A SURVEYOR, Sola Enitan, has said the real estate sector is over-regulated.
He noted that regulation had its merits, a key aspect of development appraisal that gives credence to the project feasibility and viability, without which public interest may be missing and environmental sustainability endangered.
He, however, frowned at what he described as over-regulation by some state governments, particularly Lagos.
Citing the recent compliance embarked on by Lagos State, which led to sealing of completed or fully occupied properties, Enitan said such exercise had shown the ineptitude of the regulatory system.
It would be recalled that the Lagos State Government sealed properties, especially in the highbrow areas of Banana Island, Bourdillion, Onikoyi, and Lekki.
“The Lagos State Government has one of the worst approval processes in the world. The regulatory processes are overloaded with rent-seeking line officers, shelf-time for processes are unnecessarily long.
Imagine a building approval taking a year and six months, some documents are shelved, indefinitely in ‘keep in view’, while some are lost in transit. The Lagos Government needs to be mindful that unnecessary delays in project approvals increase the cost of construction and development unnecessarily.
Time is money, cost of doing business with the Ministry of Physical Planning and its departments and units is astronomically high,” Enitan claimed.
He advised the government to be mindful that developers were burdened with time constraints, cost of funds, and opportunity cost of money, inflation, and other economy-related stresses, which compel need for expeditious approval process in order not to increase the cost of doing business in the real estate sector.
He noted that government should make the approval and documentation processes friendly to discourage people from looking for ways to circumvent the system.
“There are cases of houses built without any sort of approval whatsoever. Some don’t even apply for approval. It is in the public interest to ensure that developers don’t endanger others because they want to build houses.
‘’However, cutting of corners became a convenient alternative when the government has become too compromised by rent and corrupt practices. Instead of sealing completed houses because they are unable to provide approval of plans, the government should come up with mobile courts with immediate sentencing and punitive fines.
For instance, a developer in Washington DC, Deadwood, was fined $250,000 for building without approval, a process which ordinarily would have cost him about $1,500,” Enitan said.
He said if the government could deploy the mobile court option for housing sector, building without approvals by developers would decline.
He alleged that civil servants were guilty of conspiracy in the circumventing of approval processes by some developers.
According to him, building approval processes take too long and are cumbersome, thereby entrenching the building control department and the real estate sector into needless conflicts.
Source: The Street Journal