Planning and land policy experts recognize the need for timely and accurate information about how to take account of likely, if uncertain, environmental and climate change impacts on global land use and development patterns. The Lincoln Institute’s fifth annual land policy conference in May 2010 addressed the status of many of these issues currently and through the twenty-first century.

Transport and Land Use

Providing effective transit service—a smart growth policy—requires residential densities of at least 30 persons per hectare. A review of census tract data for 447 U.S. urbanized areas in 2000 indicates that about a quarter of the urbanized population resided in areas with such densities, down from half in 1965. Fully 47 percent of the 447 areas had no tracts with a transit-sustaining density. But, transit ridership requires more than just dense residential areas.

For example, New York and Los Angeles have similar average residential densities, but 51 percent of commuters in New York use transit compared to 11 percent in Los Angeles. An analysis of travel diaries from nearly 17,000 Los Angeles households indicates that accessibility to employment centers increases transit use much more than living in a high-density area. Alternatively, congestion toll schemes dating from the mid-1970s have yielded sustained increases in transit use and reductions in auto use and congestion. While such policies are likely to produce land use changes, theory is ambiguous about their direction, and virtually no empirical evidence is available.

Energy and Carbon Pricing

Analysis of 13 completed LEED-certified developments showed that their residents produced fewer vehicle miles travelled than the average for their metropolitan areas, suggesting that these developments are fulfilling one of their objectives. A review of the land intensity of alternative energy sources demonstrates that wind and solar sources are feasible in terms of their land coverage, whereas heavy reliance on bio-fuels would require unfeasibly large shares of current agricultural land. However, alternative energy sources for electricity will require large investments in transmission lines across the continent.

An analysis of the effects of cap-and-trade, a carbon tax, and emissions standards as instruments to reduce carbon emissions shows that their impacts depend critically on implementation details. The first two approaches can appear very similar if permits are auctioned rather than given away. The regressivity of carbon taxes can be offset by revenue recycling that is proportional to total tax payments. Emission standards are likely to involve efficiency losses but may be most attractive politically.

Climate Change Impacts

Models of how climate change will affect sea-level rise, temperature, and rainfall differ greatly at the micro level, but all indicate that major costs will be borne by coastal cities and areas in the lower latitudes, with lower costs and some benefits accruing to those in the higher latitudes. A temperature rise of two degrees centigrade in this century seems inevitable, and constraining it to that level will require both large investments and effective policies. Such policies will have to include coordinated management of the one-third of land in the United States that is publicly owned, carbon capture in the form of larger forest areas, and mobilization of revenues for protection of environmentally sensitive areas.

The Way Forward

Many subnational U.S. jurisdictions are already engaged in implementing relevant policies, but the federal government needs to develop an approach to climate mitigation that includes benefit-cost standards, a realistic financing framework with beneficiary and user fees, and a national plan consistent with state plans. Internationally, capacity to address governance issues related to global commons is developing slowly and is hampered by inadequate funds, insufficient consensus, and a lack of legitimacy of existing institutions to address these issues, as well as by an increasing popular skepticism about the very existence of climate change.

The conference volume, with papers and commentaries by more than 25 contributors, will be published in May 2011.

Sonia Rabello de Castro has a Ph.D. in law and is a professor of administrative law and urban law at the University of the State of Rio de Janeiro (UERJ). She was elected in 2008 as a member of the Municipal Legislative Council of the City of Rio de Janeiro, representing the Green Party. She is also a member of the Ethics and Mores Parliamentary Committee and represents the Legislative Municipal Council at the Environmental Municipal Council.

From 1992 to 1996 she was attorney general for the Municipality of Rio de Janeiro, where she collaborated in the development of several far-reaching urban projects, including the Favela-Bairro program. She has also worked as director of legal services for a number of public entities and has published numerous articles on urban development, housing, governance, public administration, and preservation of the cultural patrimony. Her book on Preservation of the Brazilian Cultural Patrimony (Preservação do Patrimônio Cultural Brasileiro) is considered a basic reference for administrative and juridical decisions on this topic.

Land Lines: How did you become associated with the Lincoln Institute of Land Policy?

Sonia Rabello: I met Martim Smolka, the director of the Program on Latin America and the Caribbean, in the late 1990s, when I was researching how the traditional concept of property rights based upon civil law could be transformed in the context of urban law. The development of new urban laws could lead to conceptual changes in the way the right to property was originally understood, given the need to adapt the concept to meet the social and economic requirements of urban development. At that time, Brazil had not yet approved the federal urban development law known as the City Statute (Estatuto da Cidade), although the Brazilian Federal Constitution of 1988 had introduced the principle of urban development as a social function subject to public policy.

As a visiting fellow at Lincoln House in 2000 I became convinced of the need to create a new, more modern concept of property rights that would reflect the current urban reality in Latin America and allow for the use of the city by all citizens, whether they are property owners or not.

Land Lines: Can you explain this property rights concept further?

Sonia Rabello: It is the need to distinguish the right to own land from the right to build on that land. The Civil Code in Latin American countries follows the French model, which defines real estate property rights as having three components guaranteed to the owner: the right to use the property; the right to receive income accruing from the property; and the right to dispose of the property. Only the owner can exercise these rights. The right to build is not in itself an inherent component of this property right, but a condition for the owner to use the property, without which the utility of the property would be voided—and in this case the very meaning of the property right would be lost.

For the owner to exercise her ownership right to use the property, the public authority, through established urban planning regulations, must allocate a minimum building coefficient to that land. The building coefficient refers to the amount of development allowed on a parcel, also known as floor-area-ratio (FAR). The allocation of an equitable and free minimum building coefficient applied to all properties uniformly has a double function. First, it guarantees to all owners and possessors an economic use of their property. Second, it precludes the occurrence of unjust differences in the allocation of building coefficients among owners.

Land Lines: Why is this concept important for Latin America?

Sonia Rabello: All Latin American countries, including Brazil, have been addressing urban regulation and land policy at the national level, especially since the economic stabilization and redemocratization during the 1990s, when the need to consider the so-called accumulated social debt became a prominent issue. At the time, Latin American cities were experiencing acute problems due to the lack of basic infrastructure services such as sewer systems, public spaces, transportation, and access to affordable housing, as well as the challenge of creating a more equitable distribution of costs and benefits in the urbanization process.

Land Lines: How relevant is Brazil’s City Statute in this process?

Sonia Rabello: The City Statute, which was approved in 2001, confirms the distinction between the right to own land and the right to build, a distinction that had been discussed and implemented since the 1970s in São Paulo and other Brazilian cities. The expression “right to build” as used in the Brazilian Civil Code had led many landowners to assume that their right to own land also included the right to build on the land, in keeping with urban legislation and norms.

How much and what can be built is reflected in the price of land. That is, parcels with a higher building coefficient than others, or parcels where commercial use is permitted as well as residential use, sell at prices that incorporate the benefits freely given to landowners by the public authorities. When this happens, landowners appropriate as their private good the building rights provided by urban law, even though they had not invested in the infrastructure or services needed to support the land development. As a result, the costs of urbanization fall entirely on the public authority while private citizens profit, contradicting the general legal principle barring enrichment without just cause.

Land Lines: What does the principle of “enrichment without just cause” mean?

Sonia Rabello: This general principle of law, accepted in most Latin American countries, deems unacceptable an increase in private wealth that does not result from the person’s own labor or investment—that is, a legitimate cause pertaining to the person who benefits financially. In Brazil this principle is explicit in the legislation, specifically in the Civil Code, and is applicable to the entire juridical system.

Land Lines: How does the City Statute provide for the separation of the right to own land from the right to build?

Sonia Rabello: This concept was introduced through the instrument known as “charge for awarded building rights” (outorga onerosa do direito de construir) in Art. 28: “The master plan may delineate areas where the building right can be exercised above the basic coefficient adopted, given a counterpart payment by the beneficiary.” It is important to emphasize that the City Statute is a federal law that addresses the content of real estate property rights and has the same hierarchical standing as the Civil Code. Thus, if the law states that the public authority shall charge for a given right, then that right does not belong to the person to whom it is given.

Land Lines: In what way does the “charge for awarded building rights” help to preclude enrichment without just cause?

Sonia Rabello: The charge extracts the corresponding value of such rights from the land price. In other words, without that charge, the land price would include the value of the building rights freely granted to the landowner by the urban planning legislation. Without the charge, when the landowner sold the land he would be paid according to its market value, which includes the maximum use permitted on that land.

Land Lines: However, if I buy land expecting to build at a given floor-area-ratio that exceeds the basic coefficient and the public authority charges for these awarded building rights, wouldn’t that imply paying twice for the land?

Sonia Rabello: No, as long as the system of acquiring building rights from the public authority is well-established. Under the new law, building rights above the minimum coefficient belong to the city as a whole and must be purchased separately from the public authority. As a result, when paying the landowner, the buyer discounts from the land price the value of the additional awarded building rights.

Land Lines: In what other ways is this charge implemented to benefit society?

Sonia Rabello: In addition to addressing unjust enrichment, the principle concerns the legitimacy of recovering the added land value generated by public sector interventions in the urbanization process, and to prevent the added value accruing to the landowner. This principle is also reflected in the compensation paid for urban land expropriation. When not recovered by the public authority, the value of the additional building rights becomes an integral part of the market price. If the public authority expropriates that land, the landowner will receive compensation equivalent to the market price, which includes the land value plus the value of the building coefficient granted by the public authority free of charge.

Land Lines: Since the property tax is imposed on real estate property, wouldn’t this charge constitute double-taxing?

Sonia Rabello: To understand why this is not the case we need to look at the important distinction between the Colombian and Brazilian legislation. The Colombian law classifies the value capture charge as a tax, but in Brazil it is defined as an instrument for the public authority to recover a good that belongs to society. That is, the nature of the charge is a responsibility relative to the costs of urbanization. A decision by the Brazilian Supreme Court (RE509422 STFSC of 2008) resolved this issue by ruling that the charge for awarded building rights is not a tax but a payment for which the landowner is responsible.

I think this juridical opinion is coherent given that a tax corresponds to a contribution to the public treasury from one’s private assets, but, as noted, awarded building rights are not privately owned but are a public good that belongs to the city as a whole. To classify the value capture charge as a tax suggests a juridical inconsistency, since taxation is a form of assessing private wealth to finance public goods and services. This is not the case in Brazil, since the charge is levied on an essentially public asset.

Land Lines: Does the judiciary in Latin America accept and implement these concepts?

Sonia Rabello: Not uniformly or consistently. These juridical concepts fundamentally change the traditional understanding of property rights. Because of that, the principles upon which they are based and the logic behind them must be disseminated and assimilated more broadly. This is a judicial evolution that has to happen in order to reduce the exacerbated social exclusion that characterized Latin American cities.

Land Lines: How has the Lincoln Institute’s Program on Latin America and the Caribbean contributed to this new vision of land policy in the region?

Sonia Rabello: The Institute has been a very important influence in clarifying land policy issues among public officials and politicians in Latin America, especially through its training programs in which participants can be exposed to such principles, concepts and ideas, exchange experiences, and build a new land policy culture. The Institute has developed a critical mass of people committed to improving the quality of land policies and promoting new strategies to finance urban development. Understanding that individual property rights can coexist with social rights to the city has been a critical factor driving the evolution of urban thinking in the region.

Antonio Azuela, fellow del Instituto de Investigaciones Sociales de la Universidad Nacional Autónoma de México, posee títulos de grado en Derecho de la Universidad Iberoamericana (México) y de la Universidad de Warwick (Inglaterra), así como también un doctorado en Sociología por la Universidad Nacional Autónoma de México (UNAM). Desde finales de la década de 1970, Azuela se ha dedicado a la investigación y la enseñanza del derecho urbano y medioambiental desde una perspectiva sociolegal. Su libro “Visionarios y pragmáticos: Una aproximación sociológica al derecho ambiental”, México: UNAM, 2006, es una reconstrucción sociológica de sus experiencias como procurador general en la Procuraduría Federal de Protección al Ambiente (PROFEPA) de México desde 1994 hasta 2000. Recientemente editó el libro “Expropiación y conflicto social en cinco metrópolis latinoamericanas”, publicado por la UNAM y el Lincoln Institute of Land Policy en 2013.

Land Lines: ¿Cómo se involucró usted con el Lincoln Institute of Land Policy?

Antonio Azuela: En 1991, conocí a varios funcionarios del Instituto mientras realizaban un viaje de exploración por México. Mantuve el contacto con ellos porque me interesaba el enfoque del Instituto respecto de la política urbana. Mi relación con el Instituto se afianzó en el año 1998 en una reunión que tuvo lugar en El Cairo, organizada por el Grupo Internacional de Investigaciones sobre Derecho y Espacio Urbano (IRGLUS), en la que el Instituto expresó su interés en un enfoque sociolegal de los problemas del suelo urbano. En el año 2000, tuve el honor de que me invitaran a formar parte del directorio del Instituto. Desde entonces, he mantenido un contacto permanente con el equipo y los programas del Instituto Lincoln.

Land Lines: ¿Por qué la adquisición pública de suelo se ha convertido en un problema tan crítico, en especial en América Latina?

Antonio Azuela: La expropiación (es decir, la adquisición obligatoria de suelo por parte del Estado) es un tema muy importante en todo el mundo, ya que es una manera de obtener terrenos para proyectos urbanos públicos. Sin embargo, en América Latina este problema es aún más crítico, debido a la naturaleza débil del Estado en cuanto a los asuntos urbanos. Antes de la transición democrática que experimentó la región, los gobiernos obtenían terrenos fácilmente mediante el uso de mecanismos que se considerarían cuestionables en una democracia. Pero la transición fortaleció al poder judicial, que, por lo general, no es proclive a las intervenciones del gobierno en el mercado. Hoy en día, los propietarios privados tienen cada vez más posibilidades de interferir en la adquisición pública de suelos en la región (con la notable excepción de Colombia, donde una amplia coalición de diferentes profesionales, jueces y organizaciones sociales apoya la doctrina de la función social de la propiedad). Esta tendencia puede observarse, por ejemplo, en la compensación exorbitante que algunos tribunales han otorgado en casos de expropiación de suelo en la ciudad de México y en São Paulo.

Land Lines: ¿Cuáles son los principales puntos en conflicto?

Antonio Azuela: El primero es la adopción de políticas económicas que defienden un rol menor del Estado. El segundo tiene que ver con la condición legal de los derechos de propiedad. Cuando las reformas constitucionales permiten a los jueces limitar la facultad de expropiación, dicha restricción no es necesariamente mala, ya que puede dar como resultado una administración pública de mayor calidad, aunque, a corto plazo, ha interferido en la facultad del gobierno de adquirir terrenos urbanos para proyectos públicos. Existen dos excepciones notables: en Brasil y en Colombia, las reformas constitucionales han establecido políticas urbanas inspiradas en ideas de justicia social, aunque solamente en Colombia existe una nueva generación de jueces que actúan conforme a estos principios. En Brasil, los tribunales se encuentran dominados por la visión liberal clásica de la propiedad privada, lo cual interfiere en la capacidad de implementar la función social de la propiedad, una idea que ha circulado por América Latina durante casi un siglo.

Land Lines: Muchas jurisdicciones prefieren adquirir terrenos en el mercado abierto en lugar de utilizar instrumentos tales como la expropiación.

Antonio Azuela: La expropiación no debería ser la primera opción para adquirir terrenos. El desafío es que el gobierno pueda regular diferentes clases de instrumentos con el fin de lograr un objetivo general: reducir el componente del suelo en el costo total del desarrollo urbano. La utilización de la expropiación debe estar garantizada por un marco legal sólido que establezca un equilibrio adecuado entre el poder del Estado y el poder de los propietarios, y debería representar la última alternativa a la hora de adquirir terrenos para proyectos urbanos públicos.

El gran problema es el costo del suelo, pero los mecanismos de intervención del gobierno pueden inflar los precios. Por ejemplo, si no se espera que el uso de la expropiación aumente el valor del suelo y los jueces determinan que la expropiación es el enfoque adecuado, entonces este instrumento puede tener un impacto positivo en los mercados inmobiliarios. Al menos, podemos esperar que la adquisición de terrenos por parte del gobierno no genere un aumento de precios.

Land Lines: ¿Cuáles son los principales resultados de su investigación en torno a la utilización de la expropiación para el desarrollo urbano en la región?

Antonio Azuela: Aunque existe una tendencia general de fortalecer los derechos de propiedad, que interfiere en la facultad de expropiación, se observan diferentes variaciones en dicha tendencia dependiendo de la relación entre el poder judicial y el poder ejecutivo en los gobiernos post autoritarios de la región. El proceso de cambio institucional depende menos de las tendencias mundiales que de las fuerzas nacionales o incluso locales, ya que puede observarse que ciertas ciudades siguen caminos diferentes a otras ciudades de un mismo país. Aun cuando los gobiernos municipales adoptaran la misma estrategia, los tribunales de una región protegerán a los propietarios en mayor medida que los tribunales de otras regiones. El área metropolitana de Buenos Aires, por ejemplo, ilustra de qué manera el sistema institucional de la expropiación no es homogéneo, aun dentro de la misma área metropolitana. Así, en la Ciudad Autónoma de Buenos Aires, las personas que viven en asentamientos informales (denominados “villas miseria”) han recurrido a los tribunales y han impedido el desalojo. Sin embargo, en la provincia de Buenos Aires, el clima político es tal que no existe amenaza de desalojo: la expropiación se utiliza con el fin de garantizar a las personas la permanencia en el lugar donde se han asentado.

Otra lección importante que podemos extraer es que, en América Latina, no existe un diálogo auténtico acerca de la importancia de la expropiación o de las diferentes maneras en que los tribunales han abordado los dilemas que la expropiación presenta. Aunque el pensamiento constitucional de la región es muy rico en ideas sobre ciertos problemas legales, tales como los derechos de los aborígenes y de los ancianos, las políticas urbanas (en particular, la expropiación) no han generado debates profundos entre los juristas. Lamentablemente, estos problemas parecen ser considerados como excepciones, a pesar de la enorme cantidad de personas que vive, ya sea sufriendo o disfrutando, en los grandes centros urbanos.

Land Lines: ¿Las compensaciones por expropiación son arbitrarias o injustas? De ser así, ¿para quién?

Antonio Azuela: La compensación inadecuada es, sin duda alguna, uno de los mayores desafíos para el futuro desarrollo de la expropiación como instrumento de política de suelo. En algunos casos, los gobiernos pueden aprovecharse de la impotencia de ciertos grupos sociales y ofrecerles una compensación ridículamente baja por sus tierras o casas. En otros casos, el poder económico y la influencia de ciertos propietarios pueden generar compensaciones exorbitantes. Pero más allá de estos dos casos extremos, en los que el propietario afectado es o muy vulnerable o muy poderoso, resulta difícil discernir una tendencia dominante.

Una respuesta más precisa a su pregunta requeriría un estudio de mercado sobre una gran cantidad de casos de expropiación a fin de determinar si la compensación es alta o baja al compararla con criterios preestablecidos. No obstante, según las investigaciones existentes, los tribunales generalmente no poseen criterios claros o ampliamente compartidos para determinar si las compensaciones son justas. Además, los tribunales carecen de la capacidad de comprender lo que está en juego en un proceso de transformación urbana en el que se utiliza la expropiación. Consideremos, por ejemplo, el caso de una familia prominente de Ecuador que recibió una compensación muy alta por la expropiación de suelo de cultivo que poseía en la periferia de Quito. Lo notable aquí fue que el organismo que falló en este caso fue el Tribunal Interamericano de Derechos Humanos, y resulta evidente que este tribunal no estableció criterios claros para determinar la suma de la compensación, sino que simplemente realizó un promedio de las valuaciones presentadas por cada una de las partes. La compensación zen este caso fue la más alta que haya otorgado este tribunal superior, que fue creado con el fin de atender las violaciones a los derechos humanos cometidas por dictadores, aunque terminó beneficiando a los propietarios privados a expensas del interés público. El hecho de que este caso no haya generado un escándalo entre los constitucionalistas de la región indica el grado de marginalización que presentan los problemas legales urbanos en América Latina.

Land Lines: ¿Cuáles son las tendencias que usted ha observado que están cambiando?

Antonio Azuela: Observo con cierto optimismo que muchos tribunales y gobiernos municipales de la región están atravesando un proceso de aprendizaje e intentando no repetir los errores judiciales del pasado. Lamentablemente, estas lecciones raramente trascienden el área local afectada para incorporarse al saber jurídico regional común.

Land Lines: ¿Qué tipo de educación o capacitación recomendaría usted?

Antonio Azuela: Lógicamente, debemos intensificar el intercambio entre las diferentes disciplinas y países y colocar a los tribunales en el centro del debate, ya que estos son los que tomarán las decisiones finales. Sus fallos deberían expresar la mejor síntesis posible de un acervo de conocimientos que debemos construir en torno a la dinámica urbana de la región. En los contactos que hemos tenido con diferentes tribunales, con el apoyo del Instituto Lincoln, descubrimos que, una vez establecido el diálogo, los jueces ven la necesidad de aprender más a fin de comprender los efectos de sus decisiones. En otras palabras, aunque los tribunales parecen no mostrar un gran interés en los problemas urbanos, tal como se demuestra en la actitud rutinaria de sus decisiones diarias, pueden igualmente entrever nuevas perspectivas para su propio desarrollo profesional dentro del contexto de un análisis crítico de problemas urbanos.

Land Lines: ¿Cuáles son los problemas críticos que deben analizarse en mayor profundidad? ¿Qué es lo que aún no sabemos?

Antonio Azuela: Deberíamos intentar comprender la lógica de las decisiones emanadas de los tribunales de la región. Con frecuencia interpretamos de manera simplista las medidas tomadas por los tribunales, ya que los medios de comunicación tienden a amplificar los peores casos. No obstante, muchos jueces se esfuerzan por encontrar la mejor solución posible para cada caso. ¿Y en qué condiciones realizan su labor? Uno de los desafíos que conlleva investigar estos problemas en América Latina es el de comprender el mundo real en el que se toman dichas decisiones, además de los temas de la corrupción y la incompetencia, tan comunes pero siempre relevantes. Debemos analizar los datos estadísticos con el fin de obtener tendencias generales, junto con la aplicación de un enfoque etnográfico sobre el funcionamiento de los tribunales. Sólo entonces seremos capaces de entender qué es lo que debe reformarse para mejorar el rendimiento de los tribunales en los conflictos urbanos. Aunque es muy importante determinar quién resulta favorecido por las decisiones de los tribunales (lo que puede lograrse analizando el contenido de los fallos judiciales), necesitamos comprender mejor las condiciones en las cuales se toman dichas decisiones. Y para ello, debemos acercarnos mucho más a los tribunales.

Strengthening Municipal Fiscal Health in China

Since 2013, Zhi Liu has been a senior research fellow and director of the China Program at the Lincoln Institute of Land Policy, and director of the Peking University–Lincoln Institute Center for Urban Development and Land Policy (PLC). Prior, Zhi was lead infrastructure specialist at the World Bank, where he worked for 18 years, with operational experiences in a number of developing countries.

Zhi received a B.S. in economic geography from Dr. Sun Yat-Sen University (China), a M.S. in city and regional planning from Nanjing University (China), and a Ph.D. in urban planning from Harvard University.

LAND LINES: The Lincoln Institute recently initiated a global research agenda on municipal fiscal health. This effort arises from the recognition that a number of cities in the United States and in many other countries including China suffer financial hardship. What is the nature of municipal fiscal distress in China?

ZHI LIU: It’s very different from the financial troubles faced by cities in the United States. The two countries are at very different stages of urbanization. While the U.S. is highly urbanized, with more than 80 percent of citizens living in urban areas, according to the 2010 census, China is only halfway through the urbanization process. Today, 750 million Chinese citizens live in cities, accounting for 55 percent of the total population. By 2050, the urban population is expected to reach 1.1 billion, or 75 percent of the total population. Over the last two decades, with the exception of a few mining cities, almost all municipalities have seen rapid population growth and spatial expansion, generating a significant demand for public investment in urban infrastructure.

In China, the main sources of funding for urban infrastructure investment are revenues from land concessions and local borrowing from commercial banks, often using land as collateral. Urban land is owned by the state, and rural land is collectively owned by villages. The Land Administration Law stipulates that only the state has the power to convert rural land into urban use. This sets the stage for the municipal governments to take rural land for urban development through the land concession process. As it goes, municipal governments expropriate rural land, service it with infrastructure, and sell the land use rights to real estate developers. The compensation to farmers for the farmland taken is low, based on the land’s agricultural production value instead of market value for urban use. When the demand for real estate development is high, the land concession fees are bid high, and the municipal governments stand to collect a huge amount of revenues. For the last 10 years, revenues from land concessions have accounted for more than one-third of total local fiscal revenues.

Moreover, municipal governments further expand their financing capacity by using land assets as collateral to secure commercial loans from commercial banks. Before a recent amendment, the Chinese Budget Law did not permit local governments to borrow. However, most municipal governments bypassed the law by creating their own local financing vehicles—known as urban development investment corporations (UDICs)—that borrowed commercial loans or issued corporate bonds for the governments. The size of outstanding local debts has grown rapidly over the last few years, reaching at least one-third of the GDP now.

The land-based financing mechanism has helped municipal governments in China raise a significant amount of funds for capital investment. However, the success has also created incentive for municipal governments to rely on land concessions and UDICs too heavily. Today, China’s economy is growing more slowly than before, and the mechanism is running out of steam in many localities where conversion of rural land for urban use exceeds the real demand. Some cities have borrowed much more than they can repay, leaving them heavily indebted.

Many empirical studies, including some funded by the Lincoln Institute, find that China’s land-based financing mechanism is one of the main causes of other urban issues that we face today. Skyrocketing housing prices, growing local debts, excessive land-taking, growing tension between the farmers and municipal governments over land-taking, and widening gaps of income and wealth distribution between urban and rural populations are among the major issues.

LL: The international mass media has been reporting on these issues. How will China address them?

ZL: There is a high level of consensus on the root causes of the problems. In November 2013, the central government announced a set of reforms, and a few are directly related to urbanization policy and municipal finance. For example, the scope of land expropriation will be narrowed to the confine of public purposes, and villages are allowed to develop their land for urban use under the premise that it conforms to planning. The reforms also call for acceleration of property tax legislation; reform of hukou, the household residential registration system, to help farmers become urban residents; and government efforts to make basic urban public services available to all permanent residents in cities, including all rural-to-urban migrants.

LL: What are the implications of hukou reform on municipal finance?

ZL: The government is phasing out China’s longstanding hukou system, and the implications for municipal finance will be significant. Hukou was designed to identify a citizen as a resident of a certain locality, but for several decades the government used the system to control rural-to-urban migration. A rural hukou holder could not become an urban hukou holder without the government’s approval. Without urban hukou, a rural migrant worker is not eligible for public services provided by the urban governments.

Since the economic reform, the expanding urban economy has absorbed a large number of rural-to-urban migrant workers. Earlier, I mentioned China’s urbanization rate of 55 percent and urban population of 750 million. These numbers include the 232 million rural migrants who stay in cities for more than half a year. If they were excluded from the calculation, the level of urbanization would be just 38 percent. Due to their rural hukou status, however, migrant workers don’t have access to many services enjoyed by urban hukou holders, despite the fact that many have labored and lived in cities for years. Municipal governments determine the extent of many urban public services—such as public schools and affordable housing—according to the number of urban hukou holders inside the municipal jurisdiction. Phasing out hukou would significantly increase the fiscal burden to the municipal governments for public service provision. Some scholars in China estimate that the cost of providing full urban public services to each rural migrant would be at least RMB 100,000 (roughly $16,000 U.S.). The total outlays for all current rural migrants would be at least RMB 23 trillion (about $3.8 trillion U.S.).

LL: China is introducing the residential property tax. What is the status of that initiative?

ZL: The government is drafting the first national property tax law as part of the ongoing reform of public finance. China is one of only a handful of countries without a local property tax. The current taxation system relies heavily upon taxes on businesses and transactions, and very little upon taxes on household income and wealth. In a more urbanized China with a wealthier population who own residential properties, the property tax would be a more viable source of municipal revenues. Today, 89 percent of urban households own one or more residential units, and the value of those properties has much to do with urban public services. Property tax will allow cities to tax urban residential properties whose value would benefit from the improved public services made possible by property tax revenues. It should also fill part of the fiscal gap left by the expected reduction of revenues from land concessions. However, property tax will not be a major source of municipal revenues any time soon. It may take one or two more years for the National People’s Congress to pass the new law. It would also take perhaps two to three years for cities to establish the property database and assessment and administration system.

LL: It must be tough for cities to deal with declining revenues from land concessions without an immediate alternative—especially as they are coping with growing local debt, which has been widely reported. How will Chinese cities get out of this situation?

ZL: The situation is indeed tough. China’s economy is slowing down. The real estate sector is no longer as hot as it was in the last 10 years, resulting in lower demand for land and thus lower revenues from land concessions for municipal governments. Cities are now facing a fiscal gap. One possible way to fill the gap would be local government borrowing. However, as I mentioned earlier, many cities are indebted and have little capacity to borrow further. In fact, most cities in China do not have adequate capacity for debt management. The newly amended budget law permits provincial-level governments to issue bonds within the limit set by the State Council, but also closes the door on other forms of local government borrowing. Currently, the central government actively promotes infrastructure financing through public-private partnerships (PPP). While this is a good move, it won’t be sufficient to fill the infrastructure financing gap, as PPP is suitable mainly for infrastructure projects with a strong revenue flow. There are many other urban infrastructure projects that generate little or no revenues. In the long term, I believe that China should actively establish a municipal government bond market to channel funds from institutional investors to municipal infrastructure investment and enable local governments to access commercial loans based on creditworthiness. To do so, municipal governments need to develop institutional capacity on several fronts, such as local debt management, capital improvement planning, multiyear financial planning, and municipal infrastructure asset management.

LL: Is PLC’s work relevant to the current reform?

ZL: The PLC was jointly established by the Lincoln Institute and Peking University in 2007. By the time I arrived, in 2013, the center had developed its reputation as one of China’s premier research and training institutions on urban development and land policy issues. The center supports a number of activities, including research, training, academic exchange, policy dialogue, research fellowship, demonstration projects, and publication. We focus on five core themes—property taxation and municipal finance, land policy, urban housing, urban development and planning, and urban environment and conservation. Over the last few years, our research projects have touched upon land-based finance, local debts, housing prices, infrastructure capital investment and finance, and other topics relevant to municipal fiscal health. We have also provided training to Chinese government agencies on the international experiences of property tax assessment and administration. I would say that our work is highly relevant to the current reform.

Implementation of the new comprehensive policy reforms is generating considerable demand for international knowledge and policy advice in the China Program’s focus areas, especially property taxation and municipal finance. We plan to initiate a pilot demonstration project with one or two selected cities in China, to support the institutional capacity required for the development of long-term municipal fiscal health. Our team has started a study to develop a set of indicators to measure municipal fiscal health for Chinese cities. It is the right time for us to initiate this agenda in China.

Smart growth has moved from the domain of policy analysts into more general acceptance. It is championed by national leaders such as Vice President Al Gore, governors (Parris Glendening of Maryland), urban mayors (William A. Johnson of Rochester, New York), non-governmental organizations (National Trust for Historic Preservation), and the private sector (Urban Land Institute). Voters in many California cities, including Sacramento, Santa Barbara, Irvine and Davis, and in numerous suburbs around San Francisco have approved urban growth boundaries (UGB) as one type of intervention to contain sprawl development.

Urban containment policies are not limited to environmentally active communities in California, Oregon or Colorado, or booming economies in states such as Florida, however. Lexington, Kentucky, observed the 40th anniversary of its urban growth boundary last year, and Sioux Falls, South Dakota, has had a containment boundary for many years. This kind of broad-based popular support for smart growth policies is more than simply a growth management fad and is likely to increase, particularly as long as the national economic expansion continues. Indeed, urban containment appears to be building a kind of momentum as a land use policy that has not been seen since the Supreme Court’s sanctioning of zoning in Ambler Realty Co. vs. Euclid, Ohio.

Urban containment planning has two basic purposes: (1) to promote compact, contiguous, and accessible development provided with efficient public services; and (2) to preserve open space, agricultural land and environmentally sensitive areas that are not currently suitable for development. Urban containment consists of drawing a line around an urban area within which development is encouraged, often with density bonuses or minimum density requirements, to accommodate projected growth over a specified future time period, typically ten to twenty years. Land outside the boundary is generally restricted to resource uses and to very low-density residential development by limiting the extension of utilities, wastewater services and other infrastructure.

Intuitively, however, this sort of land regulation appears to be a double-edged sword. On the one hand, measures aimed at reducing traffic congestion or infrastructure costs, or improving the aesthetic quality of urban areas, are appealing. On the other hand, measures that are seen to limit land supply and potentially cause housing prices to increase are unappealing, particularly to those seeking to expand the stock of affordable housing.

To explore the implications of these two faces of urban containment as smart growth policy, the Lincoln Institute and the Fannie Mae Foundation convened a group of scholars and practitioners for a symposium in Cambridge last February. The economists, planners and other researchers in attendance discussed the existing literature on urban containment and identified questions for future research that could inform policy making in this dynamic area of land regulation.

Housing Price Effects

Housing costs reflect the price of land, the price of the house and the value of amenities. Urban containment policies change housing costs for two reasons. First, land prices change when land supply is altered. Second, if urban containment increases the value of the amenity package associated with a house, then that, too, will cause a change in house prices. Much of the discussion at the symposium centered around these two theoretically distinct aspects of the housing price problem.

Most economic literature assessing urban containment argues that it raises land and housing prices principally by constraining the supply of land and/or by failing to accommodate new demand for serviced land. But, others argue that urban containment systems, when coupled with increased densities within the growth boundary, should not adversely affect supply and, indeed, should generate benefits to residents. This latter view shifts the focus away from the microeconomic theory of price determination to housing economics, which introduces the concept that house prices capitalize the value of neighborhood amenities.

For example, the increased densities within an urban growth boundary can make it practical to extend or enhance existing public transit, thus yielding greater accessibility. In addition, increases in densities can result in lower costs to provide urban services by the public sector. Similarly, higher neighborhood densities can lead to more interactions with neighbors and more “eyes on the streets,” which, in turn, can translate into lower crime rates. Finally, if urban containment is successful in preserving open spaces, house values in neighborhoods near the preserved open space should also rise.

All of these benefits can be counted among the amenities that give value to a house and are ultimately capitalized in its value, even while the land supply restriction can also put pressure on house prices. In truth, both factors may be at work, and we still have much to learn about their impacts. Furthermore, some of these internalized benefits may have different values for households at different income levels.

A comparison of Atlanta, Georgia, and Portland, Oregon, both suggests of these sorts of benefits and points to areas for future research to answer these questions more comprehensively (see Table 1). During the first half of the 1990s, Portland experienced a large increase in housing prices (approximately 60 percent compared to almost 20 percent in Atlanta, in nominal terms). Between the mid-1980s and the mid-1990s, homeownership rates in Portland increased by nearly 5 percent while Atlanta’s rate remained virtually unchanged. Finally, perceptions of improved house quality were greater among Portland residents than those in Atlanta. In both metropolitan areas and in both time periods, the proportion of household income spent on housing was virtually the same, suggesting that income growth in Portland exceeded that in Atlanta. However, it is difficult to conclude definitively that increases in house quality in Portland were due to enhanced amenities conferred on households by changes in land regulation, rather than to rising incomes.

Although urban containment policies may stabilize the supply of land, they usually increase the supply of development opportunities. Such policies are typically accompanied by “upzoning” whereby land zoned formerly at one level of development intensity is changed to allow for a higher density. One strategy to increase densities is to infill and redevelop (or “refill”) urban areas at higher than extant levels through the adoption of “minimum intensity” zoning. We do not know the subsequent effect of such policies on house prices, and we know even less about their effect on household budgets and disposable income. For example, higher housing prices may simply reflect capitalization of more efficient development patterns that reduce expenditures in other parts of the household budget.

It is possible, however, that current and future homeowners will benefit directly from these sorts of capitalized savings. For example, location-efficient mortgages, a lending instrument being tested in a few markets, allow lenders to extend mortgages to households based on a higher mortgage-to-income ratio. The rationale for altering the income eligibility is that, in comparison to suburban households, urban households can substitute walking and public transit for automobile payments, including both capital costs and operating expenses. Thus, disposable income is effectively increased as non-housing expenditures decline. Current experiments with the location-efficient mortgage are underway in Chicago’s northside neighborhoods and in central Seattle. If default rates for these loans are similar to those for traditional mortgages, we may see greater adoption of this instrument in appropriate submarkets.

Other savings that may accrue to urban homeowners as a result of containment policies are lower taxes due to lower capital costs or increases in supplemental income if higher densities are achieved through the addition of accessory apartments in existing houses.

Landowner Behavior Implications

The imposition of urban containment policies and changes in density are also likely to result in changed expectations of landowners. Therefore, an additional consideration for researchers, which the symposium participants confronted, is the role of containment in affecting the nature of landowner behavior with respect to land acquisition and land development.

In an environment of a relatively inexhaustible supply of land, speculation can be reasonably efficient while the competition to sell land keeps prices low. The end result may be that housing prices will not be affected materially. However, when supply is constrained, even if upzoning increases development capacity, the number of players in the land market can fall and cartels may form. Furthermore, an assumption of urban containment policies is that undeveloped land inside the boundary will come on-line in sufficient amounts and at appropriate times to sustain development. There is no research into this, however. Will owners of land, knowing they hold an oligopolistic position in the land market, delay its sale to get a higher price?

Until now, in our studies of urban land markets, we have lived with the assumption of relatively inexhaustible (i.e., elastic) land supply. Urban containment policies can change that premise by making land an exhaustible commodity, resulting in the problem of dual predictability. On one hand, developers are given more certainty in whether and how they develop land; on the other hand, landowners know that land supply will become exhaustible and therefore they may be enticed to become speculators, in their own right. Will local governments reward those willing to develop vacant or underused parcels with higher densities to offset others who delay sale? Certainly, a land tax is expected to limit this sort of behavior. Can other changes in the tax regime encourage development within the UGB? For all of these reasons, we have much to learn about the effect of urban containment on landowner and speculative behavior.

Summary Observations

The symposium participants spent more time on the economic issues related to urban containment than on environmental concerns. However, some material was presented that suggested significant environmental benefits as a result of urban containment. Table 2 presents additional comparisons of Portland and Atlanta between the mid-1980s and the mid-1990s. While vehicle miles traveled increased in both places, Portland experienced little change (2 percent) whereas Atlanta experienced a significant increase (17 percent). At the same time, Portland’s average commute times fell, air quality improved, and per capita energy consumption declined.

All of these indicators suggest that Portland is different from Atlanta in meaningful ways. Furthermore, typical behavior by individuals in each of these metropolitan areas is presumed to be different. We should attempt to find out the degree to which growth containment policies account for these behavioral differences and whether there are other policies that may also play important roles in affecting the economic and environmental dynamics of metropolitan regions. For example, the problem of housing affordability remains a serious concern in most cities, whether with or without urban containment boundaries.

Urban containment creates an entirely new regime in urban planning and development decision making, offering research challenges because of the difficulties in developing methodologies that can tease out complex interactions and frame the results in a manner that can advance both public and private interests. The Lincoln Institute, the Fannie Mae Foundation and the U.S. Department of Housing and Urban Development are among a growing number of research entities interested in pursuing these challenges.

Arthur C. Nelson is professor of city planning, urban design and public policy at the Georgia Institute of Technology in Atlanta. He organized the seminar referenced in this article and has researched and written extensively on this topic.

Numerous convergent trends motivated 40 academics and practitioners from 15 countries to meet at the Lincoln Institute in July 1998 to discuss recent land market reforms. First, the recognition that the world’s population is becoming increasingly urban and so the quantity of land converted to urban use is expected to rise significantly. Second, evidence that a major proportion of the world’s poorest households now lives in urban areas (e.g., 80 percent in Latin America). Third, the perceived sea change in the role of government shifting away from intervention and regulation toward more selective urban management. During the three-day workshop, participants presented papers and discussed the rationale behind recent legal and institutional reforms, the nature of the transition from customary or informal to formal markets, evidence for improved land market efficiency, and access to land for the poor.

Legal and Institutional Reform

Several participants made the case for institutional reform of land markets in different ways. Steve Mayo (Lincoln Institute) drew conceptual and empirical links between the performance of property markets and the macro economy. He noted that poorly functioning land markets influence wealth creation and mobility rates which, coupled with particular finance conditions, could aggravate macro-economic instability. Drawing data from the Housing Indicators Program he showed that the prices of raw and serviced land tended to converge with higher land prices, indicating larger land development multipliers at lower prices. He also noted a relationship between the price elasticity of the housing supply and the policy environment.

Although there is a perception that reforms toward ‘enabling’ policy environments are now widespread in developing and transition economies, Alain Durand-Lasserve (National Center for Scientific Research, France) observed the rarity of explicit reference to ‘land market reform’ in political statements in Africa. Indeed, he argued that the ideological underpinning for freer land markets was more advanced than the practice of establishing the prerequisites for effective and unitary markets. In practice, a number of papers indicated competing political agendas, legal ambiguity and diversity of progress in the reform process.

“The law can be reformed, history cannot,” said Patrick McAuslan (Birkbeck College, London) in discussing the role of the law as a necessary basis for effective land market reform. He described the evolution of the recent Land Act of Uganda, which seeks to establish a land market based on individual ownership. He commended the government for dovetailing the reform process with extensive public debate, but noted that drafts of the Act set up new contradictions in a century-long history of competing land relations between freehold, customary tenure and nationalized public lands. His paper outlined a series of ‘time-bombs’ left by colonial administrations and aggravated by post-independence governments, only some of which are addressed by the new legislation.

The inconsistent nature of reform appears to be particularly acute for the transition economies of Eastern Europe and Southern Africa. In Eastern Europe, the legacies of communism have led to inappropriate land uses and the assignment of non-monetary values to property. Legal changes toward land privatization, however, have been slow. Tom Reiner (University of Pennsylvania) argued that despite a strong normative case for privatization and latent demand in the Ukraine, current laws make no provision for freehold sale. He presented data to show that privatization would yield considerable macro-economic and fiscal benefits: direct sales revenue alone would amount to $13 billion, plus increased taxes and more efficient resource allocation.

In Russia, according to Jan Brzeski (Crakow Real Estate Institute), the emergence of land markets has been inhibited by a different understanding of the social role of property and turf politics. In Poland, where privatization is more advanced, he argued that reforms have been insufficient to overcome extensive resource misallocation. Assignation has taken place at symbolic prices without reforms to ground rents or property taxes, and with high transaction costs. Nevertheless, land market turnover is increasing faster than economic growth and re-sales represent about 25 percent of capital investment.

The1991 privatization program in Albania appears to have stimulated an active property and land market. Research by David Stanfield (University of Wisconsin-Madison) indicates substantial increases in turnover rates and increasing prices, but also extensive conflicts between pre-collectivization and post-privatization holders, contradictions in the many laws and errors in the new documentation. The research points to the relative ease of establishing frameworks for privatization but greater difficulties in allowing markets to function thereafter.

Lusugga Kironde (University College of Lands and Architectural Studies) described how shortcomings in the ‘planned’ allocation system in Tanzania meant that 60 percent of people acquired land through informal methods. This in turn denied revenue to the government since transactions were outside official sanction and in some cases well-off households received plots with a substantial subsidy. Michael Roth (University of Wisconsin-Madison) described a similar situation in Mozambique, where the legacy of state socialism is still felt in the level of government intervention and under-representation of freehold tenure.

In both countries, the assessment of reform was mixed. Tanzania’s New Land Policy (1995), while a useful step in accepting the existence of a land market and providing security to plots with customary tenure, has fallen short of removing the barriers to an effective land market. In particular, Kironde noted that the new measures concentrated decisions in a Land Commissioner despite a national policy of administrative decentralization. The policy offers no incentive to encourage the formalization of informal practices and no stake to ensure the compliance of important middlemen. In Mozambique, since the late 1980s, market-oriented reforms have produced unclear administrative responsibilities and uncertain land rights. One feature has been land disputes with households calling upon newly empowered producer associations to defend claims. The 1997 reforms attempt to guarantee tenure security, provide incentives for investment, and incorporate innovative ideas for community land rights.

In Latin America, reform has been less concerned with establishing markets per se and more with improving their function, especially land reforms motivated by largely rural concerns but which have important urban impacts. Rosaria Pisa (University of Wales) indicated that reforms in Mexico have created the necessary conditions for the privatization of community (ejido) land, but progress has been slow. Less than one percent of land has been privatized in five years due to other government interests and legal ambiguities that have established a second informal land market.

Carlos Guanziroli (INCRA – the National Institute on Colonization and Agrarian Reform, Brazil) argued that rural reform was producing land use diversity, especially through the survival of small family farms. Reform was also affecting Brazil’s urban land markets as capital switched from rural to urban areas, probably raising urban land prices. Francisco Sabatini (Catholic University) argued that the liberalization in Chile had not reduced land prices because landowners’ and developers’ decisions are influenced less by regulations and more by demand.

Overall, the consensus on whether reforms were producing unitary and less diverse land markets was unclear. Agents and institutions are proving to be very adaptable to new conditions, a point made for all three regions. Ayse Pamuk (University of Virginia) argued that, based on her analysis of informal institutions in Trinidad, researchers should look away from formal regulations as a barrier to land market operation. Instead, they should consider how social institutions such as trust and reciprocity were producing flexible solutions to tenure insecurity and dispute resolution.

Clarissa Fourie (University of Natal) described how user-friendly local land records could be merged with registries on marriage, inheritance, women’s rights and debt to produce a useful tool for land administration in Namibia. Nevertheless, she noted that the incorporation of customary practices into land administration to provide security of tenure would mean some adaptation of social land tenure systems. Pointing to research in Senegal and South Africa, Babette Wehrmann (GTZ, Germany) argued that customary and informal agents were flourishing and providing high-quality sources of market information.

The Formalization and Regularization of Land Tenure

Peter Ward (University of Texas at Austin) described the diversity of regularization programs across Latin America, where some countries consider it to be a juridical procedure and others regard it as physical upgrading. Regularization may be an end in itself (mass titling programs), or a means to an end (to develop credit systems). Ward argued that the differences among programs stem from how each government ‘constructs’ its urbanization process and represents this vision back to society through laws and language.

Edesio Fernandes (University of London) explained how Brazil’s Civil Code dating from the beginning of the century created a system of individual property rights that restricted the ability of government to regularize favela communities. The 1988 Constitution attempted to reform this situation by acknowledging private property rights when accomplishing a social function. Nevertheless, legal tensions within regularization programs have failed to integrate the favelas into the ‘official city,’ leading to some politically dangerous situations.

Under different circumstances, South Africa produced a regulatory regime that denied freehold tenure to black households or offered only complicated non-collateral permits to the few. Lauren Royston (Development Planning Alternatives, Johannesburg) outlined how the country’s Land Policy White Paper contemplates legally enforceable and non-racial rights, a wider range of tenure options and opportunities for communal property acquisition.

The two developing countries with the most extensive mass titling programs, Mexico and Peru, were scrutinized by Ann Varley (University College, London) and Gustavo Riofrio (Center for the Study and Promotion of Development – DESCO, Lima). Varley assessed two prevailing assumptions that run through the contemporary policy literature: that decentralization produces more effective land management, and that the regularization of customary tenure is more complicated than the regularization of private property. In Mexico, despite the rhetoric of decentralization, a highly centralized system has been increasingly effective in providing land regularization to settlements on ejido land. On the other hand, the regularization of private property is tortuously long and frequently produces poor results. She commented with some concern on the current trends in Mexico to convert ejido land to private ownership and to move toward greater decentralization.

Riofrio questioned the validity of the claims made for land regularization in Peru. He noted that in reality household interest in property title was quite low, not least because records are inaccurate and therefore offer less security than promised. Moreover, only an incipient housing finance market has emerged, based on the regularized properties. Households are wary of debt but are willing to borrow small sums for micro-enterprises and consumption secured on their housing.

New Social Patterns and Forms of Land Delivery

Would liberalization produce more segregated land markets? Brzeski noted that state planning in Eastern Europe has left a legacy of spatial equity and few informal land holdings, but that it would not last forever and planners need to take this into account in instigating reform. In countries with notable levels of social segregation, such as Chile, Colombia and South Africa, less predictable trends are emerging. Sabatini’s data indicated less spatial segregation in Santiago despite liberalization as intermediate spaces are developed, around malls for example, and as new lifestyles are reflected in ‘leisure home’ developments outside the metropolitan area.

Carolina Barco (University of the Andes) argued that new measures in Colombia, specifically the 1997 Ley de Ordenamiento Territorial, will allow the government of Bogota to capture land value increments and transfer these revenues to public housing and other projects. This process is still problematic, however, even in a city with considerable experience in the use of valorization taxes.

In South Africa, strategies to cope with the ‘land hunger’ of the post-apartheid city, especially the Development Facilitation Act nationally and the Rapid Land Development Program in the province of Gauteng, have offered fast-track land release but have performed less well against the principles of equity and integration. Royston explained that the result has been a large number of invasions and the speeding up of land delivery through local government on the urban periphery that does not challenge the ‘spatial quo.’

Changing the method of land delivery and government stakeholding has the potential to affect segregation and access to land. Geoff Payne (Geoff Payne and Associates, London) outlined the principles and practices of public/private partnerships in developing countries. Although much heralded in international policy, research in South Africa, India, Pakistan, Egypt and Eastern Europe has shown that such partnerships had undersold their potential.

Crispus Kiamba (University of Nairobi) outlined a transition in Kenya from government-sponsored schemes, which left the informal and formal circuits separate, to new approaches with greater NGO involvement, ‘group ranches’ and partnerships. In Mexico, too, partnerships are seen as one method to eliminate the cycle of illegality and regularization. Federico Seyde and Abelardo Figueroa (Mexican government) outlined a new program called PISO, which, despite numerous bottlenecks when compared to previous interventions (e.g. land reserves), was proving more effective.

Land Markets and Poverty Reduction

In my opening remarks I argued that most research on markets considered poverty as a legitimate context, but thereafter seemed more concerned with market operations than with how these operations might affect poverty. In the final session, Omar Razzaz (World Bank) outlined a proposal for linking land market operation to poverty reduction. The ‘Land and Real Estate Initiative’ aims to investigate ways to improve the liquidity of land assets and access to the poor through re-engineering land registries (improved business processes), developing regulatory infrastructure (the exchange-mortgage-securitization continuum), and accessing and mobilizing land and real estate by the poor. The appropriateness of this initiative generated considerable debate, which may help in refining ideas that could benefit the 500 million people living in urban poverty in developing countries.

Gareth A. Jones was the program developer and chair of the workshop.

How have infrastructure investments shaped global city regions? What have been the effects on the residents? Do the effects differ among residents in different sections of the city? Is the process different by type of infrastructure, such as highways, mass transit, airports or seaports? What if high-technology telecommunications infrastructures are included among our considerations? When the forces of globalization and technological change interact, do cities fare differently? Do their residents experience these changes differently?

These were among the questions generated at the second meeting of the global city regions consortium coordinated in July by Roger Simmonds, senior lecturer of planning at Oxford Brookes University. Most of the participants at the first conference held at the Lincoln Institute in September 1995 reconvened in El Escorial, Spain, to present the results of their latest research on the relationship between the location and timing of infrastructure development and the spatial form of the region. Teams from 11 city regions made presentations: Ankara, Turkey; Bangkok, Thailand; Madrid, Spain; San Diego, California; Santiago, Chile; and Sao Paulo, Brazil; Seattle, Washington; Taipei, Taiwan; The Randstad, Holland; Tokyo, Japan; and West Midlands, England.

Commenting on the relationship between infrastructure, governance and regional planning, Pedro Ortiz Castano, director of planning for the municipal government of Madrid, described the municipality’s extensive infrastructure plan. Existing highways, roads and transit lines will be woven together with other planned development to cover the region in a matrix or grid. This configuration is meant to reduce congestion and increase accessibility across city sectors as well as among social and economic classes.

Madrid’s grid-system of infrastructure and settlements presents a sharp contrast to the concentric rings of highways found in Seattle, as described by Anne Vernez-Moudon, professor of architecture and urban planning at the University of Washington. Despite the presence of Puget Sound to the west and the Cascade Mountains to the east, Seattle reflects the typical North American affection for beltways. Furthermore, with one highway dubbed the “Boeing Beltway,” the relationship between government-funded infrastructure and the private sector is clear.

This comparison also illustrates the role of Madrid’s strong regional government in attempting to have infrastructure-whether government-funded or privatized-shape the urban form. In most global city regions with weaker governments, infrastructure only plays catch-up with existing demand.

Consortium commentator Gary Hack argued that the polynucleated ‘spread city’ is the more typical reality, usually accompanied by an increase in spatial segregation by class. Since the powerful economic and technological forces at work around the globe are likely to accelerate and reinforce these trends, he concludes that planners should focus on specific sites within city regions where they can exert their influence with the most positive results.

The comparative analysis between Ortiz’s metropolitan-wide infrastructure plan and Hack’s site-specific approach reminds us that, despite the similarities among forces shaping city regions across the globe, the ways these forces play out vary widely. These variances reflect important differences in institutional arrangements, history, culture, attitudes about private property, and notions of the public interest, among other factors. Furthermore, these differences also affect how researchers see their own cities in comparison to others.

The role of informal markets, for example, illustrates the challenge researchers face in attempting to understand both the unique and common features of international forces. While it is hard to understand land markets and land use in cities as different as Ankara and Santiago de Chile without understanding the informal sector, western European and North American researchers rarely attempt to understand their cities’ land markets from this perspective.

The regional city teams are continuing to work on their respective reports in preparation for publication of a book by International Thomson Publishing in the United Kingdom.

Rosalind Greenstein is a senior fellow of the Lincoln Institute and director of the Program on Land Use and Regulation.

In four years, there will be a fresh count of Americans. The 2000 Census will reveal how many of us there are, who we are in terms of race, nativity, income, family size and occupation, what kind of housing we occupy, where we live and where we work.

All these numbers, but especially the latter two, will reflect what is happening to what planners and social scientists call settlement patterns. The Census will show how people and jobs are distributed regionally between North and South and East and West; within regions between metropolitan and non-metropolitan areas; and within metropolitan areas between cities and suburbs.

Settlement patterns have been transformed radically in the twentieth century (see graph 1). On a regional basis, the trend has been from East to West and North to South. In the decade between 1980 and 1990, for example, three states in the West and South accounted for 50 percent of the nation’s population growth: California, Florida and Texas.

Within all regions, the trend has been toward ever larger metropolitan agglomerations. By 1990, metropolitan areas of 1,000,000 or more accounted for 50 percent of the nation’s population. Within metropolitan areas, cities grew faster than suburbs at the beginning of the century, but by the 1950s the trend was sharply in favor of the suburbs, which now account for more than half of the nation’s population.

Will the 2000 Census confirm the continuation of these trends? What stakes do we have in the outcome? Quite a few. We worry about trends that erode the economic base of cities because we are concerned about job opportunities for the poor who are committed, by choice or circumstance, to live in the city. We are also concerned about the health of the tax base, which affects the capacity of the local government to deal with the needs of all its residents.

We also worry about land use patterns in the suburbs which both require and increase auto-dependency. This trend in turn leads to more auto travel, aggravates congestion, pollutes the air, and complicates our international relations because of our heavy dependence on imported oil.

We are in the throes of a revolution comparable in scope to the revolution in transportation technology that heavily influenced settlement patterns in the nineteenth and twentieth centuries. The transportation revolution, from ships and trains to cars and planes, made it possible for both workers and their employers to have a wider choice of locations.

The pace of the revolution in data processing and communications, which began slowly in the middle of the twentieth century, has quickened rapidly in recent years. We speak of a post-industrial information economy. By that we mean that information constitutes an ever-increasing share of the Gross National Product, both as “input” to the production of other goods and services and as “output” in the form of entertainment and related activities.

Household Location Decisions

How will settlement patterns be affected by the transition to an information economy? Let us first consider the worker’s choice of a residential location. In classical urban economics, this choice is seen as a “trade-off” between the merits of a particular place in terms of quality of life and the cost of commuting to work. As the transportation revolution reduced the time and money costs of commuting, more and more workers were able to afford to locate in what they considered an attractive suburb that offered the lifestyle they preferred: a private home with a lawn, good schools, parks and open space, shopping facilities, and friendly neighbors.

The New York Times of July 14, 1996, reports that because of the revolution in communications and data processing, accompanied by company downsizing, as many as 40 million people work at least part time at home, with about 8,000 home-based businesses starting daily.

Logic suggests that some of this new-found workplace freedom will manifest itself in location choices that favor places considered desirable, be they in the farther reaches of suburbia, exurbia, or rural America. On the other hand, if these dispersed self-employed workers end up commuting less, their freedom may not “cost” the society more in terms of congestion and pollution.

Business Location Decisions

What about the conventional company and its location decisions? Like the household, the company does a “balancing” act when it chooses a location. From the perspective of product distribution, Place A might be preferred. From the perspective of the inputs of materials, Place B might be ideal. From the point of view of labor costs, Place C might be best. For tax purposes and related “public” issues, Place D might be most beneficial.

If the entire company has to be in one place, then compromise is inevitable. But if the communications revolution permits the “dis-integration” of the company via the physical separation of functions or the “outsourcing” of particular functions, then what used to be one location decision becomes a multiplicity of decisions, each component responding to a compelling argument for a particular place.

The classic example is the “front” office of a bank or insurance company in the midst of a congested city center with the “back” office in a rural area in another region or even in another country.

Settlement Trends

How these changes in household and business location choices will ultimately affect settlement patterns in metropolitan America was the subject of a major study by the Office of Technology Assessment (OTA), an agency that served the U.S. Congress for many decades but was abolished by the Congress in 1995. The summary chapter in The Technological Reshaping of Metropolitan America states that “technology is connecting economic activities, enabling them to be physically farther apart, reducing the competitive advantage of high-cost, congested urban locations, and allowing people and businesses more (but not total) freedom to choose where they will live and work.”

But OTA concludes that “the new wave of information technologies will not prove to be the salvation of a rural U.S. economy that has undergone decades of population and job loss as its natural resource-based economy has shrunk.” Rather, most economic activity will locate in large and medium-sized metropolitan areas (see graph 2).

“Technological change. . .threatens the economic well being of many central and inner cities, and older suburbs of metropolitan areas,” the report continues. Overall, the trends suggest that these places will find it hard to compete without economic development policies designed to offset their competitive disadvantages.

In short, the OTA expects that, the communications revolution notwithstanding, the 2000 Census will report a continuation of the trends manifested throughout the latter half of the twentieth century. The favored locus of activity in both residential and business terms will be the outer suburbs of metropolitan areas. Given our concerns with the adverse effects of prevailing settlement patterns, the challenge to land policy is greater than ever.

______________

Benjamin Chinitz is an urban economist who served as director of research at the Lincoln Institute from 1987 to 1990. He continues to serve as a faculty associate at the Institute and as visiting professor in urban and regional planning at Florida Atlantic University.

Thomas Horan is director of Applied Social and Policy Research at Claremont Graduate School in Claremont, CA.

The land market allocates land and access to urban amenities, and it does so with impressive efficiency. Yet, economists and planners continue to debate the extent to which the market fails to achieve broader social goals, how far regulation can offset for that failure, and even whether regulation results in land market outcomes being even farther from the socially desired outcome than would be the case without any regulation. To examine this debate and the underlying issues, more than 30 economists and planners met at the Lincoln Institute in July 2002 to encourage new policy-relevant analysis on land markets and their regulation, and to foster more fruitful communication between the disciplines.

At the center of the substantive debate was the basic question of regulation within a market economy and the unintended consequences that can result. The discussions touched upon many themes including gentrification, the use of public resources for private consumption, distributional issues, urban form and its regulation. If perspectives regarding market regulation differed between the two disciplines, so too did views regarding the strengths and limitations of the analytic tools that academics from different disciplines bring to such thorny problems. Among the challenges are the basic questions of how to define the problem, how to measure the current conditions in light of limited data, and how to interpret findings. Throughout the conference, the differences in the perspectives, assumptions, tools and references between planners and economists were ever present, in particular with regard to the role of politics in planning and policy making.

Unintended Consequences of Land Market Regulations

Despite their differences, concern for land markets and their centrality to social, political and economic life was the common focus of both economists and planners at the conference. They agreed that land markets are about far more than land. These markets have an important role in delivering life experiences and conditioning the welfare of the majority of people in developed and developing countries alike who live and work in cities. In addition, their regulation has both direct and indirect economic effects that extend into many areas of economic life and public policy. For example, the urban poor are likely to have worse schools and to experience higher levels of neighborhood crime because land markets capitalize the values of neighborhood amenities, such as better school quality and lower crime, thereby pricing poorer households into less desirable neighborhoods.

This power of land markets to reflect and capitalize factors that affect a household’s welfare was revealed in a study of impact fees levied on new development in Florida. Ihlanfeldt and Shaughnessy found that impact fees appear to be fully capitalized into house prices for owners of new and existing houses by redistributing the costs of new infrastructure provision from existing taxpayers to a reduced value of development land. In fast-growing Miami the cost of impact fees was borne by developers, yet offset by the increases they received in higher prices for new housing, “while buyers of new homes are compensated for a higher price by the property tax savings they experience. In contrast to the neutral effects that fees have on developers, landowners, and purchasers of new housing, impact fees provide existing homeowners a capital gain” (Ihlanfeldt and Shaughnessy, 26).

One complement to their story of Florida’s impact fees was illustrated in several other papers concerned with the unintended outcomes of regulation. British participants reported that Britain’s containment policy has generated higher densities within urbanized areas, but cities leapfrog out across their Greenbelts (or growth boundaries) to smaller satellite settlements; the consequence is that development becomes less contiguous and travel times increase. Villages become high-density suburbs surrounded by a sea of wheat: London in functional terms extends to cover most of southeastern England.

In a U.S. example based on an econometric simulation, Elena Irwin and Nancy Bockstael found that a clustering policy intended to preserve open space could instead backfire. Using Maryland data, they simulated the effects of a policy that was intended to preserve rural open space and found that it would instead accelerate development if “small to moderate amounts of open space are required to be preserved (specifically, 20 acres or less) and would slow the timing of development if larger amounts of open space are required to be preserved” (Irwin and Bockstael, 26). Their simulation results yield an interpretation that is highly nuanced and requires careful thought. That is, under certain conditions the cluster policy can backfire, while under other specific conditions the policy can yield an intended policy outcome.

These hypothetical clusters in Maryland may be echos of a real situation that Jean Cavailhès and his colleagues observed in the French countryside, where some urban dwellers moved to farm regions to create a mixed-use area that is neither entirely urban nor entirely rural. These former urbanites appear to value their proximity to a functioning rural landscape in exchange for longer commutes and (surprisingly) smaller residential lots. The authors hypothesize that these peri-urban dwellers benefit in different ways from living among the farmers.

In another example of the unintended consequences of regulations, Donald Shoup analyzed curbside parking. Many U.S. municipalities require developers to provide minimal parking per square foot of new commercial or, in some communities, residential space. The requirement for off-street parking, coupled with a systematic underpricing of curbside parking, has a double impact, according to Shoup. It imposes a substantial tax on affected developments (equivalent to up to 88 percent of construction costs), increases land taking, and means that public revenues annually lost an amount equal to the median property tax.

In these cases of unintended consequences of policy or regulatory interventions in the market, the authors argued for more careful design of both policies and regulations so state and local governments could reasonably achieve their policy goals. Despite the fact that the conference debate tended to pit regulation against the market, there was probably a tendency—if not full-fledged consensus—to favor market incentives and disincentives to achieve policy goals, rather than to rely strictly, or even largely, on regulation. Roger Bolton’s comments on Shoup’s paper cogently reflected this viewpoint. He said that Shoup’s work was valuable because it urges us to pay attention to a whole package of “important and related phenomena: inefficient pricing of an important good, curb parking; inefficient regulation of another good, privately owned off-street parking; and missed opportunities for local government revenue.”

Data and Measurement Challenges

Growth management and urban form were referenced extensively throughout the conference. The paper presented by Henry Overman, and written with three colleagues (Burchfield et al.) provided useful grounding to that conversation. They attempted to measure the extent of sprawl for the entire continental U.S. Using remote sensing data they calculated and mapped urban development and the change in urban land cover between 1976 and 1992. They defined sprawl as either the extension of the urban area, or leapfrog development, or lower-density development beyond the urban fringe. They concluded that only 1.9 percent of the continental U.S. was in urban use and only 0.58 percent had been taken for urban development in the 16-year period covered by the study. Furthermore, during this period, urban densities were mostly on the increase.

This study found development to be a feature of the “nearby urban landscape,” whether that was defined as close to existing development, or near highways or the coasts, and thus was perceived as encroaching on where people lived or traveled. The authors use this last observation to reconcile the apparent contradiction between their finding that less than 2 percent of the continental U.S. has been developed and the fact that containing and managing sprawl is at the center of policy agendas in many states and regions across the U.S. While relatively little land might have been consumed by new development in aggregate during the study period, many people see and experience this development on a daily basis and perceive it to represent significant change, often the kind of change they do not like.

The conference discussion touched upon some of the data questions raised by this work. The paper’s discussant, John Landis, noted some challenges he has faced in working with these and similar data to measure growth patterns in California. The estimates by Burchfield et al. are extremely low, possibly for technical reasons, according to Landis. Among the reasons is the difficulty in interpreting satellite images and the different outcomes that can occur when different thresholds are used for counting density, for example. That is, an area can be classified as more or less dense depending on what threshold the analysts establishes. “Ground-truthing” is required to remove some of the arbitrariness from the analysis, but this is an enormously costly undertaking.

Policy analysts are always faced with data limitations. Sometimes the problem is missing data, while other times it is data with questionable reliability. Yet, all too often researchers spend very little time paying attention to how serious that deficiency is for the policy problem at hand. When the available data is a very long time series with frequent intervals that relies on a well-structured and well-understood data collection method, and where few transformations occur between data collection and data use, most researchers and policy analysts would feel extremely comfortable interpolating one or two or even a handful of missing data points. Econometricians relying on data collected at regular intervals from government surveys frequently face this situation and are quite adept at filling in such “holes in the data.” In the world of limited data, that might be considered the best-case scenario.

At the other extreme we might have data that are collected using relatively new methods and that require significant transformation between collection and use. Data reliability likely decreases under these circumstances. Given the imperfect world in which we live, the answer is probably not to insist on using only the “best data.” However, researchers and policy analysts do have the obligation to use care in interpreting results based on weak data and to convey that weakness to their audience.

Another side of the limited data problem is the translation from concept to measure, and it explains why the conference participants spent so much time discussing “What is sprawl?” For researchers this question becomes “How does one define sprawl in such a way that one can measure it?” Burchfield et al. define sprawl as leapfrog or discontiguous urban development. Landis argues for “a more multi-faceted definition of sprawl, one that also incorporates issues of density, land use mix, and built-form homogeneity.”

Definitions are not trivial in policy analysis. If we cannot define the problem or the outcome, and we cannot measure it, how can we know if it is getting better or worse, and if our policies are having an impact? On the other hand, a very precise definition of a different but perhaps related concept may lead to unnecessary intervention. The new policy may improve the score on the measure but have little or no effect on the problem. For a variety of reasons (perhaps in part the customs and cultures within different disciplines) the economists at the conference tended to favor concepts that are simple and for which the data exist. On the other hand, the planners tended to favor concepts that are messy. In the end, one is left with weaknesses on both sides. The uni-dimensional definition, and therefore the uni-dimensional measure, may provide many of the desirable properties that allow statistical analyses. Multi-dimensional concepts are difficult to translate into measures. Which is better for policy making?

The Political Nature of Land Policy

Planning as a political activity was emphasized by several authors, notably Chris Riley (discussant of papers by Edwin Mills and Alan Evans), to emphasize the importance for economists to recognize this role and the constraints it imposes on significant change (particularly given the capacity of land markets to capitalize into asset values the amenities generated by planning policies themselves). Richard Feiock added there was also evidence that the forms of planning policies that communities selected (both the severity of such policies and the degree to which they relied on regulation in contrast to market instruments) could be largely accounted for by the political structure and socioeconomic and ethnic composition of those communities.

Participants reacted differently to the political nature of land policy and planning. For some this was problematic: it meant that the market was not being allowed to work. For others, it meant that the political process in a democracy was being allowed to work: the people had spoken and the policy reflected the expressed will of the body politic.

Reflections on Debate

The differences between economists and planners will continue, and differences among practitioners in different countries and even different parts of the same country (notably the large United States) can either stimulate or thwart future debates over the study of land market policies and implementation. Perhaps, though, the word debate itself thwarts our efforts. In debates, the debaters rarely change their minds. They enter the debate with their point of view firmly fixed and do not get “points” for admitting that their debating opponent taught them something or that they have consequently changed their own mind. However, one purpose of a professional conference is, indeed, for thoughtful people to consider their own assumptions and to be informed and changed by the points of view of others. In the future, perhaps debates will be supplanted with reflective conversation.

Paul Cheshire is professor of economic geography at the London School of Economics, England; Rosalind Greenstein is senior fellow and cochair of the Department of Planning and Development at the Lincoln Institute; and Stephen C. Sheppard is professor in the Department of Economics at Williams College, Massachusetts. They jointly organized the Lincoln Institute conference, “Analysis of Urban Land Markets and the Impact of Land Market Regulation,” on which this article is based.

Conference Papers

The conference participants whose papers are cited in this article are noted below. All conference papers and discussants’ comments are posted on the Lincoln Institute website (www.lincolninst.edu) where they can be downloaded for free

Burchfield, Marcy, Henry Overman, Diego Puga and Matthew A. Turner. “Sprawl?”

Cavailhès, Jean, Dominique Peeters, Evangelos Sékeris, and Jacques-François Thisse. “The Periurban City.”

Feiock, Richard E. and Antonio Taveras. “County Government Institutions and Local Land Use Regulation.”

Ihlanfeldt, Keith R. and Timothy Shaughnessy. “An Empirical Investigation of the Effects of Impact Fees on Housing and Land Markets.”

Irwin, Elena G. and Bockstael, Nancy E. “Urban Sprawl as a Spatial Economic Process.”

Shoup, Donald. “Curb Parking: The Ideal Source of Public Revenue.”

Una versión más actualizada de este artículo está disponible como parte del capítulo 2 del libro Perspectivas urbanas: Temas críticos en políticas de suelo de América Latina.

Durante las dos décadas pasadas, y en particular en años recientes, en varios países latinoamericanos los gobiernos centrales, regionales y locales han instrumentado programas de regularización de la tierra y de mejoramiento en asentamientos irregulares. Aunque incipiente, esta política urbana está teniendo resultados que merecen no sólo ser estudiados para fortalecer las prácticas vigentes sino, también, para promoverlos como directrices para los gobiernos que experimentan este tipo fenómenos por primera vez y que enfrentan la necesidad de desarrollar políticas para responder a la cada vez más intensa dinámica de los procesos informales de desarrollo urbano.

Para responder a esta necesidad, el Instituto Lincoln patrocinó la tercera edición del curso de “Mercados Informales y Programas de Regularización de la Tierra en Áreas Urbanas”. El curso se celebró en noviembre de 2003 en Recife, Brasil, ciudad que se seleccionó por su tradición en planeación urbana, que comprende entre otras experiencias, un programa pionero de regularización (PREZEIS) que, aún con limitaciones, ha operado durante 20 años. El curso se desarrolló con la participación de 35 personas de 10 países de América Latina , representantes de una variedad de profesiones y posiciones institucionales.

A continuación se analiza un conjunto de 13 lecciones interrelacionadas entre sí, que derivan de los trabajos presentados en Recife de las experiencias discutidas en los dos cursos previos, celebrados en 2001 y 2002, y de los resultados de la reunión de la Red Latinoamericana sobre Regularización del Instituto Lincoln, que se llevó a cabo en Brasilia, Brasil en junio de 2003.

Los autores se hacen responsables de cualquier interpretación que resulte de una síntesis general, como la presente; aún cuando este breve y crítico análisis sobre los programas de regularización de la tierra incorpora contribuciones de múltiples personas, (ver Figura 1).

El proceso de favelización

En América Latina se ha incrementado de manera significativa el ritmo del proceso informal de generación de espacio urbano, a pesar de que a diferencia de África o Asia, la región ha experimentado un ritmo persistente de urbanización durante varias décadas.

Las áreas ocupadas se están densificando y diariamente se forman nuevos asentamientos. Estos últimos, se constituyen de manera cada vez más frecuente en zonas de alta sensibilidad medioambiental: cercanos a depósitos protegidos de agua, terrenos públicos y otro tipo de áreas no aptas para la ocupación humana o económicamente poco viables en el mercado formal de suelo.

Este proceso ha generado repercusiones negativas de todo tipo (sociales, medioambientales, legales, económicas y políticas) no sólo para los millones de personas que residen en los asentamientos informales, sino también para los gobiernos de las ciudades y la población urbana en general.

A pesar de los innumerables programas de regularización y mejoramiento que se han instrumentado en décadas recientes, la tasa de desarrollo de los nuevos asentamientos informales ha sido de dos a tres veces superior a la del crecimiento de la población urbana. Por ello, el incremento en la informalidad no se puede atribuir de forma exclusiva a los cambios demográficos, ni al incremento en la pobreza urbana, que si bien ha aumentado, lo ha hecho en tasas menores.

El círculo vicioso de la informalidad

El establecimiento de asentamientos informales es producto de una multiplicidad de factores. En un balance, se observa que las variables locales resultan de mayor peso en la conformación de las “discrepancias inexplicables”, que los factores demográficos y macroeconómicos que afectan la pobreza urbana (políticas de empleo e ingresos). Al actuar o dejar de actuar, las autoridades locales han fomentado el desarrollo del fenómeno con mecanismos excluyentes de regulación de usos del suelo, privilegiando la asignación de la inversión publica en zonas residenciales de altos ingresos; actuando en complicidad con los fraccionadores ilegales de terrenos, y con la aplicación de inadecuadas políticas fiscales de orden local.

El corolario de esta tolerancia de la informalidad es un factor clave en la política de valorización del suelo. Los valores en el mercado informal se benefician de una mayor libertad regulatoria y de los valores sociales vinculados a las redes entre los residentes de los asentamientos. Los precios del mercado informal se ven afectados por ambas dinámicas hasta puntos absurdos. Por ejemplo, una casucha de madera de 60 metros cuadrados (60 pies cuadrados) ubicada en una zona pantanosa de Recife, se valúa en US $1.300,00.

Las variaciones extremas en los precios son el reflejo de la diversidad de procesos informales que inciden en el acceso al suelo urbano y la vivienda, tanto en el interior de un mismo asentamiento como entre asentamientos. Por lo tanto, un ingrediente indispensable de cualquier política que pretenda mitigar las consecuencias de la informalidad deberá ser la lucha contra los factores que perpetúan el círculo vicioso en la formación de los precios.

El mundo de la diversidad

Lejos de ser un fenómeno homogéneo, la informalidad se manifiesta en una diversidad de formas, contextos y lugares. Es posible hallar enormes diferencias en el interior y entre asentamientos de una misma cuidad, que se acrecientan al comparar ciudades de un país y ciudades de distintos países.

Cada área informal tiene barrios buenos y malos; unas zonas de alto valor y otras de valor bajo; una distribución desigual de cualquiera de los servicios con que cuenta y propiedades con distintas modalidades de tenencia. Asimismo, se observan variaciones en los niveles de ingreso, con familias que perciben mayores ingresos que aquéllas que residen en asentamientos formales que, en general, pagan por algunos de los servicios públicos.

Al comparar la diversidad de asentamientos informales que se encuentran distribuidos entre los barrios formales en muchas ciudades latinoamericanas, no se ha logrado establecer una correlación entre los gradientes de precio de las propiedades, lo que revela la presencia de distintas fuerzas de mercado. Si bien los mercados del suelo en las áreas formales e informales son muy vigorosos, los factores determinantes del precio tienen órdenes distintos de magnitud para cada mercado. Como se mencionó, la mayor libertad regulatoria, así como las redes informales de intercambio de beneficios intangibles, afectan los valores de la propiedad. Estos factores son una realidad ineludible, que debe tomarse en cuenta en el diseño de programas de regularización para que éstos puedan conducir a una reforma positiva en la práctica tradicional.

Es necesario, también, adecuar los programas a las distintas condiciones de los asentamientos; diferenciado entre los de reciente creación y aquéllos con varios años de existencia, ubicados en zonas consolidadas. Se pueden rastrear con mayor claridad las cadenas de transacciones con el suelo en los asentamientos recientes, mientras que en las zonas con mayor antigüedad no se observan sucesiones lineales de transacciones. De hecho, en los asentamientos más consolidados se observa una compleja sobreposición de derechos y transacciones informalmente definidos, por ejemplo, la venta a terceros de techos como “terreno”, que potencialmente contribuirían a la ampliación de espacios habitables.

Aún no está claro si los programas de regularización debieran iniciarse en asentamientos recientes, donde los costos de mejoramiento son menores y se cuenta con mayores grados de libertad; o bien, en zonas más antiguas y consolidadas, en las que las acciones pueden conducir a consecuencias sociales más inmediatas y donde, sin embargo, puede haber algunos derechos legales establecidos.

Tolerancia de la informalidad

A pesar de todas las implicaciones negativas asociadas al desarrollo urbano informal, las autoridades han tolerado los procesos: siendo negligentes, aprovechándolos políticamente, realizando acciones ambiguas o promoviendo directamente las ocupaciones.

Sin embargo, hay una falta de conocimiento en relación con los derechos que en el tiempo se generan por la propia tolerancia, y de información respecto a los altos costos, absolutos y relativos, de los programas de mejoramiento.

Paralelamente, la tolerancia frente a la ocupación informal se acompaña de una creciente convicción tanto de las autoridades como de la opinión pública, de que los asentamientos consolidados deben mejorarse a través de la introducción de infraestructura, provisión de servicios urbanos básicos y de equipamiento. Un estudio reciente, desarrollado por la Alianza de Ciudades en Brasil, demostró que la decisión de regularizar un asentamiento irregular se toma, con frecuencia, más rápido que la decisión de aprobar un asentamiento regular (seis meses, comparada con dos o tres años).

Esta tolerancia oficial también se aplica a la aceptación de “soluciones de segunda clase” para “ciudadanos de segunda clase”, que frecuentemente resultan en un rápido deterioro de las zonas mejoradas. La combinación de materiales de baja calidad y costo, y la utilización de técnicas no convencionales conlleva a procesos de rápida obsolescencia de la infraestructura y consecuentemente a altos costos de mantenimiento. Adicionalmente, es frecuente que las zonas mejoradas no estén integradas a los sistemas fiscales municipales. La irresponsabilidad fiscal de las autoridades municipales, que es característica de la región, se agrava por una falta de responsabilidad sobre el desarrollo territorial de las localidades, así como por su negligencia, o en el mejor de los casos actitudes paternalistas respecto a estos asentamientos.

Expectativas y valores del suelo

Hasta la fecha los programas de regularización se han instrumentado en un porcentaje muy reducido de asentamientos informales, y como resultado la gran mayoría de las personas que viven de manera informal no han sido beneficiarias de ninguna intervención pública. En la práctica, muchos de los programas de regularización se han desarrollado sin considerar las causas de la informalidad, generando resultados contraproducentes que tienden a acentuar los procesos de segregación socio-espacial.

La mera expectativa de regularización conduce a incrementos en la cotización de la tierra que se prevé será sujeta al mejoramiento, lo cual impacta de manera significativa los precios en el mercado informal. Mientras más alta sea la expectativa de regularización a futuro de un área, más alto será el sobreprecio del suelo en cuestión, y en consecuencia aumentará la demanda de terrenos más baratos en otros lugares.

Lo anterior plantea dos formas de abordar el mejoramiento: programas integrales, aplicados en pocos lugares, con políticas destinadas a incidir en las expectativas futuras de mecanismos de recuperación de costos. O bien, programas de mejoramiento parcial, instrumentados en todas las áreas informales de la ciudad, destinados a promover un balance y mayor consistencia en la actividad futura del mercado. Sigue sin comprenderse la importancia e implicaciones de integrar las áreas mejoradas a los sistemas fiscales municipales.

Políticas aisladas y fragmentadas

Las intervenciones públicas a través de programas de regularización de asentamientos irregulares han sido de carácter sectorial, aisladas, y en consecuencia no se integran con el contexto urbano más amplio, donde operan las políticas generales de administración del suelo que impactan directamente tales asentamientos. Estas políticas comprenden, entre otros temas, los de la construcción de vivienda social; la rehabilitación de centros urbanos deteriorados; la ocupación de baldíos e inmuebles vacantes; la asignación más amplia de inversión pública para infraestructura y servicios urbanos; la modernización de catastros y de sistemas de recaudación de impuestos, así como la promoción de asociaciones entre los sectores público y privado.

La mayoría de los programas de regularización se ha aplicado en zonas habitacionales y poco se ha hecho en áreas informales de industria y comercio, en edificios públicos desocupados; terrenos en zonas centrales o en asentamientos irregulares en zonas rurales.

En todos los niveles de gobierno, los programas de regularización se identifican por su fragmentación estructural (dentro de los programas, entre las diferentes secretarías y ministerios, y entre los distintos niveles de gobierno nacional, estatal y municipal), y como resultado los recursos son malgastados o bien no llegan a la población a la cual se dirigen.

Los programas también han adolecido de una falta de continuidad administrativa, generalmente producto de cambios en los contextos políticos locales. En lugar de apoyar a otras iniciativas, los programas de regularización frecuentemente consumen los limitados recursos de los gobiernos locales, en detrimento de otros tipos de programas de vivienda que se restringen o sacrifican.

Este problema tiene su origen tanto en las amplias líneas de crédito proporcionadas por organismos nacionales y agencias internacionales y multilaterales, como en la falta de mecanismos para operar con aportaciones de las autoridades locales, como vía para compartir la carga de los programas y promover esfuerzos para que los gobiernos municipales aumenten sus fuentes propias de ingresos. En términos generales, las líneas de crédito para los programas de regularización se han establecido sin un análisis adecuado de la capacidad financiera de los gobiernos municipales.

La falta de recursos financieros

Como si los problemas señalados fueran pocos, hay que agregar la falta de recursos financieros suficientes para los programas de regularización. Las provisiones presupuestarias no son compatibles con las aspiraciones de los objetivos propuestos, y frecuentemente no se cuenta con recursos específicos para los programas. Los ingresos obtenidos de operaciones relacionadas con el desarrollo urbano (cobros por derechos de construcción en áreas formales y de altos ingresos) no han sido adecuadamente canalizados hacia los programas de mejoramiento. Los recursos obtenidos a través de agencias internacionales no se han utilizado de la mejor manera. Ha habido una falta de seguimiento en el cumplimiento de objetivos y metas, y de evaluación de los propios programas. Adicionalmente, destaca la ausencia de políticas de microcréditos que pudieran utilizarse para incentivar y apoyar las organizaciones comunitarias.

Disociación del mejoramiento y la legalización

Se podrá argumentar que la ilegalidad es producto de la oferta insuficiente de suelo servido a costos accesibles. Sin embargo, en la práctica, se observa que a pesar del énfasis en el concepto de mejoramiento, una gran mayoría de los programas de regularización opera al margen de los programas de mejoramiento de vivienda y de apoyo socioeconómico con los cuales se busca la integración de las comunidades, y no están vinculados a las políticas destinadas a la legalización de terrenos y lotes individuales.

El mejoramiento y la legalización se han concebido como procesos independientes, e incluso se ha llegado a sostener que la legalización es producto de los procesos de mejoramiento. Lo cierto es que la mayoría de los programas de mejoramiento no conduce al cumplimiento de las condiciones requeridas para poner en marcha los procesos de legalización en áreas informales. En los pocos programas en los que se ha logrado dar inicio al proceso de legalización, se han desarrollado soluciones legales y políticas ad-hoc, que con frecuencia son ajenas a las condiciones urbanas y fuerzas que operan en el entorno.

A pesar de la publicidad que se ha realizado en torno a los programas de regularización, el número de títulos de propiedad expedidos por las dependencias responsables es sorprendentemente bajo. Entre las explicaciones dadas se destacan la complejidad de las leyes y las actitudes conservadoras y de resistencia de parte de los notarios y de las autoridades responsables de los registros de la propiedad. Es importante agregar, también, que la mayoría de las familias, al recibir un título que reconoce su legítimo derecho sobre la propiedad, no concluye los procesos de registro, muchas veces por no entender el trasfondo legal, o por su complejidad y por los costos que significan.

En respuesta se ha propuesto, por un lado, la simplificación de los requisitos y procesos de titulación y registro y, por otro, la necesidad de restarle poder a las estructuras burocráticas responsables de los citados procesos.

La importancia de la titulación

Como resultado de los problemas mencionados, son pocos los programas en que se alcanza la etapa de legalización, y son menos aún en los que se concluye el registro de los lotes legalizados. Por ello, muchos analistas han concluido que los títulos no son importantes y que lo realmente significativo es la percepción de seguridad en la tenencia de la tierra que tengan los pobladores.

No se puede negar que la percepción de la seguridad es un elemento que promueve la inversión de las familias para consolidar sus viviendas, sin embargo la titulación es importante por dos razones: el interés personal de los residentes (por la seguridad de tenencia de la tierra, la protección contra desalojos, los conflictos domésticos, las separaciones maritales, las herencias, los conflictos vecinales y el acceso a formas diversas de crédito); y el interés de la ciudad en su conjunto, ya que la legalización puede contribuir a la estabilización de los mercados del suelo, y con ello permitir formas más racionales y articuladas de intervención pública.

Hoy todavía hay grandes resistencias del sistema judicial y del público en general, con respecto a los programas de titulación. Es importante señalar, también, que los beneficiarios individuales de estos programas con frecuencia desconocen la protección y las limitaciones que derivan de la titulación. Las preguntas ¿para qué sirve un título? y ¿por qué se tienen que registrar los títulos?, entre otras, apuntan a la necesidad de acompañar los programas de regularización con programas educativos tanto para los administradores de las ciudades como para los residentes de los asentamientos informales.

Otro punto a considerar es la falta de análisis sobre el impacto de los instrumentos que se emplean en la legalización de lotes. Como resultado del énfasis en la titulación individual, se ha tendido a ignorar la necesidad de generar soluciones legales colectivas, para responder a problemas sociales comunes. De hecho, cuando se han empleado estos nuevos instrumentos legales, no se ha logrado compatibilizarlos con la normatividad urbana existente y no han previsto sus implicaciones legales.

El análisis de alternativas legales ha sido insuficiente y carente de creatividad. Se requiere realizar mayores y más consistentes esfuerzos para desarrollar nuevos instrumentos y para lograr acreditarlos, no sólo ante los distintos organismos financieros, sino también ante la sociedad en su conjunto.

La falacia de la participación popular

Aun cuando los contextos políticos de los programas de regularización han variado inmensamente en el tiempo, en términos generales, la participación popular ha sido poco significativa en su formulación e instrumentación. Esta situación se ha agravado debido a la creación de formas de participación artificiales, para cumplir con los requisitos de los organismos financieros. Los mecanismos de participación popular diseñados han sido, en el mejor de los casos, una formalidad, y en el peor, una farsa.

Son muy pocos los programas en los que se ha logrado incorporar propuestas de soluciones generadas por las comunidades afectadas. El marco político-institucional y cultural en el que se ha desarrollado la mayoría de los programas de regularización, junto con las limitaciones que derivan de las formas de financiamiento, prácticamente eliminan las posibilidades de una participación pública efectiva, dado que la participación pública normalmente trae consigo cuestionamientos severos al status quo. Por ello, los programas de regularización tienden a percibirse como soluciones destinadas a promover o proteger la institucionalidad, más que como respuestas a las demandas de la mayoría de la población de menores ingresos.

Compatibilidad entre escala, traza y derechos

Quizás el problema central de los programas de regularización sea la dificultad de compatibilizar la escala de las intervenciones, con las patrones técnicos, urbanos y medioambientales propuestos para los asentamientos, y la naturaleza de los derechos que les serán reconocidos a los residentes. Para poder garantizar la sustentabilidad de los programas y su impacto, es necesario discutir los temas de escala, traza y derechos de manera conjunta.

Efectos de los programas de regularización en el tiempo

Concluidos los programas de mejoramiento y legalización, las autoridades suelen retirarse de los asentamientos, aun cuando podrían realizar una diversidad de funciones que van desde el monitoreo y evaluación del mantenimiento de la infraestructura provista (por ejemplo, de los sistemas de agua potable y drenaje), hasta el desarrollo de lineamientos y reglas para la incorporación de población nueva.

Los asentamientos tienden a deteriorarse muy rápidamente por la falta de presencia e intervenciones oficiales, al grado que la legitimidad provista por los programas de regularización puede “contaminar” a barrios de origen formal, promoviendo prácticas informales de usos del suelo.

En términos generales los programas de regularización no han logrado la integración urbana, social y cultural de las áreas mejoradas que se había anticipado. De manera tal que las áreas regularizadas siguen siendo consideradas como “de segunda”, mucho tiempo después de concluidos los programas. La idea de que los asentamientos regularizados experimentarán una trayectoria virtuosa, escasamente sobrevive a las justificaciones que dieron origen a los programas.

El equilibrio entre las libertades individuales y las funciones públicas

A pesar de la preocupación por garantizar que los beneficiarios de las intervenciones públicas sean efectivamente residentes de los asentamientos informales en los programas de regularización, no se ha logrado un equilibrio adecuado entre el respeto por los derechos y libertades individuales y las funciones públicas de los programas (los derechos sociales a la vivienda y la necesidad de generar áreas para tal efecto). Frecuentemente las soluciones legales propuestas implican restricciones que, en la práctica, congelan los procesos de movilidad que caracterizan a este tipo de asentamientos (afectando, por ejemplo, los términos de venta, compra y renta), lo cual tiende a reforzar la informalidad.

La estrategia de centrarse en un área o un grupo social parece ignorar la esencia y el origen de la informalidad, lo que representa una situación en sí misma tramposa. Por un lado, la falta de recursos de los programas, les dificulta a las familias capitalizar el beneficio obtenido, para reubicarse en otro asentamiento informal, esperando ser sujeto de un siguiente proceso de regularización en el futuro. Por otro lado, el costo de monitorear y controlar este tipo de prácticas puede ser muy alto y hasta inviable. Como se mencionó, la imposición de restricciones a las transacciones simplemente generará nuevos arreglos informales.

Es interesante observar que son muy pocos los programas que han reconocido y logrado responder a la movilidad (ascendente o descendente) de los residentes de los asentamientos regularizados. Los programas se diseñan pensando en una comunidad estática. La movilidad interurbana, particularmente entre residentes de asentamientos informales y entre áreas formales e informales, no es un proceso bien entendido y por ello, mejor se ignora. Una posible salida a este acertijo podría encontrarse en mecanismos para la recuperación de costos o para la recuperación de plusvalías, que operen desde de la fase de planeación de los nuevos programas de regularización.

Conclusiones

Generalmente en la formulación de los programas de regularización no se parte de metas y cronogramas de trabajo claramente establecidos, problema que se agudiza por la falta de indicadores de evaluación adecuados.

En suma, los objetivos formales de los programas de regularización en Latinoamérica (promoción de la seguridad de la tenencia y la integración socio-espacial de los asentamientos y su población) no se han logrado traducir en diagnósticos integrales, instrumentos efectivos y estrategias claras para su ejecución, como tampoco han podido incidir en las deficiencias en la capacidad administrativa de los ejecutores. Como resultado, a la fecha no se puede considerar que las experiencias latinoamericanas en materia de regularización sean exitosas.

Se puede decir, sin embargo, que los programas de regularización han tenido la virtud de despertar y sensibilizar la conciencia pública con respecto a la legitimidad de las demandas de un grupo significativo y creciente de ciudadanos, que al estar excluido del sistema socioeconómico formal, requiere respuestas integrales y efectivas.

Incluso con las limitaciones señaladas, estos programas han permitido que grupos de pobres urbanos puedan permanecer en zonas servidas ubicadas en áreas centrales de muchas ciudades latinoamericanas y han contribuido a mejorar las condiciones de vida de familias residentes de asentamientos regularizados. Estos logros son de gran importancia, sobre todo a la luz de la cruel dinámica de segregación socio-espacial que prevalece en la región.

Edésio Fernandes es profesor de medio tiempo en la Unidad de Planeación del Desarrollo (Development Planning Unit) del Colegio Universitario de Londres (University College, London). Martim O. Smolka es Senior Fellow y Director del Programa de América Latina y el Caribe, del Instituto Lincoln.

Artículos relacionados, publicados en Land Lines

Angel, Shlomo, and Douglas Keare. 2002. Housing policy reform in a global perspective. Abril: 8-11

Calderón, Julio. 2002. The mystery of credit, April: 5-8

Fernandes, Edésio. 2002. The influence of de Soto´s The Mystery of Capital. Enero: 5-8

Fernandes, Edésio. 2002. Faculty profile, Julio: 12-13

Smolka, Martim O. 2003. Informality, urban poverty and land market prices. Enero: 4-7

Smolka, Martim O., and Laura Mullahy. 2003. A decade of changes: A retrospective on the Latin America program. Octubre: 8-12

Figura 1: Aciertos y Desaciertos de los Programas de Regularización

• Aciertos
  • Entender y planificar las ciudades de manera integral antes de diseñar una estrategia de regularización, que deberá integrarse a la política urbana general
  • Involucrar a todos los agentes en la toma de decisiones con respecto a la ubicación y la forma de instrumentar los programas de regularización
  • Considerar los programas de regularización como parte la política social, que en su más amplio sentido promueve la integración social
  • Conservar la presencia del Estado en los asentamientos regularizados, a través de su incorporación al catastro y los sistemas de recaudación de impuestos locales
  • Difundir, desde el inicio de los programas y las intervenciones, los objetivos y metas que se propone cumplir, ligándolos a los derechos legales correspondientes
  • Considerar, desde el inició de las intervenciones, que puede haber más de una forma de hacer las cosas
  • Diseñar y promover programas preventivos que acompañen la instrumentación de los programas de regularización, que son esencialmente paliativos
  • Reconocer el derecho a ser diferente
  • Reconocer que la falta de acceso a los servicios básicos es, frecuentemente, más onerosa que su provisión
  • Reconocer que los residentes de los asentamientos informales tienen derechos legítimos sobre la ciudad
  • Ser sensible a los temas de género (por ejemplo, la creciente permanencia de las mujeres jefes de familia)
  • Reconocer la existencia de distintas modalidades de regularización de la tenencia, incluyendo soluciones colectivas para responder a problemas sociales comunes
  • Mantener la unidad entre proyectos, programas y estrategias
  • Para evaluar la efectividad de los programas, es necesario considerar los costos de no regularizar
  • Intervenir con el apoyo de sistemas de información georeferenciada
• Desaciertos
  • Tratar la informalidad como una excepción; formular programas aislados de regularización al amparo de políticas sectoriales, a cargo de una sola rama de la administración pública
  • Exaltar la informalidad como solución para un grupo social que se considera marginal
  • Entregar títulos sin proporcionar servicios
  • Ignorar la dinámica del mercado, como variable que incide de manera directa en la valuación de los beneficios otorgados
  • Crear falsas expectativas, en contextos donde no se cuenta con fuentes de financiamiento y/o recursos suficientes
  • Restringir la movilidad de las familias
  • Fracasar en la prevención y no reprimir el desarrollo de nuevos asentamientos informales
  • Ignorar las irregularidades en áreas residenciales y de altos ingresos
  • No considerar la capacidad de pago de los residentes de los asentamientos irregulares, e ignorar la necesidad de asociaciones público-privadas como medio para financiar los programas de regularización
  • Flexibilizar normas y reglamentos urbanos, sin contar con el fundamento legal necesario
  • Contener de manera artificial las presiones de la oferta y demanda en el mercado
  • No reconocer que los programas de mejoramiento y legalización deben diseñarse para operar de manera conjunta
  • Difundir la idea de que cualquier situación puede ser regularizada y no aclarar que el proceso puede implicar, en algunos casos, la reubicación
  • Considerar que desde el punto de vista económico los programas de regularización nos son viables
  • Iniciar el monitoreo de los programas estando en marcha los procesos de mejoramiento, con objeto de magnificar sus resultados positivos