EFFECT OF COASTLINE ON PROXIMATE RESIDENTIAL PROPERTY RENTAL VALUE IN LAGOS STATE, NIGERIA

Abstract

The analysis of various amenities and disamenities in human settlements is crucial in determining the market value of residential properties. This research appraised the effect of coastline on proximate residential property rental values in four coastal communities of Lagos State. The focus was to appraise the effect of amenities and disamenities associated with the coastline on proximate residential property value while controlling for other housing attributes through the examination of the physical characteristics of proximate residential properties, evaluation of the factors influencing residential location choice of tenants, evaluation of the differences in rental values of varying residential property types, and examination of the influence of the coastline on rental values of residential properties within 250m of the coastline and between 251m to 500m away from the coastline. The population for the study comprised rented residential properties and tenants who were household heads occupying the residential properties in Victoria Island, Lekki, Badore, and Orimedu. The residential properties within 500 metres of the coastline in the study area which amount to 3,938 constituted the sampling frame. The sample size for tenants was 992. Random sampling technique was used to pick the property tenants while the validly completed questionnaires from the research survey were 914 representing a response rate of 88.57%. The breakdown of which was 204, 298, 256, and 156 for Victoria Island, Lekki, Badore, and Orimedu respectively. Data analyses employed were descriptive statistics and inferential statistics of Independent-samples t-test, Mann-Whitney U test, Chi-square test, Fisher’s exact test, Kendall’s Coefficient of Concordance, Principal Component Analysis, and Hedonic Price Model. Findings indicated that the physical characteristics of residential properties showed some variability in their distributions and availability within 250 metres of the coastline and between 251 and 500 metres away from the coastline. The results revealed that dwelling and neighbourhood attributes played important roles in the residential location choice of tenants across the coastal communities. Moreover, environmental attributes which comprised closeness to the coastline for a view of water as well as closeness to the beach for leisure and recreation purposes exerted moderate effects on the residential location choice of households in Victoria Island and Lekki but played limited roles on the residential location choice of households in Badore and Orimedu respectively. The results showed that two (2) bedroom blocks of flats between 251 and 500 metres away from the coastline have more rental prospects than those within 250 metres of the coastline in Lekki. Contrariwise, findings indicated no significant differences in rental values of 3 bedroom bungalow in Victoria Island, a tenement in Lekki, a tenement in Badore, and a tenement in Orimedu within 250 metres of the coastline and those in location between 251 and 500 metres away from the coastline. Furthermore, without controlling for disamenities in the entire-sample model for each coastal community, the results revealed that a 1% increase in distance from the coastline for houses located within 500 metres was associated with a 0.013% (N126.96) decline in house rent in Victoria Island but increases house rents by 0.31% (N983.54) in Lekki, 0.04% (N34.17) in Badore and 0.04% (N5.70) in Orimedu for the same change of distance from the coastline. When flood occurrence was included in the entire- sample hedonic model for each community, flooding reduces house rents in Victoria Island by 0.018% (N175.79) for every 1% decreasing distance to the coastline and further lower house rents in Lekki, and Badore by 0.11% (N345.04) and 0.12% (N94.56) respectively for the same change of distance to the coastline. Meanwhile, in Orimedu, decreasing distance to the coastline by 1% results in a 0.007% or N1.00 increase in house rent. Considerably, findings from the piecewise models for each coastal community revealed that the signs and magnitude of the coefficients of the variables of interest (Log DISCOAST and Log DISCOAST*FLODRATE) do not yield similar results with those in the entire-sample hedonic models. The study recommended among others that policy makers and urban planners should respond to the desires of tenants by paying attention to addressing the menace of the neighbourhoods including crime and traffic congestion. Also, coastal managers should adopt sound protection measures of the coastline across the coastal communities in the study area. With these recommendation, it is hoped that residential locations across the coastal communities will be equally attractive to tenants and the reflection of flood risk observed in house rents very close to the coastline will decline while rental values are likely to perform better.