Abuja Rent Control Bill:

Dead on Arrival?

Simeon Ogoegbulem

Shelter ranks high on the scale of basic needs of man after food. As such, the need to have a descent shelter over one’s head remains one of the major headaches of tenants across major cities of Nigeria. However, the issue of a decent and affordable shelter in the Federal Capital Territory (FCT) took a dramatic turn for the worse since the massive demolition of what authorities of the FCT termed as “Squatter Settlements”. 

The massive demolition of houses left in its wake massive housing deficit not just in the FCT but across the entire country. At the last count, data from the National Bureau of statistics (NBS) has it that Nigeria has a deficit of over 17 million houses. Though the demolition brought an equally massive development of housing estates across the FCT, the springing up of these estates has not in any significant way improved on the availability of affordable accommodation in the capital city.

The downturn in the national economy has further worsened an already bad situation to the extent that the challenge is no longer about the availability of houses but also the ability of tenants to sustain the payment of house rents as at and when due.  The economic crisis has made many to put on hold their quest to have their own houses and most of them have to abandon the construction of their houses midway 

For a one bed-room apartment within the city, tenants should be ready to part with between N1.5 million to N2 million while a two or three bedroom flat goes for between N2.5 million to N3.5 million per year.

High cost of accommodation in the city is also driving rents in the suburbs to high heavens. For instance, Gwagwalada that to used to be associated with low rent on houses is now competing with satelite towns like Kubwa and Lugbe where a one bedroom apartment is going for as high as N650,000 to one million naira.

This ugly situation has led to a near crisis point where most tenants are finding it difficult to meet their obligations to their house owners. The nation’s judicial system is said to have loads of cases relating to disputes between house owners and their tenants.

In order to avoid undue embarrassment, most tenants are opting to relocate to far flung suburbs of the federal capital. This move has led to the choking up these suburbs like Kwali, Gwagwalada, Bwari and Kuje. This is even as residents who are daily finding it difficult to meet up with their rent obligations have moved to the neighbouring states of Niger and Nasarawa.

At the end, the inability to meet up with the huge rent placed on houses in the Federal capital has led to a situation whereby many houses have remained without occupants. From Lokogoma to Jahi, Jabi, Airport Road, Karasana and other districts of the FCT are littered with housing estates that are yet to be occupied by tenants. This has created a paradox of sorts as the seat of power is brewing with houses while residents are in dire need of accommodation

Faced with this ugly situation, the Nigerian Senate recently moved to ensure that houses in the territory are not left fallow for a long time by legislating against the mandatory demand for advanced rent payment by tenants. The bill titled, “Advanced Rent (Residential Apartments, Office Spaces, etc) Regulation Bill 2022”, was sponsored by Mr. Smart Adeyemi, representing Kogi West in the Red Chambers of the National Assembly.

The bill, among other things seeks to make it an offence for any landlord to demand payment of advance rent from tenants and reduce advance payment of rents from one or two years by tenants to three months and subsequent monthly payments.

Adeyemi, a former national President of the Nigeria Union of Journalists, while presenting the Bill explained that the proposed legislation would enable tenants to pay maximum advance payment of three months rent, followed by subsequent monthly payment.

The lawmaker while defending the proposed legislation, further explained that the Bill was “borne out of the realization that landlords in the FCT compel tenants to pay one or two years advance rent payment before granting them keys to their apartments”.

Adeyemi stated that the proposed law is targeted at the welfare and wellbeing of the lower income bracket , adding that many “residents of FCT are finding it very difficult to cope with huge rent payment, the reason why many of the houses built for such purposes are empty”.

“The law we are proposing stipulates a maximum advanced rent payment of three months. After the expiration of the three months rent, the tenants are expected to pay monthly. There are many tenants whose salaries are competing with their rents because they live in cities like Abuja,” he explained.

“Many landlords did not secure loans to build their houses, they are products of free money they acquire from the system, yet they make lives difficult for poor Nigerians who do not have such privilege of making ill-gotten money from the system and put up structures”, the lawmaker further explained.

Interestingly, this is not the first time the government would move to regulate rent administration in the country. In the past, states like Lagos, Anambra, Plateau and Rivers have enacted laws to stabilize the rental accommodation and ensure that their cities provide affordable housing for lower and middle-class residents as well as stop the eviction of tenants by landlords.

In spite of the good intentions of the proposed bill, stakeholders in the housing sector are of the opinion that the law would be dead on arrival. This is because, the conditions that would make the law to be effective in Abuja and elsewhere have not been put in place by the government.  

For instance, Mr. Charles Anyanwu, a real estate practitioner is of the opinion that government should embark on two major policy reforms that would liberalize the housing sector in Nigeria. First, according Anyanwu, is for the government to embark on massive construction of low income houses for civil servants across the country. The second policy reform is for government to liberalize land acquisition.

Anyanwu is of the strong opinion that government cannot jump in to regulate what it did not contribute in establishing. “You know the cost of acquiring a land in the FCT, the huge amount you pay for approvals and other sundry levies and the attendant compensation you pay to the indigenes? All these add to the cost of housing delivery and would make monthly payment of rent unachievable.”, Anyanwu noted.

He stated that house owners choose to make their investments in the housing sector just as others choose investing in the capital market or oil and gas, while others opt for haulage or aviation. It is therefore his view that coming with legislation to force rent payment on monthly basis is a great disincentive to investors in the housing sector.

He blamed the large number of empty houses in the FCT in the midst of accommodation shortage to the fact that most of those empty houses were acquired with free state funds. According to him, if those houses were acquired through bank facilities, the owners would be worried to the extent of at least servicing the loans rather than allowing the houses to lie waste.

Mr Philip Yaro, an estate surveyor said that the National Assembly, trying to enact a legislation to control rent payment is akin to one trying to reap where the person did not sow. Aligning his position with Anyanwu’s, Yaro urged government to provide houses as was done in the 1970s up to late 1990s. He noted that government should provide mass housing schemes while the private sector operators should provide luxury or upper end accommodation for those who can afford them.

Yaro further challenged government to stop emulating whatever it fancies from Europe and other developed world while turning a deaf ear to the welfare services that those developed countries are providing for their citizens. He cited the example of council flats in United Kingdom where government houses the vulnerable in the society.

A civil servant who does not want his name in print described the move by the lawmakers to enact a law to regulate payment of rent in the FCT as a waste of scarce public resources. He noted that the accommodation challenges faced by residents of the FCT worsened following the introduction of the monetization policy and the demolition of houses. 

He wondered how the lawmakers reasoned and concluded that the accommodation problem of the FCT would be solved through monthly payment of rents. According to him, where will the majority of the residents secure the funds for monthly payment when government is always in default of paying staff salaries as and when due. “As we speak the Academic Staff Union of Universities (ASUU) is on strike, Area Council Workers in the FCT are also on strike, so tell me with this type of situation, how will the proposed law be effective?”, he queried.

For a cross section of residents of Abuja, the proposed Abuja Rent Control Bill is dead on arrival. According to them, what the lawmakers are engaged in is putting the cart before the horse. The residents were of the opinion that the proposed law would not serve anybody’s interest