‘How Diaspora City’ll bridge housing deficit’

The Federal Housing Authority (FHA) is working to build Diaspora City across seven cities in an effort to close the housing deficit and create jobs. The Managing Director of Federal Housing Authority, Prof. Mohammed Al-Amin, listed the seven cities as Abuja, Lagos, Port Harcourt, Benin, Kaduna, Enugu and Kano, adding that they have already made a case for it and the government has approved it. Prof. Al-Amin said, “The project will gulp about $30bn with funding being sought from international financiers and a mortgage process for Nigerians in the diaspora.”

Why Diaspora City?

The idea of Federal Housing Authority, Diaspora City was cultivated after careful studies that showed Nigeria attracts multi-billion dollar funding from the diaspora annually. Data available at the Federal Housing Authority indicates that in 2011, 2.6 million adult Nigerians received money from overseas. Moreso, Nigerians in the diaspora remitted $21bn to Nigeria in 2012. Of this, those in the United Kingdom and the United States remitted $12.26bn and $7.76bn respectively.

“One of the first focuses of diaspora citizens is to secure decent accommodation in areas of their choice in their motherland,” the data showed.

The Federal Housing Authority then keyed into this by creating an opportunity for diaspora citizens to have a legal home or business in Nigeria that could generate returns for them and guarantee their successful return. The concept was the brainchild of the Department of Commercial Housing of the authority after an interaction with the Independent Corrupt Practices and Other Related Offences Commission (ICPC). The project is being executed under the Nigeria Diaspora Housing Programme (NIDHOP) that provides home ownership for Nigerians overseas and workers of Nigerian Diplomatic Missions.

 

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Housing style and execution

The Federal Housing Authority, Diaspora City is coming with four house types: flats, duplexes, terraces and bungalows covering 200 hectares per site, and 50 hectares neighbourhood. It has a completion period of 16 to 36 weeks after the ground-breaking ceremony. A Federal Housing Authority document on the project indicates that the cost for each 50-hectare neighbourhood is estimated at N116.750bn, which covers 3,920 housing units.

The first housing style – blocks of luxury flats, will cover two-bedroom apartments of 560 units and three- bedroom apartments of 560 units. They will be on four suspended floors per block and five flats per floor. This project’s cost, including building, infrastructure and project administration, is estimated at N12.648bn, Federal Housing Authority said.

The garden city terrace apartments will house semi-detached duplexes mainly targeted at people that have plans to relocate only their families back home. This will cover 10 hectares in each of the seven cities and could be completed within 36 months after the financial close. The 210 housing units for each city is estimated at N4.518bn: building alone will gulp N3.5bn from the total cost. Federal Housing Authority has also planned what it calls the “Metropolitan Conurbations” comprising high rise buildings of 13 suspended floors with underground parking and services. It will also apply the rent-to-own option to accommodate buyers and people who could afford only to rent them. It is estimating N36.855bn for the 2,520 housing units it has proposed.

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There is also the Family Executive Duplexes that would occupy 10 hectares per location. They will be five-bedroom duplexes with gatehouse and boys quarters and will have up to 70 housing units in each location. This project is estimated to gulp about N4.970bn and could be completed within 16 to 36 weeks depending on the speed of funding. The Diaspora Urban Village combines bungalows, flats and semi-detached houses for about 1,120 housing units per location, split into 560 units of three- bedroom semi-detached bungalows and 560 units of three-bedroom detached duplexes. This project section will gulp about N12.648bn on completion.

Federal Housing Authority said it also planned a special housing style for just a few cities and modelled after the Dubai Oxygen City. The Billionaire Green will be located only in Abuja, Lagos and Port Harcourt as a resort-based luxury living and lifestyle. It is working with developers and stakeholders on the computation for the cost of this project.

Funding sources

The Federal Housing Authority boss said the government had considered local and foreign funding for the projects and that the Federal Housing Authority was discussing with six local investors, two of which are commercial banks. Offshore funding is also being considered from China, Europe and some American investors. A precise negotiation is that of the Federal Housing Authority and a consortium of Chinese investors under the aegis of Chinese Engineering. The authority said the consortium consented to a $30bn facility that was payable in 27 years with a three-year moratorium.

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“The Federal Housing Authority is favourably disposed to this among the other investors. We are, however, working to adjust the terms, if the investors agree to 10 years moratorium: as being pushed by Federal Housing Authority, then there can hardly be any better offer, which can also afford us to use part of the fund to cover mortgages,” Federal Housing Authority said in the project document.

The Federal Housing Authority also said it was open to any Nigerian diaspora branch on alternative funding idea. It is also seeking mortgage funding options. Locally, it has contacted the Federal Mortgage Bank of Nigeria (FMBN) on financing the mortgage aspect of the projects. Federal Housing Authority is also leveraging on the investment it has with the Nigerian Mortgage Refinance Company (NMRC) for longer mortgage tenure, while it has gotten three offers from European firms and two American consortiums, but it is considering the security and interest rates involved.

How diaspora citizens could own homes

Once the project begins, diaspora citizens would have access to participate in the home ownership on individual payment basis under three options. There is the outright purchase of the property option. The tranche payment option is next: buyers will pay in four instalments of 25:35:30:10 ratio over the project’s construction period. The third option is creating mortgage through a Primary Mortgage Institution (PMI) that will create a long tenure plan. Federal Housing Authority is creating an interest registration portal on its website for Nigerians in the diaspora. “The diaspora citizen that wants this will enrol with us and start remitting about $300 to the Central Bank of Nigeria (CBN) which will then be passed to us,” Prof. Al-Amin said.

SOURCE: DAILY TRUST