Waterfronts: Govt Evolves Market Value Compensation

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In a bid to placate residents of the waterfronts area of Port Harcourt, ahead planned redevelopment , government has introduced market value compensation strategy.
Going by the development property owners in the slum areas are expected to pocket huge sums to enable them afford fresh accommodation immediately the redevelopment commences.
Explaining why government took that action, Rivers State Governor, Rt Hon Chibuike Amaechi said the essence is to cushion the effects of the exercise and provide soft landing for residents of the area.
With reasonable amount of money in their hands, the Governor, while speaking at the accountability forum to mark the second year of his administration said any property owner who receives compensation can be able to provide alternative accommodation for him or herself.
Precisely in June this year, experts under the auspices of the Nigerian Institution of Estate Surveyors and Valuers had taken appraisal of the matter during their annual mandatory continuing professional development seminar.
In his paper title, “ Effects of Urban Renewal on Property Value”, Mr Gabriel Ofoma commended government for the re-think and already approved polices that have properly set up efficient urbanization and urban renewal programme.
Mr Ofoma remarked that, “today we love Abuja and Calabar after we had condemned El Rufai and Donald Duke when they were rectifying faulty development. Today similar exercise is on in Port Harcourt, Enugu, Lagos and few other cities in Nigeria aimed at restoring past glory of these cities”.
The effect of the exercise he buttressed would spill-over unto the mainland because of the teeming population that has adverse influence on housing demand.
Since the exercise commenced early this year, rents in the city centre have risen. Houses in less-demanded areas of Diobu and other fringe communities are scarce to obtain.
Ofoma observed, “property values had always been positively affected in areas that have been planned and effectively serviced with all infrastructural facilities”.
For the redevelopment to be effective, the estate surveyor noted that it must commence from an efficient allocation and judicious utlilization of land resources, ‘ it is land resources that propel growth and development in all activities, be it agricultural, industrial, commercial, trading, housing, transportation”, he added.
Ofoma expressed happiness that efforts are now being made to review mistakes initially made in the land allocation and utilization and to replan, extend and infact construct new areas to meet the needs of the present without compromising opportunity of the future generation to also benefit.
Controversies however have continued to trail the scheme to redevelop the waterfronts in Port Harcourt, most of the fears express cannot be disconnected from the Maroko-experience in Lagos.
Many residents are apprehensive that the exercise may mark the beginning of their losing their properties. But in a quick measure to douse such feelings, government recruited enumerators to conduct verification exercise of houses types and ownership in the area.
If the enumeration exercise is finally conducted, it would provide the government with the real picture on how to make compensation and in the long run a blue print for the former slums.
A lecturer in the department of estate management of Abia State University, Uturu, Dr I.U.Kalu speaking on compensation implication of Nigerian Urban renewal schemes argued that the major drive for government acquisition bid was purely for economic reasons.
Dr Kalu was of the view, “when poor income predominate a neighbourhood, the rent crash, criminals find such areas conducive and maintenance of structures will be given little attention.
He was however, quick to add that the balancing of both economic and social implications of urban renewal has led to the abandonment of the schemes.
Even with the resistance to the exercise, Governor Amaechi said he would not be blackmailed maintaining that the exercise is for the good of all the people.
Immediately, the area are redeveloped Amaechi said that huge expense of land would be sold to any person from the state. He had earlier stated that waterfronts are for high brow accommodation.
Consequently, Dr Kalu was of the opinion that the success of the programme would rely more on the cooperation of the people, stressing that the coast of acquiring obsolescent properties and rehousing the occupiers, rebuilding to new improved standard of design, layout and amenties, is far more expensive than the value that can be derived from a residential scheme.
Commenting on why the government might have adopted the market value strategy to compensate owners, former publicity secretary of NIESV in Rivers State, Mr Emmanuel Mark told The Weekend Tide that apart from cushioning the effects of relocation, it would propel estate market.
Mr Mark contended that valuers considered the depreciation and appreciation values of the properties saying that is the only way to sustain that both valuers and property owners benefit from the scheme.
Considering the future plan for the area, he observed that government would stand to benefit and double gain if finally the areas are redeveloped.
Most of the factors that go into valuations, Dr Kalu explained include land, buildings and crops.
On the other hand, another contentious issue is in the area of ownership. Experts are of the view that most landlords are of temporary hold titleship, since the lands were not adequately acquired.
They argue that the land US Act provides legal backing for government action in redeveloping the area, this view however was contended by notable lawyers and former president of Nigeria Bar Association (NBA) Barrister Onueze C.J Okocha.
Okocha who spoe on compensation and the provisions of law”, supported the action of Governor Amaechi to pay adequate compensation to property owners at the waterfront.
His words, where a right of occupancy in respect of any developed land on which a residential building has been erected is revoked under this act, the governor or the local government , as the case may be, may in his or its discretion offer in lieu of compensation payable in accordance with the provisions of this act.
Resettlement in any other place or area by way of a reasonable alternative accommodation”.
From the governor’s perspective, relocation seems to have been clearly ruled out with the huge compensation paid to property owners.
Okocha on the other hand declared quoting section 29 of the Land Use Act that, where the value of any alternative accommodation as determined by the appropriate officer of the Land Use and Accommodation Committee is higher than the compensation payable under this Act, the parties concerned may by agreement require that the excess in value in relation to the property concerned shall be treated as a loan which the person affected shall refund or repay to the government in the prescribed manner”.
The Senior Advocate of Nigeria while explaining what Fair Market Value” was stressed that buildings, installation or improvement including the replacement cost of the building should be incorporated in the computation of compensation.