• Thursday, April 18, 2024
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BusinessDay

Lagos rekindles renters hope, assures on monthly rental policy

Tinubu’s Renewed Hope Cities gets a boost as states pledge land for project

Once again, the Lagos State government has raised hope for home renters, assuring that by the end of this year or early next year, relief will come their way as it will implement and enforce the monthly rental policy initiated a couple of years ago.

For a state where 80 percent of its estimated 20 million population lives in rented accommodation, the implementation of this policy will not only help individuals and households income a great deal, but also stabilize the state’s rental market which is, to a large extent, landlord’s market.

Barakat Odunuga-Bakare, the Special Adviser to Governor Babajide Sanwo-Olu on Housing, who disclosed government’s plan to revisit the monthly rental, said the idea is in line with global best practice, explaining that in other countries of the world, tenants don’t pay rents in advance as it is the practice in Lagos and other Nigerian cities.

“We all see what is being done in other climes; rents are collected monthly. Hence, we are looking and hoping that before the end of the year, or by early next year, we will be able to implement the policy of monthly rental. Also, the rental would be charged according to tenants’ earnings,” she said.

Continuing, the special adviser noted, “the good part about it is that we would be test-running it first within the public sector since we can ascertain how much everybody is earning, and once we see that it works in the public sector, we can now push it out to the private sector.”

As a response to what is, obviously, rental crisis in Lagos, Sanwo-Olu in 2021 noted that the current rental model in which people pay yearly rent in advance to property owners has become inadequate to address contemporary realities in the housing sector, especially in cities where demand for property is high and expensive.

The governor who spoke at the 10th meeting of the National Council on Lands, Housing and Urban Development held in Lagos, advocated a monthly rental system which, he said, would be affordable to low- and middle-income earners the yearly rent obligation.

The Special adviser recalled that when the idea of the monthly rent system was mooted, N5billion was allocated for it, disclosing that the money was still untouched. She explained that the slow take off of the policy shows that the state government was still trying to perfect one thing or another.

“The last administration that initiated the monthly rental scheme was coming to an end when the scheme was to be introduced. Now, we have a new administration and the governor wants the scheme to come into effect by the end of this year or early next year,” she said.

Monthly rental idea in Lagos dates back to 2011 when Babatunde Fashola, the then governor, signed a tenancy law that sought to make it illegal for landlords to charge more than one year rent for a new tenant and not more than six months for a sitting tenant.

As minister of works and housing, Fashola also pursued, unsuccessfully though, the idea of monthly rent, believing that the yearly rental system had created inequality in housing supply and widened the affordability gap for low-income earners.

When Rabiu Olowo, the ten commissioner for finance in Lagos announced the N5 billion seed capital for the monthly rent, he disclosed that the scheme was set up to support both tenants and landlords regarding rent remittance.

The commissioner who spoke at a two-day event, organised by the Lagos State Real Estate Regulatory Authority (LASRERA), tagged ‘Lagos: 21st Century Real Estate Investment Hub,’ disclosed further that “the first set of beneficiaries of the scheme will be drawn from the formal sector, the second set will be from the informal sector and others will follow accordingly.”

The monthly rental scheme was sequel to a market survey conducted by the state government which revealed that a large percentage of Lagos residents finds it difficult to pay their rent on yearly basis.

“To start with, a N5 billion portfolio has been put in place to kick off the scheme. “We welcome more support from more financial institutions to raise the bar of the portfolio for the masses to enjoy from this policy,” Olowo said.