The proposed Lagos Monthly house rent program is set to begin this January 2022; however, many of the Lagos state tenants are unaware of how it would meet their demands.
The Lagos State Government announced this scheme last year at the Lagos Real Estate Market Place Conference and Exhibition. The scheme was done to relieve tenants from paying advance rent; however, the yearly rent still stands.
During a discussion on Rental Policies at the event, Toke Benson-Awoyinka, a special adviser to the state governor on housing, said that the new monthly house rent scheme was a social investment program introduced by the Lagos state government. It was introduced to reduce the burden of yearly rent payments on residents.
However, the housing scheme raised some concerns as employment stability in the country is not guaranteed, renters have no government options to rely on, and the scheme may impede investment in housing in the state.
The state’s housing commissioner, Moruf Akinderu-Fatai, downplayed these concerns, stating that the government will protect the interests of investors, tenants, and landlords and defend against payment default or tenant abuse.
The monthly house rent system is part of the Lagos state government’s efforts to address the state’s massive housing crisis. Lagos has a thriving rental market, with an estimated 60% of the population living in leased housing and paying nearly half of their salary on rent.
Here is a Breakdown of How the Monthly House Rent Scheme will Work
According to the chairman of the Real Estate Developers Association of Nigeria (REDAN), South-West Zone, Debo Adejana, here are the breakdown:
- The state government will establish a body that will collaborate with the business sector.
- Potential tenants would apply for and receive a one-year loan from the established body, which they would use to pay their landlord’s one-year rent while making monthly repayments on loan.
- The loan to be repaid will not be the same as the money borrowed since interest, and other fees will be added. However, the fees will be lower than on the open market because it is a government-sponsored social program.
- The strategy would result in creating a platform where tenants may browse for rental apartments of their choosing. Landlords who also desire to list their properties for rent on the platform would also do so.
- The scheme will start with the formal sector, and interested tenants must be registered residents of Lagos state and consistent with their state tax responsibilities.