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close this bookHabitat Debate - Vol. 5 - No. 3 - 1999 - Security of Tenure (HABITAT, 1999, 63 p.)
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View the documentThe Illegal City
View the documentBenefits of Regularizing Informal Settlements
View the documentUrban Tenure Reform in South Africa
View the documentCollective Land Acquisitions in São Paulo, Brazil
View the documentTowards Land Reform in Bangladesh
View the documentShadow Lives: Urban India’s Informal Economy
View the documentThe Benefits of the Rental Sector in Western Europe

The Illegal City

by Edesio Fernandes

Illegality in urban areas usually takes many distinct forms, ranging from a vast informal economy and innovative survival strategies to the increasingly - “sophisticated” mechanisms of popular justice which have been identified in many cities. Of particular importance is the growing practice of “illegal access” to urban land and housing. Indeed, if both the conditions of access to land and construction patterns are taken into account, between 40 to 70 per cent of the population in cities in developing countries are in one way or another disobeying the law. The combination of lack of an efficient official housing policy in most countries and the impact of largely uncontrolled market forces does not provide adequate housing solutions for the vast majority of urban populations.

It should be stressed that urban illegality is not restricted to the urban poor; on the contrary, illegal practices involving land use are increasingly taking place among the more privileged social groups. However, given its grave consequences, illegality among the urban poor needs to be urgently addressed - and confronted - especially regarding the central issue of security of land tenure.

Invasions, irregular land subdivisions and all other forms of precarious occupation, as well as the widespread practice of illegal construction, are a reflection of the powerful impact of land markets and political systems. But they are also the result of the nature of the legal system in most developing countries, which is often elitist and exclusionary. Laws which do not reflect the existing social reality and lack of proper regulation have aggravated, if not determined, the process of socio-spatial segregation.

The central issue to be addressed is that of property rights, specifically concerning urban real estate. The traditional approach to property rights prevailing in many developing countries, is that of classical liberalism which views property purely in monetary terms and does not consider its social function. It also fails to consider traditional customary values which place more emphasis on communal property rights rather than on individual property rights.

It should be stressed that security of tenure can be achieved through several means, and not only, or necessarily, through the recognition of individual property rights. There is a wide range of legal-political options to be considered, from the transfer of individual ownership to some forms of leasehold and/rent control to more innovative forms of collective ownership or occupation. Whatever the solution adopted, it will only work properly if it is the result of a democratic and transparent decision-making process which effectively incorporates the affected populations.

Moreover, the recognition of security of tenure needs to be promoted within a broader context in which urban reform and law reform are reconciled. Law reform is a function of urban governance: it requires new strategies of urban management, based upon new relations between the State (especially at the local level) and society, renewed intergovernmental relations, and the adoption of new forms of partnerships between the public and the private sectors within a clearly defined framework. Law reform also requires the renovation of the overall political decision-making process, so that traditional mechanisms of representative democracy and new forms of direct participation are combined. Finally, the need to promote a comprehensive legal reform and judicial review can no longer be ignored, especially in order to broaden collective access to courts to guarantee law enforcement.

In other words, urban reform and the recognition of security of tenure are not to be attained through law, but through a political process which supports the recognition of the long claimed “right to the city” not only as a political notion, but as a legal one too. There is, of course, a fundamental role to be played in this process by lawyers, judges, and public prosecutors. However, the collective action of NGOs, social movements and individuals, within and without the State apparatus, is of utmost importance to guarantee both the enactment of socially-oriented laws and, most significantly, their enforcement. If these are truly democratic times, the age of rights has to be also the age of the enforcement of rights. It is only through a participatory process that law can become an important political arena to promote spatial integration, social justice and sustainable development.

Edesio Fernandes is a Research Fellow at the Institute of Commonwealth Studies, University of London, U.K. He is also Co-ordinator of IRGLUS (International Research Group on Law and Urban Space) and co-editor (with Ann Varley) of the book Illegal Cities: Law and Urban Change in Developing Countries (Zed Books, 1998).

Benefits of Regularizing Informal Settlements

by Alain Durand-Lasserve

Given that 30 to 60 per cent of the population of cities in developing countries lives in irregular settlements,1 it is now widely accepted that regularization policies are - at least in the short-term - the only realistic solution to improving the housing conditions of the urban poor. For this reason, an increasing number of governments at central and municipal levels have now embarked on tenure upgrading and regularization projects and programmes. However, in many cases, points of resistance and obstacles still hinder the large scale implementation of such policies. For this reason, the benefits of tenure regularization need to be more clearly assessed and stated.

What are the advantages of regularizing informal settlements?

Regularizing informal settlements means, first of all, providing security of tenure to the populations concerned. This is an essential step. Households should not be evicted by an administrative or a court decision for the sole reason that they are not the owners of the land or house they occupy, or that they have not entered into a formal agreement with the owner, or do not comply with planning and building laws and regulations.

When in situ regularization proves impossible (for planning, public health, or environmental reasons), then security of tenure means that households concerned must be given fair compensation or relocated to another place with comparable advantages. This does not mean that households will necessarily be granted real rights.

Secondly, regularizing informal settlements means that the households concerned must have access to basic urban services. For these households, tenure regularization has obvious advantages:

· as emphasized by John Turner2 nearly three decades ago, it encourages households to improve their housing conditions;

· it encourages and facilitates investment in home based activities which play a major role in poverty alleviation;

· it facilitates the provision of urban services in the settlement (beneficiaries of urban services are clearly identified and located);

· it helps to mobilize communities to contribute to the management and maintenance of their settlement environment.3

For public authorities, the regularization of informal settlements and the provision of secure tenure can - in principle - have an effect on local resources as it improves the rate of tax recovery or makes possible the setting up of local taxation, both on property and on economic activities. In addition, by making possible the identification of service beneficiaries, it improves the recovery of services and equipment costs. For many observers, tenure regularization policies tend to accelerate the integration of informal land and housing markets and economic activities in general into the sphere of the formal economy, especially when tenure regularization is accompanied by the allocation of real rights, whether freehold or leasehold.4 In political terms, regularization programmes are seen as a significant step to ensuring social peace and stability in cities.

What problems must be addressed?

In order to evaluate the real benefits of regularization policies, three main problems must be addressed: legal, administrative and financial.

Legal problems concern the land rights issue.5 Despite repeated statements from many governments, providing security of tenure does not necessarily require access to land ownership, especially through individual property rights. In most cases, this is not a realistic objective. Giving real rights is a complicated, time-consuming and expensive process. Administrations in charge of land management can simply not cope with the demand. However, it is essential that the right to occupy land for housing (whether it is guaranteed by a permanent or temporary administrative permit or by any form of non-transferable leasehold) can be converted into a real right if the household needs it (for selling, inheritance reasons, investment project or to mortgage the property). In this case, it can be agreed that formal land registration and the delivery of a real right should be made case by case at the expense of the applicant.

An appropriate administrative and regulatory environment must be set up, adapted to:

i. the identification of rights holders and households entitled to tenure regularization:
ii. the resolution of land related conflicts; and
iii. the allocation procedure of rights on land.

At institutional level, the implementation of regularization policies requires powerful specialized institutions and political and administrative reforms aiming at transferring land management responsibilities to local entities, along with requested financial resources.

Financial problems result from the fact that, to be successful, tenure regularization policies must be implemented on a large scale. If limited to a few settlements, regularization programmes will not have any sustainable effect at city level. This requires mobilization of huge financial and human resources. In addition, successful tenure regularization policies must be accompanied by the provision of basic services in all regularized settlements. This requires sufficient resources, both public and private. Innovative forms of partnership can help to resolve this problem.6

Who benefits and who loses?


Regularization would improve access to basic services for slumdwellers who currently rely on informal means to secure these services. - © UNCHS/Rasna Warah

Even if we deliberately adopt the most optimistic and consensual approach, we cannot assume that tenure regularization will benefit all urban stakeholders. Vested interests in land are considerable. All tenure regularization projects disrupt these interests and change the balance of power between urban stakeholders.7 This explains why, whereas the majority of urban stakeholders can benefit from regularization policies, some urban stakeholders are still strongly opposed to the implementation of such policies.

Tenure regularization programmes benefit a wide range of urban stakeholders including:

· the direct beneficiaries living in informal settlements who would no longer be subjected to the discretionary power of landowners and government administrations i.e. who would not be evicted;

· governments and political leaders, as tenure regularization has an effect on social control;

· governments at central and local levels, which can expect improvement in their financial base and resources through, for example, taxation; (Investment in housing and infrastructure by the beneficiaries themselves also eases the burden on governments.);

· investors who would benefit from the formalization of informal processes;

· providers of urban services which would be able to identify service users and charge rates.

However, lessons from experience indicate that four broad categories of urban stakeholders can be directly and adversely affected by tenure regularization policies, for different sets of reasons:

· Tenure regularization can be detrimental to some households living in irregular settlements, especially those who have the most vulnerable legal or social status (renters or sub-renters on squatter land, newly-established occupants who are not considered eligible for regularization, single young men and women, women heads of households, etc.)

· Tenure regularization programmes can be detrimental to urban and suburban landowners as they cannot be compensated on a market price basis: the populations concerned do not have sufficient resources, and public authorities can rarely subsidise large-scale land acquisition programmes. Negotiation can help find an acceptable solution for the landowner (for example through land readjustment or land sharing), but this requires sound political will, efficient negotiation procedures and an appropriate regulatory framework.

However, the situation varies according to the type of local situation. In the case of squatter land, especially in a global context where evictions can no longer be envisaged due to political risks, tenure regularization can be seen by land owners as the only opportunity to obtain some form of compensation from public authorities or beneficiary households.

In the case of informal commercial land development for sale, land owners, intermediaries and illegal land subdividers are rarely penalised by regularization programmes once their development project is completed and sold out. However, implementation of large scale regularization programmes and accompanying control measures on informal markets generally prevent them carrying out any new development projects.

In all regularization projects and programmes, the actors who have least to gain are land owners, intermediaries and/or informal developers - those who are involved in the informal rental sector, such as shack owners in suburban areas or inner city slums. Regularization puts an end to their highly profitable but exploitative activities. They are also not legally entitled to any form of compensation. It is essential to deal with these actors. But this is often difficult as they usually have close connections with officials and decision-makers at local levels.

For government officials, the problem is more complicated as it is linked to cultural behaviour and the dominant administrative culture. What is at stake in many cities is the discretionary power of government officials to allocate land and to regularize tenure7. Countries in sub-Saharan Africa - where the allocation of land remains mostly a State monopoly and where several land markets co-exist - illicit practices and corruption are undermining all administrations in charge of land management. Major problems encountered in regularization policies emanate from the passive resistance of intermediate level officials in central and local governments as they are in a position to obstruct or slow down implementation and enforcement measures.

How can resistance and obstacles be overcome?

Lessons from experience suggest that emphasis should be placed on the following set of measures.

· At capacity building level, particular attention must be placed on information and training of government officials in charge of land management, especially at the local level. Training must focus both on technical matters (new land management techniques, land information systems, etc.), on the social dimension of land management (social and economic function of urban land) and on the land markets mechanisms.

· At research level, particular attention should be given to alternatives to property rights for securing tenure, including research on innovative land surveying techniques and land registration procedures. Another research area concerns the understanding of land management practices within government administrations concerned. As far as possible, research must be combined with capacity-building.

· At land management and planning level, experience stresses that successful regularization policies require that more decision-making power is transferred to local entities, including community-based organizations. In addition, appropriate procedures for the large scale implementation of regularization policies must be set up, especially progressive procedures for allocating rights on land. This must be generally accompanied by a drastic revision of norms and standards.

· At political and administrative levels, one of the key issues is the decision making process. Particular attention must be given to improving transparency at all administrative levels. This requires the consolidation of local governance and decentralization of administrations in charge of land management. In this context, compensatory measures must be found to encourage government officials to support regularization policies.

Alain Durand-Lasserve is Research Director at the Centre National de la Recherche Scientifique in Paris, France. He is also Scientific Coordinator of the European Science Foundation Network on “Innovative practices and emerging concepts for sustainable urban management in developing countries: a European contribution”.

References

1 Durand-Lasserve Alain and Clerc, Valerie. Regularization and integration of irregular settlements: lessons from experience. Urban Management Programme, Working Paper Series No.6 UNDP/UNCHS/World Bank-UMP, Nairobi, 1996, 94p.

2 Turner, John F.C. Uncontrolled urban settlements: problems and solutions. in Breese, G. Ed. The city in newly developing countries, 1966, pp. 507-534.

3 These issues are discussed in:

- United Nations Centre for Human Settlements (Habitat). Gestion fonciere urbaine, politiques de regularisation et developpement local en Afrique et dans les Etats Arabes, Serie gestion Fonciere No. 5, Nairobi 1995 and in:

- AITEC and Groupement de Recherche Interurba, Cities in developing countries: Integration of irregular settlements. Current questions in Asia and Latin America. Collection Pratiques Urbaines, No. 12. Paris, January 1995, 127 p.

4 Mayo, Stephen K. and Angel, Shlomo, Housing: enabling housing markets to work, a World Bank policy paper, the World Bank, Washington DC, 1993.

5 On this question see: Fernandes, Edesio and Varley, Ann, Editor, Illegal Cities. Law and urban change in developing countries. Zed Books Limited, London & New York, 1998.

6 Payne, Geoffrey, Ed. Making Common Ground: Public-private partnerships in land for housing, Intermediate Technology Publications, London 1999 256 pages.

7 These issues have been discussed recently in the International Workshop on: “Tenure security policies in South African, Brazilian, Indian and sub-Saharan African cities: a comparative analysis”, IFAS and Development Works, Johannesburg, 27-28 July 1989.


A world of difference. - © UNCHS/P.Wambu

Urban Tenure Reform in South Africa

Social Redress, Sustainable Development or Both?
by Lauren Royston

South Africans currently hold land under a variety of tenure systems, including freehold and customary tenure and various other forms of tenancy. Until recently, black South Africans were prohibited from registering ownership rights, and were subject to arbitrary removal and relocation. While racially-based laws have been removed, many people still face tenure insecurity.

According to the Department of National Housing, approximately 58 per cent of all households (4.8 million households) have secure tenure (ownership, leasehold, or formal rental contracts). About 9 per cent of all households (780,000 households) live under traditional, informal, inferior and/or officially unrecognized forms of tenure, primarily in rural areas. An estimated 18 per cent of all households (1.5 million households or 7.4 million people) live in squatter conditions, backyard shacks or in overcrowded conditions in existing formal housing in urban areas, with no formal tenure right over their accommodation.

The Development of “Bantustans”

South Africa has a long history of territorial segregation and tenure inequality. A policy on native locations and limitations on access to residential rights was firmly established as early as 1910. By the late 1950s and 1960s urban population resettlement was a cornerstone of the apartheid strategy to reduce the size of the urban African population.

The implementation of the apartheid vision saw urban inhabitants “superfluous” to white needs resettled to ethnically defined “homelands” (reserves or bantustans), the development of industries on the borders of bantustans and the denial of urban residential rights. It was from this time that millions of people were evicted from their homes within the urban areas. Freehold settlements such as Sophiatown, Lady Selbourne, Marabastad, District Six and Cato Manor were destroyed to force black residents to move to formal townships on the periphery of the “white” cities and towns. Many hundreds and thousands of black people were evicted from urban areas altogether and removed to bantustans - small areas of mainly rural land set aside for the black population.

This is the context within which today’s urban policies in South Africa are embedded. This is the history of injustice which they seek to redress. The apartheid legacy is compounded by severe material, economic constraints which continue to limit the access of South Africa’s poor to the benefits of urban life.

Subsidy Policy

Since the first democratic elections in 1994, a host of new national laws and policies have been enacted and developed. Urban development in South Africa is led by the housing sector. The national housing capital subsidy scheme is arguably the most important instrument for urban tenure reform. It is within the policies emanating from both the Departments of Housing and of Land Affairs that national policy guidelines for urban tenure security are to be found.

The Housing White Paper claims that security of tenure is a cornerstone of the Government’s approach towards providing housing to people in need. The Subsidy policy has been designed to accommodate a variety of tenure options on the basis of a limited state contribution to be driven by private (individual) investment, credit finance and where possible the sweat equity of the owner. South Africa’s land policy advocates that people should choose the tenure system which is appropriate to their circumstances and the land reform programme aims to extend greater tenure security to South Africans under diverse systems of tenure.

Inherited Maze of Laws


A squatter camp on the edge of Soweto, South Africa. - © UNDP/Stephenie Hollyman

In practice however, both the land reform programme and the housing subsidy scheme paint a slightly different picture. The housing subsidy scheme delivers mainly individual ownership. Officials generally display a resistant attitude to alternative forms, frequently motivated on the grounds that beneficiaries prefer individual ownership and that they are resistant to any alternatives.

To date, implementation of the land reform programme is mainly rural in focus, although there are large numbers of former homeland towns in which land rights are unclear, overlapping and at times conflicting. In fact, it is the provinces which are driving one of the major urban tenure reform initiatives in South Africa - a process of large scale privatization of public rental stock in terms of which units are being transferred to occupants. The demand for transfer to ownership is almost universal due to the historic denial of ownership. Nevertheless, this programme has raised the need for alternative forms of tenure, such as family title, due to the difficulty of establishing clear entitlement, as a result of innumerable informal changes in tenancy and a variety of occupancy patterns resulting from overcrowding, including the occupation by more than one family of a single unit.

Land tenure reform is intended to establish legally enforceable rights to land and to build a unified non-racial system of land rights. Legal rationalisation is faced with the enormous challenge of an inherited maze of laws. As a result, a variety of land rights exist which are interpreted differently according to different pieces of legislation, varying from freehold to leasehold rights, Deeds of Grant and Permission to Occupy rights. By way of illustration, the nature of the rights conferred in terms of deeds of grant, and the registration procedures administering the rights, vary according to the range of laws conferring such rights, and according to specific geographic contexts. Another example is that permits to occupy are no longer issued, but the rights conferred in terms of the permission to occupy certificates are still in existence.

The land reform policy establishes that tenure reform must accommodate de facto vested rights. The process of establishing and consolidating the homelands and informal settlement development has generally resulted in a de facto situation of overcrowding and overlapping of land rights. Recording systems have been accused of being inaccessible and have frequently failed to keep up with the dynamic processes of urbanization and settlement, leading to uncertainty about the current rights holders. In certain instances records were destroyed through political protest action.

In informal, unregistered settlements, no formal means exists for identifying either the rights holder or of defining what the holder is entitled to. Attempts to secure tenure based on the de jure situation are sure to lead to conflict or to fail. Ascertaining the de facto condition requires, on the other hand, local level investigations, facilitation and in all likelihood, dispute resolution. Accommodating de facto rights is bound, in many cases, to require the provision of alternative land. In situ tenure reform initiatives should be linked with the development of new land, not only to accommodate de-densification and non-residential uses, but also to provide choice to beneficiaries. Beneficiary choice is required if households are not to be condemned again to peripheral locations. Such an approach could possibly challenge apartheid spatial form and offer the chance of more sustainable types of development.

Lauren Royston works for Development Works (Integrated Development Planners) in Johannesburg, South Africa.

Collective Land Acquisitions in São Paulo, Brazil

by Helena Menna Barreto Silva

In Brazil today, especially in the metropolis of SPaulo, land and home ownership is often the only security people have in a country where public housing and other social welfare benefits are not available.

However, buying a house in the formal market is affordable only to families that earn over 15 minimum wages1 per month. Also, because public provision of housing is inadequate for the largest part of the population, home ownership can only be achieved through self-construction. For that, acquisition of land is very important.

Since access to land is almost impossible in the formal market, the common way to own land has been through the acquisition of illegally parceled land, provided by land parcelers and big property owners, usually in rural areas. Such parceling and selling of land occurred in larger scales during the country’s period of economic and job growth, especially the growth of formal jobs.

Since the mid-1970s, the increase in the value of land and the reduction of real wages has resulted in the acquisition of land by invasion of public and private land by the urban poor. The invasions were initially done on an individual basis but are now being done collectively.

Such illegal solutions, usually in precarious locations unsuitable for construction, have been tolerated due to the incapacity or absence of interest in facing the problem by the Government.

Since the late 1970’s, the problems caused by illegal settlements and the difficulties in acquiring land has resulted in the consolidation of citizens’ organizations for housing. The organizations have three main aims:

· regularization of the illegally parceled lands;
· upgrading of slums to improve security of tenure;
· improving access to land for building.

Nowadays, these organizations have three options when acquiring land: claiming from the government, organizing invasions, or acquiring a collective title deed (collective acquisition). The organizations can switch from one option to the other during the negotiation process, depending on the situation.

Collective acquisition, involving the creation of an association, can serve many purposes. It can:

· avoid problems associated with invasions;

· allow direct promotion of land parceling and construction of houses by the societies with their own resources;

· allows for enrolment in public programmes for housing finance and urban development.

However, this option only benefits those families which earn more than 5 minimum wages per month and have few children because one must have a certain income to organize a legal society and acquire land. (Not all associations are genuine, however. Some have used the collective acquisition system to deceive both the authorities and urban poor families.)

On the other hand, most associations which acquire land for construction have to do so outside the law because:

· exorbitant land prices in areas that are legally suitable for construction forces the associations to seek areas where land parceling and the construction are forbidden;

· the lack of resources for urbanization in the terms of the law;

· the bureaucracy and project approval terms are lengthy;

· public housing finance institutions cater for only a few people.

· The waiting time and cost of housing finance are too high. This forces people to seek illegal solutions.

· Although the associations can be prosecuted by local authorities for illegal land parceling, such prosecutions are rare.

Collective acquisition by associations can lead to a beneficial partnership between government and organized communities. However, for that to happen, it is necessary to revise urban laws, allocate more resources for housing finance, infrastructure and construction. Technical support for land selection should also be provided so that land parceling is done in adequate locations.

The Government’s position of deliberately ignoring the illegal acts committed by organized communities has the net result of justifying the expulsion of the poor to inadequate locations. Promoting the regularization of land after irregular occupations is not the solution; it is necessary to guarantee that the poor inhabit adequate areas in the first place and have security of the land ownership from the moment they occupy the land.

The efforts of associations are not a substitute for the Government’s responsibility of providing housing for people who are left out of the formal market. It is essential for the Government to define land policies and legal instruments that lower land costs for public programmes.

Helena Menna Barreto Silva teaches at the Faculty of Architecture, University of SPaulo, Brazil. She has dealt with urban planning, land policy and urban legislation issues in several Brazilian municipalities.

This article is based on investigations conducted for The Lincoln Institute of Land Policy during the period 1998/1999, which included interviews with associations that acquired or intended to acquire land, NGOs, public agencies that financed the purchase of land by associations and county agencies responsible for regularization of land parceling.

Reference

1 The monthly minimum wage varies between US$70 and US$100.

Towards Land Reform in Bangladesh

by Patrick McAuslan

The principal message of the Istanbul Declaration on Human Settlements and the Habitat Agenda, is that while a strategy of enablement is the preferred mechanism for providing access to land and ensuring security of tenure, the role of Governments does not stop at enabling land markets to operate efficiently and transparently. Governments must also direct their attention to considerations of equity in the operation of land markets; land markets must be enabled to work for the benefit of all and all must be enabled to participate on an equal and fair footing in the land market. To this end, government and civil society must be involved in working with the disadvantaged and the poor, removing obstacles to their obtaining land, developing innovative mechanisms, instruments and institutions to assist such persons to obtain access to land and security of tenure via the market, and governments must desist from actions which penalise such persons and lessen their opportunities to obtain and hold on to land.

An important mechanism to bring about the changes necessary to comply with these principles is the law: reforms in the law to develop an appropriate legal framework to facilitate access to land and security of tenure for all people is a leit motiv running through that part of the Habitat Agenda dealing with ensuring access to land.

The Urban Problem

Over the last four decades, a substantial urban population increase has taken place in Bangladesh, both in absolute terms and as a percentage of the total population. In 1961, the urban population was 2.6 million people, or 4.8 per cent of the total population. According to figures contained in the Bangladesh National Report to Habitat II, the urban population of Bangladesh in 1993 was 23 million which represented just over 20 per cent of the total population.

Low-income patterns in urban Bangladesh ensure that access to shelter and land is limited to the small percentage who can afford to pay the price. In Dhaka, the capital, an estimated 70 per cent of the urban households are low-income, with 28 per cent middle income and 2 per cent high-income. The small proportion of high-income households has access to 15 per cent of the residential land while the vast majority of low-income households has access to just 20%. Similar distributions apply in the three other major cities.

The urban poor lack access to land and where they do occupy land, the amount per household is extremely small, and there is no security of tenure. Where they are legally in occupation as tenants, private landlords will dispossess them if greater income earning opportunities present themselves in relation to land occupied by such tenants. Where they are occupying private land as squatters, either illegally or with the tacit acquiescence of the landowner, they are liable to be dispossessed for the same reason or in addition have to pay protection money to stay. Where they are illegally occupying government land, they are liable to be evicted at any time with minimal or no warning.

Land Laws

No special arrangements exist for the management of urban land, notwithstanding that such land poses different challenges and has different needs to the management of rural land. Policy statements recognize the need for new laws on urban land matters. However, these laws focus more on urban planning and improving the operation of the land market and do not touch on the development of any specific legal framework for urban land management or for upgradation or regularization of slums and squatter settlements.

Land laws in Bangladesh are based on the common law system of freehold and leasehold title for private and public land. In the case of public freehold or leasehold, there are various official lengthy procedures which have to be complied with before land can be transferred to a private citizen. In the case of private freehold or leasehold, the legal framework for accessing land, protecting title and setting out the rights and obligations of the parties to any particular transactions is contained in the Transfer of Property Act 1882 and the Registration Act 1908.

Both these Acts are venerable pieces of legislation but they are land laws for the minority; the ability to use the laws depends on access to lawyers, to some basic knowledge about one’s rights under the law and on being a legally recognized part of society; that is, landlord and tenant laws apply to the legal relationship of landlord and tenant and not the informal or “illegal” relationship between squatters and landowners or between squatter landlords and squatter tenants. These laws have really no meaning or relevance to the urban majority - the poor. The most fundamental criticism of the land law is not of the existing laws but of the missing laws; namely, laws which address the tenure problems of the urban poor.

There is general agreement that urban planning laws are ineffective in Bangladesh. Commentators call for more powers of intervention in the land market with particular emphasis on the area of low-income housing. However, rather than seek to increase control and regulation on the assumption that what was missing in the past was insufficient control and regulation, policies and laws on urban land use management should be directed to harnessing the energies of the urban poor and facilitating their acquisition and use of land.

Behind the arguments about laws and their reform lie policy issues which must be resolved before any new laws can be developed. The arguments for urban land law reform are based on a policy of in situ regularization of informal settlements and this in turn is based both on international experience - wholesale demolition and relocation don’t work - and international obligations such as the Habitat Agenda. The arguments against urban land law reform are based on long-standing and consistent national policies which emphasise the sanctity of private and public property and the need therefore to relocate squatters.

Towards Reform of Laws and Policies

The sharp contrast between relocation and regularization is misplaced as it is based on an approach to rights to land which does not correspond either to reality on the ground or to current developments in legal thinking and practice. The way forward is to blend reality and law in the development of a new urban land law for Bangladesh which provides the legal framework for land rights and for their progressive realization via programmes of regularization and secure tenure for the urban poor.

Patrick McAuslan is Professor of Law at the University of London (U.K.). He is currently working as a consultant for UNCHS (Habitat) in its Land Management Programme and urban land reform in Bangladesh.

Shadow Lives: Urban India’s Informal Economy

by Patralekha Chatterjee


A street “tailor” in Bangladesh: The informal economy has won the numbers game in many Asian countries. - © Anwar Hossain/Mother Jones International Fund for Documentary Photography

Take a typical day in the life of the Kapoor family in Delhi, India’s capital city and a teeming megapolis of nearly 12 million people. It is early morning. Reclining on the easy chair in his front verandah, Mr. Kapoor sips his cup of tea. The day’s papers, hand-delivered by the newspaper boy, do not bring good tidings. Mr. Kapoor scans the headlines, glances at the life-style pages and quickly turns to the sports page. The doorbell rings. It is the man who washes the car. Every month, for a fee of US$ 3. Mr. Kapoor, like other residents in his apartment block can spare himself the drudgery of cleaning his own car. Just as he is leaving for work, the doorbell rings again. It is the sweeperess. She cleans the toilets and picks up the daily trash of the Kapoor family for a monthly fee of US$ 2.

The Kapoors have two maids. A part-time domestic help sweeps and swabs the floor, and washes the dishes. Then there is the live-in cook cum girl-Friday. The vegetable vendor who comes to their doorstep every morning saves Mrs. Kapoor a trip to the market.

On Sundays, the bell keeps ringing incessantly. A phalanx of odd-job men arrive at the Kapoor household one after the other - something or the other always need mending and you can always spot a plumber or an electrician or a carpenter making his way to the Kapoor household. One man without whom the Kapoor household would grind to a halt is the local scrap dealer. His ‘boys” traverse lanes and by-lanes of Delhi’s neighborhoods scrounging for rubbish - empty bottles, old newspapers, plastic cans, junk metal - just about anything which you or I consider unsightly and would like to throw away. It is the ultimate take-away service. The boys come to the Kapoor household, sort the rubbish, pay a price and cart it away in gunny bags.

The man who washes Mr Kapoor’s car, the woman who cleans the dishes in the Kapoor family, the vegetable vendor and the waste-picker are part of the “informal sector” - the economist’s jargon for a vast pool of poorly trained, low wage workers who sometimes work in dangerous environs. Without the intricate web of services provided by these people, families such as the Kapoors would not have their existing comfort level. And yet, the linkage between their lives and the shadow lives of the men and women outside the regulatory framework of the city’s economy is not easily understood and rarely figure in public discussions.

The informal economy has won the numbers game in India. As Amitabh Kundu, a professor at Delhi’s Jawaharlal Nehru University puts it: “ Given the nature of industries experiencing rapid growth in recent years, employment in the organized sector would not grow in any significant manner. A steady decline in the proportion of regular/salaried workers is likely in the future. The multinationals that have come so far, have high capital intensity and low potential for employment generation. Much of the employment growth in the economy is taking place through the process of subcontracting, use of casual or self-employed workers”.

So, as formal sector employment shrinks and influx from the jobless countryside continues, the shadow economy remains the only hope and source of livelihood for the swelling ranks of the urban poor. But there is still no coherent policy on how to tap the productive potential of this sector optimally. Most middle-class educated Indians don’t even know that the informal sector accounts for an astounding 66.7 per cent of total employment in Delhi, that the corresponding figure for Mumbai is 68 per cent and for Chennai, it is 60.6 per cent.1

The new migrants settle in already overcrowded slums where safe drinking water is scarce and sanitation facilities virtually non-existent. Worst is the insecurity of tenure. Anyday, a hut can be demolished. Even if a shanty dweller has the money, h/she is reluctant to invest in upgrading his/her dwelling. And yet, as case study after case study from the developing world demonstrates, providing slum dwellers security of tenure has dramatic results. The face of a colony changes where the residents have security of tenure. It becomes cleaner. The slum dwellers themselves, often in partnership with NGOs, learn quickly how to negotiate for better facilities. It often leads to occupational mobility. An authorised settlement, even if it is a one-room house, can be used as collateral for a bank loan with which the informally employed can diversify. Clearly, there is a self-interest argument here for all concerned. But these are issues which have been on the back-burner.

One fall-out of the continuous neglect of this vital and growing sector of the economy is a complete lack of standards and accountability. The informal services sector is low-cost and equally low-value. Lack of capital, working space, education, skills and training severely undermine the efficiency of the informal sector. Ultimately this impinges on the productivity of the formal economy. Talk to anyone who has had a brush with an electrician or a carpenter in India, and you will hear horror stories. An electrician with no technical qualifications learning on the job can blow up your most expensive gadget, a carpenter can bring your roof down, a plumber can leave behind a greater mess than he found.

Or take the case of the scrap trade. Waste pickers are at the bottom most rung of the shadow economy. Their work is dirty and dangerous and they get paid a pittance. Usually, such work is done by illegal migrants and those without recourse to any other work. But the situation at the bottom cannot change dramatically till the whole chain is revamped. Typically, the scrap dealer’s shop is not registered. He does not pay any tax. He cannot get a loan to expand his business because dealing in scrap is not recognised as an economic activity by bankers though India has one of the highest levels of recycling in the world. The scrap dealer cannot even mortgage the land where his shop is located - he is a squatter. He sells his scrap to bigger dealers who sell the plastic to remoulding factories, the old newspapers to paper mills. If he needs a loan, he taps this network. The vicious cycle continues.

Quite apart from issues like the need for credit, until recently, other requirements for activities within the informal sector were also ignored. The City Master Plans, for instance, concerned themselves only with the space requirements of activities within the formal sector. Therefore even if those in the informal economy could access credit, employment options within the informal sector necessarily had to be restricted by the availability of physical space. It was in the Indian Government’s 7th Five-Year Plan (1985-1990) that a thrust was given to urban employment generation as a means of tackling urban poverty. One official initiative was the Self-Employment Programme for the Urban Poor.2

Non-governmental initiatives

One area which is witnessing reform is domestic service, a major source of informal employment for women in Indian cities. Traditionally, no minimum standards guided domestic work. This left the field wide open for the employer and the employee to try to constantly exploit each other. A few years ago, in Delhi, an initiative called the Delhi Domestic Workers Forum was launched under the aegis of the Indian Social Institute, a non-profit body. The Forum is a lobby group of domestic workers. The Forum’s members enter into a written agreement with employers, by which they are guaranteed a minimum salary and working conditions. The employer too benefits. (S)he is assured of integrity and a basic quality of service. In case there is violation of any of the terms of the contract, both parties can approach the Forum. Only a fraction of Delhi’s domestic helps are organised and members of the Forum so there is still a great deal of exploitation. But it is a welcome beginning.

Such initiatives try to bring the semblance of a structure to the unregulated economy. Even at the community level, in many cities in India, one is witnessing a move forward by Residents Welfare Associations. For instance, in many colonies and apartment blocks in Delhi, identity cards are issued to scrap collectors, vegetable vendors, plumbers and electricians and others. This establishes that the antecedents of the card-carriers have been verified. It is the first step towards bringing in an element of quality control.

Initiatives such as these are welcome but they alone will not dramatically increase the productive potential of the informal economy. To do that, a whole re-think on the policy front is required. Security of tenure and access to credit would dramatically alter the shape of the informal economy. Alongside, there is the need for basic services, skills and training. Unless these are addressed, the informal sector will continue to be stuck in the current low cost, low value matrix.

As we inch closer to a new millenium, one of the biggest questions before urban India is how to balance the interests of the “real” economy with the “shadow” economy so that they mutually fortify each other. There is no one solution or one approach to the problem. Rather, the answer lies in a variety of strategies and initiatives - both official and at the community level.

Patralekha Chatterjee, a New Delhi based journalist, reports on urban trends in Asia for several national and international publications.

References

1 Statistics from UNCHS (Habitat)’s Global Urban Observatory.

2 Venkateshwaran, Sandhya, The Wealth of Waste, Friedrich Ebert Stiftung, 1994.

The Benefits of the Rental Sector in Western Europe

by Nic Nilsson

Rental units are needed in every country. In Western Europe, as in other parts of the world, there are two reasons why people become tenants: they prefer to live that way or they cannot afford or are unable to secure any other forms of tenure. There are several other reasons why people in Western Europe choose to rent, rather than own, their homes, including:

Convenience

Tenants do not have to bother about all the practical things, which an owner occupier has to take care of e.g. mortgages, maintenance, repair etc. Rent covers all those costs and problems.

Security

Most Western European countries offer some degree of security of tenure to tenants. According to the housing law/rent act security of tenure means in practice, that tenants are protected if they meet certain basic preconditions. The landlord cannot get rid of the tenant without any legitimate reason. The rent act applies to agreements on the letting of a house or part of a house let and there must be “rent” payable. In the British Housing Act it is stated:

A landlord wishing to obtain possession of a flat let on a secure tenancy, or wanting an order ending the secure tenancy (which may or may not involve a possession) under a provision for re-entry or forfeiture, must first serve a notice on the tenant giving particulars of the ground on which the landlord will apply to the court. The court has no power to order possession unless this notice is served. The grounds might be: failure to pay the rent or breach of any other obligation of the tenancy agreement.

This applies to most other Western European countries. Countries with the strongest tenancy rights include Austria, Germany and Switzerland.

Tenant Participation

Tenants in Western Europe get to participate in the management of housing, either by participating in the decision-making organ (Neighbourhood or Housing Estate Committee etc) or by running some of the activities in the housing estates. In France, tenants in public housing get to formally elect the management board of their area. Something similar exists in Vienna. In the UK, a lot of social activities are conducted and carried out by tenants. In Denmark, the social housing movement is run just by tenants. In Sweden, tenants negotiate through their organizations about rents and other tenant-related questions.

Reasonable Rents

The issue of what is a reasonable rent has been discussed extensively in Western Europe. Should the rent be determined by market forces, or should there be some sort of rent regulation? It is important to keep in mind that in most European countries, the private sector was associated with overcrowding and slum conditions at the turn of the century. It might be said that it was a result of the poverty at that time. This is partly right, but it also has to do with unscrupulous and uncaring landlords and practices. At that time there were no laws about security of tenure. Different kinds of rent regulations were introduced only after World War II.

Rent Regulations and Housing Subsidies

There is no country in Western Europe with a totally free housing market. Various kinds of rent regulations and housing subsidies exist in all countries. These are important as they mitigate the negative effects of pure market forces. For example, Swedish rent regulations are carried out in a system of negotiations between the tenants associations and the landlords. (This is possible in countries where there are strong tenants’ associations.) This law has been in force in Sweden for 30 years and is still functioning.

Tenants Associations

In all Western European countries, there are tenants associations at the national (except Spain), regional, municipal or local levels. They are open to all citizens and are ready to help the tenants in many ways. In Germany, 1.3 million households are members; in Sweden nearly 50 per cent of all tenant households belong to an association.

Box 1. Types of Tenure in Western Europe (1990)

Country

Owner occupiers

Social housing

Privately rented

Others

Belgium

65%

6%

28%

1%

Denmark

52%

24%1

18%

6%

France

54%

17%

20%

9%

Germany

38%

15%

43%

4%

Greece

77%

0%

23%

-

Ireland

81%

11%

8%

-

Italy

67%

7%

25%

5%

Luxembourg

68%

1%

30%

1%

Netherlands

45%

40%

15%

-

Portugal

58%

4%

35%

3%

Spain

78%

2%

16%

4%

UK

67%

26%

7%

-

Austria

50%

18%

21%

11%

Finland

71%

14%

13%

2%

Sweden

43%

21%

21%

15%2

Switzeland

31%

3%

60%

6%3

Norway

61%

0%

20%

19%4

As Box 1 illustrates, the highest number of tenant households are in Switzerland, Germany and the Netherlands. Austria, Denmark and Sweden have 40 per cent of their population living in rented accommodation. All of these countries are also known for their high standard of living and their strong State welfare system.

Social Housing

Although the extent of social housing varies in each country, most Western European countries have governments which are involved in some form of rent regulation, which makes rents affordable. Subsidies are based on income. If your income rises, you have to either move out or pay a higher “super” rent.

As shown above, the governments of Western European countries play a crucial role in ensuring that rental housing - both in the public and private sectors - is fair and affordable and is not left purely to market forces. This ensures that almost everyone, regardless of income, has access to security of tenure and some kind of shelter.

Nic Nilsson is a former General Secretary of the International Union of Tenants, based in Stockholm, Sweden.

References

1 Includes 7% under co-operative management.

2 Includes 15% co-operative housing.

3 Includes 3.7% co-operatives.

4 Includes shareholders and co-operatives.