For every travel article featuring a Caribbean paradise with gentle waters lapping a sandy beach, there is an anxious news story about a brewing hurricane. The Lesser Antilles, an archipelago of small islands that form a crescent in the eastern Caribbean, have always been particularly vulnerable, thrust into the volatile waters of the Atlantic Ocean. In 1776, the Pointe-à-Pitre hurricane struck the French colony of Guadeloupe and killed 6,000, making it the deadliest Atlantic storm on record at that time. Four years later, the Great Hurricane of 1780 hit even harder, making landfall in Barbados, then ravaging nearby islands, killing at least 20,000 and wrecking British and French fleets maneuvering at the height of the American Revolution. Two centuries and dozens of storms later, even Hurricane Ivan wasn’t as deadly when it devastated Grenada in 2004, leaving the parliament in ruins and 85 percent of the structures on the island damaged.

In recent decades, climate change has heightened threats to the region. U.S. strategies employed in the wake of Hurricane Katrina or Superstorm Sandy are not especially relevant to the fragile, yet vibrant islands of the Lesser Antilles, from Puerto Rico in the north to Trinidad and Tobago in the south. With tourism-dependent economies and extremely limited amounts of developable land, especially on mountainous islands, this potpourri of independent countries, dependent territories, and overseas departments share a common land use challenge: how to grapple with development patterns oriented toward the coast while managing the growing threat of sea level rise.

One island in the region stands out for its exceptional capacity to recognize and prepare for the rising tide: Pear-shaped Barbados has become a Caribbean leader in integrated coastal zone management—the contemporary practice of integrating sectors, levels of government, and disciplines to address the coastal zone both in the water and on dry land. Coastal land use and environmental management are always contentious issues on a small island. But, as former UN Secretary General Kofi Annan once remarked, “Barbados consistently punches above its weight.” Almost 50 years since independence, the island nation has leveraged a combination of foresight, international support, and local capacity to develop planning institutions and prepare for an uncertain future.

From Sugar to Sun Worshippers

Today, Barbados is famous as a top international tourist destination, with trademark white-sand beaches, warm aquamarine water, and ample sunshine along its 60 miles of coastline. Nearly 300,000 people live on the 166 square-mile island; 44 percent of Barbadians are classified as living in urban areas, centered in Bridgetown and along the developed south and west coasts. With a per capita GDP of US$23,600 and near-universal literacy, Barbados ranks 38th in the world and first in the Caribbean according to the United Nations Development Programme’s 2013 Human Development Index. Relying on its sand and surf, Barbados derives 80 percent of its US$4.4 billion GDP from its tourism and service industries.

But this evolution is a recent one, part of a similar pattern of development across the Caribbean in light of independence movements and the advent of commercial aviation. Originally inhabited by a native Amerindian population, Barbados was first settled in 1627 by the English, who quickly turned it into one of the world’s leading sugar producers. Barbados’s colonial history is unusual for the region; unlike many other Caribbean islands that saw multiple changes of European powers, Barbados did not leave British rule until independence in 1966—earning it the nickname “Little England.”

The colonial economy was a classic model of trade to enrich the metropolis. The English imported African slaves to work sugarcane plantations, molasses refineries, and rum distilleries. As a result, 90 percent of modern-day Barbadians claim African descent. Following independence, the already-lagging sugar crop, which suffered fluctuations common to any monoculture, became even less reliable as the push for free trade led the U.K. and later the EU to slowly draw down subsidies and preferential pricing.

At the same time, Barbados invested heavily in its tourism services, which shifted the locus of development. Historically, the island was mostly rural, with sugarcane plantations carving up the interior of the country, home to slaves and, later, itinerant sharecroppers toting moveable wooden “chattel” houses, Barbados’s typical vernacular architecture. The coast was home to Bridgetown, the principal port, where a navigable river meets the ocean, and a few smaller towns and fishing villages. A deep-water port dredged in 1961 also laid the groundwork for the arrival of cruise ships. The growing number of tourists necessitated hotels, resorts, restaurants, shops, and bars, all within a stone’s throw of the ocean. This impulse led to strips of coastal development between the airport and Bridgetown, on the south coast, and along the west coast, home to the calmest water and charming Holetown and Speightstown. By the 1990s, Barbados’s Grantley Adams International Airport was receiving regularly scheduled British Airways flights from London on one of the few Concorde supersonic jets.

The Local Response to Rising Waters

Lying just east of the main arc of the other eastern Caribbean islands, outside the Atlantic hurricane belt, Barbados has a meteorological advantage. Although it’s still susceptible to major storms, it experiences far fewer hurricanes than its neighbors to the northwest. Yet any threat to the beach and coral lining Barbados would have devastating consequences, given the island’s economic dependence on the coast. Its well-being is endangered by creeping sea level rise, coupled with possible storm surge if the island suffers even a glancing blow from a major hurricane. The Intergovernmental Panel on Climate Change (IPCC) has strong evidence that following a period of almost no change for centuries, there was an increase in global sea level measures in the 20th century, and that trend is accelerating in the 21st century. In August, the IPCC said sea levels could rise more than three feet by 2100.

Never a major contributor of carbon emissions, small island states are disproportionately impacted by global climate change resulting from modern industrialization elsewhere in the world. Shifts in weather patterns have produced a greater number of major storm systems, increased global temperatures, melted polar ice caps, and contributed to sea level rise. While major industrialized countries such as the United States, China, and Western Europe also experience impacts from sea level rise, the vulnerable proportion of these countries is miniscule compared to the susceptible areas of Barbados. The developed world’s inability to understand the impacts and consequences of its behavior, as evidenced by political inaction on issues such as carbon cap-and-trade agreements, has forced countries in the developing world to act now or face a perilous future.

Paradoxically, Barbados’s imperial history—often a burden on postcolonial countries—has proved an advantage, in that the island has a long, uninterrupted history of British-style town and country planning. Like the United Kingdom, Barbados is administratively divided into parishes, and modern development law is based on the British Town and Country Planning Act of 1947. Once independent, Barbados established its own planning framework with the 1972 Town and Country Planning Development Order. Presently, the Town and Country Development Planning Office (TCDPO) oversees all construction on the island, with the chief town planner reporting directly to the prime minister.

The Physical Development Plan from 1988 guides development on the island. Since the document’s amendment in 2003, there has been a turn toward sustainable development, not just as a catch phrase, but as an inherent value for the government’s vision for the island. In a 2008 conference speech, the previous prime minister, David Thompson, outlined a few core ideas of the plan: protect natural, agricultural, and cultural resources; promote mixed-use centers and corridors to encourage a diversified economy; maintain central Bridgetown as the financial and commercial hub; and stimulate tourism by the modernization of older beachfront properties and development of new opportunities. Today, the current prime minister, Freundel Stuart, continues this push for sustainability, as shown by his participation in high-level panels at last year’s United Nations Conference on Sustainable Development, Rio+20.

By the late 1970s, individual property owners began to notice coastal erosion affecting their land. The media began to harp on this issue, as it was concurrent with the push for tourism, quickly becoming the country’s main source of foreign exchange reserve. Prompted by this coastal erosion—but also concerned about catastrophic events such as hurricanes, earthquakes, tidal waves, volcanic eruptions, and oil spills—the Barbados government embarked on a diagnostic pre-feasibility study in 1981 with funding from the Inter-American Development Bank (IDB) as part of its Coastal Conservation Program. The study focused on the west and south coasts, as these areas of the island had the greatest potential for tourism infrastructure. At that time, the government set up the temporary Coastal Conservation Project Unit (CCPU), which oversaw the pre-feasibility study and came to a series of conclusions on the causes of coastal erosion and damage to beachfronts. For example, because inland Barbados had poor water quality, the runoff polluted the sea, damaging coral reefs. Natural phenomena, such as storm swells and the occasional erratic hurricane, also caused erosion. In turn, the sea defense structures in place were poorly designed. The IDB study mandated the CCPU to continue monitoring the shorelines, to provide advice to the public on coastal matters, and to serve as an advisor to the TCDPO on waterfront development.

Coastal Zone Management Unit is Born

As the Coastal Conservation Project Unit continued its mandate for a decade, the Government of Barbados, along with additional funding from the IDB, embarked on another study, which recommended the establishment of a permanent unit to oversee the coastal zone. This Coastal Zone Management Unit (CZMU) was created in 1996 to regulate, make recommendations, and educate the Barbadian population about coastal management. Still receiving a large amount of its funding from the IDB, the CZMU is currently housed in the Ministry of Environment, Water Resources, and Drainage. As its title suggests, the CZMU manages the coastal zone, which it defines as “the transition zone where the land meets water; the region that is directly influenced by marine hydrodynamic processes; extends offshore to the continental shelf break and onshore to the first major change in topography above the reach of major storm waves.” Therefore, the unit oversees the coral reefs around Barbados and all coastal engineering projects, while serving as an advisor to the TCDPO for onshore coastal development.

Land use issues are at the forefront of the relationship between the CZMU and TCDPO. When the TCDPO receives any application for development in the coastal zone, it forwards it automatically to the CZMU for review and comment. Since the tourism industry is based mainly in the coastal zone of the island, many of Barbados’s development applications go through the CZMU for review. The unit vets the application to make sure the setbacks are correct, 30 meters from the high water mark for developments along the beach and 10 meters for developments along cliffs, measured from the landward point of undercut. In addition to verifying setbacks, the CZMU looks at drainage requirements, buffer zones, fencing restrictions, and other regulations. The CZMU then makes recommendations to the TCDPO on the application.

CZMU Acting Director Dr. Lorna Inniss, who holds a Ph.D. in oceanography from Louisiana State University, praises this process. She says, “Our interministerial collaboration is extremely high. We have the ability to establish and improve government structure that’s inclusive and consultative by nature.” The government process is admirable for its cooperation and silo-breaking tendencies; unfortunately the CZMU’s recommendations are purely advisory and have no binding power for the TCDPO to enforce. Regulations in the coastal zone are not retroactive for the legions of properties built during the resort boom, and penalties for violations also remain very low. This process is the closest Barbados approaches to a formalized environmental impact assessment, per a U.S. model, but it’s a strong first step for the Caribbean. CZMU and TCDPO have been more successful in planning for low-impact future development—along the more rugged east coast, for example, where the Physical Development Plan envisions a national park.

The CZMU is most effective in implementing coastal engineering projects to protect the coastline and stop beach erosion. The most natural conservation technique is to restore sand dunes and mangroves. Planting vegetation in the coastal areas allows the dunes to form naturally and hold back inundations from storm surges, while mangroves absorb wave action. Beach nourishment is a popular quick fix but more of a Band-Aid approach that is more costly and less effective, as currents and storms can easily erode the nourished beach.

The CZMU safeguards the coast with various physical interventions as well, including breakwaters, groynes, and seawalls. Breakwaters are concrete structures, sunken close to the beach, that force waves to break farther from the coast so they don’t directly pummel the sand. Groynes are rock structures that jut out into the ocean to disrupt the movement of sediment. Seawalls are the CZMU’s largest type of intervention. Intended to protect more populated areas, these construction projects involve either a riprap design of large rocks or a flat, concrete seawall that can create public space attractive to both tourists and residents, such as the Richard Haynes Boardwalk, partially funded by an IDB loan. Because these techniques can sometimes exacerbate erosion and require more expensive maintenance than natural interventions, their long-term efficacy is up for debate, but, in the short term, they protect the coastline and the tourism industry.

Given the island’s vulnerability to storms, engineering projects can be costly. Inniss, however, explains, “We have a policy of rigorous stakeholder consultation, and it’s not just lip service. November through April is our high season; on a recent project in Holetown, we heard from merchants that it was vital to complete work by November, so we hustled to do so. In a spirit of mutual cooperation, we can get private sector buy-in.” Hopefully, the CZMU can leverage the political capital it earns from the private sector on such projects, in order to make more demanding regulations become binding down the road.

In order to build support, the CZMU maintains a major outreach campaign to educate the island’s population, to which Inniss herself attributes the success of the CZMU internally and externally: “It begins with a nationally high level of education and literacy—over 98 percent for decades.” Former Senator Henry Fraser echoes her, “People ask, ‘Why do things work in Barbados?’ It’s largely because of the emphasis on education since emancipation. And, because it’s a small, highly religious place with people living close together, respect, tolerance, and a work ethic are greater than elsewhere.”

To deepen the educational foundation of Barbados’s cooperative approach to coastal zone management, the CZMU distributes a newsletter, maintains a strong social media presence, and produces an educational television show that explains the geological history of the island and techniques to raise awareness about sea level rise and the importance of coastal management. It also hosts many activities such as International Coastal Clean-Up Day, Sundown Beach Walks, Summer Seminar Series, and a summer internship program for secondary- and tertiary-level students. It also provides lectures for schools and educational institutions, NGOs, private organizations, and the general public.

Next Steps and Global Cooperation

The IDB continues to be a major supporter of Barbados’s efforts. The development bank’s most recent aid to the country includes a 25-year, $30 million loan to pursue a Coastal Risk Assessment and Management Programme. Inniss is excited by the confidence that such support expresses, as it indicates the government’s belief that the CZMU can execute a project that will create enough value to repay the money. “It will be a next level, state-of-the-art integrated coastal zone management strategy that will involve a series of stakeholders: tourism, rum distilleries, light and power utilities, marinas, boaters, commercial fishermen, the port, divers,” Inniss details. “Key decision makers have recognized that coastal zone management is important not just as an environmental program but to grow the economy of Barbados.” Hopefully other Caribbean countries have taken notice, as Inniss herself has provided technical assistance to St. Lucia, Trinidad and Tobago, and St. Vincent and the Grenadines—while in turn taking cues from New Zealand, Hawaii, and Fisheries and Oceans Canada as a model of how to implement international standards.

Of course, there is still room for improvement. Even as the CZMU works closely with TCPDO on land use planning, with national marine parks to conduct ecosystem-based monitoring, and with civil engineers from the Ministry of Public Works, CZMU is still not fully integrated with the Ministry of Agriculture and Fishing. For example, Inniss acknowledges, “We know scientifically that agricultural runoff is the biggest contributor of marine pollutants.”

Indeed, on a small island, the land and water are intrinsically interconnected. While Barbados continues to do its part in the battle against global climate change—another IDB loan signed alongside the coastal management funding will establish an Energy Smart Fund to reduce dependence on fossil fuels—it cannot sit tight and wait for the larger countries of the world to act. As small, developing island states in the Indian and Pacific oceans face the prospect of resettling their populations in other countries a few decades down the road, Barbadians plan to stay and protect their piece of paradise.

About the Authors

Gregory R. Scruggs was a consultant to the American Planning Association for Latin America and the Caribbean from 2010 to 2013. He is currently pursuing a master’s in regional studies of Latin America and the Caribbean at Columbia University. Contact: gscruggs.apa.consult@gmail.com.

Thomas E. Bassett, a senior program associate at the American Planning Association, works on the Energy and Climate Partnership of the Americas grant from the U.S. Department of State as well as the domestic Community Assistance Program. Contact: thomas.e.bassett@gmail.com.

Resources

Bassett, Thomas E. and Gregory R. Scruggs. 2013. Water, Water Everywhere: Sea level Rise and Land Use Planning in Barbados, Trinidad and Tobago, Guyana, and Pará. Lincoln Institute of Land Policy Working Paper WP13TB1. https://www.lincolninst.edu/pubs/dl/2282_1621_Bassett_WP13TB1.pdf.

Belle, N. and B. Bramwell. 2005. Climate change and small island tourism: Policy maker and industry perspectives in Barbados. Journal of Travel Research 44: 32–41.

Dharmartne, G. and A. Brathwaite. 1998. Economic valuation of coastline for tourism in Barbados. Journal of Travel Research 37: 138–144.

Inter-American Development Bank. 2010. Indicators of disaster risk and risk management, Program for Latin America and the Caribbean, Barbados. September. Accessed July 9, 2012. http://idbdocs.iadb.org/wsdocs/getdocument.aspx?docnum=35160015.

Phillips, M. R. and A. L. Jones. 2006. Erosion and tourism infrastructure in the coastal zone: Problems, consequences, and management. Tourism Management 27: 517–52.

Shaping the Future of the American West

Summer Waters is the third director of Western Lands and Communities—a joint program established in 2003 by the Lincoln Institute of Land Policy and the Sonoran Institute to inform policy related to the use of land and natural resources in the Intermountain West. Summer has a B.S. in biology from the University of South Florida and an M.S. in civil engineering, with concentrations in environmental and water resources engineering, from the University of Colorado at Boulder. Before joining the Sonoran Institute, she spent 15 years working in urban planning and natural resources for government entities including the University of Arizona Cooperative Extension and the County of San Diego, where she won an Emmy award for coproducing an educational video.

LAND LINES: What attracted you to the challenge of directing this joint program between the Lincoln Institute and the Sonoran Institute?

SUMMER WATERS: The chance to help shape the future of the American West. The Lincoln Institute of Land Policy is a thought leader in this realm, and the Sonoran Institute is well known throughout the region for its dedication to collaborative work with local communities and other organizations. Our shared mission is ambitious, but each organization has complementary attributes that make it successful. Our mutual, longstanding commitment gives the joint program depth and flexibility.

LL: Why is this job the right one at the right time for you?

SW: My interest in the natural world led me to study biology as an undergraduate, and my desire for a solutions-oriented career led me back to school for engineering. After graduation, I gravitated toward planning, because it allowed me to work with both the natural and built environments. After gaining professional experience, I began to recognize how the use of land, water, and energy interconnects with economics and community development. And I appreciated Western Lands and Communities’ holistic approach to the challenges facing the region.

LL: Both the Lincoln Institute and the Sonoran Institute have recently undergone leadership changes. What challenges and opportunities does this transition afford you?

SW: Both Stephanie Sklar, the new CEO of the Sonoran Institute, and Lincoln Institute President and CEO George McCarthy are motivated leaders who inspire me personally and professionally. Stephanie is ambitiously embarking on a strategic planning process that will guide the Sonoran Institute through its 25th anniversary as an organization. Her breadth and depth of knowledge inform the process and ensure that we both celebrate and evaluate our work. George McCarthy is a courageous and visionary leader guiding the Lincoln Institute through a similar transition. His appreciation for the West was obvious when he recently visited our Phoenix office. He comprehends the challenges we are facing and the importance of demonstration projects, such as our Colorado River Delta Restoration effort, in shaping the future of this region.

LL: How is Western Lands and Communities contributing to the Sonoran Institute’s effort to restore the ecology and economy of the Colorado River Delta?

SW: Western Lands and Communities supports the implementation of Minute 319, the binational agreement between the United States and Mexico that guides the sharing and delivery of water on the Colorado River under the 1944 treaty through 2017. Perhaps the most significant event resulting from this agreement was the release of a “pulse flow” of 105,000 acre-feet of water into Mexico in the spring of 2014. This intervention was designed to mimic what would have been the Colorado River’s natural flow cycles under spring conditions, when snowmelt from the mountains once ran through what is now seven U.S. states and two countries, ultimately to the Sea of Cortez. This historic effort breathed life into the desiccated delta, and in May 2014 the river reached the sea for the first time in years. In the spring of 2015, we will convene a group of NGO representatives, academic professionals, and agency scientists at the one-year anniversary of this event. Participants will discuss the impact of renewed flows on critical ecosystem functions in the region and evaluate the implications of this temporary agreement between the U.S. and Mexico. Through this process, we hope to inform future policies related to the allocation of this precious resource to the natural environment.

LL: I understand this project fits into your broader agenda to conserve large landscapes. Tell us more about that effort.

SW: Public land ownership in the Intermountain West is vast. At first glance, a map of the region depicts a disconnected pattern of various land agencies and managers with very different missions and approaches. Working lands and tribal lands further complicate that scenario. Landscape-scale conservation relies heavily on the full range of people who live within this picture; in order to avoid “random acts of conservation,” and to achieve more coordinated and meaningful results, collaboration among public entities, individual land owners, and tribes is key. Fortunately, Westerners—regardless of political viewpoints, upbringing, or economic status—typically unite around a shared goal of preserving a way of life that is intertwined with the landscapes they inhabit. The way forward involves capitalizing on this shared vision, engaging communities in shaping their own future, and connecting practitioners with stakeholders in a meaningful manner.

LL: How does Western Lands and Communities help communities respond better to the major challenges for the future of the Intermountain West?

SW: The West faces essentially the same challenges as other areas of the United States, but under a unique set of circumstances. We have a growing population, which triggers changing economies and demographics. Both urban and rural areas struggle to balance growth with natural resource protection. Given the sheer scale and grandeur of the natural environment in the West, it is easy to view our vast natural resources as infinite—a misperception that can lead to sprawl and other issues associated with natural resource extraction. Our expansive landscapes also create specific challenges related to transportation, which contributes to climate change—a force that exacerbates all other problems. The joint program assists communities through the development of planning tools, webinars on smart growth and sustainable development topics, and compilations of successful case studies from communities across the West.

LL: Western Lands and Communities is engaged in exploratory scenario planning—a unique approach to long-range planning that explicitly challenges communities to evaluate their proposals against an uncertain future. How is exploratory scenario planning different from traditional planning, and how is it being applied in the West?

SW: Exploratory scenario planning is a process that encourages imagination in the planning process. Through the engagement of stakeholders, community members, and experts, we develop a variety of plausible scenarios and acknowledge the complex forces, such as climate change, that could lead to a significantly different future. We help participants to view their particular issues in terms of the broader social, political, economic, and natural forces that shape communities in general. While some scenarios currently seem more probable or desirable than others, each receives equal consideration throughout the workshops. Most importantly, this process is more flexible, engaging, and dynamic than traditional planning, requiring participants to develop multiple strategies in response to a spectrum of future uncertainties. Western Lands and Communities has helped communities across the West apply this approach to General Plan updates, watershed plan development, and preparation for the economic impacts of changing climate and weather conditions. Ultimately, exploratory scenario planning is designed to help communities adapt to change better by addressing complex issues that are embedded in great uncertainties. The foresight and strategies generated through this process prepare leaders to guide their communities toward a more sustainable future.

LL: What are the special challenges of planning for climate change in the Intermountain West and how have WLC’s approaches recognized those issues?

SW: In the West, climate change affects ecosystems that are predominately arid and often exhibit high variability, compounding problems. In the past, we have built large reservoirs to cope with fluctuating water supplies due to cycles of drought. But that solution is no longer sufficient, as we are seeing droughts of unprecedented severity punctuated by extreme floods. Communities must now tackle issues that could once be left to the federal government. They must determine for themselves how to cope with diminishing water resources, increasing temperatures, migrating ecosystems, and extreme weather. The approach that Western Lands and Communities takes is to help communities identify priorities and develop policies to create resilience.

We have to be cognizant of the fact that neighboring communities can be very polarized when it comes to climate change. While some communities have embraced the reality of it, others hold onto a past way of life that is essential to the character of the region, yet leaves little room for adaptation. The West has large populations of American Indians and Latinos who are particularly vulnerable to climate change impacts. We recently began working with urban Latino communities in Arizona to address their disproportionate exposure to the effects of global warming. We do this by convening leaders, crafting messages that resonate with Latino communities, and working with organizations to train community members to educate others on this topic. Every community is a little different, so we blend replicable methods with adaptive management.

LL: The scope of Western Lands and Communities’ work has widened considerably since it started with an exclusive focus on the needs, challenges, and opportunities for state trust lands. What is the significance of that original mission and the resulting relationship, built over time, with state trust land managers?

SW: Historically, state trust lands have been poorly understood by the general public and natural resource professionals alike, particularly with respect to their fiduciary responsibilities. People rely on state trust lands for their livelihoods, as do children and young adults who need access to quality public education. Here in Arizona, we have seen unprecedented cuts to funding for public schools and universities in recent years. Our work has brought greater understanding of state trust lands as a source of funding for public schools and as natural systems with important biological functions that need to be protected. Mitigation banking and land exchanges help to integrate state trust lands into the broader context of large landscape conservation and sustainable development. But most state trust lands managers face regulatory challenges when they try to implement conservation practices. Reform is necessary to remove barriers that hinder implementation of the full array of practices that provide for both conservation and profit.

The economic and environmental benefits of state trust lands will continue to be significant. Ultimately, our commitment to western communities through our work with state trust lands will remain intact. Although the focus of the program may change as states encounter new and different challenges, the need to educate people about the state trust land mandate to create value for the trust beneficiaries will remain constant in the years to come.

Holyoke, una ciudad de alrededor de 40.000 habitantes en el oeste de Massachusetts, fue una de las primeras comunidades industriales planificadas del país. A partir de finales de la década de 1840, inversores de Boston transformaron lo que había sido hasta entonces un área agrícola en un pueblo industrial impulsado por molinos de agua, aprovechando la ventaja de su ubicación geográfica cerca del Río Connecticut. Los inversores querían fabricar textiles de algodón. Pero con el tiempo la ciudad construyó un elaborado sistema de canales para permitir la instalación de más y más molinos, y comenzó a ser conocida también por la producción de seda, lana y papel. En aquel período, Holyoke se convirtió en la “Ciudad del Papel”, por los molinos de agua dedicados a su fabricación.

Con el desarrollo de los molinos, la ciudad prosperó. Con la abundancia de trabajo, la ciudad atrajo olas sucesivas de inmigrantes irlandeses, franco-canadienses, alemanes, polacos, judíos, italianos y puertorriqueños para trabajar en los molinos, quienes crearon pequeñas empresas, formaron familias y construyeron una ciudad que llegó a tener 63.000 habitantes en 1917 (McLaughlin Green 1939).

Después, todo comenzó a desmoronarse… lentamente. Desde su auge en la década de 1920, la industria local se fue reduciendo gradualmente cuando las empresas y los puestos de trabajo se mudaron al extranjero o migraron al Sur y al Oeste para estar más cerca de la materia prima y de mano de obra más barata. En el censo del 2000, la población de Holyoke se había reducido a menos de 40.000 habitantes. Como otras pequeñas ciudades industriales del país, se convirtió en un símbolo en vías de extinción del pasado industrial de los EE.UU., y la otrora próspera Ciudad del Papel luchaba por conservar su nivel económico.

Afortunadamente, a Holyoke le tocó la lotería en 2009, cuando fue seleccionada para albergar lo que hoy se conoce como el Centro Informático Verde de Alta Prestación de Massachusetts (Massachusetts Green High Performance Computing Center, MGHPCC) un complejo de supercomputadoras respetuoso con el medio ambiente para promover —según la denominación que le dieron los funcionarios estatales— la “economía innovadora” de Massachusetts. La energía hidráulica fue, una vez más, la clave del éxito para la ciudad. La ubicación de Holyoke sobre el río Connecticut ofrecía acceso a energía hidroeléctrica de bajo costo, y el río y los múltiples canales de la ciudad ofrecían agua para refrigeración, una ventaja importante para las supercomputadoras. “Holyoke ha tenido problemas para sobrevivir después de haber perdido su base industrial”, dice Kathleen Anderson, presidente de la Cámara de Comercio del Gran Holyoke. “Teníamos una infraestructura envejecida que necesitaba reutilizarse para otros fines, perdimos puestos de empleo y las condiciones demográficas cambiaron. Holyoke ha tenido que pensar creativamente y reconocer los activos que teníamos. Tanto el talento humano como la decisión de construir la represa y su energía hidroéctrica han sido esenciales para nuestro renacimiento”.

Cuando inauguramos el centro informático en 2012, representó un primer paso importante para mejorar el destino de Holyoke, pero ello no fue suficiente para restaurar su vitalidad. La ciudad emprendió un esfuerzo de planificación que dio como resultado un plan de renovación de 20 años para revitalizar y volver a desarrollar el área donde se encuentra el MGHPCC, en el centro de la ciudad. Un paso importante en la ejecución del plan fue la creación del Distrito de Innovación de Holyoke, una inversión del estado por medio de la Asociación Tecnológica de Massachusetts (Massachusetts Technology Collaborative) que reunió a funcionarios locales, líderes empresariales y organizaciones comunitarias para estimular el desarrollo económico local y regional. “La instalación del centro informático en Holyoke desencadenó nuestro proceso de planificación alrededor del Distrito de Innovación de Holyoke. Nosotros decimos que el Distrito de Innovación nació del centro informático”, dijo Marcos Marrero, director de planificación y desarrollo económico de Holyoke y copresidente del Distrito de Innovación de Holyoke, en una entrevista en septiembre (Desmarais 2015) aparecida en el periódico Bay State Banner.

Liderazgo, colaboración, resurgimiento

Fue entonces cuando entró en escena el Banco de la Reserva Federal de Boston. Desde 2008, el personal de investigación del banco había estado estudiando las viejas ciudades industriales similares a Holyoke, como parte del esfuerzo para ayudar a revitalizar otra ciudad de Massachusetts: Springfield. Como Holyoke, Springfield había visto días mejores. El banco realizó un estudio de dos años en colaboración con Springfield para analizar los desafíos que se presentaban para la cuarta ciudad más grande del estado, que seguía decayendo aun cuando el gobierno estatal y las organizaciones sin fines de lucro habían invertido millones de dólares en obras de revitalización.

Una parte del estudio trató de aportar lecciones para Springfield a partir de los destinos de otras 25 pequeñas ciudades industriales del noreste, medio oeste y sur septentrional de los EE.UU. Los economistas de la Reserva Federal de Boston descubrieron que algunas de estas ciudades pudieron mantener o recuperar su estabilidad económica, medida según su nivel de ingreso, tasas de pobreza, cantidad de población y vitalidad económica. Los investigadores las denominaron «ciudades renacientes», y buscaron aspectos comunes que pudieran explicar la razón de su éxito. Encontraron que todas estas ciudades habían enfrentado los mismo desafíos: pobreza, cambio del perfil racial y étnico y pérdida de su base industrial. Pero estaban tratando de superar estos desafíos y compartían un elemento clave del éxito: liderazgo sostenido y colaboración entre empresas, gobierno, organizaciones sin fines de lucro y grupos comunitarios. “Una y otra vez, nuestro análisis de la historia de las ciudades renacientes identificó el elemento de liderazgo por parte de instituciones o individuos clave, junto con la colaboración entre los diversos grupos que compartían su interés en el desarrollo económico”, escribieron los investigadores del banco en un informe de 2009 (Kodrzycki y Muñoz 2009).

Los investigadores también notaron que el origen del liderazgo local variaba de un lugar a otro. En New Haven, Connecticut, las universidades locales trabajaron con funcionarios gubernamentales y la industria privada con el objeto de brindar capacitación laboral y financiamiento para atraer compañías. En Providence, una fundación sin fines de lucro trabajó con ejecutivos empresariales para desarrollar ideas y llegar a un consenso sobre proyectos de desarrollo inmobiliario en el centro. En Evansville, Indiana, un alcalde inició el proceso de recuperación en la década de 1960, proceso que tuvo continuidad gracias a una agresiva campaña de desarrollo económico liderada por la Cámara de Comercio local. A pesar de sus diferencias, todos estos esfuerzos de revitalización económica se prolongaron durante décadas, y precisaron de un liderazgo sólido y continuado.

Todos estos esfuerzos también contaron con la colaboración activa de numerosos grupos e individuos. Según la investigación de la Reserva Federal, “la colaboración fue un elemento necesario porque la transformación económica es compleja y porque los agentes externos, como los gobiernos nacionales y estatales, las fundaciones y las empresas que son una fuente potencial de financiamiento y fuente de trabajo, requieren frecuentemente una evidencia de la colaboración conjunta para contribuir al desarrollo de una ciudad”.

A la altura del desafío

Estas conclusiones llevaron a la Reserva Federal de Boston a preguntarse qué se podría hacer para ayudar a construir la infraestructura cívica sólida que era fundamental para el resurgimiento. Esto llevó a la formación de Working Cities Challenge (Desafíos para Ciudades en Funcionamiento), una organización creada por el banco con la ayuda de Living Cities, una asociación de 22 fundaciones, instituciones financieras y otros miembros, con sede en Nueva York.

El Desafío consistió en una competencia entre las antiguas ciudades industriales pequeñas de Massachusetts. En la primavera de 2013, 20 comunidades solicitaron participar. De estas 20, seis ciudades fueron seleccionadas para recibir un total de US$1,8 millones en subvenciones para financiar proyectos de liderazgo y colaboración. Entre ellas se encontraba Holyoke, junto con Chelsea, Fitchburg, Lawrence, Salem y Somerville. El objetivo era simple: ayudar a salvar estas ciudades de Massachusetts que luchaban por sobrevivir, respaldando el desarrollo de las herramientas necesarias para ayudarse a sí mismas. Este programa fue un hito importante e inusual para un banco de la Reserva Federal. Los bancos son más conocidos por sus investigaciones económicas que por organizar programas concretos. No obstante, la iniciativa fue un reflejo del compromiso del presidente de la Reserva Federal de Boston, Eric Rosengren, para aplicar las investigaciones económicas del banco al mundo real, y para mejorar las comunidades de Nueva Inglaterra. Y el concepto se puede extender, con la posibilidad de impulsar a ciudades y pueblos en todo el país que han tenido problemas con las realidades económicas del siglo XXI.

Tamar Kotelchuck, directora de Working Cities Challenge, dice que las investigaciones del banco sobre las ciudades renacientes le enseñaron que hasta las ciudades con muchos problemas pueden mejorar. “Con base en lo que aprendimos del estudio de ciudades renacientes, nos comunicamos con Living Cities (Ciudades Vivas) y se nos ocurrió la idea de una competencia para otorgar financiamiento multianual con objeto de incentivar el liderazgo y la colaboración”, dijo.

Señala que el banco decidió comenzar con un programa piloto en Massachusetts, concentrándose en ciudades pequeñas y medianas. El objetivo eran ciudades de entre 35.000 y 250.000 habitantes que compartían determinados aspectos económicos y demográficos, como una gran cantidad de familias pobres y una baja mediana de ingresos. “Estas ciudades ya habían formado una coalición para apoyar sus intereses con la ayuda de MassINC, una ONG de expertos”, dice Kotelchuck. “Se hacían llamar Gateway Cities (Ciudades-Portal), y habían estado colaborando para resolver problemas económicos y políticos comunes desde hacía varios años. Aprendieron que el trabajo conjunto les daba cierta cantidad de poder que cada ciudad por separado no tenía”, dice (Forman et. al. 2007).

Working Cities adoptó una metodología original para ayudar a estas ciudades, según Andrew Reschovsky, fellow del Instituto Lincoln. “Lo original de la iniciativa de Working Cities es que, a diferencia de muchas otras estrategias de desarrollo económico urbano, se enfoca en mejorar el bienestar económico de los residentes de bajos ingresos que viven actualmente en cada ciudad”.

Los bancos de la Reserva Federal no pueden usar fondos propios para otorgar subvenciones, pero una serie de socios dispuestos a ayudar se ofrecieron a apoyar a Working Cities. Kotelchuck dice que, como parte de la iniciativa, la Reserva Federal se encargó del diseño e implementación del modelo, en conjunto con un comité directivo, proporcionando asistencia técnica y ayudando a los equipos a capacitarse mediante la asistencia de expertos, redes de contactos y buenas prácticas. Estas subvenciones son financiadas por varios donantes, como el gobierno estatal; Living Cities; Massachusetts Competitive Partnership (Asociación Competitiva de Massachusetts), asociación de los 16 empleadores más grandes del estado que se concentra en el crecimiento económico; y MassDevelopment, la agencia de desarrollo estatal.

Kotelchuck dice que cuando el banco y sus socios organizaron la primera competencia en 2013, dieron libertad a las ciudades para proponer cómo se usarían los fondos de la subvención. “No dijimos a las ciudades en qué tenían que trabajar”, dice. “El Desafío está diseñado para ayudar a construir colaboración sobre temas importantes a nivel local”. Sin embargo, un requisito importante para que un proyecto obtuviera éxito era que generara una colaboración entre el sector privado, el gobierno y otros grupos locales. “Buscamos proyectos que promovieran un cambio sistémico”, dice. “Nuestra meta fue ayudar a los líderes locales a solucionar problemas en sus propias ciudades”.

Un jurado independiente evaluó las propuestas de las ciudades en base a los criterios establecidos por Working Cities Challenge: colaboración, participación de la comunidad y el uso de pruebas concretas para medir el progreso. Los proyectos tenían que concretarse en una contribución duradera para mejorar las vidas de los residentes de bajos ingresos.

En enero de 2014 se anunciaron los premios de las primeras subvenciones. De las seis ciudades seleccionadas, cuatro recibieron subvenciones multianuales y dos recibieron subvenciones en forma de capital semilla. Todas las ciudades estaban combatiendo una alta tasa de desempleo, bajo desempeño estudiantil y un futuro incierto. No obstante, dice Kotelchuck: “Todas las ciudades ganadoras tenían propuestas distintivas. No había dos propuestas iguales. Todas abordaban necesidades locales específicas, tal como esperábamos”, dijo.

Por ejemplo, Fitchburg, situada en la región central del norte de Massachusetts, recibió una subvención de US$400.000 durante tres años para su Iniciativa eCarenomics, un esfuerzo para desarrollar medidas comunes para la salud y bienestar vecinal, con el objetivo de mejorar una parte de la ciudad. Chelsea obtuvo una subvención de tres años para su Iniciativa Shurtleff-Bellingham, diseñada para reducir la pobreza y las tasas de movilidad en un 30 por ciento en su barrio más problemático. Salem recibió una subvención de capital semilla de US$100.000 destinada a su plan para alinear los indicadores económicos de uno de sus barrios de bajos ingresos con el resto de la ciudad, enfocándose en el desarrollo económico, el desarrollo de pequeñas empresas, el desarrollo de la fuerza de trabajo y el desarrollo de liderazgo. Somerville también recibió una subvención de capital semilla de US$100.000 dirigido a un programa de capacitación laboral para jóvenes de 18 a 24 años de edad que no estaban estudiando en la escuela.

El premio más cuantioso, una subvención de US$700.000 durante tres años, fue otorgado a Lawrence, en el noreste del estado, para la Lawrence Working Families Initiative (Iniciativa de Familias Trabajadoras de Lawrence), cuyo objetivo era crear un Centro de Recursos Familiares para aumentar los ingresos de los padres de estudiantes de escuelas locales en un 15 por ciento en un periodo de 10 años. La iniciativa está liderada por la organización Lawrence Community Works y el sistema escolar local, con respaldo de varios empleadores y organizaciones sin fines de lucro de la zona. “El sistema escolar de Lawrence había entrado en quiebra en 2011”, explicó Kotelchuck, así que era lógico concentrarse en las familias y las escuelas.

La ciudad también tenía características económicas que se ajustaban al modelo de Working Cities. La mediana de ingresos de la unidad familiar era la mitad que la mediana estatal, y su tasa de pobreza era casi el triple de la tasa estatal. “El 70 por ciento de la población de la ciudad es ciento hispana, y la tasa de desempleo era alta”, dice Kotelchuck. Muchos de los problemas de la ciudad se trasladaban a las escuelas. “El objetivo del Centro de Recursos Familiares es ayudar a las familias de todas las formas posibles. Brinda capacitación en temas financieros, apoyo en casos de crisis y otros servicios para fortalecer a las familias”, dice.

Además del centro familiar, una gran parte de la iniciativa está enfocado en lo que Kotelchuck llama “participación auténtica de los padres” en las escuelas. La iniciativa creó círculos de educación comunitaria, donde padres, maestros y estudiantes trabajan en problemas escolares específicos. “El objetivo es que los padres se comprometan y participen en el sistema escolar”, dice. Hasta ahora, el programa ha reclutado a 400 padres, ha contratado a un entrenador familiar y ha conseguido trabajo a más de 30 padres, según Kotelchuck.

Holyoke recibió el premio de una subvención de US$250.000 durante tres años que se está usando para implementar el programa de estimulación de potencial y acceso a recursos de conocimientos (Stimulating Potential, Accessing Resource Knowledge, SPARK). Este “centro de iniciativas comerciales y emprendimientos sociales” en el centro de la ciudad se propone aumentar la cantidad de empresas, sobre todo entre los residentes de la ciudad, incluyendo la población latina, que asciende al 60 por ciento del total. El equipo de proyecto que creó el programa se compone de representantes de la ciudad, la cámara de comercio, la biblioteca pública de Holyoke, un centro integral de empleo llamado CareerPoint y la organización local sin fines de lucro Nuestras Raíces.

El programa SPARK se “propone identificar, reclutar y estimular a los residentes y las organizaciones de Holyoke que tienen la ‘chispa’ o el deseo de convertir sus proyectos innovadores o propuestas de negocios de idea en realidad, poniendo énfasis en una metodología comunitaria integral de emprendimiento, aprendizaje individual y capacitación de liderazgo”, de acuerdo con la ciudad. En definitiva, está diseñado para ayudar a empresarios potenciales a elaborar planes de negocios para poner en práctica sus ideas.

Otro objetivo es incorporar a miembros de la comunidad del centro de Holyoke al Distrito de Innovación que la ciudad ha creado alrededor del centro de supercomputadoras. “La ciudad tiene un gran centro de datos “, dice Kotelchuck. “Pero ese hecho por sí mismo no necesariamente va a ayudar a las personas de bajos ingresos de Holyoke. La cuestión que SPARK trata de resolver es cómo aprovechar los recursos de la población inmigrante de Holyoke y conseguir que la gente se beneficie del desarrollo del Distrito de Innovación y sus alrededores.

Los funcionarios municipales están de acuerdo. “El premio de esta subvención es una buena noticia más para el futuro del Distrito de Innovación de la ciudad”, dijo el alcalde Alex Morse cuando se anunció. “Hemos hecho un gran esfuerzo para que Holyoke pueda competir en la economía moderna, para lo cual hace falta estimular proyectos innovadores y emprendimientos comerciales. Con la colaboración de algunas de las mejores organizaciones y líderes comunitarios de Holyoke, este financiamiento nos permitirá ayudar a los residentes locales a poner en práctica sus ideas innovadoras.

Kotelchuck dice que muchas ciudades tratan de atraer a profesionales jóvenes y enfocarse en trabajos de alta tecnología. Ven que otras ciudades han implementado y copiado este modelo con éxito, pero otras no. “Si no ayudamos a los residentes de bajos ingresos”, dice, “simplemente estaremos moviendo la pobreza de un lugar a otro, y eso no ayuda a nadie. La iniciativa Working Cities ayuda a la gente en el lugar donde vive. Ayuda a gente que de otra manera no tendría trabajo”.

“Muchas ciudades persiguen la estrategia de moda más llamativa para revitalizarse, pero al final no es la tendencia más novedosa lo que revitaliza una ciudad”, dice. “Son los efectos de muchas ideas a lo largo del tiempo, y sólo ocurre en aquellas ciudades que cuentan con participación y colaboración comunitaria. Nuestra recomendación es observar lo que uno tiene y construir sistemáticamente a partir de ello”.

Al supervisar el progreso del Desafío, comenta, ha notado diferencias en la manera en que las ciudades piensan sobre su futuro. “Algunas ciudades dicen: Tenemos muchísimos problemas, por favor dennos dinero”, continúa. “Pero otras dicen: Tenemos estos recursos. Tenemos cierta energía. Lo que necesitamos es ayuda para descubrir nuestro potencial”. Dice que las iniciativas de revitalización requerirán una década de esfuerzo o más. El objetivo de la Reserva Federal es proporcionar un adelanto de tres años para este esfuerzo.

También puede generar un interés más amplio en la revitalización de las ciudades. Recientemente, Holyoke SPARK recibió US$56.000 adicionales de Massachusetts Growth Capital Corp, una agencia cuasi pública que da apoyo a pequeñas empresas, para que el programa pueda ofrecer más clases, dar asesoramiento a los emprendedores y respaldar un programa de préstamos para microempresas para aquellos que reúnan las condiciones. También recibió este año financiamiento adicional de subvenciones en bloque para el desarrollo comunitario de la ciudad.

Signos de progreso

La Reserva Federal y sus socios están satisfechos con los resultados del proyecto hasta ahora, dice Kotelchuck. Y el banco anunció recientemente una segunda y tercera tanda de subvenciones para ciudades de Massachusetts y Rhode Island. Con el tiempo, ella cree que esta idea se podría difundir a otros distritos de la Reserva Federal. “Para la Reserva Federal es un modelo nuevo de involucrase en estas comunidades. Otras Reservas Federales están demostrando interés, y nos encantaría que esta idea prendiera en otros distritos”. Rosengren, el presidente del banco, dice que la Reserva Federal de Boston piensa expandir el programa, al menos a otros estados de Nueva Inglaterra.

El programa Working Cities tiene un gran potencial para extenderse más allá de la región. Hay pequeñas ciudades y pueblos en todo el país que han sido golpeados por el cambio de fortuna económica en las décadas recientes. Merecen una oportunidad de convertirse también en ciudades renacientes, y es gratificante ver como una organización como la Reserva Federal de Boston está invirtiendo su inteligencia y su influencia para mejorar el futuro. No hay una sola solución, no hay garantía de éxito, pero Working Cities Challenge demuestra que con tiempo, compromiso, esfuerzo y un poco de dinero se pueden conseguir buenos resultados.

Este es un punto que Reschovsky, del Instituto Lincoln, también subraya: “Aun cuando todas las ciudades involucradas actualmente en Working Cities necesitan más recursos económicos y fiscales, la clave para el éxito de la iniciativa será la combinación de recursos adicionales y el desarrollo y promoción de organizaciones sin fines de lucro, gobiernos, empresas e instituciones sociales.”

Eso parece, efectivamente, lo que está ocurriendo en Holyoke. Últimamente ha generado también algo de reconocimiento a nivel nacional. En el número de febrero de la revista Popular Mechanics, los editores nombraron las 14 mejores ciudades en marcha del país, expresando que querían identificar “la próxima ola de ciudades que están construyendo un ecosistema que convierta a los innovadores en emprendedores”. La lista incluye ciudades pequeñas a lo largo del país. Holyoke apareció en el sexto puesto (Popular Mechanics 2015).

Inevitablemente, la principal ventaja de la ciudad es lo que ya sabemos. “Tenemos energía barata”, escribió el alcalde Morse al describir la innovación aportada por Holyoke para la revista. “En el borde oriental de la ciudad, el río Connecticut tiene una caída de 17 metros en su avance hacia el sur. Cuando se fundó la ciudad en 1850, el río impulsó las ruedas de los molinos de papel; hoy genera energía barata y limpia”. También mencionó las viejas fábricas de ladrillo que se construyeron para la industria papelera, signos del pasado industrial que se han transformado en «atractivos espacios industriales de trabajo”.

“Holyoke ha vuelto a su punto de partida”, dice Anderson, de la Cámara de Comercio. “Nuestros antecesores construyeron un sistema de canales para utilizar la energía del río, y ahora estamos utilizando energía verde para alimentar una economía nueva”.

Billy Hamilton is vicecanciller ejecutivo y director financiero del Sistema Universitario de Texas A&M. Fue contralor adjunto de cuentas públicas del estado de Texas durante 16 años. Desde 2007, escribe una columna semanal para State Tax Notes.

Fotografía: Jeffrey Byrnes

Referencias

Desmarais, Martin. 2015. “The Holyoke Innovation District Finds Creative Solutions to Revitalizing the City.” The Bay State Banner. 10 de septiembre, 2015. baystatebanner.com/news/2015/sep/10/holyoke-innovation-district-finds-creative-solutio/?page=3

Forman, Benjamin, David Warren, Eric McLean-Shinaman, John Schneider, Mark Muro y Rebecca Sohmer. 2007. Reconnecting Massachusetts Gateway Cities: Lessons Learned and an Agenda for Renewal. The Brookings Institution and MassINC. Febrero. www.brookings.edu/research/reports/2007/02/regionsandstates-muro

Kodrzycki, Yolanda y Ana Patricia Muñoz. 2009. “Lessons from Resurgent Cities.” Federal Reserve Bank of Boston. 2009 Annual Report. www.bostonfed.org/about/ar/ar2009/lessons-from-resurgent-cities.pdf

McLaughlin Green, Constance. 1939. Holyoke, Massachusetts: A Case History of the Industrial Revolution in America. New Haven, Connecticut: Yale University Press.

Popular Mechanics. 2015. “The 14 Best Startup Cities in America.” Popular Mechanics. Febrero. www.popular mechanics.com/culture/advertorial/g1859/the-14-best-startup-cities-in-america

The introduction of land titling programs to the informal land market seemed to offer a magic solution to the problem of poverty in third world countries. Various governments breathed a sigh of relief, as the struggle to reduce poverty would no longer require the complex and stressful income redistribution measures that always cause conflicts between social groups and classes. According to this magic formula, all that was required was for informal urban dwellers (about 50 percent of the population in the major cities) to formally register their properties and thus gain access to title deeds, so they could obtain mortgage loans from private banks. Their titles and newfound access to loans would enable them to increase their real estate capital, improve their homes and develop small businesses (de Soto 1986; 2001).

To put this hypothesis to the test, and at the request of Perú’s National Institute of Statistics and Data Processing (Instituto Nacional de Estadísticas e Informática–INEI), I conducted a study of the official real estate registration policy under which more than one million title deeds were conferred in Perú between 1996 and 2000. This policy was implemented by the Commission for the Official Registration of Informal Property (COFOPRI) and the Real Estate Registry of Urban Settlements (RPU). As stated in Perú’s Law Decree 803 of March 1996, the purpose of this policy was to establish a formal relationship between the distribution of land titles, access to formal credit mechanisms and better standards of living. Based on information provided by National Household Surveys (ENAHO) for 1998 and 1999, conducted by INEI, my study analyzed data on housing that either was acquired through invasions or other illegal means and did not have property titles or had obtained titles from COFOPRI through the regularization process. The data base consisted of 913,335 units in 1998 and 1,033,480 in 1999, out of a total of 3,572,091 urban housing units for both years. The financing obtained for housing expansion and other domestic expenses was used as an indicator to determine the access to credit, whereas the structure of the dwelling and the supply of basic services were used to determine standards of living.

Those who advocate the regularization of property in Perú argue that property titles should be granted on a large scale by recognizing informal occupation (that is, legalizing land ownership), awarding registered land title deeds, and thus establishing the links needed to gain access to formal credit mechanisms. Official registration is the legal procedure whereby actual rights to a property result in legal ownership. A particular characteristic of this procedure is the firm resolve to establish connections between the legalization of land and property and the access to mortgages through the private banks. As described by the Path to Property Association, an organization dedicated to promoting these policies worldwide, the basic philosophy behind the formal registration process is that prosperity in countries with market economies is largely achieved because those societies have adequate property systems that enable their markets to operate through exchangeable ownership rights in a wide-ranging market.

To grant landowners indisputable proof of ownership and protect them from fraud and uncertainty ownership rights must be standardized, and universally accessible exchange instruments must be registered in a central government system by legal norms and regulation. Consequently, through the official registration of property, the “energy” of the informal sector can be channeled toward organized and prosperous market economies. From this perspective, informality is merely the inability of governments to make their laws coincide with the real circumstances under which people work and live. Nevertheless, this viewpoint fails to reduce a complex phenomenon to its legal dimension and neglects its economic aspects.

Land Titling Policy and Outcomes

To speed up the distribution of land titles and to avoid troublesome formalities, COFOPRI took over this responsibility from the municipalities. The World Bank supported this policy, granting COFOPRI a US$38 million loan in December 1998. Between 1996 and 2000, 1,134,000 duly registered land title deeds were awarded: 645,165 of them in Lima, 112,631 in Arequipa and 74,180 in Trujillo (the first, second and third largest cities in Perú, respectively). In terms of the distribution and registration of land titles, the success of the formal registration policy is undeniable. However, the fact that municipalities were removed from the process is questionable, since their legal role in the urban system was undermined.

A close connection between the official registration of property and the standard of living was observed in Lima after the policy was implemented. Between 1998 and 1999, regularized (formerly illegal or informal) housing in the capital city showed improved construction of walls, floors and roofing; however, the nonregularized housing units also had improved construction of walls and floors. In the rest of the country, informal housing in urban areas predominates over regularized housing.

While regularized housing units outside Lima increased from 17,929 to 48,869 between 1998 and 1999, the number of units still without property titles increased from 371,005 to 392,436, indicating the persistence of invasion mechanisms. The gaps between different types of improvements on regularized and informal houses outside Lima increased between 1998 and 1999 for most categories (see Table 1).

Looking at the relationship between official land titles and access to credit, the study found that of the 70,725 houses in Lima awarded land title deeds by COFOPRI in 1998, about 23,965 (34 percent) of those homeowners gained access to varied types of financing, such as loans from banks, lending agencies or family members, to improve or renovate their homes. In 1999, the owners of about 23,804 (18.3 percent) out of a total of 129,588 titled houses obtained such financing. Although there is no official information on how many homeowners applied for credit and were denied, this result proves that officially registered households that gain access to loans are a minority and, in fact, the number has decreased. This situation is explained by complex factors including the economic recession, the default rate of 10 percent on private bank loans, fear of giving loans to lower-income sectors, and fear among these residents of mortgaging their houses and land.

Similarly, the number of bank loans to already titled landowners in Lima decreased from 12,750 in 1998 to 8,993 in 1999. In contrast, the use of own resources to finance housing improvements rose from 12,282 in 1998 to 14,811 in 1999. Not only is a larger majority spending their own funds on housing, but they are facing more difficulties in gaining access to credit institutions, despite the formal registration of their properties. A study by COFOPRI-DESCO (Riofrío 2001) identified several characteristics of those who are willing to take mortgages:

• Stable nuclear families;
• Both husband and wife are wage-earners;
• Entrepreneurial mentality and willingness to take risks;
• Have self-owned businesses (microbusinesses, taxis, etc.); and
• Have information on the use of the Urban Land Registry.

Of the 12,750 households officially registered and regularized in Lima in 1998 that also received bank loans for renovations and improvements, 52.6 percent obtained their loans from the Banco de Materiales and 47.4 percent from the National Construction Company (ENACE). In 1999, 8,993 officially registered and regularized households received loans for renovations and improvements, 7,593, or 84.43 percent from the Banco de Materiales and 15.57 percent from the ENACE. Since these are both public entities that grant subsidized loans (at the same annual interest rate of 7 percent), there is no connection between the official registration of property through regularization programs and access to loans from private banks.

With respect to seeking financing for other kinds of household expenses, only 11,323 (8.7 percent) out of a total of 129,588 households registered in Lima in 1999 resorted to any kind of financial assistance. Since no public entity provides loans for these expenses, most households receive money from friends and relatives (47 percent) or other sources such as lending agencies (25 percent). Only 28 percent of these 11,323 registered households gained access to loans from private banks for household needs.

In other urban areas, the situation of officially registered households is different from Lima’s experience. In 1998, the use of the households’ own funds for housing improvements predominated over bank loans (78.7 percent compared with 21.2 percent), whereas in 1999 bank loans predominated over own funds (51.3 percent compared with 42.9 percent). In 1998, all of the loans were public loans granted by Banco de Materiales, and 93 percent were from that source in 1999. With respect to loans for other household expenses, 6,163 (13 percent) of the total of 47,302 households officially registered during 1999 received some financing. Of this small group, 45 percent received financial assistance from lending agencies and other sources, 34 percent from friends and relatives, and 21 percent from their employers or work centers. None of them obtained funds from private banks.

Conclusions

The study yielded the following conclusions with regard to the relationship between official registration of titles and access to credit:

• In general, and despite the increase in the number of properties regularized between 1998 and 1999, access to loans decreased during that period, coinciding with the economic recession and related problems affecting private banks.
• The use of personal resources predominates over bank loans as a source of funds for the expansion of both regularized and informal housing. Loans for other household expenses are obtained mainly from relatives and friends, followed by private banks and informal lending systems. Lower-income families primarily use their own funds or those of social networks for improvements to both regularized and informal housing; resources from formal public or private institutions are secondary.
• Surprisingly, informal households gain more access to loans from private banks than do regularized households. For example, in 1999, 100 percent of loans for improvements to housing units regularized by COFOPRI in Lima were public loans, thus none received private loans, whereas 28 percent of nonregularized housing units did obtain private loans. This suggests that the eligibility criteria used by private banks is based on job stability and fixed monthly income, rather than on land tenancy. The information obtained from ENAHO shows that in 1998, 25 percent of families living in informal dwellings earned about US$747.50 per month. This is the equivalent of “6 to 7 minimum monthly wages,” a frequently used measure for salaries for lower-income sectors in Latin American countries. In contrast, only 12 percent of families living in officially registered properties regularized by COFOPRI earned a comparable salary. This paradoxical situation, whereby title holders do not have access to private banks, while those without titles have higher incomes and better access to loans, may be explained by the fact that COFOPRI, seeking to grant a large number of titles quickly and to create political impact, concentrated its efforts in newer, fragmented neighborhoods where it was easier to identify the landowners. In contrast, COFOPRI tended to ignore older and more close-knit neighborhoods where it was harder to identify the owners due to the presence of multiple generations living under the same roof.
• In the case of both regularized and informal properties, the main sources of loans were public entities that grant subsidized loans (i.e., Banco de Materiales).

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Thus, there is no direct relationship between the number of title deeds handed over to informal dwellers and their subsequent access to loans from private banks. This conclusion was confirmed when the transition government that succeeded former President Fujimori (1990-2000) revealed in 2001 that only 12,388 mortgages had been recorded in the RPU throughout the country, which is equivalent to only 5 percent of potential beneficiaries. Although registration facilities may be useful, they are certainly not sufficient to increase access to credit. Effective policies require an in-depth study of a number of different factors, including:

• The policies on which private bank loans are based. Discriminatory policies (redlining, etc.) are prevalent in Latin America, as in the U.S.
• The popular credit culture, particularly as regards poor people’s fear of losing their property (which is virtually their only asset), as well as the lack of understanding of concepts of property titles, credit and even banks. It’s important to study the patterns of cultural inertia that are put to the test by this type of policies and consider the opportunities for education that could facilitate these processes.
• The reluctance of people to register their properties and use the registries. The intention of this article, and the research behind it, is not to minimize the importance of policies aimed at facilitating access to credit by the poor by means of regularization programs. On the contrary, such policies are important and should be stimulated, although we would not suggest urban poverty can be resolved exclusively through this means. For the system to improve, it is essential to have a better understanding of the credit system and the popular credit culture, as well as to develop financial assistance programs that address the current resistance to the use of mortgages by both the poor and the banking sector.

Julio Calderón Cockburn is a sociologist and a Ph.D. candidate at the University of San Marcos in Lima, Perú. He has written many books and articles published in the Americas and Europe, and he currently works as an independent consultant and university professor. He is a faculty associate of the Lincoln Institute, which supported the study reported here and other research and teaching projects in the past. Several of his written works are available on the Lincoln Institute website in the Latin America section under LAC Papers (www.lincolninst.edu).

References

Calderón Cockburn, Julio A. 2001. Comparative analysis of the benefited and non-benefited population by the national formalization plan. In Has the well-being of the population improved?: A balance of the main social policies and programs. Lima: National Institute of Statistics and Data Processing (INEI): 65-92. de Soto, Hernando. 1986. The Other Path. London: I.B. Tauris & Co. Ltd.

_____. 2002. The Mystery of Capital. London: Bantam Press.

Fernandes, Edesio. 2002. The influence of de Soto’s The Mystery of Capital. Land Lines 14 (1): 5–8.

Riofrío, G., J. Calderón y M. Zolezzi. 2001. Estudio sobre cultura registral. Lima: COFOPRI-DESCO. Agosto.

Una versión más actualizada de este artículo está disponible como parte del capítulo 5 del libro Perspectivas urbanas: Temas críticos en políticas de suelo de América Latina.

Pocos países de América Latina (o del resto del mundo) se han atrevido a poner en práctica reformas tan radicales de la política de tierras urbanas como lo ha hecho Chile en los últimos 20 años. En 1979 el gobierno comenzó a aplicar las políticas de desregulación mediante la publicación de un documento donde se establecía que la escasez de la tierra era un producto artificial de la excesiva regulación, que había llevado a la virtual eliminación de los límites de crecimiento urbano.

Desde entonces ha habido cambios numerosos en la morfología y estructura interna de las ciudades chilenas, pero la evaluación de dichos cambios varía según la posición ideológica de quien evalúa. Si bien las políticas urbanas explícitas de orientación social han propiciado un mejoramiento significativo en lo que se refiere al acceso a la vivienda para la población de bajos recursos, algunas personas sostienen que la segregación espacial derivada de tales políticas ha perjudicado a la sociedad al indirectamente disminuir la calidad de vida, impedir el acceso al trabajo y agravar la alienación social.

Incluso antes del período del gobierno militar de 1973 a 1990, Chile estaba reconocido por su sistema político unitario y centralista, caracterizado por una fuerte presencia del Estado en la economía y la política. Esta sociedad con cultura relativamente homogénea se diferencia de otros países latinoamericanos por su fuerte tradición legalista. De la misma manera, las ciudades chilenas exhiben marcados contrastes cuando se las compara con sus homólogas latinoamericanas. Prácticamente no hay mercados de tierra informales; la tenencia de la tierra ha sido casi completamente regularizada mediante programas públicos radicales; y la mayoría de los pobres urbanos viven en áreas urbanizadas cuyas calles principales están pavimentadas. La violencia urbana, a pesar de su tendencia creciente, es aún mínima si se la compara con el resto del continente.

Políticas y problemas de la liberalización

Entre los aspectos más innovadores de la política urbana chilena figuran los siguientes:

• La eliminación de límites al crecimiento urbano, manteniendo al mismo tiempo la designación de áreas sensibles para la protección ambiental. Esta medida tuvo dos propósitos: delegar un papel de liderazgo en el desarrollo urbano y uso de la tierra a las fuerzas del mercado, y reducir los precios del suelo.
• El establecimiento de un sistema de subsidios con el objetivo de reducir el déficit de vivienda. Considerado por muchos como el pilar de la política habitacional de Chile, el sistema de subsidios es ampliamente percibido como la síntesis original y más innovadora de las políticas de liberalización con la tradición estadista de Chile. A través de este programa se canalizan subsidios sustanciales a familias (mediante la asignación de cupones o vouchers por puntajes, basada en los ingresos familiares, estructura familiar, capacidad de ahorro demostrada, y condición de vivienda actual) a fin de financiar una vivienda facilitada por el sector privado según ciertos criterios preestablecidos. Como resultado, Chile se ha destacado por ser el único país de la América Latina en donde, desde 1992, el aumento de viviendas nuevas ha sido más acelerado que la formación de nuevos hogares, lo cual ha eliminado gradualmente el déficit habitacional.
• El desalojo de los asentamientos pobres de áreas de altos recursos, y otras políticas evidentemente segregacionistas. No muchos países se atreverían hoy en día a poner en práctica tales políticas, que sin duda suscitarían una fuerte oposición en sociedades menos autocráticas que reconocen como legítimos los derechos de sus habitantes pobres.

Si bien, algunos de los logros de estas políticas de liberalización se han reconocido ampliamente como positivos -particularmente en lo que se refiere a la regularización legal y física o urbanística y la cantidad de vivienda social proporcionada- muchos chilenos creen que las políticas de los últimos 20 años han sido una fuente de nuevos problemas, entre ellos:

• Una expansión urbana desenfrenada, con sus consiguientes efectos de aumento de tráfico y peligrosos niveles de contaminación del aire. Como ejemplo, los niveles de contaminación del aire en Santiago son equivalentes a los de ciudades tres veces mayores tales como Ciudad de México y São Paulo, incluso con un uso relativamente bajo del automóvil.
• La formación de vecindades de bajos recursos, pobremente equipadas y socialmente segregadas. En el contexto de una creciente inseguridad económica y laboral, estas áreas se convierten en un núcleo de problemas sociales como drogadicción y delincuencia, apatía y alienación juvenil1. Cualquier visitante a Santiago, la capital chilena, no puede dejar de notar el marcado contraste entre las comunas2 -jurisdicciones planificadas y pudientes tales como Las Condes-, y la monotonía de vecindades desarrolladas por constructores privados en comunas periféricas, como Maipú y La Florida.
• El aumento continuo del precio de la tierra. En contraposición a las predicciones hechas por los responsables de las políticas de liberalización, el precio del suelo chileno ha aumentado, absorbiendo una porción aun mayor del programa de subsidio habitacional3. Algunos analistas aseveran que los precios de la tierra ya corresponden a un 60 a 100 por ciento del subsidio. Esto no sólo está seriamente comprometiendo la capacidad de sustentación del sistema de vouchers, sino que está forzando a los sectores más pobres fuera del programa. No obstante, estos aumentos en los precios de la tierra no deberían sorprender, si se piensa en las experiencias similares de otros países donde las políticas de liberalización han influido en las expectativas de demandas futuras de alternativas más baratas de desarrollo en la periferia urbana, como alternativa a los centros congestionados.

No está claro si estos cambios urbanos pueden atribuirse directamente a la eficacia de las políticas urbanas de mercado, o a la positiva evolución de la economía chilena en general. El crecimiento sostenido del producto interno bruto (GDP), con un promedio del 7 % anual desde 1985, se interrumpió sólo recientemente debido a los efectos de la crisis asiática.

Expansión del debate

A pesar de que la liberalización de los mercados de suelo urbano en Chile constituye una experiencia interesante e innovadora desde un punto de vista internacional, el debate público interno ha sido limitado. No obstante, los logros y problemas de la liberalización han llegado a tal punto de importancia que últimamente han estimulado un nivel generalizado de preocupación y una variedad de planteamientos al respecto. Más aún, el gobierno está proponiendo una serie de modificaciones de la actual “Ley General de Urbanismo y Construcciones”, que traerían consigo un número de cambios significativos, entre ellos:

• Ampliación de las responsabilidades de planificación urbana, las cuales tendrían que contemplar todos los espacios del territorio (no solamente las áreas urbanizadas dentro de cada municipalidad, como se hace en la actualidad), y
• La aplicación de una serie de regulaciones económicas o de mercado tales como la emisión de “certificados de constructibilidad” especiales, diseñados para conservar el patrimonio arquitectónico del país, y la creación de “zonas de desarrollo urbano condicionado” para favorecer esquemas mixtos de uso del suelo.Pese a la importancia que tienen estas potenciales modificaciones sobre la planificación futura, todavía no ha habido una discusión cabal sobre las mismas. La propuesta legislativa no contempla consideraciones teóricas ni explicaciones justificativas de los cambios propuestos.

Con el fin de facilitar una discusión concentrada en los temas anteriores, Carlos Montes, Presidente de la Cámara de Diputados de Chile, invitó al Instituto Lincoln a participar en un seminario coordinado con el Instituto de Estudios Urbanos de la Pontificia Universidad Católica de Chile. El seminario, llamado “A 20 años de la liberalización de los mercados de suelo urbano en Chile: Impactos en la política de vivienda social, el crecimiento urbano y los precios del suelo”, tuvo lugar en octubre de 1999 en la ciudad de Santiago. Allí se reunieron miembros del Congreso chileno y de la comunidad comercial (promotores, líderes financieros, etc.), oficiales de organismos públicos (ministerios, municipalidades, etc.), académicos y representantes de organizaciones no gubernamentales para participar en un animado debate. En la discusión se notó una marcada polarización ideológica entre las metodologías “liberal” y “progresiva” utilizadas para entender y resolver los asuntos de la liberalización, es decir, “más mercado” frente a “más Estado”.

Desde el punto de vista liberal4, estos problemas emergen y persisten debido a que los mercados de tierra no han sido nunca suficientemente liberalizados. De hecho, algunos liberales insisten en que la intervención pública no desapareció nunca, y creen que la regulación más bien aumentó después de que Chile retornara a la democracia en 1990. Por ejemplo, los liberales citan varios medios, a menudo indirectos, que utiliza el Estado para restringir el libre crecimiento de las ciudades, tales como cuando se intenta ampliar áreas designadas con protección ambiental y cerradas a usos urbanos, o se impone un criterio oficial y casi homogéneo de densificación para todo espacio urbano. También aseveran que los ciudadanos deberían tener la libertad de elegir diferentes estilos de vida, y que las autoridades deberían limitarse a informar a los ciudadanos sobre el costo privado y social de sus opciones, con el entendimiento implícito de que tales costos están reflejados en los precios del mercado cuando hay un funcionamiento eficaz de los mercados de suelo urbano, es decir, cuando están completamente liberalizados.

La principal explicación ofrecida por los liberales sobre los problemas de equidad y eficiencia que enfrenta el desarrollo urbano chileno actual son los avances insuficientes en la aplicación de criterios para “internalizar las externalidades”, particularmente externalidades negativas, por aquellos que son responsables por ellas. Tal como lo han clamado apasionadamente algunos de los representantes de este grupo, se debería permitir a los agentes privados actuar con libertad, siempre que éstos estén dispuestos a hacerse cargo de los costos sociales involucrados.

Por otra parte, los progresistas creen que la liberalización se ha excedido en su abordaje de mercado y ha dejado muchos problemas sin resolver, tales como el aumento en los precios del suelo; los problemas en la calidad y durabilidad de la vivienda; las condiciones de servicio de la tierra; los problemas sociales asociados con la pobreza urbana; y los problemas de eficiencia y equidad derivados de los patrones de crecimiento de las ciudades, p. ej., la disparidad entre áreas dotadas de servicios públicos y las localidades seleccionadas para proyectos privados de desarrollo.

Estas críticas reconocen la naturaleza imperfecta de los mercados urbanos y la necesidad de tener mayores niveles de control e intervención. Entre las formas de intervención recomendadas por muchos progresistas se encuentran los instrumentos de captura de plusvalía, los cuales raramente han sido empleados o incluso contemplados en programas de financiamiento para la provisión pública de nueva infraestructura y nuevos servicios urbanos. La creación de tales mecanismos apoyaría la idea de internalizar las externalidades, un punto de relativo consenso entre progresistas y liberales. La diferencia principal es que los liberales restringirían la captura de plusvalía a la recuperación pública de costos específicos, mientras que los progresistas considerarían el derecho a capturar la plusvalía entera que resulte de cualquier acción pública, bien sea como resultado de inversión como de regulación.

En términos más generales, los progresistas claman que no todo puede medirse estrictamente en términos monetarios. Hay valores y objetivos urbanos relacionados con la política pública que no pueden conseguirse a través del mercado, ni siquiera por ley, tal como el sentido de comunidad. Aunque mayormente se le desatiende en las nuevas opciones habitacionales facilitadas por promotores privados a familias de bajos recursos, tales como el sistema de vouchers, la solidaridad comunitaria es un asunto de enorme importancia para contrarrestar los problemas sociales que la segregación espacial tiende a exacerbar. La protección ambiental es otro ejemplo de un objetivo de política urbana para el cual las “etiquetas de precios” son de dudosa eficacia.

Con respecto al crecimiento libre de las ciudades y la idea de respetar las opciones para sus ciudadanos, los progresistas apuntan los fuertes costos ambientales y sociales que normalmente acompañan el crecimiento descontrolado. También hacen notar el hecho de que el único grupo que realmente puede elegir su estilo de vida a través del mercado es la minoría pudiente. Si bien conceden que hay beneficios en la concentración, los progresistas también expresan sus inquietudes sobre el exceso de densificación. Algunos chilenos han expresado interés en una autoridad metropolitana que maneje los asuntos regionales, y también en el uso de inversión en infraestructura pública como forma de orientar el crecimiento.

Las respuestas adecuadas a estos asuntos y perspectivas implican algo que va más allá de soluciones técnicas o fiscales, tales como el punto al cual los promotores realmente pagan por el costo total de los cambios que imponen en la sociedad (para no hablar del problema de evaluar los costos con precisión) o la sustentación del sistema de vouchers bajo demanda, que constituye la base de la política habitacional de Chile. Las soluciones también involucran inquietudes de mayor amplitud y con más contenido valórico, tales como los costos ambientales del crecimiento descontrolado y la importancia de mantener las identidades e iniciativas comunitarias locales. La discusión continúa en el Congreso y en otros entornos, pero es de esperar que pase un tiempo antes de que los bandos opuestos lleguen al consenso.

Martim O. Smolka es Senior Fellow y Director del Programa para América Latina del Instituto Lincoln. Francisco Sabatini es profesor asistente de la Pontificia Universidad Católica de Chile. Otros contribuyentes a este artículo fueron Laura Mullahy, asistente de investigación, y Armando Carbonell, Senior Fellow, ambos del Instituto Lincoln.

Notas: En contraste con el resto del continente, las drogas no eran un problema mayor en Chile hasta hace poco tiempo.

2 El área metropolitana de Santiago se compone de 35 jurisdicciones administrativo-políticas independientes llamadas comunas.

3 Véase Gareth A. Jones, “Comparative Policy Perspectives on Urban Land Market Reform”, Land Lines, noviembre de 1998.

4 El uso del término “liberal” en este contexto corresponde a su connotación en Chile, la cual se refiere a la fuerte influencia del principio económico del libre mercado, tal como la aboga la teoría desarrollada por la Escuela de Chicago.

Fuentes: Francisco Sabatini y colaboradores, “Segregación social en Santiago, Chile: Conceptos, métodos y efectos urbanos” (monografía, 1999); y Secretaría Ejecutiva de la Comisión de Planificación de Inversiones en Infraestructura de Transporte (SECTRA), “Encuesta de recorridos de origen y destino en Santiago”(1991).

The complexity that characterizes the interaction of transportation and land use in urban areas is matched by the variety of the disciplines called on to address these issues, including economics, urban planning and civil engineering. In recent decades, communication among scholars in these disciplines has improved and the acceptance of a common base of theory and method, based on economics, is increasing. The Taxation, Resources and Economic Development (TRED) conference on “Transportation and Land Use” held at the Lincoln Institute in October 1996 focused on these issues. Ten papers presented at that conference are now published in a special issue of the journal Urban Studies. The papers are organized into four groups as summarized below.

Trends in Urban Development

Gregory Ingram’s paper on “Metropolitan Development: What Have We Learned?” documents the worldwide prevalence of several trends that characterize modern urbanization. Employment decentralization and the emergence of multiple employment centers in large metropolitan areas are observed worldwide in both developing and developed countries. Although employment continues to be more centralized than population, the typical Central Business District does not contain more than about 20 percent of jobs, and much smaller percentages are common in the U.S. Manufacturing employment has become more decentralized than service employment. Decentralization has reduced traffic congestion and travel distances and has contributed to a weakening of transit systems. The increased affordability of motorized transportation worldwide has led to more trip-making, with work trips typically being less than a third of all trips in urbanized areas.

Peter Gordon, Harry Richardson and Gang Yu find evidence that the suburbanization and exurbanization of employment in the U.S. has picked up its pace since 1988. In their paper, “Metropolitan and Non-Metropolitan Employment Trends in the U.S.: Recent Evidence and Implications,” they argue that the ability of manufacturing and even of services to locate in exurban and rural areas, shunning inner-suburban and central city locations, is a consequence of the continued weakening of the agglomeration economies that shaped the now outdated downtown-oriented city.

Robert Cervero and Kang-Li Wu examine the relationship between average commuting distance and employment subcentering in their paper, “Subcentering and Commuting: Evidence from the San Francisco Bay Area, 1980-1990.” They are concerned with changes in employment densities in 22 employment subcenters and with the commuting distances and travel times of those employed in these subcenters. The authors find that employment densities have increased more in the outlying suburban centers and that commuting to these centers has experienced modal shifts away from transit and in favor of the automobile. According to their data, while jobs in these centers grew by 18 percent during the decade, average one-way commuting distances to these 22 subcenters increased by 12 percent, and average one-way travel times rose by only 5 percent.

These findings are consistent with theory: with the number of subcenters fixed and the degree of spatial mismatch between jobs and housing invariant with job growth, an increase in the number of jobs in each subcenter should result in longer commutes on average. If new subcenters are spawned in between existing ones or new ones develop in outlying areas-something that does not appear to have occurred in the Bay Area-then average commutes should decrease. The 22 subcenters account for less than half of total employment in the Bay Area, the rest of the jobs being broadly dispersed throughout. Because such dispersed employment is not included in their study, we do not know about the total effect of job decentralization on average commute distances and times.

Genevieve Giuliano’s paper, “Information Technology, Work Patterns and Intrametropolitan Location: A Case Study,” examines the impact of information technology, including the advent of fax machines, computers, modems and the internet. One of her central observations is that while the U.S. labor force increased by 14 percent from 1980 to 1990, the “contingent workforce,” a diverse group of temporary workers, part-time workers, the self-employed and business service workers, increased much faster, from about 25 to 33 percent.

This trend implies that the information revolution is causing structural shifts in the labor force as more and more workers offer temporary services to a variety of employers and, as a result, do not have a long-term attachment to any one employer. Theory suggests that such workers should locate in a way that is sensitive to their expected accessibility to jobs. Also, the advent of information technology should facilitate “telecommuting,” thus reducing the need for physical proximity to jobs.

Giuliano uses the 1990 U.S. Census Public Use Microsample for the Los Angeles region to compare the residential location and commuting patterns of contingent and non-contingent workers. The socioeconomic complexity of contingent workers makes it difficult to draw clear conclusions, but Guiliano does find that those contingent workers who live in suburban areas are likely to live in high amenity areas. Controlling for socioeconomic factors, commuting distances are shorter for part-time workers than they are for full-time workers, and among full-time workers the self-employed have the shortest commutes.

Agglomeration Economies

The next two papers offer empirical contributions on intra-urban employment agglomeration. “Spatial Variation in Office Rents within the Atlanta Region,” by Christopher Bollinger, Keith Ihlanfeldt and David Bowes, is a hedonic rent study for office buildings in the Atlanta area from 1990 to 1996. The authors find that part of the rent differences among office buildings is due to differences in wage rates, transportation rates and proximity to concentrations of office workers. More importantly, the convenience of face-to-face meetings facilitated by office agglomerations is also reflected in office rents, providing evidence that agglomerative tendencies continue to be important in explaining office concentrations, despite the ability of information technology to reduce the need for some such contacts. In their paper, “Population Density in Suburban Chicago: A Bid-Rent Approach,” Daniel McMillen and John McDonald show that population density patterns in the Chicago MSA are strongly influenced by proximity to subcenters, which include the Central Business District, O’Hare Airport and 16 other centers. Site-specific variables such as access to commuter rail stations or highway interchanges have smaller influences on population densities.

Travel Behavior and Residential Choice

Among the challenges posed by the evolving trends in transportation and land use is a better explanation of the role of non-work travel in residential location decisionmaking. Motorized mobility has greatly increased non-work travel, thus weakening the relevance of the now classical commuting-based theory of residential location. While information technology may result in more telecommuting, the importance of non-work travel relative to work travel may grow even more in the future.

Two papers attempt to develop new techniques that can be used to explain the influence of non-work travel behavior on residential location and land use patterns, and vice versa. Central to this research is the notion that when a household makes a residential choice decision it will consider the pattern of non-work trips its members are likely to make. Accessibility to non-work opportunities is likely to be important and, for many households, perhaps more important than accessibility to jobs.

Moshe Ben-Akiva and John Bowman model the probability of choosing a residential location by treating the non-work trip patterns and activity schedules of the household’s members as explanatory variables. Their model allows the treatment of trips as tours with stops at multiple destinations. In their paper, “Integration of an Activity-Based Model System and a Residential Location Model,” the authors report that their model does not fit the data as well as a work-trip-based comparison model. But, the non-work accessibility measures are more appealing conceptually and allow a richer set of predictions and simulations to be made.

Until recently, economists have suppressed the importance of non-work trips in their theories of land use. Planners have viewed land use planning as a tool that can affect behavior and travel demand. But what is the evidence that travel patterns can be influenced meaningfully by manipulating land use at the neighborhood level or in a larger area?

Marlon Boarnet and Sharon Sarmiento tackle this question by means of a travel diary survey of Southern California residents. Their paper is titled “Can Land Use Policy Really Affect Travel Behavior? A Study of the Link Between Non-work Travel and Land Use Characteristics.” The number of work trips made by residents is explained by sociodemographic variables describing the residents and by land use characteristics describing their place of residence. Generally, the land use variables describing the neighborhood are not statistically significant, but future studies could follow this approach by trying more complex specifications and using better data.

Jobs-Housing Mismatch

As first stated by John Kain in 1968, the “spatial mismatch hypothesis” claimed that black central city residents are increasingly at a disadvantage economically as jobs disperse to the suburbs. Many suburban governments limit the quantity of high-density/low-income housing, forcing workers to make long, expensive commutes. Although there is a wealth of empirical work on the mismatch hypothesis, Richard Arnott’s paper, “Economic Theory and the Mismatch Hypothesis,” is one of the first attempts to formulate a microeconomic theory of the mismatch problem. In Arnott’s model, jobs flee to the suburbs because of the advent of international trade (relaxation of global trade barriers) and the emergence of suburban-based inter-city truck transport after World War II. At the same time, large-lot zoning and discrimination in suburban housing markets force minorities to reside in central cities. An increase in the cost of commuting effectively lowers the wage paid to low-skilled labor from the city.

In “Where Youth Live: Economic Effects of Urban Space on Employment Prospects,” John Quigley and Katherine O’Regan investigate how neighborhood of residence and access to jobs affect the employment prospects of minority youth. Black youth unemployment rates are higher in metropolitan areas where blacks are more isolated geographically. Controlling for socioeconomic characteristics, minority youth who have less residential exposure to whites are more likely to be unemployed. Finally, controlling for socioeconomic characteristics as well as residential exposure to whites, minority youth living in neighborhoods that are less accessible to jobs are more likely to be unemployed. While these findings support the mismatch hypothesis, they also suggest the importance of social networks and spatial search as important mechanisms in the intra-urban labor market.

Alex Anas, professor of economics at the State University of New York at Buffalo, was the editor of the special issue of Urban Studies (Vol. 35, No. 7, June 1998). The article and figures used in Land Lines are adapted with permission.

Note: Ben Chinitz, former director of research at the Institute, helped organize the 1996 TRED conference and the following colleagues served as discussants of the papers: James Follain, Vernon Henderson, Douglass Lee, Therese McGuire, Peter Mieszkowski, Edwin Mills, Sam Myers, Dick Netzer, Stephen Ross, Anita Summers, William Wheaton, Michelle White and John Yinger. The conference participants were saddened when news arrived that William Vickrey, who had been named a Nobel laureate in economics only a few days before, had passed away while traveling to the conference. Professor Vickrey had been a leading thinker on issues of transportation and land use and a regular attendee of previous TRED conferences. The special issue of Urban Studies based on the 1996 conference serves as a tribute to his memory.

Water companies and the communities they serve have been grappling for years with complex issues of water treatment and provision, watershed management, public finance and control over regional land use decisionmaking. The federal Safe Drinking Water Act of 1974 prompted water providers across America to face a dilemma: “to filter or not to filter.” Some states or regions require filtration to ensure water quality, but elsewhere communities explore alternative strategies to both protect natural filtration processes in their watersheds and avoid the enormous costs of installing water treatment plants.

The hard-fought conversion of the New Haven Water Company from a private, investor-owned company to a public regional water authority provides an informative case study of a partnership strategy. In the process of hammering out agreements on difficult land use and tax issues, the city and surrounding suburbs succeeded in breaking down conventional barriers and recognized that regional solutions can meet shared needs for a safe water supply, open space protection, recreation and fiscal responsibility.

The drama unfolded in 1974, when the Water Company attempted to sell over 60 percent of its 26,000 acres of land in 17 metropolitan area towns to generate capital for filtration plant construction. The announcement of this massive land sale created vehement opposition throughout the state. Residents of the affected towns viewed the largely undeveloped land as an integral part of their community character. They feared losing control of the land as well as environmental damage and increased costs associated with potential new development.

Several New Haven area legislators recognized the critical link between the city and its watershed communities. They introduced legislation imposing a moratorium on the land sale and proposing public ownership of the water works. New Haven Mayor Frank Logue countered with an announcement that the city planned to buy the water company under a purchase option in a 1902 contract. The suburban towns responded by promoting regional ownership as the only viable alternative to city control.

After a lengthy feasibility study, and despite a gubernatorial veto, legislation enabling the creation of the South Central Connecticut Regional Water Authority (RWA) was enacted in 1977. In addition, separate legislation classified all utility-owned watershed land and severely restricted its sale. The sale restrictions combined with standards for source protection, provisions for public recreation and consideration of the financial impact on ratepayers, also diminished the land’s market value, thereby limiting the Water Company’s ability to use the land as a source of capital.

Regionalization of the Water Company also required a regional approach to taxation. This was the most difficult obstacle to overcome in passing the RWA enabling legislation. With New Haven Water Company’s projected capital investments in excess of $100 million, the region’s towns had looked ahead to vastly increased tax revenues from the private utility. However, New Haven, with the majority of consumers, was more concerned with keeping water rates low.

The conflict between city and suburbs was resolved through the principle that the regionalization of the water utility would cause no erosion of the tax base. Under the agreement, each town would receive payments in lieu of taxes (PILOTs) on all property acquired by the RWA, equivalent to the taxes that would be paid by a private owner. However, while these payments would rise and fall with future assessments, the RWA would not be required to make such tax-substitution payments for any new capital improvements.

Lessons of Regional Resource Sharing

In addition to forcing a reconsideration of the balance between suburban tax bases and urban water rates, New Haven’s Regional Water Authority has broadened its own mission. While protecting the water supply is the primary focus of all RWA land use policies, the authority also manages recreational use of the land to meet the needs of both inner city and suburban residents.

The early success of the conservation and recreational use plans depended on public participation in formulating the RWA Land Use Plan. Many types of active recreation would have been unsuitable for water supply land, but it was determined that hiking and fishing, the two most popular activities, could be conducted without threatening water quality.

The RWA’s active program for policing the watersheds was reinforced by establishing a center to educate future consumers on water supply protection. Located at the base of the dam at Lake Whitney, the Whitney Water Center annually teaches thousands of children the basics of drinking water science. It emphasizes the interdependence of source protection and safe drinking water.

Primary among the lessons to be learned from the New Haven Water Company’s ill-advised land sale proposal is that the value of a water supply watershed as a natural and human resource is far greater than its value as a market commodity. Management of the watershed’s natural resource potential must extend beyond the collection and distribution of water to include the needs of the people who live within the watershed. At the same time, limiting watershed land activities to low-risk uses minimizes the water treatment costs that are still necessary for safe drinking water.

Regional cooperation need not begin and end with water. Developing economic and ecological partnerships between cities and their suburbs for tax-sharing, recreation, and education recognizes that the economic and ecological concerns of all residents in a metropolitan region are interdependent. Successfully bucking the trend toward privatization, the RWA demonstrates that regional resource sharing is the most viable way of meeting the needs of New Haven and its suburbs.

Watershed Protection vs. Filtration in Other Regions

The public acquisition of the New Haven Water Company in the 1970s provided a preview of 1990s approaches to managing water resources. Today, water supply management is increasingly becoming watershed management, with plans reflecting the broader ecological functions of watersheds and the importance of partnerships with local residents. Conflict resolution has become an essential skill for today’s watershed managers.

Watershed land acquisition continues to be a key filtration avoidance strategy in many areas. New York City has the nation’s largest unfiltered water supply, and some experts have called on the city to develop programs to filter its drinking water. However, New York Governor George E. Pataki has taken the position he would “do whatever it takes to avoid filtration,” from working with farmers and businesses on mutually beneficial voluntary programs to buying up to 80,000 acres from willing sellers to protect the water supply.

New Jersey Governor Christine Todd Whitman has committed to a “hands across the border” $10 million contribution toward purchasing the New York portion of the two-state metropolitan watershed in Sterling Forest, which is threatened with commercial recreational and housing development. The nonprofit Trust for Public Land and the Open Space Institute are negotiating the purchase on behalf of both states, and recent congressional action has guaranteed funding for the project.

In central Massachusetts, the Metropolitan District Commission’s Quabbin Reservoir has met the Safe Drinking Water Act’s criteria as an unfiltered water supply source for the Boston area, but the MDC’s Wachusett Reservoir has not. A recently approved $399 million state open space bond includes funds for land acquisition in the Wachusett watershed.

Acknowledging the essential function that undeveloped land serves in preventing contaminants from reaching water supplies is long overdue. But is watershed source protection alone a viable alternative to filtration?

In North Carolina, where all surface water supplies are already filtered, state legislation requires local water authorities to develop watershed land use plans that must be approved by the state. Although such legislation can reduce the health risks of watershed development and the cost of water treatment, it cannot prevent future development.

Our conclusion is that the combination of watershed protection and filtration is a proven, cost effective approach to ensure safe drinking water while also building partnerships to implement regional land use policies.

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Dorothy S. McCluskey was a Connecticut State Representative from 1975 to 1982 and chaired the Environment Subcommittee on the Sale of Water Company Land. She subsequently served as director of government relations for The Nature Conservancy Connecticut Chapter. Claire C. Bennitt, secretary-treasurer of the Regional Water Authority since 1977, was a resident of North Branford when the threatened land sale galvanized the New Haven region. She worked with Rep. McCluskey as her administrative assistant in the state legislature. They have written Who Wants to Buy a Water Company: From Private to Public Control in New Haven, to be published in early 1997 by Rutledge Books, Inc., of Bethel, Connecticut.

As a part of the educational activities of the Lincoln Institute’s Latin America Program, a course on “Large Urban Projects,” held in Cambridge last June, focused on the most important and challenging aspects of this land planning issue. Academics, public officials and representatives from private enterprises in 17 cities participated in the presentations and discussions. This article presents a synthesis of the principal points, questions and challenges raised in carrying out these complex projects.

Large urban redevelopment projects have become an important issue in many Latin American countries recently, due in part to changes motivated by the processes of globalization, deregulation and the introduction of new approaches in urban planning. These projects include varied types of interventions, but they are characterized primarily by their large size and scale, which challenge traditional instruments of urban management and financing.

Urban projects on a grand scale are not considered a novelty in Latin America. The diverse elements of existing developments include the revitalization of historic centers; conversion of abandoned industrial facilities, military areas, airports or train stations; large slum rehabilitation projects; and construction of innovative public transportation models. However, at least four important features characterize this new type of intervention:

• An urban management structure that implies the association of various public and private, national and international actors;
• Significant financing needs that require complex forms of interconnections among these actors;
• The conception and introduction of new urban processes that are intended to transform the city;
• The questioning of traditional urban planning perspectives, since these projects tend to exceed the scope of prevailing norms and policies.

The last feature is reinforced by the influence of different planning strategies and the impacts of large urban projects in various cities around the world (Powell 2000). One project that has influenced many city planners and officials in Latin America was the transformation of Barcelona in preparation for the Olympic Games in 1992 (Borja 1995). Several projects in Latin America have been inspired by, if not directly emulated, this approach (Carmona and Burgess 2001), but it also has faced serious criticism (Arantes, Vainer and Maricato 2000). It has been seen as a convenient process through which a group of decision makers or private interest stakeholders manage to bypass official planning and policy channels that are seen to be too dependent on the public (democratic) debate. As a result most such projects tend to be either elitist, because they displace low-income neighborhoods with gentrified and segregated upper-class land uses, or are socially exclusionary, because they develop single-class projects, either low-income settlements or high-income enclaves, in peripheral locations.

Large-scale projects raise new questions, make inherent contradictions more transparent, and challenge those responsible for urban land analysis and policy formulation. Of special importance are the new forms of management, regulation, financing and taxation that are required for or result from the execution of these projects, and in general the consequences for the functioning of land markets.

Size, Scale and Timeframe

The first issue that emerges from a discussion of large-scale projects has to do with the ambiguity of the term and the necessity of defining its validity. Size is a quantitative dimension, but scale suggests complex interrelations involving socioeconomic and political impacts. The wide variety of feelings evoked by large projects shows the limitations in being able to restore a vision of the urban whole and at the same time its global character (Ingallina 2001). This issue has just begun to be discussed in Latin America, and it is framed in the transition to a new approach in urban planning, which is related to the possibility and even the necessity of constructing a typology and indicators for its analysis. Issues such as the emblematic character of these projects, their role in stimulating other urban processes, the involvement of many actors, and the significance of the impacts on the life and development of the city are all part of the discussions. Nevertheless, it is the scale, understood as being more than just simple physical dimensions, that is the central core of this theme.

Since the scale of these projects is associated with complex urban processes that combine continuity and changes over the medium and long terms, the timeframe of their execution must be conceived accordingly. Many of the failures in the implementation of such projects have to do with the lack of a managing authority that would be free or protected from the political volatility of local administrations over time.

The cases of Puerto Madero in Buenos Aires and Fenix in Montevideo, the first completed and the second in process, offer examples of the difficulties in managing the scale and timing of development in the context of economic situations and policies that can change drastically. Twelve years after its construction, Puerto Madero has not yet stimulated other large-scale projects, such as the renovation of nearby Avenida de Mayo, nor appreciable transformations in urban norms.

The scale and timeframe are particularly important for the project in Montevideo, raising doubts about the feasibility of executing a project of this scale in relation to the character of the city, its economy, and other priorities and policies of the country. Its goal was to generate a “work of urban impact,” in this case promotion of public, private and mixed investments in a neighborhood that lost 18.4 percent of its population between 1985 and 1996, and focusing on an emblematic building, the old General Artigas train station. Most of this work has been executed, with a loan of $28 million from the Inter-American Development Bank, however the percentage of public and private investments are minimal and the Fenix project is having to compete with another large-scale corporate-commercial development located east of the city that is already attracting important firms and enterprises.

Land Policy Issues

The issue of scale relates intrinsically to the role of urban land, which makes one ask if land (including its value, uses, ownership and other factors) should be considered a key variable in the design and management of large-scale urban operations, since the feasibility and success of these projects are often associated with the internalization of formidable externalities often reflected in the cost and management of the land.

Projects to restore historic centers offer important lessons to be considered here. We can compare the cases of Old Havana, where land ownership is completely in the hands of the state, which has permitted certain activities to expand, and Lima, where land ownership is divided among many private owners and public sector agencies, adding to the difficulties in completing an ongoing restoration project. Even though Old Havana has received important financial cooperation from Europe and Lima has a $37 million loan from the Inter-American Development Bank, the main challenge is to promote private investment while also maintaining programs of social and economic assistance for the local residents. Both cities have created special units for the management of these projects, which constitutes an interesting commentary on institutional modernization.

The Role of the State

The scale, the time dimension and the role of land in large urban projects lead us to consider the role of the state and public investment. While urban operations on a large scale are not new in Latin American cities, their present conditions have been affected radically by economic changes, political crises and substantial modifications in the role of the state in general. These conditions make the execution of urban projects, as part of the process of long-term urban development, a source of contradictions with the generally short tenure of municipal governments and the limits of their territorial claims. We must also consider the differences in regulatory competencies between central governments and local municipalities, and the differences between public entities and private institutions or local community organizations, which often reflect conflicting interests due the decentralization and privatization processes being promoted simultaneously in many countries.

Two large projects related to transportation infrastructure are examples of local situations that led to very different results. One was the transformation of the old abandoned Cerrillos airport in Santiago, Chile, and the other was a project for a new airport for Mexico City in Texcoco, an area known as ejido land occupied by peasants and their descendants. In the first case, the active participation of interested groups is expanding the recuperation process of a zone of the city that does not have quality urban facilities. A total investment of $36 million from the public sector and $975 million from the private sector is supporting the construction of malls, facilities for education, health and recreation, and housing for the neighborhood. In Mexico serious conflicts between state interests and community rights to the land had caused social unrest and even the kidnapping of public officials. As a result, the federal government has recently withdrawn from the Texcoco project, assuming huge political and economic costs for this decision.

Segregation and Exclusion

Many planners and practitioners have doubts about the feasibility of large projects in poor countries and cities because of the distortions that their execution could cause on future development, in particular the reinforcing tendencies of segregation and social exclusiveness. The diminishing capacity of the state to look for new alternatives for financing socially beneficial projects through private capital, principally from international sources, adds to the doubts about their success. Many large-scale projects are seen as the only alternative or the unavoidable cost that the city or society has to pay to generate an attractive environment in a context of growing competition among cities for a limited number of external investors.

A key matter with respect to the use of public space generated by these projects is to avoid segregation of space and people. Special attention must be given to protect the inhabitants of the zones where the large urban projects are developed from the negative consequences of gentrification. This is without a doubt one of the most difficult aspects of large urban projects. Table 1 shows the most important aspects and the principal challenges that arise from an analysis of the large urban projects. Effectively, the integration of projects of this scope calls for a vision of the city that avoids the creation of islands of modernity isolated in the middle of poor areas, which would contribute to the process called the dualism of the city, or the generation of new exclusive urban centers.

Table 1: Aspects and Challenges of Large Urban Projects

Two cases in different political-economic contexts help us reflect about this matter. One is the El Recreo project, planned by Metrovivienda, in Bogotá. Although presenting innovative proposals about the use and management of the land in a large project for popular housing, the project has not been able to guarantee the integration of social groups with different income levels. In the Corredor Sur area of Panama City large zones are being planned for the construction of residences, but the result again serves primarily medium- and high-income sectors. Thus in both a decentralized and a centralized country the general norms that provoke residential segregation cannot seem to prevent negative consequences for the poorest sectors of society.

In view of all this, large urban projects should not be seen as an alternative approach to obsolete plans or rigid norms like zoning. They could instead be presented as a kind of intermediate-scale planning, as an integrated approach that addresses the needs of the whole city and avoids physical and social separations and the creation of norms that permit exclusive privileges. Only in this way can large-scale projects take their place as new instruments for urban planning. The positive effects of specific elements such as the quality of architecture and urban design are valuable in these projects if they operate as a benchmark and are distributed with equity throughout the city.

Public Benefits

Large-scale projects are public projects by the nature of their importance and impact, but that does not mean they are the total property of the state. Nevertheless, the complexity of the participant networks involved directly or indirectly, the variety of interests and the innumerable contradictions inherent in large projects require a leading management role by the public sector. The territorial scale of these operations especially depends on the support of the municipal governments, which in Latin America often lack the technical resources to manage such projects. Local support can guarantee a reduction of negative externalities and the involvement of weaker participants, generally local actors, through a more just distribution of the benefits, where the regulation of the use and taxation of the land is a key issue. Such is the intention of the Municipality of Santo Andre in Sao Paulo in the design of the extraordinarily complex Tamanduatehy project. It involves the reuse of an enormous tract of land previously occupied by railroad facilities and neighboring industrial plants that fled this once vigorous industrial belt of Sao Paulo to relocate in the hinterland. The project involves establishing a viable locus of new activities, mostly services and high-tech industries, capable of replacing the economic base of that region.

Beyond creating and marketing the image of the project, it is important to achieve social legitimacy through a combination of public and private partners engaged in joint ventures, the sale or renting of urban land, compensation for direct private investment, regulation, or even public recovery (or recapture) of costs and/or of unearned land value increments. Active public management is also necessary, since the development of the city implies common properties and benefits, not only economic interests. Analysis of economic and financial costs, and opportunity costs, are also important to avoid the failure of these projects.

Conclusions

The basic components in the pre-operational stage of executing large urban projects can be summarized as follows:

• Establish a development/management company independent from the state and municipal administration
• Formulate the comprehensive project plan
• Elaborate on the marketing plan
• Design the program of buildings and infrastructure
• Define adequate fiscal and regulatory instruments
• Formulate the financing plan (cash flow)
• Design a monitoring system

An adequate analysis of the trade-offs (economic, political, social, environmental, and others) is indispensable, even if it is clear that the complex problems of the contemporary city cannot be solved with large interventions alone. It is important to reiterate that more importance must be given to the institutionalization and legitimacy of the final plans and agreements than simply the application of legal norms.

The presentations and discussions at the course on “Large Urban Projects” show that the matter of urban land strongly underlies all the aspects and challenges described above. Land in this type of project presents a huge complexity and offers a great opportunity; the challenge is how to navigate between the interests and conflicts when there are many owners and stakeholders of the land. It is necessary to combat the temptation to believe that modern urban planning is the sum of large projects. Nevertheless, these projects can contribute to building a shared image of the city between the inhabitants and the users. This topic clearly has facets that have not been completely explored yet and that need continued collaborative analysis and by academics, policy makers and citizens.

Mario Lungo is executive director of the Office of Planning of the Metropolitan Area of San Salvador (OPAMSS) in El Salvador. He is also a professor and researcher at the Central American University José Simeón Cañas.

References

Borja, Jordi. 1995. Un modelo de transformación urbana. Quito, Peru: Programa de Gestion Urbana.

Carmona, Marisa and Rod Burgess. 2001. Strategic Planning and Urban Projects. Delft: Delft University Press.

Ingallina, Patrizia. 2001. Le Projet Urbain. Paris: Presses Universitaires de France.

Powell, Kenneth. 2000. La transformación de la ciudad. Barcelona: Ediciones Blume.

Arantes, Otilia, Carlos Vainer e Erminia Maricato. 2000. A cidade do pensamento unico. Petrópolis: Editora Vozes.

Gerrit-Jan Knaap is an economist, professor of urban studies and planning, and executive director of the National Center for Smart Growth Research and Education at the University of Maryland, in College Park. His research interests include the economics and politics of land use planning, the efficacy of economic development instruments, and the impacts of environmental policy. His research in Oregon, Maryland and elsewhere has made him a recognized expert on land use policy and planning. He is the coauthor or editor of several books, including two published by the Lincoln Institute: The Regulated Landscape: Lessons on State Land Use Planning from Oregon (1992); and Land Market Monitoring for Smart Urban Growth (2001).

Land Lines: As director of the National Center for Smart Growth Research and Education, what land policy issues are you addressing now?

Gerrit-Jan Knaap: This Center has been in existence for only three years, but this year it is finally getting established and recognized. In the past year we have been able to pull together a core group of national and international researchers who are now working in three key areas: land use and environment; transportation and public health; and international urban development. The Center is also recruiting a faculty researcher to concentrate on housing and community development.

LL: What are the Center’s most difficult challenges?

GK: Ironically, the Center’s name is a problem. While the phrase “smart growth” is helpful shorthand for describing an approach to land use planning and management, some people identify the term with liberal causes or with former Maryland Governor Parris Glendening or the Clinton-Gore administration. As a result, the phrase has been politicized in a way that causes confusion and polarized reactions. The Center does not support or oppose smart growth; it is just an adjective modifying what we do: research and education.

We have found, however, that it is more difficult to obtain funding for objective research on growth management and planning issues than it is to obtain funding for activities that advocate either for or against smart growth. The Lincoln Institute’s willingness to fund independent, objective, high-quality research in this field fills an important niche.

LL: What are some of the Center’s most significant projects?

GK: We are doing a lot of work to develop quantitative measures of urban form. We are not alone in this enterprise, but we think we’re still a step ahead of other research centers in applying such measures to policy issues. Reid Ewing, a nationally recognized expert on growth management, community development and traffic management, recently joined the staff. He and others, for example, have developed a sprawl index that they use to explore the relationship between sprawl and obesity, which is part of our public health focus.

Yan Song, a former post-doctoral fellow in the Center and now an assistant professor at the University of North Carolina, developed quantitative measures of urban form and used them to explore whether Portland, Oregon, was winning the battle against urban sprawl. She also used them to determine whether characteristics like street network connectivity, residential density, land use mix and pedestrian accessibility to commercial uses were capitalized into property values. Most recently, she has used the measures to classify neighborhoods into clusters with similar design characteristics as a means of classifying the types of neighborhood that are currently being built.

Another major focus of our work is land policy and growth management in the People’s Republic of China. As a result of recent economic growth and reforms, China’s 1.3 billion people are urbanizing at an astonishing rate, creating an unprecedented growth management challenge. The Chinese are struggling to find a way to accommodate urban growth and, at the same time, preserve their ability to feed their people. Though we certainly do not have all the answers, Chinese scholars and public officials are interested in learning from our experiences in confronting and balancing these challenges. Chengri Ding, another member of the Center’s faculty, is leading this work with support from the Lincoln Institute. He and Yan Song are editing a book on the evolution of land and housing markets in China that will be published by the Institute later this year.

Our third major focus area is land market monitoring, which grew out of my work in Oregon. Land market monitoring is based on the idea that urban growth management is partly an inventory problem: too much land can lead to urban sprawl, but too little land may create land and housing price inflation. Maintaining balance requires accurate and timely information about land supplies, development capacity, land and housing prices, natural resource constraints and urban development demands. We have conducted several workshops around the country on land market monitoring, and now we are working with the U.S. Department of Housing and Urban Development (HUD) and the Lincoln Institute to establish a national demonstration project.

LL: How did you develop this concept of land market monitoring?

GK: It started with my dissertation work on the price effects of the urban growth boundary (UGB) in Portland, Oregon. Later, at the University of Illinois, Lew Hopkins and I worked on a project we called, “Does Planning Matter?” We sought to develop planning support systems that not only helped to improve land use decision making, but also helped identify the effects of land use plans and regulations on urban development patterns (Ding, Hopkins and Knaap 1997). Building on this work, I organized a conference at the Lincoln Institute in Cambridge in 2000 and invited a group of leading scholars to present papers on this issue. These papers were published by the Institute in the book Land Market Monitoring for Smart Urban Growth, which was recently translated into Chinese. The idea of measuring development capacity and the need for housing is actually as old as planning itself, but recent advances in GIS technology and digital data bases makes it possible to monitor development capacity on a nearly continuous basis.

LL: How are these ideas being used by planners in the U.S.?

GK: Well, to a large extent, they are not. Typical planning practice in the U.S. still involves the formulation of a comprehensive plan—usually for a 10- to 20-year period—then implementing the plan, and then, after 5 to 10 years, formulating a new plan. With a land market monitoring system it is possible to shorten this cycle considerably. In the extreme, it is conceptually possible to monitor development capacity and urban development trends on a continuous basis and make adjustments as needed. Most planners, however, are not trained to think about growth management issues in this way.

LL: What are the obstacles to using land market monitoring in different locales?

GK: The major obstacles are: (1) the lack of quality data; (2) the lack of intergovernmental cooperation; and (3) the lack of political will to place this issue high on the agenda. The primary problem is not money. To do land market monitoring correctly requires a certain level of resource commitment, but since virtually every local government is developing GIS data and has the necessary technical capacity, it is not difficult to develop an operational monitoring system.

There are some positive examples, however. Monitoring of some kind has been required in Oregon for many years; for this reason, Metro, the regional government for the Portland metropolitan area, has developed an extensive monitoring system (Knaap, Bolen and Seltzer 2003). In its Growing Smart Guidebook, the American Planning Association recommends that any local government that adopts an urban growth boundary also should develop a land monitoring system. Most recently, Maryland Governor Robert L. Ehrlich Jr. signed an executive order that will initiate a pilot program of land market monitoring in five cities and five counties, and I will serve on the task force that oversees that demonstration project.

LL: What are your plans for the future?

GK: We have two demonstration projects under way. In the first, we are working with the Maryland Department of Planning to develop a series of indicators to assess the progress of the state’s Smart Growth program. These indicators will measure development capacity as well as housing starts and prices, acres of land protected from development, vehicle miles traveled, transit ridership and other trends that will help state officials and the public judge the effectiveness of smart growth policies.

Second, we have just completed phase one of a national demonstration project that was jointly funded by HUD, the Federal Highway Administration and the Lincoln Institute. We identified a generic protocol for conducting a development capacity analysis, applied this protocol to 15 counties in Maryland, and held workshops on monitoring in several metropolitan areas around the country. With Zorica Nedovic-Budic, we also conducted an assessment of the capacity of regional governments to use GIS for land use and transportation planning (see http://www.urban.uiuc.edu/faculty/budic/W-metroGIS.htm). We hope to begin the second phase of that project early in 2004 in five selected sites around the country. Phase two will focus first on residential development capacity, then on employment development capacity, then on how to tie together land use forecasting with transportation planning.

We’re also exploring the possibility of setting up a land market monitoring demonstration project in China, in conjunction with the Lincoln Institute’s new China program.

LL: So where does smart growth go next?

GK: What will happen to the expression “smart growth” is difficult to say. Governor Ehrlich has started calling his version of Maryland’s land use program “Priority Places,” but all of the newspapers still refer to his effort as smart growth. So, it remains to be seen whether the phrase becomes part of the national lexicon or fades like the Macarena. There is no doubt, however, that the issues associated with the term “smart growth” will not go away, in Maryland, around the country, or even overseas. We think this Center is now well-positioned to become an important and objective source of information and education on these issues well into the future.

References

Ding, Chengri, Lewis Hopkins and Gerrit Knaap. 1997. Does Planning Matter? Visual Examination of Urban Development Events. Land Lines 9(1): 4-5.

Knaap, Gerrit, Richard Bolen, and Ethan Seltzer. 2003. Metro’s Regional Land Information System: The Virtual Key to Portland’s Growth Management Success. Lincoln Institute Working Paper.

Land value is determined primarily by external factors, mainly changes that occur in the neighborhood or other parts of the city rather than by direct actions of the landowner. This observation is especially valid for small lots whose form or type of occupancy do not generate sufficiently strong externalities to increase their own value retroactively; that is, a small lot generally does not have a significant impact on those very external factors that could affect its own value. However, large urban projects (grandes proyectos urbanos or GPUs) do influence those factors, and also the value of the land that supports them. Herein lies the essence the Lincoln Institute’s interest in such projects.

We propose two perspectives for analyzing GPUs that complement and contrast with others that formerly predominated in this debate. First, these projects can be a stimulating force for immediate urban change that is capable of affecting land values, and therefore land use, for large areas if not an entire city region. This view is focused more on urban design or urbanism and stresses the study of the physical, esthetic and symbolic dimensions of large urban projects. A second approach, covering the field of regulation, attempts to understand the land value appreciation generated by the implementation and operation of these projects as a potential means for self-support and economic feasibility. It analyzes the role of GPUs in providing a new function for certain areas of the city. Both perspectives require a more holistic understanding that includes the diversity and levels of complexity of the projects, their relation to the city plan, the type of regulatory framework they require, the role of the public and private sectors in managing and financing them, land taxation and fiscal policies, and other factors.

These large projects are not new to Latin America. In the early twentieth century, many cities were impacted by programs that used public-private management arrangements, including outside players (national and international) and complex financial structures. Some projects had the potential to trigger urban processes capable of transforming their surroundings or even the city as a whole, as well as accentuating the preexisting socio-spatial polarization. Often the projects were layered over existing regulations, contributing to questions about the urban planning strategies in force at the time. Large urban developers and utility companies (English, Canadian, French and others) coordinated the provision of services with complex real estate development operations in almost all the major cities of Latin America.

Today large projects attempt to intervene in especially sensitive places to reorient urban processes and create new urban identities on a symbolic level. They also aim to create new economic areas (sometimes territorial enclaves) able to foster an environment protected from urban poverty and violence, and more favorable to domestic or international private investment. When describing the motives that justify these programs, the rhetoric focuses on their instrumental role in strategic planning, their alleged contribution to urban productivity, and their effectiveness in boosting their intercity competitive position.

In a context marked by transformations due to globalization, economic reforms, deregulation and the introduction of a new focus on urban management, it is not surprising that these programs have been the subject of much controversy. Their scale and complexity often spur new social movements; redefine economic opportunities; put into question urban development regulatory frameworks and land use rules; strain local finances; and expand political arenas, thus altering the roles of urban stakeholders. An additional complication is the long time frame for executing large urban projects, which usually exceeds the terms of municipal governments and the limits of their territorial authority. This reality presents additional management challenges and formidable dilemmas within the public and academic debate.

The Lincoln Institute’s contribution to this debate is to underscore the land component in the structure of these large projects, specifically the processes associated with urban land management and the mechanisms for land value capture or the mobilization of land value increments for the benefit of the community. This article is part of a broader, ongoing effort to systematize recent Latin American experience with GPUs and to discuss the relevant aspects.

A Wide Range of Projects

As in other parts of the world, large urban projects in Latin America comprise a wide range of activities: restoration of historic downtown areas (Old Havana or Lima); renovation of neglected downtown areas (São Paulo or Montevideo); redevelopment of ports and waterfronts (Puerto Madero in Buenos Aires or Ribera Norte in Concepción, Chile); reuse of old airports or industrial zones (the Tamanduatehy artery in Santo Andre, Brazil, or the Cerrillos airport in Santiago, Chile); expansion zones (Santa Fé, Mexico, or the former Panama Canal zone); residential or neighborhood improvement projects (Nuevo Usme in Bogotá or Favela Bairro in Rio de Janeiro); and so on.

Land management is a key component in all of these projects, and it presents diverse sets of conditions (Lungo 2004; forthcoming). One common trait is that the projects are managed by a government authority as part of a city project or plan, even though they enjoy private participation in several respects. Thus exclusively private programs, such as shopping centers and gated communities, are a different category of development project not included in this discussion.

Scale and Complexity

The minimum threshold of scale, in terms of surface area or amount of financial investment, for a project to meet the GPU criteria depends on the size of the city, its economy, social structure and other factors, all of which help define the complexity of the project. In Latin America projects often combine large scale and a complex set of players associated with key roles in land policy and management, including various levels of government (national, provincial and municipal), private entities and community leaders from the affected area. Even relatively small upgrading projects are often formidably complex with regard to the land readjustment component.

There is obviously a huge difference between a project proposed by one or a few owners over a large area (such as ParLatino, an abandoned industrial site in São Paulo) and a project involving the cooperation of many owners of small areas. The latter requires a complex series of actions capable of generating synergies or sufficient external economies to make each action economically viable. Most projects fall between the two extremes. They often involve the prior acquisition of rights over smaller parcels by a few agents in order to centralize control over the type and management of the development.

The key to analysis and design of GPUs in Latin America lies in the ability of the institutional organization in charge of project management to incorporate and coordinate scale and complexity appropriately. Governmental corporations have been created in some cases, but they operate autonomously (as in Puerto Madero) or as special public agencies attached to the central or municipal governments (as in the housing program being developed in the city of Rosario, Argentina, or the Nuevo Usme program in Bogotá). The case of the failed project to build the new Mexico City airport demonstrates the negative consequences of not correctly defining this fundamental aspect of GPUs.

Relationship of GPUs to the City Plan

What is the point of developing GPUs when the city has no comprehensive urban development plan or socially shared vision? It is possible to find situations where execution of GPUs may stimulate, enhance or strengthen the city plan, but in practice many such projects are established without any plan. One of the main criticisms aimed at GPUs is that they become instruments for excluding citizen participation in decision making about individual elements of what is expected or supposed to be part of an integrated urban project, as is normally provided for in a city’s master plan or land use plan.

This is an interesting debate within the framework of urban policies in Latin America, since urban planning itself has been criticized as being elitist and exclusionary. Some authors have concluded that urban planning has been one if not the main cause of the excesses of social segregation typical of cities in the region. In this context the recent popularity of GPUs can be seen as a reaction of the elite to redemocratization and participatory urban planning. Others may view GPUs as an advanced (and perverse) form of traditional urban planning; a yielding to the failures or ineffectiveness of urban planning; or even a lesser evil because at least they ensure that something is done in some part of the city.

There are many challenges for GPUs regarding their relationship to a city plan. They can help build a city plan where none exists, alter traditional plans, or do what we might call “navigating through the urban fog” if the former paths are not viable. In any case, land management proves to be a critical factor, both for the plan and for the projects, because it refers to the fundamental role of the regulatory framework covering urban land use and expansion.

Regulatory Framework

The preferred regulatory solution would be a two-part intervention: on one hand, maintaining general regulations for the whole city but changing the conventional criteria to be more flexible in absorbing the constant change taking place in urban environments; and on the other, allowing specific regulations for certain projects but avoiding regulatory frameworks that may contradict the stated goals of the city plan. Urban Operations, a specific and ingenious instrument devised under the Brazilian urban development legislation (Statute of the City Act of 2001), has been used widely to accommodate these dual needs. The city of São Paulo alone has 16 such operations in effect. Another version of this instrument is the so-called “partial planning” provision to readjust large tracts of land, which is included in Colombia’s equally innovative Law 388 of 1997.

Again in practice we see that exceptions are often granted in an apparently arbitrary manner, and regulatory restrictions are frequently ignored. The point is that neither type of regulation is submitted to any assessment of its socioeconomic and environmental value, thus losing a significant portion of its justification. Given the financial and fiscal fragility of cities in Latin America, what prevails is an extremely low capacity for public discussion of the requests made by the proponents of GPUs. The absence of institutional mechanisms that would make these negotiations transparent makes them more venal, insofar as they expose the capacity to discuss other, less prosaic legal challenges.

Public or Private Management and Financing

What is the desirable combination of public and private management of these projects? To guarantee that public management of a large urban project fulfills its function, land use must be monitored and regulated, although the degree to which the control should be exercised, and on which specific components of land ownership rights, is unresolved. Ambiguity in the courts and the uncertainties associated with the development of GPUs often result in public frustration over unanticipated outcomes favoring private interests. The proper balance between effective ex ante (GPU formulation, negotiation and design) and ex post (GPU implementation, management, operation and impacts) controls over land uses and rights is at the heart of the problem. Typically in the Latin American experience with GPUs there is a huge gap between original promises and actual outcomes.

In recent years the management of GPUs has been confused with the utility and feasibility of public-private partnerships, such as those set up in many countries to carry out specific projects or programs. Some stakeholders even propose the possibility of privatizing urban development management in general. If the private sector has complete control over the land, however, GPUs are severely limited in their ability to contribute to socially sustainable urban development, despite the fact that in many cases the projects contribute significant taxes to the city (Polese and Stren 2000).

The preferred public management system should call on the greatest social participation possible and include the private sector in the financing and implementation of these projects. The large urban programs that seem to contribute the most to the development of a city are those based on public management of the land.

Land Value Appreciation

There is consensus around the fact that GPUs generate an appreciation in land value. Differences emerge when we try to assess the real amount of this appreciation, if it is to be redistributed and, if so, how it should be shared and whom it should benefit, both in social and territorial terms. Again we have the public-private conundrum, wherein this redistribution formula often leads to the appropriation of public resources by the private sector.

The appreciation of land value as a resource that can be mobilized for self-financing the GPU or transferred to other areas of the city could be a way to measure whether or not public management of these projects is a success. However, we rarely have an acceptable estimate of this land value increment. Even in the Puerto Madero project in Buenos Aires, which is considered to be a success, to date there is no evaluation of the land value increment associated with either the properties within the project itself or those in neighboring areas. As a result, the discussion of possible redistribution has not gone beyond a few educated guesses.

GPUs conceived as instruments for achieving certain strategic urban goals are generally registered as successes when they are executed according to plan. The question regarding to what extent these goals were actually reached is not fully answered, and it is often conveniently forgotten. The hypothesis that best seems to fit Latin American experiences with GPUs is that the apparent lack of interest in goals has little to do with any technical inability to make the source of the increased value transparent. Rather, this inattention comes from the need to hide the role of public management in facilitating the private sector’s capture of the land value increment in general, if not its capture of public resources used to develop the construction project itself.

We are not feigning ignorance of or trying to minimize the difficulties in advancing knowledge about how land value appreciation is formed and in measuring its size and circulation. Indeed, there are many technical obstacles to overcome when faced with complicated land rights, the vicissitudes or permanent flaws in cadastres and property registers, and the lack of an historical series of geo-referenced real estate values. Even the smallest plan must distinguish between the appreciation generated by the project itself and that generated by urban externalities that almost always exist despite the scale of the project, the different sources and rates of appreciation, and so forth. Some encouraging work has been done on measuring and evaluating the land value increment associated with development, but technical obstacles seem to be less relevant than the lack of political interest in knowing how these projects are being managed.

When land value increments are created, they are usually distributed in the immediate project area or nearby. This principle is based on the need to finance a specific project within the area, to offset certain negative impacts, or to implement actions such as relocating precarious housing sited on the land or its surroundings that may detract from the image of the new project. Given the socioeconomic conditions found in the typical Latin American city, it is not hard to see that the preferred use of the captured value is to earmark it for projects of a social nature in other parts of the city, such as housing complexes. In fact a significant part of the generated land value increment results exactly from the removal of negative externalities produced by the presence of low-income families in the area. Needless to say, this strategy raises conflicting opinions.

There is certainly a need to devise better legislation and instruments to overcome the trade-off between socially mobilized land value increment and gentrification through displacement. Despite the lack of hard empirical studies, there are reasons to believe that a broader understanding of the impacts of these projects will show that some of the compensatory intracity transfers may actually prove to be counterproductive. For example, the resulting higher land price differences and social residential segregation may involve higher social costs that will need to be addressed by additional public resources in the future (Smolka and Furtado 2001).

Positive and Negative Impacts

On the other hand, the negative impacts caused by GPUs often obscure the varied positive impacts. The challenge is how to reduce the negative impacts produced by this type of urban intervention. It soon becomes clear, whether directly or indirectly, that the role of land management is critical to understanding the effects of large interventions in urban development, planning, regulation, socio-spatial segregation, and the urban environment and culture. Scale and complexity have a role as well, depending on the type of impact. For example, scale is more relevant to environmental and urban development impacts, while complexity is more critical in terms of social impact and urban policy.

As already mentioned, the gentrification that these projects generally produce encourages the displacement of the existing, usually poor, inhabitants from the new project area. However, gentrification is a complex phenomenon that requires further analysis of its own negative aspects, as well as how it could help to raise living standards. It could be more useful to move on from simple mitigation of unwanted negative impacts to better management of the processes that create these risks.

Any GPU can have positive or negative effects, depending on the way urban development is managed, the role of the public sector, and the existing level of citizen participation. We have emphasized that one of the central issues is management of the land and of the land value increment associated with these projects. Large urban projects can not be analyzed in isolation from the entire development of the city. Likewise, the land component must be evaluated with respect to the combination of scale and complexity that is appropriate for each project.

Mario Lungo is a professor and researcher at the Central American University (UCA José Simeón Cañas) in San Salvador, El Salvador. He formerly served as executive director of the Office of Planning for the Metropolitan Area of San Salvador.

Martim O. Smolka is senior fellow of the Lincoln Institute of Land Policy, cochairman of the Department of International Studies and director of the Program on Latin America and the Caribbean.

References

Lungo, Mario, ed. 2004. Grandes proyectos urbanos (Large urban projects). San Salvador: Universidad Centroamericana José Simeón Cañas.

Lungo, Mario (forthcoming). Grandes proyectos urbanos. Una revisión de casos latinoamericanos (Large urban projects: A review of Latin American cases). San Salvador: Universidad Centroamericana José Simeón Cañas.

Smolka, Martim and Fernanda Furtado. 2001. Recuperación de plusvalías en América Latina (Value capture in Latin America). Santiago, Chile: EURE Libros.

Polese, Mario and Richard Stren. 2000. The social sustainability of cities. Toronto: University of Toronto Press.