All governments in Nigeria since independence highlighted housing as a major priority. Unfortunately it has been 53 years of its independence, Nigeria is yet to develop a vibrant mortgage market and houses continue to be provided through the tortuous traditional method of buying land and building over some years, which could be an individual's entire life time. In many cases such buildings are left uncompleted or individuals have to deplete their entire life savings in order to build a home. One of the major housing policy initiatives was the Policy on Affordable Housing that was initiated in 1979 by the Shehu Shagari Administration. The policy though laudable was unable to meet the nation’s housing needs because it was based on the unsustainable tenet that houses will be provided by government (this remains the anomaly that we must resolve).

The implementation of the 2002 housing policy reforms was a promising beginning, but a lot remains to be done. In a recent news report on the Nigerian Housing Sector aired on African Independent Television (AIT), it was stated that between 1973 and 2006, the Federal Housing Authority (FHA) built only 30,000 housing units nationwide. According to Mr. Tunde Ipinmosho of the Federal Housing Authority (FHA), the current housing deficit is about 20 million homes. If we take the current population of over 160 million Nigerians as reported by the National Population Commission in the 2006 census exercise and assume 30 percent of the population as working adults we have 42 million estimated working adults; assuming about 45 percent or 18.9 million of the working adults qualify for mortgage loans, and assume an average house final selling price at about Naira 2.8 million for a 2-bedroom flat, the possible size of the mortgage market is close to 53 trillion Naira.

Looking at the statistics we see that there are tremendous opportunities in the Nigerian housing sector waiting to be tapped. We should note that the government alone cannot fill the housing gap. In order to fill the gap we would have to leverage on the resources available in the private sector, while also encouraging foreign investment (in short government has no business building houses). Government (federal and the sub-national governments) should focus on providing a favourable investment climate, infrastructure, and mortgage insurance to first time home buyers and low-to middle income families. We must however, note that there are challenges to harnessing the huge potentials inherent in Nigeria’s housing sector, and invariably providing affordable housing in Nigeria. So, in order to resolve the country’s current housing problems, the following steps should be taken:

1. Land Reform/Review of the Land Use Act: It is generally believed that the Government has abused the trust of the people as far as the Land Use Act cap 202 LFN 1990 was concerned. The Act has become an obstacle rather than an enablement to development and therefore needs to be reviewed to improve the availability of land for housing development. Nationalization of land should be reversed. The Land Use Act or any future land reform legislation should not form part of the Nigerian constitution; this will make any necessary amendment of the law easier to achieve thereby making the law responsive to the needs of the times. Apart from the problem of corruption and abuse of trust which has bedeviled the application of the Act, there is the ownership issue which rendered the use of bare land as security for loans very unattractive and risky to the financial institutions. The Act provides for compensation for unexhausted improvements. Revocation of the right of occupancy over undeveloped land, technically, does not attract any compensation except for the ground rent paid in the year of the revocation; the Government which graciously permitted you to occupy her land will not pay compensation when she takes back what was hers in the first place. This, therefore, rendered bare land an unsafe and unacceptable security for a mortgage loan, thereby reducing the potential for raising funds for additional housing development. The requirement of governor’s consent should be expunged from the Land Use Act to facilitate easy transfer, assignment and foreclosure of mortgages which are essential for the efficiency of the mortgage market. A new land reform which guarantees private ownership of property without compromising government’s right of eminent domain is hereby proposed, to increase land availability and improve accessibility of funds for housing development.

2. Improving Land Registration: Land registration is still a very frustrating experience in most States of Nigeria. It is expensive, inefficient and time-consuming. The process is very prone to corruption. The introduction of the Geographic Information System (GIS) in land registration will solve most of the afore-mentioned problems. The initial cost of establishing the system is quite high but the enormous benefits make the system very cost-effective. The experiences in both Abuja and Lagos where the GIS has been implemented are very encouraging. Other States should quickly follow their example.

3. Government-funded infrastructural development: The Government should encourage increased housing development by providing access roads, power, water and drainage facilities to proposed housing development areas. The developers will then channel available funds to provide the houses proper and thus quickly realize the houses.

4. Cooperative Housing: An idea akin to housing development efforts in the African traditional setting is the pooling of resources to develop houses by members of a given social group for the benefit of their members. Members contribute into a common pool for a pre-arranged order of housing development for members; this form of development strategy is most applicable among low-income earners for cheap, albeit adequate low-cost housing.

5. Social Housing: Social housing refers to rental housing which may be owned and managed either by the State or non-profit organizations, or a combination of the two, with the aim of providing affordable housing (Wikipedia, 2007). For majority of the low income earners rented accommodation, subsidized or non-profit, will provide the adequate and affordable accommodation. The Government should through direct funding provisions or negotiated tax waivers assist the housing corporations and certain private developers to provide social housing to alleviate the housing problems of majority of the urban low income earners. We should note that the government alone cannot fill the housing gap. In order to fill the gap we would have to leverage on the resources available in the private sector, while also encouraging foreign investment (in short government has no business building houses). Government (federal and the sub-national governments) should focus on providing a favorable investment climate, infrastructure, and mortgage insurance to first time home buyers and low-to middle income families. We must however, note that there are challenges to harnessing the huge potentials inherent in Nigeria’s housing sector, and invariably providing affordable housing in Nigeria.