Landlord and Tenant

Housing the Poor in Urban Mexico

Alan Gilbert, Ann Varley

• Publisher: Taylor & Francis
• Year: 2002
• Print ISBN: 9780415055932
• eBook ISBN: 9781134936007
• Edition: 1
• Topic: Scienze fisiche
• Subtopic: Geografia

This ground-breaking work employs survey data and in-depth interviews to compile a detailed picture of landlords and tenants in developing countries. Focusing on Mexico the authors examine the state's housing policy, with its clear bias towards increasing home ownership, and explores the possibilities of improving the quality and increasing the stock of rented accommodation in the developing World.

1Introduction

Where do the poor live in Latin American cities? To many readers, the answer may seem to be obvious: poor households live in self-help settlements, occupying land through informal processes and building their homes through some kind of self-help construction. After all, this process has been described extensively in one Latin American city after another, and indeed, throughout most parts of the so-called Third World. In fact, the answer is by no means so straightforward, for many poor households rent or share accommodation. It is this issue that is at the heart of this book. We are principally concerned with establishing which kinds of family own their homes, and which rent or share them. What are the main factors influencing their tenure choice?

Traditionally, most urban Mexicans have lived in rental housing. Indeed, it is only since the Second World War that there has been a massive expansion of self-help housing. And, if it is true that the mass of the Mexican urban population now lives in self-help settlements, a substantial proportion of the occupants do not own their home. Depending on the city concerned, up to half the population live in homes belonging to other people. Many live in rental accommodation; others share homes with kin; some young adults continue to live with parents; some families look after homes for neighbours or friends.

If there was a pronounced shift towards owner-occupation after 1950, that tendency may now have been reversed. Indeed, there are good reasons for suspecting that the proportion of Mexican families occupying their own self-help home has declined during the 1980s. A combination of falling real incomes, rising costs of land and materials, and changing state policies may well have halted a seemingly endless tide.

In practice, we know too little about the residential preferences of the Mexican poor, and the economic constraints which face them, to know the answer. We do not know whether the majority aspire to the ownership of a self-help home. We are uncertain whether they yearn for such a home but simply lack the resources to realise such a dream. We do not know whether as cities grow in size some among the poor are forced to reject the option of peripheral ownership simply because of the difficulty of getting to work in the city centre. For this reason we are principally concerned with the factors underlying tenure choice.

THE DEBATE ABOUT LAND

This book is intended to link the issue of renting to a number of basic issues raised in the theoretical debate about the role of self-help housing. One of the issues which has been extensively discussed in the literature relates to the cost of land in third world cities; in general, most commentators argue that the cost of land is rising, thereby slowing the growth of owner-occupation (Angel et al., 1983; Doebele, 1987; van der Linden, 1987; Baross, 1987; Geisse and Sabatini, 1982; Durand-Lasserve, 1986). This argument differs radically from earlier thinking: for many years it was assumed that self-help housing flourished in most third world cities because land was easy to obtain. In Africa and parts of Asia, customary forms of landholding allowed newcomers to obtain free plots on the fringe of the city (O’Connor, 1983; Peil and Sada, 1984; Stren, 1982). In Latin America and the Middle East, land was often obtained through the medium of the land invasion, a process frequently encouraged by government and opposition parties alike (Drakakis-Smith, 1976; El Kadi, 1988; Danielson and Keles, 1984; Ward, 1982). Indeed, it was in a Latin American city dominated by land invasions that the doyen of the self-help housing literature formed most of his ideas. The very fact that John Turner worked in Lima, rather than some other city, was vital in convincing him that low-income households could successfully build and consolidate their own homes. A series of governments in that city had encouraged the invasion of public-owned land as a way of accommodating a burgeoning population and indeed garnering their political support (Collier, 1976). Had Turner worked elsewhere it would have been obvious that access to land was much more of a problem in most other large Latin American cities (Gilbert, 1981).

Today, many writers on third world housing contend that the period of free access to urban land is over. As Baross (1983: 205) argues:

The majority of people who came to the large cities in developing countries in the last two or three decades found or developed housing in popular settlements. It was an historical epoch of non-commercialised or cheap commercial land supply…. people did not have to pay or paid very little…this era in many developing countries is drawing to an end.

Similarly, UNCHS (1984: 25) have pointed out that

non-commercialised processes for supplying land are disappearing in many countries… the land market is becoming increasingly commercialised. Land, particularly in the cities, is being quickly transformed from a resource with a use-value to a commodity with a market value.

Access to free land has become much rarer for a variety of reasons. First, the combined forces of demographic growth and suburbanisation have simply used up most of the accessible land. Rapid urban growth has exhausted areas of land which were previously available to low-income housing: ‘pockets of unused or underused land … have long since disappeared. Accessible public land has been inundated’ (Doebele, 1987: 14).

Second, a fully commercialised land market has been established in most cities. Low-density suburban development has led to increasing numbers of middle-class owners occupying peripheral land. This has meant that most owners, including the public sector, have become well aware of the market value of their land. They have come to realise that the process of urban land conversion is a highly profitable business. It is not only the large landowner who is involved in this business: in the low-income settlements land invaders frequently sell spare land or subdivide their own plots (Gilbert and Healey, 1985). Growing commercialisation has become a dominant characteristic of the Latin American land market.

Third, commercialisation has encouraged the process of land speculation. Many owners of peripheral land have kept their property out of the market until the price of land has risen. Within the built-up area, many individuals hold plots for speculative reasons. The result is that large areas of land are excluded from the market, with obvious effects on the purchase price (Kowarick, 1988). As Trivelli (1986: 105) argues:

The retention of urban land for speculative purposes, waiting for the general growth of urban areas to increase the value of land, is a common phenomenon in most cities. This speculative phenomenon has been driven to an extreme in the case of Brazil, where vacant lots represent one-third of the building space of Brazilian cities.

A similar process has also been documented in Santiago, Quito and Lima (ibid.).

Fourth, the search for profits through land speculation and real-estate development has led to much more sophisticated links developing between the real-estate, construction, and financial sectors. ‘With economic development and city growth, finance and construction capital generally becomes progressively more important in the real-estate sector, and land revenues become more dependent on investments stemming from these sources’ (Geisse and Sabatini, 1982: 162). Similarly, UNCHS (1984: 27) observe that

land and housing markets are becoming integrated and monopolised. There are indications that land development, housing development and housing finance are becoming increasingly integrated in large corporations with substantial land reserves, managerial capacities and access to short-term and long-term finance.

The operation of these large organisations makes it more difficult for small-scale operators to find land for low-income people. There is certainly evidence of this occurring in Bogotá where over the past fifteen years a handful of major companies has been developing middle-class estates on land that was once deemed fit only for low-income groups (Gilbert and Ward, 1985: 116).

Fifth, commercialisation has been further encouraged by the action of the state. In particular, governments have been much more prepared in recent years to upgrade irregular settelment and even to grant full legal title. As McAuslan (1985: 32) notes: ‘Country after country has abandoned its neutral role in private market transactions and adopted regulations’. Clearly, this has brought benefits to many occupiers, particularly when it has given security of tenure to those living in fear of eviction. It has also led to major service and infrastructural improvements (Gilbert and van der Linden, 1987). But, the trend has also brought complications. ‘Regularization causes an additional source of cost to illegal settlements. …land is often bought or expropriated by the state and then sold to occupants’ (Trivelli, 1986: 117). Similarly:

regularisation or legalisation can be a double-edged sword. For owners, it represents their formal incorporation into the official city, and the chance to realise what may be a dramatically increased asset. For tenants, or those unable to pay the additional taxes that usually follow, it may push them off the housing ladder altogether.

(Payne, 1989: 47)

Sixth, official intervention has sometimes brought additional problems for the poor. In particular, efforts to control urban sprawl have reduced the supply of land and particularly that available to low-income groups:

public authorities have taken strong measures to limit urban expansion into fertile agricultural areas, in efforts to preserve them for food production, for open space and for the control of pollution. Where such actions have been successful… [it has become] more difficult for low-income and disadvantaged groups to compete for sites … sometimes pushing them to distant fringe villages.

(UNCHS, 1984: 25)

Finally, access to land has been hindered by the sheer physical growth of the city and has been worsened, in places, by the inadequate development of transport services (Kowarick, 1988). In many cities, peripheral land is now very far from the city centre. While jobs in factories or urban sub-centres may still be accessible, work in the central city is only available to those prepared to spend several hours commuting.

According to the literature, the result of these processes has been a rapid rise in land prices. According to UNCHS (1984: 26) ‘land prices … over long periods have tended to increase more rapidly than consumer price indices’, and, according to Trivelli (1986:103), ‘land prices grow at a much faster rate than salaries’. The latter cites a series of sources which have documented sometimes spectacular rises in land prices. Even if few of these sources are methodologically very sound, there seems little doubt that prices have risen in real terms in most Latin American cities. Certainly, by far the most reliable survey of land values in any city, the World Bank study of Bogotá, shows that prices on the urban fringe are rising rapidly for all income groups, both in the formal and the informal market (Mohan and Villamizar, 1982; Carroll, 1980).

Despite this general consensus, a few words of warning are in order. First, it is by no means certain that land prices are bound to rise perpetually. After all, circumstances in Latin America have recently changed. While the 1960s and 1970s were a period of rapid demographic and economic growth, the 1980s have seen both a slowing in population expansion and a dramatic decline in economic prosperity. Certainly, real land and housing prices remained steady in Caracas between 1983 and 1986, and may well fall as a result of the acute crisis of 1989 (Gilbert, 1989a: 162). The economic recession is bound to slow increases in land values in most parts of Latin America, except where there is rapid inflation.

Second, if the price of peripheral land is rising rapidly as a result of the rural-urban conversion process, it is by no means certain that the cost of land within the already developed area will increase so dramatically. Certainly, land values in central Bogotá fell between 1955 and 1977 (Mohan and Villamizar, 1982) and evidence from low-income settlements in both Bogotá and Mexico City shows that real prices begin to fall after a couple of years (Gilbert and Ward, 1985: 113).

Third, generalising about land is fraught with difficulty because the situation in every city is different. Not only does the state of the economy differ but also the rate and form of urban growth. For example, some cities, such as Managua, Valencia and Monterrey, still have plenty of land, whereas the topography of others, such as Caracas or Rio de Janeiro, makes land very much scarcer. Size of city, the degree of land concentration, and most important of all, the attitude of the state varies considerably. As Trivelli (1986:101) warns us: ‘It is always risky to generalise about Latin America because situations vary considerably from one region to another and from one country to another. This is particularly the case for the operation of the land market’.

In practice, therefore, land market behaviour is likely to vary considerably between cities. And, while it is likely that real land prices will rise during periods of economic and demographic growth, the poor will not be excluded from access to peripheral land in every city. Indeed, that issue will not be determined wholly by economics; equally important is the attitude of the state to the poor. Latin American governments intervene heavily in the land market, with many states using land not only to reward construction and real-estate companies, but also as a means of seeking votes and political support. For this reason, governments as diverse a...

Table of contents

• Front Cover
• Half Title
• Title Page
• Copyright
• Contents
• List of figures
• List of tables
• Glossary of Mexican acronyms
• Preface
• 1 Introduction
• 2 Research strategy and a brief guide to Mexico
• 3 Residential tenure in urban Mexico since 1940
• 4 Mexican housing policy
• 5 Urban development and the housing market in Guadalajara and Puebla
• 6 Residential tenure: choice or constraint?
• 7 Landlords and the economics of landlordism
• 8 Landlord–tenant relations
• 9 The future of renting: policy options
• Notes
• Bibliography
• Index