Against the backdrop of the huge housing deficit in the country, particularly in Lagos State, the reported hike in building planning permit in Lagos is least expected, counter-productive and against public interest. The move is bewildering given that recently the Lagos State Government called for partnership with the private sector to bridge the housing deficit gap to meet the increasing population and demand decent and affordable shelter in the megacity. Meeting the increasing housing deficit has continued to present a formidable challenge. Apparently, Lagos State Government did not consult the private sector, its desired partner; hence the policy somersault.

That being the case, it is not clear why the same Lagos State Government would turn around to hike building planning permit, which would likely truncate housing development as well as discourage people from building in Lagos. What is the essence of the new policy, one may ask. Coming at a time the economy is down with severe hardship on the populace, the Lagos State Government should consider reversing the decision in the public interest.

As at 2015, Nigeria was estimated to have a housing deficit of approximately 17 million. The Federal Government had stated that a total of N1 trillion would be committed to the construction of housing accommodation in order to bridge the housing deficit. The news that building planning permit has taken a leap in the construction and real estate sectors in Lagos is therefore shocking. It followed a review of prices by the state government, raising fears among prospective home builders and property developers of even harsher times to come under the Babajide Sanwo-Olu administration.

The development is coming on the heels of increased financing costs, rising interest rates and inflation that took shine off real estate investments. A lot of property developers were forced to downsize portfolios, invest in assets at potentially cheaper levels and reposition properties to meet shifting consumer demand. For instance, the exchange rate more than doubled, putting pressure on building material importers and culminating in high prices in the market. Currently, the prices of local building materials, such as wood, tiles, iron rods and cement have also skyrocketed.

The cost of renovating and developing new houses also rose sharply. The rise in interest rates made it more expensive to finance real estate projects at reduced returns for investors. Expectedly, most landlords and property owners have capitalised on the situation to raise their rents in most parts of the metropolis. In all, the masses are the victims, being deprived of decent, affordable housing and thus confined to slums and ghettos.

Certainly, the upward review of the permit rates, which is the third in two years, will further dampen the construction industry, as it affects building assessment, special enhancement levy, infrastructure development charge and stage certification in all local government areas (LGAs).

Prior to the latest increase, building assessment was N10, 000 for one to 650 square meters and N4, 000 for subsequent 1,000 square meters for all areas, while stage certification is 35 per cent of building assessment and registration and application N5, 000 and N25, 000 respectively for all areas. The renovation fees were 25 per cent with former permit and 100 per cent with no proof of former permit.

Town planners said the rates would add to the overall cost of construction and disrupt budgeting or financial plans, particularly, as the rates are made retroactive. The new rates will lead to an increase of between 15 and 20 per cent on documentation, which is part of stage one of the construction budget. Ultimately, investors or developers will have to increase rents on the development, whether residential or commercial to be able to amortize their investment.

Besides, prices of sale of property will also be affected, as some developers may not apply for planning permits due to the high cost. This has been the situation even before the rates were increased. Many developers, particularly single dwelling owners in LGAs like Badagry, Epe, Ibeju- Lekki, Ikorodu and others have put up buildings without planning permits.

Reactions of stakeholders have been most apt. President, Nigerian Institute of Town Planners (NITP), Nathaniel Atebije, said the immediate implication of the hike is that it may encourage illegal and poor construction activities. “Developers will, more than ever before, cut corners and procure permits through fraudulent and corrupt practices, especially in Lagos, where we do not have enough personnel and equipment to monitor developments.”

It is unfortunate, as Atebije pointed out, that the government, which is supposed to provide services to people for social benefits, has in recent times, been guided by some consultants to commercialize every of its activities. “It (housing) is a fundamental right of citizens to be given organised space to live, work and play; and this should apply to all classes of people. Anything outside this is inconsistent with the rights of citizens. If other states follow the steps of Lagos in this matter, then hopes for the less privileged will be depleted in terms of living in decent environments, adding that approval fees should be as low as possible to encourage developers to come up with genuine intentions to develop. He advised the government to encourage development by making approval fees affordable, and later put tax on the development when it is put into use for the lifetime of the building. “Property tax may be more rewarding than raising approval fees,” he added.

Corroborating, the Chairman, NITP Lagos chapter, Mr. Tayo Awomosu, said the development was a bad decision by the government, warning that it will affect the construction sector negatively. He said the new rate is a big disincentive to developers and construction, as it will make properties more expensive.

According to him, in the long run, the rate will have a detrimental effect on the construction sector, as more people will disobey planning laws. This, he said, “may lead to a degenerated environment and make town-planning offices begin to chase illegal development all over the state.”

The observations and admonitions are valid in our view. Although home ownership is a critical basic need of man, the absence of a definite and all-encompassing housing development plan prompts people to erect their own houses, often, indiscriminately and in no particular order. The houses lack uniformity and are built without access roads, water and sanitation facilities. In many cases, there is no electricity. The environment creates room for squatter settlement, which ultimately leads to slums. Yet, the addition of one house goes a long way to alleviate the acute housing shortage. Contrarily, the demolition of any house compounds the problem. Governor Sanwo-Olu’s government should consider these factors in reversing the decision to increase building planning permit.

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