Una versión más actualizada de este artículo está disponible como parte del capítulo 7 del CD-ROM Perspectivas urbanas: Temas críticos en políticas de suelo de América Latina.

Los proyectos de reurbanización a gran escala (denominados grandes proyectos urbanos o GPU) plantean muchas dudas sobre las consecuencias de la urbanización subsiguiente provocada por la intervención. Los GPU se caracterizan por el impacto que tienen en una parte significativa de la ciudad, a menudo con el uso de algunos nuevos instrumentos fiscales o reguladores y la participación de una amplia red de agentes e instituciones. Se espera que estos proyectos afecten los precios del suelo, reciclen la infraestructura y las instalaciones existentes o creen otras nuevas, y atraigan otras construcciones nuevas.

Los GPU como instrumento de política urbana han sido objeto de controversia y debate considerable en toda América Latina. Se argumenta a menudo que promueven la exclusión social y la renovación de edificios para aspiraciones de la clase media, tiene efectos limitados en la estimulación de actividades inmobiliarias y requieren grandes subsidios públicos (a veces ocultos) que a menudo quitan recursos fiscales de otras necesidades urbanas. A pesar de su creciente popularidad en América Latina, existe poca evidencia empírica para apoyar estas críticas.

Este artículo presenta el caso de un GPU introducido en São Paulo, Brasil, en 1996 como una “operación urbana” para reurbanizar un área de ingresos medios que constaba en su mayor parte de hogares unifamiliares que iba a ser atravesada por la prolongación de la Avenida Faria Lima. El proyecto es conocido como el Consorcio de Operaciones Urbanas de Faria Lima (OUCFL). Examinamos los principios económicos que afectan el rendimiento fiscal del proyecto y su oportunidad para recuperar plusvalías, evaluamos los cambios en densidad residencial y analizamos los cambios en la distribución de ingresos y la estructura de la propiedad. Por último, ofrecemos algunas sugerencias de políticas sobre cómo y cuándo usar esta clase de instrumento en función de estas evaluaciones.

¿Qué es una operación urbana?

Una operación urbana es un instrumento legal que trata de proporcionar a los gobiernos locales el poder de llevar a cabo intervenciones relacionadas con mejoras urbanísticas y de planificación municipal en asociación con el sector privado. Identifica un área particular dentro de la ciudad que tenga el potencial de atraer inversiones inmobiliarias privadas para beneficiar a la ciudad en su totalidad. Los índices de planificación municipal apropiados (es decir, zonificación y otros reglamentos sobre coeficientes de construcción, índices de ocupación y usos del suelo) se redefinen según un plan maestro, y las inversiones se hacen en infraestructura nueva o reciclada.

Una operación urbana permite a la municipalidad recuperar (a través de medios negociados u obligatorios) los incrementos del valor del suelo relacionados con los subsiguientes cambios de uso del suelo. En comparación con otros instrumentos de recuperación de plusvalías, estos fondos están destinados o justificados dentro del perímetro del proyecto y serán compartidos entre el gobierno y el sector privado para inversiones en infraestructura urbana y subsidios de las inversiones inmobiliarias privadas para apoyar el proyecto mismo.

Cada operación urbana en Brasil es propuesta por el poder ejecutivo y aprobada por el poder legislativo de la jurisdicción. En el caso de São Paulo, esta autoridad fue creada en la Ley Orgánica Municipal (Constitución de la Ciudad) en 1990, que se incluyó más adelante en la nueva ley de urbanización brasileña (Estatuto de la Ciudad de 2001). Los primeros proyectos propuestos fueron la Operación Anhangabaú (más tarde ampliada como parte de la Operación Centro de la Ciudad y denominada Operación del Centro) y Água Branca, seguida por las operaciones de Água Espraiada y Faria Lima. Después de aprobar el nuevo Plan Maestro de la ciudad en 2001, se generaron otras nueve operaciones urbanas. Se espera que estos trece proyectos afecten del 30 al 40 por ciento del área edificable de la ciudad de São Paulo.

Financiación de Faria Lima

La operación urbana de Faria Lima (OUCFL) fue propuesta y aprobada en 1995 con el objetivo de obtener recursos privados para financiar las inversiones públicas necesarias para comprar suelo e instalar infraestructura con el fin de ampliar la Avenida Faria Lima. Se estimó que estos costos ascendían a aproximadamente US$150 millones, dos tercios para adquisición de suelo y un tercio para la avenida en sí. Al proyecto se opusieron muchos interesados por motivos que iban desde el origen de los fondos (es decir, avanzados del presupuesto local a través de una deuda nueva) hasta preocupaciones del vecindario (una de las cuales pudo mantener sin cambios los coeficientes de edificabilidad [floor area ratio o FAR] y excluirlos legalmente de la zonificación de OUCFL) y problemas de diseño técnico.

Los estudios técnicos realizados en su momento indicaban que sería posible aprovechar 2.250.000 metros cuadrados potenciales más de los ya permitidos por la legislación de zonificación de la ciudad y consecuentemente se modificaron los FAR. Estos derechos de construcción adicionales fueron garantizados contra un pago mínimo del 50 por ciento de su valor de mercado usando el instrumento existente Solo-Criado (venta de derechos de construcción). La OUCFL despertó gran interés por parte de empresarios inmobiliarios. No obstante, este instrumento también fue cuestionado por su falta de transparencia, su enfoque de “proyecto a proyecto”, y la arbitrariedad en la forma en que se establecieron precios relevantes que después se usaron para calcular el valor de los derechos de construcción adicionales.

En agosto de 2003 ya se había autorizado un total de 939.592 metros cuadrados, o casi el 42 por ciento de los 2.250.000 metros cuadrados totales posibles. Se aprobaron más de 115 proyectos inmobiliarios, incluidos casi el 40 por ciento de edificios comerciales y el 60 por ciento de edificios residenciales de alta calidad. No obstante, los recursos (aproximadamente US$280 millones) obtenidos de estos proyectos aprobados no habían compensado completamente los gastos (US$350 millones, incluidos el capital más los intereses) relacionados con la ampliación de la avenida, teniendo en cuenta los elevados intereses reinantes en Brasil durante los casi ocho años desde la ejecución de los gastos. Así, aproximadamente el 80 por ciento del costo (aunque mayor que el anticipado) se ha recuperado mediante el proceso de Venta de Derechos de Construcción. Desde julio de 2004, la compensación de estos fondos de avance se obtuvo mediante el ingenioso y nuevo mecanismo de recuperación de plusvalías conocido como CEPAC, siglas que significan Certificado de Potencial Adicional de Construcción. Un CEPAC representa un metro cuadrado.

La introducción de CEPAC

Aunque los CEPAC se definieron en el Estatuto de la Ciudad de 2001 de Brasil, no fueron aprobados por el CVM (equivalente brasileño de la Comisión de Bolsa y Valores de EE. UU.) como libremente comerciables en la Bolsa de Valores Brasileña hasta diciembre de 2003. El reglamento establece que el precio de cada certificado sea definido por una subasta pública y que puedan ejecutarse en cualquier momento los metros cuadrados correspondientes de derechos de construcción (que también incluyen cambios de uso e índices de ocupación) expresados en cada certificado. El reglamento indica también que se pueden emitir nuevos lotes de certificados (y venderse en subastas) sólo después de confirmarse que los recursos capturados por la venta previa han sido destinados de forma efectiva al proyecto. Para asegurar este uso designado, los ingresos se depositan en una cuenta especial, no en el tesoro municipal. Desde el punto de vista de los inversores privados, esta designación asegura la aceptabilidad de este instrumento de recuperación de plusvalías a su propia valorización. Al emitir un número menor de certificados que el número de derechos de construcción potenciales —es decir, al gestionar su escasez— el sector público puede beneficiarse de la valorización y poder así recuperar la plusvalía “ex-ante” (Afonso 2004, 39).

La aprobación final de los CEPAC para la OUCFL y todos los pasos necesarios para lanzarlos al mercado financiero se produjo a mediados de 2004, y la primera subasta a finales de diciembre de 2004 generó casi 10 millones de reales (unos US$4 millones), correspondientes a la venta de unos 9.000 CEPAC de un grupo autorizado de 650.000 metros cuadrados. Los certificados de OUCFL se vendieron a un valor nominal de 1.100 reales (unos US$450) por metro cuadrado sin un precio adicional como resultado del proceso de licitación.

Esta situación contrasta con la operación urbana de Água Espraiada, que se esperaba que fuera completamente financiada por CEPAC desde su inicio. En su tercera subasta, los certificados ya estaban alcanzando los 370 reales por certificado en vez del valor nominal de 300 reales fijado para esta operación. Una subasta más reciente en Água Espraiada vendió 56.000 CEPAC y alcanzó 21 millones de reales (US$9,5 millones), reflejando un precio por certificado de 371 reales. Este contraste de precios refleja los distintos valores nominales originales en los dos proyectos. En el caso de OUCFL los urbanizadores de compraron (y acumularon) derechos de construcción por adelantado, para beneficiarse de las reglas más flexibles antes de las aprobaciones de la CVM. El precio de los certificados en Faria Lima empezó siendo de más de 1.100 reales porque es un área más valorada. En Água Espraiada los urbanizadores estaban dispuestos a pagar un precio mayor que el valor nominal original, ya que los certificados eran menos caros y había una mayor demanda.

Implicaciones de los precios del suelo

Los precios del suelo sin ocupar y de las áreas urbanizadas experimentaron un aumento considerable en algunos bloques dentro del perímetro de OUCFL durante los años 90, pero disminuyó en otros bloques. No obstante, el precio promedio del metro cuadrado de nueva urbanización descendió en toda la región metropolitana de San Paulo (RMSP) en todas las franjas de precios, cuando se comparan los precios promedio de 1991 a 1996 con los de 1996 a 2000.

Después de controlar una serie de atributos relacionados con el carácter variable de las urbanizaciones y su ubicación, las estimaciones de precios mostraron un aumento relativo inequívoco después de haber dado comienzo a la operación. El precio promedio por metro cuadrado dentro del perímetro de OUCFL aumentó de 1.680 reales en el período de 1991–1996 a 1.920 reales en el período de 1996–2001, lo que representa un aumento del 14 por ciento, mientras que los precios en la RMSP disminuyeron de 1.210 a 1.060 reales, lo que representa un descenso del 12 por ciento en el mismo período (1,95 reales/1,00 dólares estadounidenses en diciembre de 2000). Así pues, el precio por metro cuadrado en OUCFL era aproximadamente un 26 por ciento mayor que el de RMSP. El precio por metro cuadrado en OUCFL fue un 38 por ciento mayor que el precio promedio en la RMSP en 1991–1996, y aumentó a un 81 por ciento en 1996–2001.

¿Fue este aumento capturado por la municipalidad el previsto? Considerando que el costo de la construcción es en promedio aproximadamente igual a 1.000 reales por metro cuadrado, la subasta de 2004 (la única hasta ahora) capturó casi todo el valor añadido a los precios actuales. El sistema previo anterior a CEPAC capturó aproximadamente el 50 por ciento o más, dependiendo de la capacidad y del éxito de los negociadores municipales, y de la exactitud del precio de referencia. CEPAC ahora cambia este porcentaje y el valor nominal del instrumento puede recuperar todo el incremento del valor o incluso más, dependiendo de la relación de este valor nominal con los precios del mercado, y de los resultados de futuras subastas. Al comparar un proyecto de reurbanización financiado completamente por bonos de construcción (como CEPAC) y otro financiado totalmente por tributos inmobiliarios generales, no existe ninguna duda de que el anterior es menos regresivo que este último. Incluso con un tributo inmobiliario progresivo, con tasas que aumenten según los valores, parte de los costos serían pagados por hogares más pobres.

Esta evidencia de que aproximadamente el 80 por ciento del costo del proyecto ya se ha recuperado, en combinación con la subasta de los derechos de construcción restantes mediante CEPAC y el impacto de la apreciación de la propiedad en los ingresos de tributos inmobiliarios actuales, indica que el proyecto no sólo debe pagarse por sí mismo sino que realmente genera una plusvalía fiscal para la ciudad en general en los siguientes cinco o siete años.

En efecto, los cambios causados al sustituir casas unifamiliares más antiguas por nuevos edificios residenciales y comerciales produjeron un cambio sustancial en la recaudación de tributos inmobiliarios en el área de la OUCFL. Muchas parcelas e incluso bloques enteros habían sido ocupados por casas de uno o dos pisos construidas en los años 50. Muchas de estas estructuras tenían derecho a un coeficiente de descuentos por obsolescencia de hasta un 30 por ciento del tributo inmobiliario. Fueron reemplazadas por edificios nuevos, más altos y de mayor calidad para los que el descuento era nulo. Nuestras estimaciones indican que las diferencias en recaudación de tributos inmobiliarios por metros cuadrados construidos puede haber aumentado al menos 2,7 veces y hasta 4,4 veces más. Es decir, el tributo inmobiliario promedio por metro cuadrado aumentó a un mínimo de 588,50 reales hasta un máximo de 802,50 reales desde 220,95 reales si la casa tenía más de 25 años, o desde 179,70 reales si la casa tenía más de 30 años.

Implicaciones sociales

El caso de la OUCFL ofrece una oportunidad única para cuantificar cambios en las características de residentes antes y después de la intervención, ya que hay datos disponibles a nivel de seguimiento del censo para 1991 y 2000, y la intervención empezó en 1996. Nuestro análisis de renovación y desplazamiento de residentes más pobres confirma principalmente las conclusiones de Ramalho y Meyer (2004) de que los ingresos promedio han aumentado relativamente en la mayoría de los bloques dentro del perímetro de la OUCFL. En lo que se refiere a las normas brasileñas, la clase media-alta fue desplazada de la región por el 5 por ciento más rico de hogares en el área metropolitana. Los datos del censo también mostraron que la densidad residencial descendió entre 1991 y 2000, de 27 a 22 residencias por hectárea, aunque estas cifras pueden estar distorsionadas porque reflejan la razón de residencias totales en todo el área, no un promedio de las razones por parcela donde se convirtió el uso del suelo.

Los datos de 1991 indicaron que la población ya estaba abandonando el área de la OUCFL antes de la aprobación de la operación urbana, pero este éxodo se intensificó después de 1996, generando parcelas desocupadas en el proceso de configuración del sitio para acomodar a las nuevas urbanizaciones de edificios altos. Al mismo tiempo, aumentó la densidad de construcción. El número promedio de pisos por nuevo edificio en el área aumentó de 12,6 en el período de 1985–1995 a 16,7 en el período de 1996–2001. El número de viviendas por edificio aumentó de 37,1 a 79,6 en los mismos períodos.

Esta contradicción aparente entre la menor densidad residencial y el mayor número de viviendas se explica en parte por la construcción de edificios comerciales que reemplazaron muchas residencias unifamiliares en parcelas pequeñas o de tamaño promedio. La OUCFL provocó una concentración inmobiliaria considerable, ya que los nuevos edificios comerciales y residenciales reemplazaron las casas y requirieron áreas de suelo más grandes para proyectos arquitectónicos de clase alta. Los 115 proyectos aprobados entre 1995 y agosto de 2003 que solicitaron aumentos en los coeficientes de utilización requerían un total de 657 parcelas, o un promedio de 5,7 parcelas por proyecto.

La combinación del aumento en nivel de ingresos y la reducción en densidad de hogares indican que el proceso de renovación avanzó dentro y fuera de la región de la OUCFL durante los años 90. No obstante, éste no es un caso clásico de renovación para la aspiración de clases medias, donde las familias pobres son expulsadas de un área debido a diversas presiones socioeconómicas. En este caso fueron mayormente las clases medias-altas quienes fueron desplazadas. Excepto en lo que se refiere al pequeño núcleo de favelados restantes (Favela Coliseu), la región estaba ya ocupada por personas que pertenecen a los sectores más ricos de la sociedad.

Algunas observaciones de política

Este artículo contribuye al debate sobre la gestión social de valoración del suelo proporcionando evaluaciones de datos reales y elementos económicos. Estos elementos faltaban en la mayoría de los análisis, y creemos que este vacío en las publicaciones ha contribuido a una interpretación incompleta de las implicaciones de una operación urbana y a recomendaciones de política pública equivocadas.

Nuestra conclusión es que el mecanismo de financiación de CEPAC por sí mismo no aumenta la característica regresiva de las operaciones urbanas, ya que sin esos bonos de derechos de construcción toda la inversión en reurbanizaciones sería financiada por impuestos generales. Si el proyecto de la OUCFL fuera inadecuado en términos de distribución de ingresos, hubiera sido aún peor sin el mecanismo de recuperación de plusvalías. En vez de eso, CEPAC y el mecanismo de recuperación de plusvalías usado previamente ofrecieron dos características deseables en cualquier inversión pública: cobrar a los nuevos terratenientes es al menos neutro en términos de distribución de ingresos; y los beneficiarios principales terminan por pagar el proyecto.

Además, el mecanismo de operación urbana ofrece incentivos para la reurbanización. Dado que la mayoría de los proyectos aumentan los precios del suelo y echan a los pobres de la región, sería mejor invertir todo el presupuesto municipal en proyectos a pequeña escala. Esto es lo opuesto a lo que ocurrió con la reurbanización de la rica área adyacente de Berrini donde los urbanizadores decidieron la forma de concentrar su inversión, resultando en una concentración aún mayor de ingresos que en el área de la OUCFL. Debido a la falta de acción de los gestores de política en ese caso, la municipalidad no capturó ningún valor de Berrini, pero pagó el costo completo de la infraestructura.

El uso de bonos de derechos de construcción puede disminuir el aspecto regresivo de la urbanización, pero hacer que un proyecto sea verdaderamente progresivo requiere atención en el lado de los gastos, financiando toda la inversión a través de instrumentos como CEPAC. La limitación principal sobre la distribución de beneficios a los pobres es que la ley establece que todos los fondos recogidos mediante la recuperación de plusvalías (CEPAC u otros instrumentos) deben invertirse dentro del perímetro de la intervención. Una forma de que estas intervenciones sean más progresivas es invertir en actividades que suministren extras a los pobres, como transporte público, educación y salud. Además, la legislación importante permite que la administración seleccione un área dentro del perímetro de una operación urbana y la declare zona especial de interés social (ZEIS) donde las parcelas se pueden usar exclusivamente para vivienda social de bajos ingresos.

Otra alternativa es establecer áreas de vivienda social dentro del perímetro de la operación urbana. Al subsidiar viviendas de bajos ingresos con dinero de urbanizadores y nuevos terratenientes, no habría una distorsión de precios fuera de la industria de la vivienda. El subsidio resulta de la segmentación del mercado y de la transferencia de la renta adicional a hogares pobres. Se trata de una gestión social real de valoración del suelo.

Ciro Biderman está afiliado al Centro de Estudios de Política y Economía del Sector Público (Cepesp) en la Escuela de Ciencias Económicas y Empresariales de la Fundación Getúlio Vargas de São Paulo, Brasil. Es profesor visitante de desarrollo internacional y planificación regional en el Departamento de Estudios y Planificación Urbanos del Massachusetts Institute of Technology, Cambridge.

Paulo Sandroni es economista y profesor en la Escuela de Ciencias Económicas y Empresariales de la Fundación Getúlio Vargas.

Martim O. Smolka es Senior Fellow y director del Programa sobre América Latina y el Caribe del Lincoln Institute.

Referencias

(Estas publicaciones sólo se encuentran en portugués).

Afonso, Luis Carlos Fernandes. 2004. Financiamento é desafio para governantes (La financiación es un desafío para los gobernantes). Teoria e Debate Nº 58, Mayo-Junio: 36–39.

Ramalho, T., e R.M.P. Meyer. 2004. O impacto da Operação Urbana Faria Lima no uso residencial: Dinâmicas de transformação (El impacto de la Operación Urbana Faria Lima en el uso residencial: dinámicas de transformación). Mimeo. São Paulo: Lume/FAUUSP.

Biderman, Ciro y Paulo Sandroni. 2005. Avaliação do impacto das grandes intervenções urbanas nos precos dos imoveis do entorno: O caso da Operação Urbana Consorciada Faria Lima (Evaluación del impacto de los precios en la propiedad cerca de intervenciones urbanas a gran escala: El caso del Consorcio de la Operación Urbana Faria Lima). Lincoln Institute of Land Policy Research Report (Abril).

Faculty Profile of Fernanda Furtado

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.

Antonio Azuela, a fellow of the Institute for Social Research at Mexico’s National University, holds law degrees from the Universidad Iberoamericana (Mexico) and the University of Warwick (England), as well as a Ph.D. in sociology from Mexico’s National University (UNAM). Since the late 1970s, he has been engaged in research and teaching on urban and environmental law from a sociolegal perspective. His book Visionarios y pragmáticos: Una aproximación sociológica al derecho ambiental (Visionaries and Pragmatists: A Sociological Approach to Environmental Law), Mexico: UNAM, 2006, is a sociological reconstruction of his experience as General Attorney for the Environment in the Mexican Federal Government, from 1994 to 2000. He has recently edited the book Expropiación y conflicto social en cinco metrópolis latinoamericanas (Expropriations and Social Conflict in Five Latin American Metropolises), published by UNAM and the Lincoln Institute of Land Policy in 2013.

Land Lines: How did you get involved with the Lincoln Institute of Land Policy?

Antonio Azuela: In 1991, I met several of the Institute’s officers while they were on an exploratory trip to Mexico. I stayed in touch, because I was interested in the Institute’s approach to urban policy. My relationship grew stronger in 1998 through a meeting in Cairo organized by the International Research Group on Law and Urban Space (IRGLUS), where the Institute expressed interest in a sociolegal approach to urban land problems. In 2000, I was honored with an invitation to join the Institute’s Board of Directors. Since then, I have been in permanent contact with the Lincoln Institute staff and programs.

Land Lines: Why has the public acquisition of land become such a critical issue, particularly in Latin America?

Antonio Azuela: Expropriation, also known as eminent domain (i.e., the compulsory acquisition of land by the state) is an important subject all over the world, because it is a way of procuring land for public urban projects. But in Latin America it is even more critical, due to the weak nature of the state regarding urban matters. Before the democratic transition in the region, it was easier for governments to procure land using mechanisms that would be questionable in a democracy. But the transition has strengthened the judicial branch, which is generally unsympathetic to government interventions in the marketplace. Now, it’s increasingly possible for private owners to interfere with the public acquisition of land in the region (with the notable exception of Colombia, where a wide-ranging coalition of professionals, judges, and social organizations supports the doctrine of the social function of property). This trend can be seen, for example, in the exorbitant compensation that some courts have granted for land expropriations in Mexico City and São Paulo.

Land Lines: What are the main watershed issues?

Antonio Azuela: The first is the adoption of economic policies that advocate a lesser role for the state. The second pertains to the legal status of property rights. When constitutional reforms empower judges to limit the power of eminent domain, this restriction is not necessarily bad, because it can lead to higher quality public administration, but in the short term it has interfered with government power to purchase urban land for public projects. There are two notable exceptions: In Brazil and Colombia, constitutional reforms have established urban policies inspired by ideas of social justice—though only in Colombia do we find a new generation of judges who act in accordance with these principles. In Brazil, the courts are dominated by the classic liberal view of private property, which interferes with the ability to implement the social function of property—an idea that has been circulating in Latin America for almost a century.

Land Lines: Many jurisdictions prefer to acquire land in the open market instead of using instruments such as eminent domain.

Antonio Azuela: Eminent domain should not be the first option for acquiring land. The challenge is for governments to regulate a variety of instruments in order to achieve a general goal, which is to reduce the land component of the total cost of urban development. The use of eminent domain must be guaranteed by a strong legal framework that can establish an adequate balance between the power of the state and the power of the landowners, and it should be the last option when acquiring land for public urban projects.

The big problem is the cost of land, but the mechanisms of government intervention can inflate prices. For example, if the use of eminent domain is not expected to increase land value, and the judges determine it’s the right approach, it can have a positive impact on land markets. At the very least, we can expect from governments that their acquisition of land does not raise prices.

Land Lines: What are the main outcomes of your research on the use of eminent domain for urban development in the region?

Antonio Azuela: While there is a general trend to strengthen property rights, which interferes with the power of eminent domain, this trend shows several variations, depending on the relationship between the judicial and executive branches in the post-authoritarian governments of the region. The process of institutional change depends less on global trends than on domestic and even local forces, as certain cities follow different paths from others in the same country. Even if all local governments were to adopt the same strategy, the courts in one region will protect landowners more than the courts in other regions. The metropolitan area of Buenos Aires, for example, illustrates how the institutional system of eminent domain is not homogeneous, even within the same metropolitan area. In the Autonomous City of Buenos Aires, for example, people who live in informal settlements (villas miseria) have gone to court and prevented evictions. In the Province of Buenos Aires, however, the political climate is such that there is no threat of eviction; eminent domain is used to ensure that settlers can remain where they are.

Another important lesson is that there is no authentic dialog in Latin America on the significance of eminent domain or on the various ways the courts have tackled the dilemmas it presents. While the constitutional thinking in the region is very rich in ideas about certain legal issues, such as the rights of indigenous people and the elderly, urban policies—in particular, eminent domain—have not triggered deep discussions among legal scholars. Unfortunately, these issues seem to be viewed as exceptions, despite the enormous number of people who live (suffering or enjoying) in large urban centers.

Land Lines: Are eminent domain compensations arbitrary or unfair? If so, for whom?

Antonio Azuela: Inadequate compensation is, no doubt, one of the great challenges for the future development of eminent domain as a land policy instrument. In some cases, governments may take advantage of the powerlessness of certain social groups and offer them ridiculously low compensation for their land or homes. In other cases, however, the landowner’s economic power and influence can result in exorbitant compensations. Beyond these two extremes, in which the affected landowner is either very vulnerable or very powerful, it is difficult to discern a dominant trend.

A precise answer to your question would require a market study of a large number of eminent domain cases in order to determine if the compensation is high or low when compared to preestablished criteria. The existing research has shown, however, that in general the courts do not possess clear and widely shared criteria for determining whether compensations are fair. Moreover, courts lack the capacity to understand what is at stake during the process of urban transformation in which eminent domain is used. Consider, for instance, the case of a prominent family from Ecuador that received a very high compensation for the expropriation of agricultural land on the periphery of Quito. What is remarkable is that this case was decided by the Inter-American Court of Human Rights, and it was obvious that the court did not establish clear criteria to determine the amount of compensation; it simply averaged the assessments submitted by the different parties. The compensation was the highest ever awarded by this high court, which was created to address violations of human rights committed by dictatorships yet ended up benefiting private property owners at the expense of the public interest. The fact that this case did not create a scandal among constitutionalists in the region indicates how marginalized urban legal issues are in Latin America.

Land Lines: What are some changing trends you have observed?

Antonio Azuela: I observe, with some optimism, that many courts and local governments in the region are undergoing a learning process, trying not to repeat prior judicial mistakes. Unfortunately, these lessons rarely transcend the affected local area and become incorporated into the common regional juridical knowledge.

Land Lines: What sort of education or training would you recommend?

Antonio Azuela: Logically, we need to intensify exchanges among different disciplines and countries, placing the courts at the center of the discussion, as they will make the final decisions. These decisions should express the best possible synthesis of a body of knowledge that we need to build around the urban dynamics of the region. In the contact we have had with the courts, with the support of the Lincoln Institute, we have found that once a dialog is established, judges understand the need to learn more in order to grasp the effects of their decisions. In other words, while the courts do not seem to show a great interest in urban problems, as evidenced by the routine attitude shown in their day-to-day decisions, they can see new perspectives for their own professional development in the context of a critical analysis of urban issues.

Land Lines: What are the critical issues that need to be investigated more deeply? What is it that we do not yet know?

Antonio Azuela: We should try to understand the logic of court decisions in the region. We frequently make a simplistic interpretation of the actions taken by the courts, because the media tend to amplify the worst cases. However, many judges make an effort to find the best possible solution to each case. Under what conditions do they operate? One of the challenges of investigating these issues in Latin America is to understand the real world in which these decisions are made, apart from the common but always relevant themes of corruption and incompetence. We need to analyze statistical information to observe general trends, combined with an ethnographic approach to the functioning of the courts. Only then will we be able to understand what needs to be reformed in order to improve the court performance in urban conflicts. While it is important to ascertain who is being favored by the court decisions—which can be done by analyzing the contents of judicial decisions—we need better understanding of the conditions under which these decisions are made. In order to do that, we need to get closer to the courts themselves.

Vivienda inclusiva: La creación y el mantenimiento de comunidades equitativas

Por Rick Jacobus

En diferentes ciudades, como Seattle, San Francisco, Chicago, y Portland, Maine, se ha desatado un debate sobre la vivienda inclusiva, es decir, el requisito de que los desarrolladores reserven un porcentaje de los nuevos desarrollos residenciales para viviendas asequibles. Algunos sostienen que esta política desalienta el desarrollo o, con alegación más polémica que podría llegar a la Corte Suprema, que constituye una amenaza a los derechos de propiedad. Mientras tanto, el alcalde de la ciudad de Nueva York, Bill de Blasio, se enfrenta a críticas desde ambas partes: que su propuesta de vivienda inclusiva va demasiado lejos, o que no es suficiente.

En este nuevo informe titulado “Vivienda inclusiva: Creación y mantenimiento de comunidades equitativas”, Rick Jacobus separa la realidad de los mitos y traza el camino a los gestores de políticas, mostrando cómo la vivienda inclusiva puede usarse de manera eficaz para reducir la segregación económica.

“En las ciudades con mercados inmobiliarios muy activos, el aumento de los precios de la vivienda, obliga a los residentes de clase media y de bajos ingresos a alejarse de los empleos mejor remunerados, del transporte confiable, de las buenas escuelas y de los barrios seguros”, sostiene George W. McCarthy, presidente y director ejecutivo del Instituto Lincoln. “La vivienda inclusiva por sí sola no solucionará nuestra crisis de la vivienda, pero es uno de los pocos baluartes que tenemos para contrarrestar los efectos del aburguesamiento, y únicamente si preservamos las unidades que tanto nos cuesta construir”.

Mediante un análisis de la bibliografía sobre el tema y casos de estudio, Rick Jacobus, de Street Level Urban Impact Advisors, ofrece soluciones para superar las principales barreras políticas, técnicas, legales y prácticas que enfrenta todo programa de vivienda inclusiva para tener éxito.

“Más de 500 comunidades han utilizado las políticas de vivienda inclusiva con el fin de mantener la vitalidad y diversidad de los barrios en transición, y hasta ahora hemos aprendido mucho”, señala Jacobus. “Según investigaciones realizadas, si los programas se diseñan e implementan concienzudamente, pueden llegar a ser una herramienta valiosa en tiempos en que la vivienda inclusiva se necesita desesperadamente”.

En particular, el autor se refiere en este informe a la preocupación de que la vivienda inclusiva podría impedir nuevas construcciones debido a que el desarrollo tendría un rendimiento económico menor. Según el informe, muchas ciudades han evitado dicho impacto otorgando flexibilidad a los desarrolladores para cumplir con las normas y ofreciendo incentivos, como la posibilidad de construir unidades con mayor densidad.

Otras conclusiones y recomendaciones clave que surgen del informe son las siguientes:

• La rápida construcción de viviendas a valor de mercado en realidad potencia la necesidad de más viviendas inclusivas, lo que cambia el carácter de los barrios.
• Los programas de vivienda inclusiva se han impugnado a nivel judicial, pero pueden diseñarse de manera cuidadosa para minimizar los riesgos legales.
• El seguimiento de los programas mediante la ejecución de las normas y la administración es fundamental. En algunas comunidades se han creado miles de hogares asequibles que, más tarde, desaparecen a consecuencia de ventas posteriores.

Durante muchos años, el Instituto Lincoln ha desarrollado estrategias para apoyar la vivienda permanentemente asequible, mediante, por ejemplo, el establecimiento de fideicomisos de suelo comunitarios y otros acuerdos de capital compartido. Estas medidas se han tomado teniendo en cuenta la actual crisis de acceso a la vivienda existente en muchas ciudades. Los precios estratosféricos de los precios de alquiler y compra de viviendas en los mercados inmobiliarios muy activos han ido desplazando a los antiguos residentes y cambiando el carácter de ciudades y barrios.

Para encargar ejemplares: http://www.lincolninst.edu/pubs/3583_Inclusionary-Housing.

Rick Jacobus, es experto nacional en vivienda inclusiva y en acceso a la propiedad de viviendas asequibles. Es director principal de Street Level Urban Impact Advisors (StreetLevelAdvisors.com). Fundó Cornerstone Partnership y actualmente es asesor estratégico en Cornerstone.

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.

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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.