Comparative analysis of rent differential in selected residential areas in Obio/akpor Rivers State
Abstract
This study was on Comparative analysis of rent differential in selected residential areas in Obio/akpor Rivers State. The study used the following objectives for the analysis: To identify the factors that most influence any such rent differentials in the study area, to determine the factors that influence any differentials of residential houses rent that may exist in the study area and to determine the relationship between the residential housing rent and the income classes of the household head in the study area. The researcher used both questionnaires, interview and self-observation as method of data collection. The data was collected among some landlords, and tenants at Obio/Akpor, Rivers state of the selected properties. The data collected was analyzed based on interpretation and conclusion and recommendation was made
Chapter one
Introduction
1.1Background of the study
The provision of adequate housing that is safe, secured, accessible, affordable, and sanitary is a fundamental human right, as enshrined in the United Nations habitat Agenda, the global on human settlement housing has been universally accepted as the most second most important human need. It is a basic need for human survival and an essential component to the advancement of the quality of life of the citizenry. This universally accepted fact has been acknowledged by successive Nigerian government, as evident from the pockets of in coordinated initiatives and programmes in mass housing development over the years. Despite these efforts, differences in housing rent remain a major challenge.
Effective housing rent involves many actors and therefore requires effective partnership collaboration and information the significant shortfall in housing provision and rent has been attributed to the inadequacy of the existing national housing policy (1991) to meet current challenges and economic trends and to guide development in the sector.
Housing, in all its ramification is more than mere shelter, since its embraces all the social services and utilities that goes to make a community or neighbourhood a livable environment the problem of housing in Nigeria are enormous and complex, exhibiting marked regional differences furthermore, the challenges faced by the rapid rate of uncontrolled and unplanned urban growth are immense. Million of people lives in sub-standard and sub-human environment characterized by slumps, squalor and grossly inadequate social amenities. The problem of housing in our urban centres is not only restricted to the quantity of housing unit, infrastructure, the disparity in housing rent and the environment, the result is manifested in growing overcrowding in homes, neigbourhoods, communities and increasing pressure on infrastructural facilities such as roads, drainages, power supply and rapidly deteriorating environment.
The scenario is slightly different in the rural areas where the problems are primarily, not just that of inadequate quantity of housing unit, but also that of inadequate and poor infrastructural facilities such as roads, drainages, water, power supply, differences in housing rent and basis social amenities (Schools, health care facilities etc.)
The housing sector is the bedrock of the economy of developed nations. In the more advanced economies like the United States of America, Great Britain and Canada. This sector contributes between 30% and 70% of their Gross Domestic Product (G.D.P) investment for housing account for 15% to 35% of aggregate investment worldwide, the housing sector in Nigeria contributes a significant 0.38% to its G.D.P. these countries rose to become the greatest advanced economies on the tide of housing development, the housing sector has the potential to general employment, increased productivity, raised standard of living and alleviate poverty. It also has the capacity to reduce crime rate, militancy, terrorism and substantially address wealth distribution as well as security concerns. It is able to achieve this because investment in housing affects all facets of our life.
Shelter is invariably the most basic of man’s need for survival after food in order of importance. Overtime, man has made use of elements in his environment skillfully to provide dwelling units for himself and his family, although a house is not a home, it exerts an enabling influence through its natural and physical location, on a variety of services made available, some of which includes health, education and recreation, public utility services such as power supply, transportation, sewage disposal and economic services such as work opportunity and income. Monetary value placed on these variables is usually in form of house rent or house sales. It is therefore, expected that differences in these services as regards house to house would also result in difference in their rent.
Market forces of demand and supply could also cause differential in house rent in the Nigeria housing market today.
According to the law of demand and supply “the higher the demand for particular goods or services, the higher the price for that goods or services”, that is under a price system. Competition for housing unit tends to increase the price of rent placed on such housing unit, housing problem in Nigeria, like those other developing countries are essentially urban-oriented. This is necessitated by man’s craving for greener pasture and better livelihood, causes an enormous demand for housing in urban centres far exceeding the available number in existence.
Rapid urban growth caused by migration of people from rural areas and other towns to urban centres, this trend of migration is usually associated with an accelerated temporal of social economic development of activities in urban centres and its result of activities in high rent as a result of shortage of dwelling unit which is as a result of demand for housing units at different spatial locations varies, hence differences in house rent is inevitably.
Rivers State as a whole, lie every other cities in Nigeria has a high level of attraction for both indigenous and foreign migrant not only is it because of its high economic activities but also it has a conducive weather for learning and the demand for house is much more cheaper and affordable compare to other city centres like Lagos, Port Harcourt and Abuja.
Statement of the problem
The problem of this study could be characterized by specifying the major ramification (aspect) of the various components that interact to constitute the observed residential rent differences in Obio/akpor Rivers State
At present, Obio/akpor Rivers State serves as one of the major urban centre in the Rivers State and this is accompanied by the massive influx of people and their business to the city, housing demand supply resulted from the uncontrollable influx of people into the city.
The security challenges in Rivers State in these recent times are a factor to be considered in which an individual would tend to live for safety and this is mostly influenced by the individual’s religion. In this case, the safe areas within the town tends to attract more people migrating from unsafe places thereby causing massive influx of people in such areas thereby leading to high demand for residential housing, thus, leading to high rent.
On the other hand, places that are considered unsafe attract fewer prices for house rent because the supply for such houses is more than the demand for such housing unit.
An acute shortage of residential houses in the area tends to have a negative and positive influence in particular on house rent generally, and in certain locations that could probably account for any differentials in house rent that may exist between Obio/akpor and its suburb.
In view of the development, the problem of this study is posed in terms of the following questions:
- What are the differentials in house rent between town centre and pen-urban in Obio/akpor Rivers State?
- What are the factors that account for the spatial disparity of house rent in the study area?
- What is the socio-economic characteristic of the residents of the study area?
- What is the monthly income of the household head of individual households in the study area?
Objective of the study
The objectives of the study are;
- To identify the factors that most influence any such rent differentials in the study area
- To determine the factors that influence any differentials of residential houses rent that may exist in the study area.
- To determine the relationship between the residential housing rent and the income classes of the household head in the study area.
Research question
- What are factors that most influence any such rent differentials in the study area?
- What are the factors that influence any differentials of residential houses rent that may exist in the study area?
- Is there any the relationship between the residential housing rent and the income classes of the household head in the study area?
Research hypotheses
For the successful completion of the study, the following research hypotheses were formulated by the researcher;
H0: there are no factors that most influence any such rent differentials in the study area
H1: there are factors that most influence any such rent differentials in the study area
H02: there are no factors that influence any differentials of residential houses rent that may exist in the study area
H2: there are factors that influence any differentials of residential houses rent that may exist in the study area
H03: there is no the relationship between the residential housing rent and the income classes of the household head in the study area
H3: there is relationship between the residential housing rent and the income classes of the household head in the study area
Significance of the study
The finding of this study will be of benefit to the following;
Firstly, tenants who are charged rents based on different reasons, especially when the properties are of the same nature (physically). This will again enable the investors not only to understand how occupier thinks, but also why and the things they consider before acquiring properties for certain uses. For example residential and commercial use.
Secondly, the generality of the public can now understand the reason why the rents being commanded by these properties have to differ.
Lastly, this research work will help to determine the factors influencing, commercial and residential properties which is an essential pre-requisite to successful development as well as stimulating interest in the students to carryout out further research on the topic.
Scope and limitation of the study
The scope of the study covers Comparative analysis of rent differential in selected residential areas in Obio/akpor Rivers State
The researcher encounters some constrain which limited the scope of the study;
- a) AVAILABILITY OF RESEARCH MATERIAL: The research material available to the researcher is insufficient, thereby limiting the study
- b) TIME: The time frame allocated to the study does not enhance wider coverage as the researcher has to combine other academic activities and examinations with the study.
Definition of terms
Rent: The universal dictionary of the English language (1971) defined rent as there gular payment made for the use of land or buildings that belongs to someone else. The Economist defined rent as “the revenue from land resources that is equal to the value of its marginal services rendered in a productive process” (Richfield,1974). In summary therefore, the word rent is that fixed periodic payment made by a tenant to his landlord for the exclusive possession and use of leased property
Residential property: according to Kilpatrick (1999) is a land use in which housing predominates, as opposed to industrial and commercial areas. Housing may vary significantly between, and through, residential areas. These include single-family housing, multi-family residential, or mobile homes.
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