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Pyrex Journal of Research in Environmental Studies (PJRES)

September 2016 Vol. 3(4), pp. 49-56

Copyright 2016 Pyrex Journals




Full Length Research Paper


Implications of the Presence of Power Plants on Property Rents: The Case of Kinyerezi in Dar Es Salaam, Tanzania


Kelvin Kimario and Charles Lucian*

School of Real Estate Studies (SRES) Ardhi University, P.O BOX 35176, Dar es Salaam, Tanzania.

Corresponding Author E-mail: lucian@aru.ac.tz

Accepted 8th September, 2016



Abstract


This study sets out to examine the implications of the presence of power plants on property rents in Kinyerezi, a suburb of Dar es Salaam largest City of Tanzania. Using questionnaires, data were collected from tenants and property owners around the Kinyerezi power plant and by applying multiple regression models, the relative impacts of factors that determine rents were established. Multiple regression models managed to explain about 78 percent of variation of rents in Kinyerezi with an F statistic of 8.18 which is significant at a 5% significance level. The principal finding was the Kinyerezi power plant negatively impacts property rents at the rate of Tsh. 10,700 for every kilometre near the power plant (This is equivalent to 2.34%). However, the relationship was not statistically significant at a 5% significance level. This means that we have failed to accept the null hypothesis, and the alternative hypotheses are preferred. The reasons for this conclusion are based on: First; other factors, particularly housing attributes and plot sizes were very strong in the model and effects attributed to the power plant were not as strong as they were anticipated to be. Second; sound construction and workmanship and larger plot sizes were associated with increasing distances from power plants, and hence a secondary or indirect relationship between power plants and rents was deduced. Third; property market participants around the Kinyerezi power plant are imperfectly informed about the full range of visible and invisible effects emanating from power plants.

Keywords: Power Plants, Energy Infrastructure, Rents, Regression Analysis.

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