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Integrating the “Informal”:A Comparison of Land-Titling and
Urban Intervention Policies inLima and Rio de Janeiro
Natalie WestbergLatin American Politics8 December 2014
Image: Favela in Rio de Janeiro, Brazil(Pulsa Merica, 2014)
Westberg
According the UN-Habitat, Latin America is the most urbanized place on
earth (UN-Habitat 2011, XV). Over three-quarters of the region’s population live in
cities, and this proportion is only increasing. The industrialization of agriculture and
rural depopulation are driving more and more people to Latin America’s urban core
and creating endless metropolises. The dramatic increase of a generally low-income,
unemployed population has made the provision of housing a primary issue. Many
argue that housing and shelter are a basic human right, but in Latin American cities,
this is not the case. In urban capitalist society, “quality of urban life has become a
commodity, as has the city itself” (Harvey 2008, 31). As a result, a large proportion
of the urban population live in informal settlements—densely packed into
peripheral urban space. In 2005, one third of Latin America’s total population lived
in slums (UN-Habitat 2011, XV).
Housing is arguably the most pressing issue of informality, as it is the basis
for community, stability, and security. The burdens of informality in the housing
sector impact both the overall city and the lives of individual residents. In a Lincoln
Institute of Land Policy report, Edesio Fernandes identifies the legal, social,
environmental, political, and economic burdens of informality (Fernandes 2012, 6-
7). These issues include a lack of legitimate citizenship, exclusion from public
services, safety and health hazards, discrimination and stigmatization, and economic
inefficiency (Ibid). In this paper I will examine the response to housing informality
through urban policy, and look specifically at the success of land-titling programs as
opposed to a more integrated type of upgrading program. To evaluate this issue, I
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will compare the outcomes of two large-scale approaches to addressing informality
in Lima, Peru and Rio de Janeiro, Brazil.
Incorporating Informality into Urban Planning and Policy
Urban informality must be addressed through policy and urban planning.
However, a key issue in urban planning literature is the application of theory on
urban growth in the developed world to cases in the developing world (Roy 2005,
147). In “Urban Informality: Toward an Epistemology of Planning,” Ananya Roy calls
for scholars to focus on the intricacies of urban growth in the developing world,
particularly in relation to the dynamics of informality (Roy 2005). She identifies two
branches of scholarship on informality, one that views the informal sprawling of
cities as a crisis and another that looks as informality as entrepreneurial and heroic
(Ibid, 148). Roy argues that neither framework helps to incorporate informality into
urban planning conversation. One presents informality as a disastrous situation,
while the other provides an excuse for the state to remain uninvolved.
Along with the need to consider and incorporate informality as a new
epistemology, there needs to be a place-specific approach to developing policies that
tackle informal housing in Latin America. Social housing issues and solutions in
Latin America must be viewed apart from cases in advanced capitalist countries, as
the needs and demands are quite different (Balchin and Stewart 2001). In Latin
America, the relationship between formal and informal provides a unique dynamic
and tension. This polarity infiltrates into every aspect of life in Latin American
metropolises, “not only the physical aspect of cities, but also their entire socio-
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political fabric” (Hernández and Kellet 2010, 1). Within a single city there is both a
vibrant formal and informal city.
In order to address the pressing difficulties of informality, Latin American
countries have enacted policies to “regularize” settlements in slums and
shantytowns. However the implementation and successes of these policies have
been varied. The primary form of regularization is de jure legalization through the
granting of legal ownership of land and settlements. Two arguments are generally
used to justify the regularization of informal settlements and granting of land deeds.
The first is economic, as the formalization of housing gives these structures
commercial value and they can act as collateral for loans (Balchin and Stewart 2001,
337). The second is the level of stability and community investment that land titles
provide, “secure tenure allows access to socio-cultural facilities and the legal basis
for the provision of amenities including potable water, sanitary facilities, refuse
disposal and domestic security” (Ibid, 337). There is an underlying belief that
secured tenure will create sustainable communities and trigger resident-led
upgrades (Kiddle 2010, 890).
Peru’s Commission on Formalization of Informal Property (COFOPRI) is
known for its numeric success in granting over one and a half million land titles in
an efficient and quick manner. This program was one of the most extensive of its
kind and it provided legitimacy and security to a substantial part of the population.
In order to understand the application and outcome of policies that attempt to
address informality, I will examine the impact of COFOPRI in Lima, Peru as a
program that granted legal status in the hope of more comprehensive impacts. To
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compare an alternative approach, I will bring in the case the Favela-Bairro program
in Rio de Janeiro, Brazil, which intentionally steered away from “regularization” and
instead aimed to develop favela communities and infrastructure from an integrated
method with multiple approaches.
Lima and Rio de Janeiro are similar sized cities with comparable amounts of
informal housing and economic life, but these contrasting policies have shown
distinctive results. Through comparing the approaches and outcomes in these two
counties, I will address the question of whether legal titling can act as a stimulus for
socio-economic development. Is there is a need for a more integrated approach to
upgrading informal settlements? Lima and Rio de Janeiro illustrate the complexity of
implementing policy that will formalize populations in different ways. However,
they ultimately demonstrate that policies that attempt to address informal
communities must go beyond providing legal security through land titles, and must
take an integrative approach to community-wide development. However the
success of these policies will always be somewhat limited as they address only the
outcomes of poverty, while the sources are ignored.
Mass Titling in Lima, Peru
What is most sticking about it (Lima), for a city of nearly 9 million, is that it is
70 per cent informal. Away from the colonial center and the fancy
restaurants of Miraflores, the city stretches out in a seemingly endless swath
of dust-colored self-built housing (McGuirk 2014, 67).
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Lima’s “informal” communities, composed of self-built housing are known as
barriadas. As this quote illustrates, barriadas dominate the contemporary urban
landscape. The occupation of land and construction of informal housing has been
the primary driver of urban growth and development over recent decades (Golda-
Pongratz 2004, 40). This trend has forced the Peruvian government to respond to
the shifting nature of urban structure and growth through the creation of policy.
There were four policy changes in Peru that transformed the process for
informal settlements in need of land titles (Dosh 2010, 45). Three of these
alterations are laws that address the appropriation of land and settler’s rights in
lands they occupy. The other critical policy change is the creation of the Commission
on Formalization of Informal Property (COFOPRI) in 1996 by President Alberto
Fujimori and the World Bank (Dosh 2010, 45).
The formation of COFOPRI was inspired by the work of the Peruvian
economist Hernando De Soto, who speculated that two million land titles for
informal settlements would stimulate the economy by formalizing and integrating
low-income residents (Dosh 2010, 46). De Soto’s works focus on the creativity,
dynamism and assets of informality (Fernandes 2011, 27). “Informal economy is
people’s spontaneous and creative response to the state’s incapacity to satisfy the
basic needs of the impoverished masses” (De Soto 1989, 14). He refers to ability of
settlers who are granted land titles to use their homes as a financial asset, thus
activating about US$ 9.34 trillion of “dead capital” (Fernandes 2011, 27).
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The procedure for identifying and formalizing settlements requires research
and documentation of relevant plots and the naming of occupiers (Ibid). The
establishment of COFOPRI did not make the process of land titling simple or
tremendously accessible, but it did imply that “settlers often have the state
government in their corner…the granting of one million titles in five years suggests
that most settlers had a quite easy time with the process” (Dosh 2010, 46). COFOPRI
was also able to absolve previous landowners of rights if settlers had been
occupying the land for at least ten years. Although this process was not an assured
or common process, it “lent an air of legitimacy” to settlers in this situation (Dosh,
46).
Image: COROPRI workers
(El Comericio)
Peru’s approach effectively confronted the issue of “legitimizing”
undocumented, informal settlements. This is demonstrated by the reality of 1.6
million land titles granted by 2006 (Fernandes 2011, 28), along with an
environment of legitimizing the rights of “illegal” settlers. However there is evidence
to show that provision of land titles was not enough to catalyze meaningful change
in barriadas.
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There is an underlying assumption in this policy, along the lines of De Soto’s
scholarship, that low-income residents could access private loans to improve their
socio-economic opportunities and activate “dead capital” (Calderón 2004, 290).
However banks and private institutions have been reluctant to grant loans based
solely on home ownership to residents that don’t meet certain income requirements
(Ibid, 299). “At present, in spite of their legal mandate, COFOPRI has not been able
to achieve the objective of enabling those with title deeds to obtain formal credit”
(Ibid, 299). He also makes the case that improving quality of life and access to
resources is not guaranteed or even helped with the acquisition of a land title.
Decades have shown that urban residents are able to gain access to basic needs and
resources without land titles, “title deeds have not been instrumental in improving
access to services” (Calderón 2004, 299).
Calderón interprets these lessons from COFOPRI as a need for deeper change
to address the chronic poverty and low standard of living in informal settlements.
He argues that the case of Lima illustrates how “the policy of formalizing tenure
through titles is not the only way to fight poverty and that a new relationship
between the state, banks, and the poor is needed to improve access to services and
credit” (Ibid, 300). This claim prioritizes services and credit over granting land
ownership as a more sustainable form of addressing the precarious nature of life in
informal settlements.
Quality of life in barriadas remains relatively unchanged after regularization.
According to a housing quality study from 2006, metropolitan Lima is still a hyper-
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segregated city (Meng and Hall 2006). The lowest-income areas are those with the
poorest living conditions and housing quality, located on the urban fringes.
Conditions are overcrowded, with households constructing their own
dwellings from the cheapest and most easily obtained materials. Little
attention is paid to providing servicing such as water supply and sewage
disposal as the need for shelter takes precedence over all other concerns
(Meng and Hall 2006, 427).
The report also notes that these settlements are “often encouraged and actively
developed by various levels of government” as a form of addressing the desperate
need for housing (Ibid). The authors acknowledge the need for and perpetuation of
informal housing, but present a critical examination of the dire housing conditions
that persist in spite of policy changes.
The shortcomings of this program and specific case should not indicate that
land titling programs are inadequate or futile. Scholarship on the COFOPRI program
has indicated that political misconduct and a lack of commitment to comprehensive
quality of life improvement were significant contributing factors. Julio Calderón
argues that Fujimori used COFOPRI as a tool to gain electoral support in the 2000
election rather than supporting its mission and purpose (2004, 290). Despite his re-
election, Fujimori stepped down months later after being charged with corruption.
The interim government made significant changes to the structure and functioning
of COFOPRI, which were ultimately harmful to its success (Ibid).
Calderón is not alone in his critique of land titling as a limited form of reform.
In a report on the outcomes of the formalization program Edésio Fernandes
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synthesizes conclusions of international assessments on Peru’s approach. He
identifies access to credit, investment in housing, and poverty alleviation beyond
titling as the three necessary steps to improve the outcomes of Peruvian policy
(Fernandes 2011).
Lima exemplifies that legalization is not enough to catalyze comprehensive
socio-economic development. The answer is not always to formalize. Several
authors argue that as regularization in general can make owners susceptible to
harmful market forces or that it puts owners at an economic disadvantage as they
are plunged into the formal sector (Davy and Pellissery 2013, S81). For this reason,
many turn to address what is a growing and pervasive sector of the urban Latin
American population through working with the existing infrastructure that has been
developed through informal means. Informality has become the norm. It was
initially met with resistance, but now provides more housing units than the public
sector is prepared to supply (Balchin and Stewart 2001, 336).
Favela-Bairro and Integrated Development: Limited Scope, Broader Impact
Brazil presents a larger scale case of urban informality than Peru. In Peru, the
urban population is concentrated in Lima, which far exceeds the population of any
other Peruvian city. In contrast, Brazil is home to seventeen cities with a population
over one million. Similar to Peru, Brazil has been recognized for its attempt to
provide innovative solutions to integrate informal settlers and alleviate poverty.
However, in contrast with the work of COFOPRI in Lima, the upgrading program
that I will focus on in Brazil, attempts to address informality beyond its legal sense.
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This case provides an alternative approach that ultimately yielded more ingrained,
sustainable results. I will examine the case of Rio de Janeiro’s Favela-Bairro
program, an example of one program that aimed to address informality in favela
communities through targeting multiple avenues for infrastructural and community
development and improvement. The lack of focus on land titling within Favela-
Bairro was intentional. This was an effort to protect low-income residents from the
pressures of entering the formal, aggressive housing market, and reduce the
possibility of gentrification in upgraded areas (Handzic 2010).
The municipal government’s housing department in 1994 established Favela-
Bairro with financing from the Inter-American Development Bank. At its time, the
Favela-Bairro program was the largest slum-upgrading program of its kind. The
program was influenced by the ideals of “urban acupuncture,” which looks to solve
large-scale urban issues through a holistic approach to targeted issues within a
community-based, local scope (Segre 2010, 168). Improvements include basic
infrastructural and sanitation development, road paving, the reconstruction of
unsafe housing, and the creation of quality public spaces (Fiori and Brandao 2010,
193).
Favela-Bairro was the first upgrading program to incorporate design as a
tactic to integrate favela communities into the greater city (McGuirk 2014, 114).
This change came alongside the international shift towards accepting and working
with informality in urban development. The program operated on upgrading costs
of about $4,000 per household. In an Intra-American Development Bank report on
the economic benefits of various settlement upgrade programs, Fernando Cuenin
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found that investments from Favela-Bairro reaped significant rewards. “The cost-
benefit analysis of the programme for each of the beneficiary informal settlements
yielded rates of return that ranged from 13 to 71 percent (an average of 42
percent)” (Cuenin 2010, 207).
Favela-Bairro operated on the platform of connecting informal networks to
the rest of the city and building upon and improving what already existed. This
principle extended to both physical and social impacts of the program. The first
stage of the program was a competition among architects for proposals on design
and technique. The program framed improvements as “urban interventions” (Segre
2010, 170).
The aim of the Favela-Bairro program was not just to improve the quality of
life in favelas, it was to raise the perception of the favelas in the urban
imaginary. In this respect it was far more complex and nuanced than any
upgrading program that has come before (McGuirk 2014, 118).
Favela-Bairro resulted in better infrastructure and the physical quality of favelas, a
stronger sense of urban citizenship and unity, and increased home values (Ibid,
118). By 2008 the program had made improvements in 168 of Rio’s favelas, and the
assessments indicated their success and a lack of displacement or rising cost of land
(Osborn 2012).
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Image: Before and after Favela-Bairro improvements (Sérgio Magalhães Consultoria)
In spite of these undeniable improvements Favela-Bairro has also received
negative assessments in relation to its execution and approach. The program
received criticism for failing to deliver on the participatory structure that it
proposed, and many of the improvements were reportedly carried out in a top-
down and “paternalistic” manner (McGuirk 2014, 119). The perspective in an article
from the community organization Rio On Watch supports this notion: “Favela-Bairro
upgrades were largely administered from the top down” (Osborn 2012). However,
this has been identified as a result of the failed reform of democratic governance in
Rio rather than a specific inadequacy of Favela-Bairro (Riley et al 2001, 529).
Another critique was that this program alleviated the effects of living in
poverty, but did not address the roots or factors that perpetuate poverty (Osborn
2012). The program’s emphasis on aestheticism has been challenged and some have
argued that design elements were prioritized over social, economic, and cultural
considerations (Broudehoux 2001). This focus on artistic qualities has also been
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criticized as an interjection of a Western notion of urban design, “some critics felt
that the aesthetic approach of inserting symbols of urbanity smacked of
authoritarian planning and threatened to weaken the identity of the favelas”
(McGuirk 2014, 116).
Similarly to Peru’s program, this development model assumed that
investments would spur community-led initiatives and improvements, which did
not occur (McGuirk 2014, 119). Another incorrect assumption was the idea that
these community improvements would impact or challenge the drug-trafficking
culture which dominates many favela communities (119). The Favela-Bairro
program was established with the goal of reducing inequality and class-based
segregation, but embedded, structural issues in Brazil hinder this aspiration.
The economic and social reality of the country, the acute contradictions
between different social groups and the progressive segregation and
separation of residential areas make the coexistence and connection between
the rich and poor hard to achieve (Segre 2010, 175).
This point should not diminish the widely agreed upon successes of the program,
which provided innovative and community-wide improvements, and marked
increases in the socio-economic status of involved residents (Ibid). Neither Favela-
Bairro nor COFOPRI managed to dramatically reduce inequality in Lima and Rio de
Janeiro, for this structure is perpetuated by larger systems.
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Lima and Rio: Short Term Efficiency vs. Long Term Sustainability
A 2010 article that evaluates the success of Favela-Bairro as a program
provided secure tenure without legal rights claims that programs that seek full
regularization of informal settlements make low-income residents vulnerable to an
aggressive market (Handzic 2010). The lack of displacement and gentrification in
areas that were upgraded through Favela-Bairro is commonly associated with the
lack of legal formalization and the commodification of this housing in an aggressive
market. Widespread legalization is rooted on the ideal that informality with not be
tolerated, and so those without access to the exclusive, expensive formal market are
forced to remain surviving in illegality (Ibid, 16). They are essentially forced out of
the system completely rather than incorporated into a hybrid model.
Lima and Rio de Janeiro have both received international recognition for
developing policy that works to improve the situation of residents living in informal,
urban housing. In numerical comparison, Favela-Bairro reached about 253,000
residents, a far cry from Lima’s 1.6 million land titles (Fernandes 2011). However
unlike COFOPRI, Favela-Bairro focused on a more integrated approach to addressing
more than just legal informality. The outcomes in Rio de Janeiro showed the
creation of more lasting security for impacted residents. These policies have
diverging theoretical underpinnings, and ultimately they exemplify the debate that
exists in literature about how to address informality in growing Latin American
mega cities. COFOPRI impacts legal tenure in the hope of catalyzing greater
development, whereas Favela-Bairro looks to “urban acupuncture” as the means for
creating large-scale urban change. One focuses on the power of an individual to
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activate greater change whereas the other develops the community as a whole in
order to improve the situation and morale of the area’s residents.
A critical distinction between these two policies is in the way in which they
value housing. The system of land titling and De Soto’s writing prioritizes the
market, exchange value of housing (McGuirk 2014, 68). There is an expectation that
giving residents a way to utilize their home as an economic asset will improve their
situation. Conversely, a program like Favela-Bairro emphasizes the use value of a
home, and insuring stability and security through investing in community
improvements. As I mentioned above, Favela-Bairro received criticism for focusing
too heavily on urbanism, design, and trying to impact more conceptual, spatial
injustices in the city.
Another point of assessment is the overall contributions of these two
approaches to the international community. Reports and reflections on the
outcomes of Favela-Bairro are wholly positive, as it challenged and reshaped the
way in which policymakers and planners think about addressing issues of
informality. It uniquely responds to the complex dynamic between informal and
formal in Latin American cities.
The guiding concepts behind the Favela-Bairro program, those which made it
one of the most important experiences of slum upgrading and poverty
alleviation in the developing world, remain extremely relevant today (Fiori
and Brandao 2010, 203).
In contrast, the primary lesson from COFOPRI is that the process of legal titling can
be successfully streamlined. The program managed to reduce the time to receive a
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title from 7 years to 45 days, the procedural steps from 207 to 4, and practically
eradicate the financial cost (Guerinoni 2004). However Lima’s program does not
provide an instructive legacy or clear understanding of the socio-economic impact
of a land-titling program. This is could be due to either the lack of clear assessment
or the lack of a significant influence.
Another consideration is the financials of the two programs. Brazil is an
outlier in Latin America based on their liberal social spending (Fernandes 2012, 33).
Favela-Bairro was far from an inexpensive or simple solution, and it is framed as in
investment towards creating a different urban structure and dynamic. In contrast,
COFOPRI is a relatively inexpensive approach to securing tenure. Between 1996 and
2004, one and a half land titles were granted for US$66.3 million (Ibid, 34). Although
it is a challenge to evaluate, it is worth factoring in the cost-efficiency of solely
addressing legal tenure.
There are clear benefits and drawbacks to either program. Favela-Bairro
exemplifies that a well-funded, innovative program can only do so much in an
extremely unequal society where uncontrolled forces perpetuate poverty and its
isolation. However, given the goal of providing security and integrating the informal
and formal within a city, the far-reaching, extensive nature of the Favela-Bairro
program accomplishes holistic stability for both individuals and communities. “The
Favela-Bairro program paid more attention to infrastructural improvements and
standard of living conditions of those that resided in favelas, which proved to be a
much better use of limited resources in what is a very large and complex issue of
incorporating favelas in to the formal city” (Handzic 2010, 16). Land titling
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programs add a degree of legitimacy to life in informal settlements, but they do not
provide concrete access to greater security or resources.
There is no simple solution that will fix issues associated with informality in
cities across Latin America and the world. Countries must instead consider lessons
and successes from other cases in relation to their own resources and
particularities. Some argue that the best approach is to diversify and invest in a
variety of approaches to legitimize and upgrade the communities that have begun to
define urban life in Latin America (Balchin and Stewart 2001, 340).
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