GENESIS, PROBLEMS AND PROSPECTS OF PROPERTY DEVELOPMENT AGENCY IN NIGERIA
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GENESIS, PROBLEMS AND PROSPECTS OF PROPERTY DEVELOPMENT AGENCY IN NIGERIA
ABSTRACT
Property and economic progress are symbolically linked. Property business should be a vital aspect of economic development and an alternative source of income for developing countries.
Beginning in the 1960s, economists and legal experts began to analyse the property rights held by tenants under various estates carried out by property development organisations as part of the burgeoning subject of law and economics.
The development process necessitated the expertise of numerous individuals, making the process difficult and time-consuming for the average development agency.
Property development remains a viable and profitable industry, necessitating the need for the government to implement specific steps to alleviate the problems and difficulties that development agencies encounter while simultaneously meeting the expanding housing demands of the population.
The property industry has remained one of the least exploited industries with the potential to be a large source of revenue for the government, as it is currently in the United Arab Emirates [Dubai] and China.
CHAPITRE ONE
1.1 HISTORICAL INTRODUCTION
The origins of the Property Development Agency may be traced back to a type of control in the planning, distribution, and utilisation of land based on the nature, norms, and customs of the people in accordance with Customary Law.
Nigerian planning regulations are becoming tools for environmental design. Planning and development are governed in part by English laws and in part by local legislation.
Housing has always been low on the list of priorities for social investment, and state governments have relied on local governments to address the issue. Despite the establishment of the Federal Mortgage Bank of Nigeria in 1977, efforts to provide low-cost rural housing have been negligible, and shantytowns and slums are ubiquitous in urban areas.
Overcrowding in urban dwellings is a major issue. It is believed that approximately 85% of the metropolitan population lives in single rooms, with eight to twelve people per room. The living conditions are deplorable.
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The government has failed to meet the needs of the population in terms of housing, prompting them to seek collaboration with development agencies in order to alleviate the suffering of the populace, particularly in urban regions. Bolanle Bamgbose & Associates, a renowned Property Lawyer in the country and Lagos State in particular,
has taken up the challenge of meeting the needs of the urban centre in building affordable homes. One such project undertaken by this Law firm cum Property developer is Oke-Alo Estate in Gbagada Area of Lagos State, although her role was completely limited to providing land for the owners to develop.
1.2 INTRODUCTION
DEVELOPMENT OF LAND
Purchasing undeveloped land for future development is known as speculative development. The primary tool for community development is land subdivision. Subdivisions technically
explain the legal and physical stages that a developer must follow to convert raw land into developed land. Subdivision is an important component of a community’s expansion since it determines its appearance and the mix of infrastructure, such as roads, drainage systems, water, sewage, and public utilities.
Land development, in general, is the riskiest but most profitable strategy since it is so reliant on the public sector for approvals and infrastructure, as well as because it requires a long investment period with no positive cash flow.
Following subdivision, the developer usually sells the land to a home builder or another end user, such as a warehouse or shopping centre. In any case, the usage of Spatial Intelligence tools mitigates these developers’ risk by modelling the population patterns and demographic make-up of the type of clients that a home builder or business would like to have surrounding their new locations.
A development team can be formed in a variety of ways. A huge corporation, on the other hand, may offer a wide range of services, from architecture to engineering. A development firm, on the other hand, may consist of one principal and a few employees who hire or contract with other organisations and professionals for each service as needed.
It is necessary to assemble a team of professionals to solve the environmental, economic, physical, and political concerns that arise in a complicated development project. The capacity to coordinate the execution of a sequence of interrelated activities efficiently and at the appropriate time is critical to a developer’s success.
Many professionals are needed to complete the development process: architects, landscape architects, civil engineers, and site planners to address project design; market consultants to determine demand and a project’s economics; attorneys to handle agreements and government approvals;
environmental consultants and soils engineers to analyse a site’s physical limitations and environmental impacts; surveyors and title companies to provide legal descriptions of a property; and licensors to provide
property use, property valuation, and determining landowner revenues are among the oldest concerns in economic theory. Agriculture requires land as an input (element of production), and agriculture is by far the most important economic activity in pre-industrial society.
As a result of industrialization, significant new uses for land emerge, such as locations for factories, warehouses, offices, and urban agglomerations. Furthermore, the value of real property in the form of man-made structures and machines rises in comparison to the value of land alone. Real property finally grows to embrace virtually all forms of tangible fixed capital.
With the advent of extractive industries, real estate has expanded to include natural capital. With the increase of tourism and leisure, the value of real estate has expanded to include scenic and other amenity benefits.
Beginning in the 1960s, economists and legal experts began to analyse the property rights held by tenants under the various estates, as well as the economic benefits and costs of the various estates, as part of the burgeoning discipline of law and economics. As a result, we now have a much better grasp of the:
Tenants’ property rights are protected by numerous estates. These include the following:
o Determine how a piece of real estate will be used;
o Prevent others from using the property;
o On mutually accepted terms, transfer (alienate) some or all of these rights to others.
The nature and repercussions of transaction costs in estate changes and transfers.
In Nigeria, the rate of urbanisation has increased dramatically during the previous two decades. In the early 1950s, a census revealed that there were approximately 56 cities in the country, with these cities accounting for approximately 10.6% of the overall population. Given the predicted rise in urban population, the scale of the country’s housing problem is huge.
The National Rolling Plan (NRP) estimates that the national housing requirement is between 500,000 and 600,000 units, based on the current occupancy ratio of three to four people per room. If this predicted annual requirement was met at an average cost of N500,000 per unit, the costs would be tremendous, if not unfathomable.
Housing alone will cost between N250 Trillion and N300 Trillion (without the cost of infrastructure construction). This is the big picture of the housing crisis. This means that the government and mortgage lenders will require this much capital to successfully address the housing crisis. On a local level,
it has been noted that home ownership is one of the top goals for most households and represents the largest single investment for the majority (between 50% and 70% of household income).
This fact is especially important when one considers that Nigeria’s per capita income (now N3, 000) has been declining, as has the ordinary Nigerian’s actual income. The dramatic rise in building material prices over the previous five years has further limited the affordability of most Nigerians.
With annual housing demand of N82.53 billion and N85.82 billion estimated for 1989, and above 88 billion in 1991, as well as per capital income of N3,000, financing becomes a crucial component in property development, particularly long-term funding. One could wonder why so much focus is being placed on housing.
The most basic of all human wants, undoubtedly, defines and provides the biggest obstacle. Second, a thriving and buoyant real estate [housing] industry indicates a robust national investment agenda, and it is indeed the basis and first step towards future economic growth and social progress.
The inability of the Nigerian government or a constant neglect by higher authorities paved the way for property development agencies like Bolan1e Bamgbose & Associates to take up the challenge of providing affordable homes for the masses and to exploit the profitability of the business of property development in Nigeria.
At 30% and above, the rate of returns on real estate investments in the Nigerian cities of Abuja, Lagos, and Port-Harcourt is -much higher than the rate of returns on real estate investments in the Nigerian The most expensive type of ownership is a 99-year leasehold with a certificate of occupancy (CoO).
Land is vested in the state, and governors are the ones who issue these certificates, and even the process of obtaining this Certificate of Occupancy is so time-consuming, especially in Lagos State, that it takes an average of 6-8 months, which means that if a developer took a loan to acquire a property, for example, before he could do anything at all,
he has to obtain this CoO, which will serve as key to getting approval for the property he wants to build whether for residential Is the carrying out of any building, engineering, mining, or other operation in, on, over,
or under any land, or the making of any ecologically significant change in the use of any land demolition of buildings, including tree felling and tree planting
Standing erections used for displaying advertisements on land, as well as the word to develop and its grammatical modifications, shall be interpreted accordingly. Land is defined as all of the earth’s non-human natural resources.
Nigeria has an overall Land Use Policy enshrined in the Land Use Act, and prior to the Land Use Act in 1978, the current system was based on land tenure. Tenure is derived from the Latin word “Tenere,” which means “to hold” a landed property.
1978 Land Use Act Decree
The Land Use Act aided property developers’ activities, which witnessed a significant increase in the early 1990s. Land planning and control trace back to the mediaeval period as customary norms and ways of life of the people.
Nigeria has historically exercised control over land planning, allocation, usage, and development based on the nature, norms, and practises of the people in accordance with Customary Law.
In modern times, Nigeria planning laws are tools for environmental design, planning, and development that are influenced by both English laws and local legislation. The Land Use Act of 1978 An Act to vest in the Governor of the State solely all land comprised in the territory of each state (except land vested in the Federal Government or its agencies),
who would hold such land in trust for the people and would henceforth be responsible for allocating land in all urban areas to individuals resident in the State and to Organisations for residential, agricultural, commercial, and other purposes, while similar powers with respect to non-residents would be retained.
Investigating the actions of property development agencies in Nigeria will never be complete without a thorough examination of the laws that permit them the use of land for development.
Property for Investment and Development
Developers are known to exploit the tax distinction between “investment” and “development” property. When a property is held as an investment, the majority of its costs are deductible when incurred, as opposed to development property,
which is subject to capitalisation. There is also a favourable tax rate on gains on the sale of investment property in certain economies, allowing the gain to be recognised as the payments are collected.
Property Development Agency Issues in Nigeria
(1) Government Command
(2) Land Use Policies
(3) Compulsory land acquisition and compensation
(4) Document Title
1.3 STATEMENT OF THE RESEARCH PROBLEM
The following issues will be investigated and suitable solutions will be proposed:
Reasons were discovered for them.
(a) Inadequate funding to carry out large-scale projects that will be economically beneficial to the government.
(c) Nigerian laws governing the use of land
(c) A scarcity of experts in the sector.
1.4 OBJECTIVE OF RESEARCH
In Nigeria, assess the economic impact of property developers’ actions.
Property Development Issues in Nigeria
Developing a Housing Solution in Nigeria
1.5 RESEARCH QUESTIONS
What role does the property development agency play in delivering affordable housing in Nigeria?
Economic Influence on the Economy
What are the prospects for real estate development in Nigeria?
1.6 RESEARCH HYPOTHESIS
Some assumptions will be established that will be tested later to determine the validity or authenticity of the study hypothesis.
The hypothesis that will be examined is
Ho:- The establishment of a property development bank is not required in order to make cash available to property development organisations.
Hello:- The establishment of a property development bank is critical in making financing readily available to developers.
1.8 RESEARCH METHODOLOGY
The following sources will be used to acquire the essential data for this study:
i. Observation and internet coverage.
ii. Questionnaire
iii. sources secondary
iv. Texts in the library will comprise both published and unpublished literature on how to become the largest property development agency.
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