IMPACT OF EXTERNALITIES ON RENTAL VALUES AND VOID PERIOD IN MINNA, NIGERIA

Abstract

This study provided evidence on the contributory effect of externalities on rental values and void period for residential buildings in Minna. The research population comprised 9,008 rented residential buildings in thirteen (13) selected areas in Minna Metropolis where rapid residential property developments have been observed over the last ten (10) years. A total of 1,134 housing units were sampled following the Yarmane (1965) formula for sample size selection and further adopting + 10% precision (margin of error), and 90% confidence level. The data used were generated through two sets of questionnaire. The first set was administered on the household heads of rented dwelling units that fell within the sample group, and focused on rents paid, and the availability and access to externalities. The second set was administered on the managers of the sampled houses, which constituted estate surveyors, non-professional estate agents, and landlords (as the case may be) in the study area. The second set of questionnaire basically elicited data on void related issues. A total of 1,134 pairs of questionnaire which were well completed were used for analysis. The well completed questionnaires represented an overall 77% response rate. In order to ensure an unbiased selection of the sample from the population, stratified and random sampling were adopted. Data analysis involved the use of both descriptive and inferential statistics to address specific objectives of the study. Precisely, collated data were analysed using Frequency distribution, Mean, Location Quotient (LQ), The Welch’s adjusted Analysis of Variance, Games Howell post hoc test, and the optimally scaled categorical regression analysis (CATREG) at different stages of the research. Nine externalities were found to sustain residential buildings in the study area, and were found to be unevenly distributed across neighbourhoods. Findings further revealed that the rental values of the four (4) predominant house types differed significantly across neighbourhoods, with Tayi village and Fadikpe recording the highest mean rental values. There was a significant difference in the mean void periods for each of the house types across neighbourhoods, while the least void periods were recorded in Nyikangbe, Fadikpe, Tudun Fulani, and Tayi village for tenement buildings, one bedroom apartment, two and three bedroom bungalows respectively. The nine (9) identified externalities accounted for 45% variance in the rental values of tenement buildings (a single room), 61% variance in the rental values of one bedroom apartments, and 68% & 54% variance in the rental values of two and three bedroom bungalows respectively in the study area. Results suggested that the identified externalities could significantly predict rental values for the four house types. Amongst others, the rental values of a room (in a tenement building) declined with closer distances to shopping centers and refuse dumps, while the rental values of two bedroom bungalows reduced with closer distances to shopping centers, educational institutions, health care centers, major roads and refuse dumps. The identified externalities also accounted for 32% variance in the void period of tenement buildings and one bedroom apartments; and 34% & 51% variance respectively in the void period of two and three bedroom bungalows in the study area. Closer distances of shopping centers and health care centers to tenement buildings significantly increased the period of void. Whereas, out of all the externalities measured, only refuse dumps significantly increased the void period of two bedroom bungalows. Having established the uneven distribution of externalities across neighbourhoods in the study area, and having also established significant differences in the rental values and void periods of similar house types across neighbourhoods, it is evident that policy makers need to ensure the equitable allocation of the externalities in question across space.