Rains often spell trouble for Latin America. This month, more than 300 people died in a mudslide in Mocoa, Colombia. In March, flooding killed at least 95 people in Peru, left 700,000 homeless, and caused severe property damage in Lima, a city built on a desert.
While the weather pattern — linked to a localized, off-year version of El Niño — is abnormal, the human costs were predictable. For centuries, Latin Americans have built housing without land titles or zoning approval. As land has grown scarcer with urban development, people have looked to increasingly precarious lands, including floodplains and hillsides, to build their homes. These self-built neighborhoods are prone to collapse when natural disasters hit.
Politicians encourage the process. Forbearance toward informal constructions is an easy way to win votes. It’s also an inexpensive “solution” to real housing needs. Countries like Colombia and Peru struggle to offer affordable housing options, especially to their poorest citizens. So even when zoning plans prohibit construction and bureaucrats can enforce them, governments often look the other way.
The international community has abetted these tendencies in Latin American politics. In 1986, the Peruvian economist Hernando de Soto and his team published an influential book called The Other Path: The Invisible Revolution in the Third World. Among other things, de Soto argued that the lack of property titles — the documents that recognize legal title to homes and land — keeps people poor. Without property titles, people cannot use their houses as collateral to obtain bank loans and start businesses. Just by providing the poor with legal rights to properties they have already occupied, de Soto argued, capitalism could be “unleashed” and poverty alleviated.
Across the developing world, politicians introduced policies to give property titles to the poor
Influenced by that book and its advocates, governments from Peru to Egypt and the Philippines undertook large-scale property-titling campaigns, often with international financial and technical assistance. Authorities granted titles to properties outside the legal economy — in rural areas, many people had never bothered to register the land they’d occupied for generations, due to cumbersome bureaucratic procedures. Swaths of Latin American cities were settled through land invasions in which squatters illegally built their houses on vacant private or state land. Other enterprising poor people purchased — at bargain prices — land that was not zoned for residential construction due to flooding, mudslide, and earthquake risks. Property-titling initiatives resolved these legal issues and granted ownership rights to millions of people in the developing world.
De Soto’s proposal was not irrational: There are real costs to legal insecurity. Yet the focus on property titles has also had unanticipated consequences.
It’s now easy to get a property title in Colombia or Peru, but that shift hasn’t sparked development. In Peru, every president has launched a new property titling campaign since the first push in 1996. In Bogotá, Colombia, it used to take an average of 20 years for an informal settlement to receive legal recognition; it now takes four.
Studies show that property title recipients spend more on their homes, work more outside the house, and have more pro-market attitudes. That’s because people invest and work more when they can be confident that they own something; they don’t need to expend time and effort protecting their claims. But contrary to de Soto’s prediction, they are no more likely to obtain commercial bank loans. Banks worry that they will not be able to recover their collateral in the case of a default because judges will refuse to evict the poor from their houses.
There was an unanticipated side effect of the new policies: land grabs
But property titles unleashed something else in Latin America — more land takings. Put yourself in the place of a family in need of housing. You could rent an apartment on the legal market and save up to buy a home with a legal title. Or you could look for a piece of land, build your own house, and wait three to five years to receive property title and become homeowners. The less time it takes to get property title, the more attractive informal housing options become. Losing everything in a natural disaster starts to seem like a risk worth taking. The incentives have created a booming land trafficking industry, whose participants peddle “soon-to-be-titled” plots to the poor.
Does this mean that families who live in informal, shadow economy housing should be left in legal limbo, or even evicted? Not without alternatives. Property titles should be provided to existing houses that do not pose environmental hazards. But housing programs must be scaled up to offer real alternatives to families who have not seized land. Colombia, for instance, has invested in 100,000 free houses for the poor across the country since President Juan Manuel Santos took office in 2010. But with a housing deficit of more than 3 million units, much more needs to happen. Only with substantial housing investments can politicians be persuaded to prevent poor constituents from building in potentially deadly areas — and be held legally responsible if they fail.
An analogy can be made to proposals for comprehensive immigration reform in the United States. Under such a deal, some kind of amnesty — a path to citizenship — would be offered to undocumented immigrants who have been in the country for many years and have put down roots. At the same time, there would be stricter measures to secure the border.
Latin American governments and international development banks have in effect offered amnesty for people who build illegally. Yet they have not provided the other half of the deal: affordable legal housing.
After the latest flood deaths, the mayor of Mocoa, José Antonio Castro, said that “not even a Chinese wall could have stopped the swelling rivers.” That may be true. But government policy played a part in encouraging people to build in the water’s path. Better housing policies can discourage such deadly choices.
Alisha C. Holland is an assistant professor of politics at Princeton University and author of the new book Forbearance as Redistribution: The Politics of Informal Welfare in Latin America.
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