Regularization of Urban Land in Peru

Julio Calderon, May 1, 1998

Access to urban land by the popular sectors in metropolitan Lima has a troubled history resulting from the combination of spontaneous, unregulated land occupation and short-sighted policies to regularize land tenancy. Policies that were designed to resolve or mitigate irregular occupations have instead exacerbated the problem.

A workshop on “Local Governments and the Management of Urban Land: Peru and Latin America” in Lima in February brought together municipal officials, Latin American experts and community leaders to address the question, “Does the current regulatory framework guarantee the orderly and fair growth of Lima and other Peruvian cities?” The program was organized by the Lincoln Institute; the Institute of Urban Development CENCA, a community-based nongovernmental organization; the Local Governments Association of Peru; and Red Suelo, the land policy network of the Habitat International Coalition.

Regularization Policies

Land regularization is generally understood as the process of public intervention in illegally occupied zones to provide urban infrastructure improvements and to recognize ownership titles or other occupancy rights. Regularization policies are needed in many developing countries to reverse irregular and sometimes illegal development patterns, such as when land is occupied and housing is built before infrastructure improvements and legal documentation are put in place.

Since 1961, the central government of Peru has supported tolerant policies that have permitted the poor to occupy vacant public land, which was seen as a natural “land bank” resource. Most of this land consisted of sandy, almost desert terrain surrounding Lima which had little commercial value and was considered unsuitable for other market uses. Some 34 percent of Lima’s population lived in irregular “barriadas” or new towns in 1993.

In the absence of policies to effectively provide for organized and legal access to land, the permissiveness that allowed irregular development of these outlying areas has led to a crisis that now dominates the urban land policy agenda (see Figure 1). Many officials and other observers acknowledge that the system itself encourages and permits informal and unregulated growth, and that some of the policies designed to regularize land have actually created more irregularities.

Urban Land Management Problems

Management of urban land policies in Peru is presently being reevaluated because of tensions between central and local government control. Between 1981 and 1995, the municipalities managed land regularization procedures, authorizations and related policies. In 1996 the Peruvian government centralized the administration of economic resources relating to habitation and urban development, thereby denying local governments the ability to manage regularization problems. This political, administrative and fiscal centralization has created serious inefficiencies, however, since local government agencies must nevertheless respond to daily demands from the population regarding land and housing concerns.

Tensions also exist because of contradictions between the legal framework of formal regulations as promulgated by public officials and the informal market transactions that occur in the “real world” on a day-to-day basis. The mismatch between these formal and informal norms is reflected in the lack of understanding and distrust between the political authorities who determine land market policies and the urban practitioners and private agents who operate outside the formal policy framework.

In spite of attempts by commercial and nongovernmental organizations to improve the coordination and implementation of land policies that affect formal and informal market mechanisms, the political leaders still make the final decision. This situation exacerbates the politicization of public management (i.e., politics for politicians and not for the community). At the same time, it encourages a short-term perspective, since a governing authority is generally more interested in the immediate work to be accomplished than in a reliable follow-up of development plans requiring longer-term execution. As a result, Lima’s serious growth problems are not being adequately addressed by the current political, legal and regulatory framework.

Common Concerns

An important result of this workshop in Peru was the sharing of experiences from other Latin American and Asian cities where local governments can use public resources to promote more orderly cities. Even though the problems regarding land management are wide-ranging and complex, some common concerns emerged for discussion in future programs:

development of public policies and community-level initiatives to capture the value of “intermediate” land that is in the process of being developed and is often the most vulnerable to speculation;

municipal housing programs that use existing legal frameworks to encourage an orderly occupation of space. Specifically, there is a need to promote coordination among various public and private agents, as well as mechanisms to support financial credit for low-income people, housing construction, basic utility services and neighborhood participation strategies.

land regularization policies and a comprehensive articulation of land access policies to break the vicious cycle of irregularities that is causing the current urban growth and management problems.

better understanding of the dynamics of both formal and informal land markets, especially on the part of those who are charged with developing and implementing appropriate policies to address complex land market activities.

Some Definitions

Illegal – land occupation that expressly contradicts existing norms, civil codes and public authorization

Informal – economic activity that does not adhere to and is not protected by institutional rules, as opposed to formal activity that operates within established procedures

Irregular – subdivisions that are officially approved but are not executed in accordance with the law

Clandestine – subdivisions that are established without any official recognition

Figure 1: Regularization Policies on Land Tenancy in Lima

February 1961-1980: Law 13517 was established to make various central government agencies responsible for regularizing land tenancy procedures, but only 20,000 titles were issued.

1981-1995: The titling function was transferred to the Municipality of Lima and the delivery of land titles increased to some 200,000. In the 1990s the delivery capacity gradually decreased until it generated a land market crisis.

April 1996: The State Commission to Formalize Informal Property (COFROPI) was given responsibilities that were formerly assigned to the municipality.

Following a presidential promise to incorporate the poor into the land market process, some 170,000 property titles were delivered between July 1996 and July 1997. An additional 300,000 titles are expected to be delivered by the year 2000. However, COFROPI states that 90 percent or 180,000 of the titles delivered prior to 1995 have recordkeeping problems, so that many of the 170,000 titles delivered since July 1996 may be redundant. Hence, it is difficult to reconstruct how many titles were properly delivered under each administration.

Julio Calderon, an urban researcher and consultant on social development programs, is affiliated with Red Suelo, the land policy network of the Habitat International Coalition.