Demolitions deepen Nigeria’s housing crisis as 28m deficit persists

Nigeria is grappling with a staggering housing deficit of 28 million units, a crisis exacerbated by widespread demolitions, among other inhibitions, across the country. JOSEPHINE OGUNDEJI writes

Nigeria, with its sprawling 923,768 square kilometres of land, holds an abundance of untapped potential to solve its housing crisis. Yet, despite this vast expanse, the country has struggled to fully harness its land for urban development. In contrast, Dubai, though significantly smaller in size, has transformed its limited land into a beacon of modern urban planning, optimising every inch for growth and innovation.

Dubai, though geographically much smaller, covering only 4,114 square kilometres, provides a striking contrast in land use efficiency. With limited space, Dubai has transformed itself into a global economic powerhouse, thanks to its visionary urban planning. The city has meticulously planned its expansion, focusing on high-density developments, vertical urbanisation, and the creation of new man-made islands to accommodate a growing population. The use of limited land in Dubai has been maximised through innovation, with a clear focus on creating sustainable, well-organised urban spaces that blend commercial, residential, and recreational areas. Dubai’s approach to maximising its small landmass stands in stark contrast to Nigeria’s sprawling informal settlements and chaotic urban expansion. Where Nigeria continues to struggle with inefficient land management, Dubai has capitalised on its compact size by utilising every square meter for high-impact urban development.

The country’s underutilisation of its land resources has been attributed by experts to be largely due to poor governance, demolitions, inadequate infrastructure, and a lack of comprehensive urban planning.

An estate surveyor, Olorunyomi Alatise, said instead of pursuing strategic expansion or transforming informal settlements into formal communities, much of Nigeria’s land remains either underdeveloped or is lost to demolitions in an attempt to manage the complexities of urbanisation.

He said, “These demolitions, rather than addressing the root causes of housing shortages, often displace vulnerable communities and deepen the housing deficit. As a result, much of Nigeria’s growth has been uncontrolled and haphazard, leaving millions in substandard housing. While authorities often justify these actions as necessary for urban renewal, environmental protection, or infrastructure development, the demolitions displace countless families and further strain the already limited housing supply.

“With no concrete plans for resettlement or affordable housing alternatives and alleged unfair compensation, the affected populations are left vulnerable, amplifying homelessness and deepening socio-economic inequalities.

“Another critical challenge is the controversy surrounding the unfair and inadequate compensation for compulsorily acquired lands for major public projects, such as the Lagos-Calabar Road construction. This issue has not only sparked public discontent but has also disrupted land acquisition processes and slowed down associated real estate developments in affected regions.”

In contrast, Dubai, with its more limited land, has shown that effective urban planning, robust policy-making, and innovative land utilisation can address housing challenges. Nigeria’s failure to fully maximise its landmass not only exacerbates its housing deficit but also highlights the missed opportunity for more strategic and sustainable development.

To close the 28-million-unit housing gap, Vice President Kashim Shettima noted that it would take a staggering N21trn to bridge the housing shortfall. “Nigeria has a deficit of 28 million houses, and we will need N21trn to meet our housing needs,” Shettima stated at the groundbreaking for a 500-unit housing estate in Sokoto in 2023.

$900bn unlocked dead capital

Nigeria has significant untapped business potential in its abandoned and underutilised property. These dormant assets are estimated to be worth over $900bn, according to PricewaterhouseCoopers Nigeria.

The international consultancy firm stated in a report, titled ‘Nigeria Economic Outlook: Seven trends that will shape the Nigerian economy in 2024,’ that the country had as much as $900bn worth of dead capital locked up in residential real estate and agricultural land.

It noted that the dead capital in the country included the Federal Government’s abandoned property estimated at N230bn.

According to the report, Nigeria’s housing deficit is estimated at 28 million units, while the population is expected to reach 223.8 million this year.

Despite the huge housing deficit, it noted that demand for housing remained depressed due to high rental and construction costs and declining disposable incomes.

It read in part, “PwC estimates that Nigeria holds as much as $900bn worth of dead capital locked up in residential real estate and agricultural land, including the Federal Government’s abandoned properties estimated at N230bn.”

The Principal Partner at Ubosi Eleh & Co., Chudi Ubosi, in his company’s quarterly real estate market briefing, cited a 2022 report by the Nigeria Institute of Quantity Surveyors, which stated that Nigeria had over 56,000 abandoned projects owned by states and the federal government.

Ubosi said those projects were scattered across the country’s six geopolitical zones, with South-South having 11,000; South East, 15,000; South- West, 10,000; North-West, 7,000; North-Central, 7,000; North East, 5,000, while Abuja, the federal capital territory, has 2,000 abandoned projects.

“Nigeria has over 300 real estate properties worldwide, many of which are abandoned and underutilised; thousands of kilometres of road projects at various stages of construction have all been abandoned nationwide,” he said.

According to Ubosi, who spoke on ‘Reinvigorating Nigeria’s Economic Potential with Dead Capital,’ Nigeria’s land size of 923,000 square kilometres, less than 10 per cent is titled, which places it ahead of just Mozambique and Zambia, where only three per cent of land is titled.

Season of demolitions

The most recent one is the demolition of residential and corporate properties in Victoria Island, Lagos State, by the federal government. This was done to pave the way for constructing the 700-kilometre Lagos-Calabar Coastal Highway. It is compounded by the expected demolition of over 2,000 houses in the Okun-Ajah community in the Eti Osa Local Government Area of the state for the same purpose. Other properties will fall to bulldozers as the project continues. The government should transparently compensate individuals who legally acquired their properties.

Lagos has also embarked on massive demolition of properties. This occurred in Ojota and Ojodu, where the government claimed the buildings were erected on drainage facilities. Other places like Lekki, Ikota, Alaba, Abule-Ado, Ajao Estate, and Ladipo have been visited by bulldozers.

Residents of Anambra, Enugu, Kogi, Oyo, Kano, and the FCT have witnessed the demolition of houses, shops, and makeshift houses in recent weeks. In Bauchi State, where the government is about to construct two interchanges, the governor has been labelled ‘Mr. Demolition.’

Bulldozers have descended on shops and shanties in Abeokuta, the Ogun capital, and under bridges and illegal shanties on the Lagos-Ibadan Expressway. Early in May, Benue pulled down 40 houses for “defacing Makurdi,” the state capital. Eight hundred houses have been marked for demolition in the state for blocking the floodplains. While some were executed to restore sanity, others were rash.

Yet, the government is mainly to blame for allowing the illegal structures to stand in the first place. It feigns ignorance when areas earmarked for industrial layouts, farming, and other activities are sabotaged by corrupt government officials, infringed upon by slum dwellers, and sold by greedy landowners.

In 2021, a lawmaker representing Bauchi Federal Constituency at the House of Representatives accused the state government of demolishing his house at the GRA for “political reasons.” Governor Abba Yusuf of Kano State has also been accused of demolishing structures for political reasons.

Instead of embarking on destruction without commensurate construction, the government could take a leaf from the books of India and Brazil, which have implemented systems to regularise and integrate informal settlements into the formal city fabric.

Bureaucratic bottlenecks

Alatise further asserted that the root cause of the country’s persistent housing crisis and the proliferation of informal, extra-legal settlements lies in the complex and often bureaucratic land documentation process.

He added, “The inefficiencies and lengthy procedures associated with land acquisition and registration create significant barriers for individuals seeking legal land ownership. In many cases, the bureaucracy is so tightly wound that people, in an attempt to bypass the lengthy process, often resort to acquiring land through informal means. This lack of proper documentation and verification of land ownership leads to the establishment of informal settlements that lack the necessary legal backing, infrastructure, and planning.

“Many Nigerians, frustrated with the bureaucratic delays, simply acquire land without doing proper due diligence and proceed to build on it. As a result, these developments often end up encroaching on government-owned land, protected areas, or other legally designated zones. Without proper documentation, these settlements remain outside the formal urban planning system. This lack of legal recognition leaves these informal settlements vulnerable to demolitions, which often occur without warning, displacing families and further exacerbating the housing crisis. Rather than addressing the root cause of these settlements, it boils down to bureaucratic inefficiencies resulting in demolitions simply pushing the problem further underground, creating a vicious cycle of displacement and legal uncertainty.

“This issue is compounded by the failure of local authorities to streamline land documentation processes and reduce the red tape surrounding land acquisition. The bureaucratic bottlenecks in securing legal titles for land contribute to the continued growth of extra-legal settlements across Nigeria. A more efficient land registration system, alongside proactive urban planning and policies that integrate these settlements into the formal housing market, would help alleviate the pressure. The problem isn’t just a matter of illegal land grabbing but also an issue of how cumbersome procedures push people into illegal practices, leading to informal settlements that eventually face the threat of demolition. Therefore, reforming land documentation processes is crucial in addressing the root cause of extra-legal settlements and ultimately reducing the housing deficit in Nigeria.”

REDAN reacts

Real estate developers in Nigeria recently faulted the spate of property demolitions in the country, especially in Lagos and Abuja, which account for over 60 per cent of real estate development activities in the country.

The developers, under the aegis of the Real Estate Developers Association of Nigeria, were particularly worried by the uncoordinated demolition of properties in Lagos to pave the way for the ongoing construction work on the Lagos-Calabar coastal highway.

The association in a recent press conference in Lagos addressed by its national executives, along with those of the Lagos State and South West zonal chapters, tasked the Federal Ministry of Works, which is supervising the highway project, to respect Nigerians’ constitutional rights and follow due process before undertaking property demolition.

“Government should be governed by laws rather than individuals’ discretion. Any action that disregards the constitutional rights of citizens sets a dangerous precedent that undermines equity and fairness. As we have seen in recent times, these unchecked demolitions are causing immense hardship for those affected and threatening the livelihoods of many Nigerians, including our members,” Akintoye Adeoye, REDAN President, said at the conference.

Adeoye noted that the ongoing destruction of project sites and investments across Lagos has already forced many developers to seek opportunities in other states, further deepening the housing deficit in Nigeria. He added that the government must ensure that fairness and transparency prevail, as these demolitions have significant economic and social impacts.

The Vice President, South West Zone, REDAN, Kunle Adeyemi, stressed that the impact of these demolitions goes beyond the shores of Nigeria. He explained that many Diaspora Nigerians are reconsidering their investment decisions back home because, according to them, the security of investment is no longer guaranteed.

Adeyemi lamented that a country that has a heavy housing deficit burden on its shoulders is busy demolishing the homes of the few who have managed to own one, adding that it is worrying that a government that is globe-trotting in search of foreign investors is destroying homes and investments that are already established and thriving.

“What is happening is discouraging new investment in this sector. About 35 per cent of diaspora investors have been affected, and these are people whose annual remittances contribute significantly to the national GDP. We as a body want both federal and state governments to make Lagos an investment haven for all categories of investors.”