Ever wondered why rental housing keeps reducing in Lagos? Developers are no longer building to rent, existing units are either being converted to short-lets, repurposed, or sold outrightly.

And worse... why institutional capital (that can build & scale rental housing) avoids Nigeria's rental market?
Do we even have a formal rental market? If yes, why are investors avoiding it especially when demand is obvious and rising?

This linkdeIn post 👇👇 got me thinking again about this rent crisis.
https://www.linkedin.com/posts/johnolugbemi_nigeriahousing-rentalcrisis-realestatenigeria-activity-7442978197727555585-nuzB?utm_source=share&utm_medium=member_android&rcm=ACoAABbt6JIBjzcnFATGwKzEj2jtgf47uQZxNWc

Agreed, the government must do something urgently. Yet, I just can't see how that happens.
Like the Lagos tenancy law, well, it stopped landlords from “moving mad,"
But how do you control pricing in a market you don't control its economics?

Meanwhile, there's something that stands out in this rent issue.
If you step back for a second, you'd see it too.

Take how Lekki is becoming commercial for example.

One reason for this is our city planning's single-use zoning.
That is, areas designated strictly as residential here, commercial there. Little or no integration /flexibility in development. It sounds structured on paper but creates a hidden economic problem.

Large residential developments but under-utilised development potential. What this means for owners (or developers) is “dead capital”:
🚩 Under-utilised developments = Limited, undiversified revenue/cash flow. Rent is once /yr.
🚩 With that seasonal cash flow, it becomes less attractive for (institutional) investors.
🚩 Naturally, investors stay away, developers build only to sell, & remaining landlords want 'drama-free' income... Businesses.

This "optimised" zoning standard, plays a major role in forcing the scarcity of rental housing due to lack of flexible development options.

Meanwhile, had zoning been more flexble, landlords would have more flexibility to maximise development potetial of their property... That is, incorporate commercial spaces within residential developments, creating continuous cash flow, making rentals more viable and attractive.

But here's an even deeper issue…

Say we fix zoning, the secondary land market, where land should be easily bought, sold, transferred, and leveraged, doesn't work.

Think about it this way. You can confidently buy, track, and sell a car anywhere because it has a clear digital identity, service, insurance, ownership histories & records. But for land, which has higher value...

It's Zero transparency. Our (undigitized) land administration is still stuck in:
🚩 Manual, slow processes that make titling, ownership transfer, verification, sales cumbersome.
🚩 Inability to convert land assets into liquid, tradable economic value.
🚩 So Zero transparency = Risks rise = Confidence drops. And land, again, = “dead capital.”

And this is where everything connects.

That the secondary land market’s inefficiencies directly impact the (possible growth of a) formal rental housing market. Without clear, digitized land administration process, property owners:
❌️ Can't commercialize their land,
❌️ When they can, limited flexibility to maximise development potential stifle cash flow,
❌️ Poor cash flow make investors hesitant about rental properties,
❌️ This hesitation = Low rental housing supply = Higher rent prices + Poor rental record = Poor credit history...

🚫 I can keep going. But, the point is, I guess you now see it too.

That the problem is land & how its value is captured/transmitted.
And in between is a system that doesn't allow land to function as an economic asset. Suggesting that fixing the secondary land market will also fix the cash-flow concerns for a formal rental market.

And it gets interesting…

Digitized land administration can unlock access to capital & finance, increase rental supply, empower renters & homebuyers, inform smarter urban planning & zoning, and reduce fraud /conflict… et.c And still help us make housing affordable.

❗️ But, there's a catch. It must go beyond ticking the box for having a digital "title verification/documentation portal" to being a digital infrastructure for income-responsive planning.

I'm sure you'd be interested in how this works.

I broke down (extensively) how all of these connect and work. Explaining how a functional secondary land market becomes a driver for affordable housing (home onwership & renting equally). And which works for the large-scale investors as well / at the same time in this video 👇👇

https://youtu.be/b3uGOs2PhxI

And in this blogpost: https://www.petithaus.com/article/fixing-nigerias-secondary-land-market-unlocks-finance-cash-flow-for-formal-rental-market

Each covers:
👉 How Nigeria's current zoning laws stifle a formal rental housing market
👉 Nigeria's secondary land market problems
👉 Implications of poor land administration on access to finance
👉 How Lack of digital land registry hinders land value capture and/or conversion
👉 Government efforts and scepticism on digital land administration systems
👉 How digitization enables income responsive urban planning
👉 Benefits of digitized land system for housing, the formal rental market and economy
👉 Supporting land digitisation for broad societal benefits.

Watch, read, critique and share.
Thank you.