Sensitivity analysis of housing affordability under Public-Private Partnership (PPP) scheme in Niger State

Abstract

The provision of affordable housing has been a concern in developed and developing world because of its role in man’s welfare and productivity. This study aimed to carry out a sensitivity analysis of the affordability of a Public Private Partnership (PPP) housing scheme in Niger State. The study set out to establish what can be done to make repayment for such housing affordable for all categories of allotees. Sensitivity analysis was applied to building cost, repayment period and interest rate. Data used for the analysis were sourced through the collection of archival data and carrying out of a questionnaire survey. The random sampling technique was employed in administering the questionnaire to a sample of 187 beneficiaries. Against standard affordability criteria that housing should consume not more than 30 percent of gross household income, the results revealed that only civil servant allotees on Salary Grade Levels 10 - 16 can afford monthly repayments of N10, 000.00 for 2-bedroom housing costing N1,900,000.00. The application of sensitivity analysis enabled the study to recommend modifications to the PPP housing scheme that will allow all workers on Salary Grade Levels 01 - 16 to afford a 2-bedroom house at a selling price of N1,200,000M, mortgage interest of 3 percent and a repayment period of 25 years.