The Minister of the Federal Capital Territory (FCT), Nyesom Wike, has said that the government cannot compel landlords in Abuja to reduce rents.
Wike made this statement during the inspection of the Zeberced Quarry in Kubwa on Saturday.
According to him, the cost of rent is driven by market forces, not government regulations.
Wike said, “No government puts a cap as regards the cost of rent. It is the market forces.”
He acknowledged that everything, including the cost of building materials, has gone up significantly.
The Minister explained that landlords who invest in constructing houses do so with the expectation of making a profit.
He added, “The man who built the house didn’t build that he would not make a profit at the end of the day.”
Wike dismissed complaints about rent increases in Abuja, stating that such complaints fail to consider the overall economic environment.
“There are increases in everything today, so rent should not be singled out,” Wike argued.
He questioned whether people were expecting the government to create a law to limit rent prices to N50,000 or N100,000 for a two-bedroom flat.
“Do you want us to make a law and say that a two-bedroom flat should not be more than N50,000 or N100,000, for example?” he asked.
Wike’s comments come amid widespread complaints from Abuja residents about the skyrocketing cost of accommodation in the nation’s capital.
Many tenants have expressed frustration over the difficulty of finding affordable housing, as rent prices have surged dramatically in recent years.
Abuja, Nigeria’s capital city, has long faced issues with high housing costs.
As the seat of power and a major commercial hub, Abuja attracts a growing population of civil servants, politicians, businesspeople, and expatriates.
The influx of people into the city has driven up demand for housing, while supply has struggled to keep up.
In recent years, Abuja has become notorious for exorbitant rents, particularly in highbrow areas such as Maitama, Asokoro, and Wuse.
Even in less affluent areas like Kubwa, Lugbe, and Gwarinpa, rent prices have risen to levels that many middle-class Nigerians find unaffordable.
The COVID-19 pandemic and subsequent inflation have worsened the situation, as the cost of building materials and labor has skyrocketed.
Developers and landlords argue that they are simply adjusting their prices to reflect the increasing cost of construction.
However, tenants feel that they are being priced out of the city.
There have been calls for government intervention, with some residents advocating for rent control measures.
Many have called on the government to impose limits on rent hikes and make affordable housing more accessible.
However, Wike’s comments suggest that such measures are unlikely to materialize anytime soon.
Wike’s reference to “market forces” highlights a common economic principle.
In a free-market economy, prices for goods and services, including rent, are determined by supply and demand.
When demand for housing outstrips supply, as it has in Abuja, prices naturally rise.
Landlords and developers, like other businesspeople, seek to maximize their profits.
If the cost of building a house increases due to inflation or higher material costs, they pass those costs onto the tenants in the form of higher rents.
On the flip side, if there were more houses available for rent than tenants seeking them, landlords would be forced to lower their prices to attract renters.
Currently, the demand for housing in Abuja far exceeds supply, giving landlords the upper hand in setting prices.
This dynamic is not unique to Abuja; major cities around the world, from Lagos to London, face similar housing challenges.
