Lagos N8bn building approvals revenue worries affordable housing advocates

The Lagos State government generated approximately N80 billion revenue from building approval applications in 2025, according to Oluyinka Olumide, the state’s commissioner for Physical Planning and Urban Development.

Though this is a positive development, as it reflects increased compliance with planning regulations and ongoing efforts to strengthen urban development across the state, it is a source of worry for affordable housing advocates who reason that such revenue could only have come from excessive approval charges.

According to the advocates, ₦80 billion revenue from building approvals applications in just one year should prompt a serious policy conversation—not because the government does not need revenue, but because the figure reveals the cost structure of housing development in the state.

Housing Development Advocacy Network (HDAN), a frontline affordable housing advocate, explained to BusinessDay that when building approvals, land-related charges, infrastructure levies, and regulatory fees become excessively burdensome, housing becomes more expensive for everyone.

“Developers do not absorb these costs in isolation. They pass them on. Ultimately, it is the ordinary Lagos resident—the aspiring homeowner, the renter, the young family, the middle-income worker—who pays the price,” Festus Adebayo, Executive Director at HDAN, explained further.

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Adebayo reasoned that this is why housing policy must be viewed through a broader economic and social lens, stressing that “housing is not a luxury. It is foundational infrastructure for human dignity, economic productivity, public health, and social stability. A city that makes housing harder to deliver raises the cost of living, weakens workforce stability, and pushes more citizens into informal or substandard shelter.

He noted that planning regulation matters and building approvals are essential for safety, environmental management, structural integrity, and orderly urban development, stressing that no serious stakeholder argues against standards.

“But approvals should serve as a governance tool, not a profit centre. Once the regulatory system is perceived primarily as a revenue-generating machine, it begins to distort the very market it is meant to organize,” he said.

Lagos already has some of the highest land acquisition and construction costs in Nigeria. Add rising approval charges, multiple taxes, and administrative bottlenecks, and the result is predictable: fewer affordable projects, slower housing delivery, weaker investor confidence, and higher final prices. In practical terms, this translates into more expensive homes, higher rents, and reduced access to formal housing for low- and middle-income households.

There is also a secondary risk that policymakers must not ignore, according to Adebayo, citing high regulatory costs which can fuel the growth of informal and unapproved developments. When formal compliance is too costly or too slow, some actors inevitably seek alternatives outside the system.

That is not good for government, not good for investors, and certainly not good for urban planning. If the goal is a safer, more orderly Lagos, the formal development process must be efficient, transparent, and economically realistic.

Nigeria’s housing deficit remains severe, and Lagos is at the heart of that challenge. At a time when millions of Nigerians are struggling to access decent accommodation, every policy signal should encourage investment in housing supply—not constrain it. This is especially important in a city where population growth continues to outpace formal housing delivery.

The way forward is not confrontation; it is reform. Lagos can still set the national benchmark for progressive housing policy by choosing balance over burden. That means reviewing building approval charges and related development fees to ensure they do not undermine affordability.

It also means simplifying approval processes, shortening timelines, and removing regulatory bottlenecks that delay projects and inflate costs. It means creating targeted incentives for affordable housing developers and offering concessions for low-income and social housing projects. And it means engaging stakeholders consistently before implementing major changes to land and development charges.

What the market needs now is predictability. What residents need is affordability. What investors need is confidence. What the government needs is a policy framework that aligns urban planning with inclusive growth.

“This is where HDAN’s position is clear and constructive. We believe Lagos can pursue orderly development without pricing housing beyond reach. We believe regulation and affordability are not opposing goals. We believe investor confidence and social inclusion can reinforce one another when policy is designed with a long-term vision.

And we believe the state’s housing ecosystem will perform better when government, developers, financiers, and civil society work from a shared understanding that housing is too important to be treated merely as a fiscal opportunity.

Lagos has the opportunity to become Africa’s leading destination for real estate investment and for delivering affordable housing. But this will require a deliberate shift in policy thinking: from extracting value from housing development to enabling value through it.