Access to
serviced land for the urban poor: the regularization paradox in Mexico
Alfonso Iracheta Cenecorta*
Martim O. Smolka*
Resumen
La insuficiente oferta de suelo con servicios
públicos para los pobres de la ciudad, y la necesidad de regularización de las
consecuentes ocupaciones ilegales de las áreas urbanas son dos de los más
importantes aspectos de la agenda de políticas de suelo en América Latina.
Considerando una visión estructural/integrada acerca
del funcionamiento del mercado de suelo urbano en América Latina, este trabajo
discute la relación entre los mercados de suelo formales e informales. Se
exponen los perversos efectos de
retroalimentación que las políticas curativas de regularización pueden
tener sobre el proceso por el cual la irregularización
es producida en primera instancia.
El trabajo sugiere que un enfoque más efectivo para
la provisión de suelo a pobres no puede ser resuelta con los actuales programas
(curativos) de regularización. Estos programas deberían tener la capacidad de
movilizar los recursos existentes hacia un programa que vincule regularización
y política fiscal, incluyendo la exploración de mecanismos de captación de
plusvalía.
Palabras clave:
mercados de suelo, políticas públicas de suelo, pobreza, regularización de
asentamientos urbanos.
Abstract
The insufficient supply of serviced
land at affordable prices for the urban poor and the need for regularization of
the consequent illegal occupations in urban areas are two of the most important
issues on the Latin American land policy agenda. Taking a structural/integrated
view on the functioning of the urban land market in Latin America, this paper
discusses the nexus between the formal and the informal land markets. It thus
exposes the perverse feedback effects that curative regularization policies may
have on the process by which irregularity is produced in the first place. The
paper suggests that a more effective approach to the provision of serviced land
for the poor cannot be resolved within the prevailing (curative) regularization
programs. These programs should have the capacity to mobilize the resources
that do exist into a comprehensive program that links regularization with
fiscal policy, including the exploration of value capture
mechanisms.
Keywords: land market,
land policies, poverty, urban land regularization.
*El Colegio Mexiquense,
correo-e: axic@cmq.edu.mx
* Martim O. Smolka. Lincoln
Institute of Land Policy.
1. Informal land market[1]
An insufficient supply of serviced land at affordable
prices for the urban poor is one of the most important issues on the Latin
American land policy agenda. The structural shortage of serviced land and the
consequent illegal occupation of urban space are emblematic features of Latin
American cities, especially in the urban peripheries and other areas,
restricted from the formal property market by topographic and environmental
conditions.
Before proceeding to further discussion some
clarification should be given with respect to the terminology used in this
article.
Firstly, one must note that although the discussion on
illegality usually centers on tenure issues, it must be stated that the need
for legalisation of tenure is derivative of the
broader more critical issue of access to serviced land. In other words, a
sufficient supply of serviced land at affordable prices would, in principle,
nullify the need for illegal tenure. In effect, as pointed out by Durand-Lasserve: “the lack of infrastructure and services as well
as the difficulties encountered in overcoming this are, even more than insecure tenure,
the main criteria for defining irregular settlements" (Durand-Lasserve, 1996: 2).
The term serviced land should be understood in its
broadest sense as land designated for urban use and equipped with basic
infrastructure including access (even if not paved) to a city road network,
public lightning, a water supply, a sewerage and drainage system as well as
electricity and telephone services. Such a degree of urbanization may even
border on that of a residential subdivision (Mayo and Angel, 1993).
Given its application to the occupation or sale of
both serviced and unserviced land, the term
illegality shall refer in this paper to the illegal, irregular, informal or
clandestine activities (generally market transactions)[2] associated
with the accessing and occupation of serviced or unserviced
land.
Thus, the focus of this paper will be on the observed
patterns of informality as but one manifestation of a broader issue, that of
the structural incapacity of the urban land markets in Latin America to provide
a sufficient supply of serviced land at affordable prices. Herein lies one of
the central characteristics of the dynamic of the urban land market in Latin
America.
2. The reasons for illegality[3]
There are many reasons why individuals seek access to
urban land through illegal, informal, irregular or clandestine means. From an
urban economic perspective, the implicit, if not ubiquitous reasoning is that
the lower strata of the urban population is 'pushed'
into informality due to low earnings. This penurious situation faced by wide
sectors of the urban population is usually considered a factor explicative of
the difficulty associated with land acquisition on the formal market: that is
to say the land provided either by the market or any other non-market mechanism
(e.g. public programmes).
As it is argued in this paper, the lack of low income land supply within the urban formal market is
also important. Land developers have neither incentives nor interests in
developing this part of the market. The experience within the Housing
Commission of the state of Mexico[4]4 regarding
this issue in Mexico City metropolitan municipalities,
is that developers face the illegal market which is highly organized and
capable of offering a product suitable to poor people's income. Finally it is
argued that it is easier to get a plot through the illegal market to such a
degree that it is considered the normal way for the poor to get a piece
of urban land.
It can therefore be said that explanations of this
phenomenon might be found not only in economic reasoning but
within the political and cultural environment created in most Latin American
countries since the demographic and urbanization revolution started in late
forties in almost all of them.
2.1. Poverty
In Latin America, there is in fact a sizeable
contingent of poor urban families, eking out a living below the survival line,[5]5 clearly
incapable of placing a positive bid on the land market, let alone meet the
minimum price set by landowners and developers. This lamentable situation is
aggravated by the fact that over the past few decades poverty has not
diminished in the region.
In Mexico, the number of households living below the
poverty line increased from 20% to 34% from 1970 to 1990. According to Boltvinik (2000), poverty in Mexico is a growing
phenomenon; from his point of view poor households in Mexico at the turn of the
century nearly account for 50% of total population (based on 1996 data), though
the Mexican government accounts between 30 and 40% according to different
methodologies and official sources (PROGRESA program and Public Credit and
Finances Secretary, both federal). In Mexico City metropolitan area (MCMA),
according to Yeung (1991), around 41% of family
income was devoted only to food, whereas in Rio de Janeiro was 26% and in Lima
70% in that year.
This situation is also the case in Buenos Aires where
the number of households existing below poverty line increased from 16.3% in
1991 to 17.6% in 1995. There are about 115,000 inhabitants whose earnings are
insufficient to cover the cost of food needed for survival. More than having
Unsatisfied Basic Needs, they are existing below the “hunger line” (Clichevsky, 1997). In the case of Venezuela, the Venezuelan
Ministry of Family estimates that in 1994, 48.89% of the population was
classified as poor with 27.26% with their basic needs unsatisfied and 21.63%
living under extreme poverty (Lovera, 1996). In
Ecuador, 51% of the population is classified as existing below the poverty
line. Such a reality is representative of many other Latin American cities
(UNDP, 1992).
It is estimated that in 1999, 60% of the residents of
MCMA earned no more than three times the minimum wage (around US$ 270 per
month). More specifically, in the Valle de Chalco,
one of MCMA's largest illegal, peripheral settlements, the square metre of unserviced land is
valued at about US$ 5; meaning that a 150 square metre
plot costs about 10 times the minimum wage in a country where 18% of the active
population earns less than one minimum wage
Siembieda, 1994). Similar figures can be
quoted for almost any other place in Latin America.[6]
Although poverty accounts for a significant portion of
the existing informal arrangements, the observed magnitude and persistence of
informality cannot be explained by poverty alone. In fact, in spite of the high
correlation found between urban poverty and informal settlements, it is hardly
the case that all occupants of informal settlements may be classified as poor.
Many empirical studies have repeatedly proven that informal settlements are not
limited to the poor (Jiménez, 1995: 34).
To prove that informality is not restricted to the
poor, is enough to consult the figures previously provided concerning the
proportion of existing illegal occupations (over 70%)[7] to that
of families below poverty line (27%). The same holds true for the annual
increments in the percentages of both groups. In fact, many who could pay some
for land (under the unrealistic assumption that families immediately above poverty
lines could do so) may yet not be able to afford the minimum price asked for in
the formal market, commonly referred to as the no alcanza
phenomena. The minimum price of land is determined by a combination of the
alternative uses of land, be these for agriculture or infrastructure on the
fringe of the city.
Recent evidence suggests that the process of peripherisation has reached an apparent threshold limit in
most large Latin American cities. In the case of low-income families, even when
the family budget is capable of covering the costs of basic needs, the minimum
land price has been found comparatively higher than the opportunity cost of not
bidding at all. Increasing transportation costs from 'adjusted' fuel prices
(Sabatini, 1997), coupled with extended commuting time,[8] plus the
relatively high cost of living contribute to a reduction in their capacity to
'bid' on land in such distant areas.[9] It may be
interesting to note that in practice higher commuting costs (associated with
more distant locations) function in effect as a surrogate strategy in the
absence of credit to buy higher valued land in more central locations. The
incapacity to bid explains why low-income families are pushed to the urban
peripheries, an issue ignored to a large extent by policymakers.[10]
Last but not least, many find it advantageous or even
profitable to engage in such transactions. As argued before, many lower income
families do not choose informal arrangements as the best alternative but
instead it is often the only option for them. Contrary to popular belief but
nevertheless well documented in the literature (De Soto, 1989), this option
tends to prove more expensive.[11]
Furthermore in many instances, the cost of accessing land through legal means
is quite high. Moreover, the existing sanctions are not sufficiently stringent
to deter the engagement in illegal, irregular, informal, clandestine activities
associated with accessing urban land. This argument is particularly applicable
to higher income families.
In other words, and looking more broadly to the issue
at hand, even if one is not poor, it may still be too costly to purchase lots
on the formal market since one may not qualify[12] or even
may encounter disincentives.[13]
Alternatively, should serviced land prices be sufficiently low or adequate
subsidies be provided, one could be poor, yet afford not to pursue informal
arrangements.
Thus, with regard to the (non) affordability aspect of
informality, it can be argued that urban land prices in Latin America tend to
be relatively high. This results in a paradoxical situation in which too
many (low-income families) pay too much for the little they get and a few (land
suppliers) get too much for the little they deliver. This reality justifies
the need to gear the discussion to the determinants of land prices, or more
specifically to why urban land markets in Latin America do not provide or
guarantee a sufficient supply of serviced land at affordable price.
2.2. Insufficient supply of serviced land
The chronic insufficiency in the supply of serviced
land, is normally attributed firstly, to not enough production of
serviced land by the government either directly or indirectly through the facilitating
roles adopted by the authority in concert with the private sector. Secondly,
the supply of serviced land is also directly determined by its retention from
the market (vacant), and thirdly, indirectly through the urban norms and
regulations, engendering inefficient use of the available stock of serviced
land. Conventional explanations attribute these three components to a lack of
public resources (e.g. insufficient tax base), the speculative practices of
landowners and developers and, the mis/over
regulation of land use.
As shall be shown below there is a high degree of
correlation among these three factors. The shortage of services overvalues the
land that is selectively serviced, paving the way for rampant speculation. At
the same time, the urban norms and regulations are usually enforced in Latin
American cities to reserve well-serviced areas to highest and best land uses,
which in practice translates into the protection of the rich from the negative
externalities accrued from .undesirable land occupations. In areas where the
urban poor could otherwise afford.
2.2.1. Public resources for the production of serviced
land
Cutting short a long and well-known story,
local and central governments apparently do not generate sufficient revenues to
satisfy the demand for the provision of urban services to the lower echelons of
the society. The contributing capacity of the poor is said to be in
disproportion to the immense demand for the urbanization of unserviced
urban areas.
The problem however, is more complicated if not
perverse. Latin America has a sad history of fiscal inequity (regressive distribution
of the tax burden) and of spatial misallocation of public expenses in favour of the high-income areas.
Over and above the proverbial problems of tax evasion
and tax collection (maintenance of cadastres, etc.), there are issues related
specifically to the (in) adequacy of the available fiscal instruments and most
importantly the reluctance to actually implement them. One such problem worthy
of mention is that of land value increments accrued from public investments
which tends to be disorganized and biased in favour
of areas occupied by higher income groups.
As for the misallocation of public investments, even
the most uninformed observer of the Latin American urban scene, ought to be
struck by the uneven spatial allocation of urban infrastructure and services.
There exist a juxtaposition of very well serviced areas side by side areas
lacking basic amenities such as street lighting, pavements and public
telephones. In some areas there are underground trains and others with no
public transportation or even basic services like garbage collection and sewage
systems.[14] This
pattern, characterised by vertical integration as
well as a truncated spatial distribution of public facilities and services, has
deep roots in the history of Latin American cities (Smolka,
1983).
This pattern of public allocation of services and
facilities revealing a preferential option for the rich can hardly be
explained in pure economic terms.[15] At the
level of rhetoric, cynical rationalisations can be
attributed to the provision of services by the State according to the spatial
distribution of 'potential' tax contributors. This pastiche intra-urban version
of a Tiebout like allocation, is often reinforced by
rationales[16] regarding
urban productivity on the grounds that scarce capital must be invested in areas
where the direct or indirect returns are higher. Direct returns refer to
extracting, through fiscal means, the resulting increments in land value.
Indirect returns, on the other hand, are derived from the attraction of other
activities that reinforce the tax base. The scarcity of public resources
implies an incapacity to service all the land that is needed, let alone that of
already irregular settlements.
As a result, the spatial allocation of public expenses
is made in a highly discriminatory manner, meaning the overvaluation of certain
serviced areas. This situation in turn opens the ground for various forms of clientelism and corruption, aggravating the already
existing problems by further distorting the equitable and efficient spatial
allocation of such services. As a result, the apparent scarcity of public funds
to address the needs for services in the areas occupied by significant segments
of the urban population is not only absolute but also quite relative for
practical purposes.
2.2.2. Speculation with serviced land
Given the limited supply of serviced land, public
investment plays an essential role in determining the rate of appreciation of
the land value more than other factors such as population growth and income. As
is often the case, the simple rumour that a certain
area may be eventually singled out for urbanization is sufficient cause for a
significant increase in land value.
Owners of sufficiently large areas of land as well as
developers often influence the process of land value appreciation.[17] The
dynamic is the following: "The land property speculation [...] has adopted
its own method of parceling up the land in the city. Such a method has worked
as follows: a new site for a housing development would never be located immediately
next to a previous one, which has already been provided with public services.
Instead, an area with vacant land would be left between the new and the old
site. Then, when the new site was sold off, the bus route put on to serve it
would of course be an extension of the one serving the old site. The same
happened with other public services: to reach the new site, they would have to
pass through empty areas, which would thus immediately benefit from the new
facilities" (Cardoso, 1973).[18]
In The Access to Land by the Urban Poor (1996),
one of the most comprehensive and authoritative overviews of the Latin American
experience, Trivelli sustains that, "Land
speculation is responsible for urban land prices to grow faster in low-income
areas in the urban peripheries than their income or even the land prices in
high income areas" (Trivelli, 1996).
Independent of whether the retention of land results
from an active or passive speculative practice, its effect on higher land
prices is evident. As argued by Brennan, "The fundamental issue in most
cities is more complex than a limited supply of urban land. The issue is more
of one of speculation and inefficient land use, with large vacant areas in the
central city held by speculators, forcing workers to live on the periphery and
commute long distances to the central city" (Brennan, 1993).
The implied idea is of course that, should all that
land be actually offered on the market, overall land prices would certainly be
much lower than those presently observed, thus more affordable.
But, as seen above, even in the absence of such
processes responding to the expansion of the urban fringe, certain active
speculative practices, associated with the process through which new land is
serviced and incorporated into the market, may also generate higher land
prices.
Although speculation is still an active factor it does
not account for the significant amount of vacant land found within most Latin
American cities. A significant portion of the existing vacant plots may also be
attributed to other factors such as statutory restrictions affecting the amount
of land owned by non-private/ non-speculative agents, law suits among competing
land users as well as the prolonged period of time between acquisition and
occupation of land by low-income groups. In addition, account must also be
taken of the changing base or conditions for speculation to occur as it affects
the determination of land prices and of land uses.
In sum, the low-income population is pushed into
illegality not only through artificially inflated land prices caused by
retention of land from the market but also due to the structure of land
ownership.[19] The
underlying structure of land ownership (and to that effect some elements of the
so-called super-structure like the legal system), and the pattern of economic
development (inflation, etc.) are themselves major determinants of how land is
actually made available for use, even the illegal ones!
2.2.3. Regulations and norms for the use of serviced
land
Finally, recent experience has shown that the
regulatory environment established by governments tend to be a deterrent to the
servicing of land for both market and/or non-governmental initiatives.
Moreover, the origin of many informal settlements can be traced directly to public
(in)action, for example the lack of coordination of government agencies
involved in programmes dedicated to the provision of
serviced land to the poor.[20]
There is a growing corpus of literature indicating
that unreasonable urban norms and regulations coupled with complex licensing
and approval procedures for land developments play a major role in determining
the accessibility and availability of serviced land. They either directly
increase the prices of land or indirectly affect the efficiency in the use of
the existing stock of serviced land.
It is interesting to note that this argument is raised
by representatives on both sides of the ideological spectrum be they
anti-market skeptics or critics or pro-market supporters or apologists. The
former argue that historically 'elitist' norms and regulations, with which the
majority of the population cannot be reasonably expected to comply, have in
fact been introduced to protect the privileges of the rich (Rolnik,
1997). The view of the apologists, epitomised in
Chile's land reform deregulation, advocates that government intervention
ultimately imposes higher transaction costs precluding market efficiency. It is
easy to infer that both these arguments contribute to the explanation of the
formation of illegal settlements (Sabatini, 1983).
Although both groups share the idea that the
government regulations themselves are in the final analysis an important cause
of informality, they differ when it comes to their perspective and most of all
on policy prescription.
Market critics, short of giving way to government
intervention, suggest instead a switch in favour of
norms and regulations with a protective character towards the poor, and also
the need (through adequate legislation) to ‘curb’ the excesses and/or democratise the market. An illustration to a more
popular legislation is given by ‘reverse’ zoning[21]
implemented with relative success in many Brazilian cities to both, regularise or formalize existing informal settlements, as
well as to designate land, facilitating low-income occupation, through less
restrictive standards. Over and above its convenience for negotiations
regarding public-private land use, providing increased bargaining power of the
public interest impacts positively on prices by changing the market expectations
of the land supply for low-income residential use.
Market apologists, taking a favourable
view of the virtues of the one size fits all rule prefer, in turn,
measures that facilitate the free functioning of the market. The underlying
idea is that unless required to correct eventual market distortions, or
imperfections, government intervention should be kept to a minimum or better
yet be restricted to facilitating market operations. This means in practice
that, ceteris paribus, the less regulated it is, the more stakeholders
(low-income urbanites included!) get for their money.
Finally, they also constitute aspects of an urban
planning system that has provided no adequate solution to the demands of the
urban poor for housing land.
Even though most land requirements for housing in
Mexican cities are for the low-income segment of the population, urban plans
tend not to designate enough areas to meet the needs of these social groups.
They also tend to fail in defining adequate densities and infrastructure for
this particular section of the population.
This sheds some light as to why around 60% of urban
housing in Mexico is located on lands with some legal tenure problem, such as
those produced outside the planning system and built by the people themselves.
Within the metropolitan municipalities of MCMA, self-built low-income housing
accounts for nearly 70% of total housing production.
It must also be considered that a huge area of the
urban fringe of Mexico City subject to urbanization in the future is located on
ejido[22] land. Cruz (2000) has shown that 55.3% of the
surface of the Federal District plus 35 of Mexico state's connurban
municipalities (totalling 5,100 km2) was ejido land (2,824.8 km2) at the time of the
agrarian reform, falling because of expropriation to 41.6% in the middle
nineties (2,119.6 km2).
Surprisingly enough, although most urban plans
consider that the bulk of urban growth will occur precisely in ejido land, they do not include specific strategies and
instruments or procedures guaranteeing the shift of ejido
land to private tenure. This creates the risk of an increasing number of
irregular or even illegal settlements in the future and the incapacity of the
urban plans to enforce norms contained therein.
3. Regularization: an adequate option?
Accelerated urban growth with a preponderance of
lower-income groups compromises the tax base, with serious shortfalls in the
budget allocated to the servicing of land occupied by these segments. A
shortage of serviced land foments the speculative process, resulting in more
retention of land from the market, which in turn implies higher land prices and
inevitably the unaffordability of land. Excluded from (or unable to face) the
formal market due to some extent to prevailing urban norms or land conditions,
the poor continue to demand serviced land.
The need to regularise
(provide services to) established illegal settlements in a post-facto condition
reduces the capacity to promote a more efficient allocation of public
investments. Furthermore, regularization places onerous demands on the already
scarce resources available. The higher the prospects for the future
regularization of illegal settlements, the higher the premium landowners may
charge for unserviced land, contributing to the
exclusion of the poorest of the poor. The resulting hierarchy in the spatial
distribution of services with its steep land price substructure adds a spatial
component to urban poverty and social inequities. This process is described in
the diagram below.
The vicious cycle of
informality
Urbanization of
poverty
Social needs
exceeding tax base
No public funds to
finance service provision
Scarcity of
urbanized/serviced land
Over-appreciation of
serviced land
Non-affordability
Illegal/irregular
land occupations
Higher cost of living
Increased urban
poverty
From the perspective of most poor urban social groups
of Mexico, illegal settlements on both ejido
and privately owned land may be seen as products of massive processes of
uncontrolled urbanization. In order to satisfy the basic human need for a
shelter these groups have recourse to whatever means at hand (thus configuring
another set of rules and a different logical standpoint) to compensate for what
neither the State nor the market could provide; an adequate answer to this
problem.
There is another vicious circle which appears as a
result of traditional regularization policies in MCMA. It has been noted since
the early eighties, that once the state regularise
land tenure and introduces basic services, land prices increase as well as all
sorts of maintenance costs (from land taxes to water supply or local ‘cooperations’ for public works) leading to both, the site's
consolidation and new urban pressures for increasing densities or land use
changes in favour of higher urban standards. As a
result, it also emerges pressure for social classes changes in favour of the better off, provoking out migration of the
poorest population which tend to ‘invade’ or acquire an illegal plot in new
sites giving way to the circular cumulative process of social segregation (Iracheta, 1984).
4. The need for regularization initiatives
The Mexico City metropolitan area has a current
population of around 19 million settled in some 180 thousand hectares, implying
a rough density of 105 inhabitants per hectare. Around 50 percent of population
is located within the boundaries of the Federal District, and the remaining
half within the municipalities of the state of Mexico.
Demographic scenarios projected for 2020 envision a
population between 22 and 26 million inhabitants. Almost all of the new
population will settle within the municipalities of the state of Mexico, which
have been facing a very strong pressure of urbanization since the late forties.
Historically, the financial resources required to face
such a process have been unevenly distributed, favouring
the Federal District over the state of Mexico. With all indicators suggesting
that these tendencies will continue, the main consequence will be the
increasing peripheral character of the latter, which implies greater
concentration of the urban poor and a greater incidence of problems vis-à-vis
land tenure, transport, employment and environmental deterioration within this
part of the metropolis.
From an economic point of view, the disperse pattern
of settlement along the metropolitan fringe specially the illegal ones mostly
in inadequate locations, and the deficit in infrastructure, multiply costs of
urbanization vis-à-vis a planned development, with the consequence of an
inefficient allocation of social resources for urban development. A clear
example of the latter is Valle de Chalco within MCMA.
Introduction of basic services represented several times the regular
investments needed for normal sites, because this immense illegal settlement is
located in land with almost no mechanical capacity for building. Valle de Chalco has grown from 360,000 inhabitants in 1980 to
1'312,000 in 1995 and to 1'679,000 in 2000. In 1995 it covered around 9,240
hectares with densities of 142 inhabitants per hectare (Iracheta,
1999). It has been needed special public works to avoid flooding or to support
water supply and sewerage pipes. (See Hiernaux,
1995.) The same could be said regarding Nezahualcóyotl,
the first huge illegal settlement of MCMA which developed from late fifties on
land of the former Texcoco lake reaching around 1.5
million population.
From a social point of view, urban disorder generates
growing costs, which the urban poor can ill afford affecting their standard of
living. Upon becoming owners in irregular settlements, they lose an important
part of their income. This happens through payments for the illegal acquisition
of a plot of land, additional costs for its subsequent regularization, the
payment of higher costs of urban services and their involvement as laborera in participatory public works as the only way to
access to basic infrastructure, whereas middle and upper class individuals pay
for serviced land under competitive schemes of pricing, technology and quality.
From a political standpoint this settlement pattern
provokes a number of negative effects which have led to an increasing number of
urban protests, not only by the community lacking basic services or suffering
of poor housing, but by many social organizations and political parties which
increasingly confront authorities because of urban settlement issues. The
average number of street protests that occur daily in the Federal District
increased from 1.7 during 1993 to 6.9 in 1995 (Iracheta,
1997) to 8.1 during 1998, involving the participation of more than 1 million
irate citizens. This process explains, at least partially, the adverse
electoral results of the Institutional Revolutionary Party (PRI) in local
elections in many municipalities both in the state of Mexico and the Federal
District in 1996.
The persistence and magnitude of urban disordered
processes within MCMA constitute the culmination of years of a lack of
political will of successive governments to promote innovative initiatives and
preventative policies with a more integrated vision. It is valid to state that
policies have not evolved adequately to keep up with the growth of social
problems and demands. This has been as much the case of legal regularization of
land tenure as of the provision of serviced land to the poor.
The policy of regularization has gained acceptance in
the face of urban population explosion, urban poverty, lack of public resources
and ingrained speculative practices. This has been associated with the analogy
of the eggs and the omelette, meaning that once the
eggs have been broken (the consequent inexorability of illegal, irregular,
informal, clandestine activities to access and occupy urban land), one should
try to make an omelette (recognizing the creative
energy embedded in such practices to access and occupy urban land).
In support of these ideas, it is often argued that the
cost of regularizing the existing settlements (from titling, redistricting and
service provision), ranging from US $1,000 to US $2,000 per family (in the case
of Favela Bairro in Rio de
Janeiro, from $2,000 to $4,000), is much lower than that of providing new
housing on serviced land. Such a cost varies between $10,000 to $20,000 per
house.[23]
In Mexico, this policies are also supported in three
main facts: first, there is almost no long term credit for poor families;
second, it prevails a salary increment control policy which already last for
almost 20 years. Finally, inflation has been greater in a long term basis (two
decades) compared with poor families income growth. Consequently, lower income
families have not much opportunity of buying new housing.
The cost-effectiveness of such regularization programmes results from three factors:
1. The pre-existence of houses. The
latter are often considered as being built faster, cheaper and of better
quality than those produced in public programs;
2. The densities are higher in such
settlements. These land use patterns are treated as acceptable in light of the
fact that they already exist, a fait accompli.[24]
3. The provision of services to land
under regularization schemes often falls short of the usually high minimum
standards established for new land developments since the services provided are
either incomplete or dependent on the application to alternative 'solutions' or
technologies considered unacceptable for new middle and upper class formal
settlements.
Tenure regularization policies in Mexico have been
practically the same over the last two decades, rendering poor results. They
have faded over time to such an extent that in MCMA, there is almost no public
land left. As a result of this shortage of public land, the State and local
governments are being forced to acquire them at market prices.
5. Metropolitan illegal/irregular urbanization. An
approach on the size of the problem
The amount of irregular/illegal land tenure within
MCMA has been an important question mark during the last two decades. As has
been stated in several research works (Iracheta,
1984, 1987, 1997) the only truth is that no one knows the truth, being the
available data at the best an approximation on the size of the problem.
Some facts are against a more precise account of this
phenomenon: first, there is not a clear concept of what actually is accountable
as irregular/illegal land tenure, taking into account that any, even the
smallest land planning statutory fault will put a plot as irregular. On the
other hand, the invasion or illegal purchase of a piece of land and/or its
occupation constitute also and irregular/illegal act.
Secondly, there is a problem of dynamics; the velocity of irregular/illegal
land occupation in most Latin American cities and clear within MCMA is so high
that there is no chance for government to follow the pace of this phenomena.
Third, there is a question of who is accountable for regularization purposes
bearing in mind that it is a policy directed to attend the urban poor leaving
aside a lot of other land tenure irregularities/ illegalities. Finally, there
is a political side of this problem related to government's do nothing
strategy because of political gains or because lack of alternative policies
to deal with low income urban land demands.
What is clear is that government data and information
about urban land tenure irregularity/illegality is partial, unclear and
comparatively inconsistent; therefore there are assumptions about the size of
the phenomena but no confident and actualized data.
Because of the latter and bearing in mind that
pressure of urbanization within MCMA is greater in the municipalities of the
state of Mexico, the state government conducted some studies in order to
identify low income land tenure trouble spots; that is, new squatting or
would-be squatting areas as well as those irregular settlements where the
community is pressing for regularization.
As of late 1998, there were 127 spots or areas with
major squatting or in risk of irregular occupation, comprising around 8,550
hectares for a population of approximately 4.2 million. Apparently, between 40%
and 50% occurs on ejido land, whereas the rest were
privately owned.
Settlements pressing for regularization totaled 71,
with a total area of 1,300 hectares for a potential population of around
650,000. These places had different degrees of occupation but all were
afflicted by problems regarding land tenure as well as a lack of most urban
services. More than 80% of this settlements were located on private property,
the rest being evenly divided between ejido and
government-owned land.[25]
In summary, there was a demand for regularization of
land tenure in areas where there was a threat of illegal occupation or in
already illegally occupied land. The government detected around 9,868 hectares
as ‘red spots’ within the municipalities of the state of Mexico. This leads us
to some conclusions:
· Firstly, there is more land under
pressure of illegal urbanization than detected by the government of the state
of Mexico since the research of the state government do not consider to be red
spots places with potential for illegal occupation in the near future,
neither ant invasions, nor illegal occupation in very small settlements.
There is also irregular/illegal land occupation within Federal District,
although to a lesser degree, which were not included in the research. Finally,
the state government is only responsible for the regularization of privately
owned land. The regularization of ejido land
on the other hand is a federal responsibility.
· Secondly, it is evident that the
supply of serviced land to the urban poor has been mostly neglected by the
formal market and by the government within MCMA, since almost all demand has
been attended by the illegal market.
· Thirdly, urban squatting has become institutionalized
to such a degree that invasion and illegal land purchase are normal means for
city growth. These settlements have been cropping up throughout the whole
metropolis, especially in the peripheral municipalities.
· Irregularity and illegality of land
tenure as well as urban squatting, are the products of the so called illegal,
irregular, informal or parallel land markets, which sprang up in
response to massive demands for low-income land for housing.
· Finally, from an economic standpoint,
this illegal market offers a product suited to the particular needs of
the population involved, albeit outside of most legal and planning rules. In
order to meet with people's income level it offers housing plots with no
facilities (water supply, sewerage, drainage, pavement, energy, etc.), lacking
permits and licenses for land use and buildings and are quite often located in
poor environmental sites or worse under conditions which violate elementary
environmental requirements. Nevertheless, this is a lower price market that
satisfies the massive demand for space by the urban poor.
6. The apparent higher relative price of illegal to
legal land
It seems to be general knowledge that prices of legal
urban land are higher than illegal, hence the dramatic growth of
irregular/illegal urban settlements. There is however information contradicting
the latter prompting the need for further explanation.[26] The
municipalities of the state of Mexico provide a clear example of this.
The main features of the analysed
cases by the government of the state of Mexico[27] are:
They are
located within metropolitan municipalities of the state of Mexico with a strong
presence of irregular settlements. None of the family plots had public
facilities nor were there social expectations for the provision of these
facilities by the government in the near future. These places are
irregular/illegal, privately owned, and are located in 12 different
metropolitan municipalities, along the periphery of the MCMA.
Land market prices were based on square metres and family plots. Cash payments made by colonos averaged 174 pesos (US$ 20.5) for one square metre, with extremes of 38 and 312 pesos. Vendors usually
offered terms requiring 30% in advance and the rest in around 16 monthly
installments. This implies that for an average 120 m2 plot without legal
tenure, outside of the planning system and lacking basic services, a family had
to pay at that time (1998) around 21,000 pesos (US$ 2,460), equivalent to
approximately 700 days of minimum wage.
At the same time, a similar investigation was carried
out in 9 ejidos located within 4 municipalities
having the state government the intention of promoting projects called ‘plots
with services’. These ejidos share similar
features with those mentioned above; that is to say, they are irregular/illegal
sites, are located on bare land and are surrounded by informal settlements.
It was detected that prices set by ejidatarios
(stakeholders in the ejidos) for the
sub-dividers were around 66 pesos (US$ 7.8) for one square metre,
with extreme prices of 20 and 120 pesos for large plots before subdivision for
housing purposes. If we subtract 20% of the total area allocated to the
establishment of roads and common areas, prices will move upwards to an average
of 79 pesos (US$ 9.3) per square metre with extremes
of 24 and 144 pesos.
Consequently because of location specific features,
there is an important difference between the analysed
cases (between US$ 20.5 and 9.3 per square metre. US$
2,460 and 1,116 for one 120 square metre plot
respectively) being both irregular/illegal sites Whereas the first represents
around 700 minimum salary days in order to get a 120 square metre
plot, the second represents approximately 316 days of minimum wage which is
actually paid by the low-income population within the state of Mexico
municipalities belonging to MCMA. If an average of 25% of yearly income is
devoted to housing (US$ 320), under the above prices one individual will need
around 8 or 3.5 years to pay a plot of irregular/illegal land.
Typically in most Latin American cities, when unserviced land located in fringe areas is designated as
urban, it is valued at US$ 5 to 20 per square metre.
The provision of all services costs about US$ 20 to $30 per square metre, but the market price, depending on location, is
usually between US$ 30 and $100 per square metre. At
the average price (US$ 65), a 120 square metre lot of
serviced land is equivalent to around 2,210 days of minimum wage in Mexico
(1998), representing six times the annual income of an individual with minimum
salary. In most Latin American cities it represents at least three times the
annual income of two-thirds of poor urban families. In these cities where at
least 25 percent of the population lives below poverty line, they can barely
meet the cost of survival, let alone pay for land.
In order to analyse the
possibility to carry out the plot with services project as joint venture
between the state of Mexico government and developers, it was asked them to analyse basic costs including land and the provision of
water, sewerage and road tracing, under similar location and hinterland
conditions of irregular sites. As a conclusion they offer the government prices
closer to those charged in the illegal private sites above analysed
(the highest in comparison with ejido cases),
considering that administrative costs (permits and licenses) were assumed by
the government and that projects were located in sites similar to those analysed before.
That is to say, with the promotion of the state
government, private developers have shown that there is possible to hit illegal
land market by substituting it. Of course, it is clear that prices in specific
locations are driven by specific conditions, so it can not
be generalized the idea that illegal land market prices are higher that those prevailing within the legal market.
Nevertheless it is worthy to analyse
why is it possible that an illegal plot of land price could be higher than a
legal one?
Firstly, the shortage in the supply of low cost land
has as the immediate consequence the overpricing of serviced land. In fact, the
provision of services usually increases the price of land by a multiple of the
cost of the services. The same occurs within non-serviced land market in the
sense that greater shortages push prices up.
Secondly, it could be assumed that there is an
extraordinary profit collected by illegal vendors derived from the difference
between the original cost of bare land and the final price imposed upon colonos. Such a difference is a direct consequence of the
shortage of low-income land, resulting in the overvalue of the available land. As was stated before, the
supply of land for low-income housing is practically non-existent, enabling
illegal developers to ‘plan’ the supply and segreate
land according to their own interests. It seems therefore that the informal
land market in MCMA is much more organized than the state government is willing
to admit.
Thirdly, it can also be assumed that the poorer
segments of the population seeking a plot of land are to a large extent,
uninformed of the alternatives regarding land supply for housing throughout the
metropolis. This lack of information drives those seeking land to the local
supply, which is monopolistic in nature. This view is based on the low levels
of literacy and limited mobility of low-income social groups, which tend to
reduce their hinterland since not much consideration is given to more
distant locations.
Finally, there is a ‘security effect’ for colonos looking for a housing plot in settlements where
they have relations with family or friends. This could imply their willingness
to pay a sort of differential rent in the interest of the security enjoyed due
to the proximity of these close relations.
This could also hint to the existence of a culture of
land tenure irregularity. In short, low-income groups view irregularity as not
only normal, but also as the most common way of getting a plot of land
for the family.
The message transmitted to younger generations and
others who seek housing has been clear: settle wherever you can and don't
worry, because some day the State will regularise
your lot. This prevalent cultural attitude reinforces the perverse nature of
the vicious cycle of land value increments: the higher the expectation
regarding the eventual regularization of irregular settlements, the higher the
price that land sub-dividers may charge to sell unserviced
or partially serviced land. Thus, the poor end up paying relatively high prices
for land.
There seems to be a widely accepted view that legal
land prices for the poor cannot be competitive with those of illegal land
markets. However, it is also likely that in many cases, as above analysed, poor families pay more for an illegal plot of
land that for a legal one with similar conditions due to the monopolistic
character of irregular/illegal land markets and the absence of state land
supply.
7. Some policy implications
Some important policy corollaries relate to this
anticipation of land appreciation resulting from expected future regularization
and generally from state (in)action and the urban land formal market failure to
offer serviced land for the urban poor.
7.1. General implications
1. Public actions to regularise land have not solved the problem of land access
for the urban poor; instead, they are really a part of the problem. Greater
regularization feeds into the industry of irregularization
to the point that one must seriously consider a deep restructuring or even the
termination of this policy and the creation of others that can offer serviced
land to those who need it.
2. This process also exposes a
fallacy regarding the (in) capacity of the poor to pay for some urban services
since they are already paying for at least a part of these services, albeit to
the landowner/sub-divider as a private land tax that could otherwise be
collected publicly. The focus of the discussion is therefore askew. The issue
is not so much whether (or not) the poor should pay, but rather how they should
pay and the limits of such payments. For example, should low-income families
benefiting from regularization programs pay for services directly, or should
the land value increment generated by the improvements be extracted from the
landowners through taxation and other fiscal policies. The latter point sheds
new light on the limits and even the perversity of some conventional subsidy
schemes as well as on the difficulties of financing services.
3. The traditional framework within
which the phenomenon of irregularity-regularization of land tenure has been
studied in low-income urban districts in Mexico (as for the rest of Latin
America) needs to be re-evaluated.
7.2. Implications for Mexico City metropolitan area
1. The supply of serviced land to the
urban poor has to be dramatically increased. The key question is: if Mexican
cities, especially MCMA, are surrounded by ejidal
land, also subject to strong urbanization pressure, would it not be more
convenient to increase supply by privatising this
land with the participation of the ejidatarios.
This would reduce the monopolistic character of the private land in the urban
periphery where prices are not affordable for poor population. In accordance
with market mechanisms, a substantial and regulated supply of land to these
social groups could push average land prices down, also reducing the
irregularity of land tenure.
2. The legal framework of urban
planning should be revised in order to make it more practical and operative.
This implies the need for an effective planning system regarding land, in the
sense that urbanization should only take place where established in the
relevant urban plans. If the land supply for the poor is augmented through the
legal opening of the ejidal land market in planned
areas, prices will tend to conform to the buying power of these low-income
segments of the population.
Finally, within these policies, the value added
associated with the ejidal land distribution
will become a major issue. One should avoid repeating past experiences in which
developers and the State became actual beneficiaries of the expropriation of ejidal land, at the expense of the ejidatarios and colonos,
in spite of the fact that they were supposed to be the main beneficiaries (Iracheta, 1984).
8. Conclusions
Not denying that the available degrees of freedom are
slimmer than would be desired, and that the realities of urban poverty,[28] the lack
of public resources and the presence of self-interested landowners can hardly
be overcome in the short or even medium run, this paper argues that:
1. Although the problems imposed by
absolute poverty can hardly be met by policies other than those of direct or
indirect subsidy, it is no longer the main reason why serviced land is not
affordable. The price of serviced land, affected by the “mode” in which the
urban land market is structured, enhances the non-affordability issue. In other
words, it is not absolute but relative urban poverty, which impedes land access
that lies at the heart of the problem.
2. The lack of public resources to
service land is also relative; the main bottleneck seems to be more in the
distribution of existing resources and most importantly in the managerial and
operational capacity of the public agencies or providers of services to
mobilize the necessary resources.
3. Finally, with respect to the
retention of serviced land from the market, the problem seems to reside less on
the speculative predatory behaviour of some large
landowners and more on the institutional and juridical or legal environment
dictating land use.[29] Even in
the absence of land speculation, or the monopolistic behaviour
of large landowners for that matter, the combination of urban poverty with lack
of public resources would be sufficient to account for the phenomenon of
informality because poor people would have no means to service land on their
own.
The problem of how to supply land to the poor in Latin
American countries cannot be resolved within the parametres
of the prevailing regularization programs. It is the understanding of the
authors that this line of reasoning is fallacious because it does not account
for many other generalized costs such as:
1. Many of the settlements carded for
regularization are located in areas originally unfit or too costly for urban
occupation et pour cause of no interest to the private market. In São
Paulo, 49.3% of the favelas are located on the
margins of rivers, 32.2% are subjected to periodic flooding, 29.3% on steep
hill-slopes, 24.2% on over eroded land, and 0.9% in garbage dumps or sanitary land fills. This data is valid for 1987 when the population
in favelas represented 8% of the total
population, in 1993 the population of those living in these shantytowns reached
19.8%. Sometimes, as in the case of many favelas
located on the hill slopes of Rio, regularization costs exceed by far the
"break-even" cost. In Jacarezinho,
regularization costs more than $10,000 per family (Maricato,
1996).
"Although
squatters' ingenuity and imagination in solving their own shelter problem under
unfavorable conditions have frequently been praised, the majority of their
dwellings are unfit for human habitation"(Brennan, 1993, referring to Mayo
and Dowall).
2. Many
times no real titles are effectively provided but only a titulo
supletorio or concessão de direito real de uso, which
are not of the same value (Bolivar). These titles are liable to ‘red linings’
or prejudices from financial agencies. In addition, given the amount of irregular/illegal
plots of land and the absence of fresh ideas to multiply the provision of
titles, decades would be needed only to solve present problems.
3. The
services provided in these areas are too costly or of low quality, unreliable
and difficult to implement, an example of this is garbage collection in narrow
streets or the pavement and building of infrastructure on sites with ill
mechanical conditions or particular location risks (e.g. flooding).
4. Finally
such curative policies feed into the industry of informality or la industria del precarismo
(PRORIENTE, 1998). That is to say, they do not take into account the comparable
cost to society, particularly if intergenerational considerations and social
well being are included. The truth of the matter however, is that public
officials in fact do not have much of a choice. Even if there were
cost-effective preventive policies, the political pressure to regularise existing settlements is hard to avoid.
5. Besides
the adverse feedback of these programmes, which
reinforces the cycle of irregularity, there are also serious questions
regarding their financial feasibility. In Mexico, as in most other places in
Latin America, regularization programmes tend to be
more curative than preventive, and depend as a rule on extra-budgetary
allocations and even on the participation of multilateral agencies. Both CORETT
(the Federal Commission for Regularization of Land Tenure) and CRESEM (the
state of Mexico's Commission for the Regularization of Land Tenure) have been
working more on the legal side of the problem, and not on the prevention of illegality, the
provision of serviced land to the poor or on the creation of land reserves.
CORETT is responsible for the regularization of ejidal
land, whereas CRESEM is responsible for the regularization of private land.
Neither of the two has achieved its objectives enshrined in its respective programme. Instead, these two bodies have become part of
the irregular land problem, not only due to their limited actions, but because
they have focused on but one of its manifestations or consequences, that is to
say, illegal tenure. Worthy of mention is the apparent involvement of some of
their officials in unclear land transactions.
6. This
problem exposes the lack of coordination and an effective fiscal policy,
particularly property taxation, with its obvious implications for a suitable
land market. Successful urban land management cannot be achieved solely through
regulatory means. Greater fiscal control of land markets is needed, principally
at the local level. This is a pre-condition for an effective mobilization of
land value increments with the intention of generating urbanized land, instead
of acting as a surrogate for a more comprehensive taxation of land values.
7.
Existing fiscal instruments governing land in Mexico, although quite diverse
and rigorous, are politically sensitive issues. They face great practical
limitations in their capacity to draw on land value increments. That is the
case of land property taxes (mainly impuesto
predial) which in general were not designated as
a means to capture land value increments or as instruments for the organization
of land use. This explains why Mexico is
considered as one of the less advanced countries in the collection of property
taxes. With the proper institutions and regulatory environment the servicing of
land could, at least in principle, be financed indirectly or directly by
private agents. Illustrations to that effect can be provided by the con
cessions given to private utility companies in most Latin American countries at
the turn of the century and value capture schemes like the Contribución
de Valorización as in the case of Colombia.
8. Over
and above these technical and political constraints, we must consider the
importance of cultural and managerial obstacles. One of the assumptions behind
the phenomenon of irregularity is the scarcity of resources. Besides the
obvious question of unfair and inefficient distribution of the tax burden as
well as the spatial allocation of existing resources, the problem is not so
much of lack of resources but more of managerial capacity and political will.
Many important services such as water, electricity, telephone and public
transport are in effect provided on a user-charge basis, thus, the issue is why
providers of public utilities, be they public or private, are not able or
willing to extend quality[30] of
services to all land. Furthermore, the lack of public resources per se is not
sufficient justification since a resource-poor public agent could still hold
sufficient clout to force affluent private landowners to service the land prior
to or as a pre-condition for its disposal on the market. This is evidenced
nowadays by new alternatives involving private partnerships as in the case of
land-readjustments derived from state of Mexico's government PRORIENTE program.[31]
9.
Planners must work with the fiscal administrators to overcome the lack of
communication that has long separated these two groups. Some promising steps
have already been taken, as many public employees are aware of the urgent need
to integrate fiscal policies and urban planning within the framework of an
integrated strategy.
10.
Finally, the issue must be considered in a broader context. Both the government
and the private sector must understand that land has become a strategic issue
within the dynamic process of urbanization-metropolization.
The main question pertains to the need on one hand, to regulate land markets
and on the other, to face the huge demand for serviced land with novel
approaches. It is also necessary to prioritize this issue which has had until
now been considered anathema in political and urban policies.
In sum, the analysis of urban land in Mexico as in
most Latin American cities, has to expose the multifaceted requirements for the
formulation of a more effective policy to provide serviced land to the poor.
Such an effort requires an improved level of co-ordination of existing policies
related to finance, territorial reserves, regularization and land market dynamics.
Many fiscal and regulatory instruments are sufficient
in theory but not in practice. The problem is not so much a lack of resources
as much as it is the incapacity to mobilize the existing resources into a
comprehensive program, linking regularization with fiscal policy. One key
question is: if servicing the land adds so much value, why is it so hard to
find private agents or developers in the formal market who are willing to
invest in the low income land market? Why is it deemed unprofitable in spite of
such handsome mark-ups? There is no easy answer, other than vague
indications regarding risks in the process due to complicated judicial and
legal problems, unclear rules of the game, the high cost of approval licenses,
lack of information about procedures, and concerns about low profitability over
time.
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Enviado:
27 de febrero de 2001.
Aceptado:
27 de abril de 2001.
[1]
Originalmente publicado en
italiano como: "Acceso a suoli infrastrutturati per la popolazione
urbana povera: il paradosso della regolarizzazione in Messico",
en Storia Urbana. Rivista
di Studi sulle trasformazioni della città e del territorio in età
moderna, año XXIII, número 88/89, julio-diciembre de 1999, pp. 119-144.
[2] In fact, nowadays for the
majority of the population, urban land is accessed, often through market
mechanisms that are not always legal, and even with the collusion of the State.
[3] The arguments in the following 4
sections have been extracted from the discussion fully developed in Smolka (1999).
[4] This Commission created by the
state government in 1993 has as permanent members representatives of developers
and building industrialists as well as a sort of municipal, state and federal
authorities. Through their discussions they have made clear what has been above
stated (see minutas and papers of these commission.s
meetings. Secretaría de
Desarrollo Urbano y Obras Públicas del Estado de México, secretary
office, 1993-1999).
[5] According to World Bank (1990) figures about 19% (or 70 millions inhabitants) of the Latin American population was
found to be living below the poverty line including 12% surviving under extreme
conditions of poverty in 1985. The situation has not
[6] In Moreno, Argentina, a lot of 300 m2 with no infrastructure costs
about 10 to 14 times the minimum wage (of US$ 80), an amount to be paid cash
since, in 1987 no finance was available (Clichevsky, Shapira and Schneider, 1990: p. 66). A typical 100 m2 plot of urban land in the periphery of the city of
São Paulo (smaller than the 125 m2 minimum lot size established by
the 6766 Law of 1979, regulating land sub-divisions) costs about 20 times the
minimum wage.
[7] Considering all forms of illegality,
São Paulo.s Planning Bureau estimated that about 2/3
of the population resides in violation of current land use and building codes.
(Rolnik et. al., 1990). Similarly in Recife these
percentages reach 80% and 70% in the case of Salvador. Even in the planners
darling model city of Curitiba, half of the population is classified as illegal
(Ultramari and Moura,
1994). In Nicaragua (ref. Morales, N. FLACSO/GIM, 1995) 73% of the houses is
considered illegal and in El Salvador about 50% of the housing is deemed
informal (FUSADES, 1996 apud Lungo
1996, CB). The so-called clandestine urbanization accounts for about 40% of
Bogota´s expansion area (re. Jiménez in Jaramillo).
[8] Commuting time of 4 or more hours in overcrowded buses is not uncommon
in the metropolitan area of Rio de Janeiro. More than anecdotal, demographers have forwarded
the hypothesis that the fall in fertility rates in such areas is attributable
to the effect of exhaustion on the libido. More sleeping time appeared
as a principal aspiration of residents based in peripheral areas in a survey of
attitudes, habits and expectations. In yet another survey, the low productivity
of workers due to commuting time was identified as an important factor
affecting Rio de Janeiro as an attractive business destination, especially with
respect to its industrial attractiveness. Many of the homeless people
identified are in fact workers who cannot afford to commute everyday.
Average commuting costs absorb typically 30% to 40% of the minimum wage.
[9] The distribution costs as well as supermarket
grocery prices (when they exist) tend to be higher in the peripheries.
[10] A heavier land value tax would
also produce a similar effect. Instead of monthly/yearly family budget expenses
on mortgages/installments on land finance credits, the budget of low-income
families would be spent on the land value tax. The difference, of course, is
that they would access credit and more importantly on much longer terms. Beyond
equity (progressiveness) a case could be made on efficient considerations of
such a policy in as much as managing land taxes are easier (and most
democratic) than credit lines.
[11] Recent investigation on Rios favelas has found that labor costs to build are at least
10% over the formal market. Telephone interview with Pedro Abramo,
1999.
[12] Ref. lack of legal credentials or spillover from other informalities
(labor market). 13 Ref. impunity, extra-economic factors affecting residential
mobility, etc.
[13] Ref. impunity, extra-economic factors affecting residential mobility,
etc.
[14] One kilometre
of underground railway costs about US $ 2 billion, an amount sufficient to pave
22,330 km of urban streets. The accumulated deficit of paved streets in São Paulo over the last 15 years is about
6,000 km (Campos, 1992: 96).
[15] For an interesting application
of Myrdal.s circular cumulative process in an institutionalist context depicting the idea of richer areas
being more capable of pressing the local administration for investments, see
Vetter and Massena (1982).
[16] As preconized in recent World Bank urban
policy reports. The argument is discussed in Doebele
(1994) and criticized in Smolka (1994) and Jones and
Ward (1991).
[17] There is
a very high concentration of land ownership throughout Latin America, with
roots deep in the history of colonization. As a result significant land
concentration could still be found in the peripheries of many Latin America
cities. In a survey valid for the late 60s, reports on more than half (52.25%)
of Lima.s potential land for urbanization was in the
hands of only 11 groups or families, with a single owner (the Banco de Crédito) concentrating
9.65% of that land.
[18]
A similar tactic
to "calentar el negocio"
or "engordar la tierra"
(sic) is described in Jiménez, Jones and Ward (1991).
In many Mexican cities land ownership in the periphery is mostly ejidal (non-private but social ownership .that of the ejidatarios. as recognized by 1992 mexican
Agrarian Law´s reform. This ownership was the product of 1910-1917 Mexican
revolution; agricultural land was expropriated and given to peasants which
became ejidatarios; in most Mexican cities, ejidos were reached by city sprawl giving way to land
irregular occupations). Nonetheless, this dynamic also tends to be true. As it
was deeply analyzed in the urbanization process between late fifties and early
eighties within MCMA (Iracheta, 1984), new sites for
middle class housing, more than 300, where developed mostly on ejido land. Even though it was required state intervention
through expropriation of ejidos which could have
implied a strong urban planning intervention, actually many of location
decisions were taken by developers. Most of these housing developments were
located along one of the most important metropolitan roads connecting Mexico
City centre with state of Mexico municipalities. Having a connecting spine,
developers located their housing sites separated ones from others so always was
kept vacant land for future development. This also worked for bigger sites
where the same rationale was applied dividing it in parts so it was possible to
increase prices in each successive stage.
[19] The patrimonial nature of the
Latin American states is historically rooted in the concentration of landownership. This is said to be responsible for distorting
(through associated clientelist, corruptive, traffic
of influence, etc. practices) the spatial allocation of the scarce public
resources for land servicing and/or the retention (through rampant speculative
practices) of serviced land from the market. Both practices lead to higher land
prices and consequently push the urban poor into informality.
[20] The reader may refer to the argument vis à vis the
responsibility of governments in Ríofrio´s (1991,
p.30) criticism of the spontaneous character on the formation of informal
settlements. The author points out that the origin of many of the barriadas can be traced back directly to the lack of
coordination within the government: one public agency´s initiative to designate
land for a popular settlements not being in coordination with the agency
responsible for the provision of public services.
[21] Urban division known as ZEIS or AEIS is a zone
or area of special social interest.
[22] For a description of ejido land, see footnote number 18.
[23] Calderón (1997)
refers to Recife´s regularization programs in which the cost of adapting land
was a multiple of 3.2, 4.4 or even up to 10 as much as the cost of provision of
housing
[24] Land densities in informal
settlements are higher than those in formal areas (Angel, 1982: 16). The poor
constitute 40 to 50% of the urban population but consume 10 to 20% of the land.
An argument however could be raised regarding the elitist or unreasonable
densities prescribed in most urban regulations (Dowall,
Bertaud).
[25] This government analysis is
consistent with some scholars research; see for instance Cruz (1999).
[26] Recent investigation on Rio´s favelas has found that labor costs to build are at least
10% over the formal market. Telephone interview with Pedro Abramo,
1999.
[27]The study was carried out by the Secretary of Urban Development and
Public Works of the State of Mexico government in late 1998.
[28] Actually, there is a substantial contingent of urban poor, many with no
means to buy land even at zero cost!
[29] Under certain conditions, less
than predatory speculation may play a positive role in the regulation of the
volatile land markets.
[30] Many services may be available but not with the adequate quality.
[31] This program has been designated
to order and develop the state of Mexico's east region which comprises around 5.5
million population (1997) being the most pressured area within MCMA.