Fashola, Sanwo-Olu back monthly rent to end inequity in wealth distribution
Babatunde Fashola and Babajide Sanwo-Olu, Minister of Works and Housing, and Governor of Lagos State respectively, have canvassed a rent system that allows tenants to pay rents monthly. They said such a system is the way to go in a country where salary income is paid per month and in arrears.
Fashola and Sanwo-Olu, who spoke at the 10th meeting of the National Council on Lands, Housing and Urban Development in Lagos recently, hoped that the system would end inequity in wealth distribution. The meeting had as theme, ‘Housing Development as a Catalyst for Job Creation, Social Inclusion and Economic Development’.
The duo noted that the current advanced rent system leaves more money in the hands of landlords at the expense of the tenants whose income comes on a monthly basis and even in arrears.
“The current rental model in which people remit yearly rent in advance to property owners has become inadequate to address contemporary realities in the housing sector, especially in cities where demand for properties is high and expensive,” Sanwo-Olu noted.
Fashola agreed, emphasizing that “yearly rental system has created inequality in housing supply and widened affordability gap for low-income earners.”
Fashola has always been a strong advocate of monthly rent and that explained his decision as governor of Lagos State to legislate monthly rent in the famed Lagos Rental Law of 2012 which prescribed various degrees of penalties for landlords and tenants that demanded or paid more than one month rent.
The law did not go far because government did not provide alternatives for those who could not afford what was on offer by private developers. Again, the law was resisted because experts said the government did not have the legal right to legislate on private properties.
Though still not enough, the state government has been involved in housing developments across the state through the Lagos Home Ownership Mortgage Scheme (LagosHOMS). It has also evolved a rent system allows tenants to pay monthly towards ultimately owning the houses.
“In Lagos, we operate a very robust Rent-to-Own programme of five per cent down payment and six per cent simple interest rate payable over a period of 10 years,” Sanwo-Olu explained.
“We are working on another product, which is a purely rental system, where residents will pay monthly. This is to accommodate those who are not keen on homeownership and address current realities. In doing this, we believe that no one would be excluded from our intervention in this critical sector,” the governor added.
He urged policymakers to consider the monthly rent as suggested and initiate regulatory framework that would aid transition to new rental system.
The National Council on Lands, Housing and Urban Development is a yearly forum that draws its audience from commissioners for housing and urban development across 36 states, permanent secretaries in the states’ housing ministries, lawmakers on housing committees, surveyors, town planners, builders and other experts in the built industry.