The Lagos State Government has initiated a new social investment scheme, which will greatly ease the burden of yearly rent payments on Lagos residents. The Government at the just-concluded Second Lagos Real Estate Market Place Conference and Exhibitions which took place at Eko Hotel and Suites, Victoria Island, Lagos, stated the modalities for the commencement of a monthly rent payment scheme, which is expected to commence very soon in the state. This disclosure was made by the Special Adviser to the Lagos State Governor on Housing, Mrs. Toke Benson-Awoyinka, during a discussion on Rental Policies.
Benson-Awoyinka explained that tenants who are interested in the scheme must be able to meet some requirements which include the capacity to make the payments on a monthly basis emphasizing that the scheme will begin with those in the formal sector with monthly income after which the informal sector will be brought on board. She stated that although the landlords will get their annual payment of house rent upfront, tenants will no longer have the burden of yearly payment of a huge amount of money.
Benson-Awoyinka said that tenants can use the savings for the yearly payment to make other forms of investments or for payment of school fees.
She said, “Tenants can therefore use the yearly payment for other forms of investments or for payment of school fees as the burden of payment of yearly rent is taken away from them completely. So, it is a win-win social investment scheme, it is a good one and it is applaudable. We thank the Lagos State Governor and the entire cabinet for this wonderful initiative and I pray the scheme will not only be successful, but will become a reference point in Lagos.’’
What the Lagos State Commissioner for Finance is saying?
Speaking at the event, the Lagos State Commissioner for Finance, Dr. Rabiu Olowo, said the initiative was part of the resilience policy of the current administration, noting that the State government did a rental survey and found out that 88% of tenants would rather pay their rent monthly.
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 to pay their rent monthly. Landlords have nothing to lose because they will continue to receive their rent yearly and their default risk is zero.’’
He said the scheme will commence with the formal sector to enable them to minimize risk, saying, “We as a Ministry are already looking into the informal sector to bring them into this program, but we need to first begin with the formal sector to enable us to minimize 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 in this, we will roll out to the informal sector. There is an insurance pack that helps us manage all of the risks. We have a data plan that will help us fish out defaulters.’’
He noted that the government is working with stakeholders, especially financial institutions, noting that the platform for the scheme is a social investment for the benefit of Lagos citizens and residents and not a moneymaking venture.
The Managing Director/Chief Executive Officer, Nobleserve Capital Management, Mr. Korede Adeyemi, described the initiative as a market platform that speaks to social impact.
He said: “With what we are doing, every landlord will get their rent annually 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.’’
According to him, the initiative is a robust system that takes care of everyone and is designed to sanitize the prices of Lagos houses in terms of tenancy rate, noting that similar property in the same area within Lagos State can either go for the same price or lower. Managing Partner of Charles Anthony LLP, Mr. Charles Adeosun-Phillips, said it is a social welfare program and it is a win-win for the landlords, government, financial institutions and all stakeholders concerned.
cc: Nairametrics