Full Project - RESIDENTIAL RENT DIFFERENTIALS BETWEEN TOWN CENTER AND PERI-URBAN

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Full Project – RESIDENTIAL RENT DIFFERENTIALS BETWEEN TOWN CENTER AND PERI-URBAN

Click here to Get this Complete Project Chapter 1-5

ABSTRACT

This study investigated the differentials that exist in rents between town center and peri-urban in bukuru. It took into consideration variables that affected differential in rent of 1, 2, 3 and 4 bedroom houses in the study area. A total of hundred questionnaires were administered and returned which was subjected to various computations.

Analysis of Variance (ANOVA), a statistical technique suitable for analysing different variables was carried out using the data on 1,2 ,3 and 4 bedroom house rents. The results derived showed that most of the known determinants influence differentials in residential house rent in bukuru.

The various determinants of house rent showed the mean rent for urban and peri-urban of 1,2,3 and 4 bedroom for housing categories in bukuru, the occupational distribution of the respondent which 25 (50%) out of 50 respondents in the urban area are civil servant, 5 (10%) of the respondents are artisan while peri-urban area which 8 (16%) are public servant,15 (30%) are artisan while the other 7 (14%) are from other works of life.

CHAPTER ONE

1.0 INTRODUCTION

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.

1.1 BACKGROUND OF THE STUDY

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.

Jos South 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.

1.2 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 Bukuru.

At present, Bukuru serves as one of the major urban centre in the Jos-Plateau 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 Jos 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 Bukuru and its suburb.

In view of the development, the problem of this study is posed in terms of the following questions:

1. What are the differentials in house rent between town centre and pen-urban in Bukuru?

2. What are the factors that account for the spatial disparity of house rent in the study area?

3. What is the socio-economic characteristic of the residents of the study area?

4. What is the monthly income of the household head of individual households in the study area?

1.3 PROBLEM DEFINITION

Housing study or housing rent is a complex undertaking that a single study frame cannot be adequately used for effective assessment. Onibokun 1971 opined that in the evaluation of housing rent the coverage should include the tenants (residents), the dwelling (housing) unit, and the environment (in which the dwelling forms a part). In the Nigeria third National Development Plan (1975-1980) residential rent was regarded as a basis index in the study of qualitative and quantitative deficiency in residential accommodation and also as an indication of the level of overcrowding. It has also been one of the indices that have been used in the provision of housing units especially in urban areas where rapid population growth associated with increased socio-economic activities has seriously aggravated the shortage of housing unit in Nigeria.

Housing rent varies from one nation to another and within a particular country, variations in climate degree of urbanization, socio-economic progress affect housing rent.

1.4 PROBLEM FORMULATION

The market forces of demand and supply interacts strongly to bring about differentials in house rent. The higher the demand for house in a location, the higher the rent for such houses in that location and vice versa. Other factors such as accessibility, housing quality, environmental quality etc. it could also interact to affect demand for houses and subsequently house rents, the market force for housing supply is usually slow in responsiveness to the market force of housing demand (Ball 1983) thus, the differentials in house rents are demand based. These factors and how they affect house rent and variations are discussed in the following sections below.

1. Housing quality

The quality of a house can be determined by the flow of services its provides, this includes the number of rooms, the size composition and choice of materials in building, availability of internal amenities (pipe-borne water, kitchen, water closet and bath) and also house design. Longetivity of a house in terms of age and quality also enhances the quality of house. Hence, the quality level of a house is a function of the rate at which that house is demanded. Thus, rent of houses with higher quality becomes higher than those with lower quality.

Since the qualities of houses differ with location a spatial difference in house quality would lead to reasonable differences in rent.

2 Environmental Quality

This refer basically to the external surrounding and conditions of a housing environment, the environment provides vital needs for man such as air, peacefulness, cleanliness, security and socio-economic status of neighbours, drainage, topography etc. the better environmental quality of a house and its location, the higher the demand for such houses or location and a corresponding increase in the rents of such residential house or location.

Bukuru, however, has a relatively high environmental quality hence differences may not be compared with other surrounding in the state. The quality of any given environment cannot be continuously uniform through space and time; it is a function of differences in people and quality, this result in spatial differences in house rent.

3 Housing Supply

The number of houses made available as required by individuals or household in a population at a given time is referred to as housing supply in most cases the supply of housing space in a function of the profit maximizing behaviour of the builder during construction, rent of a house differs with the attribute the builder decides to supply (Butter and Beckmann, 1977).

4 Housing Demand

Migration into Jos is a basic catalyst to the insatiable demand for houses in Bukuru. However, provision of housing space has not been matched by the demand in house rents in various neighbourhood of Jos.

Another factor is the income level of individuals working in Jos. Increase demand for accommodation certain neighbourhood are also a function of the income level of individuals, hence a cluster in some neighbourhood with reduced average rent in contrast with neighbourhood with higher rents.

Income level of occupants is the major controlling factor that heightens the rents and rent differences in various locations, however housing demand is at equilibrium with housing supply.

5 Housing Location

The location of a house is valued in terms of its accessibility to place of work, to central business district and neighbourhood infrastructural facilities. The greater the accessibility of a location (and the lesser the economic cost of movement in terms of distance, time and convenience) the greater the comparative advantage of the location and thus the greater the demand for houses in that location. Therefore, attracting higher house rent since location exhibit spatial variation in terms of accessibility, house rent would also vary spatially.

1.5 AIM AND OBJECTIVES OF THE STUDY

The aim of this study is to look at the residential rent differentials between town centres and peri-urban in Bukuru, Plateau State and in achieving this, the following objectives are to be taking into consideration;

1. To identify the factors that most influence any such rent differentials in the study area.

2. To determine the factors that influence any differentials of residential houses rent that may exist in the study area.

3. To determine to what extends each factor influences any differentials of house rent in the study area.

4. To determine the relationship between the residential housing rent and the income classes of the household head in the study area.

1.6 SCOPE AND LIMITATION OF THE STUDY

The scope of this study looks at the differences in rent of residential housing in Bukuru town and it’s peri-urban. Some of the variables that were examined are the socio-economic characteristics of the household Head such as income, sex, marital status, occupational status, and age. The Study also cover reasons and time of immigration to Bukuru as well as the type of houses occupied.

The study is limited to residential houses and it is only 1 bedroom, 2 bedrooms, 3 bedrooms and 4 bedrooms houses types that was considered in this study because they are the most available in the study areas.

The study is to exclude temporal variations of house rents although differences in residential house rent may exist in the temporal dimension too.

1.7 RESEARCH HYPOTHESIS

HO – Residential house rent do not differ significantly between town centre and peri-urban in Bukuru.

H1 – Residential house rents differ significantly between town center and peri-urban in Bukuru.

1.8 JUSTIFICATION OF THE STUDY

Generally, due to the importance of shelter to human life, rent have been a major determinant on what type of houses people live in as well as the quality of houses. This research takes an in depth look at the various reason why disparity exist in housing rent.

Due to its importance, housing rent is mainly determined by some factors such as location, income level, and security of a location, housing type and housing quality. In view of the above stated factors, this research aim at finding out which one is the major determining factor in rent differences between town centre and peri-urban in Bukuru.

Despite the compelling need for decent affordable rental housing, one third of our nation households across the income spectrum live in rental housing, some from choice and some from necessity. Some choose rental housing because it provides an affordable and convenient lifestyle close to neighbourhood amenities, but for many working and income families home ownership is out of reach, rental housing allows families to live in communities close to work, education and affordable transportation.

1.9 STUDY AREA

1.9.1 Population and Human Activities

Bukuru been the study area in the Jos South Local Government Area in Plateau State has the population of 15540 persons according to the Geo Name Geographical Database, and it is 15km South of the State Capital with the mining activities in Jos, most especially the Jos-South because an important National administrative, Commercial and tourist centre and this has lead to the influx of migrants into the area, mostly Igbos and the Yorubas who constitutes more than half of the population because of the commercial activities within the study area.

1.9.2 Location

Bukuru is located at 90 48’00” N, 80 52’ 00”E on the Jos Plateau and it has an area of 150km2 with 15km South of the State capital.

The Local Government Area, which is divided into four (4) district of Du, Gyel, Vwang and Kuru, the town use to be considered a separate city from the city of Jos close by, but like every other form of urbanization the city of Jos has merged with the town of Bukuru form the Jos-Bukuru metropolis.

Source: Ministry of land and survey

Fig. 2: Map of Plateau State showing Jos South L.G.A

Source: Ministry of Land and Survey

Fig. 3: District Map of Jos South showing Bukuru

Source: Ministry of Land and Survey

1.9.3Climate

Generally speaking, the climate of Jos is milder than that of the rest of the rest of the country. It is invigorating and the nearest equivalent to a temperature climate in this tropical zone. The temperature in Jos South is several degrees lower than those in the rest of the country. The recorded mean temperature is 18.7F (27.60C) maximum and 51.7F (10.90C) minimum, there are neither extreme dual temperature nor to much differences between the rainy and dry season.

In the rainy season, there are interim rainfalls and sometimes drizzles on the end. One interesting aspect of Jos weather is that it may be raining in one part of the town yet other part may remain dry and sunny, besides the drainage is generally good and because of its climate and fascinating topography.

1.9.4 Topography

The landscape of Jos generally is mountainous in nature with many beautiful rock formation and its unique physical features. Basically, Jos entirely provides a hydrological centre for many rivers in northern Nigeria and confers on the Northern part of the State a cool climate suitable for livestock rearing and growing of exotic crops.

Its relief rises steeply from 200metres and has an average height of 1,200 meter, and there are great peak like the share Hills (1829m), extinct volcanoes and crater lakes on the Jos, which is also the some of great rivers like the Kaduna, Gongola, Hadejia and Yobes.

1.9.5 Soil and Vegetation

The major soil units of Jos (South) belong to the broad category of tropical ferruginous soils, which are much thinner on the higher plateau but attain greater depth in the Southern part. There are also sizable pockets of loamy soil of volcanic origin, and these soil groups respond quiet well to fertilizers and soil erosion is a major environmental problem.

Tin mining in its heyday rendered some localities around the Jos, Bukuru and much area more susceptive to soil erosion.

The vegetation of Jos (South) falls largely within the northern guinea Savannah zone which consist mainly of short trees, grass and the plateau type mosaic vegetation in some areas in Jos South there are thick edges of Cactus which are planted around household farms or compound land.

1.10 CONCEPTUAL FRAME WORK

Increasingly, urban scholars found the neo-classical economic paradigm deficient and inappropriate in explain in rents and vacancy rate across cities.

Ernest Burges (1925) was the first sociologist to develop a recognized theory of urban rent, which he called the concentric zone theory.

Rent is a function of density, location and particular social classes. The ghetto, Chinatown, underworld, and the black belt are located near the center of the city, which Burges labeled as the “zone of transition”, whereas the working class and middle class and rich lives as a social group further away from the city. Burgess also noted that the value of land was determined by rapid movement of people near subways and trains.

Burges also presented a descriptive urban land use model, which divided cities in a set of concentric circles expanding from the downtown to the suburbs. This presentation was built on Burges observations of a number of American cities, notably Chicago, for which he provided empirical evidence.

This section also looked at the various factors effecting rents in the city and suburbs and examine how and why the rents increase as you move closer t the central business district. Firstly, we must understand exactly what rent is, it is a periodic payment by house user to a house owner. Each housing will have a market value, which is what is used to determine the rents.

Distance from CBD also affects rent; to go to work every one has some sort of commute for which the cost can be measured. In order to compensate for a lower commuting cost by offering housing closer to CBD, the rent in that area will be higher than where the commuting cost is a lot higher. One of the foundamental components of urban economics is the rent, and rent can also be impacted by the type of place where they live. For instance, if there is a theater district with a nice park, it will be more attractive to people to live there. In this case, rents will increase because people will be willing to pay more for a nicer area. This is also true for nicer schools and families, those with children may be willing to pay more in rent so that their children can attend a good school than in other areas. The opposite is also true for areas that are not so nice.

A steady progress has been made in the study of residential house rents over the past 30 years through coordinated research in this area and has abounded as regards to differences in house rent and the factors that allows for such occurrences.

Rent studies have however, been focused on those aspect from which the consumer derives maximum utilities and have attempted to rank then by such research, more light has been shed on the empirical validity of the standard theories of residential location. The areas this study concentrates on, is on the factors that affect house rents and their corresponding effect on housing demand.

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