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As the issue of unoccupied and deteriorating federal housing estates continues to garner attention across Nigeria, Ugo Peters, Founder of HXafrica, a VC-backed proptech firm, sheds light on innovative solutions to address these challenges and prevent similar issues in future housing projects initiated by the government.
In a recent interview, Peters highlighted the critical factors contributing to the deterioration of federal housing estates built under the administration of former President Muhammadu Buhari. He commended the government’s initiative to reduce the housing deficit but emphasized the need for a more accurate understanding of the target market’s socioeconomic data to achieve product-market fit.
“From Kano to Umuahia, to Kwara, Lagos and Abuja, we have such estates, unoccupied and deteriorating. Beyond being unoccupied, there is a further challenge that contributes to government not having the funds to replicate such projects, as the development value is trapped as far there is no participation by the target market.
“This is a vicious cycle that HXafrica through its platform solves, lowering the barriers to participation and ensuring ease of liquidating these assets, so that the government through its agencies can have a sustainable system to get back funds which can be redeployed to build more units.
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Peters discussed the extent of the problem across various states in Nigeria, emphasizing the importance of lowering barriers to participation and ensuring ease of liquidating these assets to prevent the loss of development value. He introduced HXafrica’s platform as a solution to this challenge, undergoing review by the Securities and Exchange Commission (SEC) under the regulatory incubation program.
“It is important to firstly commend the past government on the initiative to reduce the housing deficit in the country by actively facilitating development of units, although the 8000 units produced or under production within the period referenced is a far cry from the 28 million units’ gap, it is still a step in the right direction.
“When buildings are not used or occupied, they deteriorate because it is through use that they are maintained, this is the surface cause of deterioration. There is however a root cause which is the absence of Product-market fit. These units were not built with the accurate socioeconomic data of the target market. For instance, most civil servants will not be able to afford these unit at their outright acquisition price points and the units they can afford may not necessarily match their family size.
To achieve product-market fit there must be an embedded system that fosters affordability. FMBN has such system called Rent-to-own which many have used to acquire units, but being a bank there are necessary barriers they must have for risk reduction which still has an effect of excluding some families who need this facility.”
Regarding the consequences of allowing federal housing estates to remain unoccupied and deteriorating, Peters expressed concern over the increasing housing deficit and the diversion of funds for short-term subsidies. He underscored the importance of proper maintenance in preserving the value of properties and proposed strategies to encourage occupancy and prevent similar issues in future projects.
As a seasoned entrepreneur and mentor in the real estate industry, Ugo Peters brings a wealth of experience to the table. He is a SMEDAN certified Business Development Service Provider and the chairman of REICo Multipurpose Cooperative LTD. Peters is committed to leveraging technology and private sector participation to drive lasting and sustainable solutions in the real estate sector.
