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1 URBAN LEGALI ZATION: THE E FFECTS OF LEGALIZATION ON LAND VALUE IN THE SOUTHERN AREAS OF BOGOTA COLOMBIA By ANELKIS E ROYCE A THESIS PRESENTED TO THE GRADUATE SCHOOL OF THE UNIVERSITY OF FLORIDA IN PARTIAL FULFILLMENT OF THE REQUIREMENTS FOR THE DEGREE OF MASTER OF ARTS IN URBAN AND REGIONAL PLANNING UNIVERSITY OF FLORIDA 2011
2 2011 Anelkis E. Royce
3 To the urban poor
4 ACKNOWLEDGMENTS I would like to thank my chair, Dr. Andres Blanco for his guidance, patience time and feedback th r ough ou t this whole process. Dr. Dawn Jourdan my committee Co chair, has also shared her time and amazing suggestions that allowed me to improve my paper. M y entire family, both in Gainesville, F lorida and Takoma, Ma ryland ha s been supportive throughout my pursuit of this degree. They kept me going th rough the hard times by giving me encouraging words and constantly asking me when I would finish which initially caused me anxiety but for which I am so grateful for now I n par ticular, my mom and dad provided me with the opportunity to experience Latin American poverty and thereby broaden my un derstanding of the world and the plight of the poor. Finally, I thank my dear URP friends Lidiane and Sunny for being a source of support Lidiane for being an inspiration and Sunny for distracting me when I most needed it
5 TABLE OF CONTENTS page ACKNOWLEDGMENTS ................................ ................................ ................................ .. 4 LIST OF TABLES ................................ ................................ ................................ ............ 7 LIST OF FIGURES ................................ ................................ ................................ .......... 8 LIST OF ABBREVIATI ONS ................................ ................................ ............................. 9 ABSTRACT ................................ ................................ ................................ ................... 10 CHAPTER 1 INTRODUCTION ................................ ................................ ................................ .... 12 Defining Slums and Informal Settlements ................................ ............................... 12 Informal Settlements in Latin America ................................ ................................ .... 13 Research Questions ................................ ................................ ......................... 16 Hypothesis Statement ................................ ................................ ...................... 16 Research Objectives ................................ ................................ ........................ 17 2 LITERATURE REVIEW ................................ ................................ .......................... 20 Informal Settlements in Bogot D.C. ................................ ................................ ....... 20 Socio Economic Levels ................................ ................................ .................... 24 Pirate Sub division ................................ ................................ ............................. 26 Land Tenure ................................ ................................ ................................ ........... 28 Tenure Systems ................................ ................................ ............................... 28 Types of Tenure in Colombia ................................ ................................ ........... 29 The Land Title Debate ................................ ................................ ............................ 32 Opposing Sides of the Debate ................................ ................................ .......... 32 Financial Institutions ................................ ................................ ......................... 36 Failure of the Law ................................ ................................ ............................. 38 Housing Polici es of the City of Bogot ................................ ................................ .... 39 The CVP and PMIB ................................ ................................ .......................... 43 METROVIVIENDA ................................ ................................ ............................ 45 The Legalization Process ................................ ................................ ........................ 46 3 METHOD OLOGY ................................ ................................ ................................ ... 49 4 DATA ANALYSIS AND RESEARCH RESULTS ................................ ..................... 55 Context of Illegality in Bogota D.C. ................................ ................................ ......... 55 Characteristics of the Selected Zones ................................ ................................ .... 56 Impact of Legalization on Land Value ................................ ................................ ..... 73
6 Results ................................ ................................ ................................ .................... 75 Conclusion ................................ ................................ ................................ .............. 82 5 CONCLUSION ................................ ................................ ................................ ........ 83 Benefits of Legaliza tion ................................ ................................ ........................... 83 Limitations and Opportunities for Further Research ................................ ............... 86 APPENDIX A WORLD POPULATION DATA ................................ ................................ ................ 88 B CHARACTERISTICS OF SLUMS AND INFORMAL SETTLEMENTS .................... 89 C ......... 90 D ECONOMIC LEVELS ................................ ............................. 91 E DATA RESULTS FROM BOGOTAS CITY HALL SURVEY OF ILLEGAL SUBDIVISIOIN RESIDENTS (ALCALDIA MAYOR DE BOGOTA) ......................... 92 LIST OF REFERENCES ................................ ................................ ............................... 97 BIOGRAPHICAL SKETCH ................................ ................................ .......................... 101
7 LIST OF TABLES Table page 1 2 Urban indicators ................................ ................................ ................................ 14 2 1 Bogot: forms of production of housing (1938 2000) ................................ ........ 21 2 2 Laws, decrees and policy in the City of Bogota D.C. ................................ .......... 41 4 1 Characteristics of formal zones ................................ ................................ .......... 60 4 2 Characteristics of legalized zones ................................ ................................ ...... 62
8 LIST OF FIGURES Figure page 1 1 Study area map ................................ ................................ ................................ 19 2 1 Deve lopment of informal settlements ................................ ................................ 21 2 2 Historical development patterns of informal settlements in Bogota .................... 22 2 3 New housing units unde r construction in Colombia from ................................ .... 24 2 4 Urban land tenure ................................ ................................ ............................... 31 2 5 Benefi ts of land title ................................ ................................ ............................ 33 3 1 City localities and study area ................................ ................................ .............. 52 3 2 Study area ................................ ................................ ................................ .......... 53 3 3 Location of le galized and formal zones ................................ .............................. 54 4 1 ................................ ................................ ................................ ............ 64 4 2 Legalized neighborhoods in the City of Bogot ................................ .................. 67 4 3 Density of formal and legalized Zones ................................ ................................ 68 4 4 Socio economic strata of formal and legalized zones ................................ ......... 69 4 5 Number of legalized neighborhoods per zone ................................ .................... 70 4 6 Number of legalized neighborhoods in the selected zones ................................ 71 4 7 Number of legalized neighborhoods 1963 2000 in selected zones .................... 71 4 8 L egalized neighborhoods from 1949 to 2000 ................................ ..................... 72 4 9 Land values for formal and legalized areas ................................ ........................ 74 4 10 Real value ................................ ................................ ................................ .......... 77 4 11 Actual rate of growth for legalized zones ................................ ............................ 78 4 12 Actual rate of growth for formal zones ................................ ................................ 79 4 13 Actual rate of growth for formal and legalized zones ................................ .......... 80 4 14 Average of actual rate of growth for legalized and formal zones ........................ 81
9 LIST OF ABBREVIATION S CGUH Comite de Gestacion Urbana y Habitacional (Committee of Urban and Habitat Gestation) CVP Caja de Vivienda Popular (Popular Housing Agency) DAPD Districts Planning Department DABS Department of Social Welfare ICBF Colombian Institute for Family Welfare IDIPRON District Institute for Family Welfare IDS Internally Displaced Persons PMIB Programa de Mejoramiento Integral de Barrios (Neighborhoods Integral Upgrading Program) POT Territorial Ordering Plan SMMLV Salario M inimo Mensual Legal Vigente ( Current Minimum Monthly Legal Salary) USAID United States Agency of International Development UEL Executive Local Units VIS Vivienda de Interes Social (Housing of Social Interest)
10 Abstract of Thesis Presented to the Graduate School of the University of Florida in Partial Fulfillment of the Requirements for the Degree of Master of Arts in Urban and Regional Planning URBAN LEGALIZATION: THE E FFECT S OF LEGAL IZATION ON LAND VALUE IN THE SOUTHERN AREAS OF BOGOTA COLOMBIA By Anelkis Estela Royce December 2011 Chair: Andres Blanco Cochair: Dawn Jourdan Major: Urban and Regional Planning In 2008 a population shift occurred, for the first time 50% was living in urban areas (Population Reference Bureau 2008 ) T his rapid urbanization in combination with the lack of planning has created informal settlements in the developing world with residents having no formal security of tenure and poor access to basic urban services (Dura nd Lasserve et al., 2002) In Colombia an estimated 16% of its urban househ olds live in informal settlements, which are a product of rapid urbanization caused by rural migration and poverty. In order to ad dress the problem of poverty and informal settlemen ts the country, in the 1991 constitution, declared that it was a fundamental right of every Colombian citizen to have access to public services and infrastructure regardless of the lands legal status. In order to meet the requirements of the constitution t he City of Bogota, Colombia has implemented legalization programs. Urban legalization is the incorporation of informal settlements into city regulations and services. This study is examining legalization and the e ffects it has on land value in the southern residential area of Bogot. It is comparing formal and legalized zones to see
11 what is occurring with land value in these areas The research has found that land value in legalized zones are less susceptible to market changes than formal zones but are more susceptible to government intervention programs. L egalized zones are not as affected by the market because there are less transactions occurring than in the formal market, the market in legalized areas tend to be sluggish on the demand side because buyers have limited income and buyers of higher income are reluctant to purchase in these areas because of the origin of illegality. On the supply side residents may be reluctant to sell due to the years of sweat and equity invested in their homes. In terms of g overnment intervention, the programs are improving the quality of housing through ser vices and infrastructure and its adding value to the legalized areas. This research provides insight into legalization programs in Bogot and what types of affects it has on land values.
12 CHAPTER 1 INTRODUCTION The world has become more urbanized than ever before and with this urbanization it has brought an ever increasing migration of the rural poor to urban areas in order to nited N ations Habitat, 2007). I n 2008 a population shift occurred for the first time 50% of the was living in urban areas. I t is estimated that by the year 2030 nearly 2/3 of the world population will live in urban areas 1 ( Population Reference Bureau 2008 ) T he rapid urbanization in combination with the lack of planning has created slums / informal settlements in the developing world 2 This rapid urban growth has had a negative impact on cities of developing countries because of the inability of governments and the market to meet the housing needs of the urban poor which has resulted in increasing numbers of sl ums (W orld H ealth O rganization ). It is estimate d that cities in the developing world have between 25 % and 70 % of its population living in irregular/informal settlements 3 and these populations have no fo rmal security of tenure and poor access, if any, to ba sic urban services (Durand Lasserve et al., 2002). Defining Slums and Informal Settlements The two terms that are frequently used in the literature to refer to the poor living in the periphery of the city, are slums and informal settlements. Slums refer to lower quality or informal housing that lacks clean water, electricity, sanitation and other basic 1 For further population data see Appendix A. 2 Also refers to the global south. 3 According to the UN nearly one billion people worldwide live in slums. Asia has an estimated 554 million slum dwellers, Africa has 187 million and Latin America and the Caribbean have 128 million (Rueda Garcia, 2003).
13 Habitat 2007) Informal settlements are on land to which the occupants have no legal claims or which they occupy illegally. in compliance with current planning and building regulations (unauthorized housing) (UN Habitat 2007 ). The two terms are interchangeable and for the purpose of this document the term that will be used is informal settlement 4 Informal Settlements in Lat in America According to Cira (2002) Latin America is the most urbanized area 5 in th e developing world Countries in the region are experiencing a trend of rapid urbanization due to land conflicts or economic hardships in rural areas. T his rapid urbanizati on has created massive informal settlements and the governments of the region have been working with international organizations to address the problem. Nearly 60 % of the and the number is growing (Magalhae s and Rojas 2008 ) A possible explanation for the high percentage of informal settlements can be the income disparity that exists in Latin America According to Morley (200 1 ) Latin America has the most unequal income distribution in the world. Using Gini coefficient 6 measurements in the 1990 s Latin America had a 49.3 7 which 4 For further characteristics of slum s and informal settlements see Appendix B. 5 See appendix A. 6 equal distribution in which each person receives exactly the same income. The Gini coefficie nt varies between zero and one, with zero representing perfect equality and one a hypothetical situation in which 7 See appendix A.
14 was the highest in comparison to the rest of the world. Latin America also has the highest urban poor households, 39 % of urban households are living in poor conditions ( Worl d Bank 2002). In Colombia the trend of income disparity and a high percentage of urban poor households match what is going on with the rest of the region. Table 1 2 Urban i ndicators Region Urban Poor Households (%) Africa 38.8 Arab States 28.5 Asia and Pacific 20.1 Latin American Region 39.0 Transitional 23.5 Industrialized 12.9 Data Source: World Bank, Urban Indicators Programme 1994 1996 http://siteresources.worldbank.org/INTLAC/147256 1268173593354/22559692/EnBreve003EN.pdf Adapted by Author In 2010, Colombia had an estimated population of 44.7 million people, of which two thirds lived below the poverty line and 75 % lived in urban areas 8 (Central Intelligence Agency, 2011). In 2004, Colombia had 16% of its urban households living in informal or illegal settlements (United States Agency of International Development, 2010). Informal settlements in Colombian cities are the product of povert y and rapid urbanization. Rapid urbanization has occurred over the decades because of internal displacement and poverty. The internal displacement was created by the ongoing civil war that began in 1948 with the assassination of populist politician Jorge E liece r Gaitan 8 In Colombia 40% to 50% of its urban population is living in pover ty (Winchester & Szalachman, 2009).
15 followed by a decade of violence called La Violencia 9 (Williamson 1965) From the 1948 conflict of violent land takings in rural areas emerged the ongoing civil war between the Revolutionary Armed Forces (FARC) and the Paramilitary militia (which is controlled by landowners, local elites and drug traffickers). People have migrated from the conflict where residents lack tenure security and basic infrastruct estimated 3 million registered Internally Displaced Persons (IDPs), which is one of the highest rates of IDPs in the world; th is displaced population has relocated to urban areas where city governments do not have the infrastructure i n place to accommodate the migration (USAID, 2008). Colombia has a housing deficit of about 36 % and 97 % of this is low income housing. Because of this deficit low income families find ways to establish homes for themselves in the periphery of cities where they can afford to locate (Arbelaez, Camacho, & Fajardo, 2011). In order to address the growth of informal settlement s Latin American countries have, in the last fifty years, implemented various policies and invested in projects to address the issue, from self help housing to land titling programs (Magalhaes & Rojas 2008 ). The methods and the type of programs have changed over the decades due to ideological shifts or because they have failed to work in the manner that was originally intended In Colombia, the government has invested in the normal upgrading project trends as well as legalization programs. The first legalization programs began in the late 1940s and have been used with more frequency throughout the decades 10 9 La Violencia or The Violence lasted from 1948 to 1958. It was a conflict between the supporters of the liberal party and the conservative party that took place in the Colombian countryside (Williamson 1965) 10 See Figur e 4 4
16 Legalization progra ms allow cities to provide basic services like water, electricity an d transit to informal areas without the need to go through the formal land titling process Legalization provides a measure of tenure security to informal settlements because once services are brought in the residents feel a higher level of security that they will not be evicted from their homes. The definition of Legalization, in the context of Colombia, is the 20 01) The settlements are granted legal status without the need for individual property titles. The city of Bogot has used legalization since the 1940s in order to bring basic services and to incorporate informal settlements into the city but the process h as become more important in the 1990s This process has been implemented at such high numbers in part to fulfill the legislation established in the 199 1 Colombian constitution which states that it is a fundamental right of every Colombian citizen to have public services such as water, electricity, drainage and sewage regardless of the legal status of the land ( Arist iza bal and Ortiz 2002). Research Question s 1. What are the affects of legalization on land value s of legalized zones versus formal zones 2. Why has the government of Bogot pursued legalization programs? Hypothesis Statement Legalization allows the city to provide services and basic infrastructure to informal settlements but it will not provide landowners with the same land value as formal zones. Legalized areas have perceived tenure security but they are not part of the formal market residents do not possess a property title to their land they only have enough legality to receive services and infrastructure from the city, and therefore land prices will
17 not reach the same levels as land in formal neighborhoods. Legalized zones are not as affected by the market because there are less transactions occurring than in the formal market. T he land market in legalized are as tends to be sluggish on the demand side because buyers have limited income and ability to obtain formal financing and on the supply side residents may be reluctant to sell due to the years of sweat and equity invested in their homes Research Objectives The objective o f this research is to see what kinds of influence legalization programs have on the land market of legalized neighborhoods in comparison to formal neighborhoods where they both have the same or similar economic backgrounds. It will examine land value trends in formal neighborhoods compare d to those in legalized neighborhoods The research is examining what kinds of benefits legalization brings to the urban poor from access to services and infrastructure to possible increased land values. In order to do so it is important to look at the housing policies that have been implemented in the city and what kinds of services they provide and to see if legalization programs have an effect on land value or what kinds of trends can be derived from th e data This research will examine legalization by using parcel data on Bogota and its legalized neighborhoods, in the Popular Periphery Residential Areas. It will also use land value data to more accurately determine what kinds of patterns or influences a re being created by legalization on land value. The following section will further explore the concept of legalization in Bogot by first discussing informal settlements in the city. It will th e n review the literature on land tenu re and the land titling debate, f ollowed by policies and programs
18 towards urban upgrading as well as the legalization process. Chapter 3 will discuss the methodology used for this research Chapter 4 will present the findings and chapter five will c onclude with i mplications and recommendations.
19 Figure 1 1. Study area ma p ( Adapted from Wikipedia. http://es.wikipedia.org/wiki/Bogot%C3%A1 Last accessed August, 2011) Bogot D.C. LOCALITIES: 1. 1. Usaqun 2. 2. Chapinero 3. 3. Santa Fe 4. 4. San Cristbal 5. 5. Usme 6. 6. Tunjuelito 7. 7. Bosa 8. 8. Kennedy 9. 9. Fontibn 10. 10. Engativ 11. 11. Suba 12. 12. Barrios Unidos 13. 13. Teusaquillo 14. 14. Los Mrtires 15. 15. Antonio Nario 16. 16. Puente Aranda 17. 17. La Candelaria ( Historic Center ) 18. 18. Rafael Uribe 19. 19. Ciudad Bolvar 20. 20. Sumapaz rural N Study Area
20 CHAPTER 2 LITERATURE REVIEW Informal Settlements in Bogot D.C. Bogot is the capital city of the Republic of Colombia and is formally known as Santa Fe de Bogot 1 Capital District (D.C.) (Hataya, 1996). The city is divided into twenty localities 2 with more than 1,200 neighborhoods. It h as a population of 7 million, 22 % of which live in informal/ il legal settlements ( World Bank, 2003 ) Per DAPD calculations 23% of the current urban land has been illegally urbanized ( Nagy, 2001) as shown in Tab le 2 1 between 1993 and 2000 35% of housing production was ill egal development compared to 37% of legal deve lopment during the same time frame the rest of housing production was made up of 18 % commiss ioned and 10% state housing The reason illegal housing production is so high is due to the fact that there is an enormous housing deficit in the low income sector. Informal or illegal settlemen ts are created (illustrated in F igure 2 1 ) because of poverty and lac k of housing for the urban poor. As can be seen in F igure 2 2 i nformal settlements in Bogot developed in the 196 0 s and have continued to expand further from the city center, on the periphery. The periphery of the city is the only available option for the urban poor in terms of affordable land because no one else wants to live there; the land is located in environmen tally hazardous areas prone to flooding and landslides (Payne, 2002) 1 From now on it will be ref erred to as Bogot or the city. 2 See F igure 1 1
21 Table 2 1. Bogot: f orms of p roduction of h ousing (1938 2000) TYPE 1938 51 1951 64 1964 73 1973 85 1985 93 93 2000 Legal Capitalist Product 23,3% 23,7% 16,0% 31,7% 35,0% 37,0% 11,290 33,050 28,014 105,525 137,214 148,000 Commissioned 16,9% 17,3% 12,9% 15,0% 18,0% 18,0% 8,189 24,125 22,586 49,933 70,567 72,000 State 4,6% 16,9% 21,2% 19,5% 13,5% 10,0% 2,229 23,567 37,118 64,913 52,925 40,000 Illegal Self Help Product 55,2% 42,1% 49,9% 33,7% 33,5% 35,0% 26,748 58,709 87,369 112,183 131,333 140,000 Total housing 100,0% 100,0% 100,0% 100,0% 100,0% 100,0% 48.458 139.453 175.089 332.888 392.040 400.000 1'087.928 1'487.928 Source : [Adapted from Velanda, Antonio & Borbon, Walter. (2003) Mecanismos y Formas de Enajenacion Del Urbanizador Pirata y la Relacion Oferta y Demanda que se Genera en el Desarollo de Vivienda Ilegal en los Estratos 1 y 2. Alcaldia Mayor de Bogota D.C. Secreta ria General. Subsecretaria General de Vivienda. Bogota D.C. Marzo] Figure 2 1. Development of i nformal s ettlements. [ Data Source: Rueda Garcia, Nicolas. (2003) Understanding Slums: The Case of Bogot D.C., Colombia. UN Habitat. Global Report on Human Settlements 2003, The Challenge of Slums: 195 228. htt p://www.ucl.ac.uk/dpu projects/Global_Report/cities/bogota.htm ] Adapted by author
22 Figure 2 2. Historical development patterns of i nformal s ettlements in Bogota 1960 2000. [Adapted from Rueda Garcia, Nicolas. (2003) Understanding Slums: The Case of Bogot D.C., Colombia. UN Habitat. Global Report on Human Settlements 2003, The Challenge of Slums: 195 228. http://www.ucl.ac.uk/dpu projects/Global_Report/cities/bogota.htm ]
23 According to Hataya (1996), illegal subdivisions and low income settlements were located and concentrated in the areas of Tunjuelito, San Cristobal, Kennedy Chapinero, Usaquen, Bosa and Ciudad Bolivar. All of these are areas bordering the city center or the periphery. The author also mentions that there are two factors that have caused population increase in the settlements of the periphery, new migration and a movement of reside (Blanco, 2011). But the city has a major problem in m eeting the housing demands of low income families; it has a housing deficit in the low income stratum which promotes illegal subdivision. It was calculated that between 2000 and 2010 the city would need 500,000 additional housing units, an average of 50,00 0 units a year (Aristizabal & Ortiz, 2002). As shown in Figure 2 3, the country as a whole has only been able to build 173 thousand new priority and social housing units between 1998 and 2009. Bogota has an enormous demand for low income housing and curren tly the only solution for the urban poor is to continue acquiring plots illegally through pirate developers (land owners who divide and sell individual plots in the periphery, without any urban services to the urban poor), it has become a way for the poor to be able to afford to live in Bogot. The city currently has 1433 urban settlements that have illegal origins (Payne, 2002). Legalization programs are essential in providing better quality housing at the moment since housing construction has not caught u and Ortiz, 2004).
24 Figure 2 3. New h ousing u nits under c onstruction in Colombia from 1990 to 2009. [Adapted from Arbelaez, M.A., Camacho, C.,Fajardo, J. (2011) Low Income Housing Finance in Colombia. Inter American Development Bank: Department of Research and Chief Economist. IDB Working Paper Series No. IDB WP 256, August. http://idbdocs.iadb.org/wsdocs/getdocument.aspx?docnum=36376895 ] Socio Economic Levels Bogot economic levels 3 (or strata) according to the quality of units and neighb orhoods (Blanco, 2011). Strata 5 and 6 are the upper income levels, 4 are the middle, and 3, 2, and 1 are the low income levels. The city uses these socio economic levels to define poverty. Although strata 1, 2 and 3 are all low income, within these three assistance available. The Socio utilities paid by the different levels, the cost of taxes that must be paid and to target public investment in so 3 see Appendix D.
25 conditions. Strat a 3 and 2 families are the poor who receive the services provided by the city. Strata 3 families are the low income families who have formal titles but are facing economic hardship; they are still classified as urban poor, and have been the stratum that ha s traditionally received low income assistance through services. Strata 2 families are the ones that have acquired illegal settlements and have built self help housing. Due to new regulations, they have been recently receiving assistance from the low incom e programs. Even with all the programs being implemented, to assist the plight of the urban poor, Strata 1 families, the poorest, are not being directly targeted for assistance, due to the fact that most of the programs are geared towards upgrading familie s who own illegal plots, but they receive indirect assistance because they are benefiting from the services as well (Aristizabal and Ortiz, 2004). There are many types of informal developments that house the urban poor. But in Bogota the main method that t he poor have used has been informal subdivisions. According to Rueda income development can be characterized into three groups. The first is unplanned or informal urbanization, through subdivisions, which develop in the peripher al and marginal areas; it is characterized by initially lacking physical and social infrastructure. This is improved within a few years either through self help, city administration or a combination of the two. The second type is squatter settlement which are in more dire physical and social circumstances, the author points out though that this category historically has been of low importance. The third type is inner progressive move of 19th centu ry industrial, military and other functions adjacent to the
26 traditional urban centre to more appropriate locations, and the social, economic and Pirate Subdivision Accordi ng to B lanco (2011) pirate subdividers are a Colombian invention and it s that the phenomenon was studied and analyzed In Bogot most lands are privately owned subdivision is where settler families purchase land without services, from a proprietor or developer (Gonzales, 2009). This type of illegal subdivisions are the way low income families can afford to purchase la nd to build self help housing; they began in Bogot in the 1960 s after landowners real ized that there was a low risk market in the selling of illegal subdivis ions (Payne 2002). The way that pirate subdivision s work is that the pirate developer 4 who has secret political support, owns or obtains a large plot of land outside the urban area ( where the land is usually in high risk areas prone to landslides or flooding 5 ) and th en divide s it into small plots and s ells it to low income families (Payne 2002) The property establish the street pattern, and stakes or other markings are driven to indicate small scale office is established near the site generally consisting of one room equipped only with a desk and a plot plan of where the plots are to be sold (Doebele, 1977) The plots are located ne ar low income sectors and have no public services or infrastructure which is the 4 authorities and politici 5
27 reason the lots are so affordable In most cases owner to a figurehead, to avoid legal problems and prosecution. s to be some one because under Colombian legislation, senior citizens 2002). These subdivisions are illegal because they do not conform to local land use planning or regulatory controls and lack basic infrastruc ture and services. Once the land is subdivided very quickly low income households start occupying the ir individual lots and begin construction dwellings. They acquire many of the services like water, electricity and other essential services through illegal hookups and manage to create a functioning neighborhood. The residents of these illegal subdivisions are not owners 2009) They do acquire the land under some form of title but it is not a conventional title, it is mo re of an informal mortgage note or a promesa de compraventa (promissory note) (Foster, 2009) Pirate developers do not ensure that everyone pays and collect the money (Payne pays the mortgage note in install ments and at the end will receive a docu ment to support the transaction, but it is not legally registered 6 that they are the owners from the day that they pay their deposit to the illegal sub er 2009) They build their homes knowing full well that they will not be evicted; they have a type of tenure security. The city authorities know that illegal 6 It is a private agreement.
28 help housing is a way to accom 7 Land Tenure Understanding land tenure is important in order to understand tenure security. ith respect to inves zales, 2009). T here exist ma ny types of tenure in the world but the most common types of tenure in developing countries are customary tenure, private tenure, public tenure, and non formal tenure categories. Payne (2001) defines the mode by which land is held or owned, of the set of relationships interest in land or property vested in an individual or group and can apply separately to lan d or develop ment on it (Augustinus & Benschop, 2011) Tenure Systems According to Payne (2001) c ustomary tenure is found in Africa and the Middle East it evolved out of agricultural societies where there was little competition for land 8 7 e of the lower cost in the short term, the cost for the municipality in the long term is much higher, already established neighborhood plan and sometimes th e roads are too narrow or there is no public land set aside (Payne, 2002). 8
29 mans role a generations 9 Private tenure was brought to developing countries by colonial settlers. It is generally concentrated in urban areas and may co exist with indigenous tenure systems. This tenure system permit with private tenure is that it is difficult for lower income groups to access Public tenure or public land ownership is where the righ ts are vested in the state 10 (Payne, 2001) Non formal tenure 11 regularized and unregulari z ed squatting, unauthorized subdivisions and unofficial rental arrangements. Non formal tenure represe nts the most common tenure category and it that is growing faster than any of the other categories (Payne, 2001). There are a range of tenure systems from illegal or leg al, formal or informal systems. Because of this mixture of systems within the same city it becomes a challenge for policies to be implemented in one tenure system without having unintended consequences for others (Payne, 2001). Types of Tenure in Colombia According to the UN Habitat (2005) there are three types of official tenure in Colombia, state property, private property and communal land There is also a non 9 termined by the leaders of the community according to its needs, rather than through 10 11 some cases, several forms of tenure may co
30 formal tenure type in Colombia which is where the informal settlements fit into. Aristizabal and Ortiz (2004) define ten tenu re forms that exist in Colombia, which are listed below: Pavement Dweller Squatter tenant (partial possession) Physical possession Squatter owner Tenant in unauthorized subdivision (I nformal document) Urban legal ization (C ollective intermediate tenure) Owner in unauthorized subdivision (D eclaration of possession) Legal owner unauthorized construction Tenant with contract (Community land trust Free holder The first seven categories, mentioned above, are considered non statutory tenure which gives resident These types of tenure give residents a sense security that they will not be evicted even if they do not have property titles. Figure 2 4 shows the level of security offered by each tenure category. Aristizabal and Ortiz give a detailed discussion of the different tenure categories from Pavement Dwellers to Free holder. According to the authors, pavement dwellers have the least security since they are occupying land that is for public use, they are also the only ones from the list that have no associated rights 12 Squatter owners on the other hand have a higher security of tenure because they are protected by law. All the squatter has to demonstrate is that he is the owner of the property and he will not be evicte d a squatter unit. Tenants in unauthorized subdivisions have a 50% security that the government will not evict them; pirate subdivisions are at this tenure level. They have a high level of security from the government 13 and residents begin to have rights to some 12 obtain any pecuniary benefit, access services, or access to formal cr 13 The government is highly tolerant of them. (Aristizabal & Ortiz, 2004)
31 urban services. In unauthorized subdivisions a resident will not only have their home on the lot, b ut in some cases will also have an informal enterprise of some kind that will help them improve their income level. They do n ot have access to formal credit however since they do no t own a legal title to the lot (2004). Figure 2 4. Urban l and t enure [Adapted from Aristi zabal Nora & Ortiz Andres (2004) Improving Security Without Titles in Bogota. Habitat International 28: 245 258. ] For Aristizabal and Ortiz (2004) u category are on the path to becoming part of the formal city. When residents are in this category they benefit from an added value generated by constructions and ut ilities that the city installs without having legal title The only thing that this category lacks is access to formal credit, mainly because the residents tend to work in the informal market and cannot show a steady monthly income. The authors also discus s owner in unauthorized subdivision, legal owner of
32 unauthorized construction, tenant with contract, and freeholder. All of these tenure categories have high levels of tenure security, as can be seen in Figure 2 4 and are not in any danger of evic tion T enure security is important for informal settlement dwellers but also perceived security of tenure is very important. If residents think that they will not be remove d then they begin building and upgrading their lots. Aristizabal and Ortiz (2004) and Gilbe rt (2002) argue that for informal settlement residents in Bogot it is more important to fight for utilities then to acquire land titles because the risk of being evicted is very low The Land Title Debate legal right to the possession of Land titling is a controversial issue in developing countries when it is discussed as the solution to informal settlements. The main discussion revolves around Hernando De claims about the cause of informality and what kinds of benefits land titling will provide the urban poor There are currently two opposing positions on the issue: those who support l and titling because e con omic mobility to low income families and those who believe land titling provi des few economic benefits to low income families Opposing Sides of the Debate The literature (D e Soto, 2000; Feder, 1999; Holstein 1996) supporting land titling argue s that it will give residents, of informal settlements, access to the formal markets with all the protections and benefits that come with it Land titles will encourage informal set tlers to invest in upgrading their homes and i t will give residents access to cre dit. The title and access to credit will help them tap into the wealth they already have but were unable to use before. This co nc ept is illustrated in Figure 2 5 Land titling will also make
33 property markets more robust because each family can transfer lots without first consulting the neighbors. Figure 2 5. Benefits of land title. ( Source: Adapted by author using the literature ) De Soto Feder and Holsetein (2002) argue that land titles empower people because it gives them a sense of security. Th ey now have complete control of the land and it legally belongs to them so they are no longer livi ng in fear or doubt they know no one can remove them and thus provides them a sense of stability. The y also argu e that with land titles people will be more l ikely to improve the quality of their homes because they have a stake in the property. According to De Soto l and titles are an incentive for people to invest in their homes The authors argue that l and titling programs will be more affordable and faster fo r the government to implement. By providing residents of informal settlements with
34 property rights the government will be solving a multitude of problems with one solution It is argued by De Soto (2000) that one of the obstacles facing people wanting to b ecome part of the formal market is the government bureaucracy that impairs easy acquisition of property rights. The titling process in some countries can take up to 20 Y ears because of the bureaucratic system in place so if that obstacle is removed more households would be willing to go through the process. This long and costly process deters many residents from obtaining land titles. The literature against De land titling claims argue that land titles are not essential to create wealth. They are not against land titles p er se but they do not believe it is the solution to the inequality problem. Alan Gilbert (2002), states that availability of formal finance. A legal title on its own does not guarantee access to credit; there are many regulations in place make it quite difficult or impossible for poor people to acquire financing from banks or other private institutions even with a land title According to Gonza lez (2009) many poor families are hesitant to take out a mortgage homes. They would rather use the unsecure credit base because it is flexible and they know the people they are dealing with. Gonzalez also mentions the situation in the United States in terms of justifying a cautious approach by poor families and measures to prote ct the poor form predatory lendi ng Land titles may also be an economic hindrance instead of a benefit to the urban poor because with legal titles comes additional costs that they may not be able to afford
35 The residents have to pay for the titling proces s and any extra expenses that come with it. It may also raise the living expenses of others who are not direct beneficiaries, for example, tenants may be hurt by rent rises in newly legalized settlements. Research has shown that if residents knew the rea l cost of titling, they probably would not want to go through the process (Gilbert, 2002) The argument of the improvements of homes, due to land titles, is also disputed. L ack of title has not acted as a barrier for residents to invest in their homes. Res idents already feel a sense of ownership in the house they live in; as soon as the city provides them with some type of s ervices they feel a sense of security even without the legal title (Gilbert and Gugler, 1992) The literature discusses how households will improve the structure as long as they feel secure with the land security of tenure or perceived security of tenure alone encourages people to improve their lots. Geoffrey Payne (2001) research has found that there is evidenc iderable investment is being generated simply by an official statement that a settlement will not be removed, by the provision of services, or by the issuance of certificate of use s claim that informal development does not allow the development of robust property markets is also disputed. Gonzales argues that on the contrary there is evidence, in the city of Bogot ( and other parts of the world ) of the development of an active untitled mar ket. S tudies have also been done in major cities 14 of Latin America where it shows that title makes little difference for property markets in low income end to be sluggish on the demand side due to 14 In Bogota, Santiago de chile, Caracas and Mexico city (Gonzalez, 2009)
36 ted income (Gonzalez, 2009). Financia l Institutions Land titles are also seen as a secure form of collateral to get access to credit of collateral loss, the information costs involved in verifying owner ship and the foreclosure costs under default, thereby reducing the effective leverage ratio and 2004) But the reality is that banks are less likely to take land titles as collateral when dealing with p eople of very low resources. Banks are more likely to look at the capacity of the individual applying for the loan to have some kind of saving mechanism in order to approve the loan. Erica Fields (2004) research, which is looking at households who changed from owning no collateral to owning collateral and if they gain access to credit from formal institutions, proves that little importance, is placed on titles. Banks look at other factors when deciding o n loans. The most important consideration when banks are approving loans is the ability for the person to repay it. Fields (2004) s c ollateral is irrelevant unless households can satisfy this initial criterion, since responsible institutions would be reluctant to provide of income or savings when approving loans and this excludes the poor. Another argument is that many community based finance institutions, like th e A lso when finance institutions do
37 approve loans based on title, they find it difficult to foreclose on defaulting loans because it is politically unacceptable for the authorities to remove poor people from their homes (Gilbert, 2002) In terms of the argument that land titles help improve the property tax base. erate a corresponding through titling refuse to pay taxes, or the taxes on the property are too high and the household may not be able to afford the payments or the tax es are too low that it is more expensive to collect then the actual revenue Therefore titling alone will not increase the tax base if the people cannot afford to pay the new taxes on their property. Land tiles will improve efficiency of land and housing markets but the beneficiaries are not exactly the poor. Just the prospect of formal tenure can increase the commercial value of land in informal settlements and this can bring about reduce tenure security for the poor (Payne 2001 ) The idea behind this ar gument is that entitled land owners can now increase rents to uncontrollable levels because they feel more secure in terms of legal power and this can actually hurt poor families renting the units located on the newly titled land. Another argument is that granted it is almost impossible to revoke them. Tenure policies are also not easy to experience necessary to formulate such policie s. Because tenure policies are so inflexible and unpredictable it can be difficult to apply them and this effects how beneficial it can really be to the efficiency of land and housing market (Payne 2001).
38 Failure of the Law One important argument that De S o to (2000) makes is that the reason urban informality exist is due to the failure of the law in developing countries That th e solution privatize, deregulated and de bureaucratize the state Gonzalez (2009) argues that De Soto make s it seem that the problem is inherently part of developing countries when in developed countries in formal settlements also exist. In a study conducted by Ward, in t he state of Texas 15 there are about 1,600 settlements housing roughly 400,000 people 16 These settlements are called colonias and they are distributed throughout the periphery 17 of urban land and inhabited by the working poor. The residents of these colonias purchase 18 unserviced land, in installments, and construct their own homes or purch ase trailers (Gonzalez, 2009) According to Ward i t is a rational response 19 by the working poor to a statewide shortage of affordable housing and income inequality between high income professionals and low paid service employees In the United S tates there is also an informal market 20 in unlicensed street vendors house and office cleaning services and sweatshops. Gonzalez argues that informality is not caused by bad laws in developing countries but 15 Colonias in the United States are usually located on border towns in Texas, Arizona, New Mexico and California (Ward, 2004). 16 Are populated by Mexican Americans, whites and African Americans. (Gonzalez, 2009) 17 The colonias are located in the periphery because it is where low income households can afford to live in cities with high housing costs (Gonzalez, 2009). 18 The land is legally purchased. 19 Colonias offer the only affordable homestead for low income house holds (Ward, 2004) 20 income professional and the expansion of the low
39 (2009). Legalization programs are implemented before informal settlements go through land titling. In the literature there are tho se who argue, De Soto and company, that land titles will access economic wealth for the urban poor by giving them access to credit through mortgages and that it will allow them to s ell their homes because they would be part of the formal market. Land titli ng is an approach that all Latin American countries have implemented in order to bring economic wealth to the urban poor and to formalize informal settlements. But titling does not necessarily mean services and the time it takes to go th r ough the process c an be a long one. The land titling approach, proposed by De Soto has been heavily criticized for not bring ing about the ec onomic improvements for the urban poor that he proposes Colombia and more specifically Bogota have implemented a step before titling to provide services to areas before they are fully formal through legalization. This process has been implemented in part to fulfill the leg islation established in the 1991 Colombian constitution. Housing Policies of the City of Bogot current housing polic ies aims to achieve two goals. The firs it to increase the low income housing stock and the second is to upgrade the current low income housing stock formed by self produced housing in the informal market (World Bank, 2003) The city h as taken many steps in order to meet the objectives and be able to provide a better standard of living for the urban poor, by creating new legal tools, putting together institutions, and creating upgrading programs to meet the housing stock shortage and th e poverty problem (Rueda Garcia, 2003).
40 Th e current housing policies geared towards low income families have been implemented in part to fulfill the legislation established by article s 49 and 51 in the 1991 Colombian constitution Under article 49 21 of th environmental protection are public services for which the state is responsible. All individuals are guaranteed access to services that promote, protect, and rehabilitate public health Under article 51 izens are entitled to live in dignity. The state will determine the conditions necessary to give effect to this right and will promote plans for public housing, appropriate systems of long term financing, and community plans for the execu tion of these hous ing programs T hese two articles make it an obligation of the city to bring services and provide public housing to low income families living in substandard conditions. legal tools, to address the problem of poverty, are made up of laws, decrees, and polici es. Table 2 2 has a detailed description of the most important measures that the city has implemented. The laws and policies address a range of issues from strengthening urban policies to improving citizen participation in the upgrading process. Law 388 aims to improve the quality of life of the target population by creating planning and territorial administration for local authorities; Law 563 address the rights of citizens to participate and have access to public information this will empower the poor and allow them to be a more active and informed participant in the upgrading process which will allow the city to provide better services ; Decree 619 aims 21 bility o f the state to organize, direct, and regulate the delivery of health services and of environmental protection to the population in accordance with the principles of efficiency, universality, and cooperation, and to establish policies for the provi sion of health services by private entities and to exercise supervision and control over them. Public health services will be organized in a decentralized manner, in accordance with levels of responsibility and with the 1).
41 to improve the sustainability of urban development, social equity and increase urban produc tivity. The Development plan decentralizes the administrative district so power is spread among twenty smaller localities versus all of it being centralized in one locality. Decree 425 strengthens the development plan and establishes rules to regulate loca l plans. Executive Local Units (UEL) aim to provide more transparency to the process of public contract, this allows for better efficiency by the government and also as a way to dissuade political favors and corruption. All of these policies address import ant aspects that make development programs work (Rueda Garcia, 2003) The legal tools that have been implemented address many issues that are important in order to intervene and bring a better quality of life to the urban poor. T he laws address the issues of transparency city participation, improvement of the urban space, improvement of quality of life, the reorganization of the administrative through decentralization, and strengthening the development plan. All of these are seen as a political transforma Garcia, 2003). Table 2 2 Laws d ecrees and p olicy in the City of Bogota D.C. Type Year Description Law 388 1997 Concerning Territorial Ordering. Puts together the principles for planning and territorial administration that must be used by local authorities. The objective is to improve the quality of life of the population. Law 563 2000 States that any citizen or organized group has the right to and the obligation to participate as observers, in order to have access to all the public information in which they are interested. To activate a participatory mechanism of social control.
42 Table 2 2. Continued Type Year Description Decree 619 2000 Territorial Ordering Plan of the Capital District (POT) Valid for ten years. The aim is the construction of a desirable image of the city and its public investment private acts towards long term previsable outcomes. Aim is to emphasize sustainability of urban dev elopment, social equity and to increase levels of urban productivity. Bogot Urban Improvement Policy Aims to complement reorder and improve the urban space and housing that the illegal settlements on the city margins have produced Development Plan for Bogot 1992 1994 Administrative decentralization of the district. Motivated by the 1991 constitution. Division of the city into 20 localidades (localities) in 1992 Decree 425 1995 Stre ngthened the Development Plan. Established the rules by which local plans are regulated, turning the planning process into a learning process of community commitment. Executive Local Units (UEL) 1998 2001 Purpose of giving more transparency to processes of public contracts and the use of transfers by the local Mayors of Bogot Data Source: Rueda Garcia, Nicolas. (2003) Understa nding Slums: The Case of Bogot D.C., Colombia. UN Habitat. Global Report on Human Settlements 2003, The Challenge of Slums: 195 228. http://www.ucl.ac.uk/dpu projects/Global_Report/cities/bogota.htm Adapted by author Bogota has put together a group of institutions aimed at eradicating poverty in the city; this is an important component for upgrading programs. The most important institutions that hav e been created and have had a major impact a re the Administ rative Department for Social Welfare (DABS), and the District Institute for the Protection of Children (IDIPRON). (Rueda Garcia, 2003) The DABS was created to attend to the needs of the purpose is to inco rporate communities into the
43 national life. The DABS takes care of children under five and the priority is displaced populations because they are more vulnerable. It offers counseling services for those who have been mistreated or in conflict. The DABS has 20 operational centers, one in each locality, so that they can have a presence in the neighborhood and be able to attend to the needs of its target population. The IDIPRON targets children between 8 and 22 years of age who live in the streets and are invo lved in delinquency. The mission of this institution is to rehabilitate these youths through programs 22 of help for those who come to their centers. The se two institutions address the problems or issues of the most vulnerable, the children living in povert y. Social programs are an important component of any upgrading intervention because there are so many social problems created by living in poor neighborhoods with little or no social or physical services The children are also the future and if they are li ving in substandard conditions the health and psychological consequences will be with them the rest of their lives. The CVP and PMIB The city has various housing programs that address housing need and urban service needs for the urban poor. In 1942 Bogot created the Caja de Vivienda Popular (CVP) to promote housing for the working poor. The CVP is structured under the Comite de Gestacion Urbana y Habitacional ( CGUH) where it participates as an executive agency along with Metrovivienda, Urban Renewal, and the Sub secretariat of housing. The CVP was originally created to build direct housing for low income families and now it is the coordinator for titling programs. The CVP has three main functions; 22 Garcia, 2003).
44 one to coordinate the Programa de Mejoramiento Integral de Barrios (PMIB), two the improvement of housing through physical upgrading and land tenure, and t h ree to resettle populations located in high risk areas. The PMIB coordinated by the CVP promotes development strategies to improve consolidated areas with deficiencies in infrastructure, accessibility, public space, and services The main function of the PMIB is to improve infrastructure by planning and lega lizing barrio s, constructing storm water drainage and water and sewage systems, upgrading and rehabilitating access roads, resettlement of population in high risk areas, constructing and rehabilitating public space and community services, and technical ass istance of home improvement and land titling. It also promotes community participation, when proposing neighborhood improvement activities, ci tizen cultures and strengthens social organization (World Bank, 2003) ed to address the growing housing deficit. Thre e programs where created during the late 1990s and early 2000 to improve the living conditions of the poor: the program of Demarginalisation, the program of Integral Improvement of the N eighborhood and Progr ama Mejoremos el Barrio y la Casa (Program to Improve the Neighborhood and the home) The Demarginalisation program was from 1998 to 2001 and it was created to improve the living conditions and in and r aise the quality of life of its inhabitants benefited 620,000 residents from the poorest localities through the construction of public services (Rueda Garcia, 2003). The program Integral Improvement of the Neighborhood was from 2001 to 2004 and was a continuation of
45 Demarginalisation. The main objectives were to improve quality of life, strengthen institutions, a nd strengthen decentralization (Rueda Garcia, 2003). The Program to Improve the Neighborhood and the Home was aimed at improving the living conditions of 650,000 people from low income neighborhoods. The goal was to integrate these areas into the Cities economy by increasing resident participation in various economic and social activities. The program include d the following components legalization of tenure, investment in schools, parks and infrastructure and the improvement of institutions and community participation (World Bank, 2003) M etrovivienda The City of Bogot created the housing department Metrovivienda in order to target the development of the periphery and the plot fragmentized areas Metrovivienda was created in 1998 (under the 15th agreement ) as a land bank to construct poor housing and as a way to attack the illegal market (pirate developers) it is a public land develope r. (Rueda Garcia, 2003) The way that Metrovivienda works is that it buys 23 large tracts of land zoned as rural or semi rural 24 from land owners at low cost, and then develops an integral urban design and contracts the construction of public services and r oads (Rueda Garcia, 2003). It also obtains development permits from the city. Once infrastructure is in place the organization sells parcels to private constructors and non profit builders he competition for 23 2003) 24 Navarrete, 2003)
46 the great cost advantages created by Metrovivienda resulting from lower land purchase costs, large scale, and quicker development times to homebu Navarrete, 2003). The cost of a housing unit in 2003 was about 70 minimum legal wages ( around US$9,400), and although these low income units are aimed at the fulfill the payments of progra mmed subsidies which are destined for Social interest housing (Rueda Garcia, 2003). The Legalization Process Legalization has been used with more frequency in the city of Bogot since the 1991 constitution. The constitution grants its citizen the rights to services whether they have a legal title or not (Payne, 2002 ). According to Aristizabal and Ortiz legalizati on is the most important intermediate tenure system in Bogot (2004). Urban Legalization Legalization started out as a interme diate tenure form in all settlements of illegal origin mainly because Colombian law National Decree 1052 passed in 1998, required the legalization of all illegal neighborhoods created before that year But even after the law was passed land was still be ing illegally developed, therefore in 2002 a new Decree 1379 was issued which allows legalization for any illegal subdivision ( Aristizabal and Ortiz, 2002 and 2004 ) According to Velanda and Borbon (2003) the City had legalized a total of 870 neighborhoods between 1950 and 1994 and a total of 709 between 1995 and 2002, an almost 81% increase 25 25 Translated by author
47 According to Aristizabal and Ortiz (200 2 and 2004 ) Bogota has defined a new framework that grants coverage to all the settlements that need urban legalization. The way it works is as follow s : Urban legalization may be initiated by the city planning office, the community, the he landowner. An U rban Plan needs to be submitted to the planning office with areas, topography and plot subdivisions. The planning office tries to locate the pirate developer so they can define the plot boundaries and original title. Plot boundaries are d efined at the same time as the assessment of property tax. 26 Communal areas provided as public space must be related with the housing units. The person responsible for the legalization may commit themselves, independently of the landowner, to hand over to t he city areas that will become public space. Environmental reserve areas and areas for infrastructure will not be recognized as private. The utility companies may offer temporary services to communities, as soon as the urban legalization starts Over time the neighborhoods become consolidated and develop all the necessary inf rastructure and roads. Not all d wellers will have title by the end of the process they just have legal access to services and infrastructure. For the community the property tax assessme nt is very important because they want to pay this tax 27 even without title, because they see it as a way to legitimize their property and gain tenure security (Aristizabal and Ortiz, 2002) One area that the community has problems legalizing is sewage and drainage. In order for the water 26 Aristisibal and O rtiz 2002) 27 Property taxes in Bogota are designed progressively which means low income families are paying low or no taxes.
48 company to bring in sewage and drainage the whole neighborhood must be a part of annual investme nt and sometimes many residents will not want to become (Aristizabal and Ortiz, 2002). Legalization is important not only to acquire services but to gain tenure security for its residents. Urban legalizati on has become the upgrading tool used in Bogot due to the national governments laws and decrees. Bogot has been made to comply with the national law by providing services to the urban poor who reside in pirate subdivisions with no legal title to the land. The city incorporates the illegal subdivisions into the infrastructure netwo rk through legalization and is able to provide the residents with better living conditions This research will further explore the benefits of legalization by examining wh at kind s of affect it has on land values. It will compare the land value trends in fo rmal neighborhoods and informal neighborhoods and analyze the information to see what can be derived from it. The second part of the research will further use the data results to analyze land titling and legalization.
49 CHAPTER 3 METHODOLOGY This chapter describes the methodology used to assess legalization and land value in Bogot D.C., Colombia The study is a comparative analyzes on the affect of land value on formal zones and legalized zones. A two prong investigative strategy approach 1 was us ed to analyze the study area. The first approach is to make a community assessment by looking at zone characteristics, demographic information, and any policy history pertaining to the area. The second approach is a quantitative prop erty value impact analysis to ascertain what kind s of affect legalization had on land value. This research hopes to achieve the following objectives: To evaluate whether selected zones are comparable. To examine how the market affects land values in legalized and formal n eighborhoods. The research will seek to achieve these objectives by first using Geographic Information systems to locate the neighborhoods and then evaluating the zone characteristics to determine whether the zones are comparable. For the second objective the study will use resident ial land values for the legalized and formal neighborhoods to examine what kinds of trends exist. The City of Bogot was selected because based on the literature, it has used legalization as the method to upgrade illegal subdiv isions and improve the lives of the urban poor. 1 Based on the three prong approach by Galster, Santiago, Smith and Tatian (1999). Their approach was based on community assessment, quantitative property value impact analysis and focus groups. Since this research did not conduct a focus group analysis the three prong approach was converted into a two prong approach.
50 the responsibilities but also the rights of original owners and developers, just with defacto security supported by Colombian Laws (Aristizabal and Ortiz, 2004). Legalization is an important tool, for the city, in order to provide services and infrastructure to illegal communities that are living in substandard conditions. Legalization programs are being used more and more specially s ince the 1996 and 2002 Colombian Law s requiring the legalization of all illegal subdivisions The study area that was selected for this research is located in the south of the City of Bogot. The Southern residential area was selected because it is where the urban poor are located and where legalization programs have occurred The residents in this area are families living in strata 1, 2, and 3. Th e Southern residential area also contains both formal and legalized zones which is essential for the comparison part of the research. The zones for the study were selected based on three economic level or socio economic strata and status of neighborhood. T he legalized zones are located within the l ocalities of San Cristobal, Usme Bosa, Kennedy, Rafael Uribe, and Ciudad Bolivar. The data used for the study Valor de S uelo Urbano en Bogot (Value of the Urban Land in Bogot 2005 ) a re al estate report done every few years to track the percent increase of land value in different areas of the city The report does a study of Commercial, Industrial, and residential land values by looking at zones within each locality of the city. For the p urpose of this study only the information on the Southern Residential Areas is of any relevance because it is looking at urban legalization The report contains characteristics of each zone and also land values for each zone which are used in the study in order to evaluate the legalized and formal
51 areas. The parcel data which is explored using GIS, contains t he information needed to achi e ve the objectives of the research. The information that will be used is land values, density location (in terms of loca lity), legalized parcels (with date of legalization), and economic strata. The steps taken to identify the study zones, using GIS, are as followed: 1. Locate all residential areas in order to separate the residential zones from the other two types (commercia l and Industrial). 2. Locate low income and middle low income neighborhoods by classifying the zones based on socio economic levels. 3. Locate legalized zones and formal zones. The area that was chosen for the Study was the Southern Residential Area because it contained two essential parameters, low income and legal and formal zones. Based on the selection the next step was to locate the land values for each zone in order to be a ble to make the comparisons This study is looking at the low income to middle low income population s within a specific location of the city. The research will analyze what is going on in the land market of the chosen zones and what conclusion can be der ived from the results.
52 Figure 3 1. City localities and study a rea. [Adapted from Wikipedia. http://es.wikipedia.org/wiki/Bogot%C3%A1 Last accessed August, 2011 ]
53 Figure 3 2. Study area (Southern r esidential zones)
54 Figure 3 3. Location of l egalized and formal z ones
55 CHAPTER 4 DATA ANALYSIS AND RE SEARCH RESULTS Context of Illegality in Bogota D.C U nderstanding illegality requires an understanding of the people who reside in these illegal subdivisions. A survey conducted by the Alcaldia Mayor de Bogota collected data on residents owning or renting plots in eight localities where informal settlements are located in the city. The survey results give a better comprehension on what the residents are like and how they feel about their surroundings. The survey data was compiled to understand the population living in illegal subdivisions and their satisfaction with the ir homes in the se locations. Using the results from the survey this research can understand why people choose to purchase in these areas and why it is necessary to implement legalization programs The data 1 was not discussed in the methodology because only some results will be used to determine what is going in the neighborhoods and it is not under study but it is being used as background informa tion on the population in these localities. The survey was of 360 people living in the localities of Usaquen, Ch apinero, San Cristobal, Bosa, USME, Kennedy, Suba, and Ciudad Bolivar The information that will be looked at will be mainly demographic data in order to determine the makeup of the population. Based on the results, 60% of families living in these localiti es are earning up to 1 SMMLV ( Salario Minimo Mensual Legal Vigente or Current Minimum Monthly Legal Salary) which mean s they are the poorest of the poor. Most of the residents have migrated from outside the city, according to the results 70% came from outs ide and only 30% are locals. The reason that people are migrating is to find jobs in the city or to 1 The data results of the information used for the research are loc ated in Appendix E.
56 reunite with families 64% said that they migrated to Bogot because of lack of work in their place of origin and 19% to reunite with their families. One in teresting result was that the majority of residents arrived more than 26 years ago (28 % ) which with a rapidly urbanizing country it would have been expected that the percentage would have been higher with less years of arrival. One important question that was asked was why they relocated to the current site? An d the reason the majority (45.6 %) o f the respondents gave was that they relocated for cost reduction. The respondents are looking for cheaper places to live and that prompts them to move. The second b igges t percentage moved (30.5% ) because of location of jobs. Based on the results discussed above it is of importance to point out that the information is very relevant to the literature. In terms of what makes people relocate to the city and why they choo se to purchase or rent in places of illegal standing. In the end it all comes down to economics people migrate to the city for economic reasons and the only reason they move, once they have arrived, is in order to find jobs and places to live that they can afford. Characteristics of the Selected Zones In order to examine the data of legalization and land value the two prong structural analysis will be used. The first prong discusses the community assessment analysis and the second prong the quantitative property value impact analysis. The community assessment analysis will look at the characteristics of the zones that were selected to determine if they are comparable. In order to properly analyze the data a table was created with certain ch aracteristics for the different zone IDs see Table 4 1 and 4 2 for a detailed description The Zones that were selected, see Figure 4 2, for the study are Zones 83,
57 84, 85, 90, 91, 93, 94, 95, and 96. The characteristics that were used are type of dwellin g, type of tenure, floors, level of development, legal status, accessibility, transportation routes, urban infrastructure, road status, and interior finishes. The table does contain descriptions for problems, finance and other but it was not used as part o f the comparison. Zones 83, 84, 85 and 90 are considered formal neighborhoods because they did not have illegal subdivision origins and residents have property titles to their land Zones 84, 85 and 90 from now on will be referred to as the formal zones. T hey are self help housing of middle low income strata (strata 3) and are older developments of more than 25 years. Zone 83 has a different origin because it was a planned neighborhood under the Alliance for P rogress in the 1960 s, it is the most traditional popular zone in the city. Although it is located in the Southern Residential Zones it will not be part of the data analysis because its origin is t o o different from the other zones. Zone 84 is made up of single family dwellings built through self help hou sing it is a very old development but there is no specific date available to when it was first developed This zone has favorable accessibility and numerous public transit routes, it also has good urban infrastructure and the road network is in fair condi tions. Zone 85 is made up of single and multi family dwelling built through self help housing. This zone had a little of a different origin then the others because it was developed by organized builders but still self help housing. It was consolidated 25 y ears ago and has limited accessibility and transportation routes but this is expected to improve with the opening of the massive transportation system of TRANSMILENIO. In t erms of road status the internal roads have good continuity but several sectors are in bad states due to lack of upkeep. Zone 90 is also made up of single family dwellings built through self
5 8 help housing. It has favorable accessibility and TRANSMILENIO has had a positive influence in terms of transportation routes. The local road network is also in good condition and has good continuity. The formal zones all are made up of self help housing and tend to have favorable accessibility and good internal roads. Zones 91, 93, 94, 95 and 96, which will be called the legalized zones, tend to be m ultifamily dwellings with self help housing of clandestine dev elopment or pirate urbanization. They also consist of very poor households and are called Popular Periphery Residential Areas because they are the lowest income strata Zone 91 began as a clandestine development though self help housing more than forty years ago, in recent years it has gone through legalization and regularization programs and has been able to acquire some basic services. Zone 91 also has limited accessibility due to the topography of the area, but the available arterial roads have been improved by the TRANSMILENIO system (public transportation bus system) and there are numerous public transportation routes available. Zone 93 is also a clandestine development m ade up of self help housing. There is no specific date available for when it was developed but it shares other characteristics with the other zones. It has gone through legalization and has acquired some basic services and its roads and public transportati on routes have improved since the intervention. Zone 94 is more than twenty years old and it also a clandestine development made up of self help housing This zone has gone through legalization which has brought services and infrastructure to the area. It has limited accessibility due to the topography and few arterial roads but the roads have improved significantly due TRANSMILENIO. Zone 95 does not have a recorded year of when it was first developed but it is a clandestine development made up of self help ho using. In
59 recent years many of the neighborhoods have entered legalization programs which have improved the supply of some basic services but there is still insufficient cover by these services It has limited accessibility due to congestion in the arte rial roads. One positive is that the arterial roads are being conditioned for TRANSMILENIO The urban infrastructure has been positively influenced by the development of large government housing programs for VIS and priority housing promoted by Metrovivien da. The roads lack pavements and houses have common interior finishes and are incomplete. Zone 96 does not have a recorded year of development but it is also a clandestine development made up of self help housing. It has gone through legalization and upgra ding of infrastructure which has improved the conditions of roads and access to public services. The interior finishes are minimal and incomplete and has large areas in subnormal conditions. Through the legalization process all of the legalized zones have been able to acquire some basic services and infrastructure. They have limited accessibility and the arterial roads are in the process of being improved. The legalized zones have few or no paved roads. They also have common and incomplete interior finish es. All of the zones have been intervened by the District Administration which has improved the urban infrastructure. Although there are many differences in terms of the level of infrastructure and status the formal and legalized zones are comparable becau se they are all self help housing in the low and have experienced legalization in recent years or in previous decades
60 Table 4 1 Characteristics of f ormal z ones Zone 83 Kennedy Timiza Zone 84 Sur Occidente Zone 85 Madelena Zone 90 Suroriente 1 Dwelling Single and Multi Family Single Family Single and Multi Family Single Family Type of construction Planned Self help housing Developed by organized builders of middle low income strata. (strata 3) Self help housing Floors Five and Seven Feet One to three Two, three and up to five Up to three Developed Most traditional popular zone in the city. Developed in 1961. Timiza Developed in 1966 Very old development Consolidated 25 years ago. Consolidated in 1960 Status Formal Formal Formal Formal Accessibility Favorable due to the arterial roads that serve it like avenue 68, Americas, 1 de mayo and boyoca Favorable it is served by arterial roads like Avenue 1 de Mayo, Boyoca, Autopista de Sur and Avenida Caracas Limited it only has Autopista Sur for direct access (oriente occidente) Favorable It is served by important City arteries like 13th avenue, Roads 7A 10A and 13 and road 20th south. Roads in good state Transportation Routes Numerous public transit routes. With transportation routes from TRANSMILENIO It is expected that conditions will improve with the opening of the massive transportation system of TRANSMILENIO The TRANSMILENIO system on the avenue Troncal De las Caracas ha s had positive influence in central residential areas. Urban Infrastructure Matatigres -an intersection was built that decongested and gave access to vehicle transit to these neighborhoods. Road Status Internal road network are in fair condition. Internal roads have good continuity but several sectors are in a bad state of conservation. Local road network in good condition and good continuity. Interior Finishes
61 Table 4 1. Continued Zone 83 Kennedy Timiza Zone 84 Sur Occidente Zone 85 Madelena Zone 90 Suroriente 1 Problems Delivered incomplete housing, were severely criticized The urban and architectural designs were not suitable. Timiza was the response to the negativity by having a distinguished group of professionals in charge of the project. Finance Initially funded by the Alliance for progress. Other Operated like a research laboratory in diverse methods of construction. Data Source: Lonja de Propiedad Raiz Bogota ( 2005) Valor de Suelo Urbano en Bogota Adapted by author
62 Table 4 2 Characteristi cs of legalized z ones Zone 91 Suroriente 2 Zone 93 Patio Bonito Britalia Zone 94 Suroriente 3 Zone 95 Bosa Residencial Zone 96 Sur Occidente 2 Dwelling Multifamily Multifamily Multifamily Multifamily Multifamily Type of construction Clandestine development. Some invaded lands. Self help housing Clandestine development. Invasion and pirate urbanization. Self help housing Clandestine development, some invaded land. Self help housing Illegal development. Invaded or pirate urbanization. Self Help housing Clandestine development. Invaded or pirate urbanization. Self help housing Floors up to three one to three one to three one to three one to three Developed More than forty years. More than twenty years Status legalization and regularization programs. Have A cquire some Basic Services. Many of the neighborhoods have been part of legalization programs, have a cquire some basic services Legalization and regularization programs. Have acquired some public services. In recent years entered legalization programs. Improving some basic services. Legalization a nd upgrading of infrastructure are due to programs advanced by Bogota's Mayor's office Accessibility Limited Has few arterial roads and because of the topography of the area. Access and transportation have improved. Due to the recovery and maintenance of the arterial roads. Limited due to few arterial roads and the topography of the area. Limited due to present congestion in arterial roads (Bosa avenue, Agoberto Mejia and Autopista sur) Limited due to deficient infrastructure. It has numerous public transit routes. Transportation Routes Improved with TRANSMILENIO system. Numerous public transportation routes. Positive Influence from Portal De las Americas and complementary projects. Improved significantly with the implementation of ne w services by the Troncal TRANSMILENIO Arterial roads being conditioned for the transit system of TRANSMILENIO
63 Table 4 2. Continued Zone 91 Suroriente 2 Zone 93 Patio Bonito Britalia Zone 94 Suroriente 3 Zone 95 Bosa Residencial Zone 96 Sur Occidente 2 Urban Infrastructure The urban infrastructure has improved due to the intervention that the Administracion Distrital has advanced. The urban infrastructure has improved due to an intervention by the Administracion Distrital (District Administration). Urban Infrastructure, minimum in the majority of this zone Improved with intervention by Administracion Distrital. Positively influenced by development of large housing programs, VIS and Priority housing Promoted by Metrovivienda Minimal urban infrastructure in the majority of the zone. Improved with intervention by Administracion Distrital. Road Status Supports public transit. Lacks paved roads. Few arterial roads Lacks pave d local roads Interior Finishes Common interior finishes and incomplete Common interior finishes and incomplete. Common interior finishes and incomplete. Common interior finishes and incomplete. Minimum interior finishes and incomplete. Problems Numerous problems derived from its subnormal character and precarious habitable conditions (insufficient cover of public services and lack of paved roads). Large areas in subnormal conditions. (Average prices assigned to the zone, correspond to the more developed areas, in a more complete urban condi tion. Excludes sectors not urbanized or semi urbanized). Finance Other Data Source: Lonja de Propiedad Raiz Bogota ( 2005) Valor de Suelo Urbano en Bogota Adapted by author
64 Figure 4 1.
65 Using GIS the study was able to further explore the characteristics of the zone. Figure 4 2 shows all the legalized neighborhoods of the city according to when the legalization process took place. Based on the map it can be seen that most of the legalization program s took place in the 1990 s which is the same trend that can be seen in Figure 4 7 of the study zone s GIS was also used to see if the formal and legalized zones were comparable in terms of density and socio economic strata. Figure 4 3 s how s the density for both legal an d formal zones and based on the results both zones are comparable they have similar densities. The legalized and formal zones have density levels from 0 to 82.53, the colors brown and orange on the map. Both zones are also comparable in terms of socio eco nomic stratas. The legalized zones have families from economic stratas 1 and 2 and formal zones have families from economic strata 2 and 3. Although the formal zones are comprised of mainly strata 3 families they are all part of the low income stratas, so in terms of socio economic comparisons the two study areas share a similar economic background. The zones in terms of density and economic strata are comparable for the purpose of this study. The characteristics of the legalized zones in terms of number of legalized neighborhoods and when legalization took place is impor tant in order to further understand legalization in the context of these zones and why they were chosen for the study. Figure 4 5 shows the number of legalized neighborhoods per zone and it can be n and that legalized zones have a range of 6 to 108 legalized neighborhoods per zone. This shows that the selected zone s meet the requirements of the study of having both formal and legalized neighborhoods within the southern region of the city. Figures 4 6 and 4 7 also
66 give an idea of how many neighborhoods were legalized from 1963 to 2000 in the selected legalized zones In F igure 4 6 it is seen that in 1996 100 neighborhoods were legalized in the zones and it was the highest number since 1963. Figure 4 7 gives a better understanding of the amount of legalization happening between 1990 and 2000, it is almost 2/3 more than the amount of legalizati on happening from 1963 to 1990. This shows that legalization was used at a massive scale in the 1990s, mainly as a response to the 1991 constitution. This part of the data analysis described the characteristics of the zones from a detailed description of the different zones to comparing data about the neighborhood in terms of density and socio economic strata and the legalization process.
67 Figure 4 2 Legalized n eighborhoods in the City of Bogot
68 Figure 4 3. Density of formal and l egalized Zones
69 Figure 4 4. Socio economic strata of f ormal and legalized z ones
70 Figure 4 5. Number of l egalized n eighborhoods per z one
71 Figure 4 6 Number of legalized n eighborhoods in th e selected z ones Figure 4 7 Number of legalized n eighborhoods 1963 2000 in selected z ones 23 14 7 100 32 39 0 20 40 60 80 100 120 # of Legalized Neighborhoods Number of Legalized Neighborhoods # of Neighborhoods Y_1963 to 1969 Y_1972 to 1979 Y_1980 to 1989 Y_1990 to 2000
72 Figure 4 8 legalized n eighborhoods from 1949 to 2000
73 Impact of Legalization on Land Value The second prong, that of quantitative property value impact analysis, is explored using the data from the Urban Land Value of 2005. The land values that are used are the ones for the formal and legal zones discussed above. The study that collected the data used the land values to find real va lues and actual rates. Using the land values and graphs the study will explore what kinds of effects or trends are occurring. Figure 4 9 shows land values for formal and legalized zones from 19 90 to 2001. The graph shows that some interesting things were h appening between 19 90 and 2000 in the formal and legalized areas There are big dips in the market especially for the formal zones. The data shows that something happened in 1996 and 1997 that made the prices in the formal housing market drop; this can pos sibly be attributed to what was happening at the global scale In 1997 there was the Asian economic crisis where many Asian economies were in severe distress and in 1998 the Russian economic crisis followed, which was a result of the Asian crisis (IMF 2011 ) T his crisis had a global affect that was even felt in the housing market of Bogot. There was a worldwide economic meltdown because there was a drop in consumer spending. This meant that fewer people were purchasing homes and there fore the price of la nd decreased Also international companies were reluctant to invest in developing countries economies because the Asian crisis highlighted the risks of investing in these economies ( Chung, 2005 and Lozada, 1998 ). The formal and legalized values seem to fo llow a similar pattern with the legalized zones always below the formal market but this is to be expected since these markets are still located in the most economically distressed part of the city The formal market does seem to be having more dramatic ups and downs than the legalized market s This is due to t he fact that formal markets are more
74 susceptible to speculation; more people are buying and selling according to how the market is doing. There are more transactions occurring in the formal market whic h makes it less stable and more effected by what is happening in the global and national economy. Figure 4 9. Land v alues for f ormal and legalized areas from 1990 to 2001 0 50000 100000 150000 200000 250000 300000 LanV84N LanV85N LanV90N LanV95L LanV96L LanV91L LanV93L LanV94L Legalized Formal $ ( Colonbian pesos) Year
75 Results The objective of this research was to examine the land market in relati ons to the formal and legalized zones and to see what is happening with land va lue prices in these two areas In order to achieve this objective it was important to see if the selected zones where comparable. By categorizing and reviewing the zone descriptions it allowed for a better understanding of how the selected legalized zones compared to each other and how the formal zones compared with each other. It was also important to determine if the legalized and formal zones were comparable to each ot her and by u sing density and socio economic strata data it was determined that they shared enough common characteristics. In terms of the market affects on land value in the formal and legalized zones, the graphs in F igure 4 10 through 4 14 provide a clear er picture on what might be going on. In F igure 4 9, which looks at land values for formal and legalized areas from 1990 and 2001, it shows that formal markets are always above the legalized markets. That is simply because formal markets will have more val ue than legalized markets due to the history of their origin. Legalized zones have developed in a different manner through illegality and buyers are less likely to want to purchase homes in known economically distressed neighborhoods, unless of course the y are redeveloped, which is not the case here. What is more important to look at though is what is going on between 1996 and 2000 between the two zones. In order to further investigate this occurrence the research looks at real value, F igure 4 10 to see w hat kinds of patterns emerge. It is shown in the graph that the formal zones (ones in blue) are going up and down steeply while the legalized zones are slowly going up. In comparison the legalized zones are more flat while the formal zones have steeper cu rves. This can be because the formal market is
76 more susceptible to the market in terms of speculation; people are buying and selling more frequently in the formal market versus the legalized market. Which may point to the fact, that resident in legalized n eighborhoods will be less likely to want to sell and families, even if they receive offers of a new home, will not leave their current homes 40 Figures 4 11 to 4 1 4 furthe r investigate the phenomenon by looking at actual rates for the zones and the average actual rate for the le gal and formal zone. Figure 4 11 and 4 1 2 (using actual rates of growth ) further shows that legalized neighborhoods are less likely to be affected b y the market; the rate goes up and down with some exceptions, zone 93 has a steep decline but recovers quickly. But in comparison the formal market has steep drops and recovers more slowly. Figure 4 14 which shows the average actual rates of growth for th e two zones, has very interesting trends going on Before 1996 the formal zone is above the legalized zones and then in 1996 to 2002 the lines switch and the legalized zones are above the formal zones. This is very interesting because it shows the effect t hat government intervention has on land values According to Velanda and Borbon (2003) the government intervenes in the informal sector when the formal market is in crisis in order to stimulate the economy. One of the reasons may be because during economic hardship the ones most affected are the poor. Also by upgrading informal areas they are creating jobs in the construction sector which will help stimulate the economy. 40 Translated by author
77 Figure 4 10. Real v alue 0 50 100 150 200 250 300 350 400 Zone 84 Zone 85 Zone 90 Zone 91 Zone 93 Zone 94 Zone 95 Zone 96
78 Figure 4 11. Actual r ate of growth for l egalized z ones 20 15 10 5 0 5 10 15 20 Zone 91 Zone 93 Zone 94 Zone 95 Zone 96
79 Figure 4 12. Actual r ate of growth for f ormal z ones
80 Figure 4 13. Actual rate of growth for f ormal and l egalized z ones 20 15 10 5 0 5 10 15 20 25 Zone 84 Zone 85 Zone 90 Zone 91 Zone 93 Zone 94 Zone 95 Zone 96 Formal Legalized
81 Figure 4 14. Average of a ctual r ate of growth for l egalized and f ormal z ones 15 10 5 0 5 10 15 20 25 Average Z 84 to 90 Average Z 91 to 96
82 C oncluding Statements In c onclusion s ome interesting patterns that were observed in terms of land value and legalization zones is that it seems that the land value in legalized zones will always be of lesser value in comparison to the formal zones land values. People with the means will not p urchase homes in neighborhoods that are known to have an illegal origin. The second pattern that emerged was that the market had less of an effect on land values in legalized zones versus formal zones, mainly due to the lack of speculation in legalized zon e. This shows that there are more transaction occurring in the formal zones and therefore it is more sensitive to the market. Therefore the legalized market will have fewer ups and downs because there is not as much buying and selling going on.
83 CHAPTER 5 CONCLUSION Legalization is an important tool that the City of Bogot is using in order to bring people living in the urban fringe into the formal city. It provides families living in substandard conditions, access to important services and infras tructure. It is important to mention that legalization has become the method of upgrading in Bogot mainly because the 1991 Constitution makes it a right for citizens to have access to adequate water, sewage, and infrastructure. Therefore titling programs would not be the answer, because those programs only give titles and not services. Benefits of Legalization The literature showed that many countries pursue titling programs, either because of international organizations like the W orld B ank or IMF or because they believe it will bring access to credit The debate on titling was discussed in the literature and many authors argued against each point that is made by land title proponents. They discussed how titling does not bring the economic benefits to informal settlements that De Soto first concluded. Legalization offers an alternative way for governments to intervene in informal settlements. Legalization provides residents with the most important necessities or the ones that are most urgent which are services and infrastructure and a type of tenure security which is more important to them than titles. It also allows governments to tax the land holder even though they do not have a full title. It can be argued that having titles is important, because y ou have a legal document declaring the land as yours, but not as a main urban upgrading program. It can be a component that residents can pursue on their own if they chose to. But in the case of Colombia land titles are not important because through legali zation programs residents have security
84 of tenure and the government will not evict them from their homes on the contrary through legalization the government is legitimizing the residents claim to the land Legalization is important and it is a different method than just providing titles. According to the literature legalization brings improvement to the neighborhoods and also the individual housing unit. Legalization also provides an intermediate security of tenure which for residents is like they have ti tle s Like the literature mentioned just perceived security of tenure accesses all of the economic advantages that De Soto argues only title will. For the residents being in an illegal subdivision is not always the problem to them they feel a sense of ten ure security because they purchased the plot the problem is not having access to transportation and basic services like sewage, water and electricity. For them it is more important to have security o f tenure than title and in the case of Colombia they acq uire that security of tenure through legalization programs Residents in legalized zones have a high level of security the instant the government decides to provide them with services and infrastructure, the government is investing large amounts of money in these areas in order to improve the conditions of the residents making it clear that they support the right of the residents to reside in these areas. It is important to acknowledge that alt hough legalization is a moral necessity, the policy is in a wa y supporting further illegal subdivisions. The informal developer is not being penalized and benefi ts because he is making money in selling land that has no urban infrastructure and will continue to do so since no legislation has been put in place to addre ss that component of illegality. The government has focused on providing the urban poor with a better quality of life and is taking the burden of providing the services
85 and infrastructure at high costs with no costs being put upon the pirate subdivider to prevent further illegal subdivisions from developing. between legalization and land value. Mainly that legalization is less likely to be as affected by market trends, global trends tha n the formal market and this is in part due to the fact that residents are less likely to want to sell and relocate. They have invested in the houses that they have built over time and it is not only a financial investment but also an emotional one. They have fought for the services and they know the people in the community, they have established a permanent home There is also a stigma associated with neighborhoods in legalized areas because of the illegal origins and the lack of title available for the h omes. This stigma has allowed the legalized zones from being gentrified, people in Bogota are highly segregated due to income and will not want to purchase land in areas where the urban poor are located. Legalization is a step in the right direction but it is not the complete solution to the problem. What is needed in order to address the problem is to have a combination of policies that will address the problem. Upgrading is more expensive than planned development but it has not been pursued in Bogota at t he same rate as legalization. If the government wa nts to address the problem of illegality it will need to pursue policies that address many of the problems that come with it, like pirate subdividers, lack of low income housing and mainly the lack of jobs available to the urban poor. In order to bring people out of poverty it is important to increase their access to education and jobs. Latin America has the highest income inequality in the world and it is important for the Colombian government to address t his inequality if they want to be
86 successful in preventing further illegal development. Davis said ) Legalization is an important step but there is still so m uch more to achi eve in order to address the needs of the urban poor. Limitations and Opportunities for Further Rese arch This study was limited by only using land values without any other data type. The data available was also very limited although there w as land values for both formal and legalized zones there was no neighborhood data for the formal zones. This was not of crucial importance because there were neighborhood characteristics but it would have allowed for a better analysis. To also have a prope r analysis it is important to have data for more than just land values it is important to have the views of the people that are experiencing the legalization. Because of financial and time constraints the study could s but through the literature review there is a universal view point of informal settlement dwellers in terms of what things they want It is important to understand what the people in the specific localities want and think. It is important to know how much involvement and input the residents had and after the process how satisfied they were. No upgrading process is successful without the approval of the residents. Although there are limitations to the study some interesting things were shown thought the graphs and maps in terms of what kinds of effects legalization has on land value. In future research it would be interesting to see what the residents perceptions on the legalization programs are a nd further compare to titling programs to see which one is actually bringing improvements to the lives of the urban poor. It would also be interesting to see how satisfied residents are with the level of tenure security they have
87 acquired and if they wish to pursue titling. This study looked at one small part but the bigger picture has still to be explored. This is an interesting approach to upgrading and it seems to be working in Bogota in terms of providing the residents with urban services and infrastructure Although legalization may not be increasing land value to the levels of formal neighborhoods the improvement of the neighborhoods provided through legalization is the ultimate goa l of the programs and in that aspect it has been successful because they have improved access to basic services and road networks They have been unable to meet the demand for housing but they are providing those who have shelter a better quality of life a nd an improvement of their situation.
88 APPENDIX A WORLD POPULATION DAT A Figure A 1. Population of s lum a reas in d eveloping r egions a t m id Year 2001. ( Source: United Nations Habitat 200 6 ) Figure A 2. M edian Gini c oefficient by r egion and d ecade (Measures inequality l evels ). (Source: United Nations Habitat, 2005)
89 APPENDIX B CHARACTERISTICS OF S LUMS AND INFORMAL SE TTLEMENTS Table B 1. Characteristics of s lums and i nformal Settlements Characteristics of Slums: 1) Lacks basic services a nd poor access 2) Sub standard housing and inadequate structure Structures usually do not meet any building regulation requirements. 3) Hazardous locations Foreshores, hillsides and river basins inhabitants are exposed to environmental disasters such as flooding and landslides. 4) Overcrowding and high density 5) Lack of security of tenure Characteristics of Informal Settlements: 1) Unplanned 2) Informal or insecure property tenure 3) Inadequate or non pa rticipation in government, resulting in lack of basic services, registration and infrastructure. 4) Vulnerability of discrimination for the residents. ( Data Source: United Nations Habitat, 2003 http://ww2.unhabitat.org/mdg/ United Nations Habitat, 2007 http://www.unhabitat kosovo.org/repository/docs/I_s_webfile%202.pdf ) Table by Author
90 APPENDIX C GROWTH PATTERNS AND URBANIZATION RATES Figure C 1. u rban g rowth patterns 1950 to 1990 and urbanization r ates from 1964 to 1985 ( Source: Rueda Garcia 2003). Figure C 2. Urbanization r ates. ( Source: Rueda Garcia 2003)
91 APPENDIX D ECONOMIC LEVELS Figure D 1. Socio e conomic l evels d ata (S ource: Habitat International 2005) Table by Author
92 APPENDIX E DATA RESULTS FROM BOGOTAS CITY HALL SURVEY OF ILLEGAL SUBDIVISI OIN RESIDENTS (ALCALDIA MAYOR DE B OGOTA) Table E 1. Location and neighborhoods s elected by UPZ and n umber of s urveys Location Upz Neighborhood Owner Renter Usaqun Verbenal Villas de la Capilla y Lomitas 29 1 Chapinero San Isidro La Esperanza Nororiental 26 4 San Cristbal San Blas Laureles Suroriental 37 3 Bosa Bosa Central El Porvenir Manzanares El Anhelo 17 25 3 5 Usme Comuneros Alfonso Lpez El Danubio Uval II sector Brisas del Llano El Tuno San Martn 33 27 7 3 Kennedy Castilla Lagos de Castilla 26 4 Suba Tibabuyes Santa Rita 28 6 Ciudad Bolvar El Tesoro Monte Blanco Repblica Canada Lagunitas y Paticos 34 4 6 Table E 2. Income by h ead of h ousehold Range of Income No tiene Hasta 1 SMMLV De 1 a 2 SMMLV De 2 a 3 SMMLV Ms de 3 SMMLV Total No tiene 1,10% 7,73% 4,97% 2,21% 0,28% 16,30% Hasta 1 SMMLV 0,55% 29,83% 26,52% 2,21% 1,38% 60,50% De 1 a 2 SMMLV 0,00% 2,76% 9,94% 1,38% 1,10% 15,19% De 2 a 3 SMMLV 0,00% 0,00% 3,31% 0,55% 0,00% 3,87% Ms de 3 SMMLV 0,00% 0,00% 0,83% 1,38% 1,93% 4,14% Total general 1,66% 40,33% 45,58% 7,73% 4,70% 100,00% Base: 360 Head of Households
93 Table E 3. Level of s atisfaction with site Would you purchase again? Do you feel satisfied Would you suggest it to others Yes No Total Yes Yes 44,59% 15,61% 60,19% No 5,73% 20,70% 26,43% No Yes 1,59% 1,91% 3,50% No 0,00% 9,87% 9,87% Total 51,91% 48,09% 100,00% Base: 314 Owners Table E 4. Place of origin of the r espondents Base: 360 Respondents Table E 5. Reason for t ransfer of i mmigrants. Reason for Transfer /Migration to city Owner Renter Total Total % Total % Total % Lack of Work 136 61.26 26 86.67 162 64.28 Family Union 46 20.72 3 10.0 49 19.44 Violence 21 9.46 0 0 21 8.34 Better Education 12 5.41 1 3.33 13 5.16 Other 7 3.15 0 0 7 2.78 TOTAL 222 100.0 30 100.0 252 100.0 Base: 252 Respondents Origin Owner Renter Total Total % Total % Total % Bogota 92 29.30 16 34.78 108 30.00 Outside of Bogota 222 70.70 30 65.22 252 70.00 TOTAL 314 87.22 46 12.78 360 100.0
94 Table E 6. Time and p lace of a rrival Time of Transfer to Bogot Time of Transfer Place of Arrival to Bogot Place of Arrival Owner Renter Owner Renter Total % Total % Total % Total % Up to 5 years 5 2.25 6 20.0 Family 143 64.41 23 76.67 6 to 10 years 47 21.27 5 16.6 7 11 to 15 years 31 13.96 7 23.3 3 Rental 38 17.12 3 10.0 16 to 20 years 44 19.82 5 16.6 7 21 to 25 years 32 14.41 2 6.67 Other 41 18.47 4 13.33 More than 26 years 63 28.38 5 16.67 No Answer TOTAL 222 100 30 100 222 100 30 100 Base: 252 Respondents Table E 7. Migration p rocess. l ocation at c urrent s ite Have you lived at this Site Since Arrival to city Owner Renter Total Total % Total % Total % Yes 7 96.85 1 99.6 8 3.12 No 215 3.15 29 3.34 244 96.8 TOTAL 222 100.0 30 100.0 252 100.0 Base: 252 Respondents Table E 8. Migration p rocess r eason to m ove to c urrent site Reason You Transferred to Current Site Owner Renter Total Total % Total % Total % Location of Job 65 29.28 12 40.00 77 30.56 Cost Reduction (More Affordable) 99 44.59 16 53.34 115 45.63 Difficulty of Space 8 3.60 1 3.33 9 3.57 Family 29 13.06 29 11.51 Other 3 1.35 3 1.19 No contestaron 18 8.11 1 3.33 19 7.54 TOTAL 222 100.0 30 100.0 252 100.0
95 Table E 9. Proce ss of m obility. t ype of r esidence before m oving to c urrent s ite Type of Residence Before Moving to Current Location Bogot Local Bo got Immigrant Owner Renter Owner Renter Total % Total % Total % Total % Own Home 11 11.96 2 12.50 22 9.91 3 10.00 Rented house 30 32.61 10 62.50 66 29.74 14 46.67 Own Apartment 2 2.17 0 0 3 1.35 0 0 Rented Apartment 17 18.48 4 25.00 53 23.87 7 23.33 Own Room 1 1.09 0 0 0 0 0 0 Rented Room 25 27.17 0 0 63 28.38 6 20.00 Other 2 2.17 0 0 5 2.25 0 0 No Answer 4 4.35 0 0 10 4.50 0 0 TOTAL 92 100.0 16 100.0 222 100.0 30 100.0 Base: 360 Respondents Table E 10. Regularity of i ncome for o wners Regularity of Income Bogot L ocal Bogot Immigrant TOTAL Total % Total % Total % Male 67 79.76 172 74.78 239 76.11 Steady 36 53.74 66 38.37 102 42.68 Sporadic 22 32.83 82 47.68 104 43.51 Does Not Apply 9 13.43 24 13.95 33 13.81 Female 17 20.24 58 25.22 75 23.89 Steady 6 35.29 21 36.21 27 36.00 Sporadic 7 41.18 24 41.38 31 41.33 No aplica 4 23.43 13 22.41 17 22.67 TOTAL 84 100.0 230 100.0 314 100.0 Bas e: 314 Respondents
96 Table E 11. Economic p rofile income b ased on Minimum Monthly Wage for o wners Income in Minimum Salary Bogot (Local) Immigrant TOTAL Total % Total % Total % Male 67 79.76 172 74.78 239 76.11 Less than 1 SMLV 34 50.75 110 63.95 144 60.25 1 to 2 SMLV 13 19.40 25 14.53 38 15.90 2 to 3 SMLV 5 7.46 6 3.49 11 4.60 3 or more 6 8.96 7 4.08 13 5.44 No declaration of income 9 13.43 24 13.95 33 13.81 Female 17 20.24 58 25.22 75 23.89 Less than 1 SMLV 11 64.71 38 65.52 49 65.34 1 to 2 SMLV 2 11.76 3 5.18 5 6.66 2 to 3 SMLV 0 0 3 5.18 3 4.00 3 or more 0 0 1 1.71 1 1.34 No declaration of income 4 23.53 13 22.41 17 22.66 TOTAL 84 100.0 230 100.0 314 100.0 Base: 314 Respondents Source: [ Adapted from Velanda, Antonio & Borbon, Walter. (2003) Mecanismos y Formas de Enajenacion Del Urbanizador Pirata y la Relacion Oferta y Demanda que se Genera en el Desarollo de Vivienda Ilegal en los Estratos 1 y 2. Alcaldia Mayor de Bogota D.C. Secretaria General. Subsecretaria General de Vivienda. Bogota D.C. Marzo]
97 LIST OF REFERENCES Abbot, John. (2002) An Analysis of Informal S ettlement Upgrading and Critique of Existing Methodological Approaches. Habitat International 26 303 315 Arbelaez, M.A., Camacho, C.,Fajardo, J. (2011) Low Income Housing Finance in Colombia. Inter American Development Bank: Department of Research and Chi ef Economist. IDB Working Paper Series No. IDB WP 256, August. http://idbdocs.iadb.org/wsdocs/getdocument.aspx?docnum=36376895 Aristi zabal Nora & Ortiz Andres (2004) Improving Security Without Titles in Bogota. Habitat International 28 : 245 258. Aristizabal, Nora and Ortiz, Andres. (2002) Are Services more Important than titles. Land, Rights & Innovation: Improving Tenure Security for the Urban Poor (Payne, Geoffrey Ed.) Glasg ow:ITDG publishing. Augustinus, Clarissa & Benschop, Marjolein. (2003) Security of Tenure: Best Practices. Land and Tenure Section Shelter Branch. UN Habitat, June. http://www.unhabitat.org/content.asp?cid=1553&catid=491&typeid=3&AllContent =1 Brandao, ASP, Feder, G. (1996) Regulatory Policies and Reform: The case of land markets. PSD Occasional Paper. No. 15, The World Bank, January Blanco, Andres. (2011) Discourse of Land Allocation and Natural Property Rights: Land Entrepreneurialism and Informal Settlements in Bogota, Colombia. Planning Theory. Sage publications. http//plt.sagepub.com/content/early/2011/04/02/1473095211403124.pdf Cira, Dean. (2002) Urban Upgrading in Latin America and the Caribbean. En Breve. World Bank. June No. 3 Chung, Huimin. (2005) The Contagious Effects of the Asian Financial Crisis: Some Evidence from ADR and Country Funds. Journal of Multinational Financial Management. 67 84 http://www.aiecon.org/advanced/suggestedreadings/PDF/sug18.pdf Constitution of Colombia. (1991). http://confi nder.richmond.edu/admin/docs/colombia_const2.pdf De Soto, Hernando. (2000) The Mystery of Capital: why capitalism triumphs in the West and Fails Everywhere Else. Basic Books Doebele, William. (1977) The Private Market and Low Income Urbanization in Develop of Comparative Law 25: 531 564
98 Ellsworth, Lynn. (2004) A Place in the World: A Review of the Global Debate on Tenure Security. Ford Foundation. March Everett, Margaret. (2001) Evictio ns and Human Rights: Land Disputes in Bogota, Colombia. Habitat International 25 : 453 471. Ferguson, Bruce & Navarrete, Jesus. (200 3 ) New Approaches to Progressive Housing in Latin America: A Key to Habitat Programs and Policy. Habitat International, Decem ber Fields, Erica. (2004) Do Property Titles Increase Credit Access Among the Urban Poor? Evidence from a Nationwide Titling Program. Harvard University, January Galster, G.C., Santiago, A.M., Smith, R.E., and Tatian, P.A. (1999) Assessing property Value Impacts of Dispersed Housing Subsidy Programs. Washington, D.C. The Urban Institute Gilbert, Alan. (2002) On the Mystery of Capital and the Myths of Hernando de Soto: What Difference Does Legal Title Make? International Development Review. Vol. 24 (1)Febru ary : 1 19 Gilbert, A, & Gugler, J.(1992) Cities, Poverty, and Development:Urbanization in the Third World. Oxford University Press. 1992 Gonzalez, Carmen. (2009) Squatters, Pirates, and Entrepreneurs: Is Informality the Solution to the Urban Housing Crisi s?.University of Miami Inter American Law Review. Volume.40 Hataya, Noriko. (1996) Expanding Urban Sprawl: Growth of Low Income Settlements in Bogot, Colombia. The Developing Economies, December. http://www.ide.go.jp/English/Publish/Periodicals/De/pdf/96_04_07.pdf Holstein, Lynn. (1996) Towards Best Practice From World Bank Experience in Land Titling and Regist ration. W orld Bank. October I nternational M onetary F und (2011) Asias Growing Influence. Factsheet. http://www.imf.org/external/np/exr/facts/asia.HTM Janvry, Alain de & Sadoulet, Elisabeth. (2002) Land Reforms in Latin America: Ten Lessons toward a Contemporary Agenda. World Bank Latin American Land Policy Workshop. June : 1 13 Lonja de Propiedad Raiz de Bogota. (2005). Valor de Suelo Urbano en Bogota Latin America. Economic Updates. Federal Reserve Bank of Atlanta. Retrieved October 2011. http://www.frbatlanta.org/archives/economicsupdate/the_asian_crisiss_effect_on _latin_america.cfm
99 Morley, Samuel A. (2001) The Income Distribution Problem in Latin America and the Caribbean. Economic Commission for Latin America and the Caribbean. United Na tions Nagy. Gabriel.(2001) A Strategic Vision for Low Income Housing, Service Provision and Land Markets: Lessons From Urban Practitioners Retrieved August 29, 2011 from http://www.uic.edu/cuppa/cityfutures/papers/webpapers/cityfuturespapers/sessio n4_1/4_1strategicvision.pdf Payne, Geoffrey. (2001) Urban Land Tenure Policy Options: Titles or Rights?. Habitat International 25 : 415 429 Pop ulation Reference Bureau. (2008) 2008 World population data sheet. http://www.prb.org/pdf08/08WPDS_Eng.pdf Rueda Garcia, Nicolas. (2003) Understanding Slums: The Case of Bogot D.C., Colombia. UN Habita t. Global Report on Human Settlements 20 03, The Challenge of Slums: 195 228 http://www.ucl.ac.uk/dpu projects/Global_Report/cities/bogota.htm U nited N ations Habitat. (2006) An alytical Perspective of Pro poor Slum Upgrading Frameworks. United Nations Human Settlements Programme. Cities Alliance http://www.unchs.org/pmss/listItemDetails.aspx?publicati onID=2291 U nited N ations Habitat (2006) The Improvements of Slums and Informal Settlements in Freeetown http://www.unhabitat.org/downloads/docs/6125_11215_TheImprovementSlumsIn formalSettlementsFreetown.pdf U nited N ations Habitat. (2005) Land Tenure, Housing Rights and Gender: Colombia. Law, Land Tenure and Gender Review Series: Latin America. United Nations Human Settlement Programme. U nited S tates A gency for I nternational D evelopment (2010) Country Profile: Property Rights and Resource Governance, Colombia. http://usaidland tenure.net/usaidltprproducts/country profiles/colombia Velanda, Antonio & Borbon, Walter. (2003) Mecanismos y Formas de Enajenacion Del Urbanizador Pirata y la Relacion Oferta y Demanda que se Genera en el Desarollo de Vivienda Ilegal en los Estratos 1 y 2 Alcaldia Mayor de Bogota D.C. Secretaria General. Subsecretaria General de Vivienda. Bogota D.C. Marzo Ward, Peter. (2004). Informality of Housing Production at the Urban Rural Interface: rban informal ity: Transnational Perspective From the Middle East, Latin America, and South Asia (Roy, Ananya & Alsayyad, Nezar, ED ., 2004)
100 Williamson, Robert. (1965) Toward a Theory of Political Violence: The Case of Rural Colombia. The Western Political Quaterly, Vol. 18, No.1. March: 35 44 Winchester, Lucy & Szalachman, Raquel. (2009) Impacts of Climate Change in Latin America and the Caribbean: A Policy Agenda. Economic Commission for Latin America and the Carribean. United Natio ns World Bank. (2003) Colombia Bogot Urban Service Project. March. http://www wds.worldbank.org/external/default/WDSContentServer/WDSP/IB/2002/10/04/00 0094946_02100304100082/Rendered/PDF/multi0page.pdf
101 BIOGRAPHICAL SKETCH Anelkis Royce was born in Esteli Nicaragua In 1991 her family moved to Gainesville, Florid a where they have lived since. She graduated from P.K. Yonge Developmental Resea rch School and afterwards att ended the University of Florida, where she earned a Bachelors of Arts in political science. After graduation she took a year off to travel and work as a translator in her country of birth She was admitted to the University of Master of Arts Program where she studied u rban and r egional planning. planning department whe re she had the opportunity to learn how planning works in the real world.