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Hace cinco años, Mandy Pumilia, residente de Nueva Orleáns, estaba preocupada por la gran cantidad de estructuras aparentemente deterioradas que existían en su barrio, conocido como Bywater, donde actualmente se desempeña como vicepresidente de la asociación de vecinos. A pesar de todos los esfuerzos realizados con posterioridad a la catástrofe de Katrina, resultaba muy difícil identificar y rastrear las propiedades que verdaderamente presentaban problemas y, además, Pumilia no tenía acceso a los datos municipales que podrían haberle sido de utilidad. En lugar de ello, elaboró su propia planilla de cálculo en Google y la llenó con los resultados de su propia investigación y trabajo de campo. Según recuerda, “fue un proceso arduo”. Y a pesar de sus conocimientos tecnológicos y su determinación, esta tarea sólo fue una solución limitada: no resultaba fácil compartir la información más allá de las personas que ella conocía directamente y, además, estar al día de las audiencias municipales relacionadas con temas de la propiedad era una tarea enorme.
A partir de entonces, la aplicación web BlightStatus (blightstatus.nola.gov) –que se traduciría como “status de deterioro”– se ha convertido en una nueva y valiosa herramienta a la hora de tomar medidas de recuperación en su barrio. Creada en el año 2012 por Code for America, una organización sin fines de lucro especializada en proyectos de código abierto dirigidos al gobierno municipal, BlightStatus facilita a ciudadanos como Pumilia el acceso a datos sobre propiedades, permitiéndoles participar de manera más estrecha en la gestión del deterioro y otros desafíos de planificación. Esta iniciativa llamó la atención de otras ciudades, lo que generó una iniciativa derivada, denominada Civic Insight, que actualmente despliega su tecnología en Dallas, Atlanta, Palo Alto, Sacramento y otros lugares.
En Nueva Orleáns, BlightStatus reúne información sobre inspecciones, quejas relativas a las normas, audiencias, juicios, ejecuciones hipotecarias, etc. Por lo general, estos datos se encuentran encriptados o resulta muy difícil acceder a los mismos; sin embargo, esta aplicación reúne y actualiza la mayoría de los datos a diario. Los usuarios pueden buscar por dirección o utilizar un mapa interactivo para buscar a nivel de barrio o de ciudad. Un aspecto particularmente útil es la función “lista de observación”, que permite a un usuario como Pumilia mantener pestañas abiertas relacionadas con ciertas propiedades específicas y oportunamente envía alertas sobre audiencias o cualquier otra novedad. Pumilia agrega: “Además, me facilita empoderar a otros residentes, por lo que no soy la única persona que posee esta información”.
Cuando otras ciudades conocieron el uso extensivo que Nueva Orleáns hacía de esta aplicación y, como consecuencia, expresaron su interés en disponer de una herramienta similar, Code for America adaptó la tecnología para que pudiera funcionar en cualquier lugar. Tal como lo expresa Eddie Tejeda, uno de los creadores de BlightStatus: “Parecía que habíamos tocado una fibra sensible”. Los aspectos específicos variaban de un lugar a otro, pero la lucha para obtener datos inmobiliarios oficiales era, claramente, una frustración común a todos. Mucha gente quiere información sobre edificios y propiedades, pero lo único que suele estar disponible, según Tejeda, “es realmente muy difícil de utilizar”, ya que profundizar en estos datos requiere conocimientos y experiencia.
Con una inversión de la Fundación Knight, el grupo creó Civic Insight en el año 2013, utilizando el trabajo que habían realizado en Nueva Orleáns como un modelo que pudiera adaptarse a otras ciudades, ya fueran más grandes o más pequeñas, con diferentes necesidades y conjuntos de datos (las cuotas de configuración y suscripción anual varían según la población: aproximadamente de US$1.000 a US$10.000 para la tarifa básica, más un monto de entre 20 y 70 centavos de dólar per cápita). Entre los nuevos clientes, Dallas está resultando ser un caso de estudio particularmente importante. Esta metrópoli en franco crecimiento, que presenta una gran variedad de barrios muy diferentes entre sí –desde los caros y prósperos hasta aquellos con graves problemas económicos–, demuestra que esta estrategia de tecnología de datos de código abierto no sólo sirve en casos selectivos como el de Nueva Orleáns después del huracán Katrina.
La conexión se dio a través de la organización Hábitat para la Humanidad. La delegación que esta entidad sin fines de lucro tiene en Nueva Orleáns ha sido un usuario entusiasta de la aplicación BlightStatus. Los miembros de esta organización hicieron correr la voz a sus colegas en Dallas, ciudad que ha estado luchando por lograr estrategias para utilizar datos con el fin de definir, rastrear y abordar el problema del deterioro y otras cuestiones, como la identificación de propietarios problemáticos. La versión de Blight-Status para Dallas, cuyo lanzamiento fue a finales del año 2014 con datos similares a la información recabada en Nueva Orleáns, incorporará estadísticas adicionales relativas a delincuencia y tributación, ya que los residentes desean acceder a estos datos más fácilmente, como afirma Theresa O’Donnell, directora de planificación municipal que habló sobre la aplicación en la conferencia de Directores de Planificación de Grandes Ciudades organizada por el Instituto Lincoln en Cambridge en octubre de 2014. Según O’Donnell, “a medida que estos programas se configuren y se comiencen a utilizar, podremos contar cada vez más con los ciudadanos para que nos hagan saber si [las medidas que tomamos contra el deterioro] están funcionando o no”.
Atlanta y Sacramento están poniendo en funcionamiento sus propios programas para poder utilizar la aplicación este año, y Civic Insight está tomando medidas para que pueda utilizarse muy pronto en Fort Worth, Texas, y otros lugares. Los objetivos de los clientes no se limitan a los problemas relacionados con el deterioro, según destaca Tejeda, que actualmente se desempeña como director ejecutivo de Civic Insight: en Palo Alto, donde la zonificación, el desarrollo y la construcción son temas candentes, tanto arquitectos como propietarios utilizan la aplicación para mantenerse al día en los procesos de obtención de permisos. Esta flexibilidad es deliberada. Tal como explica Tejeda, “podemos cartografiar con relativa rapidez [datos sin procesar] en nuestra aplicación. El papel que desempeñamos es el de un traductor que interpreta lo que tiene la ciudad y las necesidades de la comunidad” (la aplicación está diseñada también para recibir nuevos conjuntos de datos, y no es de sorprender que ciudadanos activos de Nueva Orleáns, como Pumilia, tengan muchísimas sugerencias que Civic Insight está tratando de incorporar).
Los conjuntos de datos integrales y otras herramientas digitales han servido de guía a los planificadores y otros funcionarios municipales durante años, pero Civic Insight está ahora pensando en dar el siguiente paso lógico. Según Peter Pollock, fellow del Instituto Lincoln y exdirector de planificación de Boulder, Colorado, “tenemos la gran oportunidad de aprovechar estos datos –que, para muchas ciudades, son datos ocultos– y sacarlos a la luz”, de manera que resulten útiles tanto para los ciudadanos como para los planificadores.
Este nivel de accesibilidad es muy importante, ya que los gestores de políticas deben “coproducir la buena ciudad” junto con los residentes, tal como lo expresa Pollock, quien continúa: “Los planificadores tienen la tarea de aprovechar la energía de la comunidad y encauzarla hacia una visión para el futuro”. Esto implica aspectos tales como la zonificación y la obtención de permisos, pero también los referentes al mantenimiento y el cumplimiento de normas. Pollock concluye: “No se trata sólo de construir la ciudad, sino de cuidar y alimentar a la ciudad a lo largo del tiempo”.
Aun así, la propuesta de Civic Insight puede parecer confusa al principio: ¿Cómo se beneficia una ciudad al esperar que los ciudadanos analicen cuidadosamente la información que ya posee? Sin embargo, esa es la cuestión. Poner los datos a disposición de las personas que realmente conocen los barrios donde viven y trabajan equivale a una especie de estrategia de crowdsourcing –o externalización distribuida– para el mantenimiento de la ciudad en lo relativo a la planificación.
Si no, preguntémosle a Pumilia. Esta es la esencia de lo que ella trataba de hacer en Nueva Orleáns hace unos pocos años con su planilla de cálculo casera y muchísimo coraje. Ahora puede monitorear su barrio más fácilmente, y puede además recomendar BlightStatus a otras personas para que puedan también obtener rápidamente la información que necesitan y presionar al municipio para que tome medidas respecto a las propiedades problemáticas.
Mientras hablamos, Pumilia busca unos datos y nos cuenta la historia de una dirección en particular: “Sobre esta propiedad pesan no una, dos, tres, ni cuatro causas, sino ¡cinco!”. En pocas palabras, Pumilia acaba de improvisar un expediente listo para usar sobre el abandono de la propiedad, que ayudó a persuadir a los funcionarios públicos a iniciar un proceso que debería desembocar en la subasta pública de la propiedad.
A veces, Pumilia dice, riendo: “Se necesita la acción de los ciudadanos para animar a la gente a realizar su trabajo”.
Rob Walker (robwalker.net) colabora con Yahoo Tech, Design Observer y The New York Times.
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St. Petersburg was the host city for an international conference on “Land Reform and the Emerging Property Market in Russia,” organized by the Leontief Centre for Social and Economic Research and the Lincoln Institute in May 2001. Experts from government agencies, commercial entities and academic institutions in Russia, the U.S. and Europe convened to assess the progress of Russian land reforms and discuss future implementation. The conference focused on two key points: the principal obstacles to be targeted by various land reform actions and the triggers that are needed to set a series of decisive steps in motion.
From an academic and historical perspective, the unfolding story of Russian land privatization is intellectually engaging and, from a practical point of view, the process and its implications have far-reaching implications for the Russian people. The Lincoln Institute’s interest in convening the conference and its continuing involvement in Russia allow us to learn from local experts, to share Institute experience and perspectives from other countries, and to provide support for ongoing land reform efforts. The conference revealed the need for professional training for Russians working in the emerging land market, and the Lincoln Institute and the Leontief Centre are developing curriculum and training courses to be offered in St. Petersburg later this year. For example, many private business owners now find themselves in the new role of property manager, and sometimes their land and buildings are a more valuable asset to the enterprise than the business itself. However, they lack knowledge and experience regarding property rights, leases, appraisal, zoning, regulation, planning and a range of other topics.
In the post-Soviet period, privatization of the real estate sector in Russia has been most advanced in its urban centers, and St. Petersburg was one of the first cities to start selling land plots occupied by either privatized (i.e., former state) or new businesses. Yet even there, by 2000 only about 5 percent of urban land had been privatized. The main problems with regard to the land market in Russia arise from the lack of clear definitions provided by Russian law; the failure of the law to develop fundamental provisions contained in the Russian Constitution regarding private ownership of land; and the consequent lack of firm guarantees for private property and inadequate protections through the courts. A brief history of land policies in Russia will help to provide a context for the current situation.
Land in Russian History
Land has been a central social and economic force throughout Russian history, although Russia has never had private ownership of land for any length of time or in any full sense of the term. Until the beginning of the twentieth century, state property was the predominant form of property ownership. Moreover, a considerable part of that property, including land, was unregistered and unconnected to the broader economy. It was only in 1906 that the Stolypin reforms began destroying the obshchina (the existing feudal-like peasant communities) as the main structure upon which allotment-based land use depended, while extending private land ownership through land tenure regulations, a peasants’ land bank and a resettlement policy. In this pre-Soviet period, Russia’s towns and cities experienced a growing market in urban land plots that were already built upon or earmarked for further development.
Following the revolutions of 1917, private ownership of land was abolished, civil transactions involving land were forbidden, and land was transferred to the use of all who worked on it. A 1918 decree abolished private ownership of real estate in cities and towns, and the process of nationalizing land was completed with the adoption of the Land Code of the Russian Socialist Federation of Soviet Republics in 1922. During the New Economic Policy (NEP) of the 1920s, land could be leased for periods of not more than six years (although subletting was not allowed) and tenants involved in working the land could use additional hired labor. However, by 1929 large-scale collectivization was under way, resulting in the creation of so-called cooperative-collective property. Leasing of land was abolished, and hiring labor on small peasant holdings was forbidden. Under socialism land was neither sold nor bought, and all land transactions were prosecutable under the law.
The situation today is reminiscent of that at the end of the nineteenth century, prior to the Stolypin reforms, when land law consisted of piecemeal legislation applying to ownership of different types of land. Private ownership of land was introduced in 1990 by the Constitution of the Russian Socialist Federation of Soviet Republics, beginning a gradual liquidation of the state monopoly on land ownership. The 1990 laws “Regarding Peasant Smallholdings” and “Regarding Land Reform” permitted citizens to hold in private ownership plots of land for use as smallholdings for horticultural purposes, the construction of houses and other personal uses. The terminology of these laws included “the right of use of land,” “life-long possession with the right to pass on as an inheritance,” “rent” and “property.” This wide variety of bases for property rights necessitated subsequent amendments of existing legislation, a development that was also stimulated by the collapse of the USSR.
Over the past decade, land relations continued to evolve. In December 1991 the president of the Russian Federation issued a decree and the Duma passed a resolution that allowed for the privatization of land in a two-step process. First the decree granted collective ownership of land and other assets to collective and soviet farms. Subsequently, shares of farms could be owned by the individuals who worked on them. Only at the end of 2001 was the right to own land, which is inseparable from the right to buy and sell land, ratified in Russia, and this right applied only to urban lands. However, the prohibition on the sale of agricultural land has no absolute force; laws introduced since 1991 permit the sale of land that is to be used as a private subsidiary smallholding for construction of a one-family residential building, or by members of stock-rearing and garage cooperatives.
According to a former minister for agriculture, there is a flourishing black market in land, which denies the general public access to information on the market values of land and negatively affects economic development. The absence of shared information on land market values means the absence of an objective criteria against which to measure land use efficiency. The extensive black market in leasing also deprives governmental budgets of property tax income since real estate cannot be properly taxed without accurate information on levels of ground rent. Under the current Civil Code of the Russian Federation (RF), land plots are considered to be objects of real estate and rights to these plots are categorized as property rights. The land privatization process was initiated in 1997 but then stalled because the RF government overruled buyout prices established by local administrations that were perceived as too low. The RF government indexed prices at a rate higher than locally established lease rates, thus undermining the transition to a private market in real estate. At the same time, under certain conditions (such as stable lease rates or minimal investment conditions), long-term leasing may turn out to be an acceptable substitute for title ownership. On the issue of real estate registration, the existing Russian system does not protect bona fide purchasers, nor does it provide adequate reimbursement when a purchaser’s title is contested. Furthermore, purchasers are normally unable to get a comprehensive review to determine whether their title is clear in the first place.
Obstacles to Land Reform
While the evolution of a private market in land is encumbered by history and politics, the participants at the St. Petersburg conference were interested in changes and adjustments in practice that land professionals might make to facilitate the transition. Zoning and surveying, as well as investment decisions, are among the areas where changes in practice might be made at the level of local government to address some of the following obstacles to land reform.
Slow implementation of legal zoning
Legal zoning, though mandatory according to the RF Urban Planning Code, is being introduced slowly in Russian cities. Some speakers attributed this situation to reluctant municipalities that cling to the “operative space” currently under their direct control, for fear of losing that land. Others maintained that key municipal officials have a number of more specific concerns: (1) their professional image and the stability of their administration depend on the actions they take to attract investment; (2) the arrival of new investors automatically expands the amount of “operative space;” and (3) the realization that even a perfect system of urban planning regulations will leave out a sufficient number of special cases that will have to be considered separately. Further, municipal officers are citizens, too, and they sincerely wish to raise more funds for their cities’ renovations. The problem is that their attention is too often distracted by more immediate economic and political challenges. Nevertheless, an increasing number of Russian cities are introducing legal zoning regulation systems, including Novgorod Veliky, Ufa, Kazan, Irkutsk, Khabarovsk, Tver, Chelyabinsk and Nizhni Novgorod. St. Petersburg’s recent practice of issuing “by-plot urban planning regulations” raised questions about whether or not they conform to the RF Urban Planning Code, which defines urban planning regulations as a set of requirements and restrictions applicable to zones, not to individual units or parcels. The practice of issuing plot-specific regulations was found dramatically inefficient for a number of reasons. First, it precludes making investment decisions from a representative sample of properties, since each property in the city is subject to different regulations. Second, it is more labor intensive than applying regulations to an entire zone. Finally, it is laden with higher developer risks, thus impairing the city’s overall investment profile. Participants from other cities noted that these delays in introducing zonal urban planning regulations evidently clashes with St. Petersburg’s image as the frontrunner of Russia’s reforms in legal and institutional real estate market development.
Inferior surveying
Many land-related problems in Russian cities stem from inferior surveying. Some plots are limited by the uncertainty of the parcel and/or building boundaries, and others suffer from poor siting. That is, many properties that are new to the market have no direct access to transport, communications, storm water collection systems, or other infrastructure networks. The result is a host of deficient properties that in turn inhibit the development of adjacent properties, and can bring down the value of an entire urban area. The conference discussions emphasized the importance (or even inevitability) of conducting an extensive urban land survey, which could provide more certainty to both investors and developers, reduce the time needed to prepare investment proposals, and help to expand property ownership.
Confusion over privatization of apartments
Most urban residents have not taken advantage of the recent privatization of apartments. Not only did this initiative fail to produce a new class of motivated and effective property owners capable of acting as responsible customers for housing maintenance agencies, but it created baffling new legal challenges as well. No one in St. Petersburg, where the privatization of apartments is most advanced, understands who (and on what legal basis) should be in charge of issuing permits to reconstruct general-purpose premises or reassign residential apartments for nonresidential use. As a result, apartment owners can exercise only a limited set of property rights, which in turn hampers the extension of the private real estate market. The conference participants discussed to what extent a law requiring apartment owners to purchase condominiums could help address the situation. Moreover, given an environment where apartment owners have limited experience with such ownership arrangements, discussion centered around whether economic stimulation or economic sanctions would be most successful in dealing with those who fail to meet their ownership obligations.
Investment in infrastructure
The complicated issues of engineering and infrastructure support for construction and renovation projects are evident in St. Petersburg. When determining title payments, the city takes into account the developer’s contributions to urban infrastructure development and actively mediates between the developer and the resource supplier. Provision of full, authentic and timely information is the principal factor behind the attractiveness of real estate investments, since this information allows for the quick and safe selection of investment opportunities. St. Petersburg has made progress in this direction, but its database will remain inadequate until the city fully adopts urban planning regulations (i.e., legal zoning), formulates clear heritage protection standards for its many historic properties, undertakes an overall land survey, allocates areas for municipal developments, and maps at least the contours of infrastructure networks.
Intergovernmental taxation systems
A reform of intergovernmental budget relations is necessary to improve the current taxation system. Most cities receive budget support from their oblasts (similar to U.S. states). Thus, they are not interested in reporting increased property tax revenues, because those revenues would then be subject to redistribution to the oblast. For example, to simplify its taxation system and stimulate investment in real estate, the city of Novgorod Veliky replaced its two-part land and property tax with a single real estate tax. For legal persons, as opposed to business establishments, the tax is charged on full title owners only. Despite a certain dip in the tax proceeds from the unified tax (compared to revenues from the former two taxes), the city’s overall tax revenues increased because of a higher profit-tax yield due to enhanced business activities.
Lessons from Russia and around the World
The RF government’s meetings and decisions on the notorious electric supply failures in the Far East and floods in Yakutia during the late spring of 2001 show that, unfortunately, only large-scale catastrophic events seem to be able to galvanize public administrators to change their old ways. One would like to believe that less destructive developments could stimulate action as well. For example, it would be worthwhile comparing investment activities in different Russian cities to see if such activity varies with the development levels of their local regulatory bases, the amount and types of information provided to developers, and the time required to develop project applications and the time it takes for local government bureaucrats to make project decisions. The case of recent German urban planning history is instructive to the situation in Russia. Beginning in 1990, the German system lost some of its characteristically strict reliance on municipal plans and initiatives for development and moved toward more reliance on private-sector initiatives. Now it is more common for private developers, rather than municipalities, to prepare detailed zoning plans, and then to purchase and develop the site. However, a direct borrowing of this German method is not recommended for Russian cities, since any system must take into account specific local challenges and cultural traditions. American participants had a similar view on the risks of borrowing planning methods from other countries. Although the general guidelines and principles may seem to be similar across countries or jurisdictions, local regulations, procedures and techniques can vary significantly due to different historical precedents and the specificity of current challenges. Some principles to consider include the following:
This opinion was supported by Russian speakers who referred to urban planning regulations in Russia before 1917 or to the current situation that compels cities to illegally hide their revenue growth and thus evidently hamper economic development. In closing, H. James Brown, president of the Lincoln Institute, reminded the participants that it is important to build mutually acceptable decisions rather than to continue disputes and quests for the ultimate (and not always absolute) truth. He called on those present to listen to their opponents’ arguments in order to arrive at fruitful agreements, not to waste time and effort on trying to prove one’s own case.
Leonid Limonov is the research director of the Leontief Centre for Social and Economic Research in St. Petersburg.
References
Limonov, Leonid E., Nina Y. Oding and Tatyana V. Vlasova. 2000. Land Market Development in St. Petersburg: Conditions and Peculiarities. Cambridge, MA: Lincoln Institute of Land Policy Working Paper. Malme, Jane H., and Joan M. Youngman. 2001. The Development of Property Taxation in Economies in Transition: Case Studies from Central and Eastern Europe. Washington, DC: World Bank Institute.
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Una versión más actualizada de este artículo está disponible como parte del capítulo 4 del libro Perspectivas urbanas; Temas críticos en políticas de suelo de América Latina.
Brasilia, la capital de Brasil, fue inaugurada a principios de los años 1960 como una “nueva ciudad” que daría comienzo a una era distinta para las metrópolis en América Latina y que demostraría cómo el gobierno hacía un uso eficaz de la tierra en aras de un crecimiento urbano planificado. Tal propósito se servía de dos instrumentos básicos: un control normativo del uso de la tierra basado en un plan general diseñado por Lucio Costa y el gobierno como propietario de las tierras de la capital federal, lo que permitiría que ésta fuera planificada sin los tipos de restricciones y conflictos que normalmente surgen cuando la tierra está en manos privadas. Sin embargo, tres décadas y media más tarde, los problemas asociados con el desarrollo urbano en Brasilia no se diferencian sustancialmente de los que padecen otras ciudades grandes de América Latina.
Falta de visión para la tenencia de la tierra y padrinazgo administrativo
Brasilia se presenta como un ejemplo único de la gestión de tierras urbanas en América Latina porque la responsabilidad de administrar las tierras públicas siempre ha recaído sobre el gobierno local. Sin embargo, la periferia de la ciudad ha sufrido un índice explosivo de crecimiento con un patrón concomitante de ocupación irregular de la tierra, subdivisiones ilegales y carencia de infraestructura. En Brasilia la posibilidad de dirigir el proceso de crecimiento urbano a través de una política explícita de acceso a las tierras públicas se ha visto comprometida de forma lenta e irremediable por la ocupación espontánea (e ilegal) de la tierra. Esta falta de visión en el uso de las tierras públicas suele ser disfuncional tanto para la densidad urbana como para las finanzas públicas, por lo que obstruye los esfuerzos que hace el gobierno local para proveer infraestructura a esos asentamientos irregulares.
Más aún, las influencias políticas que intervienen en el proceso de desarrollo han menoscabado en gran medida las posibilidades de manejar con eficacia la oferta de tierras públicas en Brasilia. A principios de los años 1990 el gobierno distribuyó unas 65.000 parcelas en áreas que carecían de infraestructura básica. Además de reducir las reservas de tierras públicas, este “padrinazgo de la tenencia de la tierra” generó la necesidad de encontrar otras fuentes para financiar nueva infraestructura. Dado que el principal recurso que tiene disponible la entidad de desarrollo urbano del Distrito Federal (Terracap) es la tierra misma, esta política de padrinazgo trajo como resultado la venta de otras tierras públicas para financiar la construcción de infraestructura en los asentamientos irregulares. Este círculo vicioso ha provocado graves distorsiones que la administración local actual pretende resolver usando tierras públicas como “capital” para crear una política efectiva que permita controlar los ingresos provenientes de la tenencia de la tierra y los costos urbanos.
La experiencia de Brasilia parece confirmar los argumentos de Henry George y otros de que la propiedad de tierras públicas no conduce por sí sola a un crecimiento urbano más equilibrado y equitativo socialmente. La estrategia del gobierno local actual de definir maneras de manejar el ingreso proveniente de tierras públicas para así controlar el uso de tierra urbana indica una nueva modalidad de interacción gubernamental con el mercado inmobiliario. En tal sentido, el gobierno cambia su función y deja de ser el propietario principal para convertirse en el administrador de los beneficios de la tierra.
Tierras públicas como capital de tenencia de la tierra
El principio medular de la nueva estrategia de Brasilia para administrar la equidad de la tierra es la definición de tierra pública como “capital de tenencia de la tierra”. El uso de esta tierra se somete a una serie de acciones estratégicas que transforman el capital de las tierras públicas en un factor que propicia la consolidación del complejo tecnológico del Distrito Federal. Se trata de la contraparte pública en el proceso de reconvertir el uso de la tierra en el centro de la ciudad en un instrumento de promoción social en el programa de regulación de la tenencia de la tierra: las tierras públicas se usan como activos mediante ventas, arrendamientos y asociaciones en proyectos urbanos.
La aplicación de estrategias diferenciadas para la tenencia de la tierra confiere mayor flexibilidad al gobierno para coordinar sus acciones. La búsqueda del equilibrio entre las iniciativas de índole social y otras en las que el gobierno intenta maximizar sus ingresos está cobrando la apariencia de una verdadera política de administración de tierras públicas que rompe con las anteriores prácticas de padrinazgo.
En este contexto de exploración de nuevos enfoques para el uso de tierras públicas con la finalidad de controlar el desarrollo urbano en Brasilia, el Instituto Lincoln, el Instituto de Planificación del Distrito Federal y Terracap organizaron un seminario internacional sobre gestión de ingresos provenientes de la tenencia de la tierra y costos urbanos en junio de 1998.
El programa reunió a expertos internacionales, ministros gubernamentales y administradores locales con miras a evaluar las experiencias internacionales en el uso de tierras públicas para financiar el crecimiento urbano en Europa, los Estados Unidos y América Latina. Martim Smolka del Instituto Lincoln describió las relaciones entre las operaciones del mercado inmobiliario, las regulaciones sobre el uso de la tierra y la recuperación pública de plusvalías. Alfredo Garay, arquitecto y exdirector de planificación de la ciudad de Buenos Aires, expuso las experiencias en el desarrollo de terrenos públicos en los alrededores del puerto de esa ciudad.
Bernard Frieden del Instituto de Tecnología de Massachusetts describió cómo se usan las actividades comerciales realizadas en tierras públicas en el oeste de los Estados Unidos para recaudar fondos para la educación y otros fines locales. Henk Verbrugge, director del organismo fiscal de Rotterdam y representante de Holanda ante la Asociación Internacional de Peritos, describió el sistema que tiene el país para la tenencia hereditaria, una regulación legal con la cual la tierra puede tener uso y beneficios completamente privados al tiempo que permanecen bajo control y propiedad económica de la municipalidad.
Los participantes discutieron la medida en que estas experiencias eran comparables a la situación en Brasilia y concluyeron que el éxito de varias estrategias para el uso de tierras públicas depende de la idoneidad de los proyectos específicos para la cultura empresarial del país en cuestión y las prácticas institucionales vigentes en la administración local.
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My father John C. Lincoln (1866-1959) had a strong code of ethics that played a prominent role in both his practice of business and his ideas about land. In 1895 he founded the Lincoln Electric Company of Cleveland, Ohio, which became the world’s leading manufacturer of arc welding equipment. He drew his ideas about land from the 1879 book Progress and Poverty, by the American political economist and social philosopher Henry George.
My father’s core ethical principle was to treat people as you would like to be treated. This implied the following precepts:
1) Treat people with absolute fairness. This means all people. In business it includes all the constituents of a company—employees, customers, owners, and the community. In society it means government must treat individuals fairly, and vice versa.
2) Whoever creates something should be entitled to keep it. Receiving the fruits of someone else’s labor—a windfall—often occurs. But for each windfall there is a wipeout—someone doesn’t get all he or she produced. Both the windfall and the wipeout are unethical.
3) People are important. They should be treated with respect and dignity, not as machines or cogs in a wheel.
Ethics in Business
Largely as a result of following these principles, the Lincoln Electric Company has demonstrated superior performance for its entire 100-year history. Many things have to happen to run a business ethically. One of them is making an adequate profit, which benefits the shareholders. But in my opinion, any company and all its constituents are better served if the customer comes first.
At Lincoln Electric, most employees are on piece work. If they produce more, they get more. The company has an annual bonus program, and the kitty for this bonus is composed of the extra profit beyond the returns required to run the business. Running the business includes providing a fair but not excessive dividend to shareholders and investing in new products and production methods. Beyond these costs, employees at Lincoln Electric get to keep any extra profit they produce. Recently bonuses have been about 50 to 60 percent of annual salaries. There are no windfalls, and no wipeouts.
Nowadays, manufacturing is no longer as much the “thing” as it once was. Making Lincoln Electric a successful global company requires more emphasis on company-wide teams. Individual pay is more dependent upon cooperation across departmental lines. This can work just as well as more individual programs of the past, but it is more difficult to manage. Incentives must be tailored to each location where we operate.
Ethics in Land
The heritage of the Lincoln Institute of Land Policy stems from my father’s interest in the ideas of Henry George, especially the land value tax. The ethics of this tax concept are parallel to those used at Lincoln Electric.
Someone who works the land should be entitled to keep the fruits of his labor. If he produces more because of increased skill or effort, he should reap a higher reward. However, Henry George said that land is a natural monopoly. Its value is largely created by things unrelated to the actions of the land’s owner, such as population pressure or mineral deposits. The landowner or user has nothing to do with these factors, yet if they cause the land value to increase, the owner gets a windfall.
This ethical dilemma disturbed my father, as it disturbs me. He subscribed to the remedy proposed by Henry George, which is to take as a tax each year the full rental value of land produced by natural or social factors. This would eliminate the windfall. It would still leave for landowners and users the value created by their own investments and labor.
A hundred years ago land was considered one of the three factors of production, along with labor and capital. Land was essential as both a place to work and a source of raw materials. Things are more complex today. A great deal of the economy has to do with telecommunications and computer software, which allow businesses to locate anywhere and use few or inexpensive natural resources. These changes may not negate the basic economic theories of Henry George’s time, but they do make it a bit more difficult to analyze the role of land in the economy.
There are many positive illustrations that ethical business practices lead to economic success. Unfortunately, there are not clearcut illustrations showing that land value taxation produces broad economic benefits. Nevertheless, economic research suggests that land value taxation could encourage the productive and careful use of land. Individuals who used the land in ways that increased its production would be able to keep the full value they had created, and society would keep the value it created.
I believe ethical practices will benefit all sides in any transaction. Ethical land taxation should lead to an improved economy, just as ethical business practices lead to more successful companies. One should get to keep the fruits of one’s labor, but the fruits of speculation or monopolies should accrue to the community as a whole, not to individuals as windfalls. Both the private sector and the public sector would benefit. Good ethics is good business. Good ethics is good for society as well as the economy.
___________________
David C. Lincoln, president of the Lincoln Foundation and former chairman of the Lincoln Institute, presented the annual Founder’s Day lecture on August 1 at Lincoln House. He had served as chairman for the Institute’s first 22 years before stepping down in May 1996. His talk, excerpted here in part, commemorated the 130th anniversary of the birth of his father, John Cromwell Lincoln, the Cleveland, Ohio, industrialist who founded the Lincoln Foundation in 1947.
Over the last two decades, and especially in the last few years, land regularization and upgrading programs have been implemented in informal settlements by central, regional and local governments in several Latin American countries. Important lessons must be learned from this incipient practice of urban policy making, not only to contribute toward improving existing experiences, but also to guide those governments that are confronting the phenomenon for the first time, or more likely are confronting the need to design policies to deal with significant increases in informal urban development.
To address this need, the Lincoln Institute sponsored its third offering of the course Informal Markets and Land Regularization Programs in Urban Areas, in November 2003. It was held in Recife, Brazil because of the city’s historic tradition of urban policy making, including its regularization program (PREZEIS), which for the past 20 years has been a pioneering instrument, despite its many shortcomings. The course brought together about 35 people with varied academic backgrounds and institutional positions representing 10 Latin American countries: Argentina, Brazil, Colombia, Honduras, Mexico, Nicaragua, Paraguay, Peru, Uruguay and Venezuela.
The 13 intertwined lessons offered here draw on the papers presented in Recife and on experiences discussed in the two previous courses in 2001 and 2002, as well as ideas generated in the meeting of the Institute’s Latin American Network on Land Regularization in Brasília, Brazil, in July 2003. This brief, critical analysis of land regularization programs reflects contributions from many people, but the authors take full responsibility for any misrepresentations that a general synthesis like this one may produce (see Figure 1).
1. The Process of Favelización
The process of informal production of urban space is increasing at a significant pace in Latin America, despite the fact that, unlike Africa and Asia, the region has been solidly urbanized for many decades. Occupied areas are becoming denser, and new settlements are being formed daily. Increasingly, these occupations encroach on environmentally sensitive areas, near protected water reservoirs, on public land, and in other areas not suitable for human occupation or economically feasible in the formal land market. This process has created all sorts of harmful repercussions—socio-environmental, legal, economic, political and cultural—not only for the millions of residents living in informal settlements, but also for city governments and the entire urban population. Despite the many regularization and upgrading programs implemented in the last few decades, the development rate of new informal settlements has been twice and even three times that of urban population growth. Thus, increasing informality is not exclusively the result of demographic change or even the increase in urban poverty, which also has been growing but at a much lower rate.
2. The Vicious Cycle of Informality
Multiple factors are responsible for the establishment of informal settlements. Over and above demographics and macroeconomic factors affecting urban poverty (employment and income policies), local variables contribute to the “unexplained variance” of increasing informality. By acting or failing to act, local authorities have fomented the growth of the phenomenon through exclusionary land use regulation, favoring wealthy neighborhoods in the spatial allocation of public investments, outright complicity with the delinquent practices of land subdividers, and inadequate local fiscal policies.
The corollary of this tolerance of informality is of great importance for land pricing policy. The informal market values and benefits from greater regulatory freedom and from the social values associated with traditional networks among residents within the settlements. Both of these dynamics affect prices in the informal market, which are reaching absurd levels. For example, a 6-square-meter (60-square-foot) wooden shack on a mangrove swamp in Recife has been valued at US$1,300. Such extremes and variations in prices reflect the diversity of informal processes at work in the access to urban land and housing, both among different settlements and within each settlement. Attacking the factors responsible for the vicious cycle of price formation should be an indispensable ingredient of any policy seeking to mitigate the consequences of informality.
3. A World of Diversity
Far from being a homogeneous phenomenon, informality manifests itself in many forms, contexts and places. Enormous differences may be found within and between settlements in the same city, not to mention among cities within a country and among cities in different countries. Each informal area has good and bad neighborhoods; relatively high-valued and low-valued areas; an uneven distribution of whatever services are available; and properties with different types of tenure rights. The income levels of many families in informal areas also are variable and in some cases are well above those of families in formal areas who are typically expected to pay for certain publicly provided services and benefits.
In comparing the archipelago of informal settlements distributed within formal neighborhoods in Latin America, property price gradients have been found to be uncorrelated, revealing altogether different market forces. Although both formal and informal areas are subject to vigorous land markets, the intervening price determinants are of different orders of magnitude. As mentioned above, regulatory freedoms, as well as longstanding informal networks that support the exchange of intangible benefits, affect property values. These realities must be taken into account when designing regularization programs that can offer positive reform of traditional practices.
There is also a need to adjust the programs to the different conditions of newly occupied areas and long-established settlements in consolidated areas. A clearer chain of market transactions can be traced in the newer occupations, whereas there is usually no linear succession of transactions in older areas. Furthermore, established settlements reflect a complex overlay of informally defined rights and transactions, such as rooftops sold to a third party as buildable “land,” which in turn may give rise to an additional living space. It is by no means clear whether regularization programs should start with recent occupations, where the costs of upgrading are lower and degrees of freedom are greater, or with older, consolidated areas that present more pressing social consequences, but where some legal rights may already exist.
4. Tolerance of Informality
Despite all the negative implications, public authorities have tolerated informal urban development processes, whether because of neglect, political convenience, ambiguous actions or even direct promotion of informal occupations. There is, however, little understanding that such tolerance generates rights over time and little information about the extremely high costs, both absolute and relative, of what is involved in upgrading programs. At the same time, tolerance of informal occupations is accompanied by a growing acceptance by both public authorities and public opinion that consolidated settlements should be upgraded with services, equipment and infrastructure. A recent study conducted by Cities Alliance in Brazil shows that the decision to regularize an irregular settlement is often made more quickly than the decision to approve a new regular settlement (six months versus two or three years).
This official tolerance also applies to the acceptance of “second-class solutions” for “second-class citizens” and often results in the early deterioration of upgraded areas. The combination of poor-quality materials and low-cost, unconventional techniques used in upgraded areas, as well as greater pressure on the existing infrastructure because of increased densification, renders the infrastructure obsolete and incurs high maintenance costs. Moreover, upgraded areas usually are not properly integrated into the municipal fiscal system. Throughout the region, the fiscal irresponsibility of municipal administrators is aggravated further by their failure to take responsibility for the broader scope of territorial development, as well as for their negligence or at best paternalistic attitude toward these regularized settlements.
5. Expectations and Land Values
Regularization programs to date have addressed a very small percentage of existing informal settlements, and as a result the vast majority of people living informally have not benefited from any type of public intervention. Furthermore, many regularization programs have been formulated without a proper understanding of the causes of informality, and they often deliver counterproductive results that contribute to the process of increasing socio-spatial segregation.
The mere expectation of upgrading puts a premium value on the land designated for improvements, thus significantly impacting prices in the informal market. The higher the expectation that an area will be regularized in the future, the higher the premium on that land and the higher the market demand for lower-priced subdivisions elsewhere. This suggests two approaches to upgrading: comprehensive programs for everyone in a few places coordinated with policies to change future expectations about cost recovery schemes; or partial upgrading in all informal areas of the city so expectations about market activity will be more balanced and consistent. The importance of integrating upgraded areas into municipal fiscal systems is not yet properly understood.
6. Isolated and Fragmented Policies
Public intervention in informal settlements through regularization programs has been promoted in an isolated, sectoral way without the necessary integration between such programs and the wider context of urban land management policies that have a direct bearing on such settlements. These policies include construction of social housing; rehabilitation of dilapidated urban centers; occupation of vacant areas and buildings; broader spatial allocation of public investments in urban infrastructure and services; modernization of tax collections and cadastres; and public-private partnerships. Moreover, most regularization programs have been limited to residential areas and have rarely been extended to informal industrial and commercial businesses, vacant public buildings and land in central areas, or informal settlements in rural areas.
At all levels of government, regularization programs have been marked by structural fragmentation— within programs, between secretariats and ministries, and among national, state and local levels—and as a result existing resources are often misspent or fail to reach all intended beneficiaries. The programs also have suffered from a lack of administrative continuity due mostly to changes in local political contexts. Rather than supplementing other initiatives, regularization programs often absorb much of the (limited) financial capacity of local municipalities, causing other social housing programs to be sacrificed or neglected. This problem has its origins in both the broad credit lines opened by national and international multilateral agencies and the absence of a requirement that local administrations match the financial burden of the program with efforts to expand their own revenue sources. In general, credit lines for regularization programs have been established without careful consideration of the financial capabilities of municipalities.
7. Lack of Financial Resources
As if the above problems were not enough, regularization programs have not been supported by adequate financial resources. The budgetary provisions are not compatible with the proposed and sometimes ambitious objectives, and often there are no specific funds for the programs. Revenues resulting from urban planning operations (such as earmarking resources from the sale of building rights in formal and high-income areas) have not been properly used to support upgrading. Resources from international agencies have been poorly spent, especially because there has not been a rigorous evaluation of the programs, nor a firm demand that their targets or objectives are fully accomplished. In addition, there are no adequate micro-credit policies in place to support or encourage community organizations.
8. Dissociation Between Upgrading and Legalization
Although it could be argued that illegality is a consequence of the insufficient supply of serviced land at affordable prices, in the vast majority of regularization programs the greater emphasis on upgrading has been dissociated from housing improvement and socioeconomic programs aimed at integrating communities, as well as from specific policies to legalize areas and plots. The components of upgrading and legalization have been conceived as if they were separate processes, or, frequently, as if legalization were an automatic result of the upgrading process. Most upgrading programs seem to fall short of what is required for land occupations to be legalized in the first place. As a result, those few programs that have reached the legalization stage have had to invent legal-political solutions, which often do not reflect the urban conditions actually in force in the area.
Despite the publicity given to regularization programs, the number of titles that actually result in a document issued by the property registration office is disappointingly low. The complexities imposed by law and the resistance and conservative attitudes of notaries and registration offices have been identified as some of the most critical bottlenecks to overcome. It should be added that most families, once they receive a title recognizing their legitimate right to their property, simply do not bother to complete the registration process, often because they do not understand its legal overtones or because it is too expensive or cumbersome. This situation has led to an outcry for the simplification of titling and registration systems and an associated need to disempower the existing bureaucratic entities.
9.The Importance of Titling
Given these problems, few programs have reached the legalization stage, and even fewer have achieved the registration of legalized plots. Perhaps because of that failure, many analysts have come to believe that titles are not important, that the mere perception of security of tenure would suffice. Although it is true that such a perception is indeed the main factor that encourages people to start investing in their houses, titling is important for two reasons: the personal interests of the occupiers (security of tenure, protection against forced eviction, domestic conflicts, marital separation, inheritance, problems with neighbors, access to an address and to forms of credit); and the interest of the city as a whole, since legal titling can contribute to the stabilization of land markets and allow for more rational and better articulated forms of public intervention.
There is still great resistance to land titling programs, especially on the part of the judiciary and the general public. However, it is important to note that individual beneficiaries of titling programs often do not have a full understanding of the protections and limitations of their title—What is it good for? Why does one need to actually register the title? All this suggests that educational programs for both city officials and residents should accompany the introduction of any regularization programs.
In addition, there has been little reflection on the implications of the kinds of instruments used to legalize plots. The emphasis placed on individual freehold titles has ignored the need for collective legal solutions for collective social problems; whenever such legal instruments have been used, they have not been introduced in a way that renders the new legal order compatible with the existing urban order and with the legal implications of the instruments. Most existing legal options have not been fully explored and generally lack creativity. Moreover, a consistent effort has yet to be made to have the new legal instruments fully validated by credit agencies, and by society at large.
10. The Fallacy of Popular Participation
The political quality of regularization programs has varied enormously, but in general the processes of popular participation in formulating and implementing the programs have been of little significance. This situation has been further aggravated by the creation of artificial forms of participation as a result of demands from financing agencies. The designed mechanisms for popular participation are in general a sheer formality, if not a farce from the outset. Very few programs have assimilated solutions proposed by the affected community. The political-institutional and cultural framework within which most regularization programs have been formed, along with the constraints imposed by the way these programs are financed, virtually eliminates any room for a truly effective public role, since public participation normally implies major challenges to the status quo. Regularization programs are more often perceived as solutions from or for the establishment than as a response to the real needs of the majority of the low-income population.
11. Compatible Scale, Patterns and Rights
Perhaps the main problem with regularization programs is the difficulty in making the scale of the interventions compatible with the technical, urban and environmental patterns proposed for the settlements, as well as with the nature of the rights to be recognized for the occupiers. These factors of scale, patterns and rights have to be discussed together to guarantee the sustainability of the programs and their impact on reality.
12. The After-effects of Regularization Programs
After an area is upgraded or a settlement is legalized, the public authorities normally do not maintain their presence in the areas. They should perform many important functions, from monitoring and evaluating the maintenance of installed equipment (notably water and sewage systems) to creating new guidelines or rules governing new occupations. As a result of the absence of official oversight and intervention, many areas rapidly begin to deteriorate. Moreover, the legitimization provided by the regularization program may make neighboring (originally formal) areas more prone to being “contaminated” by new informal land use practices. In general, regularization programs have not led to the promised urban, social and cultural integration of upgraded areas, and the informal areas remain stigmatized as second-rate long after they have been upgraded. The idea that regularized areas are placed in a new, virtuous trajectory rarely survives beyond the original documents setting the justifications for the program.
13. Balancing Individual Freedoms and Public Functions
In spite of their concern with the need to guarantee that the beneficiaries of public intervention are indeed the occupiers of informal settlements, regularization programs have not met a proper balance between respect for individual rights and freedoms and the programs’ public functions (the recognition of the social right to housing and the need to set aside urban areas for that purpose). Frequently the adopted legal solutions embed restrictions intending to freeze the mobility process within the areas (affecting terms of sale, acquisition, rent and so forth), which only helps to generate more informality.
The strategy of focusing on an area or social group seems to ignore the very nature and origins of informality, which is in fact a Catch-22 situation. The lack of sufficient finances in most programs would, on one hand, suggest that beneficiaries should not be able to cash in their benefits and move on to a new informal occupation to be similarly regularized in the future. On the other hand, the cost of monitoring and controlling such practices may be too high, if not unfeasible. Restrictions on transactions would simply generate new kinds of informal arrangements.
Interestingly, very few regularization programs actually accommodate or adjust to the potential upward and downward mobility of the affected occupants. They are formulated with a static community in mind. Intra-urban mobility, particularly among informal settlements and between formal and informal areas, is not well understood and thus is largely ignored. A possible way out of this conundrum would be to establish a cost-recovery scheme or value capture mechanism at the very beginning of planning for a new regularization program.
Conclusion
Regularization programs are typically not formulated with well-defined goals and timetables, and the problem is made worse by the lack of suitable evaluation indicators. In short, the declared objectives of regularization programs in Latin America (promotion of security of tenure and socio-spatial integration) have not been translated into an adequate combination of a comprehensive diagnosis, effective instruments and a clear implementation strategy, not to mention deficiencies in management capacity. As a result, the Latin American experience with regularization so far can not be considered fully successful.
It may be said, however, that regularization programs have shown merit in raising public awareness about the legitimacy of claims for more effective and comprehensive responses to the needs of a significant and growing group of citizens now excluded from the formal socioeconomic system. These programs have enabled some of the urban poor to remain in central, serviced areas of Latin American cities and have improved the livelihood and conditions of those living in regularized settlements, notwithstanding this discussion of their shortcomings. Given the cruel dynamics of socio-spatial segregation in the region, this fact is in itself of great importance.
Edésio Fernandes is a part-time lecturer in the Development Planning Unit of University College London.
Martim O. Smolka is senior fellow and director of the Lincoln Institute’s Program on Latin America and the Caribbean.
Related Land Lines Articles
Angel, Shlomo, and Douglas Keare. 2002. Housing policy reform in global perspective. April: 8–11.
Calderon, Julio. 2002. The mystery of credit. April: 5–8.
Fernandes, Edésio. 2002. The influence of de Soto’s The Mystery of Capital. January: 5–8.
———. 2002. Faculty profile. July: 12–13.
Smolka, Martim O. 2003. Informality, urban poverty and land market prices. January: 4–7.
Smolka, Martim O., and Laura Mullahy. 2003. A decade of changes: A retrospective of the Latin America program. October: 8–12.
Figure 1:
Dos and Don’ts of Regularization Programs
Dos
Don’ts
One of the characteristics that makes working on land policy in Latin America so fascinating is the ever-present contrast between the characteristics that are common throughout the region and the anomalies that make each country’s relationship with land unique.
The confusing and contradictory responses by Latin America experts who participated in our survey call attention to potentially misleading policies that might be fomented by erroneous perceptions and weak indicators.
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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.
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Five years ago, New Orleans resident Mandy Pumilia was concerned about the number of apparently blighted structures in her neighborhood, known as Bywater, where she is currently vice president of the neighborhood association. Despite post-Katrina recovery efforts, it was hard to identify and track truly troubled properties, and she didn’t have access to city data that could have helped. Instead, she built her own Google spreadsheet and filled it in with the results of her own research and legwork. “It was an arduous process,” she recalls. And despite her tech savvy and determination, it was a solution with limits: it wasn’t easy to share the information beyond people she knew directly, and keeping up with property-specific city hearings was a chore.
Since then, a web app called BlightStatus (blightstatus.nola.gov) has become a valuable new tool for her neighborhood recovery efforts. Created in 2012 by Code for America, a nonprofit specializing in open-source projects that benefit local government, BlightStatus makes it simpler for citizens like Pumilia to access property details, more deeply engaging them in managing blight and other planning challenges. The effort caught the attention of other cities and led to a spinoff startup called Civic Insight, which is now deploying its technology in Dallas, Atlanta, Palo Alto, Sacramento, and other places.
In New Orleans, BlightStatus aggregates information on inspections, code complaints, hearings, judgments, foreclosures, and more. This data is generally siloed or hard to access, but the app gathers and updates most of it daily. Users can search by address or use an interactive map to search at the neighborhood or citywide level. Particularly useful: a “watch list” feature that lets someone like Pumilia keep tabs on specific properties, and sends timely alerts about hearings and other developments. “And it makes it easier for me to empower other residents,” she adds, “so I’m not the only keeper of information.”
When other cities noticed New Orleans’ embrace of the app and expressed interest in a similar tool, Code for America adapted the technology to work elsewhere. “We seemed to hit a nerve,” says Eddie Tejeda, one of the BlightStatus creators. Specifics varied from place to place, but grappling with official property data was clearly a widespread frustration. Lots of people want information about buildings and property, Tejeda continues, but what’s available is often “really hard to work with”; digging through it requires knowledge and experience.
With an investment from the Knight Foundation, the group formed Civic Insight in 2013, using their New Orleans work as a template that could be scaled for other cities large and small, with varied needs and data sets. (Setup and annual subscription-like fees vary by population: roughly $1,000 to $10,000 for the base rate plus 20 to 70 cents per capita.) Among its newer clients, Dallas is proving a particularly important case study. A sprawling metropolis with wildly diverse neighborhoods, from pricey and thriving to severely economically challenged, it’s helping demonstrate that this approach to open-data technology isn’t just for triage in a place like post-Katrina New Orleans.
The connection came via Habitat for Humanity. The nonprofit’s New Orleans chapter has been an enthusiastic user of BlightStatus. Members passed the word to colleagues in Dallas, where the city has been grappling with strategies for using data to define, track, and address blight and related issues, such as identifying problem landlords. Launched in late 2014 with data similar to the information collected in New Orleans, the Dallas version will incorporate additional crime and tax-related statistics that locals want to access more readily, says Theresa O’Donnell, the city’s chief planning officer, who spoke about the app at the Lincoln Institute’s Big City Planning Directors conference in Cambridge in October 2014. “As we get these programs up and started,” she says, “we can rely more on citizens to let us know if [our blight efforts] are working or not.”
Atlanta and Sacramento are rolling out their own programs to make use of the app this year, and other Civic Insight efforts are forthcoming in Fort Worth, Texas, and elsewhere. Client goals aren’t limited to blight issues, notes Tejeda, now Civic Insight’s CEO: in Palo Alto, where zoning, development, and construction are hot topics, architects and homeowners use the app to keep up with permitting processes. That flexibility is by intent. “It’s relatively quick for us to map [raw data] to our application,” he explains. “The role we play is being the translator between what the city has, and what the public needs.” (The app is also built to accommodate new data sets—and it’s no surprise that active citizens like Pumilia, in New Orleans, have lots of suggestions that Civic Insight is working to accommodate.)
Comprehensive data sets and other digital tools have helped to guide planners and other city officials for years, but what Civic Insight is up to is the next logical step. “There’s this great opportunity to harness this data—sort of hidden data, for many cities—and bring it to life” in ways that are useful to citizens and planners alike, points out Lincoln Institute fellow Peter Pollock, the former head of planning in Boulder, Colorado.
Such accessibility matters because policy makers must “coproduce the good city” with residents, Pollock continues. “Planners are in the business of harnessing community energy around a vision for the future,” he says. That means zoning and permitting—but also maintenance and compliance. “It’s not just building the city; it’s care and feeding of the city over time.”
Still, the Civic Insight proposition may seem confusing at first: How does a city benefit by hoping citizens will pore over information that it already owns? But that’s the point. Opening up data to people who really know the neighborhoods where they live and work amounts to a kind of crowd-sourcing strategy for planning-level city maintenance.
Just ask Pumilia. This is the essence of what she was trying to do in New Orleans with her DIY spreadsheet and a whole lot of grit a few years ago. Now she can monitor her neighborhood more easily and direct others to BlightStatus so they too can quickly round up the information they need and prod the city about troublesome properties.
Dipping into the data as we speak, she calls up the history of one local address: “So there are one, two, three, four, five cases against this property,” she says. In short, she has just whipped up a ready-made dossier of neglect—one that helped persuade officials to start a process that should lead to the auction of that property.
Sometimes, Pumilia says with a laugh, “It requires citizen action to inspire people to do their jobs.”
