Safe as houses?

Securing urban land tenure and property rights

Millions of people in developing countries live without adequate security of tenure or property rights. The United Nations expects this group to increase by nearly 37 million a year to reach 1.5 billion by 2020. The problem is particularly acute in urban areas where the costs of access to legal land and housing are high and rising faster than incomes.

In some cases, informal settlements outnumber legally planned developments and are increasing more rapidly. Beyond the effects on the poor, governments are finding themselves in danger of losing control over urban development and the affluent minority are feeling increasingly surrounded by slums and illegal settlers.

The high rates of urbanisation in developing countries over recent decades have left urban authorities overwhelmed by the demand for land, services and housing. Planning and building standards, regulations and administrative procedures based on European norms rather than local circumstances have only made matters worse. In many countries these have not changed since colonial days and impose such high costs and delays that even middle-income households are forced into informal settlements. This issue explores some of the key debates around providing secure tenure and property rights to the urban poor under conditions of globalisation, rapid urban growth, limited administrative capacity and widespread social, gender (see Mari) and economic inequality.

Defining tenure and rights

Any discussion of land tenure and property rights needs to recognise the importance of cultural, historical and political influences, as well as those of technical and legal systems. Each of these influences results in subtle differences in the way key terms and relationships are defined. The term ‘tenure’ can refer to how land is held or owned, or the set of relationships among people concerning the use of land, which can vary considerably between different cultural and economic contexts. Land or property ‘rights’ refer to what those who hold, own or occupy land may do with that land and any development that takes place on it. Property rights cover several factors, including the right to occupy, enjoy and use; restrict others from entry; dispose, buy or inherit; develop or improve; cultivate or use for production; sublet; realise a financial benefit; and access services. Again, different people or groups may enjoy recognised interests in some or all of these rights.

Not all contexts give equal emphasis to both tenure and property rights. Security of tenure involves the real or perceived protection from forced eviction, whilst property rights may vary within, as well as between, tenure systems. It is therefore possible to have a high level of security, but restricted rights to use, develop or sell land, or a limited level of security, but a wide range of actual rights.

Additionally, different forms of tenure and rights commonly co-exist within the same settlement and individual plots can change from one category to another over time. Therefore we should not think of tenure strictly as formal or informal, but acknowledge a broader range of systems from squatting, to unauthorised subdivisions and others which may simply fail to conform to official procedures. As Durand-Lasserve and Mattingly note, there may also be more than one legal tenure system operating in the same city, as in the case of Islamic societies or those where customary tenure operates alongside statutory systems.

Each of these systems has its advantages and disadvantages:

• Customary systems facilitate social cohesion, but may not be able to withstand increasing pressure on land.
• Private land ownership puts land to the most economically efficient use, but often excludes the poor and limits state land management options.
• Public or religious land ownership may facilitate equal access to prime locations, but also lead to bureaucratic inactivity and corruption.

The drawbacks of titling

These complexities have often been ignored by policy-makers. Thus, many governments and international funding agencies have taken the conventional route of providing individual land titles, either within informal settlements or in locations to which settlers are relocated. The intention is to provide high levels of security and property rights in a form which will enable poor households to obtain access to services and work to lift themselves out of poverty. But these expectations do not appear to have been widely realised and there is evidence that the claimed benefits of titling have been exaggerated. As Home observes, many households are not interested in obtaining titles because of the costs involved and the risk that they may lose their land if they have to pledge their deeds to obtain a bank loan. McLeod also notes that most bank lending is not asset- but revenue-based, so the provision of titles will not necessarily increase access to formal credit.

There are significant drawbacks to titling programmes which have not been adequately acknowledged by their advocates, especially de Soto. These include providing windfall profits to squatter ‘owners’ who sell up as soon as informal tenure is granted, the eviction of tenants or imposition of higher rents upon them, the resulting growth of new unauthorised settlements by groups hoping formal titles will also be awarded to new areas, the heavy burden placed on land registries and the potential distortion in property prices caused by the buying up of newly formalised settlements by higher income groups who may capture much of the subsidies. More seriously, some governments have used titling programmes as an excuse to evict informal settlers from prime inner-city sites and grant them titles on plots outside the city and far from sources of livelihoods and services. It is also expensive for governments to grant titles to settlers on private land, where market values may approach European or American levels. Finally, the costs and complexity of administrative procedures required for titling programmes may reduce demand, though this can also be an indication that people feel secure even without titles.

The public debate on tenure, which de Soto has done much to bring to centre stage, can now be based on a wealth of empirical evidence. For example, international experience shows that even the poor will invest what they can if they have reasonable security. However, titles are not the only means of ensuring security. Many people achieve this through political pressure, collecting receipts for utilities payments, or simply by sheer force of numbers. Interestingly, in its recent publication ‘Land policies for growth and poverty reduction’, the World Bank now acknowledges that formal titles are not always necessary or sufficient for high levels of tenure security.

What alternatives are there to titling?

Recent research reveals a range of innovative approaches world-wide which seek to increase security and rights and provide access to services and credit. Kumar reminds us of the considerable contribution of formal and informal rental tenure systems in meeting the needs of poor households for security and mobility, whilst Rakodi asserts the importance of semi-formal and customary tenure systems in current land delivery systems. Such intermediate, incremental options which emphasise an increase in land rights appear to offer improved security, increased public sector influence over land development, modest increases in tax revenues and practical options for financing land development. They are also simpler and cheaper to implement.

As Leckie observes, the primary objective of tenure policy should be to ensure protection for all households from forced eviction. This need not involve public sector agencies losing long-term control, or private landowners losing their land, but that people are given due notice and reasonable options for alternative accommodation. The secondary objectives involve improving access to livelihoods, services and credit, usually in that order.

How can these objectives be realised?

Basic security can be provided simply by proclamations announcing a ban or moratorium on evictions and relocations, allowing time to prepare more formal, long-term and socially acceptable solutions. Access to livelihoods can be provided by improved public transport systems and short-term forms of tenure in areas near employment centres, combined with basic standards affordable to low-income groups. Access to formal credit is more difficult to ensure, since many poor households are as wary about borrowing from banks as banks are of lending to the poor. However, as McLeod demonstrates, governments can encourage the establishment and expansion of community-based or commercial financial institutions that are willing to offer loans without requiring land as collateral.

Ultimately, however, tenure issues cannot be divorced from the broader issue of governance which is arguably the single most important factor for the eradication of poverty and for prosperous cities. Governments should take the following steps to help stabilise the existing situation and provide a foundation for longer-term options:

• Provide basic short-term security for all households in slums and unauthorised settlements.
• Survey all extra-legal settlements and identify any that are in areas subject to environmental hazards (for example floods or landslides) or required for strategic public purposes.
• Offer residents of all such settlements the option to relocate to sites with close access to existing livelihood opportunities and services.
• Designate all other extra-legal settlements as entitled to medium-term forms of tenure with increased rights, but not necessarily full titles.
• Encourage land sharing for informal settlements on private or customary land.

Improving tenure security and rights for existing communities will not be easy. Nor will it be sufficient, unless parallel measures are taken to reduce the need for the growth of new informal settlements. This requires a parallel approach to increase the supply of planned, legal and affordable land on a scale equal to present and future demand.

Geoffrey Payne
Geoffrey Payne and Associates
34 Inglis Road
Ealing Common
London W5 3RL
UK

T +44 (0)20 8992 2683
F +44 (0)20 8992 2683

gkpayne@gpa.org.uk
www.gpa.org.uk

See also

‘Land, Rights and Innovation’, Intermediate Technology Publications, London, G. Payne (ed), 2002
‘Urban land tenure policy options: Titles or rights?’, Habitat International Vol 25, No3, G. Payne, 2001
'Urban land tenure and property rights in developing countries: a review', IT Publications/Overseas Development Administration, London, G. Payne, 1997

Views expressed on these pages are not necessarily those of DFID, IDS, id21 or other contributing institutions. Copyright remains with the original authors but (unless stated otherwise) articles may be copied or quoted without restriction, provided id21 and originating author(s) and institution(s) are acknowledged. Copyright © 2005 id21. All rights reserved.