Why rents keep soaring in P/Harcourt

A****s the accomodation crisis in Port Harcourt, capital city of Rivers State, and commercial nerve of South South region continues to take a toll on the residents, house rents have continued to soared in the oil city as big firms and oil workers rush for decent homes, forcing landlords to hike prices and pushing low-income earners to the city outskirts of the city.

Daily Trust checks show that a two-bedroom flats apartment in GRA, Peter Odili road and other highbrow areas now cost between N1.5m and N3m yearly, up from less than N800,000 two years ago.

Though landlords and property agents blamed the increase rents on the cost of building materials and high demand and dollar-paying tenants, but observation indicate that the population of residents in the city is also higher the number of housing, which is the primary cause of rent crisis.

Some workers in the oil firms and expatriates, who look for secured and conducive environment to get accommodation could pay as high as N10 million in a duplex as rent, while low income earners like civil servants and others are being pushed out to the outskirts of the city, such as Obigbo, Elelenwo, Choba, Ahoada town among others, where rents are a bit affordable.

Also, the recent flooding in Port Harcourt and Obio/Akpo local government area that constitute greater part of the state capital has also compounded the rent crisis as landlords from the area not affected by flood have further hike their rents.

Tenants are lamenting on daily basis over the constant increase in rents amidst the biting economy in the country, urging the state government to take drastic action against it.

Though the Rivers state government is also investing in affordable housing scheme, but the big players in the housing sector the state remain the private players.

*Daily Trust *recalls that in December last year, Governor Siminalayi Fubara, inuagurated the first 1000 out of 20,000 low-income earners’ housing scheme in Port Harcourt, built and delivered by TAF Africa Global Limited and Greater TAF Nigeria Limited, built under a Public Private Partnership model between the firm and the Rivers Government.

The real estate firms are delivering the project under a Public Private Partnership model with the Rivers Government initiated by Sir Siminalayi Fubara administration.

The Managing Director and Chief Executive Officer of TAF Africa Global Limited and Greater TAF Nigeria Ltd, Mr Mustapha Njie, had during the inuaguration commended the state government for the confidence reposed on his companies, adding that 1000 homes were already completed.

Njie said: “A vision of dignity, security, and prosperity for the people of Rivers State. That vision, sealed with an MOU, a JVA and a Certificate of Occupancy, has today materialised into the first one thousand keys to new homes.

“Your Excellency, Sir, on behalf of TAF Africa Global Limited and Greater TAF Nigeria Limited, I offer our deepest gratitude. Your unwavering commitment and the supportive environment created by your Government have been the bedrock of this achievement.

“You championed this partnership, and today, we are not just delivering houses; we are delivering on the promise you made to the people. Thank you for your steadfast leadership.”

Njie commended the Greater Port Harcourt City Development Authority, for their collaboration, noting that the project stands as a testament to what is possible when the public and private sectors align with a singular purpose for the public good.

Also, Governor Siminalayi Fubara, disclosed that in a bid to frustrate his government’s move to provide decent and affordable housing for middle-income earners in the state, detractors instituted over 90 litigations to stall the project.

Hr said the project is more than a housing scheme, but a bold idea conceived during one of the most challenging periods of his administration.

The governor mentioned that ab initio, many people came with ownership claims of different parts and how the government had not paid one thing or the other.

He regretted that the suits against the estate are targeted at halting its progress, but thanked respected leaders of the area that stood with the government to ensure the vision is achieved.

He said: “This was an idea that faced challenges no other development has ever faced in Rivers State. We are all aware of the history surrounding the Greater Port Harcourt City Development Authority and the acquisition of land by previous administrations to move development from the city centre to other areas.

“You won’t believe that when we started this project, we had over 90 litigations from individuals claiming ownership of the land and alleging non-payment of compensation. It was a deliberate ploy to frustrate this vision and endanger the welfare of our people.”

Fubara said that the inauguration of the first phase affirms the commitment of his administration’s vision to deliver 1,000 housing units in the first instance, within a larger plan of 20,000 units.

Executive Secretary, National Union of Tenants in Nigeria, Ceaser Enwefa, had told Daily Trust during the interview recently that said the cause of the rent increase in Rivers State is partly the property owners and the agents and not the cost of building materials and upsurge in population.

He said most residents of the commerce I nerve are staying in the outskirts, such as Obigbo, Elelenwo, Choba and Ahoada, but despite that rent in Port Harcourt still escalate due to the government agent factors and the greed of the property owners.

He said: “If you are talking about the affordable housing crisis in Port Harcourt, it targets somewhere, first of all from the urban, and the areas that constitute urban, are Port Harcourt and Obio/Akpor local government, these are the urban centres, they have the suburbs, these are the areas affiliated to the urban centres, like the Eleme, Eleka and all those neighborhood of Obio/Akpor.

“The rent keeps making population to shift to the suburbs, and as the population is shifting, the rent in those areas continue to escalate

“The sharp increase in the rent actually is something that is difficult to identify, before we can really be able to identify the cause of the increase, we have to carry out detailed investigation, of the causes, unlike other cities like Lagos, Enugu and Abuja, where they just attribute the causes of the hike in rents to deficit of affordable houses, and population upsurge, that is always the building materials, these are always the reason attributed to the causes of the status quo, but when we carried out the investigation, these are not the causes, particularly in Rivers State.

“The causes of rent increase in Port Harcourt is not because of population upsurge, or because of building materials, because these houses were not built just yesterday, these are houses built ten to fifty years backward, so building materials cost cannot be the reason, then the some thing too for the population increase, most of the population that come to Port Harcourt don’t even stay in town here, they stay in Obigbo, Ada George and other remote areas.

“Infact, there is just one major factor that cause this rents increase, the major cause of the outrageous increase is partly the property owners and the agents.

“Also, many property owners convert residential buildings to stores to make quick money, thereby creating housing deficit, and affect affordable housing in the state, Port Harcourt and Obio/Akpor have about 15 million people, and it’s require about 21 thousand housing units, so Rivers State is not in the housing deficit, so the agents and landlords now take advantage of this to escalate the rent because there are a lot of people looking for houses.

A public affairs analyst and residents of Port Harcourt, Dr. Fyneface Dumnamene, said though the oil companies contribute to escalating rent in Port Harcourt, but the government demolition of houses at the ring road without building replacements also played a major factor in the housing deficit in the state.

He said: “The first answer is yes, but not the oil company alone. The rents in Port Harcourt is has tripped more in the past 3 years not just because of oil companies, but because the government demolished houses for Ring Road without building replacements, while leaving the rent market for agents and landlords to fix prices arbitrarily without any control.

“It is obvious that Port Harcourt in an oil-rich city and most oil workers are here, earning bigger amounts as salaries and willing to pay any amount for decent accommodation before they build their own houses. Thus, the oil workers, contractors, and servicing companies create an oil economy as they pay premium rents and this serves as a benchmark for other landlords in other areas who are told by agents that people are paying more and they increase their rents without minding that all hands are not equal. So oil companies create price distortion to affect other sector workers, what the Youths and Environmental Advocacy Centre (YEAC-Nigeria) calls “oil economy rent inflation.”

“The increase in house rent in Port Harcourt is due to many reasons. These include housing Deficit due to over population concentration in the one-city state, demolitions like the mass demolition of houses for the construction of the Port Harcourt Ring Road Project that wiped out thousands of units of houses and shops without replacement. Others include the conversation of some residential houses to hotels, lounges, warehouses for oil servicing and related purposes.

“Furthermore, the activities of unregulated and unregistered agents, and associated multiple inspection fees as well as artificial inflation of values contributed to the increases in rent as there are more middlemen before access to the landlord.

“Also, the higher costs of building materials caused by inflation, naira devaluation, rising cement, iron labour costs and land higher costs all contributed to what landlords cite as the reasons for increase in rentage.

“Rural-Urban Migration due to lack of opportunities and insecurity at the community levels also contributed the higher costs of rents in Port Harcourt as there is pressure on due to high influx of people into the city for limited available accommodation.

“YEAC-Nigeria also believes that the increases in rent in Port Harcourt is also due to disputes associated with landed properties in Port Harcourt, land grabber issues, high costs of land and building approvals by council areas, double taxation, and associated slow pace of construction among others.

“Flooding also contributes to the increase in rent. Those whose houses are flooded in a particular year move to places that have dry land houses and the landlords at those places increase their rents which people still pay in order to have peace of mind.

“So far, the government is doing very little or nothing about the situation of high rentage in Port Harcourt. The government is not really doing enough to build multiple housing units and the few built are often meant for civil servants alone and none for members of the public. The government has also generally abandoned several housing units of successful administration due to political differences and crisis afterwards. The political crisis that has persisted in the state for the past 3 years under the Governor Siminalayi Fubara administration also contributed to the increase in rentage due to political instability, absence of substantive commissioner for Housing that could have attempted an intervention. The political crisis which also affected governance and development made it difficult for money to circulate in the economy, leaving landlords and property owners to depend on rent from their properties for all the problems that they have thus leading to yearly increments.” He said.