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The creation of economic and institutional conditions for efficient urban environmental management, which are also committed to the consolidation of democracy, the promotion of social justice and the eradication of urban poverty, constitutes one of the major challenges for leading political and social agents in this century. This challenge to promote sociospatial inclusion is even more significant in developing and transitional countries, given the complexity of problems resulting from intensive urbanization, environmental degradation, increasing socioeconomic inequalities and spatial segregation. The debate on the legal-political conditions of urban environmental development and management deserves special attention.
The discussion on law and illegality in the context of urban development has gathered momentum in recent years, especially since the Habitat Agenda1 stressed the central importance of urban law. At workshops promoted by the International Research Group on Law and Urban Space (IRGLUS) over the last eight years, researchers have argued for the need to undertake a critical analysis of the role played by legal provisions and institutions in the process of urbanization. The UNCHS2 Global Campaign for Good Urban Governance suggests that the promotion of law reform has been viewed by national and international organizations as one of the main conditions for changing the exclusionary nature of urban development in developing and transitional countries, and for the effective confrontation of growing urban illegality.
Illegal practices have taken many different forms, especially in the expanding informal economy. An increasing number of people have had to step outside the law to gain access to urban land and housing, and they have to live without proper security of tenure in very precarious conditions, usually in peripheral areas. This process has many serious implications-social, political, economic and environmental-and needs to be confronted by both governments and society. It is widely acknowledged that urban illegality has to be understood not only in terms of the dynamics of political systems and land markets, but also the nature of the legal order, particularly the definition of urban real property rights. The promotion of urban reform depends largely on a comprehensive reform of the legal order affecting the regulation of land property rights and the overall process of urban land development, policy-making and management. Special emphasis has been placed on land tenure regularization policies aimed at promoting the sociospatial integration of the urban poor, such as those proposed by the UNCHS Global Campaign for Secure Tenure.
Conservative versus Innovative Approaches
This complex legal-political debate has serious socioeconomic implications at the global level, and it has to be viewed against three conservative though influential and intertwined political-ideological approaches to law and legal regulation.
First, discussion of the role of law in urban development cannot be reduced to the simplistic terms proposed by those who suggest, despite historical evidence, that capitalism per se can distribute wealth widely and who defend a “hands-off” approach to state regulation aimed to control urban development. Whereas globalization is undoubtedly irreversible and in some ways independent of government action, there is no historical justification for the neoliberal ideology which assumes that by maximizing growth and wealth the free market also optimizes the distribution of that increment. (Hobsbawn 2000).
Several indicators of growing social poverty, especially those closely related to the precarious conditions of access to land and housing in urban areas, demonstrate that, even if the world has become wealthier as a result of global economic and financial growth, the regional and social distribution of this newly acquired wealth has been far from optimal. Moreover, the successful industrial development of many countries (e.g., the U.S., Germany, or even Brazil and Mexico) was achieved by adopting regulation measures and by not accepting unreservedly the logic of the free market. Perhaps more than ever, there is a fundamental role for redefined state action and economic regulation in developing and transitional countries, especially regarding the promotion of urban development, land reform, land use control and city management. The central role of law in this process cannot be dismissed.
Second, the impact of economic and financial globalization on the development of land markets has put pressure on developing and transitional countries to reform their national land laws and homogenize their legal systems to facilitate the operation of land markets internationally. This emphasis on a globalized, market-oriented land law reform, with the resulting “‘Americanization’ of commercial laws and the growth of global Anglo-American law firms,” is based on an approach to land “purely as an economic asset which should be made available to anyone who can use it to its highest and best economic use.” This view aims to facilitate foreign investment in land rather than recognize that there is “a social role for land in society” and that land is a “part of the social patrimony of the state” (McAuslan 2000).
A third and increasingly influential approach has been largely, and sometime loosely, based on the work of the economist Hernando de Soto. He defends the notion that global poverty can be solved by linking the growing informal “extra-legal” economy to the formal economy, particularly in urban areas. In this view, small informal businesses and precarious shanty homes are essentially economic assets, “dead capital” which should be revived by the official legal system so people could have access to formal credit, invest in their homes and businesses, and thus reinvigorate the urban economy as a whole. Rather than questioning the nature of the legal system that generated urban illegality in the first place, the full (and frequently unqualified) legalization of informal businesses and the recognition of individual freehold property titles for urban dwellers in informal settlements have been proposed in several countries as the “radical” way to transform urban economies.
Contrary to these conservative approaches, several recent studies have argued that, in the absence of a coherent, well-structured and progressive urban agenda, the approach of legal (neo)liberalism will only aggravate the already serious problem of sociospatial exclusion. However, policy makers and public agencies should become aware of the wide, and often perverse, implications of their proposals, especially those concerning the legalization of informal settlements. The long claimed recognition of the state’s responsibility for the provision of social housing rights cannot be reduced to simply the recognition of property rights. The legalization of informal activities, particularly through the attribution of individual property titles, does not necessarily entail sociospatial integration.
Unless tenure legalization policies are formulated within the scope of comprehensive socioeconomic policies and are assimilated into a broader strategy of urban management, they can have negative effects (Alfonsin 2001). These consequences can include bringing unintended financial burdens to the urban poor; having little impact on alleviating urban poverty; and, most important, directly reinforcing the overall disposition of political and economic power that has traditionally caused sociospatial exclusion. New policies need to reconcile four major factors:
The search for innovative legal-political approaches to tenure for the urban poor includes reconciling the promotion of individual tenure with the recognition of social housing rights; incorporating a long-neglected gender dimension; and attempting to minimize impacts on the land market so the benefits of public investment are “captured” by the poor rather than by private land subdividers. Pursuit of these goals is of utmost importance within the context of a broader, inclusionary urban reform strategy (Payne forthcoming). Several cities, such as Porto Alegre, Mexico City and Caracas, have attempted to operationalize this progressive urban agenda by reforming their traditional legal system. Significant developments to democratize access to land and property have included less exclusive urban norms and regulations, special residential zoning for the urban poor, and changes in the nature of fiscal land value capture mechanisms to make them less regressive.
Widening the Debate
In the context of this lively debate on urban law, the Lincoln Institute supported three recent international conferences:
Law in Urban Governance
Given the relatively new emphasis on reconciling urban studies and legal studies, the legal dimension of the urban development process still needs to be made more explicitly the focus of research. This requires a more consistent approach to language so key concepts, such as property rights, can be adequately discussed in both political and legal terms. Most of the papers presented at this IRGLUS conference focused on land regularization. While regularization has become the most frequent policy response to the general problem of illegal settlement, the term is used in a variety of ways, each with different meanings, by different agencies and researchers. The implementation of the physical dimension of regularization policies entails upgrading infrastructure and introducing services. It also highlights the need to be culturally sensitive. For example, regularization policies to provide security of tenure require greater attention to the gender implications of the process.
Participants also discussed the impacts of regularization policies on both formal and informal land market. Regularization was seen by some as the “marketization” of processes operating in erstwhile illegal settlements. One area of concern was the possibility of “gentrification,” which in this case means not the rehabilitation and changed use of buildings but the process of middle-income groups “raiding” newly regularized settlements for residential or other purposes and displacing the original inhabitants. Clearly, a broad range of economic and political issues needs to be addressed when defining regularization policies. In particular, the residents of illegal settlements need to be included in the economic and political life of the city to avoid the dangers of increased socioeconomic segregation.
Responding successfully to the complex problems of illegal settlement is difficult, and particular solutions cannot always be replicated in other places. Ultimately successful regularization is dependent on government and requires costly programs and legal reform. However, the gap between the questions raised and actual practice in the field is significant. Because of the pressing need to “get ahead” of the process of illegal settlement, public agencies are concentrating on cure not prevention.
How do local governments halt the process of illegal settlement? By working on more effective housing and land delivery systems. Conference participants defended the legitimacy of tenure programs, pragmatically in some cases, or as a fundamental right in others. Given the “top-down” approach frequently given to this issue, the discussion on empowerment needs to be widened so the voice of the urban poor can emerge.
The UNCHS/ECLAC Conference
Latin America was the only region to draw up a plan of action for Habitat II-an indication that, despite the existence of fundamental linguistic, historical and cultural differences in the region, there is a common agenda that should mobilize collaboration. The region’s urban structure is undergoing significant transformation as a result of several combined processes:
All such problems have worsened because of expanding economic globalization, inappropriate liberalization policies and largely unregulated privatization schemes. Despite its rapid integration into the growing global market, Latin America has seen social poverty escalate in the last decade. World Bank projections suggest that if this picture remains unchallenged 55 million Latin Americans may be living on less than US$1 a day in the next decade.
The Santiago Declaration resulting from this conference clarified the goal of an urban environmental agenda for political-institutional dialogue and joint action. The focus is to create the conditions needed to overcome political governance obstacles that still challenge the efforts made over the last two decades to promote economic reforms and democratization in the region. To develop a more competitive and efficient urban structure, such a regional action plan should:
An urgent need is to provide better and more accessible housing conditions for the urban poor, as part of a broader urban reform strategy. Since public investment in housing in much of Latin America has decreased recently, the provision of new housing units, improvements to the existing housing stock and the regularization of informal settlements cannot be postponed any longer.
The Santiago Declaration also advanced a number of proposals, including new regulation frameworks for urban and housing policies; territorial organization policies and land use control mechanisms; and public policies for social integration and gender equity. However, it failed to confront the fact that many of the region’s social, urban and environmental problems have been caused by the conservative, elitist and largely obsolete national legal systems still in force in many countries. Any proposed new balance between states, markets and citizens to support the process of urban reform requires not only economic and political-institutional changes but a comprehensive legal reform as well, especially the legal-political approach to property rights.
Brazilian Urban Law Conference
Brazil’s 1988 Constitution introduced a ground-breaking chapter on urban policy by consolidating the notion of the “social function of property and of the city” as the main framework for Brazilian urban law. Although previous Brazilian constitutions since 1934 nominally stated that the recognition of individual property rights was conditioned to the fulfillment of a “social function,” until 1988 this principle was not clearly defined or made operational with enforcement mechanisms. In short, the 1988 Constitution recognizes individual property rights in urban areas only if the use and development of land and property meets the socially oriented and environmentally sound provisions of urban legislation, especially master plans formulated at the local level. As a result, countless urban and environmental laws have been enacted at the municipal level to support a wide range of progressive urban policies and management strategies.
Some of the most interesting international experiences in urban management are taking place in Brazil, such as the participatory budgeting process which has been adopted in several cities (Goldsmith and Vainer 2001). The imminent approval of National Urban Development Law (the so-called “City Statute”) should help consolidate the new constitutional paradigm for urban planning and management, especially by regulating constitutional enforcement mechanisms such as mandatory edification, transfer of development rights, expropriation through progressive taxation and special usucapiao (adverse possession) rights.
This change in the legal paradigm is of utmost importance. The incipient tradition of urban legal studies in Brazil tends to be essentially legalistic, but it reinforces traditional notions of individual property rights found in the long-standing 1916 Civil Code. This obsolete Code views land and property rights almost exclusively in terms of the economic possibilities granted to individual owners, allowing little room for socially oriented state intervention aimed at reconciling different interests over the use of land and property. Just as important as enacting new laws is the need to consolidate the conceptual framework proposed by the 1988 Constitution, and thus replace the individualistic provisions of the Civil Code, which still provide the basis for conservative judicial interpretations on land development. Much of the ideological resistance to progressive urban policies held by large conservative sectors of Brazilian society stems from the Code, which does not address the role of law and illegality in the process of urban development and management.
The papers presented at this conference explored the legal, political and institutional possibilities created by the new constitutional framework for state and social action in the process of urban development and land use control. Participants emphasized that the discussion of laws, legal institutions and judicial decisions has to be supported by an understanding of the nature of the law-making process, the conditions for law enforcement, and the dynamics of the process of social production of urban illegality.
Participants also remarked that if the legal treatment of property rights is to be taken out of the narrow context of civil law so it can be interpreted from the more progressive criteria of redefined public urban law, then the possibilities offered by administrative law in Brazil are not satisfactory either. The limited and formalistic administrative provisions now in force do not have enough flexibility and scope to deal with and provide legal security to the complex and rapidly changing political-institutional relations at various levels-inside the state, among governmental levels, between state and society, and inside society. New urban management strategies are based on ideas such as planning gains, public-private partnerships, so-called “urban” and “linkage” operations, privatization and public service subcontracting, and participatory budgeting, but they lack full support in the legal system. Furthermore, the new constitutional basis of Brazilian urban law still needs to be consolidated as the main legal framework for urban management.
Conclusion
Many important questions about law and urban illegality remain unanswered, and much more work, research and discussion needs to be undertaken before they can be properly answered. However, sometimes formulating the right questions is as important as providing the right answers. Thus, the discussion of the legal dimension of the urban development and management process will continue to explore questions and answers in the regional context of Latin America and internationally.
Notes
1) Habitat Agenda – the global plan of action adopted by the international community at the Habitat II Conference in Istanbul, Turkey, in June 1996
2) UNCHS: United Nations Centre for Human Settlements (Habitat). See www.unchs.org/govern for information on the UNCHS Global Campaign on Good Urban Governance and www.unchs.org/tenure for information on the UNCHS Global Campaign for Secure Tenure.
References
Alfonsin, Betania de Moraes. 2001. “Politicas de regularizacao fundiaria: justificacao, impactos e sustentabilidade”, in Fernandes, Edesio (org) Direito Urbanistico e Politica Urbana no Brasil. Belo Horizonte: Del Rey.
de Soto, Hernando. 2000. The Mystery of Capital. London: Bantam Press.
1989. The Other Path. London: I.B.Tauris & Co.
Fernandes, Edesio. 1999. “Redefining property rights in the age of liberalization and privatization,” Land Lines (November) 11(6):4-5.
Goldsmith, William W., and Carlos B. Vainer. 2001. “Participatory budgeting and power politics in Porto Alegre.” Land Lines (January) 13(1):7-9.
Hobsbawn, Eric. 2000. The New Century. London: Abacus.
McAuslan, Patrick. 2000. “From Greenland’s icy mountains, from India’s coral strand: the globalisation of land markets and its impact on national land law.” Paper presented at the 1st Brazilian Urban Law Conference.
Payne, Geoffrey. Forthcoming. “Innovative approaches to tenure for the urban poor.” United Kingdom Department for International Development.
Edésio Fernandes is a Brazilian jurist and lecturer at DPU-Development Planning Unit of University College London. He is also the coordinator of IRGLUS-International Research Group on Law and Urban Space. He thanks the participants in the IRGLUS Cairo workshop who shared their notes, especially Ann Varley, Gareth A. Jones and Peter Marcuse.
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Una versión más actualizada de este artículo está disponible como parte del capítulo 4 del libro Perspectivas urbanas: Temas críticos en políticas de suelo de América Latina.
El 18 de julio de 1997 el Congreso de la República de Colombia aprobó una innovadora Ley de Desarrollo Territorial con objetivos ambiciosos que permiten que los municipios y distritos recuperen el valor de la tierra creado socialmente, es decir, las plusvalías. Específicamente, la Ley 388 establece que los ciudadanos tienen derecho a “participar” en el aumento del valor de la tierra cuando el marco legal que regula su uso aumenta el potencial de desarrollo. Se distinguen tres categorías de acción urbanística:
Para expresarlo de forma breve, la legislación estipula que el precio del metro cuadrado de tierra se calculará antes y después de cualquier acción urbanística. Cualquier municipio, por iniciativa del alcalde, podrá exigir su “participación” y así podrá recuperar entre el 30 y el 50 por ciento (según lo decida el mismo municipio) de la plusvalía generada. El precio se determina multiplicando los dos precios en metros cuadrados por el área de cada predio individual en cuestión y restando el precio antes de la acción urbanística del nuevo precio de referencia. Se fijó una tasa máxima del 50 por ciento para garantizar que siguiera habiendo motivación financiera para los promotores inmobiliarios.
Con esta legislación, Colombia ha dado fuerza de ley nacional a la premisa fundamental de los postulados de Henry George, quien sostenía que los ciudadanos tienen el derecho moral de recuperar el valor creado socialmente, como se evidencia en este caso con el aumento del precio de la tierra generado por las tres categorías de acción urbanística mencionadas anteriormente. Tal vez con la única excepción de Taiwán, pocos países, por no decir ningún otro, han intentado incorporar de manera tan directa los principios de George en una ley verdadera de carácter nacional.
Procedimientos para la aplicación
La legislación actual es apenas el primer paso. Según las prácticas colombianas, el Congreso actúa para trazar las políticas generales, pero su aplicación depende del seguimiento que se haga en el nivel ejecutivo nacional y en el nivel municipal. Para hacer el peritazgo crítico por metro cuadrado anterior y posterior a la acción urbanística con la mayor objetividad posible, una entidad independiente llamada Instituto Geográfico Agustín Codazzi llevará a cabo los avalúos de acuerdo a las directrices establecidas en la ley para cada una de las tres categorías.
Las tasas (denominadas participaciones en la ley) deben pagarse cuando el propietario solicita una licencia de urbanización o construcción, cuando cambia el uso del inmueble, cuando hay transferencia del dominio sobre el inmueble o cuando se adquieren títulos valores (representativos de los derechos adicionales de desarrollo y construcción). Estas tasas deben quedar asentadas en el registro de escrituras de propiedades para garantizar el cumplimiento del pago, y el dominio del inmueble no podrá ser transferido en dicho registro hasta que se paguen las tasas mediante alguna de estas modalidades de pago:
Es de esperar que la mayoría de los promotores privados preferirá asociarse con los municipios en lugar de pagar dinero efectivo. De hecho, la legislación prevé a manera de incentivo un descuento del 10 por ciento sobre el monto de la participación al utilizar la modalidad (6) y un descuento del 5 por ciento al utilizar las modalidades (2) y (4).
Los municipios y distritos deben destinar los recursos provenientes de las participaciones en las plusvalías para fines específicos:
Posibles repercusiones de la ley
Esta legislación aborda muchos aspectos de las políticas de la tierra que por mucho tiempo han sido de interés para el Instituto Lincoln. Martim Smolka, director del Programa para América Latina y el Caribe del Instituto y otras instituciones asociadas realizan seminarios y programas de capacitación con el propósito de compartir las experiencias adquiridas durante los procedimientos de implementación, posiblemente brindar asistencia en los proyectos piloto y seguir la evolución del experimento colombiano.
Uno de estos programas fue un taller de tres días impartido en marzo y copatrocinado por la Universidad Nacional de Colombia y la Escuela Superior de Administración Pública de Bogotá. El taller comprendía las observaciones formales e informales de un amplio espectro de partes interesadas en el tema, tanto de Colombia como de otros países. Puesto que es obvio que Colombia ha dado un paso atrevido y existen pocos precedentes que sirvan de orientación, los funcionarios públicos responsables de la implementación deben actuar de manera innovadora. En el taller se identificaba un número de posibles complicaciones que pueden presentarse a medida que avanza la implementación.
Aspectos constitucionales: La nueva ley se fundamenta inequívocamente en el artículo 82 de la Constitución de Colombia de 1991, que en sí mismo es un documento sumamente novedoso en muchos aspectos de la reforma de políticas de tierra urbanas. Para expresarlo de forma sencilla, el artículo 82 establece que cuando las acciones urbanísticas aumentan el potencial de desarrollo de la tierra, los ciudadanos tienen el derecho de participar en la plusvalía generada por tales acciones, de manera que se sufrague y distribuya equitativamente el costo del desarrollo urbano.
El debate legal y constitucional tiene dos facetas: 1) ¿Pueden los municipios actuar con base únicamente en la ley o deben esperar hasta que el gobierno nacional decrete “regulaciones” para luego ceñirse a ellas por completo? y 2) ¿debe la ley limitarse a establecer los principios generales comunes, dado que la Constitución de 1991 confiere la responsabilidad de los impuestos territoriales exclusivamente a los municipios?
Efectos prácticos de la sindéresis municipal: En el taller también se señaló que la naturaleza voluntaria de la ley puede tener consecuencias negativas y posiblemente imprevistas. Puesto que es el alcalde de cada municipio quien da inicio a la tasación de la “participación”, puede verse sometido a una presión considerable, tanto financiera como de otra índole. En áreas de rápido desarrollo, una tasa entre el 30 y el 50 por ciento del incremento en el valor de la propiedad puede ser una suma altísima. Un vocero, por ejemplo, aseguró que en Cali el 60 por ciento de las plusvalías generadas por las decisiones de planificación equivalían al monto total del presupuesto municipal. Por otra parte, la ley puede facilitar negociaciones y asociaciones de beneficio mutuo entre los municipios y los promotores inmobiliarios, las cuales no ocurren en este momento.
Cuidado del electorado: El ambiente político que produjo esta valiente legislación abarcaba casos escandalosos de fortunas repentinas que surgieron a raíz del cambio de zonificación en Bogotá y de la decisión de extender el perímetro urbano de Cali. En este último caso, se dijo que el precio de la tierra llegó a multiplicarse, ¡más de mil veces!
Además de la implementación inicial, se plantea la cuestión sempiterna de mantener un electorado que permita la efectiva implementación de dicha ley de cara a la resistencia poderosa y bien financiada que oponen los terratenientes y promotores inmobiliarios privados. Por otra parte, la habilidad de cualquier gobierno nacional que haya aprobado una ley de este tipo es de por sí un logro que despierta interés especial en aquellos que consideran la “recuperación de plusvalías” como un elemento esencial de la política de desarrollo urbano.
Objetividad de los avalúos: A pesar de los procedimientos tan específicos estipulados en la ley con la finalidad de lograr la mayor objetividad y transparencia posibles, no será fácil para el Instituto Codazzi cumplir a cabalidad con el avalúo previo y posterior a la acción urbanística dadas las limitaciones de tiempo que establece la ley. Más aún, las distintas alternativas de transferencia para el pago de las tasas con dinero efectivo, que seguramente gozarán de mayor popularidad, dependen de la apreciación local que se haga de lo que se considera “valor equivalente”. Varios oradores señalaron que este proceso podría ser una invitación a la corrupción.
Aspectos técnicos: Los oradores también hicieron mención a un número de problemas de avalúo técnico con las directrices establecidas en la ley. Por ejemplo, si la zonificación restrictiva hace que un propietario pierda valor de su propiedad, y esto a su vez aumenta el valor de un propietario adyacente, ¿qué disposición puede estipularse para proteger al primer propietario sin dejar de recuperar la plusvalía del segundo? Es más, puesto que el mercado anticipa la acción urbanística, ¿se reflejará ya en el avalúo “previo” el aumento de valor que provoca la probabilidad de la acción? O, si las regulaciones del uso de la tierra o de la construcción aumentan el valor de los propietarios de bajos ingresos con predios o inmuebles pequeños, es posible que éstos no cuenten con el dinero efectivo necesario para pagar las tasas por desarrollo, y a pequeña escala tampoco serían viables las otras modalidades de pago. Esto podría traer como resultado ventas forzadas o el desplazamiento de los habitantes pobres. Estos asuntos plantean un reto para la viabilidad de la política: ¿Es mejor seguir adelante y resolver las dificultades a medida que se presenten o intentar una modificación legislativa de los problemas técnicos antes de proseguir?
Efectos económicos: Aunque legalmente se describe como participación pública en el aumento del valor que generan las acciones urbanísticas, la legislación también puede ser considerada como una forma de impuesto a las ganancias de capital. ¿Con qué frecuencia se aplicará? ¿La implementación tenderá a bajar los precios de las tierras afectadas o será el consumidor final el que absorba los cambios en el valor? Si ocurre esto último, la ley podría tener un efecto negativo sobre las viviendas de precio asequible. Por esta razón el artículo 83 (4) exonera del cobro de la participación a los inmuebles destinados a “viviendas de interés social”, según la definición que de esto hace el gobierno nacional. ¿Se convertirá esto en una ruta de escape para la evasión masiva? Existe poca experiencia internacional para responder estas interrogantes.
Planes de ordenamiento territorial: La Ley 388 de 1997 también estipula que todos los municipios y distritos deben elaborar planes de ordenamiento y proporciona descripciones bastante detalladas de dichos planes en los artículos 9 al 35. Sin duda la planificación altera las expectativas de los propietarios y, por ende, el valor de los inmuebles. La interacción administrativa y económica del proceso de planificación de la ciudad y la recuperación de las plusvalías seguramente será un asunto complejo.
Conflictos en los objetivos: Como suele suceder con los instrumentos fiscales, los nuevos cambios buscan alcanzar varios objetivos que no siempre son compatibles: financiar un mejor desarrollo urbano, reducir la especulación inmobiliaria, darle mayor equidad y carácter progresivo a la tributación y cerrar algunas de las vías predilectas para la corrupción de los funcionarios municipales.
Aprendizaje mediante la innovación
Pese a estas inquietudes, Colombia continúa la tradición de ser una de las naciones más innovadoras del mundo en el campo de la planificación de desarrollo urbano, legislación y finanzas. Bogotá fue la primera ciudad importante del mundo en crear un distrito de zonificación especial que reconocía las realidades de las prácticas de vivienda para sectores de ingresos menores. Con el estímulo producido por las ideas y la influencia del fallecido Lachlin Currie, asesor económico del gobierno nacional durante aproximadamente 30 años, la ciudad utilizó distritos de avalúo especial (llamados contribuciones de valoración) para llevar a cabo una transformación física de envergadura en los años 1960. Las leyes colombianas sobre el desarrollo territorial de 1989 y 1991, modificadas y ampliadas por esta ley de 1997, se encuentran entre los enfoques más integrales de la planificación urbana desde la ley británica para el control del desarrollo urbano promulgada en 1947 (British Town and Country Planning Act of 1947). Asimismo, la constitución colombiana prácticamente es única en mencionar el derecho moral que tienen los ciudadanos a las plusvalías generadas por las acciones urbanísticas.
Como cabría esperarse, algunas de estas innovaciones a la larga no llenarán las expectativas iniciales. De hecho, algunos participantes del taller sostenían que los esfuerzos invertidos en la recuperación de la plusvalía podrían ser de mayor utilidad en el mejoramiento de la eficacia de los impuestos a la propiedad convencionales. Por otra parte, la nueva ley está abordando y resolviendo algunos problemas causados por legislaciones y políticas anteriores, y el país está aprendiendo de esta experiencia. La conclusión de los participantes en el taller fue que el proceso bien ha valido la pena y que la nueva ley debe entenderse y evaluarse comparándola con otros instrumentos para la recuperación de plusvalías establecidos anteriormente y la política fiscal en general.
William A. Doebele es profesor emérito de planificación urbana y diseño en la Escuela de Postrado en Diseño de la Universidad de Harvard y miembro asociado del cuerpo docente del Instituto Lincoln. La preparación de este artículo contó con las valiosas colaboraciones de Martim Smolka, miembro superior de los programas para América Latina, Fernando Rojas, docente invitado del Instituto, y Fernanda Furtado, asociada del cuerpo docente y de investigación del Instituto.
Una versión más actualizada de este artículo está disponible como parte del capítulo 4 del libro Perspectivas urbanas: Temas críticos en políticas de suelo de América Latina.
Las políticas públicas y acciones urbanísticas relacionadas con la vivienda de interés social en Colombia, como en otros países latinoamericanos, se han concentrado en los programas de regularización y mejoras, que en muchos casos están vinculados a la necesidad de fondos para infraestructura. Estos programas también se consideran como el único instrumento paliativo para abordar un problema que parece no tener solución –el desarrollo urbano ilegal (pirata)–, aunque han resultado ser bastante limitados y hasta contraproducentes. En este trabajo presentamos una política alternativa: la aplicación de principios e instrumentos para la gestión del suelo y la participación en plusvalías (participación pública en los incrementos del valor del suelo derivados de las acciones administrativas). Esta política fue establecida en la constitución colombiana y en la Ley 388 de 1997, que estipula que los ingresos provenientes de los incrementos del valor del suelo deben usarse en inversiones sociales.
Operación Urbanística Nuevo Usme es uno de los proyectos estratégicos promovidos por el alcalde de Bogotá Antanas Mockus para resolver el problema de los desarrollos urbanos ilegales. Ubicada en el sureste de la ciudad, la localidad de Usme es una de las áreas más vulnerables a las presiones de la urbanización ilegal; poderosos urbanizadores piratas han dispuesto más de la mitad de las 1.000 hectáreas ya designadas para uso urbano. El mecanismo predominante para este tipo de desarrollo informal, además de las invasiones y los asentamientos humanos ilegales, ha sido la venta de lotes por parte de urbanizadores que compran grandes extensiones de tierra a precio rural y las venden sin redes de servicios públicos ni infraestructura y sin aprobación de la administración pública. Entre las consecuencias negativas de este tipo de desarrollo encontramos precios del suelo relativamente altos y patrones desiguales de ocupación territorial.
Se espera que Usme se extienda e incorpore otras 600 hectáreas de cerros y terrenos ecológicamente frágiles –considerados en gran parte suelo rural–, según el plan maestro de la ciudad (Plan de Ordenamiento Territorial o POT) que fue aprobado en junio de 2000. El gobierno de Bogotá ya ha invertido en sistemas de acueducto y alcantarillado para el área y está ejecutando otros proyectos, entre ellos la ampliación del sistema de transporte público TransMilenio y la construcción de 6.200 viviendas para el sector de bajos ingresos. Además, por iniciativa de organizaciones de ciudadanos, dos grandes áreas –el Parque entre Nubes y el Agroparque Los Soches– han sido designadas en el POT como hitos urbanos locales de gran significado y simbolismo. La primera es un parque grande que marca la transición entre el territorio urbano y el rural, amenazado constantemente por el desarrollo ilegal y la explotación. La segunda, un tipo de zona de amortiguación agrícola, fue creada por una organización campesina que aceptó a sabiendas una reducción en el precio del suelo al cambiar la clasificación del mismo de suburbano a rural, a fin de preservar su carácter agrario. Actualmente esta organización aplica medios alternativos novedosos de gestión de suelo mediante proyectos de conservación ecológica para beneficiar a la ciudad en su conjunto y obstaculizar la amenaza del crecimiento urbano ilegal.
¿Cómo puede la diversidad de elementos, desde la vivienda social hasta el transporte público y la conservación de tierras agrícolas, crear una oportunidad para condiciones de vida sostenible para los habitantes más pobres de la ciudad? ¿Cómo reconciliamos los objetivos de la política urbana y la justicia social? ¿Cómo puede la ciudad impedir que los urbanizadores piratas se aprovechen inmerecidamente de la nueva área de desarrollo de Usme? Este es el desafío que enfrentan el gobierno municipal, las organizaciones de vivienda popular y los residentes del sur de la ciudad.
Mecanismos alternativos para la recuperación de plusvalías
Uno de los temas de debate con respecto a la Ley 388 es el precedente de recuperación de plusvalías en áreas destinadas para viviendas sociales. Las organizaciones de vivienda han buscado exonerar esos suelos de la participación en plusvalías, debido a una frecuente interpretación errónea de la naturaleza del instrumento, según la cual el valor recuperado se transfiere al precio final de la vivienda (véase Smolka y Furtado, página 12). Desde un enfoque diferente, el proyecto Usme está estructurado a partir de varios mecanismos alternativos para la recuperación de plusvalías que van más allá de la función restringida y malinterpretada de un impuesto.
El primer mecanismo consiste simplemente en anunciar el proyecto Usme, puesto que la Ley 388 establece que en caso de adquisición pública de suelo, el valor comercial del mismo (para fines de indemnización) no puede incluir el monto correspondiente a las plusvalías derivadas del proyecto. Esta disposición congela el precio del suelo en su nivel anterior al anuncio del proyecto, por lo que es un instrumento oportuno para reducir el costo del suelo que de otra manera tendría que pagar la administración local para sus propios proyectos de desarrollo urbano.
El segundo mecanismo es el Plan Parcial, un plan para parcelas de desarrollo local que se basa en el principio de reparto equitativo de cargas y beneficios y que la legislación colombiana ha adoptado de la legislación de España. Esta modalidad de reparcelación (o reajuste equitativo del suelo) abarca la distribución de los costos de infraestructura, así como los derechos de desarrollo, y permite que la administración pública obtenga una porción del suelo urbanizado como retribución por su inversión en las obras de desarrollo. Mediante este mecanismo el Municipio de Bogotá obtiene suelo de forma gratuita o por un costo bajo que luego puede destinar para infraestructura o servicios públicos, o para viviendas de interés social.
Un tercer mecanismo es la recuperación de plusvalías, tal como la establece la Ley 388, para la cual se requiere que la Alcaldía Mayor apruebe un acuerdo específico. Si se aprueba el plan de recuperación, el municipio puede recobrar entre el 30% y el 50% del incremento del precio del suelo derivado del cambio en su clasificación de rural a urbano, la autorización para usos más rentables o el incremento de los derechos de desarrollo. Las plusvalías podrían pagarse con suelo, como un porcentaje de participación en el proyecto, en infraestructura o en dinero efectivo. Una vez más, el efecto que se busca es reducir el precio del suelo obtenido por la administración local por el cumplimiento de sus objetivos sociales.
Una alternativa más innovadora consiste en que la administración local o el municipio asigna los derechos de desarrollo del suelo directamente a beneficiarios de pocos ingresos del programa de viviendas. Este ingenioso mecanismo, basado en la separación de los derechos de construcción de los derechos de propiedad, en efecto traslada el equilibrio de fuerzas desde los urbanizadores hacia las familias de pocos ingresos que se residencian en el área y por consecuencia comparten el incremento del valor del suelo generado por el desarrollo. Estos nuevos residentes ahora tienen los derechos sobre la tierra que de otra manera habrían tenido que comprar a urbanizadores piratas que ya no tienen un mercado cautivo para la venta de lotes irregulares a precios altos en anticipación de futuros programas de mejoras.
Al adoptar una actitud activa en la regulación de la ocupación del área mediante la distribución de tales derechos de construcción, el municipio se encuentra en una posición más ventajosa para negociar directamente con los urbanizadores piratas y para emular de alguna manera sus acciones mediante la dotación de suelo urbanizado (“terrenos y servicios”) a precios asequibles. Con este enfoque jurídico el municipio garantiza la dotación de carreteras, redes de servicios públicos, zonas verdes y espacios públicos y recreativos que por lo general los urbanizadores piratas no ofrecen o que los propietarios de tierras rurales no pueden mantener. En síntesis, el procedimiento asigna los derechos de construcción a los habitantes de pocos ingresos que con el tiempo construirán viviendas gracias a sus propios esfuerzos. Al reducir los derechos de construcción del propietario original a través del Plan Parcial, también se reduce el precio del suelo.
Ampliación de la participación en plusvalías
La política de plusvalías que busca recuperar los incrementos del valor del suelo para beneficio público ha sido aceptada en áreas de ingresos altos, donde las rentas públicas se utilizan para subsidiar inversiones sociales en otras localidades. Sin embargo, los urbanizadores piratas suelen encontrar maneras de expropiar estas inversiones en áreas de ingresos bajos mediante las actividades ilegales y clandestinas prevalecientes utilizadas para el acceso y ocupación del suelo. El proyecto Usme representa un intento por trasladar el poder de negociación de la población con respecto a los urbanizadores piratas mediante el diseño de procesos de urbanización alternativos.
La Alcaldía Mayor ya ha hecho un compromiso de facto para aplicar los instrumentos de recuperación de plusvalías, aunque éstos siguen siendo objeto de explicaciones y discusiones dentro del debate general sobre la política de participación en plusvalías. Como ya hemos visto, el principio práctico en que se basa esta política es la separación de los derechos de propiedad de los derechos de construcción. No obstante, esta política afronta una enorme resistencia debido a la tradición jurídica civil de que los derechos unitarios y absolutos están asociados con la tenencia privada de la tierra.
La novedad del programa radica en su potencial para abordar directamente los retos de la urbanización de bajos ingresos. Las expectativas han hecho aumentar el precio de las tierras parceladas ilegalmente en Usme y han propiciado que los urbanizadores piratas “produzcan suelo comercial” mediante la destrucción de comunidades campesinas, la degradación de áreas de importancia ecológica y la ocupación de zonas de riesgo. La tolerancia de tales prácticas llegó a un extremo tal que los precios elevados prevalecientes en las transacciones de estos mercados inmobiliarios –ilegales, en su mayoría– han sido utilizados por la administración local como precio de referencia para determinar la indemnización justa por la adquisición de tierras.
A falta de mecanismos públicos para intervenir en el mercado del suelo, tales como la participación en plusvalías, los propietarios –particularmente los urbanizadores piratas– no sólo han recuperado todos los incrementos del precio derivado del desarrollo urbano, sino que además han tomado bajo control el proceso. La urbanización ilegal resultante es costosa para los ocupantes individuales de dichos asentamientos y para la sociedad como un todo, ya que eleva el costo de los futuros programas de mejoras entre tres y cinco veces, en comparación con el costo de urbanizar suelo no ocupado.
Mediante los mecanismos alternativos mencionados anteriormente, se espera que otras conversiones del uso del suelo, como en el caso de la urbanización de Usme, se hagan más en un entorno político-económico alternativo, en el cual el municipio participe como un regulador activo y socialmente responsable del proceso. Estos proyectos forjarán nexos estrechos entre las políticas de regulación del suelo y las reglas que se aplican para la compra o subasta pública de tierras, para la distribución de los costos de dotación de infraestructura y servicios públicos y para el ejercicio de los derechos de desarrollo. La devolución a la comunidad de las plusvalías derivadas de estos cambios en las regulaciones del desarrollo urbano y las inversiones públicas constituye la manera más eficaz de construir relaciones más democráticas basadas en el ejercicio de una demanda renovada de reforma urbana y el derecho de acceso al suelo.
María Mercedes Maldonado Copello es profesora e investigadora del Centro Interdisciplinario de Estudios Regionales (CIDER) de la Universidad de Los Andes en Bogotá, Colombia. Martim O. Smolka es miembro principal y director del Programa para América Latina y el Caribe del Instituto Lincoln.
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A conservation easement is private land, held by a private nonprofit corporation (typically a land trust) or a government agency. Though conservation easements are perceived as a win-win land protection strategy, there are several downfalls in their design—requiring this fairly new real estate law to come under increased scrutiny.
Conservation easements leave the land in private ownership and often achieve the goals of land protection without regulation or adversity, and usually without any government oversight. There is often concern that the terms of the conservation easement will be honored and that the conservation easement holder will have the capacity and resolve to monitor, enforce and defend the restrictions of the conservation easement in perpetuity, as conservation easements promise.
Because conservation easements are privately held property, most states have no public registry for conservation easements, no particular legal structure and no public review, transparency or accountability concerning their design, monitoring, enforcement, defense or stewardship.
This article identifies issues with the current practices for conservation easements and seeks solutions for the future of the conservation easement. Should their be standards enforced by federal or state governments? Should more responsibility be placed on the land owners? How would new regulations affect the use of the land? If conservation easements are to serve future generations as is their promise, they will have to resolve the issues they face.
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No recent happening in land conservation rivals the deployment from coast to coast of conservation easements. Beyond tax and other public subsidies, one of the driving forces favoring this phenomenon is that conservation easements are perceived as a win-win strategy in land protection, by which willing landowners work with private land trusts or government agencies to provide lasting protection for portions of the American landscape. Conservation easements leave land in private ownership, while allowing the easement holder (the land trust or agency) to enforce voluntary, contracted-for, often donated but increasingly paid-for restrictions on future uses of the easement-encumbered property. Conservation easements are often welcomed as achieving the goals of land protection without regulation or adversity, and usually without any government oversight.
At the same time, the rapid increase in the use of conservation easements raises the concern that they may present something of a time bomb that requires preventive action. Most of the laws and conventions concerning conservation easements were created at a time when no one could have foreseen their explosive growth and complexity. These laws and conventions require well-considered approaches to reform, lest we ultimately risk losing the public benefits that we thought conservation easements would secure in the future.
Definitions
A “conservation easement” (in some states referred to as a conservation restriction or similar term) is a set of permanently enforceable rights in real property, held by a private nonprofit corporation (typically a land trust) or a government agency. These rights impose a negative servitude (in other words, a set of promises not to do certain things) on the encumbered land, and they are permanently enforceable by the easement holder. Conservation easements are a relatively recent invention of real estate law and are enabled by statute in virtually every state.
A “land trust” is a loosely defined concept that usually includes at least two basic elements. First, it is a private, nonprofit charitable corporation incorporated under the laws of a state and qualified as tax-exempt and entitled to receive tax-deductible donations under section 501(c)(3) of the Internal Revenue Code. Second, depending on state law, a land trust’s mission, but not necessarily its exclusive or even primary one, is the conservation of land.
The Public Stake in Conservation Easements
Why should the public, and therefore its government at all levels, care about how conservation easements are created and managed? One reason is that virtually every conservation easement is associated with a significant public subsidy. Although most easements are donated by private landowners to private land trusts, they almost always result in public subsidies in the form of income tax deductions to the easement donors. In many cases a further subsidy comes in the form of reduced real property and estate taxes in the future. Increasingly, conservation easements are being purchased with public money, sometimes on a grand scale involving millions of dollars.
The public should care about how its money is being spent, whether it is being spent for something of long-term public benefit, and whether it is being spent efficiently; that is, the public should be interested in whether it is getting a fair public bang for its buck.
Beyond the public’s financial investment, its interest in conservation easements as a form of charitable trust transcends the interests of the private parties to the transaction. Further, some conservation easements guarantee public access to the property, such as for hiking or scenic enjoyment, giving the public an added stake in the long-term security of the easement. In the case of conservation easements granted by developers as a quid pro quo for regulatory permits, these easements may also comprise a public investment because they are part of the consideration in exchange for the right to proceed with a project that may cause environmental harm. Finally and not least importantly, the public has an abiding concern in the orderly future of legal understandings and the stability of interests in real estate.
In sum, when a conservation easement is created there is a legitimate public interest and concern that the terms of the easement will be honored and that the easement holder will have the capacity and resolve to monitor, enforce and defend the restrictions of the easement in perpetuity, as conservation easements promise. Indeed, the very purpose of state and federal laws that support and subsidize the creation of conservation easements is that the public interest is intended to permanently benefit from them.
Trends and Problems
Rapid growth. The attractiveness of conservation easements is demonstrated by the explosive growth of land trusts established to accept easements. Land trusts have become a big business in America, both for their vast holdings of conservation easements and other properties and for their increasing memberships and finances. Even so, many land trusts have come into existence only during the past 15 years and operate at a local level. While land trust creation continues to increase rapidly, an important policy question is whether the ever-expanding number of small land trusts throughout the nation is something that is good for our (and their) future.
The Land Trust Alliance (LTA), an organization that serves many land trusts nationwide, reported in its national census that between 1998 and 2003 the number of local and regional land trusts increased 26 percent from 1,213 to 1,526; the number of conservation easements held by these land trusts grew from 7,400 to nearly 18,000; and the area covered by these easements expanded from nearly 1.4 million acres to more than 5 million acres (Land Trust Alliance 2004; see Figures 1 and 2). In addition, there are a number of national organizations, such as The Nature Conservancy and the American Farmland Trust, that hold additional thousands of conservation easements. Untold thousands of easements also are held by federal, state and local governments.
Often land trusts and government agencies alike focus on, publicize and celebrate the accumulating numbers of conservation easements in their portfolios, as well as the numbers of acres that they cover, without equivalent regard for the quality of the easements or of the lands they protect. Since conservation easements bring with them long-term and costly responsibilities for the holder in monitoring, stewardship, enforcement and defense, this focus on numbers can be short-term thinking that leads to long-term problems.
Lack of uniformity. The terms of conservation easements are infinitely variable. Calling something a conservation easement tells one nothing about what protections it affords or even what legal boilerplate it includes. Many conservation easement advocates extol the virtues of this flexibility, since it allows the landowner and easement holder to tailor each easement to their mutual interests.
However, this increasing variability of conservation easements inevitably will result in more problems over time for both easement holders and future successions of landowners in understanding, undertaking, monitoring, defending and upholding all of the legal rights and responsibilities of each easement. Heightening this effect is the fact that many conservation easements are increasingly negotiated, nuanced and complex agreements, leaving even legal experts challenged in easement preparation, interpretation, oversight and enforcement.
Valuation issues. The valuation problem for conservation easements arises in two forms: the opportunity for excessive claims of income, estate and property tax deductions or reductions; and uncertainty as to the societal and cost-benefit calculus of each easement. The valuation of donated conservation easements has become a major cause for alarm by the Internal Revenue Service, which says that it will be applying an increasingly watchful eye on the deductions taken for these donations. However, part of the problem may be that the IRS has not been precise enough in stating how conservation easement appraisals should be undertaken.
Even if the IRS adopts a more rigorous approach to easement appraisal in the future, it will never be in a good position to determine whether each easement, for which a charitable deduction is taken, is worthy in terms of conferring a public benefit commensurate with the public subsidy. That task must be undertaken by others, starting with the land trust or other easement holder and embracing some degree of broader public participation.
Lack of legal standards. While conservation easements are intended to be permanent servitudes on privately held property, most states have no public registry for conservation easements, no particular legal structure and no public review, transparency or accountability with respect to their design, monitoring, enforcement, defense or stewardship. Accordingly, there may be a growing disconnect, or perhaps it is a correlation, between the massive deployment of these new interests in real estate, their nearly infinite variability and the multitude of new-born land trusts that hold them on the one hand, and the largely undisciplined laws and conventions that govern them on the other.
In sum, potential legal and other reforms should be considered to respond to many diverse issues related to conservation easements.
This state of affairs, already evident in many thousands of conservation easements, cannot serve future generations well. Under the present laws and conventions, how can we expect holders of these easements and succeeding generations of landowners to understand, no less attend to, the often subtle differences in their terms and to comply with, uphold, defend and enforce conservation easements forever?
Although the nearly exponential trends in the deployment of conservation easements may be heartening to many in the land conservation community, they also pose equivalent challenges that require critical examination and consideration of reform. The evident solution is to create standards for conservation easements and their holders that are more uniform, explicit, publicly transparent and rigorous. Doing so would be in the long-term best interests of those in the conservation easement community and the public at large.
Potential Solutions
Among the general approaches to reform are changes to federal tax laws; greater state oversight of conservation easements and their holders; increased self-regulation by the land trust community; consolidation and networking of land trusts; and greater supervision of conservation easements and their holders by funding sources. The purpose of advancing these reform ideas is to create more predictability and stability in the design and long-term management of conservation easements, so there can be a greater degree of assurance that these new inventions of real estate law will deliver on the promises that they make to future generations.
The most universal approach to reform would be to create more rigorous IRS standards for conservation easements, their appraisals and their holders, so there is greater assurance that their public subsidy will result in conservation easements that are permanently monitored and enforced. A second and complementary approach would be for the National Conference of Commissioners, which gave birth to the Uniform Conservation Easement Act in 1981, to reconvene and consider the issues that went unresolved in its earlier work. A third approach would be for each state to consider amendments to its conservation easement enabling act that respond to these issues. Finally, the Land Trust Alliance is already making efforts to inform and encourage its members to take affirmative but voluntary action to resolve many of these concerns.
Even while considering needed change, these reforms should not impose unreasonable transaction costs on conservation easements. The goal is to select reforms that are efficient in making a difference. At the same time, it is important to consider the tremendous and increasing public subsidies of conservation easements, their opportunity costs and potential effects on government regulatory and land acquisition programs. This scrutiny is not a condemnation of conservation easements, but rather is aimed at articulating issues and possible reforms that can make easements deliver their promises.
Conclusions
This should be an uneasy time for those in the conservation easement community. Because of alleged abuses widely reported by the media, both Congress and the IRS are investigating easement practices by their donors and holders. Congressional proposals are emerging to substantially reduce tax incentives for donations of conservation easements. The time is right to explore potentially useful reforms of all kinds in order to avoid throwing the baby out with the bathwater.
The principal source of many issues with conservation easements is the laws and conventions that govern these interests in real estate, which were created at a time when no one could have anticipated the explosive growth of easements and land trusts. While national organizations like the Land Trust Alliance have shown outstanding leadership in devising and promoting standards, practices and other assistance for land trusts, these standards are purely voluntary, and land trusts have no legal obligation to follow them. Moreover, in some cases the worst problems with respect to long-term management of conservation easements involve understaffed or inattentive government holders.
How dire is the future of conservation easements? Just as conservation easements are intended to endure, each of the problems reported here will have its day, and some already have. When evaluating the effectiveness of conservation easements under the prevailing legal structure, perhaps the best answer is that the jury will be out for 100 years, but one should be sufficiently concerned about a possibly adverse verdict to consider these issues and ways to resolve them.
If conservation easements are to serve future generations as is their promise, they will have to live up to three essential principles.
With these principles in mind, there are many approaches to resolving the issues presented by conservation easements. However, to fashion the solutions one must first acknowledge the problems. If ever we are to take action to assure the future of conservation easements, the time to do so may never be better, nor easier, than now.
Jeff Pidot is a visiting fellow at the Lincoln Institute, on leave from his work as chief of the Natural Resources Division of the Maine Attorney General’s Office, a position he has held since 1990. He has been an active participant in the land trust movement in Maine and has a wealth of experience with conservation easements in both his professional and volunteer work. While at the Lincoln Institute, he is researching and writing about the challenges of conservation easements and reforms that may be considered to meet these challenges.
His working paper, Reinventing Conservation Easements: A Critical Examination and Ideas for Reform, is available on the Institute’s website.
Reference
Land Trust Alliance. 2004. National Land Trust Census. November 18 http://www.lta.org/census/index.shtml
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Community land trusts provide affordable housing by separating the value of land from the value of buildings. Households pay for only the building or dwelling unit, and the CLT retains ownership of the land in this form of shared equity housing.
When the household sells, the CLT typically has the right to repurchase the unit at a price determined by a formula based on the value of improvements made by the household, the change in local housing prices, and the duration of tenancy. The CLT then resells the building or unit to another low-income household, and continues to own the land. This chain of sales ensures that the unit provides affordable housing services on a sustainable basis.
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In June 2005 the U.S. Supreme Court issued a much anticipated decision in the case of Kelo v. City of New London, Connecticut (545 U.S. 469 [2005]). The close decision (5–4) galvanized the planning, development, redevelopment, and property rights communities, and continues to have national and international repercussions. What was at issue?
New London, Connecticut is an old, industrial, port city on America’s east coast. Its economic height in the 1920s was based on shipbuilding. Since that time the city has experienced substantial economic and population decline. As the property tax base dwindled, the city’s ability to provide basic public services also deteriorated. In the 1990s, New London developed a plan for economic revitalization, focused on a neighborhood with 115 separate properties. The plan required consolidation of these properties into a single parcel. The city further proposed to transfer ownership of some sections of the newly configured parcel to a multinational pharmaceutical company for a research and production facility.
The city approached landowners about their interest in the voluntary sale of their land, and 100 landowners agreed to sell. The city then proposed the use of eminent domain on the outstanding 15 properties (an action where the city would pay fair market value for each property). In so doing, the city did not assert that these properties were “blighted”—the legal and planning standard under which such eminent domain actions have existed since the 1954 U.S. Supreme Court decision in Berman v. Parker 348 U.S. 26 (1954).
Rather, under the authority of state enabling legislation and based on a comprehensive plan, both of which the court later acknowledged, the city asserted only that the outstanding parcels were required as part of the plan to accomplish a greater public good—increased jobs for the community, increased pubic revenues (taxes), and increased economic competitiveness.
The Kelo Case
Fighting to save her “little pink house,” Susette Kelo became the spokesperson for the opposition to New London’s proposed action on the remaining 15 parcels. Kelo and her co-litigants argued that the type of eminent domain proposed by the city was a misreading of the original intent of the U.S. Constitution’s takings clause (“nor shall private property by taken for public use, without just compensation”).
According to Kelo’s lawyers, the original constitutional clause was intended to allow for governmental actions that create public facilities (e.g., roads, parks, airports, hospitals), but not for government to take private land from one owner to give to another owner. They asserted that if the court found in favor of New London (and against Susette Kelo, which the court did) there would be no effective limit to any proposed physical taking of privately owned land by government. That is, government could always assert that a proposed new use of land was in the greater public interest.
The reasoning and final decision in Kelo was unsurprising. On a base of strong legal and historical analysis, the majority of the court showed why the action by the City of New London was acceptable. In so doing, it affirmed 50 years of similar actions by local and state governments throughout the country—actions which, while often clothed in a justification of blight, regularly had no more (or less) justification to them than that provided by New London.
The court itself provided the basis for much of the public policy controversy that followed when it stated that the decision was only about whether New London’s action was acceptable under the U.S. Constitution: Did it violate the terms of the takings clause in the Fifth Amendment? But, the court noted, “We emphasize that nothing in our opinion precludes any State from placing further restrictions on its exercise of the takings power” (545 U.S. 469 [2005] at 489). That is, while New London’s and similar local and state governmental actions were legal under the federal constitution, the U.S. Supreme Court invited state legislatures to decide whether such actions should be legal under state constitutions.
The negative reaction to the court’s decision was swift and strong. Within a week a proposal was floated that then-U.S. Supreme Court Justice David Souter’s home in Weare, New Hampshire should be condemned so it might be replaced by the Lost Liberty Hotel. Using the threat of unconstrained governmental action against ordinary homeowners, a national movement emerged to thwart the impact of Kelo.
Following the invitation of the court, 43 states adopted laws that appear to challenge Kelo (see figure 1). The explicit intent of most of these laws is to prohibit governmental eminent domain actions both for the sole purpose of economic development and in cases where privately owned land is taken from one owner to be transferred to another owner.
Analysis of State-based Kelo Laws
Beginning in 2007, we began a two-year research project on the impact of these state-based laws. Planners, public sector lawyers, and redevelopment officials were already expressing strong concern about the constraints these new state laws could have on normal planning practice. Our question was, Would these laws impact planning, and if so, how? To investigate these laws, we adopted a multilevel approach that:
State and local governments are now grappling with circumstances quite different from those of a decade ago, especially since the economic recession in 2008 and 2009. Declines in development activity, property values, and property tax revenues appear to be leading a public discussion less focused on rapacious government activity and more concerned about how to encourage development. This change in the economic climate has had a substantial impact on the reach of the adopted state-based Kelo laws.
Stakeholder interviews provided some interesting insights as to agreements and conflicts among those focused on these new laws. Both proponents and opponents are willing to acknowledge that there have been instances of abuse by local governments in the exercise of eminent domain; they differ in whether they see this as an occasional or a regular occurrence.
Both groups comment on how the public discussion about the appropriate response to state-based laws has brought together seemingly unusual and unexpected allies. For example, libertarians and property rights activists who are opposed to expropriation on philosophical grounds are finding themselves allied with community activists who see an historical pattern of eminent domain abuse against communities of color and the poor.
Proponents and opponents also note that much of the change to date is in the legal framework for takings actions, and they agree it is less clear what the impact has been on actual planning and governmental practice. Even opponents of these laws (many planners, for example) see some good coming from them. They argue that eminent domain is becoming more tied into the planning process, more open, and more participatory.
Our survey results reinforced some of these points and added others (Jacobs and Bassett 2010). Respondents reported mixed reactions to the assertion that state-based Kelo laws were negatively impacting urban revitalization efforts, economic development planning, or programs for affordable housing (see table 1). Despite these results, respondents did note a negative effect on the willingness of local governments to use eminent domain, though there appeared to be no impact on blight designations by these governments.
With regard to changes in the planning process toward becoming more open and transparent, the majority reported no changes to date, and nearly half of the respondents saw no impact on the extent of conflict within the process (see table 2). When respondents were asked to share exactly how their localities were grappling with new requirements regarding eminent domain, most identified what we characterize as soft or tacit approaches—building networks, enhancing communication, and linking eminent domain into citizen participation processes.
Despite these relatively mild responses to the passage of state-based laws, 76 percent of respondents suggested that the property rights movement (the proponents of these laws) remains strong or very strong in their areas, versus 19 percent neutral and 4 percent reporting a weak or very weak movement. Yet the respondents also suggested that it was their perception that neither the average citizen nor the majority of elected officials were focused on the issues raised by the property rights movement.
The recent writings of supporters and proponents of the state-based Kelo laws add further understanding of what is (and is not) happening with these laws (see Ely 2009; Morriss 2009; Somin 2009). There appears to be a broad consensus that there has been little substantive impact from the state-based laws. Overall, the laws are characterized as more symbolic than substantive in nature and content. In the words of Ely (2009, 4), they are “merely hortatory fluff.” Why this is true, however, is a subject of some disagreement. Some analysts suggest it is because of the way key interest groups shaped the legislation. Others argue that while citizens appear to be concerned about the Kelo decision, they are less motivated to focus on the particular solution crafted by state legislatures.
There appears to be little expectation of substantive follow-up action by Congress or the U.S. Supreme Court, so whatever occurs will continue to be a function of actions by state legislatures and state courts. Nevertheless, the public is more aware of the eminent domain issue after Kelo, and that may affect future citizen and landowner actions. Where there is a distinction between substantive and symbolic legislation, the more substantive laws appear to be a function of both strong economic growth conditions in states and the promotion of laws through the initiative process versus the legislative process.
Impacts and Implications
Immediately after the Kelo decision, commentaries and reports by property rights advocates warned of impending danger for the American homeowner and the fundamental threat to American democracy. However, little has changed in the decade since a Lincoln Institute report examined the first generation of property rights laws (Jacobs 1999). That study concluded that state-based laws were having little impact on actual policy and planning practice. It appears that the same is largely true now.
That there should be social conflict over the public’s efforts to manage privately owned land is, in and of itself, not surprising (Jacobs and Paulsen 2009). That the physical taking of land would be the source of this conflict is even less surprising. What is surprising is that, beyond the spirited focus of a set of dedicated activists, it is not clear that the American public or their elected representatives really see the issues raised by the state-based laws as requiring substantial attention, and especially not now. The impacts of the state-based Kelo laws can be viewed in three ways.
Changes in Eminent Domain Activity
Both supporters of state-based Kelo laws and independent researchers find little change in what local and state governments are actually doing, or anticipate doing, as a result of the laws. There are several possible explanations. One is that few Kelo-style takings actually occur (Kayden 2009). The New London, Connecticut action was intended for economic development and was not based on a declaration of blight.
Physical takings can be initiated for a wide range of activities, but for at least 50 years (since Berman v. Parker) eminent domain for inner-city redevelopment has usually been accompanied by a declaration of blight. Almost none of the recent state-based laws prohibit physical takings when blight is declared. A second explanation is that even in situations where some physical taking is required, many of the transactions are (or at least appear to be) voluntary. Even in the New London situation, 100 of 115 landowners sold their land voluntarily and did not require an eminent domain action by the city. It is possible that the state-based laws are a solution to a problem that does not really exist.
Changes in Planning Practice
The state-based laws have not been all bad for planning practice. In fact, they have helped sensitize a broad range of interests to a core set of planning issues. In so doing the laws have made the planning and decision-making process a more central focus of public discussion and debate. Where there are indications of change to planning practice, they appear to be welcomed by planners. State-based laws are leading to requirements that when eminent domain is exercised it needs to be tied more explicitly to a broader planning and development process, as was the case in New London.
This means that eminent domain will be more transparent, and planners (and the elected officials to whom they report) will become more accountable. All in all, these new laws suggest that planners need to further improve the communication techniques and processes they use for planning in general, and eminent domain proceedings in particular. Few planners find objection to this, and many embrace it.
Changes in Public Discourse
As argued by even the supporters and proponents of state-based legislation, the most significant impact of these laws seems to be in the area of public awareness. The wide-ranging media coverage of the Kelo decision, the apparent bottom-up backlash against the decision, and survey data about the common understanding and appropriateness of the decision all suggest significantly heightened attention to eminent domain, and to the role of governmental activity in physical takings. It is precisely this situation that provides the conditions for changes in planning practice.
Conclusions
This research was conceptualized and begun at a time when public discussion about land use, taxation, and takings was set within a very different frame than it is today. Now, local, state, and national discussion is focused on the aftermath of the subprime mortgage collapse, the recession, and their systemic impacts on the domestic economy. Communities and states nationwide are having uncomfortable discussions about the provision of local and state services as the property tax and income tax bases that support those services soften and frequently decline, sometimes significantly and precipitously.
The national media seems to have a constant stream of articles detailing this problem. What is particularly significant for our research is the interrelationship of these events. In years past when local governments found themselves in a fiscal crisis, they could and would turn to their states for assistance. And in turn, when states found themselves in a parallel fiscal crisis, they could and would turn to the national government. Today neither the states nor the national government are able to provide assistance as their own fiscal positions stagnate, if not decline.
It is in this context that it is necessary to understand the present and then project the likely future of eminent domain actions by state and local governments and planning authorities. Research by supporters and proponents suggests that substantive, state-based legislation could be explained in part by the level of economic activity in the different states. States with strong economies, especially in the homebuilding sector, were more likely to pass substantive legislation.
What happens when there is not a strong state or local economy or when they are in a downward spiral? For the foreseeable future, we believe it is likely that planning in general and eminent domain in particular will be reexamined, and perhaps even witness a resurgence in support. Communities severely affected by the credit, housing, and mortgage-finance crises are being forced to reexamine eminent domain and related powers as ways to address abandoned housing and facilitate economic and social redevelopment. It is not at all clear what, if any, resistance they will experience from a citizenry wanting and needing solutions to real and seemingly ever more complex problems.
Even though survey respondents spoke to the continued strength and presence of the property rights movement, the results also indicated that it was not clear that the core issues of importance to the property rights movement were important to citizens in general, or even to elected officials. Does this mean that the property rights activists will abandon their activism? No. Just as they have sought to continuously advance their agenda and learn from their policy experiments for more than a decade, they will again learn from their successes and failures with state-based Kelo legislation. These laws represent the latest, not the final, wave of policy activism on property rights issues in the United States.
The planning community should not ignore the property rights advocates who have succeeded in changing the way the American public thinks about the core issue in physical and regulatory takings—the appropriate balance of the government vis-a-vis the individual with regard to property rights. But at the same time, it is not clear that the institutional changes these advocates have brought forth through state-based Kelo laws have changed public administrative practice, or that the laws fundamentally matter to the public and its representatives.
Was Kelo decided properly? That is a different question than our research focus. Are the state-based Kelo laws warranted as a response to the Kelo decision? That is a question that individuals and interest groups need to answer for themselves. Is there anything about the state-based Kelo laws that most planners should worry about? No there is not, but this does not mean that these laws or their supporters should be ignored. It does mean that planners and their allies and what they do in the public interest are on much stronger ground than the passage of these laws would seem to indicate.
References
Castle Coalition. 2007. 50-state report card: Tracking eminent domain reform legislation since Kelo. Arlington, VA.
Ely, James W., Jr. 2009. Post-Kelo reform: Is the glass half full or half empty? Supreme Court Economic Review 17: 127–150.
Jacobs, Harvey M. 1999. State property rights laws: The impacts of those laws on my land. Cambridge, MA: Lincoln Institute of Land Policy.
Jacobs, Harvey M., and Kurt Paulsen. 2009. Property rights: The neglected theme of 20th century American planning. Journal of the American Planning Association 75(2): 135–143.
Jacobs, Harvey M. and Ellen M. Bassett. 2010. All sound, no fury? Assessing the impacts of state-based Kelo laws on planning practice. Working Paper. Cambridge, MA: Lincoln Institute of Land Policy.
Kayden, Jerold R. 2009. The myth and reality of eminent domain for economic development. In Property rights and land policies, Gregory K. Ingram and Yu-Hung Hong, eds., 206–213. Cambridge, MA: Lincoln Institute of Land Policy.
Morriss, Andrew P. 2009. Symbol or substance? An empirical assessment of state responses to Kelo. Supreme Court Economic Review 17: 237–278.
Somin, Ilya. 2009. The limits of backlash: Assessing the political response to Kelo. Minnesota Law Review 93(6): 2100–2178.
About the Authors
Harvey M. Jacobs is a professor at the University of Wisconsin-Madison, where he holds a joint appointment in the Department of Urban and Regional Planning and the Gaylord Nelson Institute for Environmental Studies.
Ellen M. Bassett is an assistant professor in the School of Urban Studies and Planning at Portland State University in Oregon.
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Excess development entitlements and distressed subdivisions are impairing the quality of life, skewing development patterns and real estate markets, damaging ecosystems, and diminishing fiscal health in communities throughout the U.S. Intermountain West. Since the post-2007 real estate bust, which hit many parts of the region severely, eroding subdivision roads now carve up agricultural lands, and lonely “spec” houses continue to dot many rural and suburban landscapes. Some are vacant, but others are partially occupied and require the delivery of public services to remote neighborhoods that generate very little tax revenue. In jurisdictions where lots could be sold before infrastructure was completed, many people now find themselves owning a parcel in what was supposed to be a high-amenity development but is in fact little more than a paper plat.
These arrested developments—known colloquially as “zombie” subdivisions—are the living dead of the real estate market. Beset by financial or legal challenges, once-promising projects are now afflicting their environs with health and safety hazards, blight, decreased property values, threats to municipal finance, overcommitted natural resources, fragmented development patterns, and other distortions in local real estate markets.
This article presents an overview of the economic context that fostered so many excess entitlements in the West and of the local planning and development controls that influence how those market forces play out in a given community. It also describes how three communities in the Intermountain West have redesigned distressed subdivisions in their jurisdictions and how those efforts are facilitating recovery, creating more sustainable growth scenarios, improving property values, and conserving land and wildlife habitat.
The Economic Background that Fostered Excess Development in the West
In the Intermountain West, where land is abundant, and rapid growth is common, it’s not unusual for local governments to grant development entitlements well in advance of market demand for housing. Boom and bust cycles aren’t rare in the region either. The magnitude of the Great Recession, however, amplified the frequency of excess entitlements and exacerbated their harmfulness to surrounding communities. In the Intermountain West alone, millions of vacant lots are entitled. Across a large number of the region’s counties, the rate of vacant subdivision parcels ranges from around 15 percent to two-thirds of all lots (tables 1 and 2).
As the economy continues to recover, will the market correct this surplus of development rights, incentivizing developers to build out distressed subdivisions or to redesign those that do not reflect current market demand? In some locations, yes; in others, it is unlikely. Subdivisions are designed to be near-permanent divisions of land. Although many areas throughout the Intermountain West are rebounding robustly, many subdivisions remain distressed, with expired development assurances, few if any residents, fragmented ownership, partially completed or deteriorating infrastructure improvements, and weak or nonexistent mechanisms to maintain new services. Uncorrected, these arrested developments will continue to debilitate the fiscal health and quality of life in affected areas.
The Complexity of Revising Development Entitlements
Local jurisdictions shape the future of their communities through the entitlement of land, the approval of subdivisions, and the granting of subsequent development permits. These actions result in land use commitments that prove difficult to change in the future, establish development standards, and often commit the community to significant, long-term service costs.
Figure 1 demonstrates that excess entitlements are easiest to address when they’re purely paper subdivisions—with one owner, no improvements, no lots sold, and no houses built. As the status of a subdivision progresses from a paper plat to a partially built development—and more than a few landowners are involved, or the subdivider has begun to install improvements, or more than a few owners have built homes—the challenges grow more complex, and the options for resolving them more constrained.
The revision or revocation of a paper plat requires the agreement of only a single property owner who hasn’t made any major investments that might constrain the ability to alter design plans, allowing for the simplest resolutions (though the situation becomes more complicated if a lender must also approve any changes). The sale of even one lot to an individual landowner makes entitlement issues in the subdivision harder to resolve for three major legal reasons: (1) the need to protect the property rights of lot owners, (2) the need to preserve access to sold lots, and (3) pressure for equal treatment between current and potential future homeowners. Some of these issues can give rise to lawsuits, creating potential liability for the town or county. The revision or revocation of a plat with sold lots will require the agreement of multiple owners—each of whom may decide to file a lawsuit on one or more of these grounds.
Once the developer makes significant investments for infrastructure and other improvements, complications escalate. Although the purchase of land does not in itself create a “vested right” to complete the development, once an owner invests in improvements to serve anticipated houses, it is difficult to stop construction of those homes without reimbursing the developer for the cost of infrastructure.
Completed homes—particularly if a number of them are already occupied—further compound the complexity of resolving distressed subdivisions. Access roads will need to be retained and maintained, even if the homes are widely scattered in inefficient patterns. If the developer committed to building a golf course, park, or other community facilities, individual lot owners could claim a right to those amenities—whether or not they have been built, and whether or not the associations slated to upkeep them exist or have enough members to perform the maintenance. Even if the developer was clearly responsible for constructing the amenities, the local government could become liable for them if it has prevented the developer from building the amenities by vacating parts of the plat where those amenities were to be built.
Larger subdivisions split into several phases at various stages of completion pose the most intricate and extensive challenges. The first phases of construction may be mostly sold lots with most infrastructure in place, but later phases may be mere paper plats—unbuilt, with no lots sold and no improvements in place. Thus, a single distressed subdivision may pose several types of legal entitlement issues, with varying levels of risk and potential liability, in different corners of the development.
How Three Communities Successfully Redesigned Excess Entitlements
Local governments seeking to remedy the potential negative impacts of excess development entitlements and distressed subdivisions have many different land use and zoning measures at their disposal. We identified 48 tools and 12 best practices as a result of our research, which draws on case studies, lessons shared by experts during several workshops, data analysis, and a survey of planners, developers, and landowners in the Intermountain West. (For the scope of preventive and treatment strategies, consult the full Policy Focus Report, Arrested Developments: Combating Zombie Subdivisions and Other Excess Entitlements). Generally, they fall into four categories: economic incentives, purchase of land or development rights, growth management programs, and development regulations:
1. Economic incentives—such as targeted infrastructure investments, fee waivers, and regulatory streamlining—avoid controversial regulations.
2. Purchase of land or development rights is the most direct way to eliminate unwanted development entitlements, but it may be too costly for some communities.
3. Growth management approaches include relying on urban service area boundaries or adequate public facility requirements to limit new development entitlements.
4. Development regulations include rezoning, changes in subdivision ordinances and development assurances, initiation of plat vacating processes, and revised development agreement templates.
The following three case study communities primarily utilized development regulations. Mesa County in Colorado and Teton County in Idaho revised their development agreements to redesign local distressed subdivisions. All three jurisdictions, including the City of Maricopa in Arizona, facilitated voluntary replatting efforts as well.
How Mesa County, Colorado, Revised Its Development Approval Process and Abandoned Paper Plats
During the oil shale boom and bust of the 1980s, Mesa County, Colorado, was one of the regions hit hardest. When ExxonMobil ceased operations in the area, the population of Grand Junction, the county seat, plummeted by 15,000 people overnight. All development halted. In the bust’s wake, more than 400 subdivisions, encompassing about 4,000 lots throughout the county, were abandoned. Nearly 20 percent of Mesa County’s subdivisions were left with unfulfilled development improvement agreements.
When the county’s bond rating dropped in 1988, it put several measures in place to clean up the excess entitlements. It negotiated with local banks and the development community to establish a development improvements agreement form and procedure. It also established a new financial guarantee called the “Subdivision Disbursement Agreement” between construction lenders and the county. The agreement puts the county in a direct partnership with financial institutions to ensure, 1) an agreed-upon construction budget, 2) an established timeline for construction of the improvements, 3) an agreed-upon process, involving field inspections during construction, for releasing loan funds to developers, and 4) the county’s commitment to accept a developer’s improvements, after certain conditions have been met, and to release the developer from the financial security.
It took Mesa County 15 years to fully address the excess entitlements stemming from the 1980s bust, but the work paid off: During the Great Recession, the county had the lowest ratio of vacant subdivision parcels to total subdivision lots among approximately 50 counties examined in the Intermountain West. Not a single developer backed out of a development agreement when only partial improvements were made. While some subdivisions remain vacant, all improvements have been completed to the point that the parcels will be ready for construction once they are sold.
River Canyon (figure 2), for example, was planned as a 38-lot subdivision on 192 acres. When the real estate bubble burst in 2008, the entire site had been lightly graded with roads cut, but no other improvements were complete, and no parcels had been sold. Realizing the lots would not be viable in the near-term, the developer worked with the county to replat the subdivision into one parent lot until the owner is ready to apply for subdivision review again.
The resolution is a win-win: The county escapes a contract with a developer in default and avoids the sale of lots to multiple owners with whom it would be difficult to coordinate construction of subdivision improvements. The developer avoids the cost of installing services and paying taxes on vacant property zoned for residential development.
Now, lenders in Mesa County often encourage the consolidation of platted lots, because many banks will not lend money or extend the time on construction loans without a certain percentage of presales validating the asset as a solid investment. The landowner generally complies as well, to avoid paying taxes on vacant residential property, which carries the second highest tax rate in Colorado. If market demand picks up, property owners may submit the same subdivision plans to the county for review, to ensure compliance with current regulations. If the plans still comply, the developer can proceed from that point in the subdivision process. Mesa County consolidated parcels this way a total of seven times from 2008 to 2012, to eliminate lots where no residential construction is anticipated in the near future.
How Maricopa, Arizona, Partnered to Convert Distressed Parcels to Nonresidential Uses
Maricopa—incorporated in 2003, in the early years of Arizona’s real estate boom—is typical of many new exurban communities within growing metropolitan regions. Faced with an influx of new residents “driving until they qualified,” the community quickly committed the majority of available land to residential subdivision entitlements. At the height of the boom, the small city—37 miles from downtown Phoenix and 20 miles from the urbanizing edge of the Phoenix metro area—was issuing roughly 600 residential building permits per month.
Pinal County had approved many of Maricopa’s residential subdivisions before the city was incorporated, in accordance with the county’s 1967 zoning code. In fact, following standard practice for newly incorporated communities, the city initially adopted the Pinal County Zoning Ordinance. For a time, the county planning and zoning commission also continued to serve as the city’s planning oversight body. But this older rural county code did not consider or create incentives for mixed-use development, areas with a downtown character, a balance between jobs and housing, institutional uses, or social services. The lack of diversity resulted in a shortage of retail and service use areas and a scarcity of designated areas for nonprofits such as churches, private schools, daycare, counseling, and health services. As new residents looked for public services and local jobs, this dearth of land for employment and public facilities became increasingly problematic.
When the Great Recession hit and the housing bust occurred, supply overran demand for residential lots, and many became distressed. Maricopa faced this challenge and seized the opportunity to reexamine its growth patterns and address the multiple distressed subdivisions plaguing the community.
The city chose to partner with the private sector—including developers, banks, bonding agencies, and other government agencies—to address distressed subdivisions and the lack of institutional and public land uses. The first test of this new approach began when a Catholic congregation was looking for a church site in an urban location with existing sewage, water, and other necessary infrastructure. The City of Maricopa served as a facilitator to connect the church with the developers of Glennwilde, a partially built, distressed development. The church chose a site in a late phase of the subdivision—at that point still a paper plat. The city vacated the plat for that site and returned it to one large parcel, which the Glennwilde developer then sold to the church.
Construction has not yet begun, but the project has served as a model for other arrested developments. The collaborative effort among the city, owners of currently distressed subdivisions, and other interested parties has also inspired approved proposals for a Church of Latter Day Saints stake center, a civic center, a regional park, and a multigenerational facility throughout the city.
How Teton County, Idaho, Demanded Plat Redesign, Vacation, or Replatting
Rural, unincorporated Teton County, Idaho—with an estimated year-round population of 10,170—has a total of 9,031 platted lots, and 6,778 are vacant. Even if the county’s annual growth rate returned to 6 percent, where it hovered between 2000 and 2008, this inventory of lots reflects a stockpile adequate to accommodate growth for approximately the next 70 years. This extreme surplus of entitlements —with three vacant entitled lots for every developed lot in the county—stems from three poor decisions the board of commissioners made from 2003 to 2005.
First, the county adopted a quick and easy process for landowners to request the right to up-zone their properties from 20-acre lots to 2.5-acre lots. None of these zone changes were granted in tandem with a concurrent development proposal; virtually all were granted for future speculative development. It was not uncommon for the county to up-zone hundreds of acres in a single night of public hearings; the agenda for one meeting could include up to ten subdivision applications.
Second, the county’s Guide for Development 2004–2010 called for aggressive growth, with a focus on residential construction to drive economic development. The goals and objectives, however, were vague, and the plan failed to specify the type and location of projects. Discredited by the community, the document was ultimately ignored during the approvals process and fostered explosive, random development, resulting in six years of land use decisions made without any coherent strategy.
Third, the Board of County Commissioners adopted a Planned United Development (PUD) ordinance with density bonuses in 2005. Under the PUD cluster development provisions, developers could exceed the underlying zoning entitlements by as much as 1,900 percent. Typical PUD density bonuses for good design range between 10 and 20 percent. Now areas with a central water system that were zoned for 20-acre zoning—with 5 units per 100 acres—could be entitled with up to 100 units. In addition, Teton County’s PUD and subdivision regulations allowed the sale of lots before infrastructure installment, which provided a huge incentive for speculative development.
After the 2008 market crash, some owners of incomplete developments began looking for ways to restructure their distressed subdivisions. In 2010, Targhee Hill Estates approached the county with a proposal to replat their partially built resort (figure 3). At the time, however, there was no local ordinance, state statute, or legal process that would permit the replatting of an expired development.
The Teton County Valley Advocates for Responsible Development (VARD) stepped in and petitioned the county to create a process to encourage the redesign of distressed subdivisions and facilitate replatting. VARD realized that a plat redesign could reduce intrusion into sensitive natural areas of the county, reduce governmental costs associated with scattered development, and potentially reduce the number of vacant lots by working with landowners and developers to expedite changes to recorded plats.
On November 22, 2010, the Board of County Commissioners unanimously adopted a replatting ordinance that would allow the inexpensive and quick replatting of subdivisions, PUDs, and recorded development agreements. The ordinance created a solution-oriented process that allows Teton County to work with developers, landowners, lenders, and other stakeholders to untangle complicated projects with multiple ownership interests and oftentimes millions of dollars in infrastructure.
The ordinance first classifies the extent of any changes proposed by a replat into four categories: 1) major increase in scale and impact, 2) minor increase in scale and impact, 3) major decrease in scale and impact, 4) minor decrease in scale and impact. Any increases in impact may require additional public hearings and studies, whereas these requirements and agency review are waived (where possible) for decreases in impact. In addition, the ordinance waives the unnecessary duplication of studies and analyses that may have been required as part of the initial plat application and approval. Teton County also waived its fees for processing replat applications.
The first success story was the replatting of Canyon Creek Ranch Planned Unit Development, finalized in June 2013. More than 23 miles from city services, Canyon Creek Ranch was originally approved in 2009 as a 350-lot ranch-style resort on roughly 2,700 acres including approximately 25 commercial lots, a horse arena, and a lodge. After extensive negotiations between the Canyon Creek development team and the Teton County Planning Commission staff, the developer proposed a replat that dramatically scaled back the footprint and impact of this project to include only 21 lots over the 2,700 acre property. For the developer, this new design reduces the price tag for infrastructure by 97 percent, from $24 million to roughly $800,000, enabling the property to remain in the conservation reserve program and creating a source of revenue on it while reducing the property tax liability. The reduced scale and impact of this new design will help preserve this critical habitat and maintain the rural landscape, which is a public benefit to the general community.
Conclusion
While recovery from the most recent boom and bust cycle is nearly complete in some areas of the country, other communities will be impacted by vacant lots and distressed subdivisions well into the future. Future real estate booms will also inevitably result in new busts, and vulnerable communities can build a solid foundation of policies, laws, and programs now to minimize new problems stemming from the excess entitlement of land. Communities and others involved in real estate development would be well-served by ensuring they have mechanisms in place to adapt and adjust to evolving market conditions. For jurisdictions already struggling with distressed subdivisions, a willingness to reconsider past approvals and projects and to acknowledge problems is an essential ingredient to success. Communities that are able to serve as effective facilitators as well as regulators, as demonstrated in the case studies presented here, will be best prepared to prevent and then respond and treat distressed subdivisions and any problems that may arise from excess development entitlements.
For More Tools and Recommendations
This article was adapted from a new Policy Focus Report from the Lincoln Institute, Arrested Developments: Combating Zombie Subdivisions and Other Excess Entitlements, by Jim Holway with Don Elliott and Anna Trentadue. For more detailed information—including best practices, policy recommendations, and a how-to guide for communities dealing with excess entitlements—download the full Policy Focus Report or order a print copy. Additional information is available on the companion website (www.ReshapingDevelopment.org).
About the Authors
Jim Holway, Ph.D., FAICP, directs Western Lands and Communities at the Sonoran Institute in Phoenix, Arizona. He also is a local elected official, representing Maricopa County on the Central Arizona Water Conservation District.
Don Elliott, FAICP, is a land use lawyer, city planner, and the director of Clarion Associates in Denver, Colorado.
Anna Trentadue is the staff attorney for Valley Advocates for Responsible Development in Driggs, Idaho.
Resources
Burger, Bruce and Randy Carpenter. 2010. Rural Real Estate Markets and Conservation Development in the Intermountain West. Working paper. Cambridge, MA: Lincoln Institute of Land Policy.
Elliott, Don. 2010. Premature Subdivisions and What to Do About Them. Working paper. Cambridge, MA: Lincoln Institute of Land Policy.
Preston, Gabe. 2010. The Fiscal Impacts of Development on Vacant Rural Subdivision Lots in Teton County, Idaho. Fiscal impact study. Teton County, ID: Sonoran Institute.
Sonoran Institute. Reshaping Development Patterns. PFR companion website www.ReshapingDevelopment.org
Sonoran Institute. Successful Communities On-Line Toolkit information exchange. www.SCOTie.org
Trentadue, Anna. 2012. Addressing Excess Development Entitlements: Lessons Learned In Teton County, ID. Working paper. Cambridge, MA: Lincoln Institute of Land Policy.
Trentadue, Anna and Chris Lundberg. 2011. Subdivision in the Intermountain West: A Review and Analysis of State Enabling Authority, Case Law, and Potential Tools for Dealing with Zombie Subdivisions and Obsolete Development Entitlements in Arizona, Colorado, Idaho, Montana, New Mexico, Nevada, Utah, and Wyoming. Working paper. Cambridge, MA: Lincoln Institute of Land Policy.
Valley Advocates for Responsible Development. www.tetonvalleyadvocates.org
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Vivienda inclusiva: La creación y el mantenimiento de comunidades equitativas
Por Rick Jacobus
En diferentes ciudades, como Seattle, San Francisco, Chicago, y Portland, Maine, se ha desatado un debate sobre la vivienda inclusiva, es decir, el requisito de que los desarrolladores reserven un porcentaje de los nuevos desarrollos residenciales para viviendas asequibles. Algunos sostienen que esta política desalienta el desarrollo o, con alegación más polémica que podría llegar a la Corte Suprema, que constituye una amenaza a los derechos de propiedad. Mientras tanto, el alcalde de la ciudad de Nueva York, Bill de Blasio, se enfrenta a críticas desde ambas partes: que su propuesta de vivienda inclusiva va demasiado lejos, o que no es suficiente.
En este nuevo informe titulado “Vivienda inclusiva: Creación y mantenimiento de comunidades equitativas”, Rick Jacobus separa la realidad de los mitos y traza el camino a los gestores de políticas, mostrando cómo la vivienda inclusiva puede usarse de manera eficaz para reducir la segregación económica.
“En las ciudades con mercados inmobiliarios muy activos, el aumento de los precios de la vivienda, obliga a los residentes de clase media y de bajos ingresos a alejarse de los empleos mejor remunerados, del transporte confiable, de las buenas escuelas y de los barrios seguros”, sostiene George W. McCarthy, presidente y director ejecutivo del Instituto Lincoln. “La vivienda inclusiva por sí sola no solucionará nuestra crisis de la vivienda, pero es uno de los pocos baluartes que tenemos para contrarrestar los efectos del aburguesamiento, y únicamente si preservamos las unidades que tanto nos cuesta construir”.
Mediante un análisis de la bibliografía sobre el tema y casos de estudio, Rick Jacobus, de Street Level Urban Impact Advisors, ofrece soluciones para superar las principales barreras políticas, técnicas, legales y prácticas que enfrenta todo programa de vivienda inclusiva para tener éxito.
“Más de 500 comunidades han utilizado las políticas de vivienda inclusiva con el fin de mantener la vitalidad y diversidad de los barrios en transición, y hasta ahora hemos aprendido mucho”, señala Jacobus. “Según investigaciones realizadas, si los programas se diseñan e implementan concienzudamente, pueden llegar a ser una herramienta valiosa en tiempos en que la vivienda inclusiva se necesita desesperadamente”.
En particular, el autor se refiere en este informe a la preocupación de que la vivienda inclusiva podría impedir nuevas construcciones debido a que el desarrollo tendría un rendimiento económico menor. Según el informe, muchas ciudades han evitado dicho impacto otorgando flexibilidad a los desarrolladores para cumplir con las normas y ofreciendo incentivos, como la posibilidad de construir unidades con mayor densidad.
Otras conclusiones y recomendaciones clave que surgen del informe son las siguientes:
Durante muchos años, el Instituto Lincoln ha desarrollado estrategias para apoyar la vivienda permanentemente asequible, mediante, por ejemplo, el establecimiento de fideicomisos de suelo comunitarios y otros acuerdos de capital compartido. Estas medidas se han tomado teniendo en cuenta la actual crisis de acceso a la vivienda existente en muchas ciudades. Los precios estratosféricos de los precios de alquiler y compra de viviendas en los mercados inmobiliarios muy activos han ido desplazando a los antiguos residentes y cambiando el carácter de ciudades y barrios.
Para encargar ejemplares: http://www.lincolninst.edu/pubs/3583_Inclusionary-Housing.
Rick Jacobus, es experto nacional en vivienda inclusiva y en acceso a la propiedad de viviendas asequibles. Es director principal de Street Level Urban Impact Advisors (StreetLevelAdvisors.com). Fundó Cornerstone Partnership y actualmente es asesor estratégico en Cornerstone.
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Una versión más actualizada de este artículo está disponible como parte del capítulo 2 del libro Perspectivas urbanas: Temas críticos en políticas de suelo de América Latina.
Este artículo es un avance de la investigación exploratoria La cuestión de la regularización jurídica de los barrios urbanos. En él se presentan algunas respuestas a las interrogantes en torno a por qué en Venezuela, a diferencia de muchos otros países latinoamericanos, no se ha generalizado la regularización jurídica de los barrios urbanos.
La situación
Hasta el presente muy pocos barrios urbanos se encuentran en terrenos pertenecientes a sus ocupantes, quienes no pueden registrar la propiedad construida, sino obtener un título supletorio cuya validez legal es limitada. Desde principios de los años 1970 existe una interpretación emanada de la Corte Suprema de Justicia que establece que las operaciones sobre edificaciones en suelo ajeno no podrán ser registradas, a menos que conste el consentimiento expreso del propietario del suelo (Pérez Perdomo y Nikken, 1979:38). Éste es el enunciado de un principio general, que se aplica no sólo a las casuchas urbanas, sino a todas las edificaciones.
Sin embargo, las construcciones en las barriadas populares gozan de posesión del terreno donde se asientan, término que podría definirse más estrictamente como posesión precaria . Y el hecho es que los niveles de estabilidad de este tipo de posesión tienden a variar, desde una estabilidad razonable hasta casos donde la posesión es totalmente inestable, los ocupantes son desalojados y las estructuras demolidas.
Hay que tener presente que las ocupaciones e invasiones de tierras no son un fenómeno nuevo en Venezuela. Sólo hace falta observar el predominio de barriadas de ocupación en las ciudades venezolanas desde el siglo XIX. En este sentido, las ciudades venezolanas muestran una acentuada diversidad física y social, que se caracterizada por:
Los cambios
Al reflexionar sobre la situación jurídica de los barrios, muchos nos preguntamos: ¿por qué se ha llegado a entronizar y en cierta forma a aceptar como normal construir o vivir en terrenos que se supone son propiedad ajena a los usuarios?
Las reacciones a esta situación compleja son diversas. Y llama la atención que hasta ahora ni los supuestos dueños ni los que viven en posesión del terreno hayan llegado a tomar medidas drásticas; por ejemplo, que los propietarios exijan el desalojo o expropiación de las tierras ocupadas, o que los usuarios exijan la compra o regularización jurídica de la tenencia de la tierra. La aparición de lo que se ha definido como derecho oficial paralelo (Ontiveros & Bolívar, 2000:128-139) ha permitido la existencia y mejoramiento de las condiciones de habitabilidad de los terrenos “invadidos”, pero además a dado pie a que ésta situación se vuelva crónica, y a que ninguna de las partes involucradas parezca exigir un cambio.
No obstante, en los últimos años ese entendimiento tácito se ha quebrantado, principalmente debido a los requerimientos del sector bancario, que no ha transigido en dar préstamos a las personas sin propiedad registrada sobre el terreno que ocupan. Y también a la intervención del Banco Mundial como ente cofinanciador de operaciones de habilitación de barriadas urbanas.
Ahora por primera vez se ha incluido la regularización de la tenencia de la tierra en las barriadas en la Ley de Política Habitacional (artículo 14), y un equipo de juristas trabaja en la elaboración de una Ley Especial que permita, o al menos contribuya, a poner punto final a la situación de irregularidad jurídica que se vive en los barrios urbanos venezolanos y en algunas de las urbanizaciones populares.
Causas que obstaculizan la regularización jurídica de los asentamientos informales
A continuación nos referiremos a los diversos elementos que hemos despejado como causas de la no regularización jurídica de las barriadas, y principalmente de la tenencia de los terrenos donde éstas se asientan.
La incertidumbre sobre los verdaderos propietarios
El Dr. Rafael Caldera, expresidente de la República, argumentaba que la causa principal de la no regularización es la falta de claridad en relación con quiénes son los propietarios de las tierras invadidas. Y que frente a esta incertidumbre, lo más importante y urgente era darles los servicios fundamentales a los ocupantes de los terrenos. En suma, la regularización jurídica nunca ha sido prioritaria en el proceso de consolidación de las barriadas. No obstante, sabemos que existen otras causas más profundas de la no regularización formal.
La aceptación y creación de un orden jurídico alternativo
En Venezuela las barriadas urbanas son una empresa sorprendente que desde sus inicios, en los años 1940 y 1950, se supone que puede ser controlada y su obra demolida eventualmente. Hasta ahora nadie ha logrado esta meta. Sustituir las barriadas autoproducidas por urbanizaciones ha quedado en el discurso, en ofrecimientos. Prueba de ello es que la mitad de los venezolanos que viven en ciudades se alojan en asentamientos informales.
En la práctica se ha instaurado una suerte de derecho oficial informal para los asentamientos informales y todo lo que a ellos se refiere. Los estudios de Pérez Perdomo y Nikken (1979:21) explican “…cómo el mismo Estado ha contribuido a crear una especie de orden jurídico informal para satisfacer las necesidades jurídicas de las barriadas relacionadas con la pertenencia de la vivienda”. Lo que nos indica que existe una aceptación de hecho, pero no de derecho.
Entonces, ¿se puede decir que la gente de las barriadas irregulares no quiere que su propiedad sea regularizada? Sabemos que esto no es totalmente cierto. Ellos viven en posesión de un terreno como si fuera su propiedad. Cuando aparece el propietario y quiere desalojarlos luchan hasta detener el desalojo. Aunque pareciera que mientras la posesión no esté en riesgo de desalojo, los ocupantes se quedan conformes y esquivan la diferencia entre propiedad y posesión de sus asentamientos, muchas veces para no involucrarse en procesos burocráticos y jurídicos desgastadores y costosos. Y también para no enfrentar las obligaciones tributarias que trae consigo la legalización.
La dotación de servicios públicos en vez de la regularización jurídica
Otra prueba de la aceptación y la alternatividad jurídica es que las instituciones del estado se han ocupado de dotar, en general precariamente, de vías, servicios y equipamientos a las barriadas urbanas (Josefina Baldó, 1996). Aunque sea por cuentagotas y a cambio de votos.
Los investigadores de otros países, especialmente los de América Latina, se extrañan de la dotación de servicios que tienen las barriadas urbanas de Venezuela que no han sido regularizados jurídicamente; más sorprendente aún es el mejoramiento de las viviendas, su transformación de casuchas en casas y hasta edificios de varios pisos de materiales convenientes (Bolívar et al., 1994). Esta situación es peculiar y se debe al camino que escogieron nuestros gobernantes, de dotar precariamente los terrenos invadidos donde se había aceptado la ocupación, en lugar de arreglar primero la cuestión de la propiedad.
Tal política ha impedido, o al menos retrasado, la regularización jurídica de las barriadas. Además, se ha instituido que las bienhechurías se pagan en caso de necesitarse el terreno donde se asientan.
Los procedimientos legales y burocráticos
En Venezuela existe un acceso desigual al sistema jurídico y administrativo. Los procesos burocráticos consumen muchas energías y son costosos, así que hasta tanto no se les pida a los ocupantes el documento legal probatorio de su propiedad, a ellos no les importará no tenerlo, e incluso se pueden olvidar de que ese mecanismo existe como opción. Es de hacer notar que no siempre es posible el acceso a expertos para determinar el estado jurídico de una propiedad, y que los diagnósticos incorrectos son comunes.
Además, las iniciativas de legalización tienen que sobreponerse a las dificultades para identificar a los verdaderos propietarios. Es necesario especificar la “tradición legal de propiedad” y resolver el tema de las “tierras indivisas”, que tradicionalmente se encuentran dispersas en una maraña hereditaria. Sin embargo, prevalece la falta de sensibilidad e ignorancia de la ley entre los empleados gubernamentales que deben resolver estos casos. La ley oficial es muy estricta y en consecuencia mucho más difícil de aplicar que la ley alternativa. Y la situación se complica aún más al tomar en cuenta el resentimiento y prejuicios de burócratas corruptos hacia los “beneficiarios” de los problemas relativos al suelo, especialmente cuando éstos son los ocupantes ilegales de asentamientos construidos por iniciativa propia.
Otro de los obstáculos evocados por funcionarios entrevistados atañe a la diversidad de tamaños y formas de las parcelas existentes en las barriadas (Bolívar et al., 1994:53-100). Algunas pueden ser de unos 20 m2, otras de miles… Esto es en verdad complicado al proceder a la regularización, porque tendría que hacerse el levantamiento topográfico de las mismas y en muchos casos el recuadre. Se trata de un trabajo minucioso y dificultoso.
Conclusiones provisionales
No es frecuente que las luchas pacíficas de los habitantes sean publicitadas, a pesar de que algunas hayan costado vidas humanas. La mayoría de estas batallas queda en el olvido, aunque para los que trabajamos el área son un documento imprescindible para el estudio del tema de la regularización.
Dada la cantidad de dificultades existentes, muchas veces no hay la voluntad política para efectuar los procesos de regularización. Es fundamental sincerar esta situación. Muchos especialistas sugieren que es primordial romper con el patrón de ocupación y posesión que ha prevalecido hasta ahora. Seguir jugando con la ambigüedad de que sólo importa la posesión y no la propiedad, es condenar tanto a los poseedores como a los propietarios formales a no aclarar nunca la situación. Y a que los políticos usen el problema como recurso para generar clientelismo. Esta postura conduce a que en el tiempo las confusiones lleven al caos urbano y a que la vida cotidiana de los habitantes esté signada por la incertidumbre, el miedo y la violencia.
Referencias bibliográficas
Baldó, J. (1996). “Urbanizar los barrios de Caracas”. En: Bolívar, T. & Baldó, J. (comps.), La cuestión de los barrios. Homenaje a Paul-Henry Chombart de Lauwe. Caracas: Monte Ávila Editores Latinoamericana, Fundación Polar y Universidad Central de Venezuela.
Bolívar, T.; Guerrero, M.; Rosas, I.; Ontiveros, T. y De Freitas, J. (1994). Densificación y vivienda en los barrios caraqueños. Contribución a la determinación de problemas y soluciones. Caracas: Ministerio de Desarrollo Urbano/Consejo Nacional de la Vivienda.
Bolívar,T; Ontiveros, T y De Freitas J. (2000). Sobre la cuestión de la regularización jurídica de los barrios urbanos. Caracas: SEU/FAU/UCV e Instituto Lincoln (mimeo).
Ontiveros, T y Bolívar, T. (2000). Vivienda y acceso al suelo urbano. ¿Institucionalización de un derecho oficial paralelo. En: Edésio Fernandes (coordinador), Derecho, espacio urbano y medio ambiente. Madrid, Instituto Internacional de Sociología
Pérez Perdomo, R. y Nikken, P. (1979). Derecho y propiedad de la vivienda en los barrios de Caracas. Caracas: Universidad Central de Venezuela y Fondo de Cultura Económica.
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On July 18, 1997, the Congress of the Republic of Colombia passed an innovative new Law of Land Development with ambitious goals for permitting municipalities to recover socially created land values, known in Spanish as plusvalía. Specifically, Law 388 declares that the public has a right “to participate” in increases in land values created when land use regulations increase the potential for development. Three categories of public actions are covered:
(1) changing a designation of rural land (in which development is extremely limited) into land for urban or suburban development;
(2) modification of zoning or other land use regulations;
(3) modification of regulations that permit greater building density.
Briefly stated, the legislation provides that the square-meter value of the land shall be determined before any public action and then after the action. Any municipality, at the initiative of its mayor, may demand that it “participate” by being able to recapture 30 to 50 percent (as it chooses) of the increase in value. The value is determined by multiplying the two square-meter values by the area of the parcel concerned and subtracting the pre-action value from the post-action value. A maximum of 50 percent was established to ensure that developers would still be financially motivated.
With this legislation, Colombia has enacted into national policy the basic premise of Henry George’s writings: that the public has a moral right to recover socially created values, as manifested in this case by increases in land values released by the three categories of public decisions mentioned above. With the possible exception of Taiwan, few if any other countries have attempted to so directly incorporate Georgian principles into actual legislation at the national level.
Implementation Procedures
The current legislation is only the first step. Under Colombian practice, acts of Congress set general policies, but implementation depends on follow-up at the national executive level and at the municipal level. To make the critical before and after square meter evaluations as objective as possible, an independent organization known as the Agustín Codazzi Geographical Institute will carry out assessments according to guidelines established in the law for each of the three categories.
Fees (called participaciones in the law) must be paid when a landowner applies for permission to subdivide or to construct on the property, when the use of the property is changed, when the property is transferred, or when development rights (representing rights for additional construction) are acquired. These fees are to be recorded in the registry of titles to assure compliance, and land cannot be transferred in the registry until the fees are paid in one of various forms:
(1) by paying cash;
(2) by transferring to a public body a portion of the property that is of equivalent value;
(3) by exchanging urban land of equivalent value at other locations;
(4) by making the public body a partner in the execution of the project with an interest of equivalent value;
(5) by providing needed infrastructure or open space of equivalent value; or
(6) by giving back a portion of the development rights created by the public action that is equivalent in value.
It may be anticipated that most developers will prefer to partner with municipalities instead of paying cash. Indeed, the legislation provides an incentive to use method (6) since it carries a 10 percent discount on the fees, or methods (2) or (4), which have a 5 percent discount.
Municipalities must earmark the revenues produced from participation in socially created land values for specific purposes:
Potential Implications of the Law
This legislation touches on many land policy issues that have long been of concern to the Lincoln Institute. Martim Smolka, director of the Institute’s Latin America and Caribbean Program, and other Institute associates are holding seminars and training programs to share experiences in working out implementation procedures, possibly assist in pilot projects, and carefully monitor the Colombian experiment as it unfolds.
One such program was a three-day workshop cosponsored in March with the National University of Colombia and the Advanced School of Public Administration in Bogotá. The workshop consisted of both formal and informal commentaries from a broad range of interested parties from Colombia and other countries. Since Colombia has obviously taken a bold step and there are few precedents for guidance, the appropriate officials must be innovative as they proceed toward actual implementation. The workshop identified a number of potential issues that will have to be faced as further steps are taken.
Constitutional Issues: The new law is squarely based on Article 82 of the Colombian Constitution of 1991, itself a remarkably innovative document on many aspects of urban land reform. Article 82, in simplified terms, states that when public actions increase the development potential of land, the public has a right to participate in the increased value (plusvalía) produced by such actions, so that the costs of urban development will be defrayed and distributed equitably.
The legal/constitutional debate is twofold: 1) Can the municipalities act on the sole basis of the law, or should they wait until the national government issues “regulations” and remain subject to these regulations? and 2) Should the law be limited to establishing the common, general principles, since the 1991 Constitution attributes the responsibility of land taxation exclusively to municipalities?
Practical Effects of Municipal Discretion: The workshop also pointed out that the voluntary nature of the law may have negative and possibly unintended consequences. Since it is the mayor of each municipality who initiates the imposition of the “participation,” he or she may well come under considerable pressure, financial or otherwise. In rapidly developing areas, a 30 to 50 percent share of increasing property values might be a very large sum. One speaker, for example, asserted that in Cali 60 percent of the increases in land values caused by planning decisions would be equal to the entire municipal budget. On the other hand, the law may facilitate mutually useful negotiations and partnerships between municipalities and developers that do not occur now.
Maintaining a Political Constituency: The political environment that made this bold legislation possible included scandalous cases of overnight fortunes being made from a zoning change in Bogotá and a decision to expand the urban perimeter in Cali. In the latter case, land prices were said to have multiplied by more than one thousand times!
Beyond initial implementation there is the long-range question of maintaining a political constituency for the effective implementation of such a law in the face of powerful and well-financed resistance by landowners and developers. On the other hand, the ability of any national government to have passed such a law in the first place is an achievement of exceptional interest to those concerned about “value recapture” as an essential element in urban land policy.
Maintaining Objectivity in Assessments: In spite of very specific procedures in the law designed to make it as objective and transparent as possible, it will not be easy for the Codazzi Institute to make the required before and after assessments accurately under the time constraints defined in the statute. Moreover, the various transfer alternatives to cash payment of the fees, which are sure to be popular, are dependent on a local determination as to what constitutes “equivalent value.” A number of speakers pointed out that this process might be an invitation to corruption.
Technical Issues: Speakers also pointed out a number of technical assessment problems with the guidelines as set forth in the law. For example, if restrictive zoning causes one owner to lose value, which in turn increases value for an adjoining owner, what provision can be made for compensating the former while recovering the increased value from the latter? Moreover, since the market anticipates public action, will the “before” assessment already reflect increased values arising from the probability of the action? Or, if land use or building regulations increase values of low-income, small property owners, they may not have the cash to pay for development fees, nor would the other forms of payment be feasible at a very small scale. Forced sales or displacement of the poor could result. These matters raise the policy calculation: Is it better to stride ahead and work things out over time or attempt legislative correction of technical problems before proceeding further?
Economic Effects: Although legally described as public participation in the increased values that public actions have created, the legislation may also be seen as a form of capital gains tax. How often will it be used? Will implementation tend to push down the price of the land affected, or will changes in value be passed on to the ultimate consumer? If it is the latter, the law could have a negative effect on affordable housing. For this reason Article 83(4) exempts land to be used for “housing of social interest,” as defined by the national government. Will this become a loophole for widespread evasion? There is little international experience to answer such questions.
Master Planning: Law 388 of 1997 also requires all municipalities to prepare master plans (Planes de Ordenamiento) and contains fairly detailed descriptions of them in Articles 9 through 35. Obviously, planning alters expectations of owners, and therefore of land values. The administrative and economic interaction of the city’s planning process and its recapture of increased land values will surely be a complex one.
Conflicts in Objectives: As is often the case with fiscal tools, the new changes seek several objectives that are not always compatible: financing better urban development; reducing land speculation; introducing increased equity and progessivity into taxation; and closing some of the favorite avenues for corruption of municipal officials.
Learning from Innovation
In spite of these concerns, Colombia continues its tradition as one of the world’s most innovative nations in urban land planning, law and finance. Bogota was the first major city in the world to create a special zoning district that recognized the realities of low-income housing practices. Stimulated by the ideas and influence of the late Lachlin Currie, an economic advisor to the national government for some 30 years, the city used special assessment districts (contribuciones de valorización) to carry out a major physical transformation during the 1960s. Colombia’s laws on territorial development of 1989 and 1991, to which this 1997 law is a modification and supplement, are among the most comprehensive approaches to land planning since the British Town and Country Planning Act of 1947. Furthermore, the Colombian constitution is virtually alone in specifically mentioning the moral claim of the public to increases in land values caused by public action.
As might be expected, some of these innovations eventually fell short of initial expectations. Indeed, some participants at the workshop argued that the energies going into the recovery of plusvalía might be more usefully spent on increasing the efficiency of conventional property taxes. On the other hand, the new law is addressing and resolving some problems of earlier legislation and policies, and the country is learning from its experience. The conclusion of the workshop participants was that the process has been worthwhile, and that the new law must be understood and evaluated in its relationship to previously established instruments of value capture and fiscal policy in general.
William A. Doebele is professor of urban planning and design, emeritus, at Harvard University Graduate School of Design and a faculty associate of the Lincoln Institute. This article was prepared with important contributions by Martim Smolka, senior fellow for Latin America Programs, Fernando Rojas, visiting fellow of the Institute, and Fernanda Furtado, faculty and research associate of the Institute.
See also Fernando Rojas and Martim Smolka, “New Colombian Law Implements Value Capture,” Land Lines, March 1998.
