Una versión más actualizada de este artículo está disponible como parte del capítulo 7 del CD-ROM Perspectivas urbanas: Temas críticos en políticas de suelo de América Latina.

Muchos centros históricos de América Latina han sido el objeto de iniciativas gubernamentales y privadas para la rehabilitación de los edificios y para situar estas zonas al servicio de la industria del turismo. En la mayoría de los casos estas iniciativas han tenido como consecuencia el desplazamiento de los residentes de bajos ingresos o de toda la actividad residencial en conjunto, debido a la comercialización y el aburguesamiento del distrito (Scarpaci 2005). Más recientemente, la rehabilitación de estos centros históricos se ha enmarcado dentro de debates e iniciativas más amplios que pretenden la recuperación de los centros de las ciudades (históricos o de otro tipo) dado su papel crucial como símbolos colectivos o como espacios de interacción social, o bien por su eficacia potencial en calidad de distritos urbanos densos con buena cobertura de servicios (Pérez, Pujol y Polèse 2003; Rojas 2004).

Este artículo pretende profundizar este debate basándose en la experiencia del centro histórico de Ciudad de Panamá, el llamado “Casco Antiguo”. En él se describen algunas políticas innovadoras recientes que han explorado las intersecciones entre el turismo, la vivienda asequible, el empleo y la cultura dentro de un contexto histórico, y deduce algunas enseñanzas y perspectivas útiles.

El Casco Antiguo y la política de desarrollo inclusivo

El Casco Antiguo es la segunda ciudad de Panamá colonial, fundada en 1673 después de que el primer asentamiento se incendiara durante una invasión pirata. Su máximo apogeo tuvo lugar entre 1850 y 1920, cuando se desarrollaron los proyectos de construcción del ferrocarril y los canales que atraviesan el istmo, y la mayor parte de su arquitectura refleja la influencia de esa época. El barrio (aproximadamente 44 hectáreas) fue declarado monumento histórico nacional en 1976 y Patrimonio de la Humanidad de la UNESCO en 1997.

El Casco Antiguo comenzó a pasar de ser un centro urbano multifuncional y socialmente diverso a un vecindario residencial predominantemente de alquiler para las clases medias y los inmigrantes procedentes de las zonas rurales hacia la década de 1920, cuando la élite económica se mudó a nuevos asentamientos suburbanos de estilo estadounidense y la ciudad comenzaba su expansión hacia el este. En las décadas siguientes, el Casco Antiguo perdió muchas de sus funciones urbanas centrales, mientras que su población fue empobreciéndose cada vez más. Hacia la década de los setenta, muchos edificios habían sido abandonados por sus propietarios, y la ocupación de edificios comenzó a ser patente. No obstante, algunas instalaciones gubernamentales importantes, como el Palacio Presidencial y un puñado de otras instituciones, permanecieron en la zona, manteniendo cierta relevancia metropolitana para lo que primordialmente era un vecindario residencial grande de bajos ingresos.

Durante la década de 1970 y 1980 el gobierno elaboró sus primeros planes de reurbanización pensados para el turismo. Se renovaron plazas públicas y monumentos, pero los trabajos se interrumpieron por la crisis política que ocupó la mayor parte de la década de los ochenta. A principios de los años noventa, el sector privado inició sus propios proyectos de renovación, que han seguido siendo en su mayoría proyectos de construcción de bloques de apartamentos de lujo con espacio comercial en las plantas bajas. Los incentivos fiscales y económicos aprobados en 1997 propiciaron una oleada de proyectos y planes privados, pero muchos edificios sencillamente quedaron vacíos y sin restaurar. Entre 1990 y 2000 el censo reveló que el vecindario había perdido cerca de la tercera parte de su población, y en 2004 uno de cada seis edificios estaba cerrado y cubierto por tablones o en ruinas.

En los últimos años se han producido dos hechos significativos. Por un lado, Ciudad de Panamá ha entrado en un período de bonanza inmobiliaria propiciada por el turismo y por el mercado internacional de jubilados, hecho que ha beneficiado al Casco Antiguo en forma de numerosos proyectos de construcción de bloques de apartamentos y hoteles. También han ayudado las sanciones del gobierno para los edificios abandonados. Por otro lado, se ha implementado una política social explícita para la comunidad de bajos ingresos, que reemplaza el consenso tácito asentado desde hace mucho tiempo entre el gobierno y el sector privado sobre la necesidad de expulsar a esos residentes y aburguesar y/o comercializar toda la zona.

La nueva política social se ha centrado en dos tipos de programas: vivienda asequible y capacitación laboral. Hasta el momento se han rehabilitado cuatro edificios históricos propiedad del gobierno, que han producido 52 apartamentos de uno y dos dormitorios; éstos a su vez son alquilados por un órgano gubernamental, la Oficina del Casco Antiguo (OCA), a residentes de largo plazo, la mayoría de los cuales carecen de historial crediticio. Otros tres edificios están en proceso de rehabilitación y cinco más en fase de planificación. Los edificios ofrecen alternativas de vivienda adecuadas, además de espacios comerciales en las plantas bajas, que actualmente se alquilan a establecimientos asentados en el vecindario durante mucho tiempo, que también se enfrentaban a un desalojo.

En el ámbito de la capacitación laboral, se han ofrecido cursos en las áreas de rehabilitación de edificios, servicios de hostelería y restauración, artes culinarias, servicios turísticos e idiomas. Esta experiencia ha cambiado la línea de trabajo que ha pasado de ser simplemente uno de los muchos tipos de programa establecidos por OCA (junto con la rehabilitación de monumentos o la mejora de infraestructuras) a formar parte central de la nueva visión de “desarrollo inclusivo” del barrio.

Las enseñanzas han sido muchas e importantes y nos han permitido comprender mucho mejor los desafíos y el impacto que tienen las políticas de vivienda asequible, turismo y patrimonio cultural.

Siete enseñanzas clave

1. Vivienda asequible es mucho más que construir nueva vivienda que sea accesible.

A pesar de las condiciones deplorables de la vivienda, muchos residentes del Casco Antiguo se aferran al vecindario debido a sus lazos emocionales y por una serie de razones prácticas. En Ciudad de Panamá, las familias de bajos ingresos por lo general tienen que construir sus propias viviendas ocupadas en suelo ubicado en la periferia urbana, lejos de donde se concentra el empleo y los servicios urbanos adecuados, y aquí es también donde se suelen ubicar los nuevos proyectos de vivienda pública. El tiempo de desplazamiento al trabajo y los costos de transporte asociados pueden ser enormes − hasta 5 horas diarias y un 40 por ciento de los ingresos familiares, respectivamente. En este contexto, las políticas de vivienda asequible que mejoran las condiciones de la vivienda a costa del exilio urbano son contraproducentes e irresponsables (Espino 2007).

2. Para muchas familias de bajos ingresos, su hogar es también su negocio. Mientras que las clases medias y altas por lo general pueden permitirse separar su residencia del lugar de trabajo, y por lo tanto, viven y trabajan casi en cualquier lugar de la ciudad adonde se pueda ir en automóvil, los pobres de la ciudad a menudo necesitan combinar ambos usos. En muchas ciudades de América Latina la actividad informal constituye una importante fuente de ingresos familiares, y el lugar de residencia típicamente alberga una actividad comercial, que a su vez requiere una buena ubicación comercial. Los residentes se benefician en gran medida de vivir en partes de la ciudad accesibles y animadas, y los barrios históricos como el Casco Antiguo tienen la estructura urbana adecuada para este tipo de actividad.

En el Casco, muchos de los ocupantes de las nuevas unidades de vivienda asequible han establecido sus negocios y servicios, por ejemplo, de artesanía, calzado o sastrería, que sirven a una clientela metropolitana procedente del creciente tráfico peatonal local e internacional que el turismo ha llevado al barrio. Irónicamente, ahora que estos vecindarios ubicados en el centro por fin pueden comenzar a beneficiarse de la mayor seguridad y del ambiente que les proporciona el turismo, las familias suelen ser desplazadas.

3. La mezcla social urbana es esencial para el desarrollo inclusivo. Rehabilitar un barrio histórico sólo para los pobres tiene tan poco sentido como aburguesarlo por completo. Todo el mundo necesita seguridad, paisajes urbanos agradables y tráfico peatonal con poder adquisitivo, y los pobres de la ciudad no son una excepción. Una mezcla saludable de urbanizaciones asequibles y de categoría beneficia a todos.

4. Los proyectos de vivienda asequible no son una amenaza para la inversión de alto nivel (al menos no en los barrios históricos). En el Casco Antiguo, los proyectos de vivienda asequible de hecho se han convertido en punta de lanza de una inversión privada de alto nivel, al actuar como pioneros en zonas del barrio muy deterioradas y abrir la puerta a promotores privados menos atrevidos. Para empezar, los residentes y usuarios de altos ingresos del Casco suelen ser más tolerantes de la diversidad social que los núcleos familiares de clase media típicos. En consecuencia, los valores de la propiedad en el Casco Antiguo continúan su tendencia a la alza.

5. Las oportunidades de vivienda asequible en el centro deberían ser permanentes. En entornos de inflación alta como el Casco Antiguo, la construcción de unidades de vivienda asequibles y su posterior venta en el mercado pueden estimular la reventa, la especulación y la pérdida de viviendas asequibles. La reventa de unidades asequibles debe estar estrictamente controlada por medio de restricciones en los títulos de propiedad, y el alquiler sin fines de lucro debería considerarse como una opción seria en tales casos. El romanticismo de la propiedad debe reemplazarse por un firme compromiso de servir a la población existente y de ampliar las ventajas de la inclusión urbana a las generaciones venideras. Los gobiernos y las agencias sin fines de lucro deben garantizar un conjunto razonable de edificios para este fin.

6. Es positivo un cierto grado de separación, pero sin extremismo. Los proyectos de vivienda asequible del gobierno de Panamá se centran en una zona específica por motivos históricos (accidentales). Sin embargo, esta zona está rodeada de otras destinadas a una urbanización de lujo. Esta geografía permite tanto cohesión como interacción social, concentrando una vida comunitaria activa y unos servicios comunitarios adecuados. Los negocios como las tiendas de alimentación y las peluquerías que sirven a las poblaciones de bajos ingresos son bastante diferentes de sus contrapartidas para la clase media, en cuanto a los productos y servicios que ofrecen, los precios y los horarios de atención. Una densidad crítica de clientes permite a estos establecimientos desempeñar sus funciones, mientras que una estructura urbana abierta aumenta su base de clientes potenciales, abriéndose a otras clases sociales.

Hay que tener presente que la segregación urbana, tanto en sus aspectos positivos como negativos, no sólo afecta a la vivienda, sino también a todo el repertorio de actividades que componen un vecindario. Por este motivo, proteger los negocios formales de bajos ingresos del vecindario para evitar que sean desplazados es un componente integral de los programas de vivienda asequible en las zonas de rehabilitación. Por otro lado, debe reservarse y fomentar espacio para instituciones de categoría que se sitúen dentro o en las cercanías de estas zonas. Museos, fundaciones, centros culturales o atracciones turísticas pueden beneficiarse de estar en estas comunidades y viceversa.

7. La cultural popular interesa al turismo más allá de lo evidente.

Las poblaciones de bajos ingresos están tan ansiosas por participar en el comercio turístico como cualquier otro sector, pero normalmente sólo se las incluye si tienen algo de folklore que vender o aportar. La cultura contemporánea cotidiana de estos grupos, incluidas su comida y su música, tiende a ser despreciada y tildada de vulgar o poco interesante. Hasta la fecha la OCA ha tratado de promocionar sobre todo la cultura culinaria del barrio, ayudando a organizar a los proveedores para que participen en eventos culturales masivos en la zona. En otro proyecto, la historia familiar y vital de algunos residentes de toda la vida en el barrio se ha registrado y publicado en formato de libro. Se ha dado publicidad a sus residencias como lugares que los turistas pueden visitar para mantener una conversación informal sobre “los viejos tiempos”. Este prometedor campo de las industrias de la cultura popular tiene mucho por descubrir.

Conclusiones

Dado su carácter de atracción cultural, los distritos históricos se benefician de una forma única de diversidad social. Por encima de todo, los turistas desean explorar un barrio que es representativo de la cultura local, y no encontrar otro centro comercial internacional exclusivo al aire libre. Para mantener el barrio asentado en el aspecto cultural, es imprescindible la diversidad social, tanto en el aspecto de vivienda como en el comercial. Por otro lado, la planificación de distritos históricos está inevitablemente ligada a debates más amplios sobre la centralidad, la vivienda asequible y el “derecho a la ciudad” (Lefebvre 1996).

En Panamá, la experiencia del Casco Antiguo ha formado parte de una iniciativa más amplia en el centro de la ciudad encaminada a restablecer la dignidad a la política de vivienda asequible a través de la rehabilitación de edificios y barrios tradicionales. Representa una desviación de las políticas anteriores enfocadas a la urbanización periférica o la construcción de bloques de apartamentos monótonos y sin vida en zonas residuales. Por tanto, trasciende el planteamiento limitado sobre la vivienda y aborda asuntos relacionados con el empleo, la cultura y la ubicación.

Creemos que estas enseñanzas y experiencias tienen mucho que aportar sobre la forma que puede adoptar el desarrollo urbano inclusivo. Estas enseñanzas son interesantes porque no se ocupan de abstracciones, sino de las necesidades y deseos concretos de diferentes agentes vinculados a un espacio urbano. Asimismo, dependen de una acción premeditada y no de expectativas simplistas sobre el goteo de beneficios sociales o económicos. ¿Pueden contribuir a un debate más general sobre los paradigmas de desarrollo urbano en América Latina y en otros lugares?

Sobre el autor

Ariel Espino, AICP, es director ejecutivo de la Oficina del Casco Antiguo (OCA) de Ciudad de Panamá. Es licenciado en arquitectura por la Universidad Católica de Panamá y posee una maestría en ciencias en planificación de la Universidad de Arizona y un doctorado en antropología de Rice University. La OCA es un órgano gubernamental cuyo objetivo es la implementación del plan maestro Casco Antiguo.

Referencias

Espino, Ariel. 2007. The development of low-income housing in the central and historic neighborhoods of Panama City: New models for economic development and social integration? Documento de trabajo. Cambridge, MA: Lincoln Institute of Land Policy.

Lefebvre, Henri. 1996. Writings on Cities, traducido y editado por Eleonore Kofman y Elizabeth Lebas. Oxford: Blackwell.

Pérez, Salvador, Rosendo Pujol y Mario Polèse. 2003. ¿Son importantes los centros de las ciudades? En Desafíos de las ciudades mesoamericanas. Los casos de tres metrópolis, editado por Salvador Pérez y Rosendo Pujol. San José: FLACSO.

Rojas, Eduardo. 2004. Volver al centro. La recuperación de áreas urbanas centrales. Washington, DC: Banco Interamericano de Desarrollo.

Scarpaci, Joseph L. 2005. Plazas and barrios. Heritage tourism and globalization in the Latin American centro histórico. Tucson: The University of Arizona Press.

The Lincoln Institute has been collaborating with the Loeb Fellowship Program at the Harvard University Graduate School of Design since 1998. The Loeb Fellowship was established in 1970 through the generosity of Harvard alumnus John L. Loeb. Each year ten mid-career design and planning professionals are invited to study independently and develop insights and connections to advance their work in revitalizing the built and natural environments. In May the 2005 class of fellows traveled to Brazil on a study trip to exchange information with professional counterparts in the cities of São Paulo and Rio de Janeiro. This article focuses on what we learned about programs to improve life in the favelas of those cities.

From the lush Amazon rainforest to the futuristic skyscrapers topped by helipads in São Paulo, Brazil is a study in contrasts. The country is rich in land, with a landmass slightly larger than that of the lower 48 U.S. states; it is the largest country in South America and the fifth largest in the world.

Currently 80 percent of Brazil’s 186 million residents live in urban areas. The City of São Paulo, with a population of 10 million, is the largest city in Brazil and one of the most densely populated; its metropolitan area encompasses 16 million people. The City of Rio de Janeiro is the country’s second largest city with 6 million inhabitants and a metropolitan population of 10 million.

The income distribution in Brazil is among the most unequal in the world. The top 10 percent of the population earns 50 percent of the national income, while 34 percent live below the poverty line. Although inflation-curbing efforts have helped to steady the economy over the last few years, the country is still saddled with considerable foreign debt. Faced with the challenges of extreme poverty, drug trafficking, crime, inequitable land distribution, and inadequate housing, the government has limited funds for social programs and often has used them inefficiently.

Life in the Favelas

It is estimated that 20 percent of Brazilians currently live in favelas, or informal, low-income housing settlements. Favelas were first built in Rio in the early twentieth century, when thousands of soldiers who had fought in a civil war received little government assistance and were forced to live in makeshift structures. They often settled in locations without public services where building was precarious, such as steep hillsides or swampy lowlands. These favelas grew and many others were built in similarly unsafe areas. Torrential rains in 1966, 1996, and 2001 resulted in fatal mudslides in many communities.

Favelas began to increase rapidly in both number and size during the 1970s, when rural workers flocked to the cities for better employment opportunities. In Rio many long-established favelas are located downtown, close to wealthy neighborhoods and tourist areas. By contrast, most of the favelas in São Paulo are on the periphery of the urban core, due to local geography, history, and other factors.

Alfredo Sirkis, director of planning management and a former city councilor in Rio, explained that the scale of these informal developments and violent crime are the two most pressing challenges to improving life in the favelas. Speaking about the prevalence of the drug dealers, he said, “They have weapons of war and become braver every day. Police can neutralize the situation, but as soon as gangs are eradicated, new ones are created. State police and the municipal guards patrol these neighborhoods, but the police force is riddled by corruption.”

Most of the homes in favelas are built by residents with scavenged materials and lack proper sewage and water systems. A study conducted by Brazil’s Institute of Applied Economic Research (IPEA) estimated that 28.5 percent of the urban population does not have access to public water, sewage, and garbage collection services (Franke 2005). Some large favelas house more than 60,000 people and have been built so densely that retrofitting them with roads and utility systems is extremely difficult.

Various attempts have been made to upgrade favelas over the years. In the 1960s, following the example of U.S. urban renewal programs, some favelas were razed, and families were relocated to large, often distant, housing complexes with infrastructure and services. As in the U.S., however, this method often failed, as communities were destroyed and residents were displaced from local jobs and had few options for commuting. Furthermore, the underlying social issues, such as lack of jobs, drug trafficking, and crime, were not addressed. In the 1970s and 1980s a period of benign neglect resulted in rapid expansion of favelas and deterioration of the quality of life. The award-winning movie City of God portrays the nearly hopeless life of favela youth in a large, 1960s-era housing project that had deteriorated and became wracked with crime by the 1980s.

More recent favela improvement projects reflect lessons learned from those past efforts. The Loeb Fellows visited two such projects that focus on improving conditions in the favela’s current location by upgrading the built infrastructure and creating social programs to address job training, daycare, education, and crime.

São Paulo: Diadema

Diadema was founded in 1959 to accommodate workers in the growing automotive industry, and is now a separate incorporated city within metropolitan São Paulo. A new influx of rural job seekers moved to the area in the 1980s, and by then approximately one-third of the population lived in favelas. Much of the city faced serious structural problems due to the haphazard nature of past growth, but the government responded to the infrastructure needs by building roads and providing lighting, water, and sewage systems. Some demolition and relocation programs were required, but it was recognized that a policy to integrate the favelas into the city would achieve greater success in the long run.

The economic crisis in the 1990s precipitated a new wave of unemployment and crime, however. Between 1995 and 1998, the population of Diadema grew 3.4 percent, but the number of homicides increased 49 percent, often averaging one murder per day. Mayor José de Filippi, Jr., now serving his third four-year term, began a 10-phase campaign to fight crime by gathering some hard data. His staff mapped serious crime locations and identified the times of heaviest activity. After determining that 60 percent of homicides occurred in or near bars between the hours of 11 p.m. and 6 a.m., the city passed a law in 2001 that forced all establishments selling alcohol to close during those hours. That was the beginning of the sharp decline in serious crimes.

Another target of the mayor’s efforts to reduce crime was the youth of Diadema, who have benefited from several creative programs. The Youth Apprentice Project targets vulnerable young people from identified high-risk and socially excluded areas where drug trafficking is present. This project offers educational opportunities, sports and cultural activities, work placement, and a monthly income to those who qualify. These measures are aimed at giving young people other choices for using their time than crime, as well as new employment and social networks.

To deter crime by reducing the number of guns in favelas, the city decided again to focus on young people. The Disarmament of Fire Arms Campaign offered children a comic book in exchange for each toy gun collected, and approximately 27,000 toy guns were taken off the streets within three years. In the second phase of the campaign, collecting guns from adults, many children continued their activism and pressured their parents and neighbors to turn in their weapons. The program was far more successful than expected, with 1,600 guns collected in the first six months.

In addition to the crime-fighting programs, the mayor sought to improve the physical and social environment of the favelas. Citizens received training and free materials, and were encouraged to make structural as well as cosmetic improvements to their homes. In many areas they formed community groups that were effective in making neighborhood improvements. The city responded with a program under which residents in favelas located on publicly owned land can obtain a “right of use” of the land for 99 years at no charge. Those who remain for at least five years may begin steps to become the legal “lessee” of the land, and subsequently they are permitted to sell the structure.

Our visit to Diadema included a trip to a favela neighborhood where citizens had improved their homes and developed employment training and opportunities beyond those that the government program could provide. We gathered at a community center, which was also a place of worship and housed a classroom, to hear residents speak of their desire to take their community “to the next level.” They participated in the city’s “It’s Beautiful” program, which was created in 1983 with joint funding from the municipality and the community group. After the basic infrastructure was in place, they wanted the appearance of their community to match the pride they felt for their efforts.

Loeb Fellow Mary Eysenbach observed: “I was surprised how closely a self-organized neighborhood resembled a government-regulated one in form and organization. Whatever the solution is for the favelas, they must retain and even promote the creativity and entrepreneurship of the residents.”

Rio de Janeiro: Providência Hill

The Municipality of Rio de Janeiro created the Favela-Bairro project in 1993, when approximately one-fifth of the population lived in favelas. In its first two phases, the project has begun to integrate 620,000 citizens in 168 informal communities into the rest of the city. These settlements include 143 established favelas and 25 newer, irregular subdivisions. At least one more phase is planned, with the intention of reaching nearly 2 million people. The project is funded primarily by the municipality and the Inter-American Development Bank (IDB 2003).

The main goals of the Favela-Bairro project are to make structural improvements in the homes; expand road access; and enhance and formalize urban infrastructure, including paved roads, water supply, and sanitary sewage. These physical improvements will integrate the favelas into the urban fabric with public spaces and other amenities. Social programs will provide assistance to children and adolescents (day-care centers, arts and sports facilities) and create opportunities for income generation (professional training and schooling for adults and youths).

One small but vital part of the project helps the favela residents obtain a street address, which enables them to receive mail and establish a client relationship with service providers. The project also provides “right of use” certificates to residents after their homes are connected to the sanitation and water systems, plotted on a map, and assigned an address. This land “lease” is usually for 100 years and allows the owner to transfer the buildings to an immediate family member; the land remains the property of the city. The hope is that, in addition to providing services, this program will provide the homeowner with security and a greater sense of ownership and responsibility.

We toured Providência Hill, one of the models of the Favela-Bairro project, with approximately 5,000 residents. As a grim sign that security remains a concern even in an improved neighborhood, we were escorted by armed officers. Our guide explained that the new staircase we climbed was an important part of the project, both for pedestrian access and as a means to carry water and sewer lines to the upper part of the favela. He also pointed out that education programs are offered to show residents how to use the new infrastructure and services, but it may take time for them to integrate these new systems into their way of life.

We were impressed by the creative ideas used to address day-to-day problems. For example, the limited number and accessibility of vehicular-sized roads make trash and garbage collection difficult. One solution has been an innovative exchange program: residents receive milk in exchange for a bag of trash, thus creating a healthier population, better trash collection, and a cleaner neighborhood.

We observed a heritage project that restored a historic chapel and imbedded a gold line in the cement to guide visitors on a walking tour past the highlights of the revitalization project. Our visit also included a presentation on the Favela-Bairro project at the new daycare center that will accommodate 220 children of the most needy families. As we witnessed throughout our visit in Brazil, both city staff and neighborhood leaders participated collaboratively in the presentations and discussions.

Fellow Robin Chase commented: “The whole Favela-Bairro concept of leveraging personal investments and realizing that housing close to downtown is better than a housing project in the middle of nowhere impressed me as practical and efficient. The quality of life is vastly improved with electricity, water, and plumbing. Fixing the security issues seems like a very difficult problem that needs to be solved throughout the country.”

Conclusion

We observed positive signs of change in the favelas we visited and were impressed by the dedication of citizens and officials to integrate these communities into the larger city, but many challenges remain, notably the need for substantial financial resources to implement further changes. An extensive study of favela residents in Rio confirms our experience: “While there have been notable improvements in consumption of collective urban services, household goods, and years of schooling over the past three decades, there is greater unemployment and inequality” (Perlman 2003). Crime, police corruption, and prejudice against those living in the favelas remain barriers to progress.

“At some level, local, national, and international leaders have realized that the relocation, marginalization, and segregation strategies of the past will not work,” noted James Stockard, curator of the Loeb Fellowship Program. “People have strong connections to the land where they have settled. Leveraging that commitment and energy is an important part of making these informal neighborhoods into healthier, safer, and more economically viable communities.”

Heather Boyer was a Loeb Fellow at the Harvard University Graduate School of Design in 2004–2005 and is now a freelance editor in New York City.

References

Franke, Renata. 2005. Twenty-eight percent of Brazil’s urban population have no public water or sewage. Brazzil Magazine, June 2. www.brazzilmag.com/content/view/2641/49/

Inter-American Development Bank (IDB). 2003. Favela-Bairro: Ten years integrating the city. Washington, DC: Inter-American Development Bank.

Perlman, Janice E. 2003. The chronic poor in Rio de Janeiro: What has changed in 30 years?” Unpublished paper presented at the Conference on Chronic Poverty, Manchester, England.

Loeb Fellows, 2004–2005

Heather Boyer, former editor, Island Press, Boulder, Colorado

Robin Chase, founder and CEO, Meadow Networks, Cambridge, Massachusetts; founder and former CEO, Zipcar, Cambridge, Massachusetts

Maurice Cox, professor of architecture, University of Virginia; former Mayor, Charlottesville, Virginia

Mary Eysenbach, former director, The City Parks Forum, a program of the American Planning Association, Chicago, Illinois

Klaus Mayer, partner, Mayer Sattler-Smith, a multidisciplinary design firm in Anchorage, Alaska

Cara McCarty, curator of decorative arts and design, St. Louis Art Museum

Mario Navarro, former housing policy director, Chilean Ministry of Housing and Urban Development, Santiago

Dan Pitera, director, Detroit Collaborative Design Center, University of Detroit Mercy School of Architecture

Carlos Romero, community organizer and community development advocate, San Francisco, California

Susan Zielinski, cofounder and director, Moving the Economy, Toronto

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.

La segregación espacial es una característica de las metrópolis, de San Diego a Boston, de Santiago a Ciudad del Cabo, de Belfast a Bangalore. En algunos lugares está asociada principalmente con los grupos raciales; en otros, con las minorías étnicas o religiosas; mientras que todavía en otros, con el nivel de ingresos. En nuestra experiencia en el continente americano, encontramos que con la investigación internacional comparativa los investigadores y analistas de políticas encuentran rasgos únicos y comunes en franco contraste. Por ejemplo, en América Latina el debate público sobre la segregación espacial urbana suele centrarse en los problemas socioeconómicos, mientras que en los Estados Unidos y muchos otros países desarrollados se enfoca más en las disparidades raciales o étnicas.

La segregación residencial también tiene significados y consecuencias diferentes según la forma y estructura específicas de la metrópoli, y también según el contexto cultural e histórico. En Norteamérica, las minorías sociales y étnicas tienden a ser segregadas hacia sitios poco deseables del casco urbano mientras que la mayoría de clase media y alta se dispersan en pequeños barrios urbanos o zonas residenciales socialmente homogéneas en toda la ciudad. En oposición, en las ciudades latinoamericanas es la élite minoritaria la que tiende a concentrarse en una sola área de la ciudad.

Las fuerzas

Son numerosas y variadas las fuerzas que contribuyen a la segregación espacial. Las leyes del apartheid en Sudáfrica fueron un caso extremo de segregación espacial a gran escala aprobada por el gobierno. Otros casos han despertado menos interés internacional, como por ejemplo la destrucción de chabolas emprendida por el gobierno brasileño en los años 1960, que hizo que los habitantes pobres se refugiaran en otras zonas segregadas. En una escala menor, en Santiago de Chile, entre 1979 y 1985 durante el régimen de Pinochet más de dos mil familias de pocos ingresos fueron desalojadas de áreas residenciales de altos y medianos ingresos con el objetivo trazado de crear vecindarios uniformes según el nivel socioeconómico.

Aunque los desalojos de los gobiernos y los esquemas legislativos son mecanismos explícitos para generar segregación espacial urbana, igualmente se han usado modalidades más sutiles para crearla o imponerla. En Colombia, se impuso la contribución de valorización (una suerte de gravamen por mejoramiento) a los habitantes de asentamientos informales en Bogotá ubicados a orillas de una nueva autopista periférica. Los funcionarios públicos sabían que el gravamen era más de lo que los habitantes podrían pagar y probablemente éstos “optarían” por la reubicación. Al imponer normas sobre el uso del suelo que los sectores pobres no pueden cumplir, el gobierno prácticamente los empujó hacia áreas periféricas informales. Los Estados Unidos también recurren a tales mecanismos para crear mercados de la vivienda segregados. Por ejemplo, algunos agentes de bienes raíces excluyen a las minorías raciales y étnicas o a las personas de clases sociales más bajas que no encajan en los mercados previstos; asimismo, muchos propietarios utilizan redes informales para encontrar el tipo de arrendatarios de su preferencia.

La segregación voluntaria se ha convertido en una nueva fuerza, con la proliferación de urbanizaciones enrejadas tanto en el hemisferio norte como en el sur. Esta tendencia parece tener varios motivos, entre ellos los factores de la oferta y la demanda. En cuanto a la demanda, los residentes tal vez se sientan atraídos por la percepción de seguridad o por un nuevo estilo de vida. En lo que respecta a la oferta, los constructores y promotores inmobiliarios obtienen una tremenda rentabilidad con la absorción a gran escala de elementos exógenos en estos proyectos de desarrollo altamente controlados.

La complejidad que produce la combinación de la segregación coercitiva y voluntaria conduce a una interrogante más profunda: ¿Cuál es la relación entre las diferencias sociales y la segregación espacial? Es común suponer que lo primero “se refleja” en lo segundo. En ocasiones los grupos sociales recurren a la segregación para fortalecer una identidad débil o confusa, como en el caso de los grupos de clase media emergentes o comunidades de inmigrantes en busca de aceptación social. En gran medida, el proceso de suburbanización de la posguerra en las ciudades de los EE.UU. puede interpretarse como una manera de clasificación homogénea que buscaba reafirmar la identidad social.

Las consecuencias

En los EE.UU., la segregación espacial plantea un serio problema para la formulación de políticas debido a las complejas interacciones entre el suelo y los mercados de la vivienda, por un lado, y su conexión con los ingresos locales y la distribución y calidad de los servicios, por el otro. Las disparidades en la calidad de las escuelas quizás sea uno de los ejemplos más dramáticos de la variación en los servicios públicos de un lugar a otro.

La combinación de segregación residencial por clase y por grupos raciales o étnicos y la distribución espacial sistemáticamente desigual de escuelas de calidad trae como consecuencia enclaves pobres en los cascos urbanos donde los niños asisten a escuelas deficientes, lo que a su vez limita las oportunidades para la vida futura. Otros servicios, como son el acceso al transporte y la atención médica, también varían según el espacio, al igual que muchos factores cuantificables como la calidad del aire y la infraestructura de los vecindarios.

En otros países, la segregación espacial de la población pobre ocurre dentro de asentamientos informales. En el pasado se consideraban estas áreas como aberraciones, pero los estudiosos entienden cada vez más la informalidad como un resultado del funcionamiento normal de los mercados del suelo y la vivienda, no como parte de una dualidad de las economías formal e informal. En este sentido, las actividades ilegales, irregulares, informales o clandestinas que permiten el acceso y ocupación del suelo son la forma en que el mercado brinda vivienda a la gente pobre. Sin embargo, estos arreglos no siempre “se escogen” por su precio bajo o comodidades relativas, sino porque son una de las poquísimas opciones que tienen los sectores desfavorecidos.

Los patrones tradicionales de segregación en las ciudades de América Latina están cambiando debido a la proliferación de nuevas comunidades cerradas destinadas a grupos crecientes con ingresos altos y medianos y la aparición de centros comerciales y complejos de oficinas en áreas más “modernas” fuera de los primeros enclaves urbanos. En São Paulo, Santiago, Buenos Aires y Ciudad de México, por nombrar sólo algunas de las ciudades más grandes y dinámicas, estas construcciones incluso están surgiendo al lado de áreas de bajos ingresos. La segregación de los usos y el acceso se está intensificando, lo que está haciendo más aparentes las desigualdades sociales de las últimas décadas. Sin embargo, al mismo tiempo, estos cambios en los patrones de segregación reducen las distancias físicas entre los grupos socioeconómicos, y están poniendo al alcance de los pobres las instalaciones comerciales “modernas” y los espacios públicos mejorados.

Probablemente las consecuencias de la segregación están cambiando debido a esta reducción en su escala geográfica. Algunos de los efectos negativos de la segregación a gran escala de la población pobre (es decir, la aglomeración en la periferia de las ciudades) podrían estar disipándose en este paisaje urbano nuevo y más diverso. Los estudios empíricos recientes realizados en Santiago confirman este punto de vista.

Respuestas normativas

La segregación espacial es el reflejo tanto de la estructura social existente como de un mecanismo que impone esa estructura, lo que plantea la pregunta sobre cómo y cuándo debe abordarse la problemática de la segregación. ¿Acaso el problema en el contexto estadounidense es que los niños de las minorías pobres viven junto con otros que tienen el mismo nivel de ingresos o con grupos raciales semejantes, o se trata de que al vivir en áreas pobres y segregadas los niños tienen limitadas sus oportunidades de vida futura debido a que no tienen acceso a buenas escuelas? ¿Está la respuesta en mejorar las escuelas, integrar los vecindarios o iniciar una combinación de ambas y otras soluciones? En el caso de los países en desarrollo, ¿el problema radica en que los asentamientos informales a menudo son peligrosos (debido a las riesgosas condiciones ambientales o la violencia callejera) o que los residentes están aislados de buenos empleos, tránsito y otros servicios? ¿Está la solución en reducir o eliminar el peligro, mejorar el tránsito, crear empleos en el vecindario o tratar de aplicar todos estos programas?

Necesitamos mejorar nuestra comprensión de los problemas sociales en estas áreas segregadas para poder diseñar e implementar políticas adecuadas que sean necesariamente multidimensionales. ¿Debiera el cambio tomar la forma de programas correctivos (como son los de regularización o mejora de los asentamientos informales) o materializarse en políticas más fundamentales que implicarían la dotación masiva de suelo urbanizado a precios asequibles? Una opción “correctiva” hace contrastar la informalización de los acuerdos formales (es decir, la desregulación) con la formalización de los acuerdos informales (es decir, la redefinición de los códigos de zonificación o la regularización de los sistemas alternativos de tenencia de la tierra).

Una solución todavía más fundamental sería la implementación en tramos o la designación obligatoria de proyectos de vivienda de interés social en áreas de altos ingresos. Un tipo diferente de herramienta consiste en abrir a la participación popular la toma de decisiones sobre la asignación de inversiones públicas, como es el proceso “orçamento participativo” utilizado con éxito en el municipio brasileño de Porto Alegre, en el que se distribuye el presupuesto con amplia participación pública. Otras respuestas podrían centrarse en la mejora drástica de los asentamientos periféricos de bajos ingresos ya existentes, el uso más extendido de gravámenes por vinculación o la eliminación definitiva de los mercados del suelo, como sucedió en Cuba. No obstante, precisamos más información acerca de la eficacia de estos variados programas e instrumentos y llevar a cabo un análisis más minucioso de las condiciones necesarias para aumentar las probabilidades de éxito.

La globalización ha estimulado el movimiento de la fuerza laboral y el capital, lo que ha dado lugar al acercamiento de las experiencias, tanto positivas como negativas, de los países desarrollados y en desarrollo. Los inmigrantes que llegan a los Estados Unidos, particularmente los indocumentados, tienden a asentarse en enclaves urbanos, pero su condición legal irregular trasciende más allá de tales asentamientos. Tienen acceso limitado al mercado laboral y al crédito, lo que a su vez les restringe la movilidad y afianza la segregación espacial existente.

Por otra parte, a medida que los consorcios financieros y de bienes raíces estadounidenses amplían sus operaciones en el extranjero, implantan los protocolos, convenciones, expectativas y modalidades operativas de su país de origen. La exportación de tales normas a los países en desarrollo puede conducir a nuevos patrones de discriminación geográfica (es decir, exclusión) según la raza o grupo étnico, en lugares donde anteriormente estas prácticas eran menos explícitas.

Sabemos por investigaciones realizadas y experiencias anteriores que la segregación puede aumentar los ingresos territoriales de los promotores inmobiliarios y terratenientes. Asimismo sabemos que la rentabilidad de las obras de construcción de viviendas depende de las inversiones públicas que se hagan en carreteras, instalaciones y servicios. Al mismo tiempo, reconocemos que la segregación tiene efectos positivos y negativos sobre la vida citadina, que van desde la exclusión social que dificulta la vida de la población pobre hasta el fortalecimiento de identidades sociales y culturales que contribuyen a la diversidad y vitalidad de la ciudad.

El rostro de la segregación varía dentro de cada metrópoli y de una a otra. Sin embargo, los estudios internacionales comparativos han demostrado que existen tendencias importantes de convergencia entre las ciudades de los EE.UU. y las de América Latina. Nos queda mucho por entender con respecto al efecto de la interacción del suelo y los mercados de la vivienda y la estructura normativa de la segregación espacial y las oportunidades de vida de los residentes urbanos.

Rosalind Greenstein es miembro principal y directora del Programa de Mercados del Suelo del Instituto Lincoln. Francisco Sabatini es profesor asistente en el Instituto de Estudios Urbanos de la Pontificia Universidad Católica de Chile, en Santiago. Martim Smolka es miembro principal y director del Programa para América Latina y el Caribe del Instituto Lincoln.

A major argument in support of land-value taxation is that it creates no incentives for altering behavior in order to avoid the tax. By contrast, a conventional property tax, levied on buildings, can deter landowners from erecting otherwise desirable structures on their land. For example, homeowners may decide against finishing a basement or adding a second bath because it would increase tax liability. Thus, a conventional property tax can lead to excessively low capital-land ratios and “excess burden”—a cost to taxpayers over and above the actual monetary payments they make to the tax authorities. This article reports on a recent study of excess burden resulting from an early British antecedent of the modern property tax—the 17th-century window tax.

The Case of the Window Tax

In 1696, King William III of England, in dire need of additional revenues, introduced a dwelling unit tax determined by the number of windows in an abode. The tax was designed as a property tax, as described by this discussion in the House of Commons in 1850: “The window tax, when first laid on, was not intended as a window tax, but as a property tax, as a house was considered a safe criterion of the value of a man’s property, and the windows were only assumed as the index of the value of houses” (HCD 9 April 1850).

In its initial form, the tax consisted of a flat rate of 2 shillings upon each house and an additional charge of 4 shillings on houses with between 10 and 20 windows, or 8 shillings on houses with more than 20 windows. The rate structure was amended over the life of the tax; in some cases, rates were raised dramatically. In response, owners of dwellings attempted to reduce their tax bills by boarding up windows or by constructing houses with very few of them. In some dwellings, entire floors were windowless, leading to very serious and adverse health effects. In one instance, lack of ventilation led to the death of 52 people in the surrounding town, as reported by a local physician who called on a house inhabited by poor families:

“In order to reduce the window tax, every window that even poverty could dispense with was built up, and all sources of ventilation were thus removed. The smell in the house was overpowering and offensive to an unbearable extent. There is no evidence that the fever was imported into this house, but it was propagated from it to other parts of town, and 52 of the inhabitants were killed.” (Guthrie 1867)

The people protested and filed numerous petitions to Parliament. But, despite its pernicious effects, the tax lasted more than 150 years before it was finally repealed in 1851.

The window tax represented a substantial sum for most families. In London, it ranged from about 30 percent of rents on “smaller houses on Baker Street” to as much as 40 to 50 percent on other streets, according to a House of Commons debate in 1850 (HCD 9 April 1850). The tax was particularly burdensome on poor families living in tenements, where assessors taxed the residents collectively. Thus, if a building contained 2 apartments, each with 6 windows, the building was taxed at a rate based on 12 windows. By contrast, on very large houses of the wealthy, the tax typically did not exceed 5 percent of the rental value.

The tax schedule underwent several significant changes before it was finally repealed. In 1784, Prime Minister William Pitt raised tax rates to compensate for lower taxes on tea. Then in 1797, Pitt’s Triple Assessment Act tripled the rates to help pay for the Napoleonic Wars. The day following this new act, citizens blocked up thousands of windows and wrote in chalk on the covered spaces, “Lighten our darkness we beseech thee, O Pitt!” (HCD 24 Feb. 1848).

England and Scotland were both subject to the window tax, but Ireland was exempted because of its impoverished state. One member of Parliament quipped, “In advocating the extension of the window tax to Ireland, the Honorable Gentleman seemed to forget that an English window and an Irish window were very different things. In England, the window was intended to let the light in; but in Ireland the use of a window was to let the smoke out” (HCD 5 May 1819).

The window tax, incidentally, was viewed as an improvement over its antecedent, the hearth tax. In 1662, Charles II (following the Restoration) imposed a tax of 2 shillings on every fire hearth and stove in England and Wales. The tax generated great resentment largely because of the intrusive character of the assessment process. The “chimney-men,” as the assessors and tax collectors were called, had to enter the house in order to count the number of hearths and stoves. The window tax, by contrast, did not require access to the interior of a dwelling; the “window peepers” could count the apertures from the outside and avoid invading the privacy of the home.

The window tax, however, created some administrative problems of its own—most notably the definition of a window for purposes of taxation. The law was vague, and it was often unclear what constituted a window for tax purposes. In 1848, for example, Professor Scholefield of Cambridge paid tax on a hole in the wall of his coal cellar (HCD 24 Feb. 1848). In the same year, Mr. Gregory Gragoe of Westminster paid tax for a trapdoor to his cellar (HCD 24 Feb. 1848). As late as 1850, taxpayers urged the Chancellor of the Exchequer to clarify the definition of a window.

Notches and Their Effects on Behavior

Throughout its history, the window tax consisted of a set of “notches.” A notch in a tax schedule exists if a small change in behavior—such as the addition of a window—leads to a large change in tax liability.

Notches are rare (Slemrod 2010) and not to be confused with kinks, which are far more common even today. A kink in a tax schedule exists if a small change in behavior leads to a large change in the marginal tax rate but just a small change in tax liability. The income tax in the United States, for example, has several kinks. Married couples with taxable income from $17,850 to $72,500 are in the 15 percent marginal tax bracket; couples with taxable income from $72,500 to $146,400 are in the 25 percent marginal tax bracket. If a couple with income of $72,500 were to earn an extra dollar, its marginal tax rate would jump to 25 percent, but its tax liability would increase by just $.25.

Microfilm records of local tax data in the U.K. from 1747 to 1830 allow for a more systematic examination of the impact of the window tax and notches. This article draws on a data set from 1747 to 1757, with information on 493 dwellings from Ludlow, a market town in Shropshire, near the border of Wales. Over this period, the window tax schedule included 3 notches. A homeowner in this period paid:

• no tax if the house had fewer than 10 windows;
• 6 pence per window if the house had 10 to 14 windows;
• 9 pence per window if the house had 15 to 19 windows;
• 1 shilling per window if the house had 20 or more windows.

Homeowners who purchased a 10th window thus paid a 6 pence tax on the 10th window as well as on each of their 9 other windows, which previously had been untaxed. Thus the total tax on the 10th window was 60 pence, which was equal to 5 shillings. If the window tax distorted decisions and thus led to excess burden, then one would expect to find many homes with 9, 14, or 19 windows but very few with 10, 15, or 20. A test of this argument is discussed below.

Through the first half of the 18th century, the administration of the tax had been troublesome, as homeowners frequently camouflaged or boarded up windows until the tax collector was gone, or took advantage of loopholes or ambiguities in the tax code. As a result, tax collections were much lower than expected. In 1747, however, Parliament revised the tax by raising rates and introducing measures to improve its administration. Most notably, it prohibited the practice of blocking up and subsequently reopening windows in order to evade assessment; violators had to pay a penalty of 20 shillings (1 pound) for every window they reopened without notifying the tax surveyor (Glantz 2008).

The 1747 act reduced tax evasion significantly, so the data for the following 10 years should provide reasonable estimates of the actual number of windows. If the window tax distorted behavior, one would expect to find spikes in the number of dwellings at the notches, with 9, 14, or 19 windows. And this is precisely what the data demonstrate. Figure 1 is a histogram showing the number of windows for homes in the sample. The pattern is clear; there are sharp increases in the number of homes with 9, 14, or 20 windows:

• 18.4 percent of the homes have 9 windows, 3.9 percent 8 windows, and 4.6 percent 10 windows.
• 16.6 percent have 14 windows, 6.0 percent 13 windows, and 1.8 percent 15 windows.
• 7.1 percent have 19 windows, 3.4 percent 18 windows, and 0.7 percent 20 windows.

Standard statistical tests reject the hypothesis that there are equal numbers of houses with 8, 9, or 10 windows; with 13, 14, or 15 windows; or with 18, 19, or 20 windows. It is manifestly clear that people responded to the window tax by locating at one of the notches so as to minimize their tax liability.

Data on a sample of 170 houses for the period 1761 to 1765 shed light on the response to Parliamentary revisions to the tax in 1761. In addition to rate increases, the 1761 revisions expanded coverage of the tax to include houses with 8 or 9 windows. Under the earlier rate structures, houses with fewer than 10 windows paid no window tax. For this second sample, figure 2 shows a large spike at 7 windows: 28.2 percent of the houses have 7 windows, but only 5.2 percent have 6 windows, and just 2.9 percent have 8 windows. Once again, it’s easy to reject the hypothesis that there were an equal number of houses with 6, 7, or 8 windows.

In summary, the evidence from our two samples makes it quite clear that there was a widespread tendency to alter behavior in order to reduce tax payments. People chose the number of windows not to satisfy their own preferences, but to avoid paying higher levels of taxes. The window tax, in short, generated a real “excess burden.”

How Large Was the Excess Burden from the Window Tax?

As discussed, the window tax was substantial and induced widespread tax-avoiding behavior. Based on some standard techniques of economic analysis, our simulation model generates an estimate of what people would have been willing to pay for their preferred number of windows. The model captures each consumer’s demand for windows with and without the tax, the taxes paid, and the loss of welfare from adjusting the number of windows in response to the tax.

In the sample from 1747 to 1757, the estimated welfare losses were very large for households at one of the notches. For them, the welfare loss (i.e., excess burden) is 62 percent of the taxes they paid. That is to say, for every dollar collected under our simulated version of the window tax, the tax imposed an additional burden or cost of 62 cents on these households. The excess burden, not surprisingly, is particularly large for households that chose 9 windows. One criterion economists use to evaluate a tax is excess burden relative to taxes paid. By this standard, a good tax is one that collects significant revenue buts leads to very small changes in decisions. Consumers who purchased 9 windows are thus the worst possible case. Those consumers paid no tax; so, for them, the entire burden of the tax is excess burden.

For our entire sample of 1,000 simulated households, the excess burden as a fraction of taxes paid is about 14 percent. Thus for each tax dollar raised by the window tax, our simulation suggests an additional cost of 14 cents to taxpayers as a result of their distorted choices.

Some Concluding Remarks

The window tax represents a very clear, transparent case of excess burden—a tax that placed heavy costs on taxpayers in addition to their tax liabilities resulting from tax-avoiding adjustments in behavior. But, as mentioned early on, modern property taxes also create an excess burden, although the consequences are less dramatic than in the case of the window tax.

In designing a tax system, it is important to consider this issue. The ideal, in principle, is a neutral tax that raises the desired revenues but doesn’t distort taxpayer behavior so as to create additional burdens. Such a tax is a pure land-value tax levied on the site value of the land—that is, its value with no improvements. Thus, the assessed value of the land (and hence the tax liability of the owner) is completely independent of any decisions made by the owner of the land parcel. Unlike the window tax, which provides a compelling example of the additional costs that arise when property tax liabilities depend on the behavior of the property owner, a land-value tax creates no incentives for tax-avoiding behavior.

About the Authors

Wallace E. Oates is Distinguished University Professor of Economics, Emeritus, University of Maryland, and University Fellow at Resources for the Future.

Robert M. Schwab is a professor of economics at the University of Maryland.

Resources

Binney, J. E. D. 1958. British Public Finance and Administration, 1774–92. Oxford: Clarendon Press.

Blinder, Alan S., and Harvey S. Rosen. 1985. “Notches.” American Economic Review 78 (September): 736–747.

Dickens, Charles. 1850. Household Words. Vol. 1. London: Bradbury and Evans.

Douglas, Roy. 1999. Taxation in Britain since 1660. London: MacMillan.

Dowell, Stephen. 1884. A History of Taxation and Taxes in England from the Earliest Times to the Present Day. Vols. 2 and 3. London: Frank Cass & Co.

Fielding, Henry. 1975. The History of Tom Jones, A Foundling. Wesley University Press.

George, M. Dorothy. 1926. London Life in the XVIIIth century. New York: Alfred A. Knopf.

Glantz, Andrew E. 2008. “A Tax on Light and Air: Impact of the Window Duty on Tax Administration and Architecture.” Penn History Review 1696–1851 15 (2): 1–23.

Guthrie, Thomas. 1867. “How to Get Rid of an Enemy.” The Sunday Magazine.

HCD (House of Commons Debates). 5 May 1819. Vol. 40 cc 126–148. “Motion for the Repeal of the Window Tax in Ireland.”

HCD. 24 February 1848. Vol. 96 cc 1259–1297. “Lowest Classes Under Assessment.”

HCD. 9 April 1850. Vol. 110 cc 68–99. “Window Tax.”

Kennedy, William. 1913. English Taxation, 1640–1799. London: G. Bell and Sons, Ltd.

Marshall, Alfred. 1948. Principles of Economics, 8th edition. New York: Macmillan.

Neary, J. Peter, and Kevin S. W. Roberts. 1980. “The Theory of Household Behaviour under Rationing.” European Economic Review 13 (January): 25–42.

Sallee, James M., and Joel Slemrod. “Car Notches: Strategic Automaker Responses to Fuel Economy Policy,” NBER Working Paper #16604, 2010. http://www.nber.org/papers/w16604.pdf.

Sinclair, Sir John. 1804. The History of the Public Revenue of the British Empire. London: Strahan and Preston.

Slemrod, Joel. 2010. “Buenas Notches: Lines and Notches in Tax System Design.” Unpublished working paper. http://webuser.bus.umich.edu/jslemrod/pdf/Buenas%20Notches%20090210.pdf.

Smith, Adam. 1937. The Wealth of Nations. New York: Random House.

Walpole, Spencer. 1912. A History of England from the Conclusion of the Great War in 1815. Vol. 5. London: Longmans, Green, and Company.

Weitzman, Martin L. “Prices and Quantities.” Review of Economic Studies 41: 477–491.

Spatial segregation is a feature of metropolises from San Diego to Boston, from Santiago to Cape Town, from Belfast to Bangalore. In some places the segregation is associated primarily with racial groups, in other places, ethnicity or religion, while in still other places, income status. In our experiences with the Americas, we find that international comparative research allows researchers and policy analysts to see both unique and shared characteristics in sharp relief. For example, in Latin America, the public debate around urban spatial segregation typically focuses on socioeconomic issues, whereas in the U.S. and many developed countries the debate centers more on racial or ethnic disparities.

Residential segregation also has different meanings and consequences depending on the specific form and structure of the metropolis, as well as the cultural and historical context. In North America, social and ethnic minorities tend to be segregated in less desirable inner-city locales while the upper- and middle-class majority disperses into small, socially homogeneous urban neighborhoods or suburbs across the metropolis. By contrast, in Latin American cities it is the elite minority that tends to concentrate in one area of the city.

The Forces

The forces that contribute to spatial segregation are many and varied. The apartheid laws of South Africa were one extreme case of large-scale, government-sanctioned spatial segregation. Other cases have garnered less international attention, such as the Brazilian government’s destruction of favelas in the 1960s, when the poor inhabitants were removed to other segregated locations. On a smaller scale, in Santiago, Chile, between 1979 and 1985 during the Pinochet regime, more than 2,000 low-income families were evicted from high- and middle-income residential areas with the stated objective of creating neighborhoods that were uniform by socioeconomic group.

While government evictions and legal frameworks are explicit mechanisms for creating urban spatial segregation, more subtle mechanisms also have been used to create or enforce spatial segregation. In Colombia, the contribución de valorización (a kind of betterment charge) was imposed on inhabitants of an informal settlement in Bogotá located on the edge of a new circumferential highway. Officials knew the charge was higher than most inhabitants could afford to pay and would likely lead them to “choose” relocation. By setting land use standards that the poor could not meet, the government virtually forced them toward the informal, peripheral areas. The U.S. is no stranger to such mechanisms to create segregated housing markets. For example, some real estate agents shun racial and ethnic minorities or persons from lower social classes who do not fit their target markets, and many small landlords rely on informal networks to find the kinds of tenants they prefer.

Voluntary segregation has become a new force, with the proliferation of gated communities in both northern and southern hemispheres. This trend seems to have several motivations, including both supply and demand factors. On the demand side, residents might be attracted to the perception of security or a new lifestyle. On the supply side, builders and developers find tremendous profitability with the large-scale internalization of externalities in these highly controlled developments.

The complexity that stems from the combination of coercive and voluntary segregation leads us to a deeper question: What is the relationship between social differences and spatial segregation? It is commonly assumed that the former are “reflected” in the latter. Social groups sometimes resort to segregation in order to fortify their weak or blurred identity, as in the case of emerging middle-income groups or immigrant communities in search of social recognition. To a great extent, the post-war suburbanization process in U.S. cities can be interpreted as a means of homogeneous sorting to strengthen social identity.

The Consequences

In the U.S., spatial segregation is a serious policy issue because of the complex interactions between land and housing markets on the one hand, and their connection to local revenues and the distribution and quality of local services on the other hand. Disparities in school quality may be one of the more dramatic examples of the variations in public services between places.

The combination of residential segregation by class and by racial or ethnic groups and the systematically uneven spatial distribution of quality schools results in poor inner-city enclaves where children attend substandard schools, which in turn limits their life chances. Other services, such as access to transportation and health care, also vary spatially, as do such measurable factors as air quality and neighborhood infrastructure.

In other countries, spatial segregation of the poor often occurs within informal settlements. These areas once were viewed as aberrations, but scholars increasingly understand informality as a result of the normal functioning of land and housing markets, not as part of a duality of formal versus informal economies. In this view, illegal, irregular, informal, or clandestine activities to access and occupy urban land are the way that the market provides housing for poor people. Nevertheless, these arrangements are not always “chosen” for their low price or relative conveniences, but rather because they are one of an extremely limited set of choices available to the poor.

Traditional segregation patterns in Latin American cities are changing due to the proliferation of new gated communities for expanding high- and middle-income groups and the emergence of shopping centers and office complexes in more “modern” areas beyond the former urban enclaves. In São Paulo, Santiago, Buenos Aires and Mexico City, to name a few of the biggest and most dynamic cities, these developments are appearing even next to lower-income areas. Segregation of uses and access is becoming more intense, making the growing social inequalities of the last decades more apparent. Yet, at the same time, these changes in the patterns of segregation are reducing physical distances among socioeconomic groups, and are bringing “modern” commercial facilities and improved public spaces closer to the poor.

The consequences of segregation are probably changing due to this reduction in its geographical scale. Some of the negative effects of large-scale segregation of the poor (i.e., their agglomeration in the periphery of the cities) could be fading in this new, more diverse urban landscape. Recent empirical studies carried out in Santiago support this contention.

Policy Responses

Spatial segregation is both a reflection of the existing social structure and a mechanism to enforce that structure, thus raising the question of how and when segregation should be addressed. Is the problem in the U.S. context that poor minority children live among others of the same income and racial group, or is it that by living in poor, segregated areas the children’s life opportunities are limited because of their inaccessibility to good schools? Is the answer to improve the schools, to integrate the neighborhood, or to initiate a combination of these and other responses? In the context of developing countries, is the problem of informal settlements that they are often dangerous (due to risky environmental conditions or street violence) or that the residents are isolated from good jobs, transit and other services? Is the answer to reduce or eliminate the danger, to improve transit, to bring jobs to the neighborhood, or to try all of these programs?

We need to improve our understanding of the social problems in these segregated areas in order to adequately design and implement appropriate policy responses that are necessarily multidimensional. Should change come in the form of corrective programs (e.g., regularization or upgrading of informal settlements) or more fundamental policies that would involve the massive provision of serviced land at affordable prices? One “corrective” option contrasts the informalization of formal arrangements (e.g., deregulation) with the formalization of the informal (e.g., the redefinition of zoning codes or the regularization of alternative tenure systems).

A more fundamental solution would be either piecemeal implementation or mandatory designation of social housing developments in high-income areas. A different sort of tool is to open up decision making around the allocation of public investment, as in the successful orçamento participativo process used in the municipality of Porto Alegre, Brazil, where the budget is determined with extensive public participation. Other responses could address the radical upgrading of existing low-income peripheral settlements, more extensive use of linkage fees, or the elimination of land markets altogether, as was done in Cuba. However, we need more information regarding the efficacy of these varied programs and tools, and careful analysis of the necessary conditions to increase the chances of success.

Globalization has fostered the movement of labor and capital, bringing both the positive and negative experiences of developed and developing countries closer together. Immigrants to the U.S., particularly undocumented ones, tend to settle in urban enclaves, but their lack of legal status reverberates beyond those settlements. Access to jobs and credit is limited, which in turn restricts the immigrants’ mobility and reinforces existing spatial segregation.

On the other hand, as U.S. financial and real estate corporations extend their operations overseas, they introduce U.S. protocols, conventions, expectations and ways of operating. The exportation of such U.S. norms to developing countries may lead to new patterns of geographic discrimination (e.g., redlining) by race and/or ethnic group, where such practices previously were less explicit.

We know from past research and experience that segregation can increase land revenues for developers and landowners. We also know that the profitability of housing development is dependent upon public investments in roads, facilities and services. At the same time, we acknowledge that segregation has both negative and positive impacts on city life, ranging from social exclusion that makes life harder for the poor to strengthened social and cultural identities that contribute to the city’s diversity and vitality.

The face of segregation varies both within and between metropolises. However, comparative international work has demonstrated that there are important trends of convergence between U.S. and Latin American cities. We have much more to understand regarding the effect of interacting land and housing markets and the regulatory structure on spatial segregation and the life chances of urban residents.

Rosalind Greenstein is senior fellow and director of the Lincoln Institute’s Program on Land Markets. Francisco Sabatini is assistant professor in the Institute of Urban Studies at the Catholic University of Chile in Santiago. Martim Smolka is senior fellow and director of the Lincoln Institute’s Program in Latin America and the Caribbean.

The foreclosure crisis and its impact on the U.S. economy seem far from abating as mortgage delinquencies and foreclosure filings continue to climb. According to RealtyTrac, a total of 2.8 million properties had foreclosure filings during 2009, or one out of every 45 residences. That foreclosure rate was 21 percent higher than in 2008 and 120 percent higher than in 2007. Maintaining home ownership has proven to be a tenuous, if not impossible, proposition for many homeowners.

Some researchers, policy makers, and advocates are questioning whether conventional, market-oriented home ownership is the best form of housing for low-income households and communities. While others continue to extol the many benefits of home ownership, they question the way it is structured and suggest that alternative models of resale-restricted, owner-occupied housing may help low-income homeowners keep their homes more successfully.

Research on one of these alternative models, the community land trust (CLT), found delinquencies and foreclosures to be far lower among the owners of CLT homes than the owners of unrestricted, market-rate homes during the market downturn of 2007–2009. This article presents these findings and examines aspects of CLTs that may help to explain the sustainability and success of CLT home ownership.

Community Land Trusts

CLTs are nonprofit organizations that utilize public and private funds to provide affordable home ownership opportunities for low-income households (usually those with gross incomes less than 80 percent of the area median income). Traditionally, CLTs purchase and retain title to the land under detached houses, attached townhouses, or multi-unit condominiums. The land is leased to residents who hold a deed to their individual homes. Some CLTs use other legal mechanisms, including deed covenants, second mortgages, or cooperative housing models, to convey ownership and subsidize properties.

CLTs provide homeowners with pre-purchase and post-purchase stewardship services to protect them from high-cost or predatory mortgage lending. CLTs also intervene to cure delinquencies and prevent foreclosures. In exchange, homeowners accept limitations on the resale price and the equity they may remove from their homes. Through this arrangement, households unable to afford market-rate homes are able to realize most of the financial and social benefits of home ownership, while CLTs are able to maintain affordability of their homes for future buyers.

Reevaluating Low-Income and Minority Home Ownership

Cross-sectional investigations have found that home ownership is the most robust explanatory factor of wealth in low-income and minority households. Home equity made up 56 percent of the wealth in households within the bottom quintile on income in 2000 relative to 32 percent for all households (Herbert and Belsky 2008). Before the housing market crisis, home equity accounted for approximately 62 percent of wealth for African-Americans and 51 percent for Hispanics, but only 44 percent for whites (McCarthy, Van Zandt, and Rohe 2001).

The financial benefits of home ownership may only be realized if low-income households are able to enter and sustain it. Longer durations of tenure greatly increase the likelihood of financial returns. When studies have examined home ownership over time, they find that low-income households take longer to enter owner-occupied housing and are more likely to return to renting; indeed, roughly half of low-income households exit home ownership within five years of purchase (e.g., Reid 2005).

Risk factors associated with losing one’s home are more common among low-income and minority homeowners. They are more likely to obtain high-risk loans for purchase and refinance, and they are more vulnerable to trigger events, such as unemployment or health issues, which are associated with higher incidents of delinquencies and foreclosures (Immergluck 2009). Almost half of low-income households are severely cost-burdened by their housing expenses (Joint Center for Housing Studies 2008). Length of tenure, loan terms, affordability, and trigger events may impact sustaining home ownership and affect the likelihood that low-income and minority homeowners will accumulate wealth or debt.

Costs of Foreclosure to Communities

The costs of foreclosure extend well beyond the households that lose their homes, impacting the immediate neighborhood and surrounding municipality. Studies in Columbus (Ohio), Chicago, and New York City have shown that foreclosed properties significantly diminished nearby housing values, and that rates of depreciation were greater for lower-income than higher-income neighborhoods. Depreciation leaves remaining homeowners vulnerable to negative equity, default, and foreclosure. Foreclosures, which are associated with rises in vacant properties and crime, tend to cluster in low-income and minority neighborhoods (Immergluck 2009).

Foreclosures also impose costs on municipalities due to vacant property demolition, administrative fees, and outstanding or declining property taxes. Apgar and Duda (2005) modeled the costs of a foreclosure in Chicago and found that more than a dozen agencies could be involved in over two dozen activities, which were estimated to cost the city up to $34,199 per foreclosure. Moreno (1995) estimated the cost to Minneapolis and St. Paul for the foreclosure of houses with FHA mortgages and found that municipal losses were approximately $27,000 per foreclosure. Higher rates of delinquencies and foreclosure filings during 2009 portend continued losses for households, neighborhoods, and municipalities.

Overview of the CLT Study

In March 2010, the National Community Land Trust Network (the Network) designed and conducted the 2009 CLT Delinquency & Foreclosure Survey (Thaden 2010). All 229 CLTs in the Network’s database were invited to participate in the online survey, and 53 CLTs (23 percent) completed it. Eleven respondents did not have CLT homes with outstanding mortgages at the end of 2009, so they were not included in the final analysis. The remaining 42 CLTs in 22 states had 2,279 resale-restricted, owner-occupied homes in their portfolios, 2,173 of which had outstanding residential mortgages as of December 31, 2009. The median number of mortgaged homes for these CLTs was 30.

The primary purpose of the survey was to examine how many residential mortgages held by CLT homeowners (referred to as CLT loans) had been seriously delinquent, entered the foreclosure process, or completed the foreclosure process in 2009. Survey items were designed for comparison with results from the Network’s 2008 survey, as well as results from the 2008 and 2009 National Delinquency Surveys conducted by the Mortgage Bankers Association (MBA).

The Network’s survey replicated the definitions used by the MBA for loans that were (1) “In the Foreclosure Process,” which includes loans in the process of foreclosure regardless of the date the foreclosure procedure was initiated; and (2) “Seriously Delinquent,” which includes loans that were at least 90 days delinquent or in the process of foreclosure. The secondary purpose of the Network’s survey was to explore the practices and policies of CLTs that may help to explain the primary results.

Delinquencies, Foreclosures, and Cures

When comparing the performance of CLT loans to that of conventional mortgages for market-rate homes, it is important to emphasize that CLT loans are held by low-income households. MBA and Residential Mortgage-Backed Security (RMBS) loan samples are not limited to low-income borrowers. Considering that low-income homeowners in the market are more prone to delinquencies and foreclosures, the differential outcomes reported below may have been even greater if loans held by low-income borrowers could have been isolated for comparison in MBA and RMBS samples.

Serious Delinquencies and Foreclosure Filings in 2009

Figure 1 presents the percentages of CLT loans and MBA prime and subprime loans that were seriously delinquent or in the foreclosure process at the end of the fourth quarter of 2009. Only 0.56 percent of CLT mortgages were being foreclosed (12 out of 2,151 loans; CLT median = 0, range = 0–2), whereas the percentage of MBA loans in the foreclosure process was 3.31 percent for prime loans, 15.58 percent for subprime loans, 3.57 percent for FHA loans, and 2.46 percent for VA loans (MBA 2010). When all types of MBA loans were combined, the overall MBA percentage was 4.58 percent. Overall, MBA loans were 8.2 times more likely to be in the process of foreclosure than CLT mortgages.

On December 31, 2009, 1.62 percent of CLT mortgages were seriously delinquent (34 out of 2,099 loans; CLT median = 0, range = 0–6), while the MBA loan percentage was 7.01 percent for prime loans, 30.56 percent for subprime loans, 9.42 percent for FHA loans, and 5.42 percent for VA loans. A prime loan within the MBA sample was 4.3 times more likely to be seriously delinquent at the end of 2009 than a CLT mortgage.

2008 and 2009 Comparisons

The percentage of CLT mortgages in the foreclosure process at the end of 2008 was 0.52 percent (10 out of 1,930 loans), demonstrating a percentage point change of .04 over one year. For all MBA loans, the percentage in the foreclosure process at the end of 2008 was 3.30 percent, showing a percentage point increase of 1.28 by the end of 2009. The respective percentage point increases were 1.43 for prime loans, 1.87 for subprime loans, 1.14 for FHA loans, and 0.80 for VA loans.

The percentage of CLT mortgages that were seriously delinquent at the end of 2008 was 1.98 percent (36 out of 1,815 loans), demonstrating a percentage point decrease of -0.36 (figure 2). The percentage of MBA prime loans that were seriously delinquent at the end of 2008 was 3.74 percent, a percentage point increase of 3.27. The percentage point increases were 7.45 for subprime loans, 2.44 for FHA loans, and 1.30 for VA loans (MBA 2009).

In sum, the percentage of MBA loans that were in the foreclosure process or seriously delinquent increased from the end of 2008 to the end of 2009, while the percentages for CLT loans remained consistently lower.

The CLT Network’s surveys gathered additional information not collected by the MBA. During 2009, 0.42 percent of CLT loans completed foreclosure (9/2,160) compared to 0.26 percent during 2008 (5/1,928), which illustrates a percentage point change of 0.16. When homeowners are foreclosed upon, CLTs have a vested interest in recovering the property from the lender in order to minimize the loss of the public subsidy and preserve the affordability of the unit. No foreclosed CLT homes were lost from CLT portfolios during 2009.

2009 Cure Rates

The 2009 Network survey also gathered information on the number of serious delinquencies during the year and the total that were resolved. The percentage of CLT loans that had ever been seriously delinquent during 2009 was 2.80 percent (58/2,075). Respondents reported that 29 out of 57 were cured (51 percent).

CLTs have unique contractual rights to implement stewardship activities and intervene with homeowners and lenders in order to make mortgage payments current or preclude foreclosure completion. Respondents were asked to explain how they provided these cures, which included facilitating short-sales, offering financial counseling or referrals to foreclosure prevention programs, providing direct grants or loans to homeowners, arranging sales and purchases of a less expensive unit, and working with homeowners and lenders on permanent loan modifications.

Fitch Ratings, a global rating agency, reports cure rates for RMBS loans. They define cure as the percentage of delinquent loans returning to a current payment each month. The percentage of RMBS delinquent loans in August 2009 that had been cured was 6.6 percent for prime loans and 5.3 percent for subprime loans. Since CLTs define cures as resolving impractical financial situations for their homeowners, rather than solely as making mortgage payments current, RMBS and CLT rates are not comparable. However, these findings indicate that CLTs more often terminate serious delinquencies through a broader range of activities.

Stewardship Activities of CLTs

Intrinsic to the CLT model is a commitment to stewardship, which aims to promote positive outcomes and sustainable home ownership for residents long after they have purchased a CLT home. While stewardship is a core component of every CLT’s programming, its implementation can vary greatly. Therefore, the survey collected data on the prevalence and variety of stewardship activities in an effort to explain the low rates of delinquency and foreclosure among CLT homeowners.

The greater affordability and lower loan-to-value ratio found in CLT homes may explain part of the difference between CLT and MBA loans. However, stewardship is almost certainly a contributing factor. Without the protective shield of the CLT, low-income CLT homeowners would be prey to the same economic pressures and circumstantial factors that threaten home ownership sustainability among their market-rate counterparts. Survey results indicate that CLTs are implementing stewardship policies and practices in the following five areas, which may help to explain why CLT loans have outperformed the market.

Pre-Purchase Education

Homebuyer education enables sound mortgage decisions and prepares individuals for the responsibilities of home ownership. Because owning a CLT home entails unique contractual rights, responsibilities, and resale restrictions, supplemental education is offered frequently. The study found that 85 percent of CLTs required general homebuyer education and 95 percent required CLT-specific education prior to purchase.

Pre- and Post-Purchase Stewardship

Pre-purchase stewardship also included referrals to CLT-trained lawyers and lenders, an activity reported by 83 percent of the respondents. A one-on-one meeting of prospective homebuyers with a financial counselor was required by 71 percent of CLTs. Approximately 50 percent of all CLTs offered such post-purchase stewardship services as ongoing financial literacy training; staff outreach to homeowners; formal communications to remind them of policies; referrals for contractors or repairs; and mandatory meetings with defaulting homeowners.

Prevention of High-Risk Loans

Research finds that subprime and predatory lending have occurred more often during acquisition of refinance and home equity loans than during purchase (Immergluck 2009). Eighty-three percent of CLTs required their homeowners to seek the CLT’s permission to refinance or take out home equity loans, thus ensuring that the loan terms will not compromise affordability or home ownership sustainability and that homeowners comprehend the loan’s impact on their equity.

Detection of Delinquencies

CLTs also adopted policies and practices to monitor and detect homeowners who may be headed toward serious delinquency. Most CLTs charge a monthly ground lease fee (typically $10–50) to offset their costs. According to 90 percent of respondents, late payment of these fees was used as an indicator that a homeowner may be late paying their mortgage. Further, 69 percent of CLTs reported that they detected delinquencies through informal interactions with homeowners, and 55 percent of CLTs reported that 80–100 percent of seriously delinquent homeowners contacted the CLT on their own volition. Close to 50 percent of CLTs reported that lenders were legally obligated to notify the CLT of delinquencies or foreclosure proceedings.

Intervention with Delinquent Homeowners

CLTs reported an array of interventions with homeowners at risk of foreclosure. Two activities that are instrumental components of federally sanctioned foreclosure prevention programs were also implemented by CLTs: 71 percent contacted lenders as soon as they became aware of delinquencies; and 57 percent provided homeowners with direct financial counseling. Over half of CLTs reported other activities that enable residents to keep their homes, such as providing rescue funds for outstanding mortgage payments. For homeowners unable to keep their homes, 49 percent of CLTs reported activities to prevent completed foreclosures, such as facilitating sales to low-income buyers or directly purchasing the homes.

Discussion and Conclusions

The prevalence of stewardship activities among the nation’s CLTs may help to explain why CLT loans are outperforming most market-rate loans in terms of delinquencies and foreclosures. It may also explain the high cure rates among CLT mortgages that become seriously delinquent, as CLTs intervene to arrest the slide toward foreclosure. In this respect, CLT home ownership appears more sustainable than private market options for low-income homeowners, suggesting that CLTs may provide a less speculative and more reliable avenue to wealth accumulation for low-income and minority homeowners.

Low-income households can only enjoy the economic benefits of home ownership if they are able to remain homeowners for a number of years. If they lose their homes to foreclosure—or simply return to renting after discovering that the costs and burdens of home ownership are too difficult—low-income households cannot build wealth. The findings of the Network’s survey make clear, however, that few CLT homeowners are losing their homes to foreclosure. Moreover, other research on CLT homeowners has found that they far exceed the 50 percent home ownership retention rate reported among conventional market, low-income homeowners. Preliminary results from a study by The Urban Institute, which includes three CLTs, found that over 91 percent of low-income households remained homeowners five years after buying a CLT home. They either continued to occupy their CLT home or resold it to purchase a market-rate home (Temkin, Theodos, and Price, forthcoming).

CLT home ownership not only lessens foreclosures and increases the chances of success among the population most at-risk of losing their homes, but it also indirectly prevents costs of foreclosure for neighbors, municipalities, and lenders. Such exemplary performance implies that greater investment in this model, including its stewardship activities, is both warranted and overdue.

Only one-third of CLTs reported receiving any funding for foreclosure prevention activities during 2009, while many reported increasing stewardship activities to buffer homeowners from the economic downturn and foreclosure crisis. The study also found that only one-third of CLTs received funding to create new CLT units from foreclosed and vacant housing stocks during 2009. Hence, CLTs are not adequately resourced to create home ownership opportunities from the crisis, which could help to preclude negative outcomes associated with unsustainable home ownership in the future.

Jacobus and Abromowitz (2010) call for a reevaluation of the ways that the federal government encourages home ownership. They recommend targeting existing resources to purchase-subsidy programs like CLTs in order to more efficiently use public dollars and expand and maintain home ownership opportunities. This study provides further support for that policy recommendation.

About the Authors

Emily Thaden, M.S., is a doctoral candidate in the Community Research and Action Program at Vanderbilt University and is employed as the Shared Equity Development Specialist at The Housing Fund in Nashville, Tennessee.

Greg Rosenberg, J.D., is director of the CLT Academy of the National Community Land Trust Network and the former executive director of the Madison Area Community Land Trust. He was a contributing author to The Community Land Trust Reader (Lincoln Institute, 2010), and is a graduate of the University of Wisconsin Law School.

References

Apgar, W. C., and M. Duda. 2005. Collateral damage: The municipal impact of today’s mortgage foreclosure boom. Minneapolis, MN: Homeownership Preservation Foundation.

Herbert, C.E., and E.S. Belsky. 2008. The homeownership experience of low-income and minority households: A review and synthesis of the literature. Cityscape: A Journal of Policy Development and Research, 10(2): 5–60.

Immergluck, D. 2009. Foreclosed: High-risk lending, deregulation, and the undermining of America’s mortgage market. Ithaca, NY: Cornell University Press.

Jacobus, R., and D.M. Abromowitz. 2010. A path to homeownership: Building a more sustainable strategy for expanding homeownership. Washington, DC: Center for American Progress (February).

Joint Center for Housing Studies. 2008. State of the nation’s housing 2008. Cambridge, MA: Harvard University, Joint Center for Housing Studies.

McCarthy, G.W., S. Van Zandt, and W.M. Rohe. 2001. The economic benefits and costs of homeownership: A critical assessment of the literature (Working Paper No. 01-02). Washington, DC: Research Institute for Housing America.

Moreno, A. 1995. The cost-effectiveness of mortgage foreclosure prevention. Minneapolis, MN: Family Housing Fund.

Mortgage Bankers Association. 2009. Delinquencies continue to climb in latest MBA National Delinquency Survey. Washington, DC (March 5).

–––—. 2010. Delinquencies, foreclosure starts fall in latest MBA National Delinquency Survey. Washington, DC (February 19).

Reid, C.K. 2005. Achieving the American dream? A longitudinal analysis of the homeownership experiences of low-income households (CSD Working Paper 05-20). St. Louis, MO: Washington University, Center for Social Development.

Temkin, K., B. Theodos, and D. Price. Forthcoming. Balancing affordability and opportunity: An evaluation of affordable homeownership programs with long-term affordability controls. Washington, DC: The Urban Institute.

Thaden, E. 2010. Outperforming the market: Making sense of the low rates of delinquencies and foreclosures in community land trusts. Portland, OR: National Community Land Trust Network. (This report is also available as a working paper on the Lincoln Institute Web site.)

One of the longest standing debates in community economic development is between “place-based” and “people-based” approaches to combating poverty, housing affordability, chronic unemployment, and community decline. Should help go to distressed places or distressed people?