Flood hazard mapping to improve property valuation assessment

Abstract

The real estate sector is considered as one of the big players in the economic growth and development of a country contributing between 6.9% – 18.5% to its GDP (Acolin et al., 2021). Like any other sector, real estate suffers from many challenges and threats arising from natural hazards like floods which have caused far-reaching impacts on the economies worth trillions of dollars and millions of deaths worldwide (Committee on Climate Change, 2015; FAO, 2015). Flooding, which is usually influenced by heavy rains, overflowing rivers, urban drainage basins, storm surges and tsunamis, channels with steep sides, and lack of vegetation can be considered as one of the serious threats to real estate (Savills, 2016). In Uganda, flooding presents one of the largest hazard components nearly impacting 50,000 people and over $62 million in GDP mostly common in the areas Kampala, and the northern and eastern areas of the country (World Bank Group, 2021). The country experiences flash floods and slow-onset floods which are common in urban areas, low-lying areas, areas along riverbanks and swamplands. Flooding which is measured as largely negatively affect the real estate market worldwide and it is catered for as a discount on a given valuation date (Sprengnetter, 2012). With the increasing water level of Lake Victoria and its tributaries as well as the increased rainfall intensity in many regions in Uganda, flooding poses a substantial and growing threat to residential and commercial property values in Kampala as well as the entire real estate economy in Uganda. Methodology: This study set out to ascertain how flood hazard can be used to improve valuation assessment in Uganda. A direct processing approach using GIS and Analytical Hierarchy Process (AHP) approach were used to achieve the study objectives. Results: The study results show that a flood hazard map for Kampala and two different options for utilizing the flood hazard map during valuation assessment were developed and valuers make consistent, logical and reliable opinion in as far as flood hazard is concerned on a given property. Recommendations: According to the results, further research to ascertain the percentages that would guide valuation professionals when valuing properties located in areas with different flood hazard susceptibility levels; inclusion of a layer with NEMA boundaries onto the flood hazard map; investigations on the susceptibility levels of properties which are not located along a water source but are likely to flood as a result of human activity; the ISU website to host the map for onward public utilization, were the different recommendations made to this study.