CHAPTER ONE

INTRODUCTION

1. BACKGROUND OF THE STUDY

Housing has been a concern of individual, families, group and government since the down of urban civilization. This Problem has often been associated to land acquisition problem, low income of the individual, high cost of building materials, statutory regulation, non use of local building materials etc. It is usually a situation of either the government has failed in meeting up with its obligations or that the individuals had remained for some times incapacitated to be able to break through various bureaucracies in land acquisition procedure. One of the greatest problems in the world today is that of provision of shelter. Shelter must not be only adequate for the population but also habitable. This problem is more pronounced in the urban areas where population pressure is on the increase. The problem of looking for shelter leads to invasion of land for the purpose of building In Nigeria, the urban housing situation continues to deteriorate in the absence of an adequate arrangements to ensure that housing facilities expanded in line with the rapidly population growth. Despite the past efforts of the nation’s housing problem, it was evident that the combined effort of the public and private sectors over the past successive government plans had continued to fall far short of housing need. Past governments had tended to leave this important sector almost entirely to private effort, concentrating itself on the provision of limited number of residential quarters for its deserving officers (Bowyer, 2008).

It is evident in Nigeria that in most cases objectives designed for a particular project are hardly ever realised. This is especially so when a critical look is made of the various government housing policies. For instance, Egunjobi, (2007) assessed the effectiveness of public low income housing programme in metropolitan Kano, which showed that the overall contribution of the programme in terms of increasing the supply of new housing required in metropolitan Kano was 50% of the planned target of 77,852 housing units for the period between 1975 and 1980. In addition, the low income group for whom the programme was meant did not constitute a substantial proportion of the eventual beneficiaries.

The delivery system of housing in the country is a combination of many integrated components which include land, building materials, infrastructure, policies, building regulations and more importantly finance. The priority accorded the issue of housing is immense; to most governments, the availability of sufficient but basic housing for all is often stated as a priority for enhancing the social needs of the society. In Nigeriaalone there is a shortage of 150,000 units annually (National housing policy, 2004), the government alone with its public housing initiatives cannot curb this problem hence the need for private investors in the real estate market.

Habitable housing contributes to the health, efficiency, social behavior and general welfare of the population. Apart from providing man with shelter and security, housing plays a major role serving as an asset. For any typical home-owner, the house is a major asset that adds onto his portfolio and for many households; the purchase of a house represents a lifelong investment and a store of wealth. Provision of housing services depends mostly upon a wellfunctioning housing finance system. The consideration of constructing or acquiring a house is influenced by the cost and various government economic policies which could be fiscal or monetary (Giussani and Hadjimatheou, 1991) and even depends on the economic system adopted in a country.

Housing is a major purchase requiring long-term financing, and the factors that are associated with well-functioning housing finance systems are those that enable the provision of longterm finance. It is evident that countries with stronger legal rights for borrowers and lenders through collateral and bankruptcy laws, credit information systems that are well informed, and a stable macroeconomic environment have more developed housing finance systems (Warnock 2008). These factors also help explain the variation in housing finance across emerging market economies.

1. STATEMENT OF THE PROBLEM

In line with the government’s effort in achieving Vision 2020 and the overall development of the economy, provision of housing is essential. With an acute shortage of 150000 units annually and the ever-increasing population, a housing problem arises and consequently social and economic problems. Housing here is not the only problem, but adequate housing that can allow for the comfort ability levels sort by mankind. . The importance attached to housing problems by the government has resulted in the adoption of the housing policy; its implementation and effectiveness has not been adequate as is depicted by the current state of housing in Nigeria.

Fallis (1994) noted that housing problem might be focused on the causes, for example; the housing problem might be described as being caused by an underdeveloped mortgage market which leads to the loss of simple rental housing. There were various reasons deduced as causes of housing problems. The most important reason has been the variation between the price of habitable and decent accommodation and the number of individuals that can afford it. In the long term, market forces and government intervention determine the specific size of each of the housing tenures (Warnock 2008).

According to Dean Baker (2008), before the mortgage crisis, banks offered easy access to money.  One could qualify for mortgages with little or no documentation. Even individuals with bad credit could qualify as subprime borrowers. Stringent measures on Mortgage applications were not applied to check for accuracy as well as it should have been. When the mortgage crisis began, home prices stopped rising, borrowers who bought more houses than they could afford stopped paying the mortgage, monthly payments increased on adjustable rate mortgages as interest rates rose.

Clois and Joan (2009) concluded that there is no doubting the fact that many developing countries blindly imitate foreign laws which were either imported from abroad or inherited as part of the colonial legacy. The developing countries should understand that these laws which were introduced by the colonist were meant to maintain their home countries status in the new era of territories they find themselves.

1. AIM AND OBJECTIVES OF THE STUDY

The aim of the study is to investigate into the factors affecting housing projects in Nigeria.

Specifically, the study seeks to:

1. To determine the nature of land acquisition by the respondents in Nigeria
2. Examine whether lack of funds affect housing projects in Nigeria
3. Examine whether mortgage market and market forces affect housing projects in Nigeria
4. Examine whether governmental laws affects housing projects in Nigeria
5. To proffer solutions to the identified problems factors affecting housing projects in Nigeria

1. RESEARCH QUESTIONS

Arising from the research objectives, the following research questions will be addressed in the study as presented below:

1. What is the nature of land acquisition by the respondents in Nigeria?
2. Does lack of funds affect housing projects in Nigeria?
3. Does mortgage market and market forces affect housing projects in Nigeria?
4. Does governmental law affect housing projects in Nigeria?
5. What are the solutions to the identified problem factors affecting housing projects in Nigeria?

1. STATEMENT OF THE HYPOTHESIS

H0 Housing projects is not influenced by factors other than nature of land acquisition

H1 Housing projects is influenced by factors other than nature of land acquisition

1. SIGNIFICANCE OF THE STUDY

The study is important to the Nigerian housing policy formulation process as it will identify the major issues in housing finance. The study will also provide useful background information for those institutions involved in housing finance initiatives to understand the types and characteristic of housing finance loan products required in the market.

The findings on the study will be useful to the stakeholders, land buyers and players in the real estate industry as it will reveal whether lack of funds; mortgage market and market forces; and governmental laws affects housing projects in Nigeria.

The study will assist individuals in decision making processes and assessing the different avenues that can avail funds for housing development.

1. SCOPE OF THE STUDY

The study focuses mainly on investigation into the factors affecting housing projects in Nigeria, specifically; the interest of the study will be restricted to land owners and estate industry in Nigeria, due to time and finance constraints. The focus of the study will be on nature of land acquisition; issue of funds; mortgage market and market forces; and governmental laws.

1. LIMITATION OF THE STUDY

TIME CONSTRAINTS: One the challenges experienced by the researcher is the issue of time; the research will simultaneously engage in departmental activities like seminars and attendance to lectures. But the researcher was able to meet up with the deadline for the submission of the project.

FINANCIAL CONSTRAINTS: Every research work needs funding; however lack of adequate funds might affect the speed of the researcher in getting materials for completion of the project.

1.9 DEFINITION OF TERMS

Housing

Having a place of shelter, of safety and of retreat, i.e. a home, is commonly considered a fundamental physiological human need, the foundation from which to develop higher human motivations.

Development plan

A development plan is a document which details the overall strategy of the council for the proper planning and sustainable development of an area and generally consists of a written statement and accompanying maps.

Housing quality

Housing quality refers to the physical condition of a person's home as well as the quality of the social and physical environment in which the home is located. Aspects of housing quality include air quality, home safety, space per individual, and the presence of mold, asbestos, or lead.

Housing finance

Housing finance refers to money provided by any source other than the residents or builders of the dwelling for the construction or purchase of housing. It includes construction funds loaned to builders and mortgage funds loaned to individual families by.