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1 – 9 of 9This study reviews the teaching of real estate in the USA for the first 100 years after the foundational curriculum was laid down in 1923 by three key institutions: the National…
Abstract
Purpose
This study reviews the teaching of real estate in the USA for the first 100 years after the foundational curriculum was laid down in 1923 by three key institutions: the National Association of Real Estate Boards (NAREB), the Institute for Research in Land Economics and Public Utilities (The Institute) and the American Assembly of Collegiate Schools of Business (AACSB). Its line of investigative pursuit is the persistent lamentation by American real estate scholars that real estate is not getting the respect it deserves as an academic discipline compared to its peers in the school of business such as accounting, finance and marketing. The study addresses a fundamental question: What is the cause of this endless “search for a discipline”? This is motivated by the belief that identification of the root cause of this “search for a discipline” will lead to the requisite solution: the intellectual foundation of the real estate discipline.
Design/methodology/approach
The study used qualitative document analysis to review two primary documents published in 1959 as reports on business education in the USA: (1) Higher Education for Business, financed and sponsored by the Ford Foundation, and (2) The Education of American Businessmen – financed and sponsored by the Carnegie Corporation of New York. The impacts of the publications on the teaching of real estate to date have been reviewed in the context of scholarly actions and literature that has been generated in relation to the two documents.
Findings
The two primary documents impacted negatively on the teaching of real estate. The committee members who produced the two reports had indicated that real estate did not fit into the business curriculum hence should not be taught in business school. This conclusion led to unintended negative outcomes for real estate education. The negative impact of the reports arose principally because the teachers of real estate misinterpreted the outcome to mean that they should tweak the real estate curriculum to fit in the pedagogical framework of the business school. This reaction is responsible for perpetuating the identity crisis that has plagued real estate as an academic discipline since its inception as a subject of study in 1923. Secondly, at the inception of the real estate education in 1923, while the AACSB accepted real estate as a discipline in the school of business, Richard T. Ely wrote the curriculum under land economics which has led to the persistent collegiate dilemma regarding the teaching of the discipline.
Social implications
The study sheds light on the situation of business education in the USA and AACSB-accredited colleges internationally. It draws attention to the incoherent body of knowledge of business education and will help schools of business to redesign their curricula to include course contents that rightly reflects the business oriented academic disciplines.
Originality/value
The study is timely as it has been done 100 years since the development of the first standard collegiate real estate curriculum following the 1923 conference at Madison. The study has reviewed the first 100 years in terms of the persistent quest: “in search of a discipline”. In so doing, it has uncovered the root cause of this search during the first centennium; and to end the search, it proposes that real estate should not be taught as a business discipline.
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Following calls at different times in the United States for the definition of the body of knowledge (BOK) of real estate discipline, this briefing sets out to define the…
Abstract
Purpose
Following calls at different times in the United States for the definition of the body of knowledge (BOK) of real estate discipline, this briefing sets out to define the intellectual boundaries of real estate and applies the definitional concept to map out the scopes of real estate professions and real estate valuation vocation
Design/methodology/approach
The study essentially uses a literature review to draw out definitional issues that have been tackled before. It reviews calls that have been made in the past for a definition of the BOK of the real estate discipline. Further, it reviews past attempts at definition to reveal why they failed at the definition project.
Findings
The study found three key suggestions made in the past: that there is a need to define real estate’s BOK, that there is a need to use a “central structure” to define the BOK of real estate, and that definition of the BOK of real estate should rely on the activity nodes that constitute real estate. The study has relied on these three key ideas to define real estate as the science of value creation, distribution and sustenance in built space.
Practical implications
The definition of the BOK will help in curriculum development for real estate education. It will help faculties and departments to single out what fits into the real estate curriculum and what does not fit in.
Originality/value
A definition of the BOK for real estate: reconceptualizing the discipline and delineating jurisdictional boundaries of its practice.
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Lucy M. Nyabwengi and Owiti A K’Akumu
This study aims to evaluate the property tax base under the local government property taxation in Nairobi City and its implication on revenue adequacy of the city. Nairobi has…
Abstract
Purpose
This study aims to evaluate the property tax base under the local government property taxation in Nairobi City and its implication on revenue adequacy of the city. Nairobi has grown both in population and in physical extent resulting to increased demand for urban services. The city faces challenges of adequate infrastructure service provision against increasing demand. Property taxation if fully exploited can be a major source of city government revenue, which has been dwindling.
Design/methodology/approach
Literature review of property tax bases in the world and examination of best practices was done to highlight the inadequacies of property tax base administration in Nairobi. Primary data were gathered through interviews of officers in Nairobi City involved in the land rating process. Secondary data were obtained through documentary search and field survey of the study area.
Findings
The study established that Nairobi relies on a dual system of taxation, namely, site value rating and area rating. Tax is on vacant land only and excludes improvements. There are many legal exemptions and administrative exclusions from the tax base. The property tax registers do not include all the taxable properties and there is no regular updating of the tax registers. Nairobi relies on an outdated valuation roll whose values have no relation to the current market values.
Research limitations/implications
These factors have resulted to a narrow tax base, which affects the revenue potential of the city and its ability to adequately provide infrastructure services.
Originality/value
This is an original research, which relied mainly on primary data. To establish the property tax bases and the exempt properties in Nairobi, the researchers interviewed the officers at the Nairobi city land valuation and property management directorate using structured questionnaires. To address the third objective on whether the property tax base is complete and all-inclusive, the research relied on primary data. The research population was residential properties in Buruburu, Kilimani and Riruta areas of Nairobi city. The sample data on property details were collected from the Ministry of Land and Physical Planning (MLPP). The researchers then examined the records at the Nairobi City to evaluate whether the properties, which are registered at the MLPP, are charged land rates at the city level and at what amounts. This included properties under site value rating and area rating.
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Daniel Mutegi Giti, Owiti A. K'Akumu and Edwin Oyaro Ondieki
Low income urban housing in Kenya is underdeveloped as a result of uninnovative financing, hence the many slums and informal settlements in the country, hence the need for…
Abstract
Purpose
Low income urban housing in Kenya is underdeveloped as a result of uninnovative financing, hence the many slums and informal settlements in the country, hence the need for enhanced participation of the private sector through application of Public Private Partnerships (PPPs), which has been cited as one of the possible solutions. The purpose of this study was to investigate and make predictions of the need for enhanced role of private sector in developing low income urban housing in Kenya through PPPs.
Design/methodology/approach
Delphi method of research was used to forecast the enhanced role of private sector through PPPs in the development of low income urban housing in Kenya. Three rounds Delphi iterations using three panels of housing financiers (30 in number), housing developers (28 in number) and housing practitioners (30 in number) were used. Data was collected through questionnaires throughout the three rounds, where the first round was exploratory in nature, the second round built on answers from round one, while round three was based on answers from round two, after which the mean and standard deviation values were calculated to show the level of consensus.
Findings
Results showed that PPPs is one of the plausible ways through which low income urban housing in Kenya can be developed to address its shortage. Private sector in PPP transaction brings innovative technology, finance and efficiency, while government brings its assets such as land and other regulations long term contracts.
Research limitations/implications
The research was focussed on the Nairobi city county area in analysing the need for enhanced role of the private parties. It focussed on a panel of Housing practitioners-officers in the State Department for housing and Nairobi city county; housing financiers and housing developers, without interviewing the beneficiaries of the method.
Practical implications
It was, therefore, found out that PPPs models are applicable in developing low income urban housing because the country has the enabling environment for its effective application going forward. The implication of this study is that low income urban housing can be developed through the model.
Social implications
The slums and informal settlements will have adequate, affordable and quality housing being introduced within their neighbourhoods, which reduces political and societal animosities.
Originality/value
This research has benefited from published literature on PPPs and original research on PPPs.
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The study seeks to identify and document definitional challenges that hamper the delineation of the scope of real estate as a discipline and as an industry. Through literature…
Abstract
Purpose
The study seeks to identify and document definitional challenges that hamper the delineation of the scope of real estate as a discipline and as an industry. Through literature review the article distils the perception of body of knowledge (BOK) of real estate within the academia. Two main issues are flagged up: the problem of undefined BOK and the collegiate dilemma. Later the study looks at the standard economic classification documents to capture the occupational domains of real estate professionals or real estate activities. These steps are necessary to help define an alternative academic, practical and social meaning of real estate that is sufficient and precise.
Design/methodology/approach
The study uses literature review and, as primary method, qualitative document analysis (QDA). The study has made a special appeal for the application of qualitative strategy in real estate research other than following the methodological orthodoxy of quantitative causal research designs. Further, it has argued for the recognition of QDA as a legitimate research method in the context of real estate studies. Consequently, the study performed QDA procedures on international economic classification standards.
Findings
From literature review and QDA, the study identified five definitional problems in the meanings or understandings of real estate: undefined body of knowledge, collegiate dilemma, inadequate classification of real estate occupations, inadequate industry classification and inadequate economic sector positioning. These are aspects that lead to misconceptions of the true boundary of knowledge in society and in the academia. The paper offers clarity and insights for the redrawing of these boundaries to give real estate its rightful place in the academia and in the real world.
Originality/value
The article follows up on the academic and social misconceptions on the BOK of real estate as a discipline and an economic activity domain to identify the contribution of real estate to the welfare of mankind. Ontology or the organization of academic or social knowledge is used to map out or catalogue real estate against competing domains and to show that the role of real estate is grossly understated and misunderstood. From the findings, the study makes recommendations to university curriculum developers, and international organizations like ILO, and UN-DESA to revise their conceptions of real estate to give the discipline its rightful position in society.
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This paper brings up the regulatory environment for valuation and estate agency practices in Kenya. Its main purpose is to assess the regulatory institutions to determine whether…
Abstract
Purpose
This paper brings up the regulatory environment for valuation and estate agency practices in Kenya. Its main purpose is to assess the regulatory institutions to determine whether consumers of real estate services are protected from risks in the property market and to compare Kenya's situation to other markets in the world.
Design/methodology/approach
This is a qualitative study of institutions including bodies and laws that are involved in the regulation of valuation and estate agency practices in Kenya, using document analysis method. The roles of professional body, the Institution of Surveyors of Kenya and the registration bodies, the Valuers Registration Board and the Estate Agency Registration Boards and attendant statutes, the Valuers Act and the Estate Agents Act are reviewed to gain insights into the regulation practice in Kenya. Benchmarking is done using regulatory practices in the United Kingdom and the USA.
Findings
Concerning valuation, Kenya uses a hybrid system combining the United Kingdom's self-regulation approach and the USA's state regulation approach. The co-regulation approach is working well for valuation practice in Kenya. On the other hand, the regulatory system for estate agents is weak because of limited powers of enforcement, thereby allowing an unknown number of agents to practise outside the regulatory framework.
Originality/value
The paper is unique in its subject matter as it evaluates the external organization (regulatory) environment of professional services firms (PSFs) in the real estate market. Existing studies have been done mainly by management scholars focussing on the internal organization environment of PSFs in general. Secondly, the study brings up to the international audience the regulatory system and practice in the real estate professional services market. This has not been done for Kenya and perhaps for many other countries. Lastly, it makes a novel recommendation that emphasis should be placed on registration and regulation of PSFs rather than individual practitioners to enhance quality in the provision of services where real estate agency is concerned.
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Hilary Mati Kilonzo, Moses Muriithi and Benedicto Onkoba Ongeri
Housing finance is frequently difficult to provide in developing nations due to unstable macroeconomic conditions and a lack of supportive legal, technological and regulatory…
Abstract
Purpose
Housing finance is frequently difficult to provide in developing nations due to unstable macroeconomic conditions and a lack of supportive legal, technological and regulatory frameworks (Lea and Bernstein, 1996). Governments in these countries have, therefore, created a range of organizations and initiatives to improve the flow of capital to the housing market on a footing that is affordable to their populations given the household income levels (Ram and Needham, 2016). Housing, however, is by its very nature a significant investment requiring a considerable capital outlay at the onset (Dasgupta et al., 2014). This makes acquiring it challenging, particularly in underdeveloped nations where saving tendencies are quite low partly because of low-income levels (Keller and Mukudi-Omwami, 2017). As a result, many developing nations struggle with severe housing issues that lead to slums, overcrowding and related health issues.
Design/methodology/approach
The theoretical model for analyzing housing finance in Kenya in this study incorporates both demand and supply aspects, drawing from Brueckner’s (1994) framework. This model divides factors influencing demand into certainty and uncertainty conditions faced by households. In terms of certainty, the model considers factors that households can predict reliably. First is income, households are assumed to have stable income, allowing accurate assessment of budget constraints and mortgage decisions. Second is interest rates. While interest rates fluctuate, the model assumes that households have information about current rates, enabling informed decision-making. Finally, existing housing costs, such as rent or mortgage payments, are treated as fixed and predictable, facilitating accurate budget planning. Conversely, uncertainty factors include future income, future interest rates and housing prices. Households face uncertainty regarding future income, which can impact their mortgage repayment ability due to job market changes or unforeseen events. The model does not predict future interest rate changes, which can affect the affordability of mortgages. Furthermore, future fluctuations in housing prices add uncertainty to the benefits of homeownership and mortgage debt. Due to these uncertainties, the model in this study assumes certainty conditions, focusing on households maximizing their utility. In Brueckner’s model, a utility function captures household preferences and well-being linked to consumption choices, specifically between housing (H) and nonhousing goods (N). The utility function helps determine optimal income allocation, influenced by income (M), prices (P) and return on savings (t). The utility maximization problem involves selecting optimal amounts of housing and nonhousing consumption while managing housing credit (C).
Findings
The study confirms a significant long-run relationship between house finance and several macroeconomic variables, including interest rates on credit, inflation, unemployment and gross domestic product (GDP). The negative and significant error correction term indicates the presence of an equilibrium relationship, suggesting that the housing finance market in Kenya self-corrects swiftly in response to economic shocks. This efficiency could be attributed to increasing competition among financial institutions or a growing public awareness of housing finance options, implying a relatively well-developed market. Such responsiveness suggests that government policies aimed at influencing housing finance might have a quicker impact. For instance, introducing subsidies to reduce credit rates could rapidly boost housing finance activity (World Bank, 2019). However, the flip side of a fast-adjusting market is potential volatility, where rapid swings in economic factors could lead to significant fluctuations in housing finance availability, posing risks for both lenders and borrowers (Braun et al., 2022). Moreover, a rapid adjustment might not necessarily reflect a perfectly healthy market; it could indicate underlying issues like speculation or easy access to credit, potentially leading to bubbles or financial instability (Agnello et al., 2020).
Originality/value
This study reveals key insights into the determinants of housing finance in Kenya, demonstrating a significant long-run relationship between housing finance and economic variables such as interest rates, inflation, unemployment and GDP. The efficient adjustment of the housing finance market to economic changes suggests that government policies can rapidly influence housing finance, although this responsiveness also implies potential volatility and risks, including financial instability. Policymakers should, therefore, focus on maintaining macroeconomic stability and monitoring the housing market for signs of overheating. Encouraging competition among lenders and diversifying housing finance products can help ensure sustainable market adjustments. Credit interest rates show a modest but positive relationship with housing finance, suggesting that a stable lending environment could stimulate activity. Policymakers should manage credit availability to prevent excessive expansion and instability, enhancing financial inclusion and fostering competition in the banking sector. Inflation positively impacts housing finance, with rising inflation driving demand for real assets like housing. However, significant interest rate hikes by the Central Bank to combat inflation could reduce mortgage affordability. A flexible interest rate policy, along with targeted interventions like subsidized rates for first-time buyers, is necessary to balance market stimulation with inflation control. Unemployment’s negative impact on housing finance underscores the need for robust unemployment benefits and job training initiatives to support financial stability during job losses. Targeted housing finance programs for low- and middle-income earners can also improve mortgage accessibility. The positive correlation between GDP growth and housing finance indicates that economic expansion drives housing demand. Policymakers should prioritize initiatives that promote long-term economic growth, such as infrastructure development and innovation. Finally, the insignificance of savings interest rates in influencing housing finance suggests that traditional monetary policy may have limited effects. Promoting financial literacy and developing tailored savings instruments could strengthen the connection between savings and housing finance over time.
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H.K. Gichunge, S.M. Masu and O.A. K'Akumu
The purpose of this paper is to look at the applications of factor cost indices in the building industry in Nairobi, Kenya against the possibilities established through a review…
Abstract
Purpose
The purpose of this paper is to look at the applications of factor cost indices in the building industry in Nairobi, Kenya against the possibilities established through a review of the principles so as to establish the extent of use in practical situations in the industry. There are two organisations involved in compilation of factor cost indices in Kenya – Central Bureau of Statistics and Joint Building Council (JBC). Their practices for compilation of factor cost indices are reported in this paper.
Design/methodology/approach
The paper reviews the principles of factor cost index in order to establish a conceptual framework within which practices are then evaluated. The statistical bureau's compilation of building cost indices and the instructions by the JBC are considered as available evidence of application.
Findings
The paper finds that the application of factor cost index in Kenya is limited, a situation that therefore demands more research by the construction industry in Kenya.
Originality/value
The research's originality lies in its supportive evaluation of the application of the indicator concept in the building industry. More applications would imply greater possibilities for research and development within the case study industry.
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S. Masu, H. Gichunge and O.A. K'Akumu
The aim of this paper is to use the case study of Nairobi in Kenya in order to fill the gap of knowledge on the component ratios of new building costs that has been missing from…
Abstract
Purpose
The aim of this paper is to use the case study of Nairobi in Kenya in order to fill the gap of knowledge on the component ratios of new building costs that has been missing from international literature.
Design/methodology/approach
Using survey methodology that considered firms of contractors registered and operating in Nairobi Kenya, the paper compares its findings rendered in terms of percentage ratios: with theoretical propositions (e.g. Wood), with past studies (e.g. Knowles) and with practice guidelines in Kenya.
Findings
Overall it finds that there is no significant change in percentage component ratios considered from past studies and practice guidelines in Kenya leading to the conclusion that the building industry has not undergone any significant technical change during the periods under study, i.e. 1980‐2006.
Research limitations/implications
The study is limited by the fact that it only manages to capture the contractors' views of the component ratios. Contractors may be inclined to hide their profits which can be a sensitive issue in the Kenyan market, which as a developing economy, may be riddled with corrupt practices such as tax evasion and imperfect business competition. However, the issues raised here can be used as base information for further studies on the topic. Additionally an analysis of variance was performed on the data to ascertain its credibility. Second, the data used to argue the paper's case is partially dated but remains useful. The trend shows that there has been no significant change in the composition of component ratios hence the data remains relevant to date.
Practical implications
The paper's findings would be useful to international readers especially now that international contractors are bidding for work in Kenya. The data would give these contractors a glimpse into the structural composition of building cost components in Nairobi.
Originality/value
The paper's original contribution concerns the component ratios of building costs that has been neglected in the existing literature. In Kenya some work had been done by Knowles, but this was restricted to office block buildings only, while this paper considers all buildings as shown in Table V.
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