Agege is a well-known suburb in Lagos. Two years ago, it cost less than half of what is currently charged to rent an apartment there. Residents in the community, amongst others on the mainland, are now concerned about the spike in house rent. Certain factors are responsible for this hike, one of which is improved infrastructure.

By virtue of infrastructural development (on roads, schools, and commercial buildings), business activities and a steady influx of people have caused rents to go up. In Oke Afo near Lagos-Badagry Express Way, for instance, house rents and land prices have doubled over the last two years that the state government has been upgrading the highway.

Certain government policies have also contributed to the increase in house rents in the state. The first is the federal government’s fuel subsidy removal in 2012, which led to a rise in cost of certain goods and services. The second one is the state government’s introduction of its Tenancy Law. The Law prohibits landlords from collecting rent exceeding one year from new tenants and six months from existing tenants. Even though the Law ought to regulate house rent, in a sense, it does not because landlords and estate agents then charge more for the permitted six-month and one-year rents.

Furthermore, some landlords and estate developers argue that they increase rent to defray the growing cost of building and maintaining houses that have standard facilities. They say the cost of materials and labour that are used in building and maintenance is rising because of inflation, and that the only way to offset the increasing expenses is to raise rents accordingly.

Babatunde Quadri, a senior official at the Lagos State Development and Property Corporation, buttressed this point recently. He said, “The rising [rents] are actually because of facilities put in place [in modern buildings and buildings that are being renovated]. Estate developers and landlords want to ensure their homes have all the basic things, such as water supply. All of these inevitably add to cost.”

House rents are also going up in the state because there is a shortage of housing when supply is compared to demand, experts say. Olajugba Oluropo, a top real estate executive, said investors in the industry are too few to build houses that would meet the demand for housing in Lagos, and so the available houses are not enough to meet this demand....

More here>>> http://telegraphng.com/2013/08/a-case-for-cheaper-housing-on-lagos-overpriced-mainland/