by Jai Vipra.
This post argues that slum rehabilitation programs in India need to ask fundamental questions about which specific arrangement of property rights would be the most beneficial for all stakeholders, including the government, residents of slums, potential residents, and the rest of the city. It examines the option of providing less-than-complete titles to property as a slum rehabilitation strategy.
Urban informal settlements, largely slums, are a problem because they are squatter settlements, which means that the tenure is insecure and residents can be evicted at any time. The lack of legal tenure also affects access to services like water and electricity, and impedes the development of infrastructure such as roads and sewerage systems. Without proof of ownership of land, residents cannot mortgage or otherwise capitalise it. The lack of legality of land occupation is, of course, a problem in itself.
Slums sometimes crop up on public land, and can frustrate city planning objectives. This post does not examine the policy options for controlling the growth of new slums, which will include rural growth policy, job creation, public transport, overall land use management, etc. Here, I only focus on formalising existing slums.
Existing slum rehabilitation strategies
Sometimes, slum residents are relocated to city outskirts. This strategy has obvious problems, given that the main value proposition of slums is their location, and that relocation disrupts valuable social networks.
Mahadevia has classified slum rehabilitation strategies (other than relocation) in India into three buckets:
1. Basic Services Programs: for example, the Urban Community Development program that involved communities to reduce costs, the Slum Networking Program and the Urban Basic Services for the Poor program that integrated slum upgradation with social infrastructure.
2. Shelter and Services Programs: for example, the Slum Upgradation Program that provided land titles - leasehold or freehold - along with an optional housing loan. Another example is the Rajiv Awas Yojana, now discontinued, that provided for community participation at every stage and covered all slums, whether notified or not.
3. Special Programs: includes programs that aim to provide infrastructure and housing to cities and include slums in their strategy, for example, the Mega Cities Project.
Most of these schemes have included a provision to 'regularise' slums, and have excluded slums that could not be regularised, for example, those present on land owned by the Central government. Regularisation means that complete, or near-complete, legal tenure security is provided through full titles. Full legal tenure security means a title that grants the right to use, exclude from, inherit and alienate land through sale or transfer.
Such full titles create two kinds of problems:
1. Political economy problems: These include likely dispossession of land because of increased transaction value of property, and illegal subletting, among other issues. Dispossession occurs because full titles raise the commercial value of land, creating incentives to capture it, and thus decrease tenure security.
By some accounts, at least half of the people granted full titles in slum rehabilitation programs sublet their houses illegally.
Subletting or transfer of property rights is not an issue in itself. The issues arise either when titles are granted to non-residents pretending to be residents, or when residents, after acquiring titles, rent their properties out and move to another slum, simply shifting the issues with slums to another part of the city.
The first issue is one of monitoring and design. If community organisations play a role in determining who gets titles, their membership and conditions of membership must be rethought.
The second issue of title-holders moving to different slums indicates that a full title and a modern flat were not being demanded. Evidently some slum residents do not want these 'better' dwellings, and are using the titles to access capital. Perhaps our focus ought to be on increasing access to capital through other ways, while not losing sight of the need to improve living conditions in slums.
2. Public administration problems: Regularisation involves ascertaining original land ownership, resident status, identities, resolving disputes, etc. This process adds time and financial strain to already-strained state capacity. For example, the Slum Upgradation Program in Mumbai in the 1980s ran into problems even with a lease, because the private land would have to be acquired by the government first.
Property rights framework
We can already see that thinking of slum rehabilitation in terms of the kinds of property rights granted through titles helps us disaggregate issues. Some of the problems we saw above are caused by the peculiarities of full titling. They could presumably be solved by using less-than-full titles. Let us call such titles working titles. Working titles provide less-than-full tenure security. That means that they guarantee some, but not all, property rights. For example, a working title may guarantee the right to cultivate or occupy land, but not to alienate it. It may guarantee the right to construct non-permanent structures but not permanent structures. Working titles can avoid the need to amend the main state registry for every property transaction; they can be based on general demarcation of plots on makeshift maps; they can maintain ultimate state ownership of land when required.
They provide some tenure security, and because they do not give full ownership rights, they often skirt the need for the government to acquire private, encroached-upon land. Theoretically, they may reduce the moral hazard of encroaching on a property that will eventually be fully regularised. For this to be true, the property rights included in the working title have to be enough to provide tenure security to the urban poor but not enough for encroachment to become attractive.
There are many examples of programs providing working titles. The following table, derived from secondary literature, examines the objectives, effects, administrative design and issues of four such programs:
| Area | Purpose | Instrument | Rights | Administrative design | Coupled with | Effects |
| Cape Town, South Africa | Source | Violence Prevention | Occupancy certificates | Use | Community register | A project to upgrade infrastructure and state service provision | Unclear effects on violence |
| Access to services | Access to services | Regular but voluntary updating of registry | Improved access to services | |||
| Upgradation of infrastructure | Social consultation process | Upgradation delayed because of relocation requirement | ||||
| High-level informal settlements working group | Electrification | |||||
| Dedicated, full time on site registration office | ||||||
| Brazil | Source | Keeping public land public | Concession of Real Rights to Use | Use for a limited period of time, renewable | Registration required in some areas | Project to upgrade infrastructure and dwellings | Public land remains public |
| Reducing disputes | Transfer with municipal approval | Monthly fee in some areas | Services such as rubbish collection, water and electricity | Unclear effects on dispute levels | ||
| Tenure security | Decreased tenure security because it is perceived as a rental contract due to program design and inadequate communication | |||||
| Namibia | Source | Less strain on state capacity | Starter title | Use | Parallel registry | Only been piloted, but legal framework important | |
| Poverty reduction | Sell, transfer | Para professionals | ||||
| Inherit | Community involvement | |||||
| Landhold title | Use | |||||
| Sell, transfer | ||||||
| Inherit | ||||||
| Mortgage | ||||||
| Botswana | Source | Reducing strain on state capacity | Certificate of Rights | Use | General plans for demarcating boundaries | Services such as earth roads, water, toilets | Did not reduce strain on state capacity |
| Access to services | Inherit | Similar to customary system | Housing loan | Improved access to services | ||
| Too much urban land state-owned because of historical reasons; need to transfer rights to squatters | Transfer with municipal approval | Monthly service charge | Effectively transferred rights in public land to residents | |||
| Mortgage | Dispute resolution system | High level of disputes | ||||
| No registration at deeds registry | Unauthorised structures |
Conclusion
We can draw some preliminary inferences from these case studies of working titles. Working titles seem to improve access to services by formalising rights. They also avoid the legal issues of registration in the main registry of a country, by using parallel processes and structures. They help with identifying actual residents because communities are heavily engaged in mapping processes. They can provide tenure security if their purpose and characteristics are communicated well.
While programs that provide working titles aim to also improve infrastructure, in reality, it seems as if the infrastructure provision increases community involvement and may end up making the working titles easier to implement, and an attractive option for the poor. The hypothesis is that when coupled with infrastructure provision, services and housing loans, working titles seem to have increased take-up and easier implementation.
While working titles reduce the need for state capacity in some ways, they increase it in others, particularly with the need to involve communities intensively. They require high commitment from the administration and the community towards solving issues of tenure insecurity. They may not reduce the strain on the state's dispute resolution system. The pilots have been small, and their effects in larger contexts are unclear. They also uniformly do not increase the mortgage-ability of land; however, as the same case studies and other sources show, neither do stronger titles in these and other countries.
While there is some research on such titles, more research is required on the optimal administrative design for such programs, so as to reduce the strain on state capacity and disputability among the community. It would also be beneficial to undertake systematic research on the suitability of working titles for India.
Jai Vipra is reasearcher at National Institute of Public Finance an Policy. The author thanks Anirudh Burman, Suyash Rai and Devendra Damle for useful discussions. The two anonymous reviewers also contributed very helpful insights.
