Worries over rising home conversion to short-let rentals in cities

By : Chinedum Uwaegbulam

Date: 15 December 2025 5:03am WAT

Share :

Some flats in 1004 Estate have been converted into short-let apartments

Some flats in 1004 Estate have been converted into short-let apartments

As Nigerian cities become more competitive, interconnected and globally visible, the rising demand for short-term rentals is placing increasing pressure on urban housing markets, turning prime neighbourhoods into playgrounds accessible mainly to the highest bidders. This trend risks eroding access to affordable housing and weakening community cohesion, CHINEDUM UWAEGBULAM reports.

Across major cities in Nigeria, a quiet transformation is reshaping neighbourhoods as investors and property owners steadily convert long-term residential homes into short-term rental properties.

What began as a flexible, peer-to-peer model for travellers seeking homely accommodation has evolved into a booming commercial enterprise. While the trend offers income opportunities for property owners and boosts tourism, urban planners and housing advocates warn that the unchecked growth of short-let apartments may deepen housing shortages, drive up rents and alter the social fabric of cities.

From Lagos to Abuja, from Nairobi to Cape Town, and from London to New York, the story is increasingly similar; traditional renters are being priced out as landlords shift from monthly tenants to daily-paying guests, driven largely by platforms such as Airbnb.

In Lagos, particularly in high-demand districts such as Ikoyi, Lekki Phase 1, Oniru, Victoria Island and parts of Ikeja, entire blocks once dominated by long-term tenants have quietly turned into short-let hubs.

For landlords, the numbers are persuasive. A two-bedroom apartment that might earn about N2.5 million yearly as a long-term let can generate double or even triple that amount through short stays, especially during festive periods or peak demand seasons.

Real estate experts confirm that Airbnb-style rentals have grown significantly over the past five years, accelerated by business travel, entertainment tourism and the rise of remote work. Nigerians in the diaspora also increasingly favour short-term rentals over hotels when they return home, citing privacy, comfort and cost-effectiveness. However, this commercial success is now colliding with an already strained urban housing market.

Shrinking options for long-term renters Tenants are the first casualties of the shift. Housing advocates warn that every apartment converted to short-term lets reduces the pool of available homes for working families. In cities already burdened by housing deficits, Nigeria’s is estimated at over 20 million units; the impact is severe.

In Lagos, estate surveyors observe that young professionals, civil servants, artisans and small business owners are being pushed further to the urban fringes as rental stock in central locations declines. These displacements come with higher transport costs, longer commute times and increased pressure on infrastructure in peri-urban communities.

A tenant in Surulere, who recently received a quit notice after four years in his apartment, said his landlord openly declared plans to remodel the building into serviced apartments. “He told us plainly that short-let pays better and avoids long tenancy issues. Now, can’t find another place in this area within my budget,” he lamented.

Rising rents and market distortion Beyond displacement, the conversion trend is widely blamed for escalating rents. As supply tightens and demand remains high, landlords gain greater leverage to increase prices.

According to industry experts, short-term rental profitability is increasingly being factored into property valuations, pushing up acquisition costs for investors and developers. The effect cascades down to tenants.

In some neighbourhoods on Lagos Island, rents have reportedly jumped by 30 to 50 per cent in less than two years. Similar pressures are evident in Abuja, where districts such as Wuse 2, Gwarinpa and Maitama are witnessing a surge in short-let conversions.

Housing experts argue that when residential homes are treated primarily as hospitality assets rather than social goods, the housing market becomes distorted. Homes, they insist, should first serve as shelter before becoming investment vehicles.

Community life under strain The consequences extend beyond economics. Residents complain that short-let apartments disrupt community stability. Frequent guest turnover weakens neighbourly bonds, raises security concerns and increases noise and waste management challenges.

In gated estates originally designed for family living, residents’ associations now struggle with visitors unfamiliar with community rules. Night parties, parking congestion and trespassing incidents have become common complaints.

Security experts also warn that the anonymity associated with short-term stays complicates surveillance and crime prevention. “When faces change every few days, it becomes difficult to tell who belongs and who does not,” a security expert noted. For families with children and elderly residents, this instability raises genuine fears.

Property investors, however, argue that short-term rentals represent a rational response to market realities. Rising construction costs, inflation, interest rates and maintenance expenses have squeezed profit margins. For many landlords, Airbnb-style rentals are seen as the only way to remain financially viable.

A Lagos-based property developer explained that converting apartments to short-let allows faster recovery of investment and better cash flow. “If I depend solely on yearly rent, it may take 15 to 20 years to break even. With short-let, I can recover much faster and reinvest,” he said.

Other stakeholders also defend the model, pointing out that Nigeria’s hotel infrastructure remains inadequate in many cities. Short-term rentals help bridge accommodation gaps, especially during large events, conferences and holiday seasons.

Weak regulation and policy gaps One of the core drivers of the crisis is weak regulation. Unlike cities such as New York, Barcelona, Berlin and Amsterdam, where governments have introduced strict rules on short-term rentals, many Nigerian cities have yet to establish clear regulatory frameworks.

Elsewhere, some cities cap the number of days a property can be listed, require host registration, or restrict short-lets in residential-only zones. Others impose higher taxes on short-term rentals to discourage excessive conversions.

In Nigeria, however, planning authorities and housing agencies have largely remained silent or reactive. There is little data on how many homes have been converted, who operates them, or their impact on local housing supply.

Estate practitioners admit that most conversions occur quietly, often without formal approval. Urban planners warn that without timely intervention, Nigerian cities risk replicating the housing crises already seen in global tourist hubs, where residents can no longer afford to live in the very cities that depend on their labour.

Impact on affordable housing goals The growth of Airbnb-style rentals also threatens national housing objectives. Federal and state governments are striving, though with limited success, to close the affordable housing gap through public-private partnerships, mass housing schemes and mortgage reforms. Yet, as soon as some new units enter the market, many are flipped into luxury short-term rentals.

Affordable housing advocates argue that public infrastructure, such as roads, power lines, drainage and water systems, subsidised by taxpayers, increasingly supports commercial short-let businesses rather than serving working-class residents. This, they say, undermines the social contract underlying urban development.

The past president of the Nigerian Institute of Town Planners (NITP), Mr Toyin Ayinde, said rising property values are increasingly shaping investors’ decisions, as they seek to maximise returns on real estate investments.

Speaking to The Guardian, Ayinde explained that many residential properties previously occupied by large families are now becoming underutilised as family sizes shrink and children move into their own homes or relocate abroad. He said such changes often make these properties available for repurposing.

“Many residential properties that were hitherto occupied by large families have suddenly become desolate, with many children now living in their own apartments or abroad. These properties are then repurposed to reflect current realities of smaller family sizes and the need to generate income from real estate,” he said.

Ayinde noted that where such repurposing results in the conversion of homes into short-let apartments, the consequence is a reduction in long-term rental housing stock, which in turn drives up rental prices for the remaining units.

He stressed that the situation calls for a periodic review of development plans, noting that planning frameworks must evolve with changing circumstances. “As plans are reviewed in line with shifts in demographics, tastes and technology, existing laws and regulations must also be revisited and evaluated to ensure they remain relevant and effective,” he said.

According to Ayinde, although short-let apartments retain a residential character, they function primarily as part of the hospitality industry. “They should ideally be located in mixed-use zones or near commercial districts and transportation hubs. This helps to protect core residential neighbourhoods from the disruptive effects of short-let activities,” he said.

He added that urban planning must be embraced as a cultural practice. “Planning must become part of our way of life. It is essential for orderly and sustainable development. All stakeholders must rise to their responsibilities and contribute meaningfully to the growth of every sector of the economy, including tourism, commercial development and real estate,” Ayinde said.

Also, a past president of the Association of Town Planning Consultants (ATOPCON), Dr Moses Ogunleye, said the growth of short-let accommodation has had little or no impact on long-term housing supply, arguing that the two markets are driven by different forces.

According to Ogunleye, the factors sustaining the short-let business differ significantly from those influencing the demand and supply of long-term rental housing. “What is usually deployed for short-let purposes is an approved residential building. Therefore, planning laws and regulations cannot, on their own, stop or discourage it,” he said.

He explained that illegality only arises when a building approved for commercial or institutional use is converted for residential purposes without appropriate authorisation.

Ogunleye, however, stressed the need for effective legislation to properly regulate the sector.

“The era of unregulated short-let operations, as we have them now, is unsafe, retrogressive and inimical to the country’s socio-economic development,” he said, calling for a framework that balances the growth of short-let facilities with traditional hotel accommodation.

An estate surveyor and valuer, Mr Emeka Okoronkwo, noted that real estate markets are fundamentally driven by demand and market forces. He observed that the so-called “Japa syndrome” has turned many Nigerians into domestic tourists, increasing demand for short-term accommodation when they return home.

“With Nigeria’s large population, the timing of visits by returnees, and the depreciation of the naira, many prefer the comfort and perceived security of short-let apartments in prime city locations,” Okoronkwo said.

He explained that the short-let market offers relatively flexible revenue potential for property owners, particularly as it avoids the legal complexities associated with eviction in cases of rental default.

“Property owners and practitioners recognise this opportunity and are taking advantage of it,” he said.

However, Okoronkwo cautioned that short-let investments come with higher risks, including the need for closer supervision, frequent maintenance, and increased wear and tear due to multiple users. He added that many landlords still prefer the stability offered by long-term tenants, in line with statutory obligations. “Both markets have room for growth, and market forces will continue to regulate their evolution,” Okoronkwo said.

Tags: