CHAPTER ONE
INTRODUCTION
1.1 BACKGROUND TO THE STUDY
Lagos State can be described as the Nigeria’s commercial capital,
is the country’s most active and most expensive rental market where
tenants at its highbrow areas pay expensively for residential apartment
while similar apartments in the low-mid income areas go for amount.
Apart from high demand and low supply, there are other factors
responsible for this high rent and, according to Akinlade (2014), the
Lagos Tenancy Law and multiple taxation are driving up house rents in
Lagos. Recognizing that Lagos is home to over 21 million people, with
housing posing a major challenge to the huge population, the state
government in August 2011 enacted the Tenancy Law which prescribes one
year rent for a new tenant and six months for a sitting tenant.
Akinlade (2014) explained that the single year
rent payment law has discouraged investment in homes for rent and has
pushed rent to new level, adding that, presently, landlords collect two
years’ rent for one year in many locations in Lagos. He explained
further that developers, through multiple taxation, were made to pay
for land, planning and approval, environment, council and taxes. Access
to land through government allocation is a battleground for money bags
in Lagos. Planning approval takes forever, yet the government says it
will take one to two months.
The Federal Government’s housing policies has not contributed
enough for developers in that access to credit from banks was
near-impossible for developers and developers that are lucky to receive
loan offers must find over 150 percent security for the bank to hold;
25 percent interest rate on bank loans which is a killer for any
developer’s business plan (Collins, 2003).
Other reasons for the high rent to include sale of Federal
Government’s land in Lagos, high exchange rate to import building
material, highly priced local building material, high fuel costs
showing itself through transportation costs and generators, high
labour costs, and inadequate design to maximize land space.
Lagos has seen 30 years of mass housing gap,
because since after Lateef Jakande governed Lagos from 1979 to 1983,
there has been no mass housing for rent. Jakande was the last governor
of the state that successfully implemented and delivered mass housing
policies for rent. For 30 years, successive governments ignored this
need of Lagos residents. Jakande also commissioned a report on homes
shortage in Nigeria, as at 2010, estimated at 16 million and projected
to reach 20 million by 2020.
According to Affe (2008), it is fair to the
citizens that government discharge its responsibilities to the people
and give meaningful life to the citizens. This underscores the point
why Land Use Charge was introduced by Lagos State Government to raise
revenue for maintaining existing infrastructure and provide new ones.
It is in line with this that the researcher is examining the effect of
tenancy law and multiple taxation of residential house rent in Lagos
State.
1.2 STATEMENT OF THE PROBLEM
Lagos State is steadily emerging a multi-nuclei metropolis giving
rise to a number of real estate submarkets. Notwithstanding,
residential house rent has been abnormally high especially in the
normally adjudged as more juicy in some neighborhoods such as Ikoyi,
Victoria Island, Lekki-axis, Ikeja, Apapa, Isale Eko and Amuwo Odofin.
However, researchers are of the opinion that the skyrocketed
residential house rent in Lagos State is occasioned by several factors
including the tenancy law introduced by the Lagos State government and
multiple taxation. This study is examining the effect of tenancy law
and multiple taxation on residential house rent in Lagos State.
1.3 OBJECTIVES OF THE STUDY
The following are the objectives of this study:
- To examine the effect of tenancy law on residential house rent in Lagos State.
- To examine the effect of multiple taxation on residential house rent in Lagos State.
- To identify other factors that determine residential house rent in Lagos State.
1.4 RESEARCH QUESTIONS
- What are the effects of tenancy law on residential house rent in Lagos State?
- What are the effects of multiple taxation on residential house rent in Lagos State?
- What are the factors that determine residential house rent in Lagos State?
1.5 HYPOTHESIS
HO: Tenancy law and multiple taxation does not influence residential house rent in Lagos State.
HA: Tenancy law and multiple taxation does influence residential house rent in Lagos State.
1.6 SIGNIFICANCE OF THE STUDY
The following are the significance of this study:
- Findings from this study will educate the general public on
how tenancy law and multiple taxation has affected residential house
rent in Lagos State. It will also be a guide for policy makers and the
government of Lagos State on how to checkmate the issue related to
individuals or corporate body paying two or more types of tax at the
same time.
- This research will also serve as a resource base to other
scholars and researchers interested in carrying out further research in
this field subsequently, if applied will go to an extent to provide
new explanation to the topic
1.7 SCOPE/LIMITATIONS OF THE STUDY
This study will cover the tenancy law of lagos state and all the
issues of multiple taxation with a view of identifying their influence
of residential house rent.
LIMITATION OF STUDY
Financial constraint- Insufficient fund tends to
impede the efficiency of the researcher in sourcing for the relevant
materials, literature or information and in the process of data
collection (internet, questionnaire and interview).
Time constraint- The researcher will
simultaneously engage in this study with other academic work. This
consequently will cut down on the time devoted for the research work.
REFERENCES
Affe M (2008). Land Use Charge: Fasola Seeks Quantity Surveyors' Help. Saturday Punch, 51: 1411 in www.punchontheweb.com,
Collins C (2003). Infrastructure. Advanced Learner English Dictionary, 41h ed. London: Harper Collins Publisher.
Akinlade IU (2014 ). Property Valuation and Appraisal. Owerri: BON
Publications. Lagos State of Nigeria Official Gazette. Lagos State
Government of Nigeria. Lagos State Printing Corporation, lkeja. LSPC
566/72001/500 34: 20