MIT (3-0-9)! HOUSING AND LAND POLICIES IN RAPID URBANIZING REGIONS!
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1 MIT (3-0-9) HOUSING AND LAND POLICIES IN RAPID URBANIZING REGIONS FALL 2013 Yu-Hung Hong Class meets every Thursday 6:00 8:00 PM Tel: or Room 9-450B Office Hours: Thursday, 12:30-2:30 or by appointment Description and Objectives In this class, we will define and assess the various institutional and governance structures for urban land management systems that have significant implications for housing policy in developing countries. We will discuss how land and housing are closely intertwined in the design of any sustainable shelter policy for the urban poor. Our exploration will begin with a careful review of the unique property relations of land and housing in developing countries and then extend the analysis to the massive informality found in their real estate sector. The prime objective of the class is to devise open and inclusive governance structures for improving the living conditions and livelihoods of the poor and underprivileged groups who reside in informal settlements. Land is both a public and private good. It is a public good because land value is created not only by private investment, but it is also determined by public infrastructure construction and community actions. More significantly, access to affordable land and housing is considered a human right in most countries. In some instances, government policies to recapture the public share of land value increments and to provide social housing for the poor were hampered by overly bureaucratic land and housing administrations, inflexible regulatory framework, lack of fiscal resources and political will to tackle shelter problems, and failure to encourage public participation. Land and buildings are also private goods because they can be traded separately or together in the market like ordinary commodities. To some extent, their consumption is excludable under most property laws. Yet access to affordable land and housing by low-income households through the market is not guaranteed because the ease of entry into the real estate market depends on the availability of information, secure tenure, and proper registration systems. These preconditions do not always exist in many developing countries. Because of these unique characteristics of land and housing, neither the government nor the market alone could ensure an equitable and efficient allocation of these resources. Balancing the interactions between related institutions has proven to be a daunting task. Among all policy challenges, we will focus on four issues: property relations of land and housing, concentrating on the reciprocal nature of formal and informal rules, land use regulations, property exchanges, and informality, 1
2 conventional approaches of dealing with informal settlements, and financing informal settlement upgrading and regularization. First, with regard to property relations of land and buildings, we will cover four policy issues: (1) formal rights vs. informal claims; (2) freehold, leasehold, and communal ownership; (3) property rights and obligations; and (4) landlord-tenant relationships. The objective is to develop an array of property relations that takes into account the traditional and informal systems of tenure. We will examine the argument that reforms of property relations must consider the existing formal and informal rules and a balance between individual property rights and obligations to the community at large. Second, many scholars and analysts have argued that rigid and inflexible land use regulations in many developing countries are the major causes of informal housing development and exchanges. Some land management laws were passed by the economic and political elite to enable them to benefit from state activities rather than to enhance the welfare of the society. We will reexamine this argument by studying recent cases to determine if land use regulations can coordinate land management, integrate spatial planning with financial and sectoral development planning, and protect community interests. The aim of the review is to explain why some countries have succeeded in using master planning to achieve their land use and housing goals, while others have failed to do so. Third, we will review some conventional methods of dealing with informal settlements, including forced or voluntary relocation, titling, incremental upgrading, and land sharing. We will compare the advantages and disadvantages of these approaches, with special attention to varying contexts. A new approach called participatory and inclusive land readjustment propagated by UN-HABITAT will be examined critically with regard to its claims that the method could reduce the chance of confrontation and increase cooperation and public participation in the process. Fourth, no matter what approaches a country employs to upgrade informal settlements or to contain their expansion, the financial requirements for undertaking the policy initiative are huge. Many developing countries do not have the means. We will investigate the possibility of capturing (or sharing) land value for funding informal settlement prevention and upgrading. The focus is on mobilizing resources from both the public and private sectors and from the involved communities to make the intervention financially and institutionally viable. By discussing in detail these four land- and housing-related policy issues, we hope to learn from the literature and class discussions how various institutions and governance structures have affected land and housing policies in developing countries. Based on this understanding, we will explore reform strategies for increasing the supply of affordable housing and improving tenure security for the urban poor. 2
3 Requirements and Grading Requirements: 1. Weekly reflection on readings and class discussion Each student is required to keep an electronic journal to record her or his reflections on the reading assignments and class discussions. I will collect and review the journal each week and provide feedback if confusion or misconception is identified in the journal. 2. Class participation Students are expected to read the assigned materials prior to coming to each class and participate actively in the discussion. 3. A short essay on policy issues related to informality in a selected developing country Each student is required to submit a short essay to identify a policy problem associated with housing informality in a chosen country. The essay will explain the origin of the problem and its impacts on urban development. The short essay is due on November 7, Final paper Based on the short essay, each student will design a strategy for reforming the institutional and governance structures for the identified problem. The final paper will comprise two elements: a. A class presentation at the end of the semester. b. A final paper that is due on December 11, 2013 (the last day of classes) Further details of the short essay and final paper will be provided at the first class. Grading: Weekly submission of the journal: 20% Class participation: 20% Essay on policy problem identification 20% Final paper on reform strategy 20% Class presentation of the final paper: 20% Students will be graded according to the following weights: Final grades are based on a weighted average for the term. Grade cutoff points are: A = %; A- = 90-94%; B+ = 86-89%; B = 80-85%; B- = 75-79%; C+ = 70-74%; C = 65-69%; C- = 60-64%; D+ = 56-59%; D = 50-55%; D- = 45-49%; F = < 45 3
4 Prerequisites There are no formal prerequisites for this class. Disabilities If you have a documented disability, or any other problem you think may affect your ability to perform in class, please see me early in the semester so that arrangements may be made to accommodate you. For more information see: Academic Misconduct Plagiarism and cheating are both academic crimes. Never turn in an assignment that you did not write yourself or turn in an assignment for this class that you previously turned in for another class. If you do so, it may result in a failing grade for the class, and possibly even suspension from the Institute. Please see me if you have any questions about what constitutes plagiarism. Anyone caught cheating will be reported to the Provost in line with recognized university procedures. For more information see: 4
5 I. Introduction Topics and Schedule September 5 Course Description, Goals, and Requirements II. Property Relations of Land and Housing in Developing Countries September 12 Formal Rights vs. Informal Claims September 19 Freehold vs. Leasehold and Community Ownership September 26 Property Rights vs. Obligations October 3 Landlord-Tenant Relationships III. Land Use Regulation, Property Exchanges, and Informality October 10 Land Use Regulation and Informality October 17 Formal and Informal Property Exchanges IV. Conventional Approaches of Dealing with Informal Settlements October 31 Forced Eviction and Voluntary Relocation November 7 Titling and Incremental Upgrading October 24 Planning Practices in Response to Formal-Informal Dynamics IV. Financing Informal Settlement Upgrading and Regularization November 21 Land Value Capture/Sharing November 28 Thanksgiving Holiday November 14 Land Sharing and Participatory and Inclusive Land Readjustment December 11 Project Presentations December 5 Ways Forward: Redesigning Institutions and Governance 5
6 Reading Assignments Please read the assignments in the order of the publication dates I. Introduction September 5 Class Description, Goals, and Requirements (No reading assignment) II. Property Relations of Land and Housing in Developing Countries September 12 September 19 Formal Rights vs. Informal Claims Ensminger, Jean Changing Property rights: Reconciling Formal and Informal Rights to land in Africa. In The Frontiers of the New Institutional Economics, edited by John N. Drobak and John V.C. Nye. San Diego: Academic Press, Jenkins, Paul Beyond the Formal/Informal Dichotomy: Access to Land in Maputo, Mozambique. Reconsidering Informality: Perspectives from Urban Africa., Ch. 12. Lanjouw, Jean O., and Philip I. Levy Untitled: A Study of Formal and Informal Property Rights in Urban Ecuador. The Economic Journal 112, 482: Suggested Readings: Bellemare, Marc The Productivity Impacts of Formal and Informal land Rights: Evidence from Madagascar. Land Economics 89, 2: Fawaz, Mona Contracts and Retaliation: Securing Housing Exchanges in the Interstice of the Formal/Informal Beirut (Lebanon) Housing Market. Journal of Planning Education and Research 29, 1: Stiglitz, Joseph E Formal and Informal Institutions. In Social Capital: A Multifaceted Perspective, edited by Ismall Serageldin and Partha Dasqupta. Washington, D.C.: The World Bank. Freehold vs. Leasehold and Community Ownership Deininger, Klaus, Daniel Ayalew Ali, and Tekie Alemu Impacts of Land Certification on Tenure Security, Investment, and Land Market Participation: Evidence from Ethiopia. Land Economics 87, 2,
7 September 26 October 3 Hong, Yu-Hung and Steven C. Bourassa Why Public Leasehold? Issues and Concepts. Leasing Public Land: Policy Debates and International Experiences, edited by Steven C. Bourassa and Yu-Hung Hong. Cambridge, MA: Lincoln Institute of Land Policy, Ch. 1. Payne, Geoffrey Urban Land Tenure Policy Options: Titles or Rights? Habitat International 25 (2001): Suggested Readings: Asabere. Paul K The Pricing of the Emergent Leasehold (Possessory) Estates of Ghana. Real Estate Economics 32, 4: Feder, Gershon, and David Feeny Land Tenure and Property Rights: Theory and Implications for Development Policy. The World Bank Economic Review 5,(1): Property Rights vs. Obligations Alexander, Gregory S The Social-Obligation Norm in American Property Law. Cornell Law Review 94, Janoski, Thomas Citizenship and Civil Society: A Framework of Rights and Obligations in Liberal, Traditional, and Social Democratic Regimes. New York, New York: Cambridge University Press, Chs. 1, 3 and 5. Suggested Reading: Alexander, Gregory S The Global Debate Over Constitutional Property: Lessons for American Takings Jurisprudence. Ch. 4. Landlord-Tenant Relationships Amis, Philip Squatters or Tenants: The Commercialization of Unauthorized Housing in Nairobi. World Development 12, 1: Gilbert, Allan The Tenants of Self-Help Housing: Choice and Constraint in the Housing Markets of Less Developed Countries. Development and Changes 14,3: Lemanski, Charlotte Augmented Informality: South Africa's Backyard Dwellings as a By-Product of Formal Housing Policies. Habitat International 33, 4:
8 Suggested Readings: Gilbert, Alan, and Ann Varley Landlord and Tenant: Housing the Poor in Urban Mexico. New York, New York: Routledge. Ch.1, 7, ad 8. Jin Songqing, and T. S. Jayne Land Rental Markets in Kenya: Implications for Efficiency, Equity, Household Income, and Poverty. Land Economics 89, 2: III. Land Use Regulation, Property Exchanges, and Informality October 10 October 17 Land Use Regulation and Informality Fekade, Wubalem Deficits of Formal Urban Land Management and Informal Responses Under Rapid Urban Growth, An International Perspective. Habitat International 24, 2: Kim, Jao Hong Linking Land Use Planning and Regulation to Economic Development: A Literature Review. Journal of Planning Literature 26, 1: Roy, Ananya Why India Cannot Plan Its Cities: Informality, Insurgence and the Idiom of Urbanization Planning Theory 8, 1: Suggested reading: Arnott, Richard Housing Policy in Developing Countries: The Importance of the Informal Economy. In Urbanization and Growth, edited by Michael Spence, Patricia Clarke Annez, and Robert Buckley. Washington, D.C.: World Bank, Ch. 6. Property Exchanges Gulyani, Sumila, and Debabrata Talukdar Slum Real Estate: The Low-Quality High-Price Puzzle in Nairobi s Slum Rental Market and Its Implications for Theory and Practice. World Development 36, 10: Kim, Annette M A Market Without The Right Property Rights. Economics of Transition 12,2: Kironde, J.M Lusugga. Understanding Land Markets in African Urban Areas: The Case of Dar es Salaam, Tanzania. Habitat International 24, 2:
9 Suggested reading: Pamuk, Ayse Informal Institutional Arrangements in Credit, Land Markets and Infrastructure Delivery in Trinidad. International Journal of Urban and Regional Research 24, 2: October 24 Planning Practices in Response to Informal-Formal Dynamics Roy, Ananya Urban Informality: Toward an Epistemology of Planning. Journal of the American Planning Association 71, 2: Speak, Suzanne Planning for The Needs of Urban Poor in the Global South: The Value of a Feminist Approach. Planning Theory 11, 4: Watson, Vanessa Planning and The Stubborn Realities of Global South-East Cities: Some Emerging Ideas. Planning Theory 12, 1: Suggested readings: Ikejiofor, Uche Cosmas Planning within a Context of Informality: Issues and Trends in Land Delivery in Enugu, Nigeria. Global Report on Human Settlements, UN- HABITAT McFarlane, Colin Rethinking Informality: Politics, Crisis, and the City. Planning Theory and Practice 13, 1: IV. Conventional Approaches of Dealing with Informal Settlements October 31 Forced Eviction and Voluntary Relocation Menon-Sen, Kalyani Better to Have Died than to Live like This': Women and Evictions in Delhi. Economic and Political Weekly (2006): Patel, Sheela, Celine d'cruz and Sundar Burra Beyond Evictions in a Global City: People-managed Resettlement in Mumbai. Environment and Urbanization 14: Viratkapan, V., and R. Perera Slum Relocation Projects in Bangkok: What Has Contributed to Their success or Failure? Habitat International 30, 1: Suggested readings: 9
10 Durand-Lasserve, A Market-driven Evictions and Displacements: Implications for the Perpetuation of Informal. Informal Settlements: A Perpetual Challenge?, 207. Lovering, J., and Türkmen, H Bulldozer Neo-liberalism in Istanbul: The Stateled Construction of Property Markets, and the Displacement of the Urban Poor. International Planning Studies 16 (1): November 7 Titling and Incremental Upgrading Deininger, Klaus and Gershon Feder Land Registration, Economic Development, and Poverty Reduction. In Property Rights and Land Policies, edited by Gregory K. Ingram and Yu-Hung Hong. Cambridge, MA: Lincoln Institute of Land Policy, Ch. 11. Minnery, John, Teti Argo, Haryo Winarso, Do Hau, Cynthia C. Veneracion, Dean Forbes, Iraphne Childs Slum Upgrading and Urban Governance: Case Studies in Three South East Asian Cities. Habitat International 39: Sanyal, Bishwapriya, and Vinit Mukhija Institutional Pluralism and Housing Delivery: A Case of Unforeseen Conflicts in Mumbai, India. World Development 29, 12: Varley, Ann Gender and Property Formalization: Conventional and Alternative Approaches. World Development 35(10): Suggested readings: Datta, N Joint Titling A Win-Win Policy? Gender and Property Rights in Urban Informal Settlements in Chandigarh, India. Feminist Economics 12(1-2): Durand-Lasserve, Alain, and Lauren Royston Holding Their Ground: Secure Land Tenure for the Urban Poor in Developing Countries. U.K.: Earthscan Publications Ltd. Fernandes, Edesio Looking Beyond Land Titling and Credit Accessibility for the Urban Poor. In Property Rights and Land Policies, edited by Gregory K. Ingram and Yu-Hung Hong. Cambridge, MA: Lincoln Institute of Land Policy, Ch. 12. Galiani, Sebastian, and Ernesto Schargrodsky Property Rights for the Poor: Effects of Land Titling. Journal of Public Economics 94:
11 Gillert, Allan On The Mystery of Capital and The Myths of Hernando de Soto: What Difference Does Legal Title Make? International Development Planning Review 24, 1: November 14 Land Sharing and Participatory and Inclusive Land Readjustment Hong, Yu-Hung, and Julia Tierney Making Land Readjustment Participatory and Inclusive. Working Paper Series: No Hudson Ohio: Land Governance Laboratory. Rabé, Paul E Land Sharing in Phnom Penh and Bangkok: Lessons from Four Decades of Innovative Slum Redevelopment Projects in Two Southeast Asian Boom Towns. In Paper for the Policy Workshop, Places We Live: Slums and Urban Poverty in The Developing World. Sorensen, Andre Conflict, Consensus or Consent: Implications of Japanese Land Readjustment Practice for Developing Countries. Habitat International 24(1): Suggested readings: Hong, Yu-Hung, and Barrie Needham Analyzing Land Readjustment: Economics, Law, and Collective Action. Cambridge, MA: Lincoln Institute of Land Policy. Turk, Scene. S An Analysis on the Efficient Applicability of the Land Readjustment Method in Turkey. Habitat International 31(1): Turk, Scene S An Examination for Efficient Applicability of the Land Readjustment Method at the International Context. Journal of Planning Literature 22(3): IV. Financing Informal Settlement Upgrading and Regularization November 21 Land Value Capture/Sharing Ferguson, Bruce, and Navarrete, J A Financial Framework for Reducing Slums: Lessons from Experience in Latin America. Environment and Urbanization 15(2):
12 Hong, Yu-Hung, and Andrea Cheng Symmetry of Land Value Creation and Sharing. Working Paper Series: No Hudson, Ohio: Land Governance Laboratory. Okpala, D. C Upgrading Slum and Squatter Settlements in Developing Countries: Is There a Cost-Effective Alternative? Third World Planning Review 21(1): 1. Suggested readings: Fernandes, Edesio Regularization of Informal Settlements in Latin America. Policy Focus Report. Cambridge, MA, USA: Lincoln Institute of Land Policy. der Krabben, E. V., and Needham, B Land Readjustment for Value Capturing: A New Planning Tool for Urban Redevelopment. Town Planning Review 79(6): Sheuya, S. A Reconceptualizing Housing Finance in Informal Settlements: The Case of Dar es Salaam, Tanzania. Environment and Urbanization 19(2): November 28 Thanksgiving Holiday December 5 Ways Forward: Redesigning Land Governance December 11 Kellett, P., and Garnham, A The Role of Culture and Gender in Mediating the Impact of Official Interventions in Informal Settlements: A Study from Colombia. Habitat International 19(1): Kombea, Willard J., and Volker Kreibich Reconciling Informal and Formal Land Management: An Agenda for Improving Tenure Security and Urban Governance in Poor Countries. Habitat International 24, 2: Palmer, David, Szilard Fricska, and Babette Wehrmann Towards Improved Land Governance. Nairobi, Kenya: Food and Agriculture Organization of the United Nations and United Nations Human Settlements Programme. Project Presentations 12
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