Nigeria's widening housing deficit and rising cost of land, building materials, and mortgage finance are making homeownership increasingly difficult for millions of households. The country's housing requirement is estimated to be over 20 million units, with many existing units classified as structurally inadequate. To address this challenge, housing professionals are promoting cooperative societies as a viable channel for collective housing delivery. By pooling members' savings, acquiring land and building materials in bulk, and partnering with developers and financial institutions, cooperatives can make homeownership more achievable.
Cooperative societies can play a significant role in easing home ownership and accessibility by moving beyond their traditional savings-and-loans role. According to Gbenga Ismail, a past Chairman of the Nigeria Institution of Estate Surveyors and Valuers, Lagos Chapter, cooperatives have the collective financial strength to make homeownership more achievable for members if properly structured and professionally managed. He suggests that cooperatives can pool members' resources, acquire land collectively, partner with credible developers and mortgage institutions, and negotiate with government for serviced land and infrastructure.
Experts recommend that cooperatives introduce flexible ownership models, including rent-to-own, shared equity, and phased payments, supported by strong professional management and transparent governance. This approach can significantly reduce the cost of land, construction, and finance for members. Gbenga Afolayan, an Estate Surveyor and Valuer, proposes that societies establish dedicated housing funds requiring members to make monthly housing contributions in addition to their ordinary savings. Such funds should be ring-fenced strictly for land acquisition, construction, and housing finance.
Afolayan suggests that cooperatives can further reduce costs by developing houses collectively rather than simply giving individual members money to undertake construction themselves. Reputable professionals can be appointed to develop standard house types, including two-bedroom apartments, three-bedroom terraces, three-bedroom semi-detached houses, and four-bedroom duplexes. Standardized designs can reduce construction costs, and rent-to-own housing can be particularly useful for members who cannot raise a large deposit.
Cooperative societies can also negotiate master financing arrangements with banks and mortgage institutions rather than leaving individual members to negotiate independently. Afolayan recommends that cooperatives provide member verification, equity contributions, salary or income information, and collective repayment arrangements, potentially making it easier for financial institutions to assess and finance members. Additionally, cooperatives can establish construction-loan schemes for members who already own land, enabling them to access financing for foundation work, damp-proof courses, blockwork, roofing, plumbing, electrical works, and finishing.
Another area of opportunity for cooperatives is bulk procurement of building materials. Afolayan suggests that cooperatives can negotiate directly with manufacturers and major suppliers for cement, iron rods, blocks, roofing sheets, doors and windows, tiles, and plumbing materials, using collective demand to secure better prices. He proposes that cooperative societies establish Housing Development Companies as Special Purpose Vehicles (SPVs) for their housing projects, separating housing development projects from ordinary savings and lending activities while allowing societies to maintain transparent project accounts.
Akin Opatola, Vice President of the World Council of Managers, FIABCI International, emphasizes that cooperative societies must move beyond their traditional savings-and-loans model to become strategic partners in housing delivery. He notes that the real measure of success should not simply be how much money a cooperative has disbursed, but how many members have successfully transitioned from aspiring homeowners to actual homeowners. By evolving into strategic housing delivery partners, cooperatives can make a more significant impact in addressing Nigeria's housing deficit.
Key points
- Cooperative societies can bridge Nigeria's housing gap by pooling members' savings, acquiring land and building materials in bulk, and partnering with developers and financial institutions.
- Experts recommend flexible ownership models, including rent-to-own, shared equity, and phased payments, to make homeownership more achievable.
- Cooperative societies must move beyond their traditional savings-and-loans model to become strategic partners in housing delivery.
