THE IMPACT OF INDUSTRIAL PROPERTY LOCATION ON RESIDENTIAL PROPERTY VALUES IN IBADAN CHAPTER ONE

THE IMPACT OF INDUSTRIAL PROPERTY LOCATION ON RESIDENTIAL PROPERTY VALUES IN IBADAN

CHAPTER ONE

INTRODUCTION

1.1       Background to the Study

            Industrial revolution and subsequent growth of rapid industrialisation have caused serious threats to sustainable development of both developed and developing countries. While modem industries extracted various natural resources, other raw materials and energy from the environment to produce material goods and services, such uses and production processes have resulted in large scale emissions of wastes into the environment causing severe threats to traditional agrarian practices, suppressing the values of rural and urban property and reducing the quality of human life (Baby, 2003). Although most of the developed countries had responded to this social menace by developing a variety of technological, economic and legal regimes for regulating the polluting behaviour of firms, the developing countries have not attained sufficient progress in regulating industrial pollution and its influences on their economy and society due to lack of technological alternatives, failures of markets, institutions, government policies, mass poverty and illiteracy.

A residential area is a land use in which housing predominates, as opposed to industrial and commercial areas.  These include single-family housing, multi-family residential, or mobile homes (Kilpatrick, 1999). Zoning for residential use may permit some services or work opportunities or may totally exclude business and industry. It may permit high density land use or only permit low density uses. Residential zoning usually includes a smaller FAR (Floor Area Ratio) than business, commercial or industrial/manufacturing zoning. The area may be large or small (Knight, 2015). Residential areas are zoned for living and any industrial activities are not expected to operate in these areas so as to avoid nuisance. Industrial properties are properties used for industrial purposes. Types of industrial property include factory-office multiuse property; factory -warehouse multiuse property; heavy manufacturing buildings; industrial parks; light manufacturing buildings; and research and development parks (Barrons, 2015). The random development of small scale industrial and workshop activities in residential areas of Arab municipalities in Israelis causes environmental nuisances such as noise, air, water and soil pollution, and heat emissions. These nuisances are both harmful to the environment and local populations (Sofer, Gnaim , Potcher, 2012). Industrial sector in Kerala in India is one of the major productive and wealth creating sectors. However, it remains as a major polluter, resulting in the degradation of the health of local population and reduction in property values (Baby, 2003).

            More so, air pollution, while being a negative externality, has led to lower property values in Bogotá, Columbia (Fernado, 2000). Also, in Delhi, environmental pollution has reached alarming levels, Industry is one of the most important causes. There are over 100,000 mostly small unauthorised units located in residential areas many of them is highly polluting chemical, metal, asbestos, rubber, and plastic factories. Unhealthy conditions prevail where industry and residences are intermixed (Bentinck and Chikara, 2001). Also, there are traces of areas in developing countries such as African countries where there is concentration of industries located close to residential areas such as Kenya, Morocco, Egypt, Sudan, etc.

            Furthermore, In West African region particularly Nigeria, there are concentration of industries located close to residential areas most of which are operating illegally and it is very common in Lagos state such as Isolo, Mushin, Apapa, Ikotun, Ikeja, etc. There are also many clustering of localization of industries in various part of Nigeria such as Ogun State, Port Harcourt, Delta State, Ibadan, etc. In Ibadan, there are areas characterized by concentration of industry such as Bodija, Oke Ado, Oluyole Industrial Estate, among others. Although the development of industrial properties should be based on mono-functional policy concept of separating industry and housing, residents may be affected by industrial activities due to multiple perceived disamenities such as noise, traffic, congestion, air pollution, water pollution, land pollution, and obstruction of view. This study will contribute to the planning debate by elaborating on the implication of the presence of industrial properties such as factories on direct residential properties. This study aims at assessing negative externalities from industrial sites on nearby residential property values in Ibadan and also to assess the magnitude of such impact on the residential property values.

            The development of industrial and workshop activities in residential areas in Ibadan is causing environmental nuisance such as noise, air, water, soil pollution, and heat emission that are harmful to the health of dwellers in these areas and also affect the value of residential properties located in these areas in Ibadan. Industrial activities being a major producer of environmental nuisances are concentrated in specific zones in Ibadan, which is well monitored. Nevertheless, there are a number of cases where residential land uses are mixed with industrial activities some areas in Ibadan which may arise probably through illegal means or through conversion of use which affect residential property values located in these areas and also affect the wellbeing and safety of people that reside in these areas and in turn affect property values which is evident on the rent and prices that tenants or purchasers are willing to offer for such properties. Industrial activities directly or indirectly create problems which are detrimental to the health and survival, and wellbeing of people residing in residential properties located close to industrial sites in Ibadan, industrial activities also affect residential property values which are located close to industrial properties.

            The noise, water, air, soil pollution from industrial activities can have a negative effect on property prices (Anstine, 2003; Nelson, 2004; David 2006). It is supposed that noxious facilities would affect house values significantly. Clark (2006) finds that there are consistently negative impact on houses proximity to factories with statistically important influence on residential property values. It gives out evidence on the price drop on the real sale price of houses if the houses are located proximity to factories.

            Environmental pollution which include land, water, air, and noise pollution from industrial activities have negative effect on both residential property values and on the health and wellbeing of the occupants of those properties and thus reduces the values of residential properties because people will not want to live close to areas where their health will be endangered and where they will be disturb by frequent noise and they will want to live in areas where their health will be secured (Sofer et al., 2012). This issues have been addressed by many researchers so as to proffer a lasting solution to these negative effect but their recommended measures is yet to bring these negative externalities on residential property values as a result of proximity to industrial properties to a satisfactory level which prompted this study. This study aims at identifying the adverse effect of the operations of industrial activities on the surrounding residential properties in Ibadan.

1.2        Problem Statement

The distance of residential properties industrial sites has a statistically significant negative effect on the values of residential properties (Friso, and Henri, 2009). However the effect is largely localized within a relatively short distance from the nearest industrial site. (Bentinck and Chikara, 2001). Absence of solid waste disposal facilities by some industries in Ibadan causes discarded litters from the factories and end up in heaps along the streets. These materials may contaminate adjacent properties or be disposed of indiscriminately and contaminate residential properties. The presence of industrial areas close to residential areas in Ibadan causes overstressed of the limited infrastructural facilities provided and adverse environmental condition. Factories also cause the most serious water pollution. Industrial wastewater seeps into the groundwater, polluting the water.

It has even been claimed that vibrations caused by machines are so severe that cracks are showing up in the walls of houses (Bentinck and Chikara, 2001). Industrial machines, plants and generators, etc. is considered noise to most people. Typically, little effort is made to dispose of toxic materials from industry properly, which often are by products of manufacturing industry.  Can lead to economic obsolescence of residential properties situated close to industrial properties when there is little or no demand on contaminated properties because prospective tenants will not want to endanger their health. In cases of severe contamination sale may not be possible or the sale price may have to be reduced.

There are concentrations of industries in some areas in Nigeria, especially Lagos, Ibadan, Port Harcourt, etc. And some industrial sites are located close to residential areas. Activities from these industrial sites produces some kind of nuisance to the nearby residential neighbourhood such as air pollution (from burning of fossil fuels from factory plants and machinery, factory generators, etc.), water pollution (i.e., the discharge of industrial by-product and hazardous chemicals into streams, rivers, etc.), industrial waste generation, and noise pollution from factory machines and generators. All this nuisance produced from industrial sites directly or indirectly have an impact (usually negative) on the values of residential properties situated close to them. Although industrial properties are not meant to be situated within residential neighbourhood but there are instances in Nigeria where industrial properties are located close to residential properties such as it is found in Lagos State (i.e. Ikeja, Ikorodu, Apapa, etc.), Port Harcourt, Ibadan (i.e Old Bodija, Oke ado, Oluyole Industrial Estate, etc.). The activities from these industries will undoubtedly have impact on the values of residential properties located close to them. The activities from these industrial sites generate noise and contamination within the environment where industrial properties such as factories are located close to residential properties, and the noise and contamination in turns bring about stigma on the residential properties located where industrial operations are being held and thus affect their values. The noise and contamination produced from industrial operations also have health implication of those occupying the affected residential properties. Also, prospective tenant may not want to settle in contaminated environment and where there is undesired noise and this will have a great effect on the property values situated in a contaminated and noisy environment.

            According to Thomson (2003) industrial revolution and subsequent growth of rapid industrialization have caused serious threats to sustainable development of both developed and developing countries. He also pointed out that industrial production processes have resulted into large scale emission of waste into the environment causing severe threat to traditional agrarian practices, suppressing the values of rural and urban residential properties and reducing quality of human life. Although he and other researchers has responded to this social menace by developing and recommending measures to regulate the polluting behaviour of firms but had not attained sufficient progress in regulating industrial pollution and its influence on human life and property values.

Realizing the need for developing a sustainable economy through an appropriate environmental engineering, government has formulated a number of policies from research works and enacted legislations. Despite these initiatives, the process of industrialization continues to inflict damages to human health and property values in Ibadan. Industrial activities operating close to residential properties in Ibadan area produce impact of noise pollution and environmental contamination which have adverse effect on the health, safety and wellbeing of people occupying the residential properties and also have negative effect on residential property values. But in Nigeria, there is no legal frame research upon which noise pollution can be abated. The complexity and magnitude of the problem of environmental pollution caused by industrial activities (which this study focus on) and its impact on both occupants in the affected residential areas and the residential property values calls for effective and well planned measures in Ibadan and Nigeria at large. Based on the above discussion, the following questions agitates my mind:

Research Questions

a. What are the responses of tenants to the nuisance produced by industrial activities?

b. What are the environmental problems posed on the residential properties as a result of nearness to industrial sites?

c. What impact do environmental problems have on residential property values?

d. How are the values of residential properties affected at varying distances from industrial sites?

1.3   Aim and Objectives

The study aims at determining the associated problems of siting industrial properties within residential areas in Ibadan, with a view to determining the effect of industrial land use on rental values of neighbouring residential properties.

Towards achieving this aim, the following objectives are set to:

i. identify the industrial properties located in the study area.

ii. identify the environmental problems posed on the residents by the location of the industries.

iii. examine the impact of the environmental problems on the rental values of residential properties

iv. examine the rental values of residential properties at varying distances from the industries.

1.4       Justification of Study

Despite the fact that there is concentration of industries in many parts of the Nigeria and where in some instances, there is presence of location of industrial properties close to residential properties. Government and its agencies, and researchers in the area of real estate do not give much attention to the problems associated with siting industrial properties close to residential properties which prompted this study.  This aspect of research has not gained the focus of researchers in Nigeria and many developing countries. More so, what prompted me to this area of research is that, this area of study has not been well researched by researchers in Nigeria and most developing world, and identifying the existence of concentration of industries within residential properties in Ibadan especially in the study area and realizing the need to address the problems of siting industrial activities close to residential properties in Nigeria, brought about my interest in this area of study.

            This study will assess the effect of negative externalities produced by industrial activities on residential property values  as a result of nearness of residential properties to the industrial properties by comparing the variation in rental values and/or purchase prices (capital value, of recently sold) of the residential properties within the industrial area with the prices and rents of residential properties located a bit far away from where the industrial activities takes place in Oluyole, Ibadan. This study will also examine the impact of negative externalities of industrial activities on residential property values in the polluted areas in Ibadan by focusing and noting the size (large or small) and the nature of industrial operations. The study area of this research work is majorly characterised by medium scale industry. Thus, this study will focus on the effect of operations of medium scale and small scale industry on the residential property values in Ibadan. This study will only focus on the negative or adverse effect of industrial activities on surrounding residential property values in the study area.

            Lastly, this study will call for the attention of researchers and government and its agencies to the issue of siting industrial properties close to residential properties in Nigeria and this study will try to enlighten and educate professionals in the field of real estate the problems associated with presence of industrial properties within residential neighbourhood and the effect on residential property values.

1.5       Scope of Study

            This study focuses or is restricted to the assessment of the adverse effect or negative externalities of industrial activities operating close to residential areas in Oluyole Industrial Estate in Ibadan i.e., the adverse effect of industrial activities on the residential property values within and around, Oluyole Industrial Estate in Ibadan. This study will also be restricted to evaluating the effect of noise and air pollution, and greenhouse effect produced by industrial activities on the residential property values in the study area. This study will also compare rental and/or capital values of residential properties within the estate with the residential properties situated outside or not too close or a bit far from Oluyole Industrial Estate but within Oluyole, Ibadan area.

Oluyole Industrial Estate is an industrial estate where there is presence of residential properties located close to it. The activities from this industrial estate produces noise, air, and water pollution which affect the values of residential properties that is situated close to the industrial estate directly or indirectly which is the focus of this study. Although the industrial estate can also have positive effect on the values of residential properties located close to them in form of nearness to sources of employment. The reason behind choosing Ibadan as area of study is that there are presence of concentration of industries situated close to residential properties in some areas in Ibadan particularly the study area and it is the area am familiar with.

Finally, this study will not dwell much on positive effect of locating residential properties close to industrial properties but this study will focus on negative externalities or adverse effect of industrial activities on the residential property values in Ibadan.

1.6 Limitations of the Study

The major shortcomings of this study were that of scope, coverage, time frame, financial constraint, and lack of response from some of the respondents. Due to the nature of this study, two groups of respondent (estate firms and tenants/occupiers) are administered with two separate questionnaires. Administration of questionnaires started with the estate firms in order to ensure faster retrieval of questionnaires, but since the period for administration was not far from the festive season, some firms extended their resumption date while some firms that resumed earlier enough delayed the retrieval of questionnaires. Some firms relocated from their previous location making it very difficult to get across to them.

Administration of questionnaires on tenants during the study also posed some challenges. During the working days, the number of tenants that could possibly be captured is always very low as many of them are usually in their office or somewhere doing their various business while on weekends the tenants would seem to be available only for some of them to present series of excuses for not been able to fill the questionnaires. Incessant pleading and series of explanations had to be resorted to in order to encourage filling of the questionnaires by respondents assisted in achieving up to the number of respondent used for the study.

In addition, the time frame required for the project was a limiting factor which made it impossible for some questionnaires to be retrieved, high cost of transportation during questionnaire administration due to fuel chronic fuel scarcity, and there was lack of adequate fund meant to make this project a success. However, despite various limitations faced, it is affirmed that they contributed no negative impact or influence to the result of the study.

1.7        Study Area

Ibadan is the capital of Oyo state and the third largest metropolitan city in Nigeria, after Lagos and Kano with a population of 1,338,659 according to the 2006 census. Located between coordinates 7⁰23’47″N and 7.39639⁰N, 3⁰55’0″E and 3.916667⁰E, Ibadan is also the largest metropolitan geographical area in Nigeria. Ibadan is located in south western Nigeria, about120km east of the border with the Republic of Benin in the forest zone close to the boundary between the forest and the savannah. The city ranges in elevation from 150m in the valley area, to275m above sea level on the major north-south ridge which crosses the central part of the city. Ibadan had been the centre of administration of the old Western Region since the days of the British Colonial rule and parts of the city’s ancient protective walls still stand to this day. The principal inhabitants of the city are Yoruba people.

Ibadan has a tropical wet and dry climate (Koppen climate classification) with a lengthy wet season and relatively constant temperature throughout the course of the year. Ibadan’s wet season runs from March to October, August sees somewhat of a lull in precipitation. This will nearly divide the wet season into two (2) different wet seasons. Like a good portion of West Africa, Ibadan experiences the harmattan between the months of November and February (BBC Weather 2010). With its strategic location on the railway line connecting Lagos to Kano, the city is a major trade centre for trade in cassava, cocoa, cotton, timber, rubber and palm oil. The main industries in the city area include the processing of agricultural products, tobacco processing and cigarette, flour milling, leather making and furniture making (Lloyd et.al. 1967). The Oluyole Industrial Estate Layout lies in the heart of Ibadan and is the second most industrialized region of the city after Lagos-Ibadan expressway region in this region, various industries especially food processing and other light manufacturing industries are located.

EFFECTS OF NEIGHBOURHOOD ATTRIBUTES ON RESIDENTIAL PROPERTY VALUES IN KAFANCHAN, KADUNA STATE

EFFECTS OF NEIGHBOURHOOD ATTRIBUTES ON RESIDENTIAL PROPERTY VALUES IN KAFANCHAN, KADUNA STATE

ABSTRACT

The aim of this project is to examine the effects of Neighbourhood Attributes on Residential Properties Values in Kafanchan. The specific objectives are as followings: identify the various environmental problems common in residential neighbourhood in Kafanchan, evaluate the relationship between neighbourhood attributes and residential property values and ascertain residents rating of environmental qualities and neighbourhood attributes in Kafanchan, examine the effects of environmental qualities and neighbourhood attributes on residential property values. The research method used was survey The sampling techniques adopted for this study is the random sampling techniques, the techniques give every member of the population the opportunity to be selected without any form of preferential treatment. A total of one hundred (100) copies of questionnaires were administered, and out of these, seventy five (75) copies of the questionnaires were correctly filled and returned.  The researcher make use of statistical tools such as tables, percentage and descriptive methods to presents  and analyzed the data gathered from the field survey which was considered appropriate for the research. The study revealed that the problems common in residential neighbourhood in Kafanchan is inadequate basic services such portable water, constant electricity supply, good and affordable health care etc, substandard housing this is evident in the presence of squatter and slum settlement, irregular and informal settlement, finally poverty and social exclusion contributes tremendously to the environmental problems. Finally, the study revealed that environmental qualities and neighbourhood attributes affects residential property value in Kafanchan. The researcher recommend that the government should make concerted effort in providing the basic social amenities in Kafanchan to reduce the environmental problems encountered and the development control should ensure that development control laws are fully enforced to avert the problem squatter, slum, irregular and informal settlement.

CHAPTER ONE

1.0       INTRODUCTION

1. BACKGROUND OF THE STUDY

Environmental qualities are largely responsible for neighbourhood attributes on real estate values. Man’s attitude towards the surrounding environment is not neutral because human search for location that deliver a high quality of life (Mchi, 2013). Those expectations particularly concern man’s daily surrounding including residential area or recreation ground. The qualities of that environment largely affect the decision made on real estate market value.

Environmental qualities are numerous and its’ effect are in various ways, such as physical and socio-economic obsolescence and environmental problem and a host of others have their consequence on human. The problem of environmental and efforts directly towards their alleviation command global attention because of the increasing proportion of the world population being affected by such issues whether or not; we have face an environmental crisis “It is the subject of much debate those days some argue that our environmental problem are neither unprecedented nor over-whelming. The role of environment in assimilating waste products and providing life-support amenities will become increasingly important. Protection and conservation of key natural systems and important ecological functions will essentially, not only in terms of their value and in terms of recreation but also because these systems and functions may provide invaluable support and protection for economic activity and human welfare. But little is known about the role of environment in recent years there is growing recognition that efficient and sustainable management of environmental resources is indeed critical to economic development (VanKamp, 2003).

Neighbourhood, on the other hand is important due to its spatial linkage to the housing purchase and real estate in general. Once settled in a location, one is subject to the externalities that neighbourhood effects impose. Neighbourhoods are geographic units within which certain social relationships exist, although the intensity of these relationships and their importance in the lives of residents vary tremendously. Initially the neighbourhood unit was both a social and planning concept. On one hand, it had to provide convenience and comfort and direct, face-to-face contact in order to restore some sense of community that has been disturbed or destroyed by the specialization and segmentation of urban life. On the other hand, it was to constitute a special sub-part of a larger, more complex totality.

Environmental qualities matter to human life as they play role in assimilating waste products and providing life support amenities such as forests provide fresh air, water catchments Areas and prevention of soil erosion (Turner 1995). Despite the essential role played by environment resources in developing countries little is known about the economic development (Turner, 1995). Furthermore little is known about the impacts of markets forces and policy interventions on environmental management and environmental effects of development and programmes. Research in all these areas is proceeding, but progress remains slow given the complexity of the problems and our failure to address them adequately in the past (Turner, 1995). Development of industries and increased human population has greatly led to environment deterioration, which in turn affects the quality and property value of settlements (Turner, 1995). The Nigeria population is growing at the rate of approximately eight percent per annum, it is estimated that about 70 percent of populations live in poor, unplanned settlements (http:web.mit.edu/ urbanupgrading) Until mid- 1990 the overall urban environment had deteriorated to the extent that less than 5 percent of solid and liquid waste was collected (Nkya 2001) Lack of knowledge of the people towards the importance of environmental quality, has lead to deterioration of the environment to such an extent that in some it has decreased property values and rents of houses. 

According to Norman (1982), physical attributes and locational influences can be described as “Fundamental factors” of the property because all users of such property get utility or disutility from these fundamental factors over their expected tenure. While physical attributes include building area, type of structure and all that is attached thereof, locational influences are off-site neighbourhood attributes like healthcare facilities, parks, schools etc. Therefore real estate value will be locational dependent due to the attributes with respect to specific desirable services. Since locational influences on the value of residential property can come up from a number of sources such as accessibility to shopping centre, air quality, drainage system availability, pollution, noise, security, and availability of refuse disposal facilities etc. This research work examined the effect of environmental quality and neighbourhood attributes on real estate value.

1.2.      STATEMENT OF THE PROBLEM

Most Nigeria‘s major cities have been experiencing rapid urbanization and rapid development due to urban-urban or rural urban migration which have resulted in the failure of urban infrastructure and services have failed to keep pace with this growth. In addition to rising urban poverty, there is an increased urban environmental problems. These challenges are poor solid waste management, uncontrolled housing and neighbourhood development, flooding, traffic congestion, poor state of the urban physical environment and rising crime rates have been documented (Ugwuorah, 2002; Mchi, 1997). Obinna, Owei and Mark (2010) have also noted the deplorable housing, inadequate space, and absence of basic services in the informal settlements of the city. This state of affairs triggered the desire to examine the effect of environmental quality and residential property value in Kafanchan, Kaduna State.

1.3       AIM AND OBJECTIVES OF THE STUDY

The aim of this project is to examine the effects of environmental qualities and neighbourhood attributes on residential properties values in Kafanchan.

The specific objectives are as followings:

1. To identify the various environmental problems common in residential neighbourhood in Kafanchan
2. To evaluate the relationship between neighbourhood attributes and residential property values.
3. To ascertain residents rating of environmental qualities and neighbourhood attributes in Kafanchan
4. To examine the effects of environmental qualities and neighbourhood attributes on residential property values in the study area

1.4       RESEARCH QUESTIONS

1. What are the various environmental problems common in residential neighbourhood in Kafanchan?
2. What are the relationship between neighbourhood attributes and residential property value?
3. How do the residents rate environmental qualities and neighbourhood attributes in Kafanchan?
4. What are the effects of environmental qualities and neighbourhood attributes on residential property values in the study area?

1.5       HYPOTHESIS

H0: Environmental qualities and neighbourhood attributes have no significant effect on residential property value in Kafanchan

H1: Environmental qualities and neighbourhood attributes have significant effect on residential property value in Kafanchan

1.6       SIGNIFICANCE OF THE STUDY

This study examines the effect of environmental quality and neighourhood attributes on residential property values. The management of the environments and neighbourhood is the collective responsibilities of both the government at all levels and the property owners, thus this study would be utilized by the government at both federal, state and local government through their various ministries or agencies such as the ministry of environment, education, health and information as it will impact on them the relevance of maintaining a good and quality environments. The study will be also be beneficial to these ministries in the area of policy formulation and formulating laws that will promote good environment and neighbourhood which will be beneficial to human health and protect  the environment.

The citizenry, estate valuers and managers and professionals in real estate sector will also benefit greatly from this study, as the study will reveal how a person’s carefree attitude about the environment can be costly not only to himself but to others. Non-governmental organization in the areas of health and environment will also benefit from the result of this study. This study will guide them in the areas production and distribution of educational materials to the public to enlighten them about the effects of environmental quality and neighbourhood attributes with regards to its impact on property rental value.

The information will go along way in helping other research in the field as it will contribute to available literatures on environmental quality and neighbourhood attributes.

1.7       SCOPE AND LIMITATIONS OF THE STUDY

The study is delimited to the examination of the effects of environmental quality and neighbourhood attributes on property rental value. The study intends to investigate the environmental quality and neighbourhood attributes, and the relationship between neighbourhood quality and residential property values. The geographical scope of the study is Kafanchan, Kaduna state.

1.8       OPERATIONAL DEFINITION OF TERMS

Environment: The sum total of all surroundings of a living organism, including natural forces and other living things, which provide conditions for development and growth as well as of danger and damage.

Environmental Quality: Environmental quality is a set of properties and characteristics of the environment, either generalized or local, as they impinge on human beings and other organisms. It is a measure of the condition of an environment relative to the requirements of one or more species, any human need or purpose.

Neighbourhood: A neighbourhood is a geographically localised community within a larger city, town, suburb or rural area. Neighbourhoods are often social communities with considerable face-to-face interaction among members.

Attributes: A characteristic or feature of a product that is thought to appeal to customers.

Property Value: property value according to Millington (2017) 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.

1.9       THE STUDY AREA

Kafanchan is a mainly Christian-dominated town in the southern part of Kaduna State, Middle Belt, Nigeria. It is the location of a junction station of the Nigerian Railway Corporation, and it sits on the line connecting Port Harcourt, Enugu, Kafanchan, Kuru, Bauchi, and finally Maiduguri.^[2] As of 2007, Kafanchan had an estimated population of 83,092.

The word Kafanchan, according to Ibrahim James, is said to have been derived from the Fantswam (a dialect of Tyap) phrase “kwaFantswam“. The Fantswam indigenous inhabitants of the Kafanchan town and environs added the prefix “kwa” to all names of peoples and places. Hausa immigrant elements who interacted with them found it more convenient to pronounce the two words, “kwa-Fantswam” as Kafanchan. The town developed as a result of British colonial commercial activities, i.e. a railway junction town in the early 20th century. However, there is another claim as to how the name Kafanchan came into existence. It was said that the name originated during the railway construction period in the 1920s, when the railtrack crossbars were being laid, the white man would say in Hausa “kafanchan“, meaning leg there, i.e. ‘put your leg there’, then a crossbar would be laid after the labourer widens his leg, pushing a leg forward. Hence, the name Kafanchan.

Kafanchan was originally inhabited by the Fantswam people, who migrated from Mashan and located on present-day Atyap land, when they saw an elephant around the Ni̱mbyia̱ (Nimby) forest and shot it with a spear, causing it to flee into the forest. Being hunters, they pursued it until they met where it fell within the plains. They finally settled there and became the aboriginal inhabitants of the present day Kafanchan plains. The southern Kaduna indigenous people of the area, under the auspices of the Indigenous People of Jama’a (ICJ) responded to the turbaning by filing a suit against the Kaduna state government at the Kafanchan High Court. The Kaduna clamoured for the scrapping of the emirate system on their soil, as it was an alien institution imposed on them by the British colonialists. A result could not be ascertained until the new democratic regime came into being. However, in the year 2001, the then-governor of Kaduna state, Ahmed Mohammed Makarfi, created the Fantswam and Ninkyob-Nindem’chiefdoms amidst over ten others in the southern Kaduna area, thereby partially ending the 20th century imposition of the Fantswam people and her kins under emirate rule. However, the Jema’a emirate still remains an institution of the Hausa-Fulani inhabitants. Today, Kafanchan is a melting pot of many Nigerians from parts of southern Kaduna such as the Gwong and the Ham, and other parts of Nigeria.

AN EXAMINATION OF THE EFFECT OF HOUSING DEMAND ON RENTAL VALUE OF RESIDENTIAL PROPERTIES

AN EXAMINATION OF THE EFFECT OF HOUSING DEMAND ON RENTAL VALUE OF RESIDENTIAL PROPERTIES

CHAPTER ONE

1.0       INTRODUCTION

1.1       Background of the Study

Housing is one of the three basic needs of man. It is the most important factor for physical survival of man after provision of food. A deficiency in housing can profoundly affect the health, welfare and productivity of man. It is an indispensable necessity without which man’s survival is impossible. Beyond the fabric, services and the contents of the dwelling, housing encompasses all that surround the dwelling to stimulate healthy living. Housing has to be quantitatively and qualitatively adequate in order to fulfill its basic purposes (Aderamo and Ayobolu, 2010).

Housing as a key determinant of quality of life, can be measured at individual, household and community levels as well as human rights in the cycle of human life (Magigi and Majani 2006). It is unique among consumer goods in its pervasive economic, social, and psychological significance. The physical and social environments, within the house and the neighbourhood, support family functioning and children’s personal growth. Adequate and decent housing provision has been the central focus of developing countries’ government.

Housing demand has witnessed unprecedented increase in the past decades. The low level of economic development, physical, social and cultural factors have created, among others, immense obstacles to the provision of adequate housing to the majority of population. The population growth rates are growing faster than the provision of new housing and housing infrastructure. This has resulted in intensive usage of the existing stock of housing and deterioration of housing environments. Some of the manifestations of housing and residential land use intensification are increasing room occupancy levels, housing adjustments involving physical changes in housing space and housing space conversion (Awanyo, 1992).

Housing in all ramifications is more than a shelter since it embraces all the social services and utilities that make a community or neighbourhood a livable environment. The result is manifested in growing overcrowding in homes, neighbourhoods and communities as well as increasing pressure on infrastructural facilities and rapidly deteriorating environment (National Housing Policy, 2006).

The housing demand in Nigeria can be examined from urban and rural perspectives. In the urban centres the situation is characterized by acute shortage exacerbated by the rapid rate of urbanization with its associated high population growth rate. This problem of housing shortage is also highly associated with overcrowding and insanitary conditions. The situation in rural areas is characterized by poor quality housing with inadequate utilities like potable water, electric power supply, all season roads etc. In addition to the urban and rural perspectives of the Nigerian housing situation is that of poverty. About 70% of the Nigerian population are poor or are of low – income groups (Federal Office of Statistics, 1996). This reflects the inability of most of the population to afford good and decent housing especially in the inflation prone economy. (Igwe- Kalu and Chima, 2006).

1.2       Statement of the Problem

The deficits in housing demand have resulted in numerous problems. The problems include overcrowding, reduction in the vacancy rate, high room occupancy rates, proliferation of informal settlements, pressure on the existing housing stock, pressure on existing infrastructure, deterioration of the infrastructural facilities, inadequate basic amenities, poor spatial arrangement, and deteriorated environment. Others are high rents, increase in housing prices, lack of adequate and affordable housing and decrease in Marginal propensity to save (MPS) of the household as greater part of the income is spent on rent. It is against this background that this study examines the effect of housing demand on rental value of residential properties.

1.3       Aim and Objectives of the Study

The aim of this project is to examine the effect of housing demand on rental value of residential properties.

The specific objectives of this study include the following,

1. To examine housing demand in Kaduna metropolis
2. To identify factors that influence housing demand in the study area.
3. To evaluate the effects of housing demand on rental value of residential properties in the study area.

1.3       Research Questions

1. What is the trend of housing demand in Kaduna metropolis?
2. What are the factors influencing housing demand in the study area?
3. What are the effects of housing demand on rental value of residential properties in the study area?

1.5       Significance of the Study

The condition of human existence is directly related to the environment. This environment comprises mainly the dwelling housing. However, improving housing demand and determining its effects on rental value of residential properties become a priority for every nation where there is poor condition of housing provision and demand.

This study addresses the effects of housing demand on rental value of residential properties. It identified factors that influence housing demand, which is crucial to the formulation of appropriate housing policies and programmes. The study provides empirical evidence on the nature and extent of factors that determine housing demand. The information is crucial to the policy makers because they form basis for formulation of policies and programmes towards addressing the problem of housing shortages.

This will help them to identify and tackle the challenges facing the provision of adequate housing for all Nigerians. It gives insight to private developers on the nature of housing demand as well as the housing stock to be provided in order to meet the demand. Finally, this study will be a reference point to future researchers in the field of housing and community development.

1.6       Scope of the study

This study examines the effects of housing demand on rental value of residential properties. This is limited to examining the trend of housing demand, identify the factors that influence housing demand, determine whether there is a variation in housing demand among various group of residents and evaluate the effects of housing demand on rental value of residential properties. Geographically this study is limited to Mando, Kaduna.

1.7       Definition of Terms

Housing: Housing refers to houses or buildings collectively; accommodation of people; planning or provision of accommodation by an authority; and related meanings. The social issue is of ensuring that members of society have a home in which to live, whether this is a house, or some other kind of dwelling, lodging, or shelter (Aribigbola, 2008)

Affordable housing: Affordable is a relative term, the common definition is when the cost of shelter does not exceed 30 percent of gross household income.

Housing Demand: It is defined, as the amount and quantity of housing people are willing and able to pay for at a particular time.

Housing needs: It is the number of housing units required to accommodate a population at a given standard of housing occupancy.

Housing Stock: It is regarded as the total number of existing habitable housing units in a given place.

Housing Unit: It is defined as a unit of accommodation occupied by a household, be it one person or more.

Vacancy rates: It is most useful for measuring the existing match between households and housing units. That is the percentage of total available housing unit not occupied.

1.8       The Study Area

Kaduna is the state capital of Kaduna State in north-western Nigeria, on the Kaduna River. It is a trade centre and a major transportation hub for the surrounding agricultural areas, with its rail and road junction. The population of Kaduna was at 760,084 as of the 2006 Nigerian census.

Until the late eighties when Kaduna State seemed to have slid into intermittent sectarian and ethnic violence, its capital city, Kaduna, was one of the most peaceful, cosmopolitan and politically important cities in Nigeria. These crises have, however, merely diminished rather than eliminated the city’s virtues, thanks largely to the effective measures the authorities in the state adopted from 2000, the year of the worst crisis, to curb the hostilities in the state.

Established in 1912 by Lord Frederick Lugard, first as a garrison town and then as the regional capital of the then Northern Protectorate, Kaduna soon attracted people of all races, religions and cultures. Within two decades of its establishment, it grew from an almost virgin territory of small scattered settlements of the indigenous population, mostly the Gbagyi, to a town of over 30,000 people. This population comprised the British colonizers, artisans from other West African British colonies, artisans and clerks from the Southern Protectorate as well as labourers and traders from the Hausa, Nupe, Kanuri, Fulani and other tribes in the Northern Protectorate.

By 1963 the town had about 250,000 residents and nearly 30 years later, the 1991 census put its population at 1,307,311, a little over a third of the population of the entire state.

Kaduna’s history reflects that of the North in particular and Nigeria in general. This history dates back before 1912, the year Lord Lugard chose it to become the dual capital of the North and Nigeria. The road to Kaduna actually started in 1900 when Lord Lugard was first appointed the High Commissioner of the Northern Protectorate. At that time Lokoja, at the confluence of the mighty rivers Niger and Benue, was the centre of British missionary activities and British trade. It was also the headquarters for its wars of occupation of the North.

Lugard first settled in Lokoja as regional capital to continue with the colonial conquest of the region. Two years later, i.e in 1902, he moved the capital from Lokoja further upstream of River Niger, to Jebba. However, Jebba remained the headquarters for only a few months. Towards the end of the year, he moved even further upstream to Zungeru with the intention of making it the permanent capital of the North. Many Nigerians will remember Zungeru, a major railway town, as the birth place of Nigeria’s foremost nationalist and first president, Dr. NnamdiAzikiwe. His father had worked there as a railway staff.

For a while it seemed as if Zungeru had succeeded where Lokoja and Jebba had failed; it remained the regional capital for 10 years. However, with time, Lord Lugard himself began to doubt the wisdom of his choice especially given the vastness of the North which had been “pacified” by 1906. He then began a search for a more central and more accessible location than Zungeru.

His search finally ended at a location on the Zaria plains, roughly in the middle of the region. Not only was Kaduna centrally located and much more accessible than Zungeru, the Zaria plains in which it was located were well served by two major tributaries of River Niger, River Kaduna, which gave the settlement its name, and River Gurara. River Kaduna itself was so called because it was crocodile infested, kadduna being the plural of ‘crocodile’ in Hausa.

Apart from its centrality, accessibility and abundant water supply, the location also possessed a clement environment. Also, following the not-too-happy relationship of the colonialists with the large indigenous population of Lagos as capital of the Lagos Colony and Calabar as capital of the Southern Protectorate, the British considered the virginity of a location an important consideration in their choice of a capital. Kaduna, with its sparse and scattered settlement of the indigenous population, satisfied this criterion.

No sooner had Lord Lugard settled down in Kaduna as regional capital in 1912, than he began to plan for it as Nigeria’s capital, ahead of the amalgamation of the Northern and Southern Protectorates in 1914. This followed his promotion that same year as Governor-General of the amalgamated Nigeria. As Governor-General, he did not hide his antipathy towards Lagos and recommended that the capital be moved to Kaduna as quickly as possible. “Government House, Lagos,” he wrote in one of his papers, “would make an excellent hotel if the transfer to Kaduna was achieved.”

The transfer was never achieved. First, the Colonial Office in London thought Kaduna was too far inland for quick and effective communication between motherland and colony. Second, in 1919, Lord Lugard was succeeded as Governor-General by Lord Clifford, who did not share Lugard’s loathing for Lagos. In any case, such a transfer was considered too expensive an exercise by the British.

And so it was that Lugard could not fulfill his wish to see Kaduna become the capital of both the North and Nigeria. However, as the capital of the biggest region in the country – at 730,885 square meters the North was more than three times the size of the Western and Eastern Regions combined. It was also the most populous – Kaduna City was to assume an unmatched political importance in the country, not least because it became the headquarters of the Northern Peoples’ Congress. The NPC eventually became the ruling political party in the North and the senior partner in a coalition government at the centre up to the first military coup in January 1966.

The political status of Kaduna before independence rose a notch higher when a group of Western-educated Northerners led by the late Dr. R.A.B. (Russel Aliyu Barau) Dikko, the region’s first medical doctor, founded the Jam’iyyan Mutanen Arewa AYau (Association of Northerners Today), in 1948 in the city, ostensibly as a cultural association. The JMA transformed into a political party in October 1951 and subsequently chose Sir Ahmadu Bello to lead it. It held its first convention in Kaduna in July 1952.

The most important symbol of the city’s political importance was and remains the Lugard Hall Complex, named after Lord Lugard. Located at the heart of Kaduna and painted in the national colours of green and white, the complex with its prominent dome sits on a large expanse of land that forms a huge roundabout bound almost right round by Coronation Crescent and by the northern end of the broad Independence Way on its southern entrance. It served as the regional House of Assembly and House of Chiefs during the First Republic. Today it serves as Kaduna State’s House of Assembly.

In addition to being the political capital of the North, Kaduna soon developed into a pre-eminent center of media ( Broadcasting Company of Northern Nigeria, New Nigerian and the defunct Today, Hotline, Democrat, Citizen and Reporter) and of commerce and industry in the region and in Nigeria. These developments started in 1957 as the city became the most important hub of the country’s railway network connecting Lagos to Kano, Port Harcourt to Maiduguri and Baro, the country’s then biggest and busy inland port on River Niger.

The Arewa House lies on twenty acres of beautifully wooded land with equally beautiful landscape in the quiet neighbourhood of the former Ministers’ Quarters. It is located on No. 1 Rabah Road, on the grounds of the official residence of Sir Ahmadu Bello, the regional premier who was assassinated in the first military coup in the country.

Apart from the Arewa House, Kaduna has a large concentration of educational institutions including the Kaduna Polytechnic, possibly the largest in Africa, and the Nigerian Defence Academy, which doubles as a military training institution for officers of the Nigerian military and a degree awarding institution.

FACTORS INFLUENCING HOUSING PURCHASE DECISION IN SOME SELECTED PROPERTIES IN CBD ABUJA

FACTORS INFLUENCING HOUSING PURCHASE DECISION IN SOME SELECTED PROPERTIES IN CBD ABUJA

ABSTRACT

This study examined factors influencing housing purchase decision in some selected properties in CBD Abuja. Specifically the study seek to ascertain the factors responsible for housing purchase decision in the study area, to determine whether prospective house buyer or owners have access to primary mortgage institution, to find out if lending policies of mortgage institutions affect  housing purchase decision, to find out if high interest rates charge by mortgage institutions affect housing purchasing decision in the study area and to find out if availability of funds affect housing purchase decision in the study area. The study employed the use of self-administered questionnaires to obtain relevant data. The study revealed that the housing of preferences of civil servants in the study was ranked  the hierarchical order as follows, Duplex, Condominium, Flat house, Detached house,  Bungalow, Semi-detached, Terrace house, Tenement house, Row house while the factors influencing homeownership were ranked in the order below, Costs of building materials, Land acquisition, Personal priority, Salary, Marital status, Loan facilities, Land security, lending rate, parental home ownership, Gender, Age, Education. This work recommends that in other to improve and increase homeowners amongst civil servants mortgage finance, government should implement a policy that will make cost of building materials  affordable (rebate for importers of building materials), ensure that civil servants salaries are upwardly reviewed as at when and paid promptly, should ensure the mortgage institutions in the country are citizens-friendly, efficient and effective, government should also implement a policy that will make land affordable and secured, and provision of housing loans at a  relatively low lending rate should be implemented. These will really help increase number of homeowners the study area.

CHAPTER ONE

INTRODUCTION

1.1       Background to the study

A house is an essential need, which provides peace and comfortable space for a family. As a developing nation, Malaysia is involved with various emerging innovations, particularly in the residual sector. Various new forms and feasible destination are involved in these innovations. Despite the diversity in housing choice in terms of size, category, location, design, cost, and materials (Abdullah et. al., 2012), it remains a challenging process. Housing choice is also associated with some elements influencing the decision-making for house purchase, which varies for each individual.

In the housing market, housing choice among buyers is essential due to its function in predicting housing demand, which offers indirect assistance for the government to stabilise housing policies and further promote house ownership (Abdullah et al., 2012). Essentially, the comprehension of housing preference is crucial for the buyers’ decision-making, particularly first-time buyers (Khan et al., 2017). A study by Reid (2013) recorded various elements influencing housing preferences, namely the relative price of ownership over rent, fortune, salary, credit constraints, destination, household features, house category, cost, and distance from service and product facilities, accessibility, and open space. Other elements are convenient to access to public transport, proximity to school and commercial space (Fierro et al 2009). Accordingly, Zyed et al (2016) recorded other elements influencing housing affordability, namely house cost, household salary, and housing selection. Meanwhile, Khan et al (2017) determined other elements, including security, construction standard, and design features. Hwa (2017) recently found that the developer’s reputation is another aspect taken into account in property purchase in Nigeria.

According to Fetter (2013), factors influencing housing purchase decision are many and broad, but the major influencing factors are; Priority of needs, access to fund, Agboola (1987) in his work recognised finance as part of home development problems. Availability of land, affordability of land, security of tenure etc. Other factors have experienced a steady increase in their impact on home ownership. In a tight money market, homeownership is the first area to suffer, since neither the builder nor the consumer can readily obtain finance for home development.

Accessibility to finance plays an important role in home ownership effort. In Nigeria today, finance is the fulcrum around which housing provision revolves, and is the most crucial element in housing investment. The availability of finance determines access to other key inputs of land, labour, materials and infrastructure (Okoroafor 2007). The issue of finance is pivotal to the realization of any housing scheme. The problem arises from poor fund mobilization and current pervasive level of poverty, which inhibits savings and investment; the undeveloped nature of Nigeria’s housing finance system; absence of appropriate legal framework for efficient operation of housing finance system and general lack of awareness on the operation and benefits of housing finance system through capital markets (Nubi, 2008; Abiodun, 1999).

Essentially, purchase decision on housing property is a conclusion after consideration of buying a house or real estate. The decision can be considered as a resolution after several research activities or processes. Several changes take place in the lifestyle of the Malaysian population, which affect the determinant of housing property purchase decision and its impact on housing demand in Malaysia. In offering affordability and quality in housing, the private developers and the government should identify the primary elements leading to the house purchase, ensuring the successful operation of projects, and satisfying the homeowners’ long-term goals for living or investment. Moreover, housing property purchase decision may refer to the purchase of shelter, while the house fulfils the buyers’ needs and desires (Wang, 2013, as cited in Mariadas et al., 2019). Homebuyers would require a comprehension regarding the aim of housing property purchase and determine the associated elements before reaching the purchase decision (Thaker and Sakaran, 2016). An improved understanding of individuals’ selection of residential property is crucial (Ibem et al., 2015). This is similar to the importance of understanding the factors of buyers’ understanding of the residence adequacy and satisfaction in the circumstance of properties (Mariadas, 2019). Therefore, this research is set to examine the factors influencing housing purchase decision in some selected properties in CBD Abuja.

1.2       Statement of the Problem

One of the major problems of housing purchase or ownership has been the inadequate supply of long term funds which represents the major in issues of providing mortgages. Thus, the system has relied on compulsory savings into National Housing Trust Fund (NTITF) scheme. As a result of this, effort has been made by the regulatory authorities in Nigeria to increase the supply of long-term funds for onward lending to prospective homeowners A few of these effort include the recent recapitalization of Primary Mortgage Institutions in Nigeria, the pension and financial sector reforms and the recently promoted Mortgage Backed securities on the future of investment return in the mortgage industry. According to Agbakoba (2015), Housing purchase is a desire of an average Nigerian, and most people in Nigeria still find home ownership as a major, it is interesting to note that all governments in Nigeria since Independence have always highlighted homeownership for citizens as a major priority. Agbakoba (2015) said, “There is a shortage of housing for low – income earners and constantly growing housing demands (due to increase in population) that are not met.” Unfortunately, banks are reluctant to provide mortgage facilities to low – income earners. It is against this background that this study seeks to examine the factors influencing housing purchase decision in some selected properties in CBD Abuja.

1.3       Aim and Objectives

The aim of the study is to examine the factors influencing housing purchase decision in some selected housing properties in CBD Abuja.

The specific objectives are to:

1. To ascertain the factors responsible for housing purchase decision in the study area
2. To determine whether prospective house buyer or owners have access to primary mortgage institution
3. To find out if lending policies of mortgage institutions affect  housing purchase decision
4. To find out if high interest rates charge by mortgage institutions affect housing purchasing decision in the study area
5. To find out if availability of funds affect housing purchase decision in the study area.

1.4       Research Questions

The following are the research questions

1. What  are the factors responsible for housing purchase decision in the study area?
2. Does prospective house buyer or owners have access to primary mortgage institution?
3. Does the lending policies of mortgage institutions affect  housing purchase decision?
4. Does high interest rates charge by mortgage institutions affect housing purchasing decision in the study area
5. Does availability of funds affect housing purchase decision in the study area.

1.5       Significance of the Study

To the Government of Nigeria: The study will lead to the understanding of the factors that influence home ownership in urban centers in the country and therefore assist in crafting of policies tailored towards making home owner ship affordable to its citizens.

To the management of the Organizations: The study will be beneficial to them as it will assist in environmental scanning which involves analysis of both internal and external environmental factors which includes; strengths, weaknesses ,opportunities and threats.

To the consumers Lenders: The study will enable them to have various options available in the market as it will enable them be aware of the opportunities a available in the housing market.

To researchers: The study will lead to establishment and examination of the root cause of the problem under investigation, its effects and the necessary recommendations from the research findings while addressing problems of mortgage loans.

It will also be used as a basis of future studies, act as authority and reference. They will have material for future research topics.

To other stakeholders: The study will be useful in business decision making with the companies involved. It will enable other stake holders to deliberate and make important decisions on their dealing with the organizations involved.

1.6       Scope and Limitation of the Study

The scope of this study was limited to the factors influencing housing purchase decision in some selected properties in CBD Abuja. The study was mainly focusing on source of funds such as mortgage facilities offered by mortgage institution and the influence they had in housing purchase decision.

Limitations

1. Some respondents were likely to avoid questions put to them and this may result in wrong conclusions or recommendations made.
2. Unreturned questionnaires could lead to inadequate data from respondents. This may affect the study by not giving the general view of lenders. However a representative sample will be selected to ensure that the findings of research are not jeopardized.
3. Due to high confidentiality of some information, it was likely that access to some information which was of great importance to this study might be denied.

1.7       Operational Definition of Terms

Home: According to Cambridge English Dictionary home is defined as the house, apartment, etc. where you live, especially with your family: 2. a house, apartment, etc. when it is considered as property that you can buy or sell:

Ownership: Business English Dictionary define ownership as the ultimate and exclusive right conferred by a lawful claim or title, and subject to certain restrictions to enjoy, occupy, possess, rent, sell, use, give away, or even destroy an item of property.
Mortgage: Cambridge English Dictionary define mortgage as an agreement that allows you to borrow money from a bank or similar organization, especially in order to buy a house, or the amount of money itself:

Finance: Merriam Webster define finance as money or other liquid resources of a government, business, group, or individual.

Civil servant: Collins English dictionary define civil servants as a person who works in the Civil Service of a country or state.

   1.8       Background of the Study Area

It was in 1976 that Federal Military Government led by Late General Murtala Mohammed enacted Federal Capital Territory Act (FCT) established Abuja after it has been chosen to be the administrative capital of Nigeria and with solely administrative functions. This was after the failure of Lagos due to the problems of inadequate land space for future expansion, terrible traffic congestion, poor drainage, acute housing shortage and associated costs, unbearable ethnic influence etc. The planned period for the transfer was to be completed in 1986. However, it was on 12^th December, 1991, that the final movement of Federal capital to Abuja became a reality. Abuja is located in the geographical centre of Nigeria (Figure 1.1) and lying between latitudes 6o 45’ and longitudes 7o 39’ north of the equator. The land of approximately 8,000 square kilometres was carved out from the then neighbouring states of Kwara, Niger and Plateau to serve as the FCT and the Federal Capital City (FCC) to constitutes about 250 square metres. From its designed capacity the FCC will contain 3.2 million people when the development of the city is completed, however, the Abuja population has exploded to 6 million with less than 50% of development attained. The government vested all the land in FCT in the Federal Government of Nigeria. The government also created Federal Capital Development Authority (FCDA), as its agency responsible for the spatial planning and development of the FCT.