Legal land tenure in Mexico: An interview with Dr. Alfonso Iracheta -- Habitat for Humanity Int'l 1

Legal land tenure in Mexico: An interview with Dr. Alfonso Iracheta

By Manuel Mancuello

In Latin America, the lack of legal land tenure is a major obstacle to providing low-income families with housing loans, subsidies and, consequently, the opportunity to have a decent standard of living.

This situation has particular significance in Mexico, where two-thirds of the land in most urban peripheries is designated collective property under the ejidal[1] system. Thus the remaining one-third of the land, which is privately or government owned, is what is left for ever-encroaching low-income periphery urbanization.

Dr. Alfonso Iracheta Cenecorta recently spoke with Habitat for Humanity to provide some insight into this phenomenon. Dr. Iracheta is the coordinator of the Urban and Environmental Studies Program at the Colegio Mexiquense, AC, a research institute that offers post-graduate education in the social sciences and humanities. He is also the coordinator of the Network of Mexican Cities for Sustainability, a member of the National Housing Council and has been working with land-tenure issues for 25 years.

Some studies indicated that informal settlements occupied by the poor generally consist of 60 percent ejidal land and 40 percent private land. Others place the ratio closer to 50-50.

In Mexico, where urbanization has occurred at a break-neck pace, between five and six of every 10 families that move to a city or attempt to settle in a place other than their original residence must do so illegally, because they have no access to legal housing in condominiums, subdivisions, etc.

The lack of legal housing stock: The root of the problem

There is no legal urbanized land stock to speak of for people who earn less than three times the minimum wage says Dr. Iracheta, summing up the main problem. If there is any, it is few and far between and demand is overwhelming.

Because the price of a legal lot in any urban periphery is far beyond their capacity to pay, what do families below this income level do?

The cold reality is that they have no legal housing options. So, where does this family go? According to Dr. Iracheta, “to the country’s ever-expanding settlements or markets, where they will find someone ready to offer them an informal, irregular or illegal alternative.”

“The study we conducted for the World Bank in 2000 showed that the housing stock does not include any legal lots or houses for families that earn three times the minimum wage or less, which describes 75 percent of Mexicans,” says the researcher.

All legal housing production — whether institutional or private — is designed for people with higher incomes. Employed people with a household income of less than three minimum wages, although they make their mandatory savings contributions to the government’s Housing Institute, often live in irregular conditions because all legal housing stock is priced out of their range. Consequently they end up subsidizing the low-income segment that earns more than three times the minimum wage.

No matter how determined they are in their search for legal housing, or how many doors they knock on at social housing development companies or public organizations, those in the lowest income segment find nothing, because there is nothing to find.

Problem for some, solution for others

Illegal or irregular land tenure has become a solution for millions of Mexicans who do not have legal options.

The recent “Infomarkets” study conducted by the Lincoln Institute of Land Policy in Brazil, Venezuela, Argentina and Mexico confirms that people tend to purchase land with the intention of staying. Thus, they do not have a clear concept of the exchange value, and the property itself takes on a lesser importance. More significant is access to services and tenure security — the assurance that no one is going to evict them.

These informal or irregular occupations provide advantages for many, because most people in Mexico’s irregular urban zones do not buy their land as an investment (for tangible capital or future sale), but rather to establish a permanent residence.

Consequently, crowded houses, informal or intermittent transactions, such as inheritances of legal land, tend to be the solution for more than 70 percent of Mexicans. So much so, that these forms of obtaining urban land tenure are becoming, or have already become, the prevailing means for acquiring a house and creating a city.

Long-term solutions

Alfonso Iracheta suggests that any hope of implementing long-term housing solutions is contingent on reforms in three areas: supply, demand and institutional support.
1. In terms of land supply,
the government must create conditions in which the country’s poorest segment has access to urbanized land that adheres to urban planning principles. This is feasible, but entails an integrated vision in which part of the taxes collected from the formal real-estate industry are redirected to establish land for low-income buyers.

2. In terms of demand,
it is necessary to:
a) Create a coordinated national or state subsidy system. According to Dr. Iracheta, “Many subsidies exist, but they are not coordinated and come from multiple sources. For example, a family may receive one small subsidy that does them little good. But if the money were combined with other municipal, governmental or private subsidies, it would make a difference.”

b) Promote advance savings. People are capable of saving, but they do not have the tools to do so properly. “A mortgage system suited to the segment of people who build their house over a period of 25 years must be created. Here, the key is tailoring credit based on payment capacity. That is, design the process in terms of how much I (the client) can pay, and not how much you (the bank) want to charge me.”

3. Institutional solutions require:

a) A re-evaluation of incorporating collective (ejidal) land into urban development. “This entails reforms to existing institutions, which are inefficient or misguided in their efforts. For example, The Commission of Land Tenancy Regulation has been trying to regularize land tenure for 30 years, but it has done little more than increase irregularity,” said Dr. Iracheta. Through agreements and consensus building with landowners and developers, local governments, and organized poverty-housing settlements, an intermediary commission could be established to incorporate land according to the modern agrarian law. The law was reformed in 1992, but the institutional framework and executive management is still outdated and inadequate.

b) Less isolated settlements. “Enterprises and public entities who set out to build ‘X’ amount of houses in a given city generally acquire land and build small houses in closed subdivisions, 4 km from the urban centre, in areas with poor public transit. These areas often do not have access to regional and university services, and become the slums of the future,” says the researcher.

c) Implementation of a “macro development” concept, where each city consciously decides where urbanization will and will not take place. This necessarily entails the creation of instruments to protect areas designated as not for development. “Do everything possible to protect designated areas from development,” suggests Dr. Iracheta. “Regardless of how much someone wants to build in these areas, make it too expensive or stipulate that they cannot develop. And provide comprehensive services where development is permitted. Invite all the developers and stakeholders to create a synergy regarding land purchase.”

These actions, combined with the resulting real-estate business and coordinated in the context of long-term growth in each city, would go a long way towards freeing up land to allocate to low-income housing development and public spaces.

Key actors

Dr. Iracheta says the National Housing Council is the appropriate forum for such solutions, which require input from:

1. The national government, through the National Housing Commission and the Secretary of Social Development (responsible for land zoning), and state and municipal housing institutes.

2. Organized housing developers equipped with cutting-edge technology and that currently produce between 400,000 and 500,000 units per year.

3. Social organizations and social housing producers such as the international Habitat coalition, Habitat for Humanity and other private sector organizations that help low-income people acquire a house.

4. Anyone, such as intellectuals and academics, with relevant knowledge and the ability to organize and propose new ideas.

Habitat for Humanity’s role

According to Dr. Iracheta, organizations such as Habitat for Humanity should:

1. Help coordinate local actors and low-income families in each city, forming a network of support to demand accessible land supply.

2. Establish a social and political presence. Clarify commitments to Millennium Goals and country-defined objectives aimed at making secure house and land tenure a reality.

3. Be a valuable resource to the government, to increase housing stock and promote proposals such as those mentioned in favor of low-income families.

In this context, Dr. Iracheta concluded that initiatives sponsored by organizations such as Habitat must focus on “the supply of serviced land to low-income people creating a city. A place with access to affordable public services. A niche overlooked by the government and the market.”

Manuel Mancuello is a writer for HFH in Latin America and the Caribbean.


[1] An ejidal system is a process whereby the government promotes the use of communal land shared by the people of the community