Professional Documents
Culture Documents
TARIMO, REGANI
ARDHI UNIVERSITY
SCHOOL OF EARTH SCIENCE, REAL ESTATE, BUSINESS AND
INFORMATICS (SERBI)
DEPARTMENT OF LAND MANAGEMENT AND VALUATION
P.O BOX 35176
DAR ES SALAAM JULY, 2019
THE IMPLICATIONS OF RESIDENTIAL PROPERTY
TRANSACTIONS IN INFORMAL SETTLEMENTS
TARIMO, REGANI
This dissertation is dedicated to my beloved father Mr. Revocatus Tarimo for giving
me a reason to make it this far. To you I dedicate this piece of work.
i
DECLARATION
I, TARIMO REGANI, hereby declare that the contents of this dissertation are the
results of my own study and findings and, to the best of my knowledge, they have
never been presented elsewhere for a Diploma, Degree or any Professional award in
any institution of Higher Learning.
……………………………………
TARIMO REGANI
Department of Land Management and Valuation
School of Earth Science, Real Estate, Business and Informatics
Ardhi University
Dar es Salaam
SUPERVISOR’S DECLARATION
……………………………… …………………………………….
ii
ACKNOWLEDGEMENT
I wish to thank all people who have supported me to undertake this study. My
sincere gratitude goes to my supervisor, Ms. Muna Jalia for her support and
enriching advice since I commenced my dissertation.
I also wish to thank my lecturer and mentor Dr. Alananga Sanga Samwel for the
enriching advice and support has tirelessly given me.
Many thanks to all my classmates pursuing this degree programme that I have
exchanged knowledge and experience up to date, especially Daudi Levira, Delfina
Msofe and Innocent Mchome.
My thanks, also goes to all the responding households, local authorities, and local
Dalalis, Government Officials, and other technical persons who sacrificed their time
for the interviews and administered questionnaires.
iii
ABSTRACT
Formal accessibility to housing unit has remained the biggest challenge in urban
areas by the urban poor and even the rich. Consequently, informal mechanisms of
accessing residential properties (housing units) have emerged. This has resulted into
the emergence of informal housing, thus informal settlements in many urban areas.
In nutshell, the study found that informal settlement as the key or main variable has a
negative relationship with residential property price. In addition, there is a need to
open more access roads in the settlements, to ensure strict building inspections
during the development process as well as to promote massive sensitization on the
significance of urban planning so as to increase formality of settlements in an area.
Thus, with reduction of informal settlements then the settlements of an area will have
positive relationship with residential property price.
iv
TABLE OF CONTENTS
DEDICATION .............................................................................................................. i
DECLARATION ......................................................................................................... ii
ABSTRACT ................................................................................................................ iv
v
CHAPTER THREE.................................................................................................... 18
REFERENCES........................................................................................................... 61
APPENDICES ........................................................................................................... 67
vi
LIST OF TABLES
Table 2.1 The Determinants of the Rental Value on Residential Properties ............. 14
Table 4.5 Descriptive Statistics for Dependent Variable and Independent Variables 42
Table 4.7: Multiple R, R Square, Adjusted R Square and the Standard Error ........... 45
vii
LIST OF FIGURES
Figure 4.1: Normality of the Multiple Linear Regression Model Result ................... 47
viii
LIST OF PLATES
ix
LIST OF ABBREVIATIONS
UN United Nations
x
LIST OF APPENDICES
xi
CHAPTER ONE
RESEARCH PROBLEM
In Africa around 60 percent of the urban labor force relies on the informal economy.
Further research provides that, this proportional is increasing over time (UN-
HABITAT, 2009). Housing is the main manifestation of informality in developing
countries. Informal housing is being the host to low-income and middle-income
citizens who no longer have access to affordable serviced land and formal housing
(Blanco, 2009). The situation is further worse as there are often mismatches between
what is constructed and what the people need. These and other factors add up to
make 62 percent of urban population of Sub Sahara Africa who live in slums (UN-
HABITAT, 2009).
Tanzania is one of the countries in Sub Sahara Africa within which the highest
population of its urban population lives in informal settlements. The proportion
range from 50 to 80 percent and the informal housing shares more than 50 percent of
the urban housing stock (Kyessi, 2008). Informal settlements have increased from 40
in 1985 to over 150 in 2003, while informality tripled, population doubled in the
specified time span (Lindner & Hill, 2010).
1
The evolving organic urban forms and their associated land use structure of cities in
Tanzania do not comply with normative urban land development concepts and
standards. Those irregularly evolved urban forms houses a number of problems, for
instance; inefficient land use distribution, development pattern and health threats as
density of settlements increase over landscape (Kombe, 2005). However, Land is an
important input for housing, and access to land and housing ownership cannot be
separated. In fact, in many cities of developing countries, the low-income market for
owner-occupied housing is predominantly a land market (Ojetunde, 2012).
According to the study of Alonso (1964) which determine the price of residential
properties and the distance from the Central Business District (CBD), in such a way
that there is positive relationship with expectation that residential properties which
located near CBD tend to have higher price but this is different for informal
dwellings located closer to CBD. Thus, this study has been carried out to explore the
impact of informal settlements on residential property price.
About 70 Percentage of Dar es Salaam settlements are informal (Kyessi, 2008), such
that the price of both acquiring and possess residential properties differ from formal
settlements to that of informal settlements. This means that, the price of residential
property located in informal settlements tend to be lower than the price of residential
property located in formal settlements while most of informal settlements located
near the Central Business District (CBD) such as Mchikichini, Tandale, Keko,
Kigogo Mburahati, Mabibo, Manzese and Mwanamanyala “ibid”.
2
However, according to Bid Rent Theory which determine price of residential
properties in accordance with the distance from the CBD state that residential
properties which located near CBD has the higher price and price tend to decrease at
decreasing rate outward from the CBD, but the informal properties tends to fetch
lower price even if they located closer to CBD. Therefore, the aim of this study is to
explore the impacts informal settlements on residential property price, the case of
Mwananyamala in Kinondoni Municipality, Dar es Salaam, Tanzania.
3
1.5 Scope of the Study
This study looks into the impact of informal settlements on the residential property
price, the case of Mwananyamala, Kinondoni Municipality. This study went further
into establishing the causes of these informal settlements particularly at
Mwananyamala Ward, the basic characteristics of those informal settlements as well
as the general recommendations on the relationship arising between informal
settlements and residential price as a focus.
Thus, this study will significantly act as a guide to policy makers, legislators and
implementers in formulating all the necessary legal frameworks regarding real estate.
It also adds more on the existing knowledge for reference purposes on the impact of
informal settlements on the residential property price. The study is also a useful
source of information for the public in real estate and even academicians namely
students and other researchers.
4
1.8 Theories and Basic Concepts
Informal Settlements
According to Fakade (2000), informal settlements are known by different names
across the globe such as Shanty towns (English-speaking Africa), Bidonville
(French-speaking Africa), Favela (Brazil), Barridas (Peru), Kampung (Indonesia),
Kachi Abadis (Pakistan) and the like. However, the common names by which
informal settlements uses to be described includes; slums, low-income settlements,
semi-permanent settlements, shanty towns, spontaneous settlements, unauthorised
settlements, unplanned settlements or uncontrolled settlements (Marutlulle, 2017).
Informal settlements also defined as a housing units which are illegally developed on
a given piece of land with a rudimentary shelters as developed outside the formal
planning system, where access to land is facilitated by the operation of the customary
or quasi-customary land markets and where land development largely proceeds in
pursuit of property owners’ interests because development control is rarely exercised
by planning authorities (Kombe & Kreibich, 2000).
These settlements are usually viewed in the context of housing units which do not
conform to the laws and regulatory frameworks set up by the city authority in which
they exists. According to Vienna Declaration (2004), over decades informal housing
has been termed to be of informality in occupation and non-compliance with land-
use plans as a main characteristics. Other features emphasized by Abebe (2011)
includes unregulated competitive land market, inadequate access of basic public
services and informal land allocation according to need as well as featured by
unhealthy living conditions and hazardous locations (Payne & Majale, 2004).
Residential Property
5
According to Brueggeman & Fisher (2005) residential properties are properties that
serve as housing or a dwelling and encompass single-family, duplexes and other
multi-family homes. They include flats, condominiums, bungalows and
massionattes. These properties may be located in urban areas like Mwananyamala
and sub-urban areas like Gongo la Mboto.
The price of residential property is measured in terms of “rent” and selling price
which determined by the nature housing tenures such that there are two main tenure
categories namely home ownership and rental housing (Hoekstra & Vakili-Zad,
2011). The main difference between the two tenure categories lies in the right of
disposal, such that the home-owners are always have a legal right of disposal
regardless of practical or administrative restrictions, while tenants do not. In
nutshell, the home-owners possess de facto right namely the legal right to occupy,
use, let or to dispose their dwelling (Ruivo, 2010).
Rent
Normally, the residential properties are priced differently because every piece of
property is unique such that it is often difficult to identify the appropriate variables
that will explain the rental prices (Ruivo, 2010). According to Kim & Nelson (1996),
the assessing of rental value of residential properties is a complicated and
challenging process which normally involves analysing the rental property,
neighborhood characteristics as well as market conditions. However, Mckenzie &
Betts (2006) described these attributes as physical features such as space, age,
condition and apartments.
6
1.8.2 Theories
7
1.9 Summary of the Report
This research is structured into various chapters, where by this chapter introduced
the reader to the background of the study, statement of the problem, introducing the
purpose of undertaking a study and gives out clear explanation on the main aim and
regards of the study in general by stating the objectives of the study, research
question, research hypothesis as well as scope of the study, rationales of justification
for the study (significances of the study) and the ethical considerations of the study.
The third chapter, the study provides about the research methodology used, sampling
technique used, sample size distribution, data collection methods including the use of
questionnaires and interviews, data analysis and presentation as well as means of
statistical tests used.
In the fourth chapter, the study provides for analysis of data collected from the field
and discussion of findings and their implications.
Finally, in the fifth chapter, the study provides briefly the summary of findings,
general conclusion and recommendation of the study.
8
CHAPTER TWO
LITERATURE REVIEW, LEGAL AND CONCEPTUAL
FRAMEWORK
2.0 Introduction
This chapter reviews the literature and provides an understanding on the concepts of
informal settlements, the residential property as well as the residential prices on the
case the implications of residential property transactions in informal settlement, the
case of Mwananyamala in Kinondoni Municipality, Dar es Salaam. It is generally
intended to guide the researcher in exploring the available literatures so as to identify
gaps to be filled by the study.
2.1 Theories
Thus, to verify this theory, the property and environmental attributes has to be
reviewed as ones which results into the rent of land or property to change with
9
respect to distance of the property from CBD. Garrod & Willis (1992) provides that
each housing unit in informal settlements represents a unique combination of
characteristics, and then the rent for potential tenant depends on the following
attributes:
Now, suppose the tenant has to pay a certain rent amount depends on the
combination of property attributes and environmental attributes with respect to
distance from CBD. This can be clearly stated as follow;
Where;
Property attributes (PA) includes Number of Rooms (NR), Age of Property (AP),
Room Size (RS), Property Condition (PC), Verandah (V)
Environmental attributes (EA) includes Major and Minor accessing road (MNAR),
Location (L)
Hence;
10
Consider the illustration below;
Rent
Y2 I2
Y1 I1
X1 X2 PA, EA
From Figure 2.1 above, the X1 to X2 implies the increasing in goodness of a property
and environmental attributes for housing unit to increasing in its rental value form Y1
to Y2 respectively. Whereas, the actual amount a tenant has to pay is where the X1
intercept Y1 at I1 as well as at I2 where X2 meet Y2.
rent as well as the mode of transport has to be one. Also, he added that the
transportation costs were assumed to be equal per unit distance travelled in all
directions (Fujita, 2012). Von Thunen emphasize that, as distance to the market
increases; production costs remain constant while transport costs increases and
locational rent decreases since transport cost and locational rent are inversely related
11
In connection to this study, rent can be considered as a function of transport cost and
locational factor with respect to distance from market place. Consider the illustration
below;
Rent
R3
R2
R1
M D1 D2 D3 Distance form M
From Figure 2.2 above, M is a Market Place, Where property located at D1 has to
pay rent of R3 (high rent) since located closer to M. And property located at D3 has
to pay rent of R1 (low rent) since located relative far from M.
12
Environmental Attributes, some environmental characteristics, including views from
property, pollution, noise levels and storm water have a stake on rental values
(Oloke, et al., 2013). Also, hazardous wastes are affects property prices due to the
dis-amenities resulting from the wastes (Amenyah & Fletcher, 2013).
Level of demand for rental housing, due to high levels of demand for rental housing,
landlords tend to meet the demand with supply of rental housing, but by increasing
rents (Amenyah & Fletcher, 2013). In general, the sensitive change in demographic
and households’ characteristics namely income, age and marital status led to change
in rent such that the increase in household size by one more member led to increases
in rent (Alananga, 2017).
Economic factors, this includes incomes, employment rates and interest rates
gradually influence rental values, Tupenaite, et al (2017) provide that the interest
rates had a positive impacts on housing affordability, while unemployment rate and
inflation rates play a part in affecting housing prices effectively.
Security, where tenant guaranteed with safety before reaching a lease agreement,
then the security in terms of living conditions is mostly guaranteed hence rental price
increases compared to residential housing unit where there is presence of crime
(Xavier, 2008).
13
Table 2.1 The Determinants of the Rental Value on Residential Properties
Land speculation, due to this phenomenon, the land market is not functioning
efficiently and effectively because informal settlements cause land speculation
namely some plots are horded or just fail to sell when offered (Nnkya, 1998). This
situation limited the supply of titled land on the formal land market because of the
unattractive settlements (Wamani, 2010).
Environmental challenges, with the huge influx of people into the urban areas
searching for affordable dwelling unit (Haroon & Michihiro, 2016). However, most
dwellers are of low income group of people uses to dwell created several
environmental problems like pollution and erosion leading to decreasing in housing
rental value for property market to work efficiently (Muhammad, et al., 2015).
14
Socio-cultural challenges, the housing policies and programs failed to meet the
desired objective in terms of socio-cultural aspect of sustainability due to
inaccessible of some informal settlements as a result socio-cultural lifestyle of the
low income group excluded from accessing some infrastructures and services (Payne
& Majale, 2004).
Inadequate accessibility, most dwelling units are not easy to access them and others
accessed only by footpaths as their only accesses. This means that the majority of the
dwellings are fail to exchange on the formal land market and end up being rented at
relatively cheaper price than titled settlements (Wamani, 2010).
In Tanzania, rents and capital values have traditionally been extremely high,
significantly greater than either Nairobi or Kampala and other East African capital
cities (Kongela, 2013). In addition, rent in Tanzania can be freely negotiated and are
normally paid either bi-annually or annually (Namangaya, 2012). It’s very rarely for
one to be charged on a monthly basis although the government is now seeking to full
implementation of annual house rent outright (James, 2018). However, it has to be
noted that more than 80 percent of residents in urban areas are tenants (Sheuya,
2010). The following are the determinants of rents in Tanzania; -
Physical attributes of a house, this has to be noted that the amount of tenant to
consume a housing related services can be priced differently to arrive at an opinion
rent of housing unit (Hernandez & Garcia, 2008).
Level of demand for rental housing, the sensitive change in demographic and
households’ characteristics namely income, age and marital status led to change in
rent such that the increase in household size by one more member led to increases in
rent due to the increase in demand (Alananga, 2017).
Power relations between landlords and tenants, with this relation in Tanzania uses to
influence the amount of rent paid by a tenant to a landlord since this relation improve
the sense of relativeness between the tenant and landlord especially when a tenant
has a long duration of occupancy in a reported housing unit (Komu, 2013).
According to a study by Smit (1991), at least 50 percent of the total urban population
lives in informal settlements. Dar es Salaam, Mwanza, Mbeya and Arusha have at
least 70 percent of the urban residents living in the informal settlements. Informal
settlements growth in Tanzania is primarily associated with inadequate and
sometimes unaffordable rental housing, unlawful planning and land administration
practices particularly related to expansion of town boundaries, unfair compensation
paid to property owners in the cases of displacement and declining capacity of the
urban local authorities to provide adequate serviced residential plots (Wamani,
2010).
This chapter has covered literature review, conceptual framework and theoretical
concept related to this study. The literature review discusses various past works that
give insight about the study, also provided the highlight on the variables discussed in
chapter three and four, includes residential price, informal settlements, number of
bedrooms, age of property, open space, property condition, water services and
availability of electricity.
17
CHAPTER THREE
RESEARCH METHODOLOGY
3.0 Introduction
This chapter gives out how the research was conducted. It provides the required
information to accomplish the study, the approaches and methods of data collection
used. Where the data obtained from the unit of analysis were analysed and presented
accordingly. It further provides for tools used in data collection, validity, reliability
and ethical consideration under the study.
The independent variables predict the outcome of the dependent variable. This
means that, informal settlement explains the outcome of residential property price.
The outcome that was to be predicted was either there is positive or negative
relationship between informal settlement and the residential property price. The
basic idea is to predict the extent at which informality quantitatively contributes to
property price. However, all variables were measured, so that numbered data be
analysed using statistical procedures, and for this study, IBM SPSS statistical tool
was used.
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3.1.2 Research Method
The types of inquiry that provide a specific direction for the procedures for handling
a research which can be qualitative, quantitative or mixed research design (Creswell
& Clark, 2014). Thus, the survey method was used to gather information that was
used to account for the relationship between informal settlement and residential
property price in Mwananyamala, Kinondoni Municipality. Data was gathered from
a sample of residents in study area which was conducted at Mwananyamala ward,
whereby all sub-wards including Minazini and Kisiwani were administered with
questionnaires so as to ensure the sample used represent the entire ward.
However, Fowler (2013) provides that, the idea of using survey method helps as it
provides a quantitative or numeric description of trends, attitudes, or opinions of the
population by studying a sample of that population. Also, he adds that survey
method involved the investigation of the households’ perception/opinion regarding
the key objectives that are intended to provide the relationship that exist between
residential property price and informal settlements.
Among the disadvantage of using this method is a danger to collect and analyse mere
ideas. Then, the three sub wards of Mwananyamala namely, Minazini, Kisiwani and
Kwa Kopa were surveyed, and distributed with questionnaires as attached in
appendix III to a respondents and then researcher was pointed to other respondents
suitable for the study at each sub ward with respect to researcher’s judgement. This
was easy done due to permission granted as per Appendix II. Also, the use of
interview to ask questions local leaders, local dalalis and Government officials with
the use of interview guides as attached in appendix IV as well as per request on
getting permission to carry out research granted referring Appendix I and II.
Generally, due to time frame, the survey was conducted and questionnaires (See
Appendix III) were distributed and collected within two weeks. For that case, follow-
ups were highly conducted so as to ensure reasonable responsive rate. Seventy
questionnaires were distributed in all sub-wards at Mwananyamala ward, whereby
twelve of them were partially filled and some were completely not returned.
19
3.2 Selection of the Study Area
3.3.1 Sampling
In this study, the total population of Mwananyamala only was 50560 households
which were too large to study directly and to get the sample size, sample size
calculator was used. Whereby, fifty four questionnaires were administered to
respondents. The three sub wards of Mwananyamala namely, Minazini, Kisiwani
and Kwa Kopa were surveyed, and questionnaires were distributed to a respondent
as researcher was then pointed to other respondents suitable for the study at each sub
ward with respect to researcher’s judgement. Consider the Table 3.1 which shows
sample size distribution of three sub wards of Mwananyamala.
Whereby;
20
e = error limit of tolerance (confidence interval) which is assured to be 12% (0.12)
n = 50560/(1 + 50560(0.12x0.12))
n = 50560⁄729.064
n = 69.3491929
n = 70
Therefore, the expected population of the study area is 50560 and the sample size is
70 as distributed on the Table 3.1.
21
Questionnaires
These were prepared for local communities (households namely property owners and
tenants) in the sampled ward of Mwananyamala for the aim of getting get a right
information direct from about seventy respondents for about a whole week from May
20th to 24th, 2019. As attached in Appendix III, these helped to provide data for
establishing the existing relationship between informal settlement and residential
property price.
Interviews
Interview guides were prepared for the reason of interviewing four local leaders, four
Government officials and eight local dalalis as can be seen in Appendix IV, for about
three consecutive days namely from May 15th to 17th, 2019. They also provided an
insight into the emergence of the informal settlements and the data about the number
of residences in Mwananyamala ward households.
Direct observations
Primary data was obtained by undertaking a preliminary field study of
Mwananyamala ward recording what is of interest and significant to the study on
May 15th, 30th and 31st, 2019. Whereby, through direct observations helped in
achieving one of objective of the study, which is, “to establish the basic
characteristics of informal settlements at Mwananyamala”. The Table 3.2
summarizes the basic characteristics of informal settlements at Mwananyamala ward
as observed direct from the field.
22
3.4.2 Secondary Data
This is a type of data which have already been collected and analysed including both
raw and published materials. The reason for using this type of data is to see how
different authors looked at the issue, what research methodology they have used and
what were their findings concerning the topic (Singh, 2006). For the purposes of this
study, published works, websites, journal articles and research papers were used as
secondary data sources as can be seen in page 59.
Reliability
Under this study, a researcher used questionnaires in order to ensure that the desired
level of consistency is highly attained through asking the same questions to all
respondents to draw out their understanding on the impact of informal settlement to
the residential property price, see Appendix III.
Objectivity
A researcher guaranteed maximum neutrality in asking different questions to the
respondents so as to ensure objectivity of the instruments used in data collection and
data collected to be relevant and applicable to the study, see Appendix III and IV.
23
3.7 Ethical Consideration
In this study, the research ethics were taken into account where the respondents
informed about what was the purpose of the study by the researcher as attached in
Appendix I. Also, ensuring of no harm happen to respondents due to their
responsiveness before and after the study, the information and all details provided
were confidential and their name and particulars were not exposed to anyone except
for the researcher of this study as can be seen in Appendix III.
24
The multivariate regression model was as follows; -
Where;
X1, X2, X3, X4, X5, X6, X7, X8, X9, X10, X11, X12, X13, X14, X15, X16, X17 and X18 are
predictors of independent variables
β1, β2, β3, β4, β5, β6, β7, β8, β9, β10, β11, β12, β13, β14, β15, β16, β17 and β18 are regression
coefficients. From Table 4.6, this is B.
It means;
The regression coefficients are values of each independent variable. They indicate
how much value changed for a unit change in each characteristic, where other
characteristics are constant. And, the error term (ε) indicates the difference between
the observed value and the predicted value of the depended variable.
25
Table 3.3: Abbreviation of a Variables
Variable Abbreviation Description
Dependent variable
Residential price RP Monthly rent estimated in TSh.
Independent variables
Physical attributes of the building:
Age of property AP Number (Years)
Number of rooms NR Number of bedrooms in the building
Washrooms WR Dummy (1=if Available, 0=Otherwise)
Study room SR Dummy (1=if Available, 0=Otherwise)
Locational, Amenities and other factors:
Nearest amenities NA Number (How far are they, 1=far, 5= Very close)
Informal settlements IS Dummy (1=if Available, 0=Otherwise)
Location in term of proximity to open space
Open space OS
(1=far, 5=Very close)
Water service WS Dummy (1=if Available, 0=Otherwise)
Population P Number (Size of people in a locality)
AGE48TO57 AG AgeCat (at 4th Category)
Informal settlement effect ISE Dummy (1=if Available, 0=Otherwise)
Sport ground SG Number (from 1 to 5, 1=far, 5=Very close)
Retail traders RT Number (from 1 to 5, 1=far, 5=Very close)
Main road MR Number (from 1 to 5, 1=far, 5=Very close)
Garden G Dummy (1=if Available, 0=Otherwise)
Culture influence from neighbourhoods
Social culture SC
(Dummy, 1=Yes, 0=No)
rent40001to50000 R Monthly earning in TSh
Schools S Number (from 1 to 5, 1=far, 5=Very close)
ANOVA
This was applied in data analysis of this study for the purpose of testing for goodness
statistical model to fit the data that was applied in describing on how well it fits a set
of observations (Brooks & Tsolacos, 2010). Measures of goodness of fit typically
used to summarize the discrepancy between observed values and the values expected
under the model in question.
R Square (R2)
This is a statistical measure of how close the data are in the fitted regression line of
the model and according to Karakazova, (2005) it is a standardized measure of the
goodness of fit for a regression model. It is also known as the coefficient of
determination, it expresses the percentage of how the model expresses the situation,
and the value stands between 0% to 100% which shows level at which the change in
the dependent variable is explained by the independent variables.
Under this study the measure was used to determine the goodness of the model. The
formula of R² was provided by Loretan, et al. (2007)as shown below;
27
Adjusted R2
This was used for the purpose of penalizing for any non-important variable
increment that included in the model. This was important due to the fact that R2 tend
to increase with increasing the number of variables in the model regardless of
whether the added variable is of important or not important, therefore it was a great
need for running the adjusted one so that all increment can be penalized as the R 2
increase only if the new variable added improves the model more than would be
expected by chance (Amenyah & Fletcher, 2013). (Bhalla, 2019), provides its
formula as follows;
(1−R2)(N−1)
Adj. R2 = 1- [4]
N−p−1
Where;
R2 = Sample R Square
N = Total sample size
p = Number of predictors
P Value
The P-value stands for predictive value, this uses to predict the implication of a
variable (Karakazova, 2005). It is a measure used to determine the significance or
insignificance of a variable, and it always ranges from 0 to 1. The significant
variables range below 0.05 (<5%) also known as the alpha value, while the
insignificance variables are greater than 0.05 (>5%), therefore, the lesser the P-value
the better the predictor.
T Statistic
T-statistic measure was used to test the significance of the independent variables to
the dependent variable. According to Kadulupi (2013), the t statistic is equal to the
coefficient estimates divided by their respective standard errors. In theory, the t-
statistic of any one variable may be used to test the hypothesis that the true value of
the coefficient is zero which is to say, the variable should not be included in the
model.
28
(X−U)
This is given as; t= [5]
S⁄√N
Where;
t = T value
X = Sample mean
U = Pop mean
S = Sample standard deviation
N = Sample size
F Statistic
The F statistic also called F-ratio was used in this study to provide a test of the
significance of all the independent variables other than the constant term taken
together. According to Ekinci (2006), the F statistic is used to decide whether the
model as a whole has statistically significant predictive capability, by testing the
hypothesis that the ratio of a pair of mean squares is at least unity. In this study, it
was used to verify the significance of the regression and of the lack of fit. The F
statistic is calculated using the ratio the mean square regression to the mean square
residual (Ekinci, 2006). This is given as follows;
(SSE1−SSE2)
F= [6]
M
Where;
F = F value
SSE = Residual sum of squares
M = Number of restrictions
Multicolinearity
The highly inter-correlated or an inter-associated among the independent variables
used in this model and to observe whether the model had the data which were with
multicolinearity behavior (Habshah, et al., 2013). The Variance Inflation Factor is
used for testing and detecting multicolinearity the results of the model so as to
measure the variance of the estimated regression coefficients inflation as compared
to the predictor variables. The observation from the table 4.9 indicated that the
variables were moderately correlated as the VIF are not less than one but not more
29
than five as for the required criteria for to be moderately correlated such that 1 < VIF
< 5 to be moderately correlated.
Heteroskedasticity
Scattering behavior of the regression model results is not systematically changed on
the spreading of residuals over the range measured values (Knaub, 2007). The error
term or non-constant variance probably was due to incorrectly specified of the model
that led important variables to be left out and the model omitted effects lead to error
term. The effect of the omitted variable varied throughout the observed range of data
and resulted into telltale signs of heteroskedasticity in the residual plots.
Normality
From any Regression, when observed that the data are not actual straightly arranged
however lie randomly along the actual straight line that shows the normality of the
model (Das, 2016). It known that for Normal Probability plot the data are normally
distributed and they set and form a straight line from scatter diagram.
This chapter has exhausted research methodology used in the study, particularly
research approach and strategy namely quantitative approach and survey method,
sampling technique used namely purposive sampling for selection of sub-wards,
sample size distribution, data collection methods including the use of questionnaires
and interviews as the instruments for data collection, analysis and presentation as
well as means of statistical tests used. The next chapter provides for analysis of data
collected from the field, discussion of findings and their implications.
30
CHAPTER FOUR
RESEARCH FINDINGS, ANALYSIS AND PRESENTATION
4.0 Introduction
This chapter presents research findings, analysis and presentation on the impact of
informal settlement on residential price in Mwananyamala Ward. This research was
guided by quantitative research design. The findings were based on the data and
information from the local leaders, local dalalis, Government officials and local
citizens. Moreover, the tools that helped to generate these findings included
questionnaires and interviews. This chapter will therefore address the key research
objectives in accordance to chapter one where the research findings and discussions
are accordingly presented.
The data show that fourteen respondents (17.1%) did not return the questionnaires.
When the researcher visited them to collect the questionnaires, he found four
respondents were not around, as well as six respondents were not accessed by a
researcher for interview.
31
4.2 Demographic Characteristics of the Respondents
32
4.2.4 Distribution of Respondents by Marital Status
The situation of marital status of the respondents was also captured. Having
knowledge about marital status for the respondents helps to add knowledge to
stakeholders of various kinds in making decision. The Table 4.2 shows that about
40% of respondents were married, 55% of respondents were single and 5% of
respondents were widow.
4.2.5 Distribution of Respondents by Monthly Rent
The monthly rent of respondents was also captured. Having a knowledge about
income of the respondents help to understand their rent category a tenants are mostly
like afford to pay for residential property as describe in the Table 4.2. The table
shows that about 36% of the respondents afford to pay monthly rent of 15,000TSh or
less, 33% afford to pay 15000-20000TSh, 21% of the respondents afford 20000-
30000TSh, 7% afford 30000-40000TSh and 3% afford to pay 40000 or above.
33
4.3 Geographical Location and Population of the Study Areas
A study comprises of the majority of the respondents from Minazini, Kwa Kopa and
Kisiwani streets at Mwananyamala Ward in Kinondoni District. The study area
covers an area of hectares and is accessible via Mwinjuma road.
34
4.4 Causes of Informal Settlements
In this section of the chapter, the study addresses objective one stated as; “to explore
the causes of informal settlements in Mwananyamala ward”. It focuses on those
factors responsible for the unplanned house development in the study area, these
include the following:
The study findings indicate that affordable prices of land in Mwananyamala attracted
most land owners, landowners argued that land was very affordable in the area at the
time of acquisition compared to other areas. In an in-depth interview with one of the
indigenous holders it was apparent that land values were quite affordable in her time;
Also, tenants’ respondents argued that they were attracted Mwananyamala ward
because they could afford the rent for houses in the locality compared to other areas.
From the data collected, a medium single room for low-income groups is in the
range of Ths.20,000 and Ths.50,000 per month. Therefore, affordable land prices
and house rent are perhaps one of the fundamental reasons for increased demand for
houses in the area which has resulted into rapid sprouting of informal settlements.
35
Table 4. 4 Reasons that Attracted Tenants to Settle in Mwananyamala Ward
Affordable rent 47 11 58 81 19
The legal procedure that regulates planning and development Urban Planning Act,
2007, the Land Act 1999 as amended but the research findings revealed that these
laws especially the Urban Planning Act were far behind the present trend of
developments in Mwananyamala and Dar es Salaam as a whole. The developments
in Dar es Salaam have been controlled by the Dar es Salaam master plan which was
expired. The division physical planner pointed out that the parish does not have an
updated detailed plan and the planning laws do not give mandate to the planning
authority on how to appropriately administer planning regulations on such land.
Besides the fines and penalties embedded in these regulations are so minimal that
land owners are not afraid to develop houses without plans and approvals. With these
obsolete planning laws that are not in conformity with the increased urbanization
creates many loopholes in the system resulting into informal house developments
hence informal settlements in Mwananyamala ward.
iii. Corruption
36
“we do not have approved building plans because this is hazardous
land for which we have no land Titles (that area prone for floods) yet
seeking plan approvals from authority requires one to be the true
land owner and with a land Title”.
However, the above implies that out of the 79% landowners without approved plans,
about 54% revealed that they had paid Authorities enforcement officers to carry on
with the construction although 46% just built and have never seen any interference
from the authorities as to why they built without plans. This means that a good
number of government enforcement officers are paid bribes leaving the area to be
developed with unplanned houses hence informal settlements.
Some landowners informed the researcher that they had constructed their houses
without approved plans because it was a very long and bureaucratic process yet there
is increased demand for houses in the area during an in-depth interview, one
landowner revealed that;
Many more respondents especially households confirmed the above argument. This
means that a bigger proportion ended up constructing houses that are informal and
thus the emergence of informal settlements in Mwananyamala ward.
v. Rapid Urbanization
The population of Dar es Salaam City is growing at annual average rate of 4.1%.
This growth is influenced by migration and not just the natural rate of increase. Over
70% of Dar es Salaam population lives in informal settlements (UN-HABITAT,
2015). The rate at which the city is developing is higher than the capacity many
unplanned developments are coming up with many of them taking place in
prohibited areas such as the wetlands in Mwananyamala. Rapid population growth
37
has had a big influence on housing conditions, where 54% of the population lives in
tenements, while 12% live in stores and garages. 65% rent their accommodation,
while 71% occupy rooms rather than freestanding houses (UN-HABITAT, 2007).
38
ii. Poor housing
By study observation, the researcher also discovered that the low-income urban poor
mainly occupied the area. The majority of the residents are mainly working in the
informal sector including: - providing casual labor in factories/industries, working
with private security organizations, pottery work, boda-boda and in a lot other
‘informal jobs’ consequently earning very low income. This means that the majority
cannot afford to construct well-planned permanent houses. This was confirmed in an
in-depth interview with some local leaders.
39
“Most people are very poor with very little incomes. They struggle
hard to purchase a plot and construct permanent houses in order to
be relieved of renting. This is what they can afford with their little
earnings”
The settlements are also characterized by lack of basic utility services such as safe
water and sewage systems, waste disposal facilities. Only 30% of the total household
respondents have both water and electricity connected to their properties. The
majority rely on water from neighbours.
A traverse of the entire area also revealed that the parish has no properly ‘defined’
garbage dumping areas. This has left a lot of waste and garbage dumped anyhow
including alongside access roads and in trenches such that wherever it is raining,
garbage is deposited in wetlands by storm water. This has left most trenches blocked
and thus continued to narrow the few available access roads and footpaths.
In addition, the sewerage disposal system in Mwananyamala is very poor. The fact
that the area is not served with a public sewer line leaves people to contemplate
private disposal means. Sewerage disposal is to the septic tanks and soak pits for
those households with permanent houses while semi- permanent houses mostly use
pit-latrines. Most temporary houses have no pit-latrines. This was even confirmed
during an in-depth interview with some local leaders.
“Most households in this zone do not have toilets for sanitation. Some
people use polythene bags their convenience and dump them in
drainage channel at night”
40
Plate 4. 3 Poor Disposal System Around Mwananyamala Neighbourhoods
41
Table 4.5 Descriptive Statistics for Dependent Variable and Independent Variables
S/N Abbr Descriptive Statistics
N Min Maxim Mean Std. Dev
Dependent Variable
1 RP Residential price 58 10000 70000 27758.62 13674.551
Independent Variables
1 IS Informal settlement 58 0 1 0.48 0.504
(0=No, 1=Yes)
2 NA Nearest amenities 58 1 5 2.66 1.052
(1=Far, 5=Very
close)
3 NR Number of rooms 58 1 3 1.62 0.712
(1=One bedroom,
3=Three bedrooms)
4 AP Age of property 58 1 5 2.03 1.154
(1=Very old,
5=New)
5 S Schools 58 1 5 1.98 1.084
(1=Far, 5=Very
close)
6 SR Study room 58 0 1 0.41 0.497
(0=No, 1=Yes)
7 WR Washrooms 58 0 1 0.57 0.500
(0=No, 1=Yes)
8 R Rent40001to50000 58 0 1 0.07 0.256
(0=No, 1=Yes)
9 WS Water services 58 0 1 0.50 0.504
(0=No, 1=Yes)
10 P Population 58 1 5 2.81 1.317
(1=Few, 5=Many)
11 OS Open space 58 1 5 2.53 1.091
(1=Far, 5=Very
close)
12 AG AGE48to57 58 0 1 0.10 0.307
(0=No, 1=Yes)
13 ISE Informal settlement 58 0 1 0.60 0.493
effect (0=No,
1=Yes)
14 SG Sport ground 58 1 5 2.48 0.941
(1=Far, 5=Very
close)
15 RT Retail trader (1=Far, 58 1 4 2.29 0.955
4=Close)
16 MR Main road (1=Far, 58 1 4 2.28 0.951
4=Close)
17 G Garden 58 0 1 0.98 0.131
(0=No, 1=Yes)
18 SC Social culture 58 0 1 0.34 0.479
(0=No, 1=Yes)
42
The Model
Through regression analysis, factors that were tested are both dependent and
independent variables. Dependent variable used is residential price while
independent variables are the factors which affect residential property price.
The Table 4.6 describes and summarizes statistically the dependent variable namely
residential price. The Independent variables were Informal Settlements (IS), Nearest
Amenities (NA), Number of Rooms (NR), Age of Properties (AP), Schools (S),
Study Room (SR), Washrooms (WR), rent40001to50000 (R), Water Service (WS),
Population (P), Open Space (OS), AGE48to57 (AG), Informal Settlement Effect
(ISE), Sport Ground (SG), Retail Traders (RT), Main Road (MR), Garden (G) and
Social Culture (SC) whose estimated regression coefficients results were significant.
43
Table 4.6: Regression Results
Coefficientsa
Model Unstandardized Coefficients Standardi t Sig.
zed
Coefficien
ts
B Std. Error Beta
(Constant) -27626.551 5328.096 -5.185 .000
AGE48TO57 5591.729 1830.323 .126 3.055 .004
AGE.ABOVE58 3380.828 1553.041 .076 2.177 .036
INF.SETMNT.EFFECT -2158.785 1033.418 -.078 -2.089 .043
Sport ground 1917.504 726.170 .132 2.641 .012
Open space 1988.898 617.817 .125 3.219 .003
Retail traders -9330.213 3469.064 -.652 -2.690 .011
Schools 1982.078 478.017 .157 4.146 .000
Main road 7533.198 3432.894 .524 2.194 .034
Water service 3404.574 988.059 .126 3.446 .001
25
Garden -7345.166 3582.986 -.071 -2.050 .047
Study room -5617.178 1102.930 -.204 -5.093 .000
Washrooms 4491.622 1065.034 .164 4.217 .000
rent40001to50000 -9600.617 2452.877 -.179 -3.914 .000
Informal settlement -32325.046 4478.060 -1.192 -7.219 .000
Population -1590.468 468.266 -.153 -3.397 .002
Social culture -3888.037 1502.876 -.136 -2.587 .014
Nearest amenities 3776.772 628.249 .291 6.012 .000
Number of rooms 47515.991 3960.080 2.506 11.999 .000
Age of property -6584.017 1055.694 -.556 -6.237 .000
Table 4.7: Multiple R, R Square, Adjusted R Square and the Standard Error
Model Summary
Model R R Square Adjusted R Square Std. Error of the
Estimate
25 .982y .964 .947 3160.992
As shown in Table 4.7, the multiple regressions are 0.982. This indicates that the
correlation among the independent and dependent variables is positive and negative.
The coefficient of determination, from the regression result is 0.964, show that the
combined influence of twelve variables explains 96.4% of all residential property
price. The adjusted R Square, an explanatory power, is 0.947. This statistic is not
generally interpreted because it is neither a percentage like R Square nor a test of
significant.
The Table 4.8 shows ANOVA information which provides the breakdown of total
variation of the dependent variable which is the residential property price.
45
4.7 Statistical Tests
4.7.1 Multicolinearity
This involves checking whether the independent variables are highly inter-correlated
or not by using the Variance Inflation Factor (VIF). The observation from Table 4.9
indicates that, the variables are moderately correlated as the VIF are not less than
one but not more than five as for the required criteria for it to be moderately
correlated namely 1 < VIF < 5 except retail traders, main road, informal settlement,
number of rooms and age of property only which are dangerous or not good to check
whether they are highly correlated or not.
Table 4.9: Multicolinearity of the Multiple Linear Regression Model Result
Coefficientsa
Model Collinearity Statistics
Tolerance VIF
AGE48TO57 .554 1.804
AGE.ABOVE58 .770 1.299
INF.SETMNT.EFFECT .674 1.483
Sport ground .375 2.664
Open space .617 1.621
Retail traders .016 62.651
Schools .653 1.532
Main road .016 60.843
Water service .706 1.417
25 Garden .792 1.263
Study room .584 1.713
Washrooms .619 1.615
rent40001to50000 .446 2.242
Informal settlement .034 29.066
Population .461 2.171
Social culture .338 2.962
Nearest amenities .401 2.493
Number of rooms .021 46.544
Age of property .118 8.469
46
4.7.2 Normality
From the Regression model results, it has been observed that, the data are not exactly
straight arranged on the line along the actual straight line that shows the abnormality
of the model but the statistical data of the findings implies does not affect the results.
Though, it known that for normal probability plot the data are normally distributed
and they set a straight line from scatter diagram, thus the data set result observed
below do not reveal and form a straight line which necessitated it not to be exact
normally distributed.
47
4.7.3 Heteroskedasticity
Scattering behavior of the regression model results was not exact systematically
changed on the spreading of residuals over the range measured values since there is a
little power to discover heteroskedasticity due to small sample size used but might
not matter as well, then homoskedasticity may be prevail instead. The error term
probably was due to incorrectly specified of the model that led important variables to
be left out and the model omitted effects lead to error term. The effect of the omitted
variable varied throughout the observed range of data and resulted into telltale signs
of heteroskedasticity in the residual plots as seen in Figure 4.8.
48
Interpretation of the Results
The interpretation of the results was based on the regression outputs, which provided
the estimated regression coefficients.
From the regression equation above, when all the variables are at zero, the residential
price decrease in residential property by –TShs.27,626.551. From the model, it was
revealed that under ceteric paribus informal settlement seem to influence residential
price by –TShs.32,325.046, which means that informal settlement has negative
relationship with residential price whose statistical significant p value is 0.000. Thus,
within informal settlement, the residential property price tends to be low and vice
versa is true due to the existence of informality behaviours of a residential property
such as insecure tenure, high poverty levels and inadequate access of basic services
like water (Haroon & Michihiro, 2016).
From the model, nearest amenities like hospital and market centre have influence
residential price by TShs.3,776.772, which means that nearest amenities influence
residential price positively. When nearest amenities increase, residential property
price tends to increase as well since potentially nearest amenities uses increase
individuals’ welfare. The nearest amenities is also statistical significant with p value
of 0.000. Also, it has been reported as a well-connected property with amenities, its
residential price tends to be high compared to a less connected property (Alananga,
2017).
Number of rooms, model revealed that number of rooms influence residential price
by TShs.47,515.991, which means that residential property with many number of
rooms has positive relationship with residential price. When property has more than
one bedroom, residential property price tends to be high, this may be due to the fact
that the more the space the more the comfortability of living or/and investment. The
p value for number of room variable is 0.000. In nutshell, with an additional
bedroom, the rent tends to increase as well (Alananga, 2017).
49
potentially the near the schools the less the negative externality of incurring transport
cost. Schools were also significant with p value of 0.000. Alananga (2017) provides
that, the property with proximity consideration near to public schools has relative
high residential price compared to distant property from public schools.
From the model, study rooms have an influence on the residential price by –
TShs.5,617.178, which means that property with study rooms has negative
relationship with residential price. When property has study room in Mwananyamala
ward is not necessarily for its residential price to be low and vice versa is true since
most of dwellers does not take it as so necessity for them to rent a property. This also
was significant with p value of 0.000. Also, it has been revealed that the property
with study room has an effect on rent to increase but was not significant (Alananga,
2017).
Population was one of the variables which impact residential property price by -
TShs.1,590.468, hence it is found that population had a negative relationship with
residential property price at Mwananyamala ward with p value of 0.002. This implies
that with increase in population led to decrease in residential price which might also
not be necessary for this regression result since normally population has positive
influence on residential price. Also, Alananga (2017) found a likely result for
population to have negative relationship with rent and significant throughout the
implemented models.
From the model, water service has an influence on the residential price by
TShs.3,404.574, which means that property with water service has positive
relationship with residential price. Thus, when property has water service then its
residential price tends to be high and vice versa is true since people uses to prefer
settling in a property with assured water supply. This variable was statistical
significant with p value of 0.001. Generally, the housing unit with water services,
rent increases compared to the ones without water services (Alananga, 2017).
From the model, open space also has an influence on the residential price by
TShs.1,988.898, which means that open space has positive relationship with
residential price. When the property has an enough open spaces, then residential
property price tends to be high and vice versa is true since open space in economic
point of view provide positive externality to surroundings. This also has a p value of
0.03, hence it’s also a statistical significant. Also, Alananga (2019) generalize that
the property with open space fetches more rent compared to the ones without open
space.
From the model, informal settlement effect has negative influence on residential
price by - TShs.2,158.785, which implies that higher the informal settlement the low
the residential price has to be paid off. This has a statistical significant of 0.043. In
nutshell, this has been reported by relationship between informal settlement and
residential price as there is negative relationship by –TShs.32,325.046. It’s has to be
noted that, within informal settlement, the residential property price tends to be low
and vice versa is true due to the existence of informality behaviours of a residential
property such as insecure tenure, high poverty levels and inadequate access of basic
services like water (Haroon & Michihiro, 2016).
From the model, retail traders have an influence on the residential price by –
TShs.9,330.213, which means that property with many nearly by retail traders has
negative relationship with residential price. This also was statistical significant with
p value 0.011. When property has many retail traders in Mwananyamala ward is not
necessarily for its residential price to be high and vice versa is true (Wamani, 2010).
Main road, from the model it found out that main road was positively impacted
property rents where by the properties which are closer to main road shares
behaviour of having high residential price compared to those which are far from the
main road since they are accessible from other localities . From the findings, the
main road influence residential price by TShs.7,533.198, with significant value of
0.034 as p value. In nutshell, the property with proximity consideration near to main
road has relative high residential price compared to distant property from the main
road (Alananga, 2017).
52
Also, garden had a negative relationship with residential price by – TShs.7,345.166
which implies that in Mwananyamala ward a garden has no influence for residential
price to increase whose p value was statistical significant by 0.047. Also, it has been
revealed that the property with garden has an effect on rent to increase (Alananga,
2017).
From the model, social culture has an influence on the residential price negatively by
- TShs.3,888.037, which means that the existing social culture in Mwananyamala
ward has negative relationship with residential price since the study resided by
different group of tribes. Also, social culture was statistically significant with p value
of 0.014. The social culture has been reported as a barrier for rent increase of a
residential property (Alananga & Mwasumbi, 2019).
This chapter has presented the data from the study area, that focus in answering the
objectives of the study and come up with the finding that address significantly the
relationship of informal settlement impacts on residential property price. It also
profile different respondents’ characteristics from the study area such as age group,
education levels, monthly rent and marital status as seen in Table 4.2. Also, provide
the results obtained from Table 4.6, where informal settlement seem to influence
residential price by – TShs.32325.046, which means that informal settlement has
negative relationship with residential price. The next chapter provides a brief
discussion of findings, conclusions and recommendations as drawn from the study.
53
CHAPTER FIVE
CONCLUSIONS AND RECOMMENDATIONS
5.0 Introduction
The major objective of this study was to examine the impact of informal settlements
on residential property price at Mwananyamala ward. Specifically, the study aimed
at: to account for the relationship between residential property price and informal
settlement, to explore the causes of informal settlements particularly in
Mwananyamala ward as well as to establish the basic characteristics of informal
settlements in Mwananyamala ward. However, this chapter presents the observed
findings, conclusions and recommendations examined from the study with
equivalent discussed and observed findings gathered from the study area.
The study addresses objective one stated as; “to explore the causes of informal
settlements in Mwananyamala ward”. It focuses on those factors responsible for the
unplanned house development in the study area such as affordable housing rent, lack
of awareness, poverty and low income, bureaucracy in the building plan approval
and corruption. Also, UN-HABITAT (2015) reported that informal settlements are
caused by the range of interrelated factors, including rapid urbanization, week
governance particularly in planning, land and urban management as well as
population growth and rural-urban migration.
The aim of the study was also to determine the existing features of informal
settlements particularly at Mwananyamala ward. Whereby, it was revealed that
Mwananyamala areas with informality of settlements such as Minazini, Kisiwani and
Kwa Kopa has various features including poor housing as reported in Plate 4.2, poor
sanitation and disposal systems as evidenced in Plate 4.3, inadequate and poor access
roads and high poverty levels. It has been also provided that, informal settlements
have different features namely insecure residential status, overcrowding, affordable
dwelling unit and inadequate access to basic urban services like hospital (Haroon &
Michihiro, 2016).
54
5.3 The Impact of Informal Settlements on Residential Property Price
The major objective of this study was to examine the impact of informal settlements
on residential property price at Mwananyamala ward. Specifically, the study aimed
to account for the relationship between residential property price and informal
settlement. From analytical technique of regression analysis, findings were observed
and summarised as follows;-
From the research findings, it was found that informal settlement seems to influence
residential price by – TShs.32,325.046, which means that informal settlement has
negative relationship with residential price whose statistical significant p value is
0.000. Thus, within informal settlement, the residential property price tends to be
low and vice versa is true due to the existence of informality behaviours of a
residential property such as insecure tenure, high poverty levels and inadequate
access of basic services like water (Haroon & Michihiro, 2016).
From the research findings, nearest amenities like hospital and market centre have
influence residential price by TShs.3,776.772, which means that nearest amenities
influence residential price positively. When nearest amenities increase, residential
property price tends to increase as well since potentially nearest amenities uses
increase individuals’ welfare. The nearest amenities is also statistical significant with
p value of 0.000. Also, it has been reported as a well-connected property with
amenities, its residential price tends to be high compared to a less connected property
(Alananga, 2017).
From the research findings, schools have an influence on the residential price by
TShs.1,982.078, which means that property located nearly to schools has positive
relationship with residential price. When property has more than one school in its
55
neighbourhood then its residential price tends to be high and vice versa is true since
potentially the near the schools the less the negative externality of incurring transport
cost. Schools were also significant with p value of 0.000. Alananga (2017) provides
that, the property with proximity consideration near to public schools has relative
high residential price compared to distant property from public schools.
From the findings, study rooms have an influence on the residential price by –
TShs.5,617.178, which means that property with study rooms has negative
relationship with residential price. When property has study room in Mwananyamala
ward is not necessarily for its residential price to be low and vice versa is true since
most of dwellers does not take it as so necessity for them to rent a property. This also
was significant with p value of 0.000. Also, it has been revealed that the property
with study room has an effect on rent to increase but was not significant (Alananga,
2017).
Population was one of the variables which impact residential property price by -
TShs.1,590.468, hence it is found that population had a negative relationship with
residential property price at Mwananyamala ward with p value of 0.002. This implies
that with increase in population led to decrease in residential price which might also
not be necessary for this regression result since normally population has positive
influence on residential price. Also, Alananga (2017) found a likely result for
population to have negative relationship with rent and significant throughout the
implemented models.
From the findings, water service has an influence on the residential price by
TShs.3,404.574, which means that property with water service has positive
relationship with residential price. Thus, when property has water service then its
residential price tends to be high and vice versa is true since people uses to prefer
settling in a property with assured water supply. This variable was statistical
significant with p value of 0.001. Generally, the housing unit with water services,
rent increases compared to the ones without water services (Alananga, 2017).
From the findings, open space also has an influence on the residential price by
TShs.1,988.898, which means that open space has positive relationship with
residential price. When the property has an enough open spaces, then residential
property price tends to be high and vice versa is true since open space in economic
point of view provide positive externality to surroundings. This also has a p value of
0.003, hence it’s also a statistical significant. Also, Alananga (2019) generalize that
the property with open space fetches more rent compared to the ones without open
space.
From the research findings, AGE48to57 has an influence on the residential price by
TShs.5,591.729, which means that AGE48to57 has positive relationship with
residential price. It means, people ranges to that age group are many to impact
residential property price to be relative high and vice versa. This variable has also p
57
value of 0.004, hence it’s also significant statistically. Also, it has been provided that
the older the tenant get in an adult age from 40s’ they manage to pay rent compared
to younger age of 18 or less (Alananga & Mwasumbi, 2019).
From the findings, informal settlement effect has negative influence on residential
price by - TShs.2,158.785, which implies that higher the informal settlement the low
the residential price has to be paid off. This has a statistical significant of 0.043. In
nutshell, this has been reported by relationship between informal settlement and
residential price as there is negative relationship by –TShs.32,325.046. It’s has to be
noted that, within informal settlement, the residential property price tends to be low
and vice versa is true due to the existence of informality behaviours of a residential
property such as insecure tenure, high poverty levels and inadequate access of basic
services like water (Haroon & Michihiro, 2016).
From the research findings, retail traders have an influence on the residential price
by – TShs.9,330.213, which means that property with many nearly by retail traders
has negative relationship with residential price. This also was statistical significant
with p value 0.011. When property has many retail traders in Mwananyamala ward is
not necessarily for its residential price to be high and vice versa is true (Wamani,
2010).
Main road, from the research finding it found out that main road was positively
impacted property rents where by the properties which are closer to main road shares
behaviour of having high residential price compared to those which are far from the
main road since they are accessible from other localities . From the findings, the
main road influence residential price by TShs.7,533.198, with significant value of
0.034 as p value. In nutshell, the property with proximity consideration near to main
58
road has relative high residential price compared to distant property from the main
road (Alananga, 2017).
From the findings, social culture has an influence on the residential price negatively
by - TShs.3,888.037, which means that the existing social culture in Mwananyamala
ward has negative relationship with residential price since the study resided by
different group of tribes. Also, social culture was statistically significant with p value
of 0.014. The social culture has been reported as a barrier for rent increase of a
residential property (Alananga & Mwasumbi, 2019).
5.5 Recommendations
Under this section of the chapter, the researcher provides some recommendations
that have to be implemented by the institutions, local authorities and all other
stakeholders so as minimize informal settlements that would have negatively
influence to residential price as reported on the findings so as to ensure potential
return on residential price. Therefore, Wamani (2010) provides for the following
recommendations; strict building inspections during the development process,
59
promoting of poverty reduction programs, opening of more access roads in the
settlements as well as promoting massive sensitization on the significance of urban
planning.
60
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APPENDICES
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Appendix II: Research Permit from Kinondoni Municipality
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Appendix III: Questionnaire
Dear Sir/Madam
TARIMO, REGANI
SECTION A:
69
Please Put a Tick to whichever is applicable
Divorced
any…………
Your highest level of education reached What is your occupation?
High education
70
When you acquire your property
Constructing
Buying
Inheritance
10000-20000
15000-20000
20000-30000
30000-40000
It has effect
It has no effect
Please tick where appropriate for each question. (Scale) 1= close, 2= closer, 3= very
close, 4= neutral, 5= mostly close.
1 2 3 4 5
Market Centre
Worshiping area
Police post
Sport ground
Supermarket
Open spaces
Retail traders
Schools
Health cantres
Public parking
Main road
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SECTION C: Neighborhood Related Questions for Current Premises
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Appendix IV: Interview Guides
Dear Sir/Madam
TARIMO, REGANI
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3. Interview Guide for Local Dalalis
74