Slums: How Informal Real Estate Markets Work

Slums: How Informal Real Estate Markets Work

Slums: How Informal Real Estate Markets Work

Slums: How Informal Real Estate Markets Work


Large numbers of people in urbanizing regions in the developing world live and work in unplanned settlements that grow through incremental processes of squatting and self-building. Slums: How Informal Real Estate Markets Work shows that unauthorized settlements in rapidly growing cities are not divorced from market forces; rather, they must be understood as complex environments where state policies and market actors still do play a role. In this volume, contributors examine how the form and function of informal real estate markets are shaped by legal systems governing property rights, by national and local policy, and by historical and geographic particularities of specific neighborhoods. Their essays provide detailed portraits of individuals and community organizations, revealing in granular detail the working of informal real estate markets, and they review programs that have been implemented in unconventional settlements to provide lessons about the effectiveness and implementation challenges of different approaches.

Chapters explore the relationships between informality, state policies, and market forces from a range of disciplinary perspectives and on different scales, from an analysis of the relationship between regulations and housing in 600 developing world cities to an ethnographic account of the buying and selling of houses in Rio de Janeiro's favelas. While many of the book's contributors focus on the emerging economies of India and Brazil, the conclusions drawn illustrate dynamics relevant to developing countries throughout the Global South. The diversity of perspectives combines to create a rich understanding of an important, complex, and understudied topic.

Contributors: Arthur Acolin, Sai Balakrishnan, Eugenie L. Birch, José Brakarz, Shahana Chattaraj, Sebastian Galiani, David Gouverneur, Yvonne Mautner, Paavo Monkkonen, Vinit Mukhija, Janice E. Perlman, Lucas Ronconi, Bish Sanyal, Ernesto Schargrodsky, Patrécia Cezário Silva, Susan M. Wachter.


We live in a rapidly urbanizing world in which population growth is concentrated in the cities and urban regions of the Global South. While many point to the urban-rural tipping point that crested 50 percent in 2007 to mark this as the urban century, equally important is the fact that one-sixth of the world’s population lives in slums or informal settlements. Indeed, urban development in Africa, Latin America, and much of Asia has been, and continues to be, characterized by informality. The informal economy, which encompasses all economic activities that are “unregulated by the institutions of society in a legal and social environment in which similar activities are regulated” (Portes, Castells, and Benton 1989), is a source of housing as well as a livelihood for large numbers of urban workers in poor countries, in megacities like Mumbai, Rio, and Lagos. The evolution of the informal economy represents both challenges and opportunities for ensuring that urbanization continues to be associated with economic development in the twenty-first century.

Informal settlements go by a variety of names— basti or hutment in India and favela in Brazil— the two countries whose experiences form the heart of this book. These settlements have cropped up without conforming to local land-use regulations and without being listed in government records, official maps, or titling registries. They simply exist in legal limbo. Since these places offer little or no security of tenure, their residents face great difficulties in accessing banking and public services and have difficulty building personal assets through home ownership as they gain financial footholds in a city. Conditions in these settlements may be deplorable, but they do provide a source of affordable housing in growing cities.

Informal settlements are conventionally understood to exist within cities and outside the remit of both the market and the state. But informality extends beyond urban slums, in the form of unregulated urban expansion in the countryside or the development of informal industrial districts that . . .

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