1# RECORD 3bc07102108772a3252ac84ff32747d85447e5532# TITLE: The Impact of Neighbourhood Churches on House Prices3# YEAR: 2011.0 VENUE: nan DOI: 10.5539/jsd.v4n1p2464# AUTHORS: G. Babawale; Y. Adewunmi5# PAGES: 8 CANDIDATE TABLE PAGES (1-based): []6# ABSTRACT: This study extends literature that empirically investigates the impact of neighborhood churches on residential property values with particular reference to selected areas in Lagos metropolis. The hypothesis that proximity to a church has no effect (positive or negative) on house prices is tested with a standard hedonic pricing model using a sample of 450 rented apartments (flats) across the study areas. The results followed the more common belief that neighborhood churches, particularly the large ones, impact negatively on the values of nearby residential properties. It further revealed that where more powerful positive externalities exist in close proximity, the negative effects of churches, even the large ones, on residential property values can be neutralized or even overshadowed. Among others, the results of the study is expected to bring to light the social and economic implications of churches located within residential neighborhoods in the study area and thereby assist urban planners, the courts and real estate valuers in resolving the debate on the nuisance versus amenity effects of neighborhood churches.789===== PAGE 1 (score 17, numeric-paren 0, table-words 0, var-words 17) =====1011www.ccsenet.org/jsd Journal of Sustainable Development Vol. 4, No. 1; February 2011 12 ISSN 1913-9063 E-ISSN 1913-9071 1324614The Impact of Neighbourhood Churches on House Prices 15Gabriel Kayode Babawale, PhD. 16Department of Estate Management, University of Lagos, Nigeria 17Tel: 234-80-2316-6473 E-mail: gkbabs@yahoo.co.uk 18 19Yewande Adewunmi, M.Sc. 20Department of Estate Management, University of Lagos, Nigeria 21E-mail: yewande_adewunmi@yahoo.com 22Abstract 23This study extends literature that empirically investigates the impact of neighborhood churches on residential 24property values with particular reference to selected areas in Lagos metropolis. The hypothesis that proximity to a 25church has no effect (positive or negative) on house prices is tested with a standard hedonic pricing model using a 26sample of 450 rented apartments (flats) across the study areas. The results followed the more common belief that 27neighborhood churches, particularly the large ones, impact negatively on the values of nearby residential 28properties. It further revealed that where more powerful positive externalities exist in close proximity, the negative 29effects of churches, even the large ones, on residential property values can be neutralized or even overshadowed. 30Among others, the results of the study is expected to bring to light the social and economic implications of 31churches located within residential neighborhoods in the study area and thereby assist urban planners, the courts 32and real estate valuers in resolving the debate on the nuisance versus amenity effects of neighborhood churches. 33Keywords: Neighbourhood churches, Externalities, House prices, Hedonic model, Nigeria 341. Background to the Study 35There is a growing recognition that property development, use and management should be evaluated against 36criteria that embody sustainability measures. That is, genuine sustainability evaluations should balance social, 37cultural and economic performance measures with environmental protection (Body, 2005). In this regard, location 38of churches within residential neighborhoods has been an issue of concern and controversy in several societies. 39The question remains whether the externalities exhibited by churches are positive (amenities) or negative 40(nuisance or disamenities). Existing empirical studies are inconclusive and anecdotal evidences are mixed. 41The notion of “externalities” is a useful concept developed in welfare economics. In real estate parlance, the notion 42of externalities states that external factors to a property can have either positive or negative effects on its value 43(Appraisal Institute, 2008; Do et al., 1994). Because of its physical immobility, real estate tends to be affected by 44externalities more strongly than most other economic goods, services, or commodities. Ascertaining the effects of 45externalities on property values provide a very strong test of the nuisance versus amenities effects. If an externality 46is truly a nuisance, then values of properties within close range will be adversely affected in proportion to the 47distance from it. If on the other hand an externality is an amenity, then property value will increase the closer a 48property is located to it. 49Example of externalities that are associated with negative effects on values of residential properties in close 50proximity are landfill (Arimah & Adinnu, 1995); brownfield (Kaufman & Cloutier, 2006) contaminated properties 51(Kohlashe, 1991; Kinnard & Geckler, 1991); air pollution (Hamilton & Biggs, 1993; Komarova, 2009); industrial 52sites (Vor & Groot, 2009); oil and natural gas facilities (Chan & McMillian, 2004); and nuclear plant and iron and 53steel plant (Bilbao-Terol, 2009). On the other hand, land uses that constitute positive externalities include water 54view (Seiler et al., 2001; Paterson & Boyle, 2002; Bourassa et al., 2004); open spaces, parks and greenbelt 55(Bolitzer & Netusil, 2000; Asabere & Huffman, 2007); golf course (Nichollis & Crompton, 2007); and 56neighbourhood schools (Ketkar, 1992; Zahirovic-Herbert, 2007). 57At present, there is paucity of studies on the effect of neighborhood churches on the values of nearby residential 58properties. The few existing studies revealed varied magnitude and direction of impact: ranging from negative, to 59insignificant, and to positive impact (Do et al., 1994; Thomas et al., 1996). In the developed nations, the paucity of 60studies could be attributed to effective planning (zoning regulation) that has curtailed indiscriminate location of 61religious premises. For example, the US has the Religious Land Use and Institutionalized Persons Act (RLUIPA), 62a federal law that profoundly makes churches to adhere to zoning regulations. Thus, Clowney (2007) observed that 63the Zoning Boards have so far successfully pressured religious institutions to limit their physical presence in 64