CAUSES AND EFFECTS OF ABANDON RESIDENTIAL PROPERTY IN NIGERIA

ABSTRACT

The prevalent and incessant abandonment of residential property are alarming that it creates several negative effects to real property values, as well as, to the owners, residents, the built environment and the economy as a whole. The purpose of this paper is to investigate and determined the various causes of abandoning residential property and the effects of such causes on real properties and its values in Nigeria. The findings confirms that several factors were the causes of development projects abandonment in Nigeria with most including payment remittance Delay, lack of adequate fund allocation, leadership instability, death of the investor/client/owner, inconsistency in government policies, improper project planning and design, improper project costing, land disputes/legal issues, changes in investment purpose, etc. Further, the findings show its effects on real property and its values, and these include; real properties total value reduction, total income receivable from the real property reduction, becomes a disappointing thing to the owner and the populace, increasing effects of environmental issues to the real properties and the built environment, a reduction in the motivation to attracting investment in real properties, waste of financial and material resources, etc. The reflection is that allocating reasonable finance, developing appropriate and effective implementation plans and monitoring, evaluation and reporting on development project activities by key actors should enhance in resolving these development projects abandonment causes and effects on real properties and its values in the economy.

I.0 INTRODUCTION

Longman Dictionary (2005) defines abandon as “to stop doing something because there are too many problems and it is impossible to continue. Planning is foremost thing to be done if projects are to be completely executed (Akindoyeni, 1989).

Ogunsemi (1991) the successful completion of a project (property) depends on adequate planning which also includes financial planning. The sight of abandoned property scattered across the length and breadth of Nigeria is alarming.

The urban environment is plagued with myriad of environmental problems, which eat deep into the physical, health, social, economic, legal and cultural fabrics of the environment. The fundamental preoccupation of planning for public purpose; is to make the city safe, healthy and beautiful (Keeble, 1969), and sustainable too (Nenno, 1996). To achieve this in any built up environment, prevalence of abandoned buildings and their impacts on the aesthetics and the general livability of towns and cities must be addressed.

REVIEW OF INCIDENCE OF ABANDON PROPERTY

A high incidence of landed property abandonment has been observed the world over (Setterfield, 1997; Cohen, 2001; Mallach, 2004). The number of abandoned buildings in Baltimore in 2001 is between 12,700 and 42, 480 (Cohen 2001). Between 1996 and 2001 Detroit, Michigan demolished 18,200 condemned buildings with an estimated 10,000 substandard structures still remaining. Razed buildings were estimated to be more than 20% of urban structures in Houston,

Texas and more than 12% in Las Vegas, Nevada (Mallach, 2004).

Forth- Worth environmental management department in the United States has currently identified over 3,250 abandoned buildings in the city. This rightly suggests that the problem of landed property abandonment can be more ingrained in less developed countries like Nigeria.

Buildings will inevitably deteriorate and may subsequently be abandoned as they age unless they are properly maintained. Besides, changes in technological and commerce trend may edge out some structures; making them obsolete and prone to abandonment. The case in Nigeria cities and villages are not different. Obsolete structures and infrastructures are very much part of the core city’s landscape.

Spurred by the family traditional and communal land tenure system, the old buildings remain where they are as a rule either boarded or not; and not just anyone could put them into use without general consensus of the family. This factor alone is capable of inducing abandonment. The political will and influence is on the decline and this probably account for the out migration of the indigenous population. This may be deduced from the trend of the demography in the available data (NPC 2006).

Abandoned projects including building, Civil Engineering and heavy engineering development project like: houses, churches, schools, roads, bridges, dams, tunnels, air port, sea port etc. litter the whole Nigeria. Osemenan (1987) reported that

Nigeria has become the “world’s junk-yard of abandoned projects worth billions of naira and it is greatly unthinkable that Nigeria blessed with so great potentials in the construction industry can experience such magnitude of project abandonment.

According to another report by Kotangora (1993) there are about 4000 uncompleted or abandoned project belonging to the Federal Government of Nigeria with an estimated cost of above N300 billion which will take 30 years to complete at the present execution capacity of government, also according to him this issue of abandonment been left without adequate attention for too long which is now having a multiplier effect on the construction industry in particular and the national economy as a whole.

The construction industry plays a very dominant role in the economy of any nation. A healthy economy usually experience an increase in construction activities, but in a depressed economy, the incidence of project abandonment tends to be more prevalent.

According to Akinolu (1980) delays and cost overruns have “knock on” the effect on the construction industry and indeed in the whole economy. This applies to Nigeria where construction investments account for over 50% of the gross fixed capital formation. Akindoyeni (1989) qualitatively reasoned that some of the causes of project abandonment in Nigeria are: deaths of client, inability of client to attract fund and lack of good planning.

This study is set up to quantitatively determine other causes of residential property abandonment and their effects on Nigeria economy. This will help to proffer solutions that will drastically reduce abandonment of projects in Nigeria.

CAUSES OF PROPERTY ABANDONMENT

The lack of proper cost advice, cost planning and cost control were fingered as the major reason for the numerous uncompleted or abandoned infrastructure projects in the country. The following are the various causes of residential property abandonment:

1. Inadequate planning

2. Inadequate finance

3. Inflation

4. Bankruptcy of Contractor

5. Variation of project scope

6. Political factor

7. Death of Client

8. Delaying in payment

9. Incompetent project manager

10. Wrong estimate

11. Faulty design

12. Inadequate constant control

13. Change of priority

14. Improper documentation

15. Unqualified/inexperience Consultants

16. Administrative/legal action

17. Dispute

18. Natural disaster

EFFECT OF ABANDONED RESIDENTIAL PROPERTIES

Imperil structures smothered in damp shrubs and vine are found in their good number dotting and forming part of the cities’ built up environment. The implication of this can be enormous; it is capable of inducing or at least encourages one or more environmental, social and economic problems within the developed area. For instance, the presence of abandoned residential structures has been observed to encourage arson and other crimes, waste dump, and property value decline where they exist (Adedibu and Akindele, 2007).

While some of these structures are actually under construction but are characterized by bushy growth in and around them (if not roofed), some are old and dilapidated and partly roofed. It is even not uncommon to see some buildings dilapidating yet under construction. The age of some of these structures are only better imagined.

Some of the structures carry red paint marks ensigned by the officers of the local planning authority, which connote that they are defaulters to the rules of development control in the city. They are therefore wrong things in the wrong places performing wrong functions because of wrong environmental management attitudes. They unnecessarily mark the area in which they are found with slum characteristics.

The following are notable effects of abandoned residential properties among others:

1. Reduction in rental value of surrounding properties

2. Disappointment of the populace

3. Lowering of living standard

4. Wastage/under utilization of resources

5. Reduction employment opportunities

6. Decrease in the tempo of economic activities

7. Decrease in revenue accruing to government

8. Difficulties in attracting foreign loans

CONCLUSION

Inadequate planning has been identified as one of the causes of property abandonment; this is in agreement with Essenwa (2004) and Adedeji (1998) and Opara (1986) who were of the opinion that adequate project planning proceeds construction work if it is not to be abandoned along the way. Another cause of abandonment of residential property is inadequate funding/finance. This is in consonance with the affirmation of Odenyinka and Yusuf (1997) that owner’s cash flow problem is a major factor responsible for abandonment of project.

Bankruptcy of the contractor, variation of project scope, incompetent project manager which are other causes of project abandonment are in agreement with the opinion of Aluko (2008). Political reason as another factor of abandonment of project is in agreement with Omoniyi (1996) and Onikute (1988) who opined that changes in government/administration have often meant changes in policies. At these times, project commenced by previous political administrative are often abandoned to give way for their newly concerned idea. Wrong estimate and inadequate cost control that are also causes of project abandonment is in agreement with Ayodele (1998) who affirmed that processes of building designs not accompanied by cost planning process will produce economically outrageous designs which may not be practically financed on ground. Most of the discovered effects of abandonment of project: disappointment of the populace, low standard of living, wastage of resources, reduction in employment opportunities, decrease in tempo of economic activities, decrease in revenue accruing to government, difficulties in attracting foreign loans; are in agreement with Aluko (2008) who in a qualitative research listed the effects as: unemployment, reduction in government revenue, reduction in economic activities, lowering standard of living, wastage of equipment in site and increase in final cost of project.

RECOMMENDATION

To drastically reduce the effects of project (residential property) abandonment clients should undertake an adequate planning for the project at inception and make should enough fund available based on reliable estimate made by the Quantity Surveyor at the inception. The client should engage services of competent construction professionals; the Architect should at once and at inception produce economic design as dictated by cost plan prepared by the Quantity Surveyor who also controls cost from inception.

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