Lagos, a sprawling megacity of dreams and contradictions, lives and breathes through its housing market. This market is as vibrant as it is volatile, as complex as it is crucial to the city’s economic heartbeat. The recent enactment of the Lagos State Tenancy Law, capping rent advance payments at three months, was met with enthusiasm by many tenants and policy observers alike. On paper, it promises relief, fairness, and a new balance in a sector where landlords have long held the upper hand.
But laws, like tides, do not change the shape of the coastline. They ripple on the surface but rarely alter the deep bedrock beneath. The Lagos Tenancy Law feels like a welcome breeze, but it is unlikely to shift the entrenched forces driving the housing crisis. Without addressing the fundamental issues of supply, cost, and market incentives, this law risks becoming a well-meaning illusion rather than a transformative tool.
To understand why, consider the Lagos housing market as an overburdened highway during rush hour. The congestion, the high rents, the advance payments, the scarcity, is the visible gridlock. The new tenancy law is akin to introducing a speed limit on one lane in the hope that traffic will suddenly move faster. Without expanding the road, fixing potholes, or improving public transport, the gridlock persists. Drivers may obey the speed limit, but the jam remains, frustrating all.
At the heart of Lagos’s housing gridlock lies a severe supply-demand imbalance. Lagos has one of the highest urbanization rates in Africa, growing by approximately 3.2 million residents annually. The housing stock has not kept pace. Official estimates suggest Lagos needs at least 500,000 new housing units annually to meet demand, yet it barely produces a fraction of that number. The reasons are many: prohibitive construction costs, bureaucratic land administration, poor infrastructure, and limited access to mortgage financing.
The high cost of building in Lagos is a wall that few can scale. Cement prices, often a bellwether of construction costs, have doubled in recent years. Imported fittings and fixtures remain vulnerable to exchange rate shocks, while inflation erodes purchasing power daily. Skilled labour commands premium rates. For developers, this means a steep capital outlay before a single brick is laid. Financial returns from rental properties, already squeezed by market conditions, become increasingly unattractive.
Herein lies the paradox that many outsiders fail to grasp. Tenants clamour for affordability; landlords seek returns; and developers need viability. Yet each segment of this chain faces constraints that undermine collective success. Landlords charge hefty advance rents not purely out of greed but as a risk management strategy against tenant default, maintenance costs, and a weak legal environment. Developers hesitate to build rental properties because the cost structure and financing environment make profitability tenuous. Tenants, meanwhile, remain squeezed in an undersupplied market with limited alternatives.
From the perspective of political economy, the housing market reflects broader power dynamics and institutional weaknesses in Lagos. Land ownership in Nigeria remains entangled in historical and legal complexities, with multiple overlapping claims and slow titling processes. This fuels speculation, inflates prices, and limits land availability for genuine housing development. Public institutions responsible for housing policy and urban planning often lack coordination, technical capacity, and consistent funding. Corruption and administrative bottlenecks compound these challenges.
The Lagos Tenancy Law attempts to regulate one visible symptom without addressing these structural realities. It is a classic case of treating the fever without diagnosing the infection. The law may reduce upfront payment requirements, but landlords faced with rising costs and risks will seek compensation elsewhere, often through higher monthly rents or informal agreements. Tenants may find themselves with fewer rental options if landlords withdraw from the market or convert properties to alternative uses.
Furthermore, enforcement remains a critical concern. Regulatory capacity in Lagos is limited, and many landlords operate informally or outside government oversight. Without clear mechanisms for dispute resolution, rent collection enforcement, and tenant protection, the law’s impact will be uneven and easily circumvented. Legal provisions are necessary but insufficient without institutional backing and market incentives aligned with policy goals.
What then is the path forward? For Lagos’s housing market to function equitably and efficiently, reform must be systemic and multifaceted. First, the supply constraint must be tackled head-on. This means incentivising affordable housing development through tax breaks, streamlined land acquisition processes, and support for innovative construction technologies. Modular building, use of local materials, and public-private partnerships can reduce costs and speed delivery.
Second, mortgage finance requires urgent reform. Current mortgage interest rates and short tenures make home ownership inaccessible for most Nigerians. Lagos needs a long-term, low-interest mortgage market supported by institutional investors, government guarantees, and improved credit infrastructure. Increasing mortgage penetration will not only facilitate home ownership but also reduce pressure on the rental market by expanding supply from the demand side.
Third, urban infrastructure investments are indispensable. Without reliable water, power, transport, and sanitation services, housing projects become prohibitively expensive or unattractive. The government must prioritise infrastructure development in tandem with housing growth areas, creating ecosystems where residents can thrive.
Lastly, institutional reforms in land administration and property rights must accelerate. Transparent, digitised, and efficient land titling and registration systems will reduce speculation and encourage investment. Clear property rights empower both developers and residents, making housing markets more predictable and liquid.
In this light, the Lagos Tenancy Law should be seen as a first step: a political signal of intent and an immediate relief for renters, but not a standalone fix. Its true value lies in catalysing broader reforms and generating public discourse about housing affordability and urban development.
Ultimately, a healthy housing market reflects a capable state, one that diagnoses challenges holistically, sequences reforms strategically, and coordinates policies across sectors. Lagos’s government must leverage this momentum to deepen reforms in mortgage finance, infrastructure, land administration, and construction innovation.
Until then, rent caps without supply fixes risk creating new distortions rather than solving existing ones. The city’s millions of residents deserve more than symbolic gestures; they deserve housing policies that build homes, hope, and sustainable futures.
