Land tenure in Developing Countries

The role of land ownership, land tenure and land allocation strategies in the production of equitable urban housing in developing countries - 1991

Research Paper (undergraduate), 1991

26 Pages

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For many people, in most of the developing countries which are experiencing rapid urbanisation, the habitat conditions are totally unsatisfactory. It is now widely accepted that one of the major reasons for such a situation is the poor management of land.

The focus of this paper will be on this issue of urban land in the production of housing in developing countries. In this context the role of land, as the most central human settlement issue, will be analyzed by looking at different land tenure concepts and the potential solutions they contain for equitable land allocation strategies. The role of tenure can probably best be illustrated by the importance of political and social problems connected with urban landownership. To mention just a few: urban unrest is often based on landlord-tenant conflicts; urban planning is frequently obstructed by powerful landowners and/or politicians; and there is often rampant corruption in relation to urban land questions and urban planning.

The paper will be sub-divided in four parts. The first chapter will look at the theoretical framework behind the issue of urban land for housing the low-income groups in developing countries. The second part considers the prevailing land tenure types and characteristics in Third World Countries, whereby their effect on impartial housing production is questioned. The third part looks at a number of land tenure systems and land allocation modes which have been implemented in some countries, and assesses their positive and negative consequences for governments, private sector and low-income urban population. In the fourth chapter, conclusions will be drawn as to the future possibilities for implementing efficient land supply strategies and their potential role in promoting equal development for all actors concerned.

The public, as well as the private sector each have an important role to play in the provision of affordable, serviced and well-located plots for housing the majority of low-income urban inhabitants. The position which will be taken here, is that total state withdrawal from the issue of urban residential land markets is just as unproductive as full state control with outright land nationalisation and redistribution.

Because of the difficulties in introducing the Western concept of private freehold, and the risks it involves concerning land speculation and gentrification of areas meant for low-income households, it is preferable to support systems of land tenure and property rights based on traditional communal land tenure systems. This should be done in conjunction with the provision of public services, whereby the government acts as catalysts to attract the private sector to participate in land development for low-cost housing. Appropriate standards and levels of infrastructure must be adopted, taking into account the need for self-help and community participation, with an emphasis on incremental housing, services and infrastructure.


Access to affordable and secure land is rapidly becoming one of the major obstacles to economic development both for the state and the individual. In the urban areas of the Third World prices have invariably been escalating faster than inflation. For the governments and international aid agencies this has meant that a larger proportion of the budgets for development projects are being used for land acquisition leaving less for the project itself. For the low income groups this evolution has meant that, to get access to land, the difficulties increase continuously, which means that their social and economic position deteriorates, since a secure plot is essential to their ability to construct a house. This, to them, is critical not only for shelter but as a vehicle for incremental investment and financial security. It means access to credit, to rental income, to informal commercial activities and to security against inflation (Doebele, W.A. 1986).

Although competition among land-uses and high land prices make it difficult, if not impossible, to obtain access to even a minimal plot with basic services and in reasonable proximity of income earning opportunities, and although they have remained largely excluded from legitimate access to land, housing and public services, the poor have displayed considerable ingenuity in housing themselves outside the formal land and housing sector, while finding a variety of ways of participation in economic activities (UNCHS, 1984c).

For these reasons access to land and land tenure is a matter of high priority, higher in fact than better shelter as such. Shelter issues can not be separated from urbanisation and human settlements development issues in general, just as neither set of issues can be separated from those of poverty and economic development. When these issues are enhanced by squalor, poverty and environmental degradation they feed increased economic, social and political instability.

Squatter settlements develop not because of but despite planners, architects and administrators. They reflect the energy and creativity of the poor to provide themselves with shelter in situations where they are unlikely to have any place to live at all. These communities develop against heavy odds and through self reliance, in contravention of the ’formal’ market and administrative rules and procedures. It is this ’unauthorised’ and ’unregulated’ nature of their development, together with the inadequacy of squatter communities to measure up to approved housing standards, their ambiguous land titles and illegality of location which exacerbates their precarious position. Their hold on the land they occupy remains in many cases tenuous, and opportunities for finding new land are diminishing while pressure from new urban immigrants is increasing. These problems of residential urban land for the low-income groups are most acute in the metropolitan areas of the Third World. This is the area discussed in this paper.

Third World urbanisation has increased dramatically the demand for land in and around urban areas. A wide range of concepts exists among the urban immigrants which makes land issues politically difficult. With the urban population growing at a dramatic pace, plus the inability of the poor to enter the formal land market, conventional (Western) tenure concepts have proved unable to meet the needs of the poor. The additional short-comings of market and state supply systems have led to land invasions and squatter settlements which, in turn, have led to the emergence of illegal or informal processes and arrangements for access to land and housing. In Ankara and Lusaka, 50%; in Bogota and Dar Es Salaam, 60%; in Luanda, 70%; and in Addis Ababa, 85% of the population resides in informal settlements. These are just a few examples to illustrate the fact that at present informal settlements supply the bulk of land for housing low-income and disadvantaged groups in most of the Third World (UNCHS, 1984c).

The term "informal" in this context is used to designate the processes by which people have obtained access to land and housing outside the legal framework of rules, regulations and procedures, enforced by government, for the way land must be acquired, sold, developed and built upon (UNCHS, 1984c).

The present situation in the urban areas of Developing Countries has become extremely complex, with land held under different tenure systems and, in some cases, without any clear status. The situation has evolved in such a way that informal forms of land tenure have come to represent increasingly the most common pattern, particularly in terms of providing land for low-income settlements. Furthermore these non-formal, and initially non-commercial, forms of land supply are increasingly becoming commercialised and consolidated, whereby land is being transformed from a resource with a use value to a commodity with a market value, whether formal or informal.


The general stages of public sector and market responses to the land invasion and squatter phenomenon in rapid urbanising developing countries can be summarised chronologically as follows (Doebele, W. 1987b):

(i) Ignoring and/or tolerating squatters. Rapid industrialisation required cheap labour. Squatting on private or public land lowered the housing cost, thus reducing wage demands of the workers. So, informal ’illegal’ commercial arrangements were tolerated for providing land-to-build.

(ii) Threatening, demolishing unauthorised settlements and the provision of public housing’. Considering the assault on the logic of capitalist economy, whereby land rent must be paid, and viewing with fear the ’invasion’ of all vacant city land by a majority of poor, threatening to become uncontrollable, the responses were: (a) demolition, eviction, relocation; (b) building minimum standard subsidised public housing; (e) programmes of decentralised development e.g. rural improvement and development of secondary towns. All three categories had little or no impact on the urban population growth and resulting land need.

(iii) Accommodating and assisting squatters. As from the 1970s the international aid organisations began

supporting on a large scale the so-called self-help programmes for urban housing provision, emphasising the role of land tenure and infrastructure installations as a means to tap a maximum of resources (human and financial.) from the urban immigrants themselves. These have partly failed to achieve their objectives and have rather benefited the middle- to high-income groups mainly because of inadequacies in the conception and execution of the policies and because of the lack of effective administrative and legislative instruments of policy implementation.

(iv) Commercialisation. Sites-and-services and upgrading programmes, based on the granting of land tenure were designed to be both efficient and equitable in providing housing for the urban poor. However, the facts have shown that the granting of tenure or the provision of services and legal cheap housing of reasonable quality has opened the doors to take-overs by the more affluent classes and markets are being consolidated into fewer owners, who will have correspondingly greater power over its disposition.

An increasing proportion of the land for low-income settlements is now supplied by commercial entrepreneurs who circumvent or corrupt the administrative apparatus which is supposed to regulate urban development. This mechanism of insertion of the ’promoters’ into the local urban management structure can be seen as the re-introduction of the logic of the capitalist market, which re-establishes the administrative control system to its own advantage (Durand-Lasserve, A. 1990). This automatically means that the present trend in land and housing production is to maintain a middle to upper-income focus, whereby the processes of supplying land for housing the low-income population are being increasingly constrained, excluding once again, what is euphemistically called, the ’target group’.

The result of these developments is a growing class of urban landless, whose access to land is becoming more and more difficult, resulting in an urban housing market in which a much larger proportion of the poor dwell in rental units, and for whom the hope of ownership of land and house is likely to become increasingly remote (Amis, P. 1984; Gilbert, A. 1983). This means that developing countries must face the social consequences of an increasing number of low income families remaining in rental quarters, which cannot offer the economic benefits of ownership. This situation inhibits upward mobility by the low income renters while simultaneously increasing the revenue of the higher income groups. This in turn may threaten political stability (Doebele, W.A. 1986).

Solving the problems of land acquisition, disposition and registration directed towards housing the urban poor will not settle all the questions of land reform in developing countries. However, it would have an enormous impact on the management of the rapidly growing urban centres where conditions are in many cases approaching crisis point. Land for housing the urban poor can be argued as being the most vital condition for the healthy development of the cities of the Third World and for achieving equity in the living conditions of their low-income and disadvantaged populations. It, therefore, merits the highest priority in the development planning programmes of Third World Countries.

The question which needs to be addressed is in which way existing land tenure systems can be improved, in order to facilitate housing production for low-income urban workers. The struggle of every society, therefore, is to find a system of tenure that will optimise best, under the historical circumstances of the time, the contrary pulls of productivity and social justice; and the task of every nation, is to redefine continually tenure relationships as between public and private rights. Failing to do so can have important social-political consequences. The revolutions in France^ Mexico, Russia, China, Cuba and Nicaragua all had ’land’ as one of their central themes (Doebele, W. 1987a)1: Furthermore, effective land policy and control over the use of land are important from the viewpoint of urban efficiency, be it political, economic or social.



The structural conditions underlying the formation of informal settlements in Third World cities is that they are characteristic for societies with high rates of demographic growth, low wages and changing relations between urban and rural areas. Industrialisation creates an urban labour market and stimulates migration to the cities. Since large areas of urban land are in private hands and the price of this land is generally rising in real terms and far beyond the reach of the immigrants, squatting is a natural outcome as a solution to a housing problem. In other words, given the wide disparity in urban incomes, the majority of urban dwellers in developing countries have no opportunity to occupy architect designed houses in serviced, legal, residential areas. The inevitable response is the development and spread of squatter settlements (Perez Perdomo, R. et al. 1982).

To this type of urban migrants, access to land and land tenure is a matter of high priority, higher in fact than better shelter as such - but mostly not as high as employment. The acquisition of a small plot of land greatly facilitates people’s participation in the urban economy and is a critical element in providing upward mobility. It is on this plot that they engage in capitalization, gradually accumulating the materials for a house, or in later stages, the addition of a rental unit that not only brings them income but adds to the housing stock of the city without the It is understandable, therefore, that for their dealings with these situations, governments alternate between repression and concession, at the same time stigmatising and encouraging squatting. This interplay of integration versus repression in state policy has been noted often. Occasions are frequent where the state attempts to replace the violence related to urban land allocation by formalised modes of arbitration. In some cases (Mexico) the ruling party co-opted social movements. In other cases (Peru, Chile) national governments have indirectly organised land invasions. In the case of the barrios of Caracas the administrative practices towards the squatters are that, in one case a municipal policy exists to rent the land to the person occupying it, in other cases, the policy is to expropriate the land while paying compensation to the landowner and the dwellers. Of course, within a legal framework this is hardly justifiable considering that, legally, the houses built by squatters have no marketable value, they only have value for those who actually live in them or for those who are prepared to live in them (Perez Perdomo, R. et al. 1982).

Repression is evident in other cases where the above strategies fail. Since the state can consider squatting as illegal it acts as an opponent, and for suppression of popular mobilisation, police force, machine guns - as well as illegitimate procedures such as arson - have been used all over the Third World (Leontidou, L. 1985).

The dual or ambiguous role of the state is here quite obvious but understandable. Systematic repression of squatters and a failure to provide housing alternatives for low-income groups is socially and politically explosive. Hence land invasions often are not spontaneous, nor disorganised, but planned and even monitored by the authorities or political power groups. Therefore, squatting and servicing the squatter settlements are not inconsistent with private ownership and speculation in land and housing. Together with the so-called "informal" legal system they have satisfied many housing needs, on the one hand, and on the other, they are seen, by the political parties in power, as an ideal situation for implementing an extensive system of patronage.

Although the above examples show that in many cases it has been possible to subvert legislation aimed at making land accessible to squatters, new land legislation which favours the appropriation of land for housing the poor outside the formal market is difficult to propose. It is even more difficult to implement in market economies, where most of the political power lies with groups who have a marginal interest in the poor but a vested interest in land ownership. Political action, both to appropriate land for the poor and to control land prices, has not been particularly successful. Similarly, it has been politically difficult to allow the market system to operate unhindered or to subsidize land and housing for the poor on a continuous basis (UNCHS-HABITAT 1987).

In a market economy the ultimate objective of the dominant land development strategies is the maximisation of land rent. As far as these strategies are concerned, land rent is realised in the real-estate market, whose final product is housing. Land for residential purposes demands land development i.e. transactions, subdivisions, construction of infrastructure, financing and marketing. Each one of these operations represents an increase in value of the rent which thecorresponding executing agent appropriates as profit (Geisse, G. G. 1988).


According to Marxist theory, the informal forms of housing production perform an important function within the general workings of the capitalist mode of production, by providing cheaply the basic land and housing necessary for the workers and the industrial reserve of labour residing in the city (Burgess, R. 1985b).

Indeed, on the level of the state, introducing or allowing the development of informal land and housing provision systems has the beneficial effect of helping to stimulate the general conditions for the reproduction of the capitalist system. These conditions have three main components: firstly, the reproduction of labour power or the perpetuation of conditions enhancing the ability to work; secondly, the drive to make the system more productive, or finding ways to increase production while avoiding increased costs; and thirdly, the creation of situations that will generate acceptance and continuation of the system.

The first component for the perpetuation of the system - the reproduction of labour power - is closely linked to "housing". As the system needs a constant stream of workers, to optimise the conditions for the reproduction of the labour force becomes of vital importance. To do so a certain amount of socially necessary goods are required without which the "ability to work" will be jeopardised. The most important ones are food, fuel, clothing, transport, shelter, education, health and recreation. Shelter constitutes the single most expensive item included in the list of "socially necessary goods" and is far beyond the reach of most workers, especially in developing countries. However, as it is preferable to suppress wage increases in order to avoid inflation (decrease in productivity), but it still remains necessary to accommodate the above list of socially necessary goods, intervention in housing production is needed. As the state only intervenes in cases of crisis, the discrepancy between the demand for workers in the city generated by economic development pressures, and the possibility for these workers use of public funds. Furthermore, the access to a piece of land can be the basis for small commercial and industrial enterprises, in which the whole family may become economically productive. The same plot and house provide a financial cushion and also provide security for obtaining credit. Effective action to assure access to land in cities, therefore, is not only necessary for social justice, it is fundamental to assure that all members of society are as economically productive as their talents and energies permit them to be (Doebele, W.A. 1987b).

Land has always been one of the safest forms of investment in countries experiencing high levels of inflation or in politically unstable situations. Therefore, and besides the usual class relations as in highly developed capitalist societies, an urban class structure divided into landowners and landless squatters and tenants provides a key element in the understanding of urban processes and urban conflict in Third World cities (Evers, H.-D. 1984). In this conflict the notion of legality versus the squatting phenomenon becomes an interesting and ambiguous concept, and the reasons why programmes for access to land and housing never seem to reach the poorest groups becomes apparent.

According to Geisse (1988) there are three types of capital invested in urban land, characteristic of the urban housing development scene in Third World:

(i) capital investment which aims at its valorisation through resale taking advantage of the rise in value generated by urban growth. These speculative manoeuvres have been the main obstacle to the access of the poor to urban land. For example because of the high prices of land in San Salvador and Bogota, the poor found themselves compelled to raise densities on ’invaded land’ to unprecedented levels.

(ii) construction capital which increases in value, through the prd\ts gained in the production of housing. This concept reaches its fullest development under national policies when the state acquires land by direct purchase as a contribution to construction projects, thereby stimulating industrial activity, employment and income. Every public action to construct roads, install infrastructure, and provide social services adds to value. The key of success therefore, so it is argued by the international aid agencies, lies in public policies that will recover costs and thus create the possibility of or the continual renewal of programmes (Doebele, W.A. 1987b). However, the realisation of profits on production implies the concept of a completed dwelling, the cost of which eliminates a large proportion of the population.

(iii) financial capita! which earns interest on credits to builders and prospective house buyers. This concept is motivated by the speculative financial rationale of the real-estate speculator, implementing the complete set of land development operations including the final stage, the house. The resulting integrated housing projects have been directed towards middle and upper-income population groups. The urban poor have been excluded here once again through: (a) the maximisation of income from the projects; (b) the hoarding of private land; and (e) the repression of informal attempts to gain access to the land.

Legally speaking, in the case of the squatter settlements, where the buildings are unauthorised and constructed with ’unacceptable’ materials, the effect of the law is that the landowner becomes the owner of the dwelling and does not have to compensate its builder. From the point of view of market economics, a building of this kind does not increase the value of the land, on the contrary, initially it diminishes its market value. Furthermore, the builder is acting in bad faith because he is well aware that he is squatting on land owned by someone else. To what extent can the law be enforced? A number of considerations are called for here if one is to understand the inability or reluctance of the state to deal with or take action against the squatter settlement phenomenon. The main consideration is the quantity of squatters. They are often well-organised and act together. The direct use of violence by the landowner is precluded therefore, and the only option, if he wants to evict them from his land, is to resort to the state and its coercive machinery (Perez Perdomo, R. et al. 1982). The legal tools at his disposal are: an action for recovery of land or a case for defence of possession, breach of peace or not complying with municipal by-laws. However, the political implication of such action will certainly be considered carefully by the people in power. Physical conflict between police and squatters, electoral interests, public outcry are reasons enough for political authority to sidestep forceful actions against squatters. Therefore, the landowner faces difficulties in actually realising the advantageous position to which he is entitled by formal and legal regulations. Although the legal statutes put him in a very favourable position, simultaneously the bodies charged with the duty of setting it in motion render it ineffective. This ambiguity in state policy must be looked at as an attempt to mitigate the problem of squatting, while simultaneously securing legitimacy for the authorities in power by serving the interests of the (poor) voters. Similarly the legal system, while continuing to use legal terms, has often created solutions appropriate to the needs of the life of the squatter. This illustrates clearly that in reality a sharp separation squatter versus legality" does not exist. In the daily reality of the developing cities the largest part of informal settlements are in a semi-Iegal/semi-illegal situation, making it even more difficult for the authorities to decide which line of action to adopt. to find suitable accommodation has grown to such an extent that the risk of social upheaval threatens the political stability of the state itself.

The Marxist approach of Burgess (1978) when analysing and criticising Turner’s (1976) ideas about urban housing activities can be summarised as follows (Nientied, P. & van der Linden, J. 1985):

(i) because commercial products and labour are invested in the informal (self-help) house, they assume and exchange value on the capitalist market;

(ii) the squatter does not build outside the sphere of capital circulation, but is part of the specific circuit called ’petty-commodity production’ which is and integral part of the capitalist system. The fact that this specific circuit is allowed to survive fits in with the aim of cheap reproduction of labour power;

(iii) the government’s function to maintain the general conditions for the reproduction of capital will always prevent it from intervening against the interests of capital. It cannot reasonably be expected to legislate against the interests on which it depends and which it serves. The interests of politicians, administrators, financiers, and their political and financial manipulation of squatters must be seen in this light.

It is therefore impossible for governments to implement policies, on a large scale, that run counter to the capitalist interests. For example, the strongly redistributive formal policy which is needed to guarantee access to land for low-income households, is unthinkable in the capitalist state, according to Marxist theory.

However, a pre-condition for subsistence in an urban environment, is access to the use of urban land to build a house. As a result, the control over this urban land and the exertion of property rights also means control over the reproduction of labour power. Ownership of urban land is, therefore, also ownership of the means of production; and landlordism, landlessness, land tenure are the main factors in explaining class conflict in the cities of the Third World. Conflict between landlords and squatters is frequent but also rural-urban migrants compete amongst themselves for urban land to be able to get access to the higher income, opportunities that, in their perception, exist in the cities. Internal migration also tends to be high, because the poor in the cities are often relocated through the dynamics of urban property development. Urban conflict, urban unrest, race conflicts, strikes and riots are expressions of the tensions among the city population and of the struggle for control over the means of reproduction, that is of urban land (Evers, H.-D. 1984). Therefore the failure of governments to address the issue of urban landownership has often created an uncontrollable mobilisation of low-income groups, who put the domestic property question as a crucial social demand. Urban social movements for land allocation in the cities, therefore, often involve noninstitutional so-called illegal types of action. In the Marxist model capital intervenes between landowners and labour in the city, to promote proletarian property for economic reasons (if it will decrease the cost of reproduc^pn of labour power) and for political-ideological reasons (or in order to control and co-opt the working class). Therefore urban land and housing can also be considered as instruments of control in the class struggle (Leontidou, L. 1985). On the subject of class distinction Evers (1984) notes further that speculation in urban areas appears to be connected with high growth rates in the GNP (more than 5%), an unequal distribution of income, and the accumulation of wealth in an urban upper-class.

Ownership and control over the means of production are the basis for capital accumulation and the formation of an upper class. Low-income groups in Third World cities spend, on average, approximately one third of their income on housing plus rent and another two thirds on food plus other socially necessary goods, mainly supplied by the informal sector. This means that the formal economy is only partly or indirectly involved in the reproduction of labour power. We know that ownership of land and the construction of housing have become important fields of investment for the local upper-class, and that control over the reproduction of urban labour power is closely linked to ownership in this sector. This means that ownership of urban land in developing countries, not only controls access to urban living space, but to economic activities as well, thereby assuming a very important role in the analysis of urban development.

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Land tenure in Developing Countries
The role of land ownership, land tenure and land allocation strategies in the production of equitable urban housing in developing countries - 1991
University of London  (Bartlett School of Architecture and Planning)
Development Planning Unit
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ISBN (Book)
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Land, Developing, Countries
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Karel Bos (Author), 1991, Land tenure in Developing Countries, Munich, GRIN Verlag,


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