The Governor of Lagos State, Mr Babajide Sanwo-Olu, has 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 just-concluded 10th meeting of the National Council on Lands, Housing and Urban Development held in Lagos recently.
He urged policy makers to consider the suggestion and initiate regulatory framework that would aid 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 a period of 10 years. We are working on another product, which is a purely rental system, where residents will pay monthly.”
The Minister of Works and Housing, Mr. Babatunde Fashola, corroborated Sanwo-Olu’s position, stressing that the yearly rental system had created inequality in housing supply and widened the affordability gap for low-income earners.
He said, “Advanced payment of rent has created a mismatch in wealth distribution by putting more money in the hands of the rich at the expense of low-income earners.”