ABSTRACT
Impact of neighbourhood characteristics on rental values of residential properties has over the decade been a major topic of discussion in the global housing market. The situation emanated as a result of the multi –dimensional bundle of services and a bundle of contradictions and paradoxes that housing is known for. The study examined the impact of neighbourhood characteristics on rental values of residential properties in Minna, Nigeria. This study assess the adequacy of neighbourhood characteristics in the study area; examine the current rental values of different classes of residential properties in the study area, and examine the level of impact of neighbourhood characteristics on rental values of residential properties. The methodology adopted was the use of a structured questionnaire with closed ended questions to source data from 621 randomly selected stakeholders across the three categories of residential properties. The data were analysed using both descriptive (frequency table, and a 5 point likert scale) and inferential (multiple regression) statistical analysis. Results from the analysis revealed that rental values of residential properties in F-lay -out are higher than that of the residential properties in Tunga low cost, and the rent in Bosso neighbourhood is relatively higher than that of Tunga low cost respectively, the result indicate ₦50,000- ₦100,000, ₦100,000-₦150,000PA and ₦150,000-₦200,000PA for one bedreoom in Bosso, Tunga and F-layout respectively, ₦150,000-₦200,000, ₦200,000-₦250,000 and above ₦250,000PA for two bedroom in Bosso, Tunga low cost and F-lay out. For three bedroom, ₦200,000-₦250,000PA, ₦20,000-₦250,000PA and above ₦250,000PA is recorded for Bosso, Tunga low cost and F-layout respectively, this is in relation to the variation in the quality of neighbourhood characteristics in these areas respectively. In order not to have a wide disparity of rental values that emerges among similar categories of residential properties within the same market, The study therefore recommended that the government should undertake an aggressive infrastructural facilities development, particularly in the high density areas and to also improve the number and quality of the existing amenities in the low and medium density areas.
CHAPTER ONE
1.0 INTRODUCTION
1.1 Background to the Study
Housing forms one of the most basic needs of mankind (Aluko, 2011). It is a fundamental element of human settlement that meet the basic needs in which people live. It connotes an essential and vital component in both social and economic framework of a nation, and the performance of the housing sector is frequently seen as a determinant of the stability or instability of a nation. It is a social unit of space and the significance of living conditions which is recognized for centuries as a primary prerequisite for health, work efficiency, social-economic standards, productivity, general welfare, growth of the individuals and neighbourhood (Ibem & Amole, 2010). In another related development, Agbola (2005) looked at housing as both a product and process. The product perception of it sees it as a residential environment where man seeks shelter, safety, comfort and dignity. The process perspective which appears very multifaceted manifest to issues such as dwelling design, provision, maintenance and neighbourhood infrastructural services and regeneration.
According to Agbola and Agunbiade (2007) housing include the totality of the surroundings and infrastructural facilities that offer human comfort, improve the quality of human health and productivity as well as enable them sustain their psycho- pathological balance in the environment where they find themselves. The study considered housing as a multi–dimensional bundle of services and a bundle of contradictions and paradoxes. Indeed it has been universally acknowledged as one of the most essential necessities of human life and is a major economic asset in every nation. Adequate housing provides the foundation for stable communities and social inclusion (Oladapo, 2006).
Therefore, the significance of adequate housing to the social well-being of the people in any society cannot be overemphasized. However, housing and neighbourhood are inseparable, because it is not just about the floor space; It is about the vibe of the area, the neighbors, the amenities, schools, friends, shops and parks, transit or traffic. (Suttor, 2016). Neighbourhoods are also known to have a complicated interplay between the residential choices of housing supply and the influences of the larger metropolitan system on its constituent part. This is to say that the characteristics of a particular neighbourhood have a significant impact on the individuals choices of resident and these characteristics of neighbourhood differ from one place to the other. (Krupka and Noonan, 2009).
Although, a lot of studies on the effect of neighbourhood characteristics on rental values of residential properties have been conducted globally but only little of the studies was conducted in Nigeria and particularly in the study area. Thus, in a bid to contribute knowledge to this field of the study, the researcher examines the impact of neighborhood characteristics on rental values of residential properties in Minna, Nigeria.
1.2 Statement of the Reearch Problem
In recent times the housing has formed part of the major discussions in several global summit, this shows the complexity of housing in the global market (Oladunjoye, 2005). Housing is bedeviled by a number of risks which include property crime. The consequences of residential neighbourhood crime affect residents, entire neighbuorhood, government activities and housing investment in particular. (Agunbiade, 2012). In another related development, Krupta and Noonan, (2009) established that neighbourhoods are also known to have a complicated interplay between the residential choices of housing supply and the influences of the larger metropolitan system on its constituent part. This is to say that the characteristics of a particular neighbourhood have a significant impact on the individuals choices of resident and these characteristics of neighbourhood differ from one place to the other. Minna, being a very large settlement with many residential neighbourhoods is having varying neighbourhoods with homogeneous characteristics from the heterogeneous population and the variation of the rental values of housing across the study area is alarming. Different authors (Adama and Jinadu, 2015; Popoola et al., 2015), have found relationship between neighbourhood and environmental quality and property value in the study area, and they opined that high density can be detrimental to urban environmental quality and thus to economic attractiveness. The study examines the connection and situation in a different neighbourhood of Minna by looking at it from the angle of high, medium and low density areas of an entirely new neighbourhood in order to ascertain the relative contribution of neighbourhood characteristics on residential property values with the inclusion of socio-cultural belief of a neighbourhood and using a different approach.
1.3 Aim and Objectives of the Study
The aim of this study is to examine the impact of neighbourhood characteristics on the values of residential properties in the study area with a view to assessing the causes of rental variation across the three selected areas of the study,
The objectives are to:
1. assess the adequacy of neighbourhood characteristics in the study area.
2. examine the current rental values of different classes of residential properties in the study area; and
3. examine the level of impact of neighbourhood characteristics on residential rental values in the study area.
1.4 Research Questions
In order to be fully guided, the following research questions were developed.
1. What are the adequacies of the neighbourhood characteristics in the study area?
2. What is the current rental value of residential properties in the study area?
3. What is the level of impact of neighbourhood characteristics on residential rental values in the study area?
The research will provide answers to the above questions by collecting and analyzing required data using appropriate research techniques.
1.5 Justification of the Study
Although, a number of studies on the determinants of rental values of residential properties have been carried out globally as housing formed one of the basic topic of discussion globally; the following authors conducted a related research on the determinants of residential property values. (Visser & VanDam, 2006; Yan and Zhang, 2006; Mathews, 2007;Krupka & Noonan, 2009; Ki & Janyantha, 2016; Islam, 2012; Huang et al., 2015; Lin, 2016; Kim and Jin, 2019; Ting, 2019;).The researches were conducted in Netherlands, China, USA, USA, China, Canada, China, USA, USA and China respectively. However, all the above mentioned studies were foreign base. Meanwhile, the related studies from the Nigerian context are as follows: Oloke, et al. (2013) carried out a study on the factors affecting residential property values in Mogodo neighbourhood, Lagos state Nigeria by taking in to cognisance the structural, neighbourhood, locational and travel distance as the measurable variables. In another related study, Olajide and Lizham, (2016) examines the impact of neighbourhood crime on rental values of residential properties in Nigeria. In their study, they considered only crime rate as a determinant factor. Meanwhile, Asikhia et al. (2016) assessed the effect of housing facilities on rental values of residential properties in Benin City, Nigeria. Other related studies conducted in Minna include the following: The study of Adama and Junadu (2015) evaluate the relationship between the neighbourhood quality and property value in Minna metropolis, Niger State using correlation and ANOVA. The assessment was carried out to describe and compare neighbourhoods in terms of physical condition of the built and natural environments as well as provision of infrastructure and services. Although, the studies did not include other essential neighbourhood characteristics like the socio cultural belief of the neighbourhood and proximity to social services which may be a factor of a choice of settlement today in Minna.
Popoola et al. (2015) carried out a study on the effect of environmental quality on property rental values in Peri-urban neighborhoods of Minna, the study focused primarily on how environmental quality affect the rental values of residential properties in Minna and the choice of neighbourhood were basically restricted to the peri-urban areas of Minna. Obviously, the study is limited in terms of determinant factor considered. On the other hand, Usman, (2016) examined the impact of Housing attributes on rental values of residential properties in Minna, Nigeria. The study looked at all the housing attributes which comprises of the housing quality, location and neighbourhood attributes. Because of the multiple number of neighbourhoods and the heterogeneity of the characteristics of each neighbourhood which Minna is known for, it is pertinent to mention that what may affect the rental values of a particular neighbourhood may not be applicable as determinant of rental values of another neighbourhood and most of this neighbourhood across Minna have not been examined. Thus, with the high increase on the disparity of rental values of residential properties in the study area as a result of neighbourhood characteristics, multi–dimensional bundle of services, contradictions and paradoxes of housing, it is paramount to examine the impact of neighbourhood characteristics on rental values of residential properties in other neighbourhoods of the metropolis by taking account of the land use planning, proximity to economic activities, proximity to services, and nature of environment. With more variables under investigation, all the relevant stakeholders in the built environment especially the estate surveyors and valuers would understand the better causal factors resulting to the variation in the values of residential properties in different neighbourhoods of Minna.
1.6 Hypotheses
H0: There is no significant relationship between neighbourhood characteristics and rental values of residential properties in Minna.
H1: There is a significant relationship between neighbourhood characteristics and rental values of residential properties in Minna.
1.7 Significance of the Study
Housing represent the most basic of human want which has a profound impact on the health, welfare and productivity of individual and hence the housing market is characterized as imperfect and inefficient because of the complexity and heterogeneity nature of the housing product. Housing and neighbourhood are inseparable because of the proximity of services and facilities. Therefore, it is imperative to study the impact of neighborhood characteristics on rental values of residential properties, because it will go a long way in addressing many unanswered questions related to housing values, its quality and investments (Nubi, 2002).
Establishing the relationship that exists between rental values of residential properties and the various neighbourhood characteristics is very crucial to Estate Surveyors as it is going provide them with information which may be used to advise investors in housing market as well as the potential tenant on the choice of residents with better amenities. Findings from this research will be useful to potential investors in housing market on the choice of neighbourhood to invest their money that will yield them the optimum return that every investor desired. This will provide them with information about the type and qualities of neighbourhoods which will enable them make comparison and the make a decision on where to invest.
The findings of this study will go a long way to help the policy makers, government or relevant authorities in the built environment on the relevance of a healthy environment planned neighbourhood as well as the presence of amenities together with its significance effect on rental values or real estate investment that will yield optimum returns.
1.8 Scope of the Study
This study is on neighbourhood characteristics in the neighbourhood such as the land use planning of the neighbourhood, proximity to economic activities, proximity to services such as schools, parks, hospitals, shopping areas and religious facilities. The neighborhood socio cultural belief and nature of environment such as pollution and erosion as it affect rental values of residential properties in Minna will also be examined. To be specific, the study considered three (3) locations in Minna, Niger State. These geographical areas of coverage includes F-layout, Tunga Lowcost and Bosso Town. The choice of these areas were based on the density characteristics of the areas for instance low, medium and high density areas respectively. The study also considers One, Two and Three bedroom apartments only due to the prevalence of these categories of properties in the locations.
To effectively carry out the research and for the purpose of producing a bias free result, the housing units in the study areas were grouped based on type in order to provide a yardstick for effective comparison. The study hence focuses on the residential properties placed for rent within the three (3) aforementioned neighbourhoods in the study area.
1.8.1 Justification for the Selection of Sample Frame
Minna, being a very large settlement with many residential neighbourhoods, Cluster sampling technique was considered appropriate and was used in grouping the neighbourhoods with homogeneous characteristics from the heterogeneous population. Three clusters emerged, one each from the low density, medium density and the high density residential neighbourhoods for F-layout, Tunga low cost and Bosso area respectively. However, each of the selected sample frame have a unique or homogeneous characteristics which are considered among the selected neighbourhood characteristics variables under study that differentiate them from one another. As stated earlier in the scope, the study focuses on the following neighbourhood characteristics:
(i) Land use planning of the neighbourhood.
(ii) Proximity to economic activities.
(iii) Proximity to services for example schools, parks, hospitals, shopping areas and religious centers.
(iv) The neighbourhood sociocultural belief and nature of environment.
From the above scope of the study, Bosso is more of a community that is predominantly populated by the Gbagyi people with similar socio-cultural belief and way of life, this is a unique feature compared to the dwellers of Tunga lowcost and F- layout where they have a mixed culture and belief.
On the other hand, F-layout unique characteristics are the proximity to parks, shopping areas and relatively the presence of a hospital service compared to Bosso area. In addition, Tunga lowcost is known for its good and orderly planning and proximity to more economic activities that distinct it from both Bosso and F-lay out. Generally, the selected sample frames have unique features of neighbourhood variables under investigation by the researcher that differentiate them from one another, (Niger State Government of Nigeria 2011). It is on this basis that the researcher selects the above sample frame to investigate level of impact of these unique and homogenous neighbourhood variables in the selected areas of Minna.
1.9 The Study Area
1.9.1 Geographical Location and Climate
Minna is the state capital of Niger state in Nigeria. The city is located on Latitude 9 37‟ North and Longitude 6 33‟ East. It occupies a land area on both sides of around 884 hectares.(Baba, 2013). The Minna metropolitan area has expanded grown to surround community settlements such as Bosso, Maitumbi,Limawa, unguwan sarki, unguwandaji,Dutsenkura, Kpakungu shango, Shango and Chanchaga. The metropolitan city is currently aamalgamation of three local government (administrative) areas which includes chanchaga, Bosso and Shiroro. According to the master plan of Minna (1979), The topography of the city is enclosed mostly by gentle slope plain to the Central, Southern and Western parts of the city with traversing railway lines, streams, drainage channels and multiple road networks connected to each other, Although, hills and hummocks are the dominants in the Northern and Eastern part (NIGIS, 2014).
1.9.2 Historical Development of the Study Area
Minna was initially located on a plateau plateaus, extending its boundaries over enormous area and was surrounded by neighboring Gbagi District of Bosso to the Southwest also connected to the Pina hills and Kuta District to the Northeast and Paiko District to the Southeast, interceded by a River Gbako/Chanchaga. Evidently, Archeologist suggests that city can be dated to be around 47000 -37000 years ago (“The concise Britannica Encyclopedia”, retrieved 2019). It is also suggested that ancient city was surrounded by stonewalls use for defensive strategy which till date remain a remarkable landmark. According to tradition, the ancient city was made up of seven dotted settlements called (epo) on the hill toptogether with some interlink village settlements which includes; Jamkpa, Paida, Pyasi, Dabwo, Tayi, Fadayni and Dyani. (Baba, 2013).
The name of the city was derived from an annual festival of the people of the above aforementioned settlements (Baba, 2013). During the annual festival, it is prohibited for every household to use fire for the day until the last day of the festival when every member of each household in the community meet in the chiefs house where firewood or burning sticks were shared to the members to start fire in their various homes. The neighboring tribes around the settlements are thus refers to as “min-na” meaning spread fire or people who spread fire in Gbagi language
1.9.3 Administrative Structure
The city of Minna being the capital of Niger state since the establishment of the state when it carved out of the then Sokoto state in 1976, has since taking a high administrative and political status in Nigeria, this led to the creation and sitting of some state own ministries, parastatal and departments saddled with the responsibilities of discharging some duties assigned or designated to them. Many public and non- governmental organizations, financial institutions such as commercial banks and other private organizations are also presence in the city. These developments have led to the high influx of people both from within and outside the state and particularly to be in search of a white collar jobs (NIGIS, 2014).
1.9.4 Economic of the Study Area
Minna is a city that is highly blessed with numerous and abundant human and natural resources i.e both human and natural resources. Resources such as, guinea corn, Cotton, yam and ginger are the main agricultural product found in the city. Rice and cassava are also cultivated around the city of Minna. Natural resources such as gold are found in Chanchaga and Shango axis of the city. In Pai village which is in proximity to Beji town along Zungeru road is endowed with abundant clay. Other economic activities that form part of the economic activities in the city include: cattle rearing and Shea nut processing. The city also has ultra-modern market and host of shopping complexes. Minna as a city also has some good number of industries such as PZ cussons that produces baby products, toilet soaps, and medicament and others. Crafting, Leather work and Metalworking are also available in good number in the city.
Minna is a city has substantial number of primary, secondary and tertiary institutions. The tertiary institutions include, the Federal University of Technology (FUT), Minna; Niger state College of Education, Niger state College of Health Technology, School of Midwifery, Justice Fati College of Legal Studies, New gate college of Health Technology among others.
Minna is interconnected to other towns and cities by road. The Federal Capital Territory (FCT) of Nigeria is about 150kms away from Minna. There is rail transport connection from the city to Kaduna and Kano both from the north of Nigeria and then linked to Ibadan and Lagos which is from the south west part of Nigeria and then to some satellite villages of Ilorin, the central part of Nigeria. Minna as a city has a single international Airport as a means of Air transportation system.
This material content is developed to serve as a GUIDE for students to conduct academic research
THE IMPACT OF NEIGHBOURHOOD CHARACTERISTICS ON RENTAL VALUES OF RESIDENTIAL PROPERTIES IN MINNA, NIGERIA
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