CHAPTER ONE
1.0
Introduction
Provision of infrastructural facilities both in quantity and in quality is the bedrock that
develops a particular country. It serves as a veritable parameter used in assessing the
status of every urban area. Infrastructural facilities embrace any services in which the
various tiers of government in the country as well as communities are individually and
collectively involved in its provision. The efficiency of any form of human activity
system, including an urban area, largely depends on the provision of infrastructural
facilities and services. Hence, the significance of infrastructure in the proper functioning
of an urban area cannot be dismissed.
Apart from being a major pointer of environmental quality, infrastructure is a critical
agent for the socio-economic development of any urban area (Okusipe, 1999). It plays an
important and indispensable role in economic, social and environmental aspects of life of
an urban setting. It has a manifest impact on the quality of life. It is a backbone of any
economy; industries need it to effectively and efficiently drive their production process.
Infrastructure covers a wide range of services and facilities namely: electricity; pipe
borne water; roads; waste disposal; drainage system; communication network; primary
health services; schools and housing as the key ones. These are more often provided by
the government. Where infrastructures are adequately provided and efficiently managed,
productive and profitable land uses are usually attracted. These uses out compete less
productive uses through better rent offers. This competition for locations with good and
complementary infrastructures usually results to increase in property values, either sales
or rentals (Harley, 1994).
1
Without access to specific functional models; highways; streets; roads and bridges; mass
transit and airways; water supply resources; waste water management; solid waste
treatment and disposal; electric power generation and transmission; telecommunication;
hazardous waste management and other public services, land has little potential for
residential, commercial and industrial use. Most forms of infrastructure serve many firms
and households for long period of time and are costly to provide and maintain. For these
reasons except in very rare cases, infrastructure is usually provided by all the three tiers
of government. How government provide and maintain infrastructure therefore has a
profound influence on property value. If they are adequately provided and well
maintained, it will impact positively on the value of property thereby acting as a catalyst
for societal growth and development.
1.1
Statement of research problem
In every facet of man’s activities, he is faced with utilities maximisation and comfort
maximisation, hence, revolving around areas of great advantage.
The question for which we seek solution which affect infrastructural facilities and
services and its effects on property value within the study area are:
(1)
What is the current state of infrastructural services in Nasarawa?
(2)
Are there established means of maintaining the available infrastructures?
(3)
How effective are these means of maintaining the infrastructure?
(4)
What can be done to improve on the available infrastructural facilities to enhance
development drive?
(5)
What is the impact of infrastructural service in property value?
2
In view of the above, it is imperative to assess the positive effects or otherwise of
providing infrastructural facilities and services on property value. This project therefore
highlights and evaluates the state of infrastructural services in Tammah, Nasarawa.
1.2
Aim and objectives
1.2.1 Aim
This project is aimed at evaluating the impact of infrastructural services on property
values in Nasarawa with particular emphasis on Tammah.
1.2.2 Objectives
To achieve the above aim, the following objectives will be pursued:
(1)
To determine the current state infrastructural services in Nasarawa (Tammah).
(2)
To identify established means of maintaining the available infrastructures
(3)
To examining the means of maintaining the infrastructure
(4)
To determine what can be done to improve on the available infrastructural
facilities to enhance development drive
To understand the impact infrastructural service in property value.
(5)
1.3
Significance of the study
The importance of infrastructural facilities and services in urban areas cannot be over
emphasized. Nasarawa like many other cities across the globe is faced with the problem
of deteriorating infrastructure. Hence, the need to appraise the current state of
infrastructural facilities in the Nasarawa with a view to establish the impact this might
have on property values in the area and also to recommend possible ways or strategies on
how to improve on them.
3
Other targeted beneficiaries include the general public especially those residing within
the study area, Private Estate Developers, Facilities Managers, and practicing Estate
Surveyors & Valuers.
Lastly, it will serve as reference material to other researchers alike in their future attempt
to study the provision of infrastructural facilities and services and its effect on property
values.
1.4
Scope and limitations of the study
The impact of infrastructural services on property value is a very broad and inexhaustible
research topic. For brevity and purpose of this project, it is limited to Tammah only.
Infrastructure ranges from road network, drainage channel, water and electricity supply,
sewage incinerators, waste collection treatment and disposal, security administrative
setup, telecommunication, postal services, stadium facilities, hotels, public squares to
mention but a few. However, in this project, they are narrowed down to road,
drainage/sewage channels, portable water supply, electricity generation & transmission
and security.
Properties, being objects that can be owned range from residential, commercial,
industrial, agricultural, recreational, educational etc, but in this study, it is limited to
residential properties. The reason for focusing in residential properties is because housing
serves as second most important human need after food.
There are many classes of value as there are many classes of wants. For the purpose of
this study, rental value will be considered in details.
4
The limitation or constraint is inadequate response to questions by many occupiers of
residential properties in the study area and professional Estate Surveyors & Valuers and
most of them where not always around when the researcher called. Thus, this work is
unavoidably restricted by these constraints.
1.5
Definition of terms
1.5.1 Infrastructure:
Different definitions have been ascribed by several authors to the word infrastructure.
The term has been used in a broad sense to mean collectively: the transportation of
people and information; the provision of public services and utilities such as water and
power; and the removal, minimisation and control of waste and environmental
restoration. Nubi (2002), also described infrastructure as the aggregate of all facilities that
allow a city to function effectively. They include housing, electricity, pipe borne water,
drainage, waste disposal, road, sewage, health, education, telecommunication and
institutions or structures like police stations, fire fighting stations, banks and post offices.
1.5.2 Facilities
The Chamber English Dictionary (5th Edition) defined facility as any structure put in
place for the benefit of another. In a broad view facilities are structures or components
put in place that will be beneficial to those concerned.
1.5.3 Services
According to Oxford Advanced Learner’s Dictionary (6th Edition), service is defined as a
system that provides something that the public needs, organised by the government or a
5
private company. Such services include transportation services, telecommunication,
water supply, electricity and postal services among others.
1.5.4 Property
Property in a common language can be said to mean goods and commodities owned and
possessed by a person. It can be an object held for the owner’s exclusive use and
disposal. Property is a very complex term, whereby the meaning is viewed from different
context.
Under the English Law, property is seen in form of corporeal rights when it refers to
objects such as land and houses or incorporeal when rights which refers to abstract things
such as right of way, access to market, school, place of worship among others.
Ely (1914) described property as “bundle of rights”. In his view, property comprises
many rights but most property literature identified three most significant property rights
which can be held in land by private individuals as:
-
Right of use and enjoyment in land.
-
Right to income arising from land.
-
The right to alienate or transfer land.
All these rights are generally referred to as proprietary rights.
1.5.5 Value
The word ‘VALUE’ does not have a specific and restricted meaning as it may mean
different thing to different people. Value by its ordinary definition particularly in basic
economics is the utility or satisfaction which goods and services offer. The Oxford
Advanced Learners English Dictionary defined ‘VALUE’ as the ‘worth of something in
6
terms of money or other goods for which it can be exchanged for something being useful
or important’.
Real Estate Appraisers defined value as “something created in the mind of the people
who constitute market”. That is, value is intrinsic.
From all above definitions and for the purpose of this study, the word value can be
defined as “the satisfaction derived from the use of a thing”.
In the word of justice Brandies (1923) “value is word of different meaning”. There are
many classes of value as there are many classes of wants. Some kinds of value in
common usages in every business are as follows: Aesthetic value, scientific value, sale
value, sale value, religion value, salvage value, rental value, purchase value, mortgage
value, probate value, value for compulsory purchase and compensation, developmental
value, value for insurance purpose, value for rating, value to the owner.
For the purpose of this study, market value and rental will be considered in detail.
7
CHAPTER TWO
2.0
Literature review
2.1
Concept of infrastructural facilities
According to Dictionary of Human Geography, “infrastructural facilities are the
underlying structures of services and amenities needed to facilitate directly productive
activities. Such services include transportation, telecommunication, public activities,
human capital investment, electricity and other social and community facilities.
The Modern Dictionary of Geography also defines it as the amenities and services which
are basic to most types of economic activities. These include the provision of roads,
power supply, communication, water, sewage disposal system etc. They are provided at a
community, regional or national levels mainly by public funds to which individual users
contribute largely through the level of rules, taxes and charges.
Donald (1974) observed that infrastructural facilities are “the physical structures and
facilities that are developed or acquired by public agencies to enhance governmental
functions and provide water, power, waste disposal, transportation or similar services to
facilitate the achievement of common social and economic objectives.
Generally speaking, infrastructural facilities are the basic amenities/structures, the
framework or the system which supports the operation of an organisation, which makes
economic development possible and forms the basic capital of a nation, a region or
community.
8
They are usually capital and labour intensive and are often provided through communal
efforts or government agencies for which individuals contribute through payment of bills,
taxes, rates levies etc. Electricity and water transmission, distribution and supply,
telecommunication system, drainage channels, waste management, refuse and sewage
collection and disposal systems, health, security, banking, recreational and educational
facilities, post office to mention but a few.
2.2
Characteristics of infrastructure
The following features have been identified by Akujuru (2004) as the characteristics of
infrastructure:

It requires large lump sum investment; this perhaps justifies the reason why the
citizens usually look forward to their government for the provision of theses
facilities.

It enjoys considerable economies of scale which result in monopolies.

It has a high level of externalities both positive and negative.

It has intermediate input characteristic.

It possesses important network effects.

It poses difficulty in cost recovery.
While these characteristics have generally remained true, the exact character trait will
depend on whether it is urban, rural or inter-urban infrastructure or operator of the facility
i.e. whether public or private, central state or local government agencies.
2.3
Classification of infrastructure
Infrastructure can be classified under the following three categories with respect to their
functional characteristics. These include:
(1)
Social infrastructure
(2)
Technical infrastructure
(3)
Institutional infrastructure
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(1)
Social Infrastructure: Social infrastructure include health facilities, school, civic
centre, shops, market, places of worship, post office, fire and security services,
children playing ground among others.
(2)
Technical Infrastructure:
The technical infrastructure includes electricity,
water supply, telephone system, drainage system, sewerage systems, solid waste
disposal, telecommunication and transport system.
(3)
Institutional Infrastructure: Institutional infrastructure includes credit and
financial institutions.
2.4
Types of infrastructure
The types of infrastructures are as follows:
(A)
Water Supply
The Oxford Advanced Learner’s Dictionary defined water supply as “a system of
providing and storing water”. It is a system in which water is stored for a
township, district or dwelling houses. Water supply is an important basic need
affecting the quality of life and productive efficiency of the people. Provision of
these basic services continues to be among the care activities of urban local
bodies. The government (Federal or State) are responsible for providing the
services through proper planning, implementation, operation and maintenance,
and monitoring through the funds available under state plans, internal resources
generation and by taking loans from financial institutions.
10
(B)
Electricity Supply
The Oxford Advanced Learner’s Dictionary defined electricity as a form of
energy occurring in certain particles; electrons and protons, and hence in larger
bodies since they contain these. The supply of energy is in the form of electric
current mainly for lightening, driving machines and other domestic uses.
In these days, electric energy is finding increasing application in the field of
individual, commercial and domestic uses due to its inherent advantages over
other forms of energy. Electrical energy has virtually established its superiority
over other forms of energy because its more economic, efficient, easy to handle,
flexible and high transmission efficiency.
(C)
Drainage Channel
Daniel and Michael Hopkins et al opined that a good drainage system is required
in all types of property for proper kitchen and solid waste. Wastes are either
transported to the septic tank, soak away or into gutter provided for proper
drainage. The drainage channel is a purpose man-made control measure through
which rain water and other forms of waste water are properly drained away or into
a river in order to prevent erosion, flood marshy environment and the possible
effect on the property and the environment, thereby ensuring a decent, safe and
healthy environment which in turn improves significantly the rental value of
property situated within such well-drained areas, thus, command high value.
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(D)
Refuse Disposal
The Long Man Dictionary of Contemporary English Language defined refuse as
the waste material that has been thrown away, example, household refuse. The
provision must be made in an overall layout and internal design of landed
properties for the collection of refuse. In any shop properties, there is need for
refuse collection and disposal. Disposal of refuse depends on local government.
Under normal circumstance, there should be a dustbin in the shop where refuse
should be stored and later emptied to wherever is provided by the Local Planning
Authority for refuse disposal in the actual area set aside, for dustbin should be
well drained, adequately sheltered, conveniently situated for easy collection
having no steep gradient and with routes properly paved or in the incinerators
within shop properties premises.
(E)
Road Network
The Oxford Advanced Learner’s dictionary defined road as the way between
places especially one with a prepared surface (i.e. tarred and graded) for the
smooth move of vehicles and pedestrians. Properties located in an accessible area
or near a busy road command high rental value than the one located in a less
accessible area.
(F)
Communication System
The New Lexicon Webster’s Dictionary of English Language defined
communication as “the process of sending or disseminating information or ideas
from one place to another”. Communication can be a travel or transport link
12
between places or a system of radio and telegraph liaison from advance hoops
back to base. It is also defined in the Long Man Dictionary of Contemporary
English Language “as the process by which people exchange information or
express their thought or feelings, a way of sending information, especially using
radio, telephone, computers among others.
2.5
Stakeholders in Infrastructure Provision
Stakeholders in the provision and management of infrastructure include government,
private individuals, Community Based Organisations (CBO) and Non-Governmental
Organisations (NGO). However, all over the world, government is the major stakeholder
in infrastructural development. It is the government that has the general object of
ensuring the maximisation of overall welfare of the citizenry as against the selfish
concern of private interest.
In contemporary times, it has become increasingly realised that the provision and
management of infrastructure cannot be left solely to the government. Private sector
participation is now solely recognised in this regard. According to UNCHS/Habitat
(2000), entrepreneurial skills, efficiency in management and the ability to perceive,
access and capitalise on the opportunities created by the decentralisation of infrastructure
are increasingly prompting the private sector to participate in financing, implementing
and managing infrastructural services.
13
The privatisation of infrastructure has in one way diminished the public role in the sector.
At all levels of the government, this role has shifted from provider to enabler with an
emphasis on the ability to act as:

Regulation, monitoring service quality, ensuring equitable access and limiting
monopolistic pricing;

Catalyst, providing incentives, streamlining procedures and regulations; and

Partners contributing to project financing directly or through incentives and
project management.
Partnerships or project-based joint ventures range from outsourcing, design, construction,
contracting and management of existing systems or granting operating concessions to
specialised enterprises to privatising new service delivery through ‘Build, Operate and
transfer’ (BOT) and ‘Build, Own, Operate and Transfer’ (BOOT) agreement and to
outright sale of assets to private companies.
Similarly,
Community-Based
Organisations
(CBOs)
and
Non-Governmental
Organisations (NGOs) have now been inevitably encouraged to partner with urban
authorities in the provision of infrastructures in many parts of the world. This has become
expedient against the background of the growing difficulties and limitations of public
finance and the reality of the widening gap between the demand and supply of
infrastructural services with all its pervasive effects (Babawale, 2004, Overare, 2005).
It is in this context that public-private partnerships have been seen as a means of
overcoming constraints facing the public sector in discharging its obligations on the
provision of a wide range of services to its citizens on an efficient, effective and
sustainable basis. Public-private partnership arrangements according to Mabogunje
14
(2005) are thus based on the involvement of four categories of stakeholders or actors in
the provision of infrastructural services. They are:
(1)
The public sector, whose principal role should increasingly be to create
competitive pressure for more effective and efficient services delivery and to
enable, facilitates, regulate and monitor such partnership.
(2)
The formal private sector which because of its access to financial and
technological resources and its potential ability to operate more efficiently can
play a role in financing and providing certain infrastructural services and
engaging in their construction operations and maintenance.
(3)
The informal private sector which is actively involved in many aspects of services
delivery particularly in low income areas and whose potential role in partnership
should increasingly be recognised; and
(4)
The community and its representatives who have direct interest as service users
but can also be involved in awareness, raising, advocacy, decision making and
actual provision of services including operations and maintenance and even in
construction of facilities.
2.6
Urban Infrastructure in Nigeria
Like any other nation in the world, Nigeria has its own stock of infrastructure. Included
in this stock are electricity, water, roads, communication, drainage, waste disposal,
educational facilities, healthcare facilities, recreational facilities, security and fire
services. The three tiers of government are often involved in the provision of facilities
and services in the major urban centres (Nubi, 2003). Constitutionally, some of the
services fall within the statutory function of one tier of government or another. For
15
instance, the 1989 constitution assigned to City Councils, the responsibility of
construction and maintenance of some categories of roads, street drains, installation of
street lightening and the provision of waste disposal services. In practice however, the
state government sometimes steps in to complement the efforts of municipal councils
particularly in the cities that are state capitals.
Some of the prominent public agencies responsible for the provision and management of
the facilities are:
(1)
Power Holding Company of Nigeria Plc, in charge of electricity generation,
distribution and supply to consumers.
(2)
Nigerian Telecommunications Limited.
(3)
State Water Corporations.
(4)
Nigerian Postal Services Limited.
(5)
State Waste Management Boards.
(6)
State Health Management Boards.
2.7 Meaning And Concept Of Value
The word ‘VALUE’ does not have a specific and restricted meaning as it may mean
different thing to different people. Value by its ordinary definition particularly in basic
economics is the utility or satisfaction which goods and services offer. The Oxford
Advanced Learners English Dictionary defined ‘VALUE’ as the ‘worth of something in
terms of money or other goods for which it can be exchanged for something being useful
or important’.
16
But the Estate Surveyor and Valuer is concerned with the economic concept of value. He
tries as much as possible to translate value into monetary terms.
He looks at it as “the worth of an investment in landed property”. Real Estate Appraisers
defined value in the manner “value is intrinsic; it is created in the mind of the people who
constitute market”.
From all above definitions and for the purpose of this study, the word value can be
defined as “the satisfaction derived from the use of a thing”.
2.7.1 Market Value
This is the worth of an interest in property which reasonable buyers and sellers would
agree to, when referred to market with existence of condition for competitive market
application. Market value can also be defined as “the highest price in terms of money
which a property should bring in a competitive or open market under all conditions
requisite to a fair sale. The buyer and seller each acting prudently, knowledgeable and
assuming the price is not affected by undue stimulus.
The Federal Mortgage Association and the Federal Home Loan Mortgage Corporation of
America are of the view that market value is ‘the most probable prices which a property
should bring’. The strength of this definition is that it recognizes that the market value of
properties falls within a range and that the indicated value is an estimate which should
17
not necessarily be at the highest portion of that range. For all practical purpose, market
value provides an objective standard of measuring the worth of a property.
Similarly, the Royal Institution of Chattered Surveyors (RICS) in its guidance note of
valuation of assets (1992), defined market value as “the best price at which an interest in
property might be expected to be sold at the date of valuation either by private treaty,
public auction or tender as may be appropriate assuming:
(i)
A willing seller;
(ii)
A reasonable period within which to negotiate the sale taking into account the
nature of the property and state of the market;
(iii)
Values will remain static during the period;
(iv)
The property will be freely exposed to the market;
(v)
No account is to be taken of an additional bid by a special purchaser;
2.7.2 Rental Value
This is the worth on lease of a property on a periodic basis. When this sum is equivalent
to what any similar property will attract, such rent is called Open Market rent i.e. the
rental value, therefore is the worth of the property on periodic occupational basis. The
process of determining the rental value is similar to the process of determining the capital
value of a property. This is by comparative method taking into consideration the
condition and terms of the lease being assessed. Such rental value can be described as
“Open Market Value”.
18
Therefore, open market value worth of a property is the rent such a property would attract
or a similar one when offered in the market on the usual tenancy or lease terms and
conditions characterizing the marketing of such class and type of property. For example,
the rent of commercial properties is expressed on unit area basis e.g. shops and offices
are expressed on Nx/m2, assuming the application of standard lease conditions.
2.8 Principles Of Value
According to Edmund Fricke and others, there are various principles which are basic and
affect real estate. Some of these principles are as follows:
(1)
Principle of demand and supply: This principle states that as the demand of a
particular property increases relative to supply, the value of that property will also
increase. To this end, the interaction of demand and supply determine market
value.
(2)
Principle of change: Real estate market is dynamic in nature and is always
changing. The forces of this change affect specific properties in the neighborhood.
These changes also affect wants and needs of buyers and sellers as well as supply
and demand and therefore have effect on value.
(3)
Principle of highest and best use: In real estate practice, properties are expected to
be put into the highest and best use so as to maximize the highest and best return.
The highest and best use is that legal probable use which is expressed to produce
the best return.
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(4)
Principle of anticipation: Value is usually created by anticipating future benefit of
ownership. To this end, realistic projection of future benefit is essential to an
accurate appraisal of value.
(5)
Principle of conformity: Highest values are usually realized in properties that
show a reasonable degree of sociological, economic and architectural similarities.
For instance, the introduction of a heavy duty industrial establishment into a
residential area resulting in heavy truck traffics, air pollution and noise will
adversely affect the value of residential properties in that locality. In developing a
property therefore, these principles have to be taken into consideration.
2.9 Conditions Necessary For Value Creation
There are basically four conditions for a property to command value. The degree to
which these elements at present determine the total value that be inscribed to a property,
these elements are:
2.9.2 Utility
For any commodity to possess value, it must have utility i.e. it must have the power to
satisfy human want. Therefore, without utility, there cannot be market value. Utility is
satisfaction derived from property value. It could be in form of financial return or
psychological satisfaction, but yet, utility alone cannot create value. For example, the air
we breathe has a considerable utility for all of us. However, there is no scarcity of air in
the surface of the earth and therefore air has no market value, but for its scarcity in water,
a diver will need air seriously and can pay for it under water.
20
2.9.3 Scarcity
For any commodity to have value, it must be relatively scarce in supply. That is, I must
be limited in quantity that those who have it are able to get something else for it in
exchange. For example, since ordinary air is not scarce, it has no market value, but air to
a sea-diver is scarce and hence has great utility to the sea-diver, also creates market value
for air. Compressed air are also bought and sold.
2.9.4 Effective Demand
This is an economic term which means that there must be need or desire for an item to be
backed-up by purchasing power. Existing power is normally created by a person’s
income existing assets and extension of creation.
2.9.5 Transferability
If a commodity is not transferable, it cannot have market value. Therefore to have market
value, a commodity must be capable of being transferred. Though buildings cannot be
easily transferred, but title of land or building can be transferred thereby making property
to command value.
2.9.6 Factors affecting the value of property
(1)
Accessibility: A landed property that is easily accessible will have higher value
than he one sited in an area that is not accessible.
21
(2)
Facilities: This is another attribute of landed property that tends to influence its
value. A landed property that is located where all necessary facilities needed to
make life comfortable are present, will command a higher value than one which
has none or inadequate facilities.
(3)
Location: The location of a property influences its value to a great extent. In a
situation where there is provision for social amenities, infrastructural facilities and
adequate conveniences, definitely, the property will be of utmost value. The
property will be available to a large market and the value will be high.
(4)
Utility: The use to which a landed property is put into could really affect its value.
If the property is fully utilized, the value will be high, but if it is not adequately
used, the value will be low.
(5)
Durability: A property that is not of good attributes will not command a high
value. This is because after a while, the property is either redeveloped or
renovated. Also, the building materials o the property will determine if the
building will have an ending life span, thus making it to have a reasonable value.
(6)
Scarcity: There must be some degree of scarcity in its supply. The factors of
demand and supply are interdependent and this goes a long way in affecting its
value. When demand for landed property is higher than its supply, that landed
property will command great value. But in a situation where supply is more than
demand, the value will be low. It is good if there is an effective demand to support
derived demand because this will go a long way in increasing the value of landed
properties.
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(7)
Complementarity: Land uses have to complement each other. Complementarity
will influence the value of the landed in the sense that in an area where industrial
properties are located, it will be unheard of to locate residential properties as the
value will be very low (i.e. the value of the residential property) as they do not
complement each other. This will be different if the residential property was
located within recreational area. Here, the value is increased as they complement
each other and therefore, they are not harmful to each other.
2.11
Types of Property
Real Properties include the followings:
(1)
Residential properties
(2)
Commercial properties
(3)
Industrial properties
(4)
Agricultural properties
(5)
Special properties
1) Residential Properties: These are properties required for dwelling purposes. They
are dwelling units where all domestic activities take place which include: tenement
buildings, block of flats, bungalows, detached houses, semi-detached houses,
duplexes, maisonettes and condominium etc.
2) Commercial Properties: These are properties used for business activities. The basic
feature of commercial properties is that they are generally occupied for the purpose of
carrying out trade or profession with sole aim of profit maximisation. The type of
business carried out and the profit made in an office coupled with the location of the
23
property will determine the rent a tenant will pay. Examples are shops and stores,
hotels, market and market stalls, warehouses, offices, departmental stores,
supermarkets, corner shops among others.
3) Industrial Properties: These are properties used mainly for converting raw materials
into finished or semi-finished products or manufacturing goods and services for
human consumption. They are established with the sole aim of creating goods and
provision of services. They also form ways and channel in which the products get to
the final consumer. The location of an industrial property is an important factor. For
example, attention must be paid to factors such as nearness to market, raw materials,
skilled and unskilled labour as well as infrastructural facilities which may include:
power and water supply, transportation/communication services and waste disposal
system. Examples of industrial properties are: factories, large industrial plants,
cottage industries and warehouses.
4) Agricultural Properties: These are properties used mainly for agricultural purposes.
They include arable land, pasture land, plantations, gardens, land used for the purpose
of animal husbandry etc.
5) Special Properties: These are properties that cannot be readily found in the property
market (i.e. they are not always bought or sold). They have distinctive features such
as cemeteries, churches, Mosques, shrines, theatres, race courses and public
properties.
24
2.12
Concept of Residental Property
For the purpose of this research work, residential property will be discussed extensively.
Residential property as defined previously, it is a property required for dwelling purpose.
They are also called dwelling houses such as flat, bungalow duplex, detached houses,
semi detached houses at when residential properties are available for rent. It is considered
a good investment. The rental value is dependent on the condition, location and
neighborhood of the premises, and the availability of services such as lift, boilers, water
electricity e.t.c.
Residential houses rented out are subjected to legislation in relation to rent control and
security of tenure. Land lords are legally restricted to the amount of rent. They can charge
for their property. Repairs and insurance cover are usually the responsibility of the
landlord and also these are considered costly outgoings.
2.12.1 Types of Residential Property
1.
Housing Estate: - These are group of residential properties managed in one
building for instance, Gaduwa estate, prince and princes estate, Sani Abacha
estate low cost-housing estate e.t.c.
2.
Private Homes/House: - These are buildings on floor that is bungalows.
3.
Semi – detached Bungalows: These are building s on one floor with two section
and one being the mirror image of the other.
25
4.
Semi – detached Duplex: - These are buildings on two floors with two sections
and one being the mirror image of the other.
5.
Twin Houses: - These are semi detached house without partitions walls, similar in
structure.
6.
Apartment Building: - otherwise known as flat buildings in one home unit with all
it spaces on the same floor level i.e. kitchen, room, toilet e.t.c all on the same
level.
7.
Maissonettes: - These are residential property that has two floors in each home
unit. It is design in such away that one home unit is similar with another home
unit. For instance 1004 flat in Lagos.
8.
Condominiums: - These are housing unit fitted with adequate facilities.
Factors affecting the value of residential properties are as follows: -
2.13
1.
The location and neighborhood of the premises.
2.
The availability of utility and services such as water, electricity, telephone e.t.c.
3.
The design and construction of the building
4.
The state of the property.
The impact of infrastructural services on property value
It has been identified that one of the determinants of property values is infrastructural
facilities, the presence of which leads to appreciation in property values. Its absence
26
affects neighbourhood properties adversely (Britton et al, 1989). According to Hammer et
al (2000), provision of good and adequate infrastructure is central to property values. A
residential user may be prepared to pay a high rent for a property depending on his
consideration for basic facilities such as accessibility, water and electricity (Harvey,
1993). Litchfield (1974) also observed that areas with basic facilities such as access
roads, good drainage, electricity, public water supply and telephone services will attract
high property values. Thus, there is a direct relationship between urban infrastructure and
property values.
Accessibility which is a direct consequence of a good road network in turn leads to high
rental values of location with greatest accessibility advantages. In a situation where all
properties are accessible via motorable road network, such properties will enjoy high
rental values conferred by virtue of accessibility, (Aibangbee, 1997).
Provision of wholesome and portable water is a sin-qua-non to every household. Keeble
(1969) recognised this when he said water is indispensable to the household as it is
necessary for drinking, cooking, bathing and doing other numerous domestic activities.
Hence, properties in areas that are well-serviced with pipe borne water no doubt will
enjoy higher rental values compared to areas where the service is does not exist.
Proper sewerage and waste water management are costly but carry considerable benefits.
Richard Tabors (1977) believes sewerages are far more significant to property value and
development pattern than water primarily because developers have easier access to water.
He argues that sewerage facilities are considered a necessary precondition for significant
27
development, densities and are required when growth threatens to contaminate the public
water supply and affect other natural resources. Rationally, when a waste water treatment
system operates above 80% of capacity, a community cannot sustain addition to its
industrial land consistent with environmental quality. He cites a metropolitan Atlanta
surely of residential developments, two-third of who said that utilities, particularly
sewerage were important factors in their location decisions.
It is also important to note that the condition of the sewerage and waste water treatment
can adversely affect property value most especially residential property, because if it is in
good condition, it will enhance property value thereby attracting investment into the
sector. And if it is in a bad condition, it will negate property value because nobody wants
to live in a polluted environment.
28
CHAPTER THREE
3.0
Research Methodology
This chapter describes method and procedure used in conducting this research work. The
description of the procedures is done under the following headings: Research design, area
of study, population of study, sample and sampling procedure, instrumentation, procedure
for data collection and procedure for data analysis.
3.1
Research Design
This study examines the impact of infrastructural services on real property value in
Tammah.
The aim is to evaluate the impact of infrastructural services and find out if it has any
influence on property value.
3.2
Area of Study
The study was carried out within Tammah area of Nasarawa.
3.3
Population of The Study
The occupiers, owners and practicing Estate Surveyors and Valuers within Tammah
constitute the population of the study. PHCN, FERMA, Water Board, and Federal
Ministry of Works also form part.
3.4
Sample and Sampling Techniques
Different types of residential and commercial properties were used for the study. The
sampling technique used for the purpose of this research work is structured questionnaire
and interview. A total of seventy (70) questionnaires were distributes randomly, fifty-one
(51) were returned and analysed for the study.
29
3.5
Instrumentation
The major instrument used for this study is the questionnaire. The questionnaire is
divided into two categories: one is for the relevant agencies saddled with the
responsibility of providing and managing infrastructural facilities; and the other is for
owners and occupiers of respective properties within the study area.
3.6
Procedure for Data Collection
Two major sources were employed to collect data needed for this study: the primary and
secondary sources.
The primary source was the questionnaire designed and personally administered to
relevant agencies providing and managing infrastructure and the occupiers, owners and
practicing Estate Surveyors & Valuers.
The researcher also personally held interviews with the heads of the various agencies.
The secondary source was through the consultation of published and unpublished
materials like textbooks, journals, conference and seminar papers related to the study.
3.7
Procedure for Data Analysis
Data collected from the respondents through questionnaires were presented in tables and
figures and analysed using simple percentage and graph.
30
CHAPTER FOUR
4.0
Data Analysis and Discussion
This chapter contains detailed presentation of data analysis. All data collected through
questionnaires and interviews are fully analysed.
4.1
Survey of the Selected Infrastructural Facilities
The selected infrastructural facilities provided in Tammah area of Nasarawa include the
following:
4.2
(a)
Electricity
(b)
Roads
(c)
Water Supply
(d)
Drainage
The state and level of infrastructural facilities provided in the study area
Nasarawa metropolis like any other urban setting has its own fair share of infrastructural
facilities; the state and the level of these infrastructural facilities are the criteria or
yardstick for improving the value of property on this basis. Tammah as the study area is
ranked the most developed in Nasarawa where property value is high. However, the rate
of infrastructural facilities development and frequency of maintenance in the study area
has been very slow, and the reasons attributed to the slow pace of both development and
maintenance is mainly political. Political factors influence the rate of financial allocation
and disbursement of funds for the provision and maintenance of these facilities. There are
other numerous facilities like educational, security services, post offices, healthcare
services, recreational facilities, hotel services, fire services, refuse collection and disposal
31
systems, administrative facilities to mention but a few in Tammah area of Nasarawa, but
there is variation in the level of performance, functionality, efficiency, standard and
management. For the purpose of this study, emphasis will be laid on roads, drainage,
water and electricity supply.
4.2.1 Roads
Tammah being one of the administrative capitals of Nasarawa has a well planned, laid
out streets and road network. Tammah is centrally located and easily accessible by road
like any other part, but a lot is needed to be done to improve on the existing roads in the
areas. For example, the road from kitchen 54 to the Dunamis church which passes
through Tammah is usually characterised by high volume of roughness and galops.
Generally, the roads in Nasarawa have suffered relatively slow pace in the areas of
maintenance and development. But with changes in the status of the area in Nasarawa,
more people are attracted to the area, and demand for road usage is high.
it was observed that the total percentage rate of maintaining road network between
Tammah is 50%.
From this analysis, it is discernible that the pace of real property development in Tammah
is relatively high which in result will boost its property values.
32
4.2.2 Water Supply
The major source of water supply in Tammah is Dam, private boreholes and supply from
water tankers. Tammah is yet to achieve sustainability in areas of water supply. Despite
various efforts aimed at ensuring that the area is self-sufficient in terms of water supply,
there is still a gross shortage of its supply to meet the requirement of the fast growing
population of Tammah.
However, more effort is being made to ensure that the City Centre (Nasarawa) and its
neighbourhood are well provided with adequate water through the dredging and
boreholes. But presently, the level of water supply to the municipal is still grossly
inadequate as water supply to these areas through the various means currently available
are in the average of few hours (two-three hours) a day in a week and this is and this only
enjoyed by the few residents who can afford to pay or provide their own water supply.
From the survey and study carried out, it is shown that Tammah has relatively stable but
not regular water supply for at least four (4) to five (5) days in a week.
4.2.3 Drainages
Most parts of Nasarawa metropolis do not have good and adequate drainage systems. In
some places where they exist, especially the low density areas, the channels are either
partly blocked or not properly constructed to ease flow of water. This is attributed to
negligence and lack of maintenance from both the authority and the public.
33
Drainage systems in Tammah area include: drainage channels,and culverts. The channels
are usually on both sides of the road with some parts covered with reinforced concrete
slabs for pedestrian crossing. In areas with high volume of rainwater, the channels are
diverted from road sides to avoid spillage and flood in future. The present rate of
drainage developed in Tammah is 40%.
With the construction of drainage channels in the areas provided so far, the former
disaster or flood prone zone became properly drained which in turn created an enabling
environment suitable for property development with a corresponding improvement in
property value.
4.2.4 Electricity Supply
Electricity is facility that most people depend so much on for light, comfort, ability, and
convenience and also required to power domestic, commercial and industrial machines
appliances and other daily activities. It is cheapest, neatest, efficient, most effective and
convenient source of power supply when properly used.
The availability of electricity among other factors influences the choice of a suitable site
for most private property developers within the municipality. It also serves as the main
attraction for other investors as well as rural-urban migrants, which also leads to major
investors and transactions in properties; and which invariably enhances the value of
properties.
34
Since the whole municipality is adequately wired or electrified, the role of electricity
supply as a determinant of property value was based on the regularity of its supply.
Tammah which has a relatively stable power supply is recorded for average of six (4)
days in a week, and it was calculated to have had a performance rate of about 60% while
40% was left for the uncertainty factor that may be responsible for power failure or
fluctuation resulting from major fault or vandalization.
The reasons attributed to this frequent power failure, rationing and load shedding are
mainly: overload and low voltage supply resulting from inadequate transformer to cater
for the electricity needs of the people in this area. Other factors identified during field
survey are illegal connections, lack of adequate and timely maintenance and constant
vandalism of the P.H.C.N cable line equipments in the area.
The percentage rate of the level of development and maintenance of infrastructural
facilities which include roads, water supply and electricity in the study areas are
summarized in the table below:
TABLE 1
Summary of infrastructural facilities and services provided and maintained in
Tammah
TYPE OF
TAMMAH
FACILITY
Roads
50%
Drainage
40%
Water
40%
Electricity
60%
Source: Nasarawa L.G.A Secretariat, Office of Statistics and Data, Nasarawa.
The table above shows the quantity and quality of infrastructure in Tammah.
35
4.3
Maintenance Culture
TABLE 2
Maintenance culture of the available infrastructural facilities and services provided
LEVEL OF
FREQUENCY OF
MAINTENANCE
RESPONSE
Excellent
Adequate
9
Not Adequate
26
Poor Maintenance
11
No Maintenance
5
Total
51
Source: Field survey, 2022.
PERCENTAGE OF
FREQUENCY
0
17.65%
51.00%
21.55%
9.80%
100%
Most residents (51% of respondents) were of the opinion that the facilities were not
adequately maintained considering their level of performance. Only 17.65% of the
respondents agreed that the facilities are adequately maintained.
4.4
Impact of infrastructure on property rent
TABLE 3
Impact of infrastructure on property rent
LEVEL OF
IMPACT
Very high
Significant
Low Impact
No Impact
Total
Source: Field survey, 2022.
RESPONSE
36
11
3
1
51
PERCENTAGE OF
RESPONSE
70.58%
21.57%
5.89%
1.96%
100%
Respondents’ opinion on the impact of infrastructure provision on the rent passing on the
properties they occupy show that 70.58% confirmed the assertion. To complement this
data, interview conducted among some practising Estate Surveyors & Valuers in the
study area confirmed that the quality of infrastructure provided has direct impact on real
property value.
36
4.5
Willingness to pay higher rent for better infrastructure
TABLE 4
Tenants’ willingness to pay higher rent for provision and maintenance of facilities
FACILITY
READY PERCENTAGE
Electricity
46
90.20%
Road Network
48
94.12%
Drainage
39
76.47%
Water Supply
49
96.08%
Source: Field survey, 2022
NOT READY
5
3
12
2
PERCENTAGE
9.80%
5.88%
23.53%
3.92%
The result of the survey on this question shows that almost all the respondents (80%)
were ready to pay higher rent in case of improved infrastructural facilities. Top on the list
of their requirement in order of preference is portable water supply (96.08%), followed
by good road network at 94.12%, electricity 90.20% and 76.47% for drainage.
4.6
Analysis of trend in rental values (2017-2022)
Table 5 shows the trend of residential properties rental values in the study area between
2012 and 2017. The survey chooses to concentrate on residential properties being the
dominant type of properties in the area.
TABLE 5
Trend in rental values of residential properties in Tammah
TYPE OF
ACCOMMODAT
ION
Single- room
Tammah
Self -contain
Tammah
1-Bedroom flat
Tammah
4.7
AREA
2017
N/P.A
15,00020,000
20,00030,000
50,00060,000
2018
N/P.A
20,00025,000
30,00040,000
60,00070,000
2019
N/P.A
25,00030,000
40,00050,000
70,00080,000
2020
N/P.A
30,00035,000
50,00060,000
80,00090,000
2021
N/P.A
2022
N/P.A
35,00040,000
60,00075,000
90,000100,000
40,00050,000
75,00080,000
100,000120,000
Relationship between infrastructural facilities and property value
From the analysis made in the various foregoing sections of this chapter, it can be said
that the relationship between infrastructural facilities and property value is
37
complementary. As it tells us that the more infrastructural facilities installed in a district,
the more residents it attracts (high demand) which consequently results to an increase in
the value of real properties. Likewise, when a place lacks essential, sufficient or efficient
infrastructural facilities, demand for such sites tend to dwindle to better ones,
consequently reducing the value of properties in such vicinity. Thus, this relationship is
mutual and complementary.
38
CHAPTER FIVE
5.0
Summary of findings, conclusion and recommendations
5.1
Summary of findings
The project which is the study of the impact of infrastructural services on property value
within Tammah shows that:
(6) Electricity, road networks, water supply and drainages are the basic infrastructural
facilities considered in both Tammah.
(7) With other factors held constant, electricity, road network, water supply and drainage
provision and maintenance improve property values. This is substantiated by increase
in the amount of rent passing on properties with adequate facilities and decrease in
rent payable in areas with inadequate provision and maintenance of infrastructural
facilities.
(8) There is relatively quick pace in the provision and maintenance of infrastructural
facilities in Tammah.
(9) It has been established and proved that the rate of property development in Tammah
is to a large extent sensitive to the provision and maintenance of infrastructural
facilities.
(10)
Lastly, the analysis revealed that the provision and maintenance of infrastructural
facilities positively enhance property values in Nasarawa at large.
5.2
Conclusion
From the analysis of findings and empirical observations, it is obvious that the pressure
on essential infrastructural facilities and services serve as a major determinant of property
values. Property values tend to peak in those areas that enjoy easy accessibility (through
road network), electricity, pipe-borne water and efficient drainage system. The
39
impressive rise of property values in Tammah and other districts is largely attributed to
the provision of these facilities.
5.3
Recommendation
In view of the foregoing, the following recommendations are hereby put forward:
(a)
Nasarawa administration should embark on comprehensive rehabilitation of roads
in Nasarawa by tarring all roads in poor state of repairs.
(b)
Government should make more funds available and ensure judicious management
and utilisation of the resources for provision of infrastructural facilities as it will
enhance real property investment.
(c)
Facilities should therefore be made available, sustainable, used, redeveloped and
rehabilitated as often as necessary. This requires government to empower the
appropriate agency to embark on regular public enlightenment campaign through
various media. This will go a long way in educating the public on how best to
handle these facilities so as to prolong their life span.
(d)
The use of these facilities should be appropriately monitored by the authority
charged with the responsibility so as to protect them from vandalization, and
vandals caught should be punished by law.
(e)
As Nasarawa expands with time, the previous adequate facilities will become
inadequate and overstretched. It is therefore recommended that government
should at regular intervals increase the existing stock of the facilities.
40
REFERENCES
Aibangbee, S. S. (1997). Functions of Urban Infrastructure in National Development.
Paper presented at the 27th Annual Conference of The Nigerian Institution of
estate Surveyors & Valuers, Ibadan
Aukubueze, C. O. (2004). Land Administration and Infrastructure Management for Urban
Development. Journal of Environmental Studies Vol.27 No.1 March 2004
Apogee, R.I. (1987). Waste Water Management. A publication of National works
Improvement. New York.
Bamberger, E. (1985). Infrastructural Supports for Economic Development. APA, New
York. Sander Brothers
Britton, A. (1988). Modern Methods of Valuation. London. The Estate Gazette
Donald, C. S. (1974). Professional Education in Public Works/Environmental
Engineering Administration. Chicago, APA
Ebert, R. W. (1986). Estimating the Contribution of Urban Public Infrastructure to
Regional Growth. Federal Reserve Bank. Cleveland
Fox, W. F. (1994). Strategic Options for Urban Infrastructural Management. UMB.
World Bank Paper
Harvey, J. (1993). Urban Land Economics (3rd Edition). London. Mc Millan Press
Limited.
Keeble, L. (1969). Principles and Practice of Town Planning. London. Estate gazette
Limited.
Millington, A. F. (1981). Introduction to Property Valuation. Estate gazette.
London
Nubi, T. O. (2003). Procuring, Managing and Financing Infrastructure Towards an
Integrated Approach. Land management and Property Tax Reform in Nigeria in
Omirin et al (ed). Department of Estate Management. University of Lagos.
Orlotano, L. (1985). Predicting impact of Infrastructure on Land Use. USA. O & R
Limited.
Sherret A. (1979). Transportation and Travel Impacts. New York. O & R Limited
41
APPENDIX I
Department of Estate Management
and Valuation,
School of Technical and Vocational
Education,
Federal Polytechnic Nasarawa,
Nasarawa State.
November, 2022
Dear Respondent,
QUESTIONNAIRE ON THE IMPACT OF INFRASTRUCTURAL SERVICES
ON PROPERTY VALUE IN NASARAWA METROPOLIS
I am a post graduate student of the above department conducting a research on “The
impact of infrastructural services on property value in Nasarawa Metropolis”.
I will appreciate if you complete the attached questionnaire by giving your honest
answer.
All information given shall be treated confidentially and used for the purpose intended.
Thank you.
Yours faithfully
Enenche Dorcas
42
APPENDIX II
QUESTIONNAIRE ON THE IMPACT OF INFRASTRUCTURAL SERVICES ON
PROPERTY VALUE IN NASARAWA METROPOLIS
QUESTIONNAIRE
(5)
What type of house do you live? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(6)
How much do you pay as rent per annum? . . . . . . . . . . . . . . . . . . . . . .
(7)
Is your rent today different from what it used to be five years back?
Yes
No
(8)
If “yes” in (3) above, how much was it? . . . . . . . . . . . . . . . . . . . . . . . . .
(9)
Tick from below, the infrastructural facilities provided in your resident:
(e)
Electricity
(10)
(f)
Roads
(g)
Water Supply
(h)
Drainage
How would you describe the state of repairs of infrastructural facilities in your
district?
(a)
(b)
(c)
(d)
Electricity
Excellent
Adequate
Poor
No maintenance
Roads
Excellent
Adequate
Poor
No maintenance
Water Supply
Excellent
Adequate
Poor
No maintenance
Drainage
Excellent
Adequate
43
Inadequate
Inadequate
Inadequate
Inadequate
Poor
(11)
No maintenance
How would you describe the impact of infrastructural facilities on rental value of
residential properties in your district?
Very high
Significant
Low
(12)
No impact
Tick below, facilities which you think residents of this district would be willing to
pay high rent for its provision.
(a)
Electricity
(b)
Roads
(c)
Water Supply
(d)
Drainage
44