January 2022 when the proposed Lagos Monthly Rent scheme is planned to start is here, yet the enthusiasm that should greet such a scheme remains to be seen. This may be partly because many of the tenants do not have the right information on how the scheme will serve their needs.
Beyond the announcement that tenants in the state would no longer be paying advance rents and that the state government has set aside N5 billion for the scheme, prospective beneficiaries do not know that yearly rent still stays but with much relief.
What tenants need to know, according to Debo Adejana, chairman of, Real Estate Developers Association of Nigeria (REDAN), South-West zone, is that the state government is going to create a body that would be working with the private sector to implement the scheme.
Adejana, who quotes the state governor, Babajide Sanwo-Olu, explains that prospective tenants would be seeking and obtaining a one-year loan from the new body with which they will pay their landlord’s one-year rent, but repays the loan monthly.
“This is the information that is not available to everybody and I think the government needs to find a way to communicate this well to the people because this is a laudable scheme that, in my view, is the way to go,” he tells BusinessDay.
“What the scheme simply means is that somebody is going to pay on behalf of those who need houses to rent but cannot pool together all the money needed for one year’s rent at once,” he states.
He notes that the money to be repaid won’t be the same as the money borrowed as there would be interest and other charges, but because it is the government’s social programme, the charges are not going to be as high as what obtains in an open market.
Another good side of the scheme, he discloses, is that a portal would be opened where tenants could go to search for rental properties of their choice. The portal would also be open to landlords who might wish to place their properties there for rent.
Tenants who are interested in the scheme, which will be starting with the formal sector, must be registered residents of the state and must be up-to-date in their tax obligations to the state.
The Lagos State government, late last year at the Lagos Real Estate Market Place Conference and Exhibition, announced that it would be implementing a monthly rent scheme starting from January this year.
Toke Benson-Awoyinka, a special adviser to the state governor on housing, explained during a discussion on Rental Policies at the event that the new initiative was a social investment scheme initiated by the state government to ease the burden of yearly rent payment on residents.
Arguments against the scheme for which the state government said N5 billion had been set aside, are that job security in the country is not guaranteed; there are no government’s alternatives that tenants could resort to, and that the scheme could discourage investment in housing in the state.
But Moruf Akinderu-Fatai, the state’s commissioner for housing, dismissed these fears, assuring that the government would protect the interest of investors, tenants, and landlords and would guard against payment default or abuse from tenants.
“There is a system we are working on to make sure that the tenants, landlords, and our private sector partners in this scheme are protected,” the commissioner said at an interactive session with property editors.
Continuing, he assured, “aside from talking to the private sector and investors to see how they can help, we are also doing our part alongside our partners who have the same interest because not everyone can buy a house.”
The monthly rent scheme is part of efforts by the state government to solve its huge housing problem. Lagos is an active rental market where it is estimated that 60 percent of its population live in rented accommodation spending about 50 percent of their income on rent.
Apart from its own developments, the state also partners with private sector players, all in an effort to reduce its housing deficit estimated at 3 million units.