AN ASSESSMENT OF THE EFFECTS OF THE URBAN INFRASTRUCTURE ON RESIDENTIAL PROPERTY VALUES

AN ASSESSMENT OF THE EFFECTS OF THE URBAN INFRASTRUCTURE ON RESIDENTIAL PROPERTY VALUES

(A CASE STUDY OF KARU ABUJA)

ABSTRACT

Apart from being a major pointer of environmental equality, urban infrastructure is a critical agent for the socio-economic development of any urban area. The need and importance of urban infrastructure cannot be under estimated, since investment in infrastructure is well connected to all factors of economic development. This important and significant relationship between urban infrastructure and property value has not been properly identify therefore resulting in neglect in terms of infrastructural investment. The study administered 80 sets of questionnaire on randomly selected residence of Karu. The study reveals that infrastructural provision has significance impact on the value of residential properties. The study recommends comprehensive road rehabilitation as a way forward.

CHAPTER ONE

1.0    INTRODUCTION

1.1    BACKGROUND OF THE STUDY

An important barometer for measuring an urban areas functionality, liveability and development is its physical infrastructure. The efficiency of any urban area depends largely on the provision of efficient infrastructural facilities and services (Babarinde, 1998). Okusipe (1999) posited that apart from being a major pointer to environmental quality urban infrastructure is a critical agent for the socio-economic development of any urban area. He further asserted that urban infrastructure plays an important and indispensible role in economic, social and environmental aspects of life of an urban setting. It has tremendous impact on the quality of urban life. It is a key developmental asset of any country in that it provides the backbone for industrial concerns located within an urban area to effectively and efficiently drive their production processes.

Urban infrastructure cover a wide spectrum of services and facilities, namely; electricity, water, roads, walkways, waste disposal systems, communication, primary health facilities and services, schools and housing. These are more often provided by the government. Where urban infrastructure is adequately provided and efficiently managed productive and profitable land uses are usually attracted towards the area. These uses out bid/out compete less productive uses through better rent offers. This competition for locations with good urban infrastructure usually results in an increase in land and property values, either sales or rentals (Harvey 1993). This study therefore examines the state of urban infrastructure in Karu and its effects on residential property values.

1.2    STATEMENT OF THE PROBLEM

The needs and important of urban infrastructural cannot be underestimated since investment in infrastructure is well connected to all factors of economic development. This always includes an increase always offset by increasing opportunities and income to the general vicinity. The closer a residential area, is to new infrastructural projects, the higher the increase in its value. However, the reverse relationship is also true as failing in infrastructural investment is closely related to hold that, decaying or neglecting infrastructure is a major determent of economic decay and recession.

The problem therefore is that, this important and significant relationship between urban infrastructures and property value has not being properly identified thereby resulting in neglect in terms of infrastructural investment especially in the study area.

1.3    AIM AND OBJECTIVES

The aim of this study is to assess the effect of urban infrastructure on residential property values in Karu, Federal Capital Territory. In order to achieve this aim, the following objectives are critical:

1. To identify the types of infrastructure available in the study area.
2. To examine the level of urban infrastructure in the study area.
3. To analyse the effects of urban infrastructure on residential property value in the study area.
4. To make appropriate recommendation on the way forward.

1.4    RESEARCH QUESTION

    Below are research question derive from the objective listed above.

1. What are the types of urban infrastructure in the study area?
2. What is the level of urban infrastructure in the study area?
3. What are the effects of urban infrastructure on residential property values in the study area?

1.5    JUSTIFICATION OF THE STUDY

Similar studies in the past have revealed the poor state of our urban infrastructure and its consequential effect on property value with much emphasis on the relationship that exist between infrastructure and property value. However the income generation capacity of infrastructural provision to the public authorities through high rental values, rates and taxes has been neglected. This study is therefore necessary to assist public authorities in putting more efforts in infrastructural investment and as well take full advantage of the income that can be generated from such investment.

1.6    SCOPE AND LIMITATION OF THE STUDY

The research work is confined to the study of the effects of urban infrastructure mainly in Karu, Abuja. It deals with rental value of residential properties such as single room, two bedroom flats and three bedroom flats which are the common types of residential properties found in the study area. The work activities however, will cover the provision of road network within a period of 2010-2015.

1.7    DEFINITION OF TERMS

Some of the key words used in this work and their meaning as contain and used in the research are:

Infrastructure: This is seen as a wide range of economic and social facilities crucial to creating an enabling environment for economic growth and enhances the quality of life, Nubi (2002).

Property: Fraister (1993), stated that properly is the subject matter of ownership that anything which belongs to a person going to exclusive right to enjoy a thing. Example being land and building, real properties, denotes interest and right inherent in the owners of the physical real estate. This cluster of right which could be made the subject of a real activities “title” that signifies the lawful right of possession.

Value: Value is basically the worth of a thing which depend largely on the basis of assessment and unit of measurement.

Property Value: property value according too Millington (1981) is the money obtainable from a person willing and able to purchase property when it is offered for sale by a willing seller, allowing for reasonable time for negotiation and with the full knowledge of the nature and uses which  the property is capable of being put.

1.8    HISTORICAL BACKGROUND OF THE STUDY

Abuja, the Nigeria City came into existence by virtue of Decree No. 6 (1976). However, it assumed the state of the nation capital on the 12th December 1991 when the seat of government was moved from Lagos. The process to relocate the capital began in assumption of office by the Late General Murtala Ramat Mohammed who noticed the deteriorating conditions of Lagos and to find a lasting solution to it as it become obvious and impracticable for Lagos to be retain as the Federal Capital Territory (F.G.N 1976).

In order to solve those problems once and for all, the late General Murtala Mohammed inaugurated a committee on 19th August, 1975 under the leadership of retired Honourable Justice Akinola Aguda. The committee was charge among other things, with the task of recommending suitable and alternative location, having regard to the need for easy accessibility and their report was submitted to the federal government on the 20th December, 1975 by stating that the total land area in Lagos was estimated to be about 6112sq Km which was grossly inadequate to be used for as Federal Capital City not to even sharing it with Lagos state government (F.G.N 1976).

The recommendation proceeded that the Federal Capital should be moved from Lagos and to be relocated to the centre of the country, an area covering about 5000Sq Km, situated at the sought of the present Suleja-Niger State (Aguda 1975)  this recommendation was accepted by the Head of state who prompted the promulgation of federal capital territory on 15th February 1976 and vested the ownership and control of all land in the Federal Capital Territory on Federal government as well as the administration of the Capital Territory.

According to the national population and housing census (2006) the study area (Karu) has an estimated population of about 111, 246 inhabitants.

Karu the study area is characterised with large markets which enhance the economic activities of the neighbourhood, the major activities found there are: subsistence farming, industrial activities, banking, markets and recreational areas nevertheless many people in the study area earned above 2000 per day which make life meaningful and to grade the area on average in the society.

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