Obasanjo has warned failing to implement a sustainable urban development plan would spell political catastrophe for future leaders as villagers and rural populations continue to seek opportunities in already crowded urban centers, such as Lagos, the nation's largest city with roughly 23 million residents.
Politicians have blamed the trend on the high cost of construction materials, which due to low property values away from the Lagos waterfront can constitute over 70% of the cost in new housing developments. In addition, more than half of construction materials are imported, impacting the prices for even low-income household developments due to an extended slump in the naira against the US dollar. In turn, high prices on steel, cement, and aluminum products, combined with high housing demand among Nigeria's low-income citizens—which make up roughly 60% of the population—are putting pressure on policymakers to act before the situation worsens.

While the government currently estimates about 108 million Nigerians are either homeless or living in subpar housing in urban slums, the low-income housing shortage has not been adequately addressed because new developments have focused on high-to-middle income markets. According to Emmanuel A. Oyewole, the chairman of Petra Real Estate Investment Club, such construction trends have created an oversupply in the luxury market while leaving affordable housing demands unaddressed.
“The situation is worst in the cities where demographic distribution averages 15% for high-income earners, 25% for middle-income earners, and 60% for low-income earners where as the available trend in the provision of housing units, by both public and private organizations, are unfortunately 70%, 20%, and 10% in favor of high-, middle-, and low-income earners, respectively,“ Oyewole said during a press briefing in 2018.

In response, several public-private partnerships have formed in recent years to create satellite cities, or pre-planned suburbs, outside urban centers to ease housing demands as well as traffic congestion. One such project is Alaro City, a mixed-use real estate development being constructed outside Lagos on 2,000ha of land. The development broke ground in late 2018 and was founded on a partnership between the Lagos State government and Rendeavour, a private developer currently working on plans for seven satellite cities in sub-Saharan Africa. Alaro City is projected to house approximately 200,000 citizens while creating new employment opportunities and public service facilities for Nigeria's growing middle class.
Other private developers, such as the Lifepage Group, have also made known their ambitions to address Nigeria's housing deficit by announcing plans to build 1 million houses by 2041. Details remain sparse and will require state approval, but such plans are bound to play a large role in modernizing and improving the housing stock for millions of Nigerians currently living without property rights in urban slums.

Still, the situation is contentious. In effort to make space for new developments on Lagos' prime waterfront property, city officials have demolished several low-income housing areas, including the Otodo Gbame slum, forcibly evicting over 30,000 residents. Many former Otodo Gbame residents remain homeless and present a microcosm of the housing problem policymakers will need to address in providing sustainable solutions for their nation's growing urban population.