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14 LINCOLN INSTITUTE OF LAND POLICY Land Lines J U LY 2 0 0 8 In Latin America, the percentage of irregular hous- ing measured by observable indicators such as land tenure or sewer connections is declining in some countries, albeit at uneven rates. Disregarding the prevalent dispute around the proper measure of informality, in most Latin American cities the problem is still sizeable, and a better understand- ing of its dynamics is necessary to inform sound housing policy. In practice, measurable indicators of informal- ity based on lack of land title or access to infrastruc- ture and services are easier to obtain than those based on noncompliance with land use regulations and building standards. Poverty (in all dimensions) and insufficient public investment (in social hous- ing, infrastructure, and services) are the common explanations for the persistence of informality. But there is also increasing awareness that urban land markets in general and urban norms and regula- tions in particular are relevant contributing factors. High transactions costs in urban land markets accrue from red tape, lack or obfuscation of infor- mation, and discriminatory practices, as well as from other market dysfunctions derived from land ownership structure, monopolistic and speculative practices, and land use and building regulation that hinder compliance by low-income families. These factors increase market inefficiency and sustain informality. In this article we argue that land use and build- ing regulation managed by urban planners and officials at the local level may actually contribute to the incidence of informality. Among the 20 per- cent of Brazilian municipalities that reduced pov- erty the most over the past nine years, 23 percent also reduced untitled housing drastically, but 24 percent increased informality by more than 3.2 percent, the fastest pace observed in the country (IBGE 1991; 2000). Such differences in the perfor- mance of the low-income housing market cannot be explained only by the incidence of poverty, the Does Building and Land Use Regulation Matter? Urban Housing Informality: Ciro Biderman, Martim Smolka, and Anna Sant’Anna N ew evidence from Brazil indicates that the regulation of land use and building standards can reinforce oth- er factors that contribute to informal and irregular urban land occupation. The magnitude and persistence of informality in Latin American cities cannot be fully explained by poverty rates (which are declining), insufficient public investment in social housing or urban infra- structure (which is expanding), or even government tolerance of certain opportunistic practices on the part of informal developers and occupants ( The Economist 2007). While these factors are undoubted- ly important, inappropriate land use and building regulation also seems to play a role in the resilience of the problem. It can be argued as a corollary that an alternative regulatory framework may help to alleviate informality in urban land markets. The connection between informality and exces-
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This note was uploaded on 09/23/2011 for the course USP 480 taught by Professor Staff during the Spring '11 term at S.F. State.

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