IMPACT OF ROAD CONSTRUCTION ON COMMERCIAL PROPERTY RENTAL VALUE

IMPACT OF ROAD CONSTRUCTION ON COMMERCIAL PROPERTY RENTAL VALUE

(A CASE STUDY OF LAFIA, NASARAWA STATE)

 Abstract

Road construction is a socioeconomic activity in most urban centers. It is long piece of ground specially prepared with a hard level surface for people, vehicles to travel upon, a greater part of the nations resources since 1941 road has the most had been spent in general development such as construction work, provision of water, telephone and development of road network, poor road network is one of the factors affecting property value, for this reason the research will focus on the impact of road construction on commercial property rental value before and after road construction. Literatures on the topic were reviewed with proper citation. 100 questionnaires were administered. The data obtained were analyzed using tables and description. It was found that there was notable increase in property value after road construction and it has impacted the community positively, government have been encouraged to levy betterment tax on occupiers / owners of the commercial properties. It was recommended that road should be constructed to other nearby town so as to improve property value and foster business relationship in the area.

CHAPTER ONE

1.0       INTRODUCTION

Road construction is a socio–economic activity in most urban centers, it is long narrow piece of ground specially prepared with a hand level surface for people, vehicles to travel upon a greater part of the nations resources since 1941 had been spent in general development such as construction work, provision of water, telephone and development of road network. Since that period, road construction has become one of the most important considerable infrastructure in any locality within Nigeria. This is because accessibility provide conveniences in transporting people and conveying goods from one place to another. Good road network leads to communication between one locality and another, therefore, in any locality where there is good accessibility, there will be positive changes in physical appearance and economic activities which will result to appreciation of property values.

The opportunities open as a result of good road network leads to improvement in the general activities of people which facilitate business activities and provide links between neighboring areas. Transportation and property are important in physical and economic development of towns and cities all over the world. Property and land values tend to increase in areas with expanding transportation networks and road infrastructure, and increase less rapidly in areas without such improvements, rapid and continued rise in housing and prices are expected  in cities with road transportation network improvements and rapid economic and population growth (Gold Berg, 1970) man, nations, town regions and the world itself would be severely limited in development without road network transformational, which is a key factor for physical and economic growth (Oyesiku, 2002). Transportation systems and land use are interdependent.

According to Bailey, Mokhtarian and Littlell (2008), Transportation route is part of distinct development blue print of any urban area in the world at present. The road network coupled with increased transportation, investment result in changed levels of accessibility reflected through cost benefit analysis, savings in travel time line and other benefits. These benefits are noticeable in increased catchments areas for service and facilities like shops, petrol filling station, hotel, schools, offices, banks, and leisure activities.

Road networks are observed in terms of its components of accessibility and traffic density and it control the level of service, compactness and density of particular roads. The level of service is measured by the quality of service on transportation devices or infrastructure is determined and it is a holistic approach considering several factors regarded as measures of traffic density. Modern businesses, industries, trades and general activities depend on transport and transport infrastructure, with movement of goods and services from one place to another becoming vital and inspeakable aspects of global and urban economic survival (growth). The study area is a typical example in the history of growth and development of city with improved road networks and road infrastructure developed to cater for increase in concentration of commercial activities, pedestrian and vehicular movements. Similarly, commercial activities like retail, wholesale business, has attracted consumers and ancillary service providers. This partly caused increase in demand for commercial space and its effects on commercial property values along roads in the study area. There have been increase in rental values of commercial properties along the road although not all equal rates in all areas. This research analysed the rental value of commercial properties.

1.1 Statement of Problem

Poor road network is one of the factors affecting property values. It makes a village town or state to be backward in economic growth and development. It is the socioeconomic impact of the road construction on property values that necessitate this study.

What are the impact of road construction to commercial property rental values?

1.2 Aim and Objectives

The aim of this study is to examine the impact of road construction on commercial property rental values in Lafia. In other to achieve the above aim, the following objective shall be pursued.

1. To examine the state of the available road network in the study area.
2. To asses the supply of commercial property in the study area.
3. To examine the rental value of commercial property in the study area before and after road construction.
4. To determine the extent to which road construction has affected property values.
5. To recommend the way forward.

1.3 Research Question

1. What is the nature of available road network in the study area?
2. What is the growth rate of supply of commercial property in the study area?
3. What are the values of commercial property from 2010 – 2015?
4. To what extent has road construction has affected property values?
5. What way can road network be increase?

1.4 Significance of the Study

This study focus on the impact of road construction on commercial property rental value. Accessibility is the most important element that enhance property values. This research will encourage government to provide good road network as it has positive impact on commercial property rental values.

The greater the accessibility of a location the comparative advantage to commercial property users, and the greater the comparative advantages to the demand for more commercial property in the study area and finally this research will also serve as a requirement for the award of Higher National Diploma (HND).

1.5 Scope and Limitations of the Study

This research is confined to the study of impact of road construction on commercial property rental values in Lafia, the research covers commercial property along new Lafia modern market up to government house.

1.6       Historical Background of the Study Area 

Lafia is a town in the central Nigeria. It is the capital city of Nasarawa state and has the population of about 330,712 inhabitants according to the 2006 census results, it is the largest town in Nasarawa state.

Before Lafia become the capital of Nasarawa state, Lafia a local chiefdom in the early nineteenth century a small town of the Eggon, Alago and other minority people had existed on the site. The emirate formed the major part of Lafia division of Benue province, in 1967 the town become part of Benue Plateau state and in 1976 it was allocated to Plateau state and now Nasarawa state.

Modern Lafia is a collecting point for sesame seeds, soya beans and is a trading center for yam, sorghum, millet and cotton, beside farming, cotton weaving and dyeing are traditionally important activities of the town permanent inhabitants – members of the Alago, Tiv and Kanuri people – while Fulani herdsmen bring their cattle to graze in the vicinity during the dry season. Tin and columbite are mined nearby and there is deposit of coal in southeast of the town.

In addition to the Emirs palace, Lafia has central mosque, a roman catholic church, both primary and secondary schools as well as government health office. It is situated on the trunk railway from Port Harcourt and on the main highway between Markudi and Jos.

1.7       Definition of Key Terms

1. Road: The Concise Oxford Dictionary defined road as specially prepared truck between places for the use of pedestrian, rivers and vehicles. It could also be a long narrow piece of ground especially prepared with a hard level surface for people, vehicles etc.
2. Property: Is a legal concept encompassing all the interests, right and benefit related to ownership. Properties consist of the right of ownership which entitle the owner to a specific interest or interest in what is a physical entity and its ownership Olusegun (2003).
3. Value: As the worth of something in terms of money or other goods for which it can be exchanged or quality of being useful or important. The word value does not have a specific and restricted meaning as it may mean different things to different people Olusegun (2003).
4. Commercial Properties: Immovable properties, land together with all the properties on it that cannot be moved with any attached rights paten business operation (Microsoft Encarta 2009 Microsoft Corporation).
5. Rental Value: As the rent which is an annual or periodic payment of money for the use of land or of land and building, rental value is the highest rent obtainable for a property in an open market at any given time Olusegun (2003).
6. Road Network: Road construction is defined by Lord Hale to be open passage of bring, which from the situation of the adjacent land, and its own depth and wideness with nodal link and connectivity, afford a secure place for the common ridding and anchoring of vehicles for human and goods. Zangand lund University (2004), sees road network to consists of large number of interwoven roads exhibiting many patterns ranging from star like to grid – like with irregular patterns becoming recognized.

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