Determinants of Rental Housing Values in an Informal Settlement: A Case of Makoko in Lagos, Nigeria.

Informal settlements or slum areas have been criticized as being unfit for human habitation but the inhabitants considered them fit for living, working and recreation. This paper examined the extent to which rental values are determined by the structural and neighbourhood attributes of informal settlements like Makoko and implications for planning and development. A structured questionnaire was administered to landlords/tenants of 254 residential housing units using multi-stage cluster sampling technique. In the first stage, the housing units were identified and classified as cement, brick, plank, terrace and storey buildings and randomly the required number is selected accordingly. In the second stage, a total of 10 streets/lanes were selected based on their conditions. The estimated number of house types in the selected streets was then identified for administration of the questionnaire. Descriptive statistics (frequency, percentage, mean) and inferential statistics (regression analysis) were used for data analysis. This study showed that rental values are determined by housing and neigbourhood facilities in Makoko. The R2 change indicates that the most important determinants of rental values for the housing are housing types based on building material type (R2 = 0.326, p < 0.05), room size (R2 = 0.254, p < 0.05), availability of kitchen (R2 = 0.232, p <0.05), availability of school (R2 = 0.215, p <0.05), relaxation centre(R2 = 0.187,p <0.05), access road (R2 = 0.146, p < 0.05) and toilet type (R2 = 0.143, p <0.05). The implication of the findings is that the persistent tendency towards the slum clearance should be relaxed to lay more emphasis on upgrading of the structures and neighbourhood facilities. This means encouraging community participation and ownership of incremental upgrading programmes. The study suggested a holistic approach by the government and the stakeholders to improve housing and environmental conditions of these urban poor dwellers rather than the clearance of slums.