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Housing for All: Addressing Affordable Urban Housing Shortages in Nigeria

Access to decent and affordable housing remains a pressing challenge in Nigeria’s rapidly urbanizing context. With over 200 million citizens, Nigeria is the most populous country in Africa and among the fastest-urbanizing countries worldwide. However, the supply of affordable urban housing has severely lagged behind rising demand. This has led to mushrooming informal settlements and urban slums, overcrowding, inadequate housing conditions and a huge housing deficit estimated at over 22 million units. Bridging this shortage of quality affordable housing requires integrated strategies and coordinated action between policymakers, developers, financiers and citizens. This article analyses the root causes of the urban housing crisis in Nigeria, surveys ongoing government initiatives and presents a multi-pronged framework to expand affordable housing supply sustainably.

The Urban Housing Challenge in Nigeria

Nigeria’s housing predicament has worsened with breakneck urbanization. Key factors exacerbating shortfalls include:

Rapid Urban Population Growth

Nigeria’s urban population has ballooned from 15% in 1960 to over 50% currently. City populations and housing needs are rising exponentially, outpacing supply.

Rural-Urban Migration

Millions migrate from rural areas to cities seeking economic opportunities annually. This exerts massive pressure on urban housing and infrastructure.

Poverty and Unemployment

High poverty levels, low incomes and unemployment limit home ownership among Nigeria’s urban populace. About 40% live below the poverty line.

High Costs of Home Construction

Land, building materials, labour and financing costs make home construction expensive. This constrains supply by developers targeting affordable segments.

Lack of Long-Term Housing Finance

The absence of long-tenor mortgages at affordable rates constricts home loans for low and mid-income groups.

Constraints on Land Supply

Difficulties in land acquisition due to ownership complexities, cost and titling procedures inhibit new housing projects.

Infrastructure Deficits

Inadequate power, water supply, sewerage and transport facilities raise costs and delays for real estate projects.

Weak Institutional Framework

lapses in land administration, property rights, foreclosure laws, permitting delays and corruption impede efficient housing market operations.

These structural challenges must be addressed systematically to expand affordable, quality housing.

Government Efforts to Bridge the Housing Gap

Successive governments have initiated policies, plans and programs to tackle housing shortages:

National Housing Programs

Programs like the National Housing Fund provide low-interest mortgages. Social housing schemes target public sector workers.

Mortgage Banks

The establishment of primary mortgage banks and supervision by bodies like the Central Bank of Nigeria aims to expand home financing avenues.


Acts like the Nigeria Housing Finance Program, and Nigerian Mortgage Refinancing Company support mortgage lending and foreclosures.

Tax Incentives

Tax breaks are offered for building materials, and residential mortgages to spur supply and demand.

Infrastructure Development

Upgrades to roads, ports, power supply etc. by bodies like the Federal Ministry of Works reduce housing project costs.

Public Private Partnerships

Partnerships with private developers for projects like the National Housing Program expedite delivery at scale.

Establishment of Development Authorities

Authorities like the Federal Housing Authority promote research, planning and training around housing.

While government efforts have created an enabling environment, huge supply-demand mismatches persist. A cohesive national strategy is imperative.

Key Challenges Facing Affordable Urban Housing

Nigeria’s affordable housing segment faces roadblocks:

High Prices

Even low-cost housing estates built by government agencies are priced beyond the means of the urban poor who need them most.

Mismatch with Buyer Preferences

Cookie-cutter public housing frequently does not match buyer preferences for incremental, flexible designs accommodating home-based enterprises.

Poor Location

Affordable projects are often in city outskirts lacking transport access. This prevents uptake.

Financing Constraints

Affordability barriers persist despite special mortgage schemes due to stringent lending norms, high-interest rates and low tenors.

Corruption and Leakages

Widespread corruption in land allocation and project execution causes delays and wastage.

Weak Participation by Private Sector

High construction costs and low-profitability perception of low-cost projects discourage sufficient participation by private developers.

While affordability, flexibility and access are key priorities, quality, amenities and building standards cannot be compromised either. The solution lies in the careful balancing of trade-offs.

Principles for Developing Effective Affordable Housing Solutions

Certain guiding principles must shape affordable urban housing strategies:

Needs-Based Approach

Considering end-user perspectives and living conditions is crucial.

Locational Advantage

Accessible locations enable livelihoods. Areas with good public transport connectivity are ideal.

Optimized Project Costs

Value engineering, process improvements and technology can lower construction and operational costs.

Community Participation

Involving users in design and development increases acceptance.

Private Sector Participation

Government efforts must be supplemented by private sector efficiencies.

Incremental Housing

Allowing for incremental upgrades caters to growth in household incomes organically.

Accessible Financing

Lowering ticket sizes via micro-loans and innovative tenure models expands affordability.

Mixed Usage

Allowing small businesses and commercial activity within housing projects improves viability.


Green design, renewable energy, water conservation, and waste management principles reduce environmental footprints.

Adhering to these principles will lead to pragmatic housing solutions that work at scale.

Four Pillar Framework for Affordable Housing Provision

A comprehensive strategy attacking root causes on four fronts is needed:

Pillar 1: Conducive Policy and Regulatory Environment

  • Simplified land acquisition, registration and titling mechanisms.
  • Transparent land valuation and procurement norms.
  • Streamlined permitting procedures and approvals.
  • Rationalization of taxes, duties and fees on building materials.
  • Policies encouraging private sector participation via incentives like increased FAR (Floor Area Ratio), relaxes density norms.
  • Single window clearance for affordable housing projects.
  • Strengthened rental laws and foreclosure processes.

Pillar 2: Institutional Support and Execution Capabilities

  • Central nodal agency to coordinate affordable housing development, research and policy across federal, state and municipal bodies.
  • Increased capabilities of bodies like Federal Mortgage Bank of Nigeria and Nigeria Mortgage Refinance Company to drive innovation and outreach in home finance.
  • Multi-stakeholder partnerships bringing together players across the value chain.
  • Thrust on training – skilled labour for construction, housing finance skills.
  • Leveraging technology – building tech, fintech, online systems for transparency.

Pillar 3: Adequate Financing Ecosystem

  • Expanding funding – government budgets, institutional financing, microfinance, diaspora funds, and Real Estate Investment Trusts.
  • Increased flexibility – lower equity requirements, step-up EMI schemes.
  • Refinancing support to primary lenders to enhance liquidity.
  • De-risking via guarantees on loans for affordable housing.
  • Promoting capital market financing instruments like mortgage-backed securities.

Pillar 4: Thrust on Execution and Innovation

  • Large scale public housing and composite development projects across cities involving private developers.
  • Institutional tie-ups between banks, microfinance cos and developers for financing packages.
  • New low-cost construction materials and technologies – compressed earth blocks, prefab structures etc.
  • Innovative design solutions suited for incremental building.
  • Improved urban planning and development controls.

A coordinated push across these four pillars will produce substantive output volumes and move the needle on affordable housing at scale.

Examples of Innovative Affordable Housing Projects

Some innovative affordable housing projects worth emulating are:

Makoko Floating School, Lagos – A prototype floating structure that is flood-resistant and integrates water collection, power generation and composting in a low-income aquatic community.

Affordable Housing, Ogun State – A private developer built 10,000 low-cost homes at $10,000 each through an end-to-end partnership model spanning financing, subsurface infrastructure and site development.

Happy Homes, Asaba Delta State – Locally fabricated compressed earth blocks reduced construction costs by 45% for these apartments while also providing thermal comfort.

Jubilee Estate, Federal Housing Authority – A public housing project benefiting from private sector collaboration for speedy execution and financing packages increasing affordability.

Lafia Township Market Women’s Dormitories – Dorms with commercial activity integrated enable market livelihoods. The design promotes community living and personalization of spaces.

Such innovative models provide valuable success stories for affordable housing in Nigeria.


Nigeria’s urban housing crisis needs urgent action across policy, finance, technology and sustainability levers to expand access for lower-income citizens. The four-pillar framework encompasses requisite structural reforms, incentives for private sector participation, long-term capital infusion and thrust on execution innovations. Partnerships, community-centric solutions and leveraging technology will be vital for 21st-century housing policies. The social and economic imperatives for tackling housing shortages are clear – access to affordable, quality housing enables health, productivity and upward mobility for Nigeria’s growing urban population to realize their aspirations while fostering more inclusive cities.





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