ABSTRACT

Property and economic development share symbolic relationship. For developing countries, property business should form a major part of economic development and an alternative or income.

Starting in the 1960s as part of the emerging field of law and economics, economists and legal scholars began to study the property rights enjoyed by tenants under various estates being carried out by property development agencies.

Development process required skills of many professionals which has made the process tedious and cumbersome for an average development agency.

Property development remains a viable and profitable venture hence, the need for Government to put certain measures in place so as to reduce the problems and difficulties development agencies face and also to meet the growing housing needs of the masses.

Property sector as remained one of the least exploited sectors which has the capacity to yield a huge source of income for the government just like it is in the United Arab emirates [Dubai] and China presently.

CHAPTER ONE

1.1     HISTORICAL BACKGROUND

The Genesis of the Property Development Agency can be traced to back into a form of control in the planning, allocation and usage based on nature, norms and customs of the people vis-a-vis Customary Law. In modem times Nigeria planning laws are tools of environmental designing. Planning and development are partly English received Laws and local legislation.

Housing generally has not ranked high on the scale of priorities for social spending and state governments have tended to rely upon local authorities to meet the problem. Efforts at providing low-cost rural housing have been minimal, despite the creation of the Federal Mortgage Bank of Nigeria in 1977, and shantytowns and slums are common in urban areas. Overcrowding in urban housing is a serious problem. It has been estimated that about 85% of the urban population live in single rooms, often with eight to twelve persons per room. Living conditions are poor.

Bolanle Bamgbose & Associates is a real estate development company based in Lagos, Nigeria, with principal business activities in property development trading; property investment and finance; and property advisory. Envisioned to be a leading global property company, totally committed to delivery of quality homes, and commercial real estate products in office, retail and leisure development. In addition, provides cutting edge advisory solutions to complex areas of real estate development, investment and finance amongst others. Their promise to their customers across class and geography, is delivery of superior value of such quantum that will enable them assert without doubt that we are enriching living. We have in place, structure, processes, tools, and people of extra- ordinary qualities and abilities to make this happen. Please enjoy your stay on our site, as we strongly commend you to contact us for any of your needs within our sphere of provision.

The Government has failed in meeting the needs of the people has far as housing is concerned which made them source for partnership with developing agency in reducing the hardship of the populace especially in the Urban areas. Bolanle Bamgbose & Associates one the renowned Property Lawyer in the Country and Lagos State most especially has taken up the challenge of meeting the need of the urban centre in building affordable homes such project embarked upon by this Law firm cum Property developer is Oke-Alo Estate in Gbagada Area of Lagos State although her role was totally limited to providing land for the owners to develop such would not have being possible without the vision a Pharmacist called Chief E.O. Ashamu (late) who at the time in the 70s bought an expanse to develop for the masses.

1.2     INTRODUCTION

LAND DEVELOPMENT

Purchasing unused land for potential development is sometimes called Speculative Development. Subdivision of land is the principal mechanism by which communities are developed. Technically, subdivisions describe the legal and physical steps a developer must take to convert raw land into developed land. Subdivision is a vital part of a community's growth, determining its appearance, the mix of its infrastructure, including roads, drainage systems, water, sewage and public utilities.

In general, land development is the riskiest but most profitable technique as it is so dependent on the public sector for approvals and infrastructure and because it involves a long investment period with no positive cash flow.

After subdivision is complete, the developer usually markets the land to a home builder or other end user; for such uses as a warehouse or shopping center. In any case, use of Spatial Intelligence tools mitigate the risk of these developers by modeling the population trends and demographic make-up of sort of customers a home builder or retailer would like to have surrounding their new locations.

A development team can be put together in one of several ways. At one extreme, a large company might include many services, from architecture to engineering. At the other end of the spectrum, a development company might consist of one principal and a few staff who hire or contract with other companies and professionals for each service as needed.

Assembling a team of professionals to address the environmental, economic, physical and political issues inherent in a complex development project is critical. A developer's success depends on the ability to coordinate the completion of a series of interrelated activities efficiently and at the appropriate time.

The development process requires skills of many professionals: architects, landscape architects, civil engineers and site planners to address project design; market consultants to determine demand and a project's economics; attorneys to handle agreements and government approvals; environmental consultants and soils engineers to analyze a site's physical limitations and environmental impacts; surveyors and title companies to provide legal descriptions of a property; and lenders to provide financing.

Land use, land valuation, and the determination of the incomes of landowners, are among the oldest questions in economic theory. Land is an essential input (factor of production) for agriculture, and agriculture is by far the most important economic activity in pre-industrial societies. With the advent of industrialization, important new uses for land emerge, as sites for factories, warehouses, offices, and urban agglomerations. Also, the value of real property taking the form of man-made structures and machinery increases relative to the value of land alone. The concept of real property eventually comes to encompass effectively all forms of tangible fixed capital. With the rise of extractive industries, real property comes to encompass natural capital. With the rise of tourism and leisure, real property comes to include scenic and other amenity values.

Starting in the 1960s, as part of the emerging field of law and economics, economists and legal scholars began to study the property rights enjoyed by tenants under the various estates, and the economic benefits and costs of the various estates. This resulted in a much improved understanding of the:

·       Property rights enjoyed by tenants under the various estates. These include the right to:

o   Decide how a piece of real property is used;

o   Exclude others from enjoying the property;

o   Transfer (alienate) some or all of these rights to others on mutually agreeable terms;

·       Nature and consequences of transaction costs when changing and transferring estates.

The rate of urbanization in Nigeria has witnessed tremendous increase in the last two decades. Census in the early fifties showed that there were about 56 cities in the country and about 10.6% of the total population lived in these cities. Given the expected increase in urban population, the magnitude of the housing problem in the country is enormous. According to the National Rolling Plan (NRP) the national housing requirement is between 500,000 and 600,000 units considering the prevailing occupancy ratio of between three and four persons per room. If this estimated annual requirement was to be provided at an average of N500, 000 per unit the costs would be enormous and indeed unrealisable. The cost of providing housing alone would be between N250 Trillion and N300 Trillion (excluding the cost of infrastructural development). This is the macro perspective of the housing problem. This is to say that the Government and Mortgage Institutions will need this much as capital base to effectively tackle the housing situation. On the micro level, it has been observed that house ownership is one of the first priorities for most households and it represents the largest single investment tor most (between 50% and 70% of the household income). This observation becomes very significant when it is realized that per capital income in Nigeria has been on decline (currently N3, 000) as well as the real income of the average Nigerian. The rapid up-swing in the prices of building materials in the last five years has further reduced the affordabilities for most Nigerian. Relating annual requirements for housing with the Gross Domestic Product of N82.53 billion and N85.82 billion estimates for 1989, and over 88 billion in 1991 as well as per capital income N3,000, financing becomes a major factor of the property development especially long term funding. One may perhaps be tempted to ask why emphasis is being placed on housing. Firstly of all man's basic needs, arguably, constitutes and indeed poses the greatest challenge. Secondly, a vigorous and buoyant real property [housing] sector is an indication of a strong programme of national investment and is indeed the foundation of and first step to future economic growth and social development. The inability of the Government of Nigeria or a constant neglect by higher authority paved away for property development agency like Bolan1e Bamgbose & Associates to take up the challenge of providing affordable homes for the masses and to exploit the profitability of the business of property development in Nigeria, At 30% and above, the rate of returns on real estate investments in the Nigerian cities of Abuja, Lagos, and Port- Harcourt is -much higher than the rate of returns from stock market investments in the US or Europe which is about 12%and also higher than returns on unleveraged property investments in the US which is about 18% which shows the prospect of property business if some certain measures are put in place by the Authority to properly reduce the difficulties developers face such availability of funds, the review of the Laws that govern land ownership in Nigeria for example according to the land use of act of 1978 there is no freehold land ownership in Nigeria. The highest form of ownership is a 99-year leasehold for which you get a certificate of occupancy (CoO). Land is vested in the state and governors are the ones who issue these certificates and even the process of this Certificate of Occupancy is so tedious especially in Lagos State that it takes an average of 6-8 months which means if developer took loan to acquire a property for example before he could do anything at all, he has obtain this CoO which will serve as key to getting approval for the property he wants to build be it for residential or commercial purpose What is Property Development? Is the carrying out any building, engineering, mining or other operation in, on, over or under any land or the making of any environmentally significant change in the use of any land demolition of building including the felling of trees and placing trees

standing erections used for display of advert on the land and the expression to develop with its grammatical variations shall be construed accordingly. Land can be defined as the various non-human natural resources found on the earth. Nigeria has an overall Land Use Policy embedded in Land Use Act and prior to the Land use Act in 1978, the existing system was through Land Tenure system. The word tenure is derived from a Latin word "Tenere" meaning to 'to hold' a landed property.

Land Use Act Decree 1978

The Land Use Act was instrumental to the activities of property developers which saw a tremendous turnaround in the early 90s. Planning and control of land space dated back into medieval period as customary norms and ways of life of the people. Nigeria has a form of control in Planning, allocation, usage and development of land historically based on nature, norm and customs of the people vis-a-vis Customary Law. In modern times Nigeria planning laws are tools of environmental designing, planning and development are partly English received laws and local legislation. The Land Use Act 1978 ­An Act to vest all land comprised in the territory of each state (except] land vested in the Federal Government or its agencies solely in the Governor of the State, who would hold such land in trust for the people and would henceforth be responsible for allocation of land in all Urban areas to individuals resident in the State and to Organisations for residential, agricultural, commercial and other purposes while similar powers with respect to non-urban areas are conferred on Local Governments. (29th March 1978).

Looking into the activities of property development agency in Nigeria will never be complete without a complete perusal of the Laws that grants the use of Land to them for developments.

Between Investment and Development Property

Developers are known to take advantage of the difference in tax treatment between "investment" and "development" property. When a property is held as an investment, most costs associated with the property are deductable when incurred unlike development property which is subject to capitalisation. In several economies, there is also a preferential tax rate of gains on the sale of investment property can be sold on an installment basis, allowing the gain to be recognized as the payments are collected.

Problems of Property Development Agency in Nigeria

(1)    Government Control

(2)    Land Policies

(3)    Compulsory Acquisition and Compensation of land

(4)    Title Document

1.3   THE STATEMENT OF THE RESEARCH PROBLEM

The following problems will be looked into and possible

reasons found to them.

(a)     Lack of adequate funds to carry out huge project that will be economically useful to the Government.

(b)    Laws that govern the use of land in Nigeria

(c)     Few numbers of expert in the field.

1.4    RESEARCH OBJECTIVE

Evaluate the economic impact of property developers' activities in Nigeria.

The problems of Property Development in Nigeria

Creating solution to Housing problems in Nigeria

1.5    RESEARCH QUESTIONS

What is the contribution of property development agency in providing affordable housing in Nigeria?

The Economic impact on the economy

What are prospect of property development in Nigeria?

1.6    RESEARCH HYPOTHESIS

Some assumptions will be made that will later put to test to, check for their validity or authenticity of the research hypothesis

The Hypothesis to be tested is

Ho:-           creation of property development bank is not vital in making funds available to property development agencies,

Hi:- creation of property development bank is vital' in making funds readily available to developers.

1.8     RESEARCH METHODOLOGY

In carrying out this study, necessary data will be collected from the following sources:

i.       Observation and online write ups.

ii.      Questionnaire

iii.     Secondary sources

iv.     Library texts which will include published and unpublished literature on becoming the biggest property development agency.

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