Lagos authorities have explained that it committed N5 billion into the monthly house rent scheme to ease the burden of yearly payment on residents.
According to the state government, the initiative is part of the resilience policy of the current administration, which was agreed on, after a rental survey that found out that 88 per cent of tenants would rather pay their rent monthly.
Commissioner for Finance, Dr. Rabiu Olowo said, “We had to pursue this by working with different relevant stakeholders and we now have a model that will work and enable Lagosians pay their rent monthly.
Landlords have nothing to lose because they will continue to receive their rent yearly and their default risk is zero.”
Olowo disclosed this at the closing ceremony of the second edition of Lagos Real Estate Market Place Conference and Exhibition which held at the Expo Hall, Eko Hotel and Suites, Victoria Island, Lagos State, with the theme: Lagos: 21st Century Real Estate Investment Hub.
He said the scheme will commence in January 2022 with the formal sector to enable them minimise risk. “As government, we are already looking into the informal sector to involve them into this programme but we need to first begin with the formal sector to enable us minimise the risk level.
“It is easier for us to verify how much those in the formal sector earn and for us to know what we will get and how we will get it. When we succeed on this, we will move to the informal sector.
There is an insurance pack that helps us manage all of the risk. We have a data plan that helps us fish out defaulters.”
He said government is working with stakeholders, especially financial institutions, noting that the platform is a social investment for the benefit of Lagos citizens and residents, and not a money-making investment.
The Special Adviser to the Governor on Housing, Mrs. Toke Benson-Awoyinka, said the scheme will benefit landlords as they have their rent guaranteed and assurance of payment upfront, while tenants will also no longer have that burden of yearly payment of a huge amount of money.
Benson-Awoyinka explained that to come on board, tenants must meet the qualifications, which includes ensuring that they have the capacity to make the payments on a monthly basis.
She assured that the scheme has come to stay and will be sustainable as several government policies have stood the test of time and are still working, adding that this would not be an exemption.
“With this initiative, we are able to enable tenants pay monthly rent beyond properties built by the state government as we have in the rent-a-home scheme.
“We know we cannot enforce monthly rent collection on landlords but we have created a platform that will make monthly rent payment possible for tenants, when the system begins and runs fine, many more landlords will come on board.”
On his part, the Chairman, Lagos State House of Assembly Committee on Housing, Rasheed Makinde, promised that the legislators would not relent in enacting enabling laws to grow the sector.
He said: “With what we are doing, every landlord will get his or her rent yearly and tenants at the same will have the capacity to pay their rent on a monthly basis. This platform will be demand driven because of the convenience of payment. People will be able to log into the platform to search for houses.”
Makinde said that the initiative would also sanitise pricing of houses in terms of tenancy rate. He said this will be possible as the platform tells similar properties in similar areas within Lagos State that can either go for the same price or lower prices and people can shop for rent easily on the platform as well as rentals will be highly subsidised.
He said the initiative is a robust system that takes care of everyone, adding that it is an intervention platform that will also fish out defaulters.
Managing Partner, Charlse Anthony LLP, Charlse Adeosun-Phillips, said it is a social welfare programme and it’s a win win for all. “The landlords, government, financial institution and all stakeholders win,” she said.