Funlola Famuyiwa et al./ Elixir Infrastructure Mgmt. 51 (2012) 11034-11038 11034 Introduction 1.0 Background Public infrastructure when adequately provided offers multi-dimensional benefits within its operative network. In this regard, it is considered a positive externality as well as an environmental good. In modern society, these public services have simply become lubricants in the wheels of national development and are extremely essential for public welfare and fiscal growth. Economies require the development of infrastructure, such as water, energy, roads development, transport networks, information, and communication technology for sustainability and these urban services also positively influence the value of real estate as they improve housing conditions and quality. Odudu (2003) observed that housing values tended to peak in those locations that enjoyed one form of infrastructure or the other. Similarly in Lagos, Nigeria, recent road redevelopment projects have significantly increased the value of property in certain locations. This can be traced to the fact that housing embraces the totality of the environment and the quality of a neighborhood largely influences housing conditions and preferences. Otegbulu and Adewunmi (2009) explain that in civilized societies, housing represents more than mere shelter but includes both internal and external services. The valuation of environmental goods on property prices is a subject which has continued to gain recognition. Des Rosiers, Bolduc and Theriault (1999) state that environmental issues have attracted attention in economic and real estate literature, particularly with respect to their impact on property prices and that analytical approaches are also currently being used to measure urban externalities and the extent to which they are internalized into real estate values. Because of its immobility, real estate tends to be affected by externalities more strongly than most other economic goods, services and commodities (Babawale and Adewunmi, 2011). Determining the effects of externalities on property value provides a basis by which each attribute is inherently priced in the aggregated value of the building as they usually constitute part of the housing bundle, and represent significant aspects in fiscal and economic terms. There are various means by which the measurements of the value of housing attributes can be made. However; the hedonic approach remains the most reliable tool for such purposes as it reveals buyers' perception through their actual pricing behaviour. It aims to explain property values on the basis of house characteristics, physical and neighbourhood-related. This tool was birthed by Rosen (1974) and has remained extensively used in empirically evaluating housing characteristics. In this study, an investigation is made into the influence of municipal public supplied water on the rents of residential properties. The objectives that will help achieve this are as follows: (a) To highlight the importance of public water infrastructure, as well its current status in the study area. (b) To weigh the comparative value influence of various other infrastructure on property prices in the study area. (c) To determine the influence of urban water supply on rental values within the study area. The research will help with a view to policy formulation and administration, within the context of property based taxes. The term ‘public infrastructure’ in this paper will be used interchangeably with ‘infrastructural facilities’, ‘physical infrastructure’, ‘urban services’, ‘urban infrastructure’, ‘public facilities’ and ‘infrastructure’, as the distinctions between them are little and not necessarily of much consequence within the context of this study. This section introduces the essence of the study, and subsequent sections of the paper treat related literature, methods Tele: E-mail addresses: ffamuyiwa@unilag.edu.ng © 2012 Elixir All rights reserved Public water infrastructure in property prices: an environmental valuation approach Funlola Famuyiwa * and Austin C. Otegbulu Department of Estate-Management, Faculty of Environmental Sciences, University of Lagos, Lagos, Nigeria. ABSTRACT Public infrastructure is very vital for the functioning of an urban area. Potable water specifically remains a major United Nations target conveyed through the Millennium development goals. It is crucial for health, safety, environmental sustainability as well as for economic growth and development. Evidence from literature suggests that infrastructure services generally have positive effects on housing values, as they constitute positive externalities to surrounding properties. To this end, an investigation was made on the relative contribution of public water infrastructure on housing rental values in a residential neighborhood in Lagos, Nigeria using a hedonic regression model. Findings from the study revealed the relative impact of public water supply on property rental values. The application of the findings of this study will help direct policy formulation in the areas of urban infrastructure planning and development for investment returns and cost recovery. This is particularly necessary in a region characterized by incoherent institutional arrangements and poor financing strategies for urban infrastructure delivery and maintenance. © 2012 Elixir All rights reserved. ARTICLE INFO Article history: Received: 12 August 2012; Received in revised form: 30 September 2012; Accepted: 24 October 2012; Keywords Developing nation, Hedonic valuation, Property values, Public water infrastructure, Residential property, Urban area. Elixir Infrastructure Mgmt. 51 (2012) 11034-11038 Infrastructure Management Available online at www.elixirpublishers.com (Elixir International Journal)