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Land Use Act Frustrating Housing, Mortgage Financing

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By Chika Okeke, Abuja
The contentious Land Use Act may be thwarting mortgage financing and provision of affordable housing by the government, community and estate developers in the 36 states of the federation, including the Federal Capital Territory (FCT), LEADERSHIP Sunday findings have revealed.
The Act which was enacted in March 1978 by the Olusegun Obasanjo military administration empowers state governors to control and manage all lands in urban areas, while the local governments manage all lands within their areas of jurisdiction according to Part 1, Section 2 (a, b) of the act.
It was gathered that this section of the act has continued to cause fracas between government and communities with the transfer of land ownership to the government instead of communities, a privilege that has been abused by state governors.
For instance, it has manifested in endless land dispute in the oil producing communities of Niger Delta region between the federal government and the locals who question the eligibility of the government to own greater part of the proceeds from oil revenue.
Regrettably, the sale of community lands is done at will with little or no compensation for the natives, as currently witnessed in the FCT.
At the 10th Abuja Housing Show organized by FESADEB Communciations in July last year, Senate President Bukola Saraki said the senate was working assiduously to repeal the 1978 Land Use Act through constitution amendment.
He affirmed that the Senate was hopeful of receiving back the report by September or before the end of the year, adding that the current National Assembly must make a big difference in the housing sector.
But almost one year down the line, Nigerians are yet to receive any positive report concerning the review.
A cross section of stakeholders who spoke with LEADERSHIP Sunday described the act as a thorn in the flesh of developers and called on the legislators to urgently review it.
The group property manager of Efab Properties, ESV Peace Ugo, inquired if the Act was still functional and economical. “If it’s the part people use government powers to collect land from Nigerians and use it for their private gains, then it becomes a problem but if it’s been used for public benefit, then the Act is still relevant”, he said.
He lamented that Nigeria operates rigid land system in which land acquisition by people is difficult except through the government, even as he averred that unless developers are able to buy lands at a cheaper rate, prices of houses would continue to hit the roof.
“The Act is still relevant but there should be a review because of its age and functionality in previous years. The lacunas inherent in the law like people acquiring land through the government and converting it to private use should be reviewed”, he pointed out.
On the failure of the Senate to present the reviewed act, he said, “That shows the seriousness of the government but I believe the reviewed Act will help resolve some bottlenecks in land acquisition”.
He enjoined the upper legislative chamber to fast track the review to reflect the current economic reality so as to encourage housing development.
Also speaking, a consultant to RIC Divine Investment Company Limited, Dr Haruna Audu said one of his company’s missions was to construct houses for low income earners in the public and private sectors, using its 180 hectares of land in Zuba, Niger State.
He also acknowledged that there are bottlenecks associated with land acquisition in the country and appealed to the National Assembly to amend the constitution to knock them off.
“For instance, if you have paid for a land, it’s automatically your own. So, going back to government again to seek for permission for either re-selling or mortgaging the land is problematic; it will make a lot of difference if it can be flattened”, he said.
The chairman of Ataisi Consulting Company, a real estate development institution, Dr Paul Udayi, was emphatic that waiting for government alone to make titles available “is a very serious issue”.
Calling for a review given the dire challenges faced by developers in land acquisition, Udayi said, “By the time the government is not so disposed to providing affordable housing and titles for developers who will in turn create mortgages and also create deeds of assignments for would-be owners of the houses, there are bound to be issues.
“Personally, I have been able to secure my titles, my estate is covered with certificate of occupancy and its over 25.123 hectares and I have over 300 houses constructed, finished and ready for use in Cross River State”.
Udayi maintained that reviewing the Land Use Act was a crucial issue when talking about housing development.
However, the executive chairman of Bauhaus International Limited, Dr. Victor Onukwugha, described the Land Use Act as obsolete and human a major challenge hindering effective mortgage financing and land acquisition in the country.
Onukwugha who is also a real estate developer enjoined the federal government to review the Land Use Act, foreclosure law and titling processes for increased private sector participation.
According to him, “once the Land Use Act is reviewed, it will create good funding for construction and mortgage loan and this has to be addressed through real estate and private developers partnering the government on the provision of affordable housing”.
Onukwugha noted that the review would address the problems of funding hindering the provision of affordable housing, adding that it would lure international financing institutions to Nigerian mortgage system, thereby making provision of housing less cumbersome.





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