How Nigeria Can Build Its Way Out of the Affordable Housing Crisis
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Nigeria's 14.9 million-unit housing deficit is pushing policymakers and developers toward incremental housing, cooperatives, rent-to-own and public-private partnerships, as experts warn affordability, finance and infrastructure gaps still block scale.
Nigeria's housing crisis is pushing policymakers, developers and housing finance institutions beyond conventional mass housing schemes as the country searches for practical ways to provide homes for low- and middle-income households. The Federal Government's National Housing Data Technical Committee recently put the country's housing deficit at 14.925 million units, highlighting the scale of the challenge as rapid urbanisation continues to drive up demand.
Several alternative models are being tested across the country, including incremental housing, cooperative housing, rent-to-own arrangements, public-private partnerships and the use of locally produced building materials. At Grand Luvu, near Abuja, the Millard Fuller Foundation has tested an incremental model: the Grand Luvu 3B project comprises 248 housing units, with 177 designed to be expanded as occupants' needs and incomes increase. A 2025 peer-reviewed study of the project found monthly incomes of interviewed residents range from N75,000 to N400,000, but also that only about 30 per cent of the total units were owner-occupied, with some purchased units being rented out.
The Federal Mortgage Bank of Nigeria (FMBN) has supported such developments through its Cooperative Housing Development Product. WaterLake Estate in Abuja, for example, comprises 40 three-bedroom detached bungalows developed for the Nigeria Police Multipurpose Cooperative Society with FMBN financing. Rent-to-own schemes, which let households occupy a property while making structured payments toward eventual ownership, have also advanced; in June this year, beneficiaries received keys to houses under the bank's Rent-to-Own arrangement at Bungalow City in Abuja.
At larger scale, the Federal Government's Renewed Hope Cities and Estates programme includes a first phase targeting 50,000 housing units nationwide, with announced standard prices of N8.5 million for one-bedroom units, N11.5 million for two-bedroom units and N12.5 million for three-bedroom units. In Lagos, the Renewed Hope City at Ibeju-Lekki comprises 2,084 housing units, while the Karsana Renewed Hope City in Abuja has 3,112 units, though substantial access infrastructure is still required at sites like Karsana.
Millard Fuller Foundation Chief Executive Samuel Odia said there is insufficient evidence to determine which model currently delivers the best results, but noted that incremental housing appears among the most practical options. "Depending on who the intended beneficiaries really are, it would appear that the vast majority of homes being supplied into the market remain far out of reach of the populace," he said, adding that construction costs had risen by as much as 200 per cent over the past two years. Debo Adejana, former Vice President, South-West, of the Real Estate Developers Association of Nigeria (REDAN), called for a functional mortgage system offering low interest rates and repayment periods of at least 15 years, arguing that "without subsidies, affordable homes, by this I mean low-priced homes, are not presently possible in our economy."
Prof. Timothy Nubi, Founder and Director of the Centre for Housing and Sustainable Development at the University of Lagos, said affordability comes when the repayment of the capital outlay is spread over 20 to 30 years. "We must do everything to grow the mortgage system. As far as it is cash and carry, many Nigerians will not be able to own a house in their lifetime," he said, while also urging renewed investment in domestic building-material industries to reduce dependence on imported tiles, sanitary wares and other construction inputs.