Housing Solutions Demand More Than Law

When the Lagos State Government recently announced the new Tenancy Law, limiting rent advance payments to no more than three months for certain categories of tenants, relief washed over thousands of residents. For many renters, the law feels like the long-awaited response to a quiet but widespread hardship. In a city where tenants are often required to pay one or even two years’ rent in advance, the burden has long crossed into the unbearable. So, when the state intervened, many rightly applauded. The intention is noble, the optics are politically sound, and the headline offers hope.

That hope is not misplaced. This new law is a statement of solidarity. It tells tenants they are not invisible to the machinery of the state. It attempts to reset a rental dynamic that, for too long, has left tenants at the mercy of landlords in a market defined more by scarcity than fairness.

The Lagos State Government deserves credit for its political courage. In a city as complex as Lagos, with its vast informal economy, skyrocketing population, and overstretched infrastructure, it is no small feat to draft a law designed to make everyday life more affordable. The effort to codify rent regulation is an important signal. But laws, while powerful on paper, do not operate in a vacuum. They are only as strong as the systems and incentives that underpin them.
Which is why this law, as humane and well-intentioned as it is, may ultimately struggle to deliver real change.

Policy analyst Ademola Adigun framed the problem in a recent Facebook post with characteristic clarity: “The Lagos Tenancy Law… is not the solution. It is not even enforceable. The problem in Lagos is supply not meeting demand. There is also cost.” He is right. Without tackling the economic roots of the housing crisis, laws such as this risk being little more than policy theatre, earnest declarations with no legs to stand on.

Scarcity Market Cannot Be Legislated Away

Lagos is not suffering from landlord cruelty; it is suffering from a systemic housing shortage. The problem is structural, not behavioural. Demand for housing far exceeds supply, and the housing stock available is poorly distributed across income segments. The city grows by an estimated 80 people per hour, with new entrants needing homes the market is not prepared to provide. The result is predictable: scarcity fuels cost, and cost drives behaviour.

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In such a tight market, landlords are not being irrational when they ask for annual or biennial rent in advance. Many of them are reacting to a volatile economic environment where long-term rental income is insecure, dispute resolution is unreliable, and the cost of maintaining property is rising faster than the naira can keep up. With inflation in double digits and property taxes increasing, collecting rent in advance becomes less about greed and more about survival. It is a way to hedge risk, ensure liquidity, and guarantee maintenance funds.

The new law effectively asks landlords to bear these burdens with no safety net. There is no mention of rent insurance to protect landlords from default. No support for rental yield tax incentives. No provision for tenant vetting systems or legal mechanisms to expedite eviction in the case of non-payment. In the absence of such tools, many landlords will choose to ignore the law entirely. Others may increase monthly rates to compensate. Some may exit the market altogether, especially those renting lower-income units, where the margins are already too thin.

The market, after all, cannot be coerced into equilibrium. It must be enabled.

Housing Markets Respond to Incentives

If Lagos truly wants to make rent affordable and predictable, it must address the forces that shape housing supply and rental behaviour. That begins with fixing the broken economics of real estate development in Nigeria.

First, the cost of construction is punishing. Cement prices have tripled in recent years. Fixtures, fittings, finishing materials, and even labour are all exposed to inflation and currency devaluation. Developers are forced to import key components because local manufacturing capacity is underdeveloped. Even when a house is built, it must be serviced, by private water supply, backup electricity, and often self-funded road access. These hidden costs make housing production expensive and inaccessible for mass demand.
Second, there is a near-total absence of mortgage finance. Nigeria’s mortgage penetration hovers under 1 percent. Interest rates are prohibitively high, hovering between 18 and 25 percent, and loan tenures are too short to make repayments manageable for working-class citizens. With limited access to housing finance, most Lagosians are locked out of ownership and forced into the rental market. And since rental income is also unattractive for investors, due to maintenance costs, poor tenant protections, and low yields, very few choose to develop property specifically for rental purposes.

The result is a broken pipeline: homes are not being built affordably, and those that are built are not accessible. This bottleneck is further complicated by an inefficient land administration system. Obtaining legal title to land in Lagos can take years, and the process is riddled with bureaucratic friction and cost. Without clear title, developers cannot access credit, and buyers cannot secure financing. The legal uncertainty feeds into housing scarcity and ultimately inflates rental pressure.

This is not a law problem. It is a system problem.

Law Should Follow Structure, Not Precede It

To create a healthy rental ecosystem, the Lagos state government must first lay a proper foundation through investment, reform, and smart incentives. Regulation works best when the underlying structure is strong. It cannot substitute for structural transformation.

Here, Lagos can take lessons from other fast-growing urban centres around the world. In São Paulo, rental affordability was achieved not through caps, but through institutional investment in low-income housing backed by pension funds. In Johannesburg, municipal governments invested heavily in urban infrastructure in outer zones, making housing development cheaper. In Mumbai, slum redevelopment was incentivised by granting developers density bonuses. In all cases, the state acted as both regulator and enabler.

What Lagos needs now is a Housing Investment Framework, a clear plan to crowd in long-term capital, de-risk construction, fully digitise land titling, and scale affordable building technologies. The state must reduce the cost of doing business for developers while also improving access to finance for buyers and renters. It must also rethink infrastructure delivery – prioritising transport, drainage, water, and power access in areas earmarked for housing expansion.
Imagine if tenants in Agege or Alimosho could live in affordable units with access to reliable BRT services linking them to jobs in Ikoyi or Lekki. Suddenly, demand pressure would ease in the centre, and landlords would face competition. Rent would stabilise naturally, not because of law, but because the market found a new equilibrium.

In this sense, the role of law is to support, not pre-empt, economic logic. A three-month rent cap can work, but only if landlords feel protected. If tenant screening is digitised, rental courts are efficient, and rent insurance is available, landlords may willingly offer shorter payment terms. But forcing their hand without changing the incentives is a recipe for non-compliance and unintended consequences.