AN INDUSTRY-BASED APPROACH TO CREATING AFFORDABLE HOUSING

AN INDUSTRY-BASED APPROACH TO CREATING AFFORDABLE HOUSING FOR AWOMAMMA’SENIOR WORKERS (a case study of Nigeria breweries, Awommama)

CHAPTER ONE

INTRODUCTION

1.1Background of the Study

Housing is an integral element of a nation’s economy and its backward and forward linkages with other parts of the economy closely bond people’s needs, demands and social processes. These linkages allow housing to act as an important engine for sustainable development and poverty reduction in both society and the economy, and without a functioning housing sector, urban centers cannot be established or developed. A functioning housing sector offers appropriate, affordable housing and sustainable patterns of urbanization which are critical for the future of our ever-urbanizing planet (Arias, 1993).

According to Aribigbola (2006) housing affordability has been widely recognized as an essential issue in creating sustainable built environment especially in the context of developing world cities. Mbamali and Obiekwe (2001) described affordable housing for a particular income group as the range of houses for which the total monthly repayment costs fall within the monthly repayment capability of the average household in that income group. For AHURI (2004) the rational for housing assistance is to improve housing affordability for those receiving the assistance. Kolawole et al (1998) stressed that, for housing to be affordable for certain level of households, there should be provision for subsidy.

In Nigeria, the national housing policy does not want any Nigerian to spend more than

30 percent of their income on housing expenditure (Aribigbola, 2006).In addition, the 1992 National Housing Strategy defined affordable housing as any housing costing less than 30% of income, though some level of workers have over 30% of their salary being deducted for the repayment of the houses allocated to them. This study sets out to ascertain if the civil servants‟ all otees of the Imo State housing scheme have capacity to afford the repayment schedule.

1.2 Statement of the Research Problem.

Mabogunje (2004) stressed that the cost of providing a unit of housing remains out of the reach of the poor because of some other factors that are militating against affordable housing. Thus, brings in the financial dimension – the question of the affordability of housing. The challenge becomes not only to provide the houses but to make the houses affordable to the average Nigerian worker (Onyike, 2007).

However, the Nigeria breweries Housing Scheme was meant to provide senior workers with affordable housing; how affordable are these houses to the beneficiaries are yet to be ascertained.

1.3 Significance of the Study

The study is necessary in order to facilitate the development of large scale housing in Awommama by enabling senior workers with low and medium income to own houses on owner-occupier basis. This research work analyses the repayment burdens borne by private sector senior workers .

It is expected that the findings of the study would inform incumbent and future state governments on how best to maximize the benefits of involving private housing developers in housing delivery, through ensuring that such houses reach as many civil servants as possible and at affordable repayment plans.

1.4 Aim and Objectives

1.4.1Aim

The aim of the study is to evaluate the existing repayment schedule for all otees of the Nigeria breweries housing in Awommama relative to their income, with a view for enhancing the affordability.

1.4.2Objectives

The objectives of the study are to:

Review past and current efforts of Federal and the Niger State governments in housing development, especially Public –Private Partnerships (PPP).
establish the profile of the Niger State Public Sector beneficiaries of the PPP housing development (Nigeria breweries Housing Estate).
evaluate the affordability of the allocated houses to the allotees, under the housing scheme and the existing repayment plan.
suggest an improved repayment plan for enhancing affordability of the housing

1.5 Scope and Limitations

1.5.1 Scope

The study covered:

Houses within the Awommama Housing Estate and senior workers in Nigeria breweries that were allocated houses under the Estate in 2009,the existing formal income based on Consolidated Public Salary Scale (CONPSS) of Public Sector Workers in Niger State as at the time of the study (2011) irrespective of changes in economic circumstances of workers and applicable to all civil servants. Furthermore, the study viewed the housing cost as amount that would be repaid over a stated period of time, other charges over the life span of the house were not considered.

1.5.2 Limitations

The study discovered that only Nigeria breweries Housing Estate was completed and allocated under PPP scheme, hence, the data for the study was obtained only from the estates. As a result, other estates not completed could not be covered by the study.

In addition, only formal salary income for the all otees was considered as source of repayment in the study, other source of income (informal income) was discovered irregular and thus could not be used herein.

CHAPTER TWO

LITERATURE REVIEW

2.1 Housing Development in Imo

2.1.1 Concept of housing

Housing has been universally accepted as the second most important essential human need, after food. Housing in its entire ramification is more than shelter since it embraces all the social services and utilities that go to make a community or neighbourhood a livable environment (National Housing Policy, 2006).

Chatterjee (1981) described housing as a complex product that is crucial for National development in terms of both economy and welfare. Housing provides a combination of services, the first and most basic of which is the shelter offered by the dwelling space. Second, in conjunction with the services of land and utilities, the dwelling provides a variety of environmental services: water supply, sewage and solid waste disposal, energy use, and so on. Furthermore, housing is mentioned as a major component of household consumption.

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