The Lagos State Government has suggested that, very soon, people wishing to rent apartments in the state might only be paying monthly, instead of the usual one year advance payments that tenants and intending penants are saddled with.
The Special Adviser to Lagos State Governor on Housing, Barakat Odunuga-Bakare, says the state’s monthly rental scheme will be enforced before the end of 2024 or early next year.
She stated it during a recent Press briefing of the Lagos State Real Estate Regulatory Authority in Ikeja, Lagos.
She said, “We all see what is being done in other climes, rents are collected monthly. Hence, we are looking and hoping that before the end of the year, or by early next year, we will be able to implement the policy of monthly rental. Also, the rental would be charged according to tenants’ earnings.
“The good part about it is that we would be test-running it first within the public sector since we can ascertain how much everybody is earning, and once we see that it works in the public sector, we can now push it out to the private sector.”
Odunuga-Bakare reiterated that the N5bn allocated for the monthly rental scheme was still set aside and untouched.
She added that the fact that the scheme was slow to take off showed that the Lagos State Government was still trying to perfect one thing or the other.
She noted, “The last administration that initiated the monthly rental scheme was coming to an end when the scheme was to be introduced. Now, we have a new administration and the governor wants the scheme to come into effect by the end of this year or early next year.”
Recall that in 2021, the Governor of Lagos State, Babajide Sanwo-Olu, had said the current rental model in which people pay yearly rent in advance to property owners has become inadequate to address contemporary realities in the housing sector, especially in cities where demand for property is high and expensive.
The governor advocated a monthly rental system, which he said would be affordable to low- and middle-income earners pressured by the yearly rent obligation.
Sanwo-Olu made the recommendation at the 10th meeting of the National Council on Lands, Housing and Urban Development held in Lagos recently.
He urged policymakers to consider the suggestion and initiate a regulatory framework that would aid the transition to a new rental system.
The governor said Lagos was already working out monthly rent modalities to accommodate residents not keen on the state’s home ownership scheme.
He said, “In Lagos, we operate a very robust rent-to-own programme of five per cent down payment and six per cent simple interest rate payable over 10 years.
“We are working on another product, which is a purely rental system, where residents will pay monthly.”
The then Minister of Works and Housing, Babatunde Fashola, corroborated Sanwo-Olu’s position, stressing that the yearly rental system had created inequality in the housing supply and widened the affordability gap for low-income earners.
