Problem And Prospects Of Conversion Of Residential Buildings To Commercial Uses (A Case Study Of Bode Thomas Street In Surulere Local Government Area, Lagos)

Project and Seminar Material for Estate Management

Problem And Prospects Of Conversion Of Residential Buildings To Commercial Uses (A Case Study Of Bode Thomas Street In Surulere Local Government Area, Lagos)


There has been a gradual but steady change of land use pattern from residential to commercial use in Bode Thomas Street in Surulere Local Government Area of Lagos State in the recent time.

The aim of this study is to determine the likely cause of this change and what are the problem usually associated with this type of changes. Is it as a result of demand and supply vis-à-vis the present economic and investment climate in Nigeria today? The study will also examine the prospects and causes of changes in use of the property so as to be able to use this project to predict the future of the study in terms doing thorough analysis and field oriented results on property use and values.

Lastly, recommendation/conclusion will be preferred for the identified problems.

Table of Content

  • Title page
  • Certification
  • Dedication
  • Acknowledgement
  • Table of Content

Chapter One

1.0 Introduction

  • 1.1 Statement of Problem/Justification for the study
  • 1.2 Aim and Objectives
  • 1.3 Significance
  • 1.4 Scope of study
  • 1.5 Limitation of study
  • 1.6 Study Area (Historical Background)
  • 1.7 Definition of Terms

Chapter Two

2.0 Conceptual / Literature Reviews

  • 2.1 Concept of Property
  • 2.2 Factors Influencing Changes in the Land Use Pattern
  • 2.3 Factors Influencing changes in the Land Values
  • 2.4 Social Economic Implication of the Changes in use of the Properties.

Chapter Three

3.0 Research Methodology

  • 3.1 The Research Design
  • 3.2 Data, Types and Sources
  • 3.3 Instrumentation of Data Collection
  • 3.4 Sample frame, Sample size and Sampling procedure
  • 3.5 Method of Data Collection
  • 3.6 Method of Data Analysis

Chapter Four

4.0 Data Presentation and Analysis

  • 4.1 Nature of the use conversion
  • 4.2 Factor Influencing the Conversion of Residential Building to Commercial Building in the Study Area.
  • 4.3 Problems/Effect of Conversion of Residential Building to Commercial Building in the Study Area.

Chapter Five

5.0 Summary, Conclusion and Recommendation

  • 5.1 Summary
  • 5.2 Conclusion
  • 5.3 Recommendation
  • Bibliography
  • Appendixes

Chapter One

1.0 Introduction

Land resources are fixed in location and in supply. Virtually all human activities require land. From the large scale industrial complex the supra metro-line, the traditional market to the roadside Cobbler’s shop all require land in varying dimensions (Agboola, 2004). On the surface of the land, beneath it and hanging above it are all traces of human activities which go a long way to say that land is perhaps the single most important element in development and mankind’s most basic natural resources.

Because of the diverse needs of different human activities with respect to location and area coverage and the temporal dynamism of the location attributes and need of these human activities, there is often the intense competition for land. However, land is practically limited in supply and the awareness of land as an irreplaceable finite resource has made its care.

Development in mainly cities starts from the centre as the benefits of inner city location’s attract several land uses towards the city centre. This has significantly influenced land use on urban centres. There is a traumatic change in land use caused by several human activities competing for scarce land in urban centres. The person who is prepared to pay the highest sum for a site is likely to eventually occupy it. Such individual will be able to successful edge out other potential users. By this operation, sites in an urban area will tend to be used for that purpose for which the user makes the highest net gain from alternative uses of that site. This would result in the highest and best use for that land. This scenario has made changes in land use, as part of urban growth inevitable. Land and buildings will continue to witness conversion of use from a lower order to a higher one in order to attain optimal use. The concern of this project is to investigate the level of conversion of land use and their implications in Nigerian cities with a focus on Bode Thomas Street Surulere Local Government, Lagos (Agboola 2004).

1.1 Statement of Problem

The land use changes coupled with higher demand for commercial uses led to the continuous increase in rent in the study area. The returns realized from the properties used for commercial purpose is greater than that of properties used for residential purpose. Due to this greater returns most residential property owners prefer their property to be used for commercial.

Another is indiscriminate dumping of refuse along roads (thus causing road encroachment) and also on storm drainage systems and designated open space causing blockage, air and water pollution.

1.2 Aim and Objectives

The aim of this project is to examine the problem and prospects of conversion of residential building to commercial building taking Bode Thomas Street in Surulere local government area of Lagos state as a case study.
In order to achieve the set goals of this study or project, few steps of objectives will be undertaking: –

  1. To identify the residential properties converted to commercial properties in the study area.
  2. To examine the values of residential and commercial properties for the past 10 years.
  3. To know the problems and prospects of conversion of residential buildings to commercial uses.
  4. To study the trend in rental values in the study area.

1.3 Significance of the Study

  1. To examine the root cause of the social and economic problems associated with the conversion of residential building to commercial buildings in the study area and recommended lasting solutions applicable.
  2. To highlights the benefit and advantages derived by the owner of the residential building being converted to commercial use.
  3. To analyzed and preserved the data collected from the survey for future prediction in the use pattern and value of properties in the study area.

1.4 Scope of the Study

The scope of this study covers the conversion of residential buildings to commercial uses in Bode Thomas Street Surulere local government area, Lagos State.

The research study is restricted only to the problems and prospects of conversion of residential building to commercial building with particular reference of Bode Thomas Street in Surulere Lagos. The time period considered here is between 2003 – 2013 and the type of properties are mainly detached houses.

1.5 Limitation of Study

This study is limited to conversion of residential building to commercial uses.

Collecting information regarding transaction in property and land use conversion in the study area is a difficult tack. In few instances where information on property transactions were available, proper recording classification and analysis were not always provided. There was also reluctance by most people to give away needed information on flats and duplexes and this detached house.

1.6 The Study Area

Surulere Local Government is located in the western part of Lagos State. The area lies on latitude 60 33’ North of the equator and longitude 30 25’ East of the Greenwich Meridian. It is 8km from central Lagos and has an area of about 27sq Kilometers. The area is bounded in the north by Mushin Local Government on the west/south by Ojo Local Government and on the east by the Mainland Local Government.

The inhabitant of the area are multi-ethic, Yoruba, Igbo’s and Hausa. They also have diverse cultures. The area is well manned with modern industrial estates at Ipronri Iganmu and Coker areas.

Surulere Local Government Area was created on the 27th August 1991, from the defunct Mainland Local Government. The 2006 population census results as declared by the National Population Commission, put Surulere Local Government present population figures at five hundred and three thousand, nine hundred and seventy-five (503,975). Agriculture is still given a place among the services provided by the local government a vegetable farm which is the envy of many exists in Tejuosho area very close to the model market. Today, Surulere Local Government stands out as one of the major commercial nerve centres of Lagos State.

The first residential property to be converted to commercial use in the study area cause a lot of problems. The landlord’s association in the neighbourhood took the person that converted the property to court for constituting a nuisance to the neighbourhood and illegal conversion of the plot that was earmarked for residential use. But the landlords association lost the case.

The victory of the case coupled with other factors such as increased rent and facelift/modernization of the building among others are some of the reasons that encouraged others are some of the reasons that encouraged other landlords to allow for change in use of the property. The New Town Development Authority made several abortive efforts to stop this change in use, but were not allow to perform their duty effectively because to vested interest that the big wigs in the society and top military officials of the New Town Development Authority from performing their job effectively.

It is most surprising that while the Town Planning Authority recognized the study area as residential in their master plan and faced with the commercial use conversion problem, the local government was busy collecting the tenement rates on these converted properties which in law can be regarded as acquiescence since the local government is a body of the Nigerian government.

Initially, there was not much change in the use of properties from residential uses to commercial uses but the rampant change in use of residential houses in the study area started in 1986 when the Structural Adjustment Programme (SAP) was introduced. The policy encourage the establishment of new generation banks, finance house and bureau de-change, all of which required to be located close to Central Business District (CBD) and thereby made the exchange in use of properties in the study area inevitable. The location of the banking operation inevitable. The location of the banking operation and bureau – de- change attracted much other complimentary business which made the area more commercial. The zeal to locate in the study area by most business gave room for competition and result in increasing rents and land values mostly during the days of the banking boom Nigerian.

1.7 Definition of Terms

i. Residential Property

This is a properties that provides permanent housing for individuals, families and household. It is basically used for accommodation. It include cottages, tenements blocks of flats, bungalow, duplexes and mansions (Lawal 1997).

ii. Commercial Property

This is a property that is for commercial purpose. A commercial understanding is one conducted with a view to then realization of profits, not merely for the fun of it. (Okunola et al, 2004)

iii. Rental Value

The rental value of a property is the annual rent with may reasonably be expected to be obtained in the open market. For example, if the tenant undertook to pay rent for a particular property, it is known as rack rental value (Deane et al 1982).

iv. Value

This means the worth of something in terms of money or other goods for which it can be exchanged. It is also the power a commodity has to command other commodity in exchange for itself.

v. Property

In a wide legal sense, property means anything that is the subject matter of ownership (Olajide S. and Ismail B. 2003)

vi. Rent

A periodical payment, usually in money, although it may be in kind or services made by a tenant to a landlord for the use of land, house etc.

vii. Industrial Properties

In this category area every class of properties primarily used for the production of goods e.g. factories and warehouses, location in relation to transport system, availability of labour, market and raw materials are important factors (Ojo S.A 1991).

viii. Recreational Properties

These include amusement part, relaxation and open space, tourist centre, hostel, game, reserve, club and museum etc (Rushmore , S. 1978).

Chapter Five

5.0 Summary, Conclusion and Recommendation

5.1 Summary

The main objective of the research is the problem and prospect of conversion of residential properties to commercial properties. From my research there is no specific area in Bode Thomas Street that is used for a particular purpose without being mixed with different use. Due to high demand for commercial properties (i.e. shops and offices) most residential building have been converted to commercial uses thereby causing shortage of residential buildings.

The reason above have contributed immediately to the high rental and capital value of the properties in the study area, though some of the properties are old when converted or built their value increased.

Also, a knowledge of how land uses affect land values is a very important assets in the planning, developing and developments of all projects. Land use, in its widest dimension mean the nature of activities carried out on land while land value is the work of a particular land for the purpose it is intended to serve. The study area was originally earmarked for residential uses but within the past few years, they are gradually changing to commercial.

Therefore it can be summarized as follows:-

  1. The changes in land use of the study area especially in the recent past.
  2. The increase in rental and capital values of properties in the study area.
  3. The social implication of conge in use.
  4. The factors influencing the change in use.
  5. What does the future hold for the study area in terms of land use and values.

5.2 Conclusion

It is paramount important that a research work of this nature should not only unfold findings but conclusion so that this can give guide to other people that may study the area in future. The significance of this can not be over looked since it will of assistance to land speculator and developers in making investment decision.

No doubt, the principle of changes is fundamental in land value appraisals. Since the principle holds that nothing is static, land uses and values in Bode Thomas Street in Surulere should not be an exception. Uses and value changes sometimes slowly, sometime rapidly as is the case in the study area. All these changes depends on the extent and direction of movement of the forces acting together to bring about such changes.

As earlier discussed, changed from residential to commercial uses in the study area had seen continous increase in value during the period under review at-least as a result of forces acting together to bring such change discussed earlier.

Since there was apparently, no regulation body to check the issue of the landlord that changes the use of residential property who aion is to secure higher returns.

Based on the fact the occurrence might seem not to stop but due to what has been recommended in this research, if adequately assessed and used, the occurrence should cases.

5.3 Recommendation

Since any investment today is absolutely made in view of future benefits, prediction of future land uses and property value trend have become indispensable to investors in arriving at their investment decisions with regards to these facts, the pertinent questions then is what does the future hold? In attainting recommendation into the future of land uses and value of the past and present in order to state the appropriate recommendation.

Since the future is uncertain, it will be wise to note that it is the land use and value determinant discussed earlier that serves as guide in making this recommendation.

The following recommendations are hereby suggested.

  1. The New Town Development Authority should try as much as they could to stop this increasing conversion to commercial uses so as not to allow the remaining residential properties to give way for commercial in the future.
  2. The legislative aim of Surulere Local Government should pass into law the punishment to be incurred by any landlord found wanting in the act of giving their properties away for commercial uses.
  3. The activities of Estate Agents or any other there into called “agents” must be checked by the government.
  4. The government should build many shopping complex for the masse to transact their business without going to any neighbouring street.
  5. There should be presence of rent control edict on various types of property especially commercial properties, to avoid the change in the use of residential properties.
  6. The landlords should also be considerate with the tenant and to be satisfied with what ever rent he get from his residential properties.

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