A COMPARATIVE STUDY OF THE EFFECTS OF PLANNING ON RENTAL VALUE OF RESIDENTIAL PROPERTIES IN KARU SITE AND KARU VILLAGE, ABUJA

A COMPARATIVE STUDY OF THE EFFECTS OF PLANNING ON RENTAL VALUE OF RESIDENTIAL PROPERTIES IN KARU SITE AND KARU VILLAGE, ABUJA

ABSTRACT

The effect of physical planning on rental value of residential properties is numerous. Planning activities were directed towards ensuring orderly development of towns and cities, improvement of health, safety and visual quality of the physical environment. Planning has generally been accepted as a basis of development as well as redevelopment of residential areas of towns and cities. Residential properties are to be in conformity of the plan that will enable that property to command a high rental value but where it is not adhere to accessibility becomes difficult thereby creating a rowdy and inhabitable environment, for this problem to be solve it calls for one to analyze the land use characteristics of the study area and to examine the conformity of the developers to the lay down plans. For this research, questionnaires, oral interviews, observations, survey and literatures are used to gather data. The descriptive form of data analysis is used and it is presented with statistical tool like table. However, when a property is in conformity with land use planning, it increases the value of that property and vice versa. Property developers should adhere strictly to planning authorities, also for a property to have high rental value; it should be in a good location that is easily accessible.

CHAPTER ONE: INTRODUCTION

1.1       BACKGROUND OF STUDY

An urban area consists of great variety of interdependent activities and the choice of various land use depend on rational decision after assessment. Land use planning plays a decisive role in determining the uses for which various track of land are put into. Arowolo L.O (2006)

The extent and quality of liability of land as well as the manner in which they are used constitute an important basis for wealth, property and well being of a community. Planning human settlement has been going on from the history of man existence but scientific planning is however a relatively young discipline and it has spread quickly throughout the world.

It is historical about management of problems emanating from growth and changes at its inception. Land use planning activities were directed towards ensuring orderly development of towns and cities, improvement of health, safety and visual quality of the physical environment. Land use planning has generally been accepted as a basis of development as well as redevelopment of residential areas in towns and cities.

Land is an important component in land use planning and planning for any land use, be it residential, commercial, industrial, recreational or public land use based on the availability of land and the total population in consideration. Land use planning must be base on accurate knowledge of existing land use and maps should be prepared showing the predominant uses of all land in the planning area. People live on land and their entire activities takes place on it.

Land use planning cannot take place without the people because, planning is meant for people and the people live and undertake their activities on land. Hence all the various physical as well as social infrastructures meant for the people are to be planned on land. It is common with all types of properties, residential properties depend chiefly on their ease of access to those location which support related uses, areas providing good accessibility to school, hospital, churches, mosque, market, places of entertainment, recreational parks, areas providing complementing facilities and infrastructures and areas with long and effective transportation routes.

In the course of studying land use planning; location and accessibility cannot be isolated, accessibility in this case considers the time and convenience of getting to a place. Its involve transportation, communication, cost and time distance consideration. Accessibility does not affect solely the real cost incurred by movement, but also the real benefit. The accessibility advantage that a particular city possesses stands as the key factor in the determination of urban land use pattern.

1.2       STATEMENT OF PROBLEM

Land use planning influences the value of residential properties generally and Karu Site and Karu village in particular. It is very glaring that residential buildings without land use planning makes accessibility difficult and also creates a rowdy environment.

Generally land use planning is used to create serene, conducive and habitable environment to dwell in. That is the reason this research is embark upon in order to provide suggestion or solutions to the problems. Despite this important of land use planning, the masses still don’t understand:

1. Why should residential properties be in accordance to land use planning?
2. What determines increase in the value of residential properties?
3. Why do accessibility and location have effect on the value of residential properties?

1.3       AIM AND OBJECTIVES

The aim of this research is to make a comparative analysis on the effect of planning on residential property value between Karu Site and Karu Village, Abuja. To achieve this aim, the listed objectives shall be pursued:

1. Examine the land use characteristics of Karu Site and Karu Village in Abuja.
2. Examine the accessibility and the condition of roads in the study areas.
3. Examine the variation in rental values of similar properties in the two study area.
4. Identify the factors influencing rental value in Karu Site and Karu Village.
5. Examine the effect of planning on the residential value of the study area.

 1.4       RESEARCH QUESTIONS

1. What are the factors responsible for increase in property value?
2. What are the features of land use in the study area?
3. What are the characteristics of residential properties in the study area?
4. What are factors responsible for the differences in residential property value in the study area?

 1.5       SIGNIFICANCE OF RESEARCH

Since Estate management profession is concerned with valuation, development and disposal of real estate, this research will help real estate practitioner to carry out their effective role of valuation and disposal of residential properties in Karu Site and Karu Village without much constraint as to land use planning. It will also aid and encourage students of estate management and will serve a reference material for future use.

1.6       SCOPE AND LIMITATION OF THE STUDY  

The scope of the study shall be restricted to the effect of land use planning on residential property value in Karu Site and Karu Village so as to bring the research work to a manageable size and avoid complication.

Nevertheless, genuine efforts were made to ensure that a thorough work was produced based on the observation and data obtained from different sources. Hence, all the data collected and presented on which all references and conclusion are made, were made as accurate as possible.

1.7       DEFINITION OF TERM

DEVELOPED LAND: These include all the land that is improved by provision of utilities, services and used for the purpose that are recognized as urban in character, whether public or private in ownership in which ownership right can be exercised. It can also be defined as the earth surface which consists of mountains, rivers, rocks, vegetations and other natural resources. Onibukun A.G (2006).

LAND: Land is the total surface of the earth crust in which ownership right can be exercised. It can also be defined as the earth surface which consists of mountains, rivers, rocks, vegetations and other natural resources.(Bello N.A 2008)

LAND USE: Land use is the use in which a particular land is being subjected at a particular point in time either under the control of public power but with the wish of the owner or occupier of the land (Bello N.A, 2008).

LAND USE PLANNING: Canadian institute of planners defined land use planning as a scientific, aesthetic and orderly disposition of land, resources, facilities and services with a view to securing the physical, economic and social efficiency, health and well being of urban and rural communities.

MARKET VALUE:  It is a probable price which a specified interest in real property is likely to bring in competitive and open market under all conditions requisite to a fair sale, the buyer and seller, each acting prudently, knowledgeably and assuming the price is not affected by undue stimulus. Bryl (1984)

MIXED-USE LAND: It is the use of land in the urban setting for more than one use, such as residential cum commercial or commercial cum industrial.

PROPERTY: This is the embodiment of tangible ownership right or bundles of right in real estate. It could also be described as a concept of right which can be held separately. Babatunde (2003); defines property as a bundle of rights exercisable on land or any improvement on land such rights are called property rights. The rights include possession, right to use, and right to let, right to sale or right to derive income from.

RENTAL VALUE: This is the worth or value of property in an open market. It is also the value arising out of the lease or renting out of a property on a periodic basis usually yearly.

Davies and Johnson (1971), defines rental value as the rent or amount of money that a property might reasonably be expected to command in the open market at a given time subject to lease.  Rental value is the fair market value of property while rented out on leases.

RESIDENTIAL PROPERTY:  it is a building that is used or suitable for dwelling purpose. They are dwelling house such as bungalows, duplex, detached houses, semi-detached houses, etc. (LBTT 4010)

UTILITY: Daniel Bernoulli referred to it as an economic term of the sum total satisfaction received from consuming a good or services.

VALUE: This is the monetary worth of a thing. It is expressed as the value of a goods or services measured by the amount of other goods and services for which it will exchange. It is a determination or quality of an object, which involves any sort of appreciation or interests. Such appreciation involves feeling and ultimate desire or tendencies. Value is basically the worth of a thing. (Olayonwa 2006).

1.8       AREA OF THE STUDY

Karu Urban Area is made up of rapidly urbanizing communities in Karu Local Government Area of Nasarawa State. The local government shares a common boundary with the federal Capital Territory, Abuja along the Abuja-Keffi Express way. With an urban area comprising Mararaba, Koroduma, Ado, New Karu, New Nyanya, and Masaka communities, and a number of other rural communities, Karu Local Government Area population was put at about 216,230 people by the 2006 national population and housing census(FGN, 1991).

Karu Local Government Area, particularly the urban areas, has witnessed tremendous growth in population, economy, and social conditions. Much of this growth is attributed to the Local Government Area‟s proximity to the Federal Capital City (FCC), Abuja. The lack of adequate and affordable housing in the FCC for the teeming numbers of people migrating into Abuja from other parts of the country forced large numbers of low and medium income government workers and operators of businesses to settle in Karu Urban Area. Karu Urban Area is within the economic footprint of the Federal Capital City, and the social life in its communities has witnessed transformation from predominantly indigenous tribe dominated communities in 1991 to heterogeneous ones.

Location

Karu Local Government Area is located in the North Central geopolitical region of Nigeria and shares boundaries with Abuja Municipal Area Council (AMAC) in Abuja to the west, Keffi Local Government Area in Nasarawa to the south, and Jaba local Government Area in Kaduna State to the north. The urban communities of the Local Government Area exhibit a linear growth pattern along the Abuja-Keffi expressway forming a conurbation about 20km from Nyanya in Abuja to Masaka in Nasarawa.

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