FOURTH URBAN RESEARCH SYMPOSIUM URBAN LAND USE AND LAND MARKETS. WASHINGTON D.C., U.S.A. May 2007

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1 FOURTH URBAN RESEARCH SYMPOSIUM URBAN LAND USE AND LAND MARKETS WASHINGTON D.C., U.S.A. May 2007

2 METROPOLITAN MONTEVIDEO: LAND USES AND URBAN LAND MARKET CLUSTER 1 ISABEL VIANA URUGUAY

3 METROPOLITAN MONTEVIDEO

4 METROPOLITAN MONTEVIDEO is a non continuous and complex urban system. Today includes the Montevideo City and its expansion areas, that include 29 former medium and small cities in the Montevideo, Canelones and San José departments, and new formal and informal subdivisions of land. The Metropolitan area administration is not coherent, because each Department has their own elected government and normative.

5 THE SYMPOSIUM DEBATE PROPOSED THEMES ARE: 1/ to debate on the links between various aspects of urban land management and welfare 2/ to examine the implications of commonly used urban land and related policies using a common methodological framework 3/ to highlight priority policy and program design/ implementation questions which cannot be answered now and to propose a research agenda that sets out to address these questions

6 THE RESEARCH CLUSTER Nº 1 must analyze the implications of various land market distortions on urban welfare/quality of life, particularly for the poor; and consequences of these distortions on the efficacy of Bank/government interventions.

7 Metropolitan Montevideo provides an excellent example to analyze the distortions in the city development and the citizens wellbeing, generated, directly or indirectly, by government plans, actions and norms

8 THE QUESTIONS 1/ What are the major constraints affecting the efficiency of the formal land and housing market and land delivery? 2/ What is the consequence of an inappropriate, excessively detailed and inflexible regulatory and legal framework on the smooth supply of the land in the formal housing market, development of the private housing sector, and welfare of the poor? 3/ How much are benefits from slum upgrading and titling programs reduced due to market and regulatory distortions?

9 CONSTRAINTS THE GOVERNMENT DECISIONS AFFECT THE EFFICIENCY OF THE FORMAL LAND AND HOUSING MARKETS AND LAND DELIVERY Montevideo Department government froze the urban fringe in 1947, determining the scarcity of urban land in Montevideo City and the permanence of the so call Rural Montevideo. The land prize raised. This urban border definition is still included in the 1988 Plan de Ordenamiento Territorial POT. Those norms determine land uses in Montevideo Department, and are not valid in the bordering departments.

10 CONSTRAINTS IN ADDITION WITH THE SCARCITY OF URBAN LAND, MONTEVIDEO SHARES SOME CONSTRAINTS WITH OTHER CITIES IN THE REGION: lack of main infrastructure; inefficient and heavily bureaucratic administration; lack of coordination among national and departmental implementation agencies for provision of infrastructure and services; rigid planning regulations and controls, and delays in the planning process, and very scars reviews for conversion of land from agricultural to urban use the deindustrialization process, diminishing the employment offer and making the costs of the consolidated city unsustainable for the poor

11 DEINDUSTRILIZATION PROCESS: UNEMPLOYMENT AND GROWTH OF POOR AREAS (RED)

12 CONSEQUENCES OF THE INADEQUATED REGULATORY AND LEGAL FRAMEWORK ON THE SUPPLY OF THE LAND IN THE FORMAL HOUSING MARKET, DEVELOPMENT OF THE PRIVATE HOUSING SECTOR, AND WELFARE OF THE POOR The low and middle-low income social groups couldn t pay the cost of formal urban land, and moved towards public or private vacant land, inside the city, in its periphery, or moved out of the Department of Montevideo, looking for formal and informal land in the bordering departments of Canelones and San José. There, their options were to live in old small urban centers or in new settlements near Montevideo border, along the main communication routes. The Montevideo Department (consolidated city and rural land) diminished its population - in absolute figures - in the last census (-0,214%, 2005 INE) and the growth in some metropolitan sites of the expansion periphery reached values major than 20%, between 1985 and 1996 census

13 Montevideo government went on ruling over Montevideo Department and ignoring the metropolitan expansion as part of the city. Montevideo s map shows the poorness concentration in the urban fringe (red) and, part of the non regulated city expansions (grey) in the bordering departments. The poor areas appear bigger than their real dimension because of the administrative districts used to the analysis Source: : Intendencia Departamental de Montevideo Observatorio de la Inclusión Social, 2003)

14 METROPOLITAN MONTEVIDEO EXPANSION PATTERN

15 THE LACK OF MAIN INFRASTRUCTURE URBAN POPULATION PRECARIOUS HABITAT URBAN MONTEVIIDEO 14% PRECARIOUS HABITAT 29 PERIPHERIC URBAN CENTERS 78% URBAN LAND INCOMPLETE INFRASTRUCTURES AND SERVICES URBAN MONTEVIDEO 5% 972 HÁS INCOMPLETE INFRASTRUCTURES AND SERVICES 29 PERIPHERIC URBAN CENTERS 86% 8844 HÁS PRECARIOUS LAND INFRASTRUCTURES AND SERVICES METROPOLITAN MONTEVIDEO 33% 9816 HÁS Source: Arq. Edgardo Martínez VARIANTES en la PRECARIEDAD de la URBANIZACIÓN del SUELO METROPOLITANO/ 2002

16 A CASE STUDY: METROPOLITAN MONTEVIDEO LAND MARKETS INFORMAL SETTLEMENT 24 DE JUNIO AND ITS FORMAL SURRONDING Source: MERCADO DEL SUELO URBANO ENEL AREA METROPOLITANA DE MONTEVIDEO - Viana, Casanova, Zuccolini - Lincoln Institute of Land Policy Montevideo, 2005 / 2006

17 THE CASE STUDY: INFORMAL SETTLEMENT 24 DE JUNIO LOCALIZATION

18 THE CASE STUDY: MONTEVIDEO S PLANNING FRAMEWORK PLAN DE ORDENAMIENTO TERRITORIAL USE OF LAND Green: rural land: Orange, urban land; Grey: urbanizable land

19 THE CASE STUDY, DETAIL: INFORMAL SETTLEMENT 24 DE JUNIO Magenta: Informal Settlements Jacksonville

20 CASE STUDY LAND MARKET DISTORTIONS FORMAL LAND INFORMAL LAND Medium prize U$S 5.74 / m2 Medium prize U$S 2.00 / m2 Plots under that prize 60% Plots under that prize 52 % Minimum prize U$S 0.74 / m2 Minimum prize U$S 0.10 / m2 Maximum prize U$S 27.8 / m2 Maximum prize U$S 8 / m2 4% of the plots in the formal city has similar prizes than the ones in the informal settlement: U$S 2 / m2 (medium prize of sell expectances) so people has real chances of choosing between formal and informal city areas. Author elaboration with data produced by Case Study Mercado del Suelo Urbano en el Área Metropolitana de Montevideo -Viana, Casanova, Zuccolini

21 CASE STUDY CONFIRMATIONS (1) THE CASE STUDY PERMITS TO CONFIRM SOME PRELIMINAR HYPOTHESIS: The informal settlement 24 de Junio, is representative of the land occupation processes occurred in the first decades of the present century. The occupation process decreased with the end of the crises. The population went on leaving the formal city even when the economic situation improved after crisis. Occupants have high legalization expectations, sustained by government explicit or implicit policies and focused social policies subsidize the population of the informal settlements. The inhabitants do not pay taxes or tariffs. The majority of the informal area occupants came from Montevideo s inner city

22 CASE STUDY CONFIRMATIONS (2) The Informal settlements development is parallel to the central area s loose of population The major occupation motivation was the possibility of access to land for housing for free or at accessible prizes The majority of the informal settlement inhabitants use subsidized public transportation, though, they transfer former expenditures in housing to new expenditures in transportation The total retirement of the State in providing land or housing for the poor, during and after the crisis, and the lack of policies of revitalizing the inner city, create conditions to the continuity of the process of informal city development and its future expansion even though the economy is now growing up, the unemployment decreasing and that the families income has increased in real terms

23 THE ANSWERS the major constraints affecting the efficiency of the formal land and housing market are the rigid planning regulations, scarce controls, bureaucracy and delays in the planning process the consequences of an inappropriate, excessively detailed and inflexible regulatory and legal framework and the lack of supply of urban land for the formal housing market, are the growth and territorial expansion of the urban informality the benefits from slum upgrading and titling programs are really reduced due to inefficient and heavily bureaucratic administration, the regulatory distortions in land administration, the rigid planning regulations, the lack of coordination among national and departmental levels of government and the lack of accomplishment of legal requirements referred to public and private investment in main infrastructure

24 THANK YOU FOR YOUR ATTENTION Arq. ISABEL VIANA