Learning from informal markets: Innovative approaches to land and housing provision
Introduction: The urbanization of poverty
Rapid growth of illegal settlements in and around cities can be viewed not as the growth of slums but, in a very real sense, as the development of cities which are more appropriate to the local culture, climate and conditions than the plans produced by the governments of these same cities. Hardoy and Satterthwaite.
The 1980s and 1990s have witnessed an unprecedented acceleration of urbanization processes world-wide. Very soon city dwellers will outnumber those in rural areas, and virtually all of this growth is taking place in developing countries. While this trend is nearly complete in most of Latin America, latecomers like the countries of Sub-Saharan Africa are rapidly catching up. Urbanization has in the past been seen as a positive process, linked to modernisation, industrialization and global integration. In recent years, however, it has become obvious that relatively well-paid and secure employment in the public and formal sector is available only for a shrinking minority of the urban population.
Dimensions of housing poverty:
In order to further clarify the argument, we state that housing poverty is largely determined by land supply and allocation. Hardoy and Satterthwaite’s insight that there is no ‘housing gap’ but a dearth of suitable and affordable land for self-help housing is meanwhile accepted among experts and officials who agree that urban land is the ‘essential ingredient’. Although Turner’s skepticism against governmental activities was well-founded, his plea for a minimalist state has not stood the test of time. There is overwhelming evidence that active policies are required in the provision and distribution of the ingredient: ‘Land, because of its unique nature and the crucial role it plays in human settlements, cannot be treated as an ordinary asset, controlled by individuals and subject to the pressures and insufficiencies of the informal market.
The failure of conventional policies:
The informal market price for urban land in (more or less) attractive locations also hampered sites and services schemes. Prime land is of course not available for this purpose. Private owners would expect adequate compensation, and governments will be hesitant to ‘squander’ their own property. In effect, most sites and services projects are carried out in remote peripheral locations, not rarely 30 to 40 kilometres away from the city centres. Only people without any choice will accept these conditions. In a rather typical case form Pakistan, ‘out of the 15,000 plots developed, by 1985 only 35 plots were found to be inhabited; the rest remained vacant’. In more central locations, serviced sites ended in the hands of affluent groups, often after going through a series of speculation.
Informal markets: Why do they work?
Faced with informal market and state failures, most urban dwellers in the developing world have to rely on their own initiative in order to find shelter. The crucial question is how, or more precisely where, informal settlements emerge. The terms ‘spontaneous settlements’ and ‘clandestine subdivision’ suggest that urban land is just there for the taking of enterprising individuals and families. This picture is misleading. Even for the most modest demands, a parcel of land has to fulfil two minimal conditions to be suitable: accessibility (some public transport) and a source of water. To be attractive, it has to be located not too far from the places of employment, i.e. industrial and commercial centres. If idle land of such qualities does exist, it is as a rule hazardous.
Conclusions:
On the basis of the discussion in this paper, a number of lessons for sustainable housing and land use policies can be drawn. In Jan van der Linden’s words, ‘what is needed in brief is a bridging of the gap between the legal and the illegal systems, starting with the recognition that illegal systems have in the past achieved far more than any official
initiative’.
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