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The Effect Of Urban
Infrastructure On Residential Property Values In Karu, Federal Capital
Territory
ABSTRACT
Housing represent the
most basic human need and it has a profound impact on the wealth, welfare, and
productivity of individuals for housing to produce these impacts, it must be
adequately provided with functional infrastructure. In Nigeria urban centres,
these basic infrastructure have suffered major neglect over a long period of time
in the hands of government and its different agencies that are expected to
provide and maintain the infrastructure. Therefore, property developers are
responsible for the provision of the infrastructure in their properties which
have increased the development of the properties. For the property developers
to continue to invest in property development, the rental values of the
property must continue to be attractive to allow developers recoup back the
investment on such property. This study therefore, investigated into the
available infrastructure facilities in residential properties in Karu. The
study administered so sets of questionnaire on randomly selected residence of
Karu. The study reveals that infrastructural provision has significant impact
on the value of residential properties. The study recommends comprehensive road
rehabilitation as a way forward.
CHAPTER ONE
1.0
INTRODUCTION
1.1
GENERAL 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
Real estate developers
are consistently faced with the issue of making decisions on the types of
property to invest their earned income or highly competitive secured mortgage
funds, which were attached with high lending rate. One of the different
sections that are begging for such investment is residential property
development. This study will assess the effect of available in infrastructure
in residential property on its rental values in Karu, F.C.T.
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
and state of infrastructure available in the study area.
2. To examine the problems
associated with provision and maintenance of the facilities and the
consequential effects on residential property values in the area.
3. To examine the consequential
effect in the study area.
4. To make appropriate
recommendations to examine the impact of infrastructure with the provision
identified on residential property values in the study area.
1.4
JUSTIFICATION OF THE STUDY
Many factors interplay
to create property values. This could be economic, institutional or
environmental. Factors that negatively affect the value of real property injure
ownership motives and goals. They also damage the investor’s interest and
discourage subsequent investment.
For instance, Udo and
Egbenta have examines the effects of domestic waste dumpsite on rental values
of residential properties in Enugu, Nigeria. They confirmed that contrary to
popular belief, waste dumpsite does not necessarily affect property
values negatively. However, other factors could be harnessed to boost rental
values of properties in our cities. Since infrastructural facilities are
regarded as booster to social well-being of city dwellers, hence the choice of
infrastructural facilities as factors that may likely affect the rental value
of residential properties in Nigeria cities is considered to be appropriate.
1.5
SCOPE OF THE STUDY
The researches work is
confined to the study of the effects of urban infrastructures mainly in Karu,
Abuja. It shall 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 2009-2013.
1.6
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.
Property: The term is used in
this research to mean the rights that one individual has in land or grow to the
exclusive of other right gained from the ownership of wealth.
Value: Value is basically the
worth of a thing which depend largely on the basis of assessment and unit of
measurement.
Property Value: The measure to
properly value is a function of its degree of unity and scarcity relative to
comparable utilities.
1.7
HISTORICAL BACKGROUND OF THE STUDY AREA
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 notice
the deteriorating conditions of Lagos and try 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 other to solve those
problems once and for all, the late General Murtala Mohammed inaugurated a
committee on 19th August, 1975under 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 20thDecember,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 15thFebruary 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
estimate 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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