AN ASSESSMENT OF THE EFFECTS OF URBAN INFRASTRUCTURE ON RESIDENTIAL PROPERTY RENTAL VALUE IN MASAKA
ABSTRACT
This project titled “An
Assessment of the Effects of Urban Infrastructure on Residential
Property Rental Value in Masaka” is aimed at assessing the effects of
urban infrastructure on residential property rental value in Masaka, to
achieve this aim the following specific objectives shall be pursued: to
identify the types of residential properties, to identify the types of
infrastructure available in the study area, to access the adequacy of
the infrastructure and to analyse the relationship between
infrastructural facilities and property value. The researcher adopted
the use questionnaire to collect data from the research population which
consists of tenants, landlords, property developers and real estate
firms that resides in Nasarawa town. The use of tables, percentages and
descriptive statistical tools were used to analyzed the data. The
results of analysis indicates that the availability of urban
infrastructure positively affect the rental value of residential
property this is shown clearly in the rental values of properties
located in rural areas where there are no infrastructures and those
found in urban areas where infrastructures such as electricity, portable
water, medical centers etc are found.
CHAPTER ONE
1.0 INTRODUCTION
1.1 BACKGROUND OF THE STUDY
Investments in infrastructural facilities
do contribute immensely to the population growth of metropolitan cities
of a nation. Good quality roads, railways, airport, educational
institutions, security of life and properties and hospitals are
essential for the smooth running of the economic sectors in a developing
world. In many countries and for many years, economists, planners and
surveyors have tried to provide answers to why economic growth is faster
in some regions than others and why some cities grow faster than
others.
With the availability of major
investments in infrastructure of any city, there would be automatic
population increase that would influence massive property development.
It has been argued by Ogunba (1999) and Ighalo (1986) that rural-urban
migration, rising purchasing power and demographic factors such as
changes in the average family size are contributory factors to urban
growth. Nigeria with 5.3 percent growth rate has a population of 140
million and it is one of the countries with the fastest rate of
urbanization in the world . One of the greatest challenges of successive
governments in Nigeria had been the need to provide adequate housing to
its teeming population.
Unfortunately, the level of deficiencies
and the degree of deterioration of infrastructure in Nigerian urban
centres is becoming more alarming and worrisome due to the inability of
the public sector to meet up its social responsibilities to the people.
The problems of deteriorated infrastructure are particularly pronounced
in the old, indigenous core areas of the cities while the
non-availability of infrastructure is peculiar to the outer spontaneous
settlements that accommodate the low-income population. This led to the
prevalence of a generally unwholesome and unhygienic environment in most
Nigerian cities that pose a greater danger to the health of the
inhabitants.
The effects of infrastructural
deterioration and their non-availability on the quality of lives
notwithstanding; Floyd and Allen (1998) have reiterated their importance
in the local development process. Thus, concluding that infrastructure
development or the lack of it is often used as a policy tool to
encourage or discourage growth. However, this study focuses on the
analysis of the effects of infrastructure on property development. It is
an attempt to determine the influence of infrastructural provision on
the rent al value of residential properties based on the underlying view
that improved infrastructural facilities would enhance the rent al
value of residential
Ascertaining if and how much
infrastructure development can affect the residential property rental
value can enable policy makers to adopt appropriate measures in real
estate development. There is insufficient empirical literature on
determinants of real estate asset values in Nigeria except reports and
business journals that focus on trends, prices, demand, supply and
mortgage rates in the real estate sector. Hence this study will assess
the effects of urban infrastructure on residential property rental value
in Masaka, Nasarawa State.
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 which is 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 carry out an
assessment of the effect of urban infrastructure on residential property
rental values in Masaka, Nasarawa State.
In order to achieve this aim, the following objectives are critically pursued:
- To identify the types of residential properties
- To identify the types of infrastructure available in the study area.
- To access the adequacy of the infrastructure
- To analyse the relationship between infrastructural facilities and property value.
- To appraise the problems of residential properties in Masaka
1.4 RESEARCH QUESTION
Below are research question derive from the objective listed above.
- What are the types of residential properties in the study area?
- What are types of urban infrastructure available in the study area?
- What is the adequacy of urban infrastructure in the study area?
- What are the relationship between urban infrastructural facilities and property value?
- What the problems associated with urban infrastructural facilities and residential property in Masaka?
1.5 SIGNIFICANCE 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 Impact of urban infrastructural facilities on residential
rental problem in Nasarawa. 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 OPERATIONAL DEFINITION OF TERMS
Residential Properties: Oxford
advanced learners dictionary defined residential properties as
properties suitable for living in, consisting of houses rather than
factories, or offices.
Property: Property is by
property dictionary as anything that is owned by a person or entity,
which be divided into “real property” and personal property.
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).
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
Masaka is a town in
Nasarawa, central Nigeria. It is a district of Karu Local Government
Area, Nasarawa State and is among the towns that forms the Karu urban
area, a conurbation of towns under Karu Local Government Area of
Nasarawa State. urban area developed following the expansion of
administrative and economic activities of Abuja, the capital of Nigeria,
into the urban areas surrounding.
Masaka is a town in New Karu local
government area of Nasarawa state. It is a very big town offering
hospitality for people living at the outskirt of Abuja. It is bounded by
some towns and villages and provides access to different places within
Nasarawa state and to Abuja. From this place, one could go to Keffi, or
Marababa and Nyanya.
It is a place that has rapidly developed
within a short time largely due to its proximity to Abuja, the capital
city of Nigeria. Many people working in Abuja cannot afford to live
inside the central area of Abuja because the cost of living is high,
hence they people prefer to stay at the outskirts of Abuja in other to
be able to afford the cost of transportation and others; Masaka among
other towns such as Marababa, Karu, Nyanya, Apo etc are places that
people prefer to live while working in Abuja than within the central
area of Abuja.
It is highly populated and there are so
many businesses in diverse areas. People working in Abuja can easily get
taxis to work within this area. Areas bounding Masaka include: Area 1,
Angwan Soja, Gwandara and Kodape.
Though this area is a busy town and the
population is overwhelming, there are other basic social and economic
facilities needed which are in shortage.It is still in need of
electricity as most of the areas have their electrical power being
shared in which one area might have light for two days and then the
power is taken for another two days and vice versa. This issue of
electricity distribution has been like this for years. Sometimes, some
areas may not even have light for months
This place became populated immediately
after the destruction of houses in Abuja when Nasir El-Rufai was the
Minister of FCT, this made people to relocate to this area. Another
scarce resource is water, especially during the dry season as wells
become dried up and people would have to resort back to buying of water
from truck pushers. Even though it is a populated area, it does not have
high incidence of social vices compared to other similar areas like
Mararaba and Nyanya; but even with the population and the heavy business
activities that goes on in this area, there is no single commercial
bank and hence the people would have to go to Mararaba or Nyanya to
carry out banking transactions and even a single ATM machine cannot be
found in this large business area.
While coming from Keffi, the road is well
tarred and has two lanes which help to reduce the traffic congestion
often experience especially on Friday, the Market day and business
activities are often intensified coupled with the fact that the market
is by the Nasarawa/Abuja high way.
Weather condition could be harsh
sometimes especially around March, April and May when the weather
becomes so hot and humid that one can even be sweating while bathing. It
can become so serious that some people who cannot afford to fuel their
generators will turn to sleeping outside within their compounds on
varenders in order to grace the little fresh air and to be able to
sleep.
The nature of soil in most parts of this
area is mostly loamy soil with few areas having sandy soil. Because of
the nature of the soil, residents often have farms by the outskirts
especially for those that do not have Office Jobs. This is reflected by
the crops sold in the Market where a certain part of the market is
dedicated for the sale of Crops such as cereals, canes, legumes, tubers,
vegetables and fruits which are mostly grown within and around
this area.
The Market is every Friday of the week
and people from all over Nasarawa state come to buy and sell. In fact,
some people from Jos do bring in eggs, cabbage, potatoes etc mainly from
markets such as the Farin Market and Terminus Market and then buy some
items in order to go and sell in Jos such as Yams and groundnuts. It is
indeed a vast market with all kinds of items for sell. The only downside
of this market is the unavailability of even a single commercial bank
or even an ATM machine.
The need for
environmental sanitation should be taken seriously by the environmental
sanitation board of Nasarawa state because most populated areas without
strict sanitation often serve as breeding grounds for outbreak of
diseases such as cholera. In fact, heaps of refuse can be seen in some
communities and it becomes worst during the rainy season when the Market
area becomes so muddy that some areas become water logged.
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