The Citistates Group presents

Thank you for reading This website is no longer being updated, as of October 2013. We invite you to visit our new site at

Puzzles of Legalizing Squatters’ Settlements Worldwide

Anthony Flint / May 26 2011

For Release Thursday, May 26, 2011

Anthony FlintAs the world’s population hits 7 billion this fall, we are again reminded that we live on a planet of cities. More than half the world’s population lives in cities, and hundreds of millions more are on the way, coming in from the countryside in search of a better life. But we also risk living on a planet of slums. Although the number can’t be pinned down precisely, the UN estimates as many as 1 billion live in informal settlement — shantytowns, squatters’ shacks, and favelas that are technically illegally occupying urban land.

The reality of informal settlement has been around for decades, and though it spans from Asia to Africa, it’s Latin America — where nearly 130 million people or one out of four urban residents live in these makeshift neighborhoods — that has had the most experience in tackling the problem. South America in particular understands the costs. Informality is attributed to many causes, including low income levels, unrealistic urban planning and building regulations, a lack of serviced land and social housing, and a dysfunctional legal system. Though romanticized by some, life in the favelas too often means constant insecurity, fear of eviction, lack of basic services such as water and sewer, environmental and health hazards, discrimination, and violent crime. The costs are high for local government as well, in fighting crime, public health, and a vast array of social problems.

So what to do? The idea of “slum clearance,” bulldozing favelas and attempting to relocate large numbers to public housing, typically in dormitory-style structures at the periphery, has lost appeal. It is seen these days as socially intolerable and economically not feasible.

Instead, Latin American nations and metropolitan areas have been trying mightily to work with these areas as they exist, on site, in place – to improve conditions, provide basic services, and begin integration into the formal city. At the same time, governments don’t want to be so accommodating that they end up encourage further informal settlement. It’s been a policy bulls eye that has been challenging to say the least.

What is known as the “regularization” of informal settlement has taken two major forms: legalizing parcels by awarding the occupants titles to the property as exemplified in Peru, and Brazil’s broader approach that combines titling with extensive upgrading of public services.

Both approaches have had an impact. But a report recently published by the Lincoln Institute, Regularization of Informal Settlements in Latin America, suggests that these efforts are very much a work in progress. Titling by itself is relatively inexpensive but has not triggered neighborhood improvements, while upgrading is much more costly and can stimulate additional irregular development by those hoping to benefit from future upgrading.

The report’s author, Edesio Fernandes, a lawyer and international expert on regularization, concludes that regularization programs need to be designed carefully to avoid either making conditions worse for the low-income residents the programs are intended to help, or stimulating the development of new informal settlements.

Peru’s approach is inspired by Hernando de Soto’s hypothesis that tenure security is a trigger for development, stimulating access to finance, economic activity, and residential upgrading. From 1996 to 2006 Peru issued over 1.5 million freehold titles at an average cost of $64 per household. Evaluations indicate that the titling programs had little impact on access to credit, but yielded some investment in housing, and may have contributed to some poverty alleviation. The programs also increased property values by about 25 percent, well in excess of the titling cost.

Brazil’s broader regularization programs combine legal titling with the upgrading of public services, job creation, and community support initiatives. At $3,500 to $5,000 per household, these programs are much more costly than Peru’s titling system, and Brazil has had more modest coverage of households. Ironically, service upgrading occurs more often with little or no change in legal tenure status, although the number of titles is increasing. The few evaluations that exist indicate that the increase in property values associated with upgrading exceeds its cost.

Many residents in informal areas feel secure with de facto property rights of ownership based on customary practices. Residents in informal settlements developed on private land often have bills of sale or related documents, and such properties are bought and sold regularly. Some residents seem to prefer this system of informal titling and often do not embrace the legal titling system.

The business of awarding titles clearly needs some fine-tuning. All this work requires careful monitoring to determine if the situation is improving or worsening, and to prevent the establishment of additional informal settlements. Some may start occupying ever more precarious land because they expect that upgrading will come along eventually.

Integrating informal areas in the formal city also carries with it an intriguing notion: that residents with titles on their property pay property taxes. Yet adjustments must be made so the system is equitable in the context of conditions on the ground — not paying full freight for truck-delivered water, for example.

As noted by Martim O. Smolka, director of the Program on Latin America and the Caribbean at the Lincoln Institute, cities in Latin America are finding that addressing informality “on site” is now a political imperative, but that the long-run challenge is to provide infrastructure and services in an affordable and sustainable manner.

The recent animated film Rio depicts favelas as essentially well-functioning, fine-grained urban areas with winding streets and low-rise housing stacked on hillsides, typically with beautiful views. There is clearly some Hollywood white-washing at work. But as Jane Jacobs observed, the organic, self-organizing character of informal settlement does have integrity. Customized, cost-effective, and sustainable approaches to shoring up these accidental neighborhoods have the potential to improve the lives of millions of people.

Anthony Flint, a Citistates Associate, is a fellow at the Lincoln Institute of Land Policy columns are not copyrighted and may be reproduced in print or electronically; please show authorship, credit and send an electronic copy of usage to

One Comment

  1. Cyrus Mbisi
    Posted June 21, 2011 at 6:30 am | Permalink

    Interesting approaches in Southern America and justs wondering how these aproaches can be compared to other areas like Asia and Africa.In Kenya,for example,efforts led by non-state actors like Non Governmental Organizations are mobilizing resources amongst slumdwellers and sponsors and finding them alternative land in the countryside in basically ‘urban islands’ in rural areas.This is a new concept and its been met with resistance from the rural folks fearing the associated social ills that characterize slum dwellers…and poses new challenges of integration.