Research proposal

Research proposal

ASSESSMENT OF TENANTS WILLLINGNESS TO PAY FOR IMPROVED ENVIRONMENTAL AMENITIES IN

1.0 Introduction

The study is an assessment tenant’s willingness to pay for improved environmental amenities using the case of Kira municipality. This chapter presents the background of the study, statement of the problem, purpose of the study, objectives of the study, research questions, and scope of the study, significance of the study and conceptual framework.

Housing is one of the basic social conditions that defines the quality of life and welfare of the people and places. (Golubchikov & Badyina, 2012). Globally, housing is accepted as second most important human need after food and is considered as one of the most valuable economic asset of every nation (Adesoji , 2014).Housing being an essential ingredient that stimulate the growth of Gross Domestic Product (GDP) of any nation, encompasses various attributes which jointly function to determine the market value of the commodity.

1.1 Background to the study

According to Nwosu, (2015) Housing has been universally accepted for human habitation which is considered as the third next to food and clothing, it is more than just a home and it encompasses utilities, environmental amenities as well as services which enhance quality neighbourhood. Possibly, provision of basic amenities and human services for its increasing population is among the major challenges of successive government in Nigeria in making her habitable (Olujimi, 2010).

The property value could be attributed to property as a package of goods and services (Bello and Bello, 2008). Real estate entails more than just a dwelling as it includes social and neighbourhood features as well as environmental attributes. Therefore, property rental value or transaction price is a function of willingness to pay (WTP) for environmental, locational features and attribute of the property in its location or neighbourhood.

According to Bello and Bello (2008) it is difficult to determine environmental influences on value. Especially in Nigeria, considering the wide range externalities (positive and negative) that affects property market as a result of externalities. Water pollution, unpleasant condition of environmental sanitation, spread of squatter settlements, lack of accessibility and improper waste disposal arrangement or system, etc. are negative externalities while positive externalities entails good access road, air quality, electricity supply, security, landscaping amongst.

The influences of environment are therefore characterised and evidenced in pull and push effect of the neighbourhood on the prospective buyer or occupant of the property (Bello & Bello, 2008)A push effect like the air and water pollution may have effect on property value on one hand and occupant’s derivable satisfaction from the property occupied and environment on the other hand (Jackson, 2001) Hence, occupants’ satisfaction in respect of their shelter and environment, is social, behavioural, cultural and environmental features, not by engineering elements alone(Onibokun, 1974). Occupants may seek to approach or have properties which they hold positive attitudes in order to gain satisfaction. The efficiency and effectiveness of these depends on provision of infrastructural amenities or services (Nwosu, 2015:Babarinde, 1998). Availability of these amenities is pivotal to value of property (Hammer et al., 2000), which often leads to competition for such locations. This is because it enhances the value of property and vice versa.

According to Ferreira and Moro, (2010) occupants may seek to approach or have properties which they hold positive attitudes in order to gain satisfaction, increase by professionals. The methodology for estimating values, benefit cost of changes in quality. In developed countries, several studies have been done in the past on environmental amenities and property values (Des Rosiers et al., 2000; Diamond, 1980). Their findings cannot be directly applied in developing countries such as Nigeria, this is because of differential property market characteristics, culture difference, contextual setting among others.

Lorenz et al. (2008), Hoch and Waddell (1993) and Berry and Bednarz (1979) property and rental values has to do with the overlapping effect of neighbourhood and environmental attributes. Adequacy of these infrastructural amenities increases economic and social value to land and landed property thereby attracting would-be occupant or buyer and enhances their WTP in the concern land and landed property (Nwosu, 2015).

According to Maurizo et al., (2008) property and rental values has to do with the overlapping effect of neighbourhood and environmental attributes. Adequacy of these infrastructural amenities increases economic and social value to land and landed property thereby attracting would-be occupant or buyer and enhances their WTP in the concern land and landed property (Nwosu, 2015). In Uganda, the main issue is how real estate market will reflect these factors (environmental) as factors to determine WTP for improved environmental intangible amenities. Therefore, this study will examine tenant’s willingness to pay for improved environmental amenities in Nakawa Division, a case of Kira municipality.

1.2 Statement of the Problem

Laliberté (2008) indicates that house prices depend on both tangible and intangible or less tangible household characteristics. Among these characteristics are those of the environment and the average income of household were found to be of significant role in determining house prices or rent and on the same note (Zhou, Leng, Su, & Ren, 2019) asserts that having an improved environmental amenities like proper drainage system, improved sanitation system, clean water, clean air and generally low pollution has been scientifically proved as imperative for having a quality of life and reduced costs in Health related expenditure and this intern attracts Tenants to stay in a specific place. According to (World Economic Forum, 2019) it has been reported that there has been a mass exodus of people from rural areas to the cities in search of opportunities and this situation has intern increased a lot of pressure on the policy makers in providing the right amenities that can improve the quality of life and on the same view (Nwosu, 2015) asserts that Property values tend to be high where adequate and good environmental amenities are provided while property values are low in areas with poor environmental amenities which result in lower rental value.

It has been reported by the property managers of Namugongo division that there is a challenge in the tenants willingness to pay for a specific accommodation and this has to a large extend puzzled the policy makers as to what could be the reason for Tenants shunning some residential places in Namugongo division (Knight frank report, 2018).  Namugongo division currently is facing many challenges specifically of poor sanitation facilities, increased poor waste management facilities as observed, huge pillage of waste and increased over flow of water during rainy seasons all these has affected the residents of the area. It is therefore against this Background that this study intends to investigate into Assessment of tenants’ willingness to pay for improved environmental amenities in a case study of Namugongo Division, Kira municipality.

1.3 Main objective

The main objective of the study is to assess tenant’s willingness to pay for improved environmental amenities in Kira municipality in Wakiso district.

1.4 Specific Objectives

This study was guided by the following specific objectives.

1. To identify the various environmental amenities that attracts tenants.
2. To investigate other demand shifters that affect tenants’ willingness to pay.

• To investigate the influence of income on tenants willingness to pay for improved environmental amenities.

1.5 Research questions

The study was guided by the following research questions:

1. What are the various environmental amenities that attracts tenants?
2. What are the demand shifters that affect tenants’ willingness to pay?

• What is the influence of income on tenants’ willingness to pay for improved environmental amenities?

1.6 Scope of the Study

1.6.1 Content Scope

The content scope included; various environmental amenities that attracts tenants, other demand shifters that affect tenants’ willingness to pay and the influence of income on tenants’ willingness to pay for improved environmental amenities.

1.6.2 Geographical Scope

Kira Town, a municipality in the Wakiso district of the Central region of Uganda, is the country’s second-largest city by population. It is administered by the Kira Town Council, an urban local government. The national census in 2002 estimated Kira’s population to be 140,774 people, of whom 67,222 (47.8 percent) were males and 73,548 (52.2 percent) were females. The Uganda Bureau of Statistics estimated the mid-year 2010 population to be 172,300 and the mid-year 2011 population to be 179,800. The town planner, however, estimated the population to be 300,000 in 2010. In August 2014, the national population census put the population at 313,761.

Therefore carrying out this study will be of benefit to other scholars in finding out why Kira municipality is Highly populated.

1.6.3 Time scope

The research study focused on a period of five years from 2015 – 2019. This is because this is the period that the government through Kira municipality increased its budget for the development of most of the towns in the country.

1.7 Significance of the Study

The study will add to the general body of knowledge on tenant’s willingness to pay for improved environmental amenities of residential property in Kira municipality. The study will also create awareness to the would-be investors/ investors on opportunities available for investment and effect of lack of those environment amenities/ services on the general performance of residential properties in the rental markets

The study may be of importance to government in making housing policies and decree and/or amendment of planning and environmental laws as the study will reveal those environmental amenities that need to be improved.

This research also will be an available source to other researchers in the future for their research works such as projects, thesis, paper and term paper which can be reference to in their project work.

1.8 Justification of the study

The population of Namugongo has grown significantly and currently it is estimated at more than 69,000 residents (UBOS, 2014), from less than 30,000 resident’s a decade earlier this has therefore raised a number of speculation on to what could be the reason for the population increase in this area.

The has been many factors influencing the recent fluctuation in the tenants occupancy of the Buildings in Namugongo and therefore it is imperative for the study to be carried out to establish what could be the cause for the fluctuation in the number of occupants in Namugogongo division.

The dynamics in the demographics and the changing tenancy expectation of the environment is considered critical in the decision by the Tenants to rent a specific place and therefore this study will enable the future scholars to have a comprehensive information regarding the environmental amenities and tenancy occupancy in Namugongo.

The social economic status of the people in Namugogo has been changing overtime and therefore it is imperative to assess tenant’s willingness to pay for improved environmental amenities in Kira municipality in Wakiso district

1.9 Conceptual Framework

The conceptual framework below shows the relationships among variables. It indicates that the independent variable of this study which are improved environmental intangible amenities and the dependent variable which is tenants’ willingness to pay for improved environmental intangible amenities.

Independent Variable                                                                             Dependent variable

                                                            Moderating variable

Source: adopted and modified by the researcher

Figure 1: A Conceptual Framework Showing Relationship between environmental amenities and tenant’s willingness to pay.

From the conceptual framework above, the independent variables are measured in terms of environmental amenities, socio-economic characteristics and other demand shifters which tend to affect tenant’s willingness to pay.