Globalisation and land markets –
Scope for pro-poor development?
Ramin Keivani
UK-Brazil Urban Research Network
Oxford Workshop
9-11 March 2011
Main Research questions
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What are the main characteristics, drivers and limitations of the initiative under consideration?
How do these initiatives relate to the main concern of this network for enabling governance
for sustainable and flexible urban futures?
Does governance actually matter in the success or failure of these initiatives?
If it does then what are the emerging forms and patterns of governance that are most effective
for developing and implementing policies for economic growth, environmental sustainability,
social inclusion and poverty alleviation?
What other actions or interventions can governments (at different levels), private sector and
civil society actors make to facilitate more sustainable and flexible urban futures in the fields
under consideration?
What are the key transferable or informative lessons for consideration across each country?
What are the conceptual and theoretical insights that can be drawn from exploring these issues
across both countries?
What are the key issues in each field that would need to be developed as part of a broader
research agenda for addressing the main objectives of this network?
Globalisation: What does it entail?
 Implies that a world composed of separate national
economies is being superseded by a single global economy,
States by global markets – countries/cities become junctions
in flows that governments have less control
 Uneven development
 Path dependent
 Macro economic effects
 Deregulation, liberalisation, sectoral shifts
 New city economy as junctions of flow
 Pervasive effects in the North and South
Impact on urban form and property1
• City development reoriented in line with spatial requirements
of international capital
– Occupier demand
• Intensified redevelopment of Central Business Districts, creation of new CBDs –
Three CBDs in Sao Paulo!
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State of art office space with global connection
• Globally connected industrial estates
• Retail, leisure and hospitality facilities
• Housing
– Investment demand
• Core and opportunistic investment depending on:
– Institutional risks
» Property laws and regulations, professional services, contract enforcement, etc
–
Market risk
» Interest rates, recession, wars, political stability, economic growth, etc
Total investible and invested real estate
by region in 2009
(RREEF, 2010a)
Impact on urban form and property2
 Encroachment on cheaper peripheral land
 Particularly for industrial development and upper middle class
housing
 Formation of extended metropolitan regions and even larger
mega urban regions
 E.g., Macro Greater Region of Sao Paulo
 Blurring of rural and urban dichotomy, shifting industrial
activities to peri-urban and rural areas, agglomeration
economies, etc.
 Restructuring city economies and resultant spatial
reconfiguration and redevelopment
 All of this means major investment in real estate both as a
direct result of global investment diversification strategies
and indirect result of (globally induced) development
activities
 But what about Brazil and Sao Paulo?
Sao Paulo: an emerging global city!?
• Widely recognised as the main gateway to Brazil and the centre of
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Brazilian economic growth producing 34% of national GDP
Service and Finance sector 47% of state GDP
Industrial sector still highly important at 46% of state GDP
Transition to a high value global function is still incomplete but the
trend is one of gradual de-industrialisation and development as a HQ
and service centre for Brazil and the Mercosur Region
Booming Real Estate market from both international and local demand
– Mortgage lending doubled to $42 billion between 2009 and 2010
– Attracting large scale and individual international investors
– Emergence of a large number of real estate funds for indirect investment across
different sectors targeted at International investors
Global Network Connectivity
175 firms – 526 cities
(Pain, 2009)
Rank
GNC
2008
1
London
100
8
Shanghai
69.74
12
Seoul
63.5
16
Buenos Aires
61.19
17
Mumbai
60.86
18
Kuala Lumpur
59.72
19
Warsaw
56.4
20
Sao Paulo
56.19
2000
16
Sao Paulo
54.74
23
Buenos Aires
44.56
Latin America 2009 commercial
property investment activity
(RREEF, 2010b)
Global real estate market value in
2009
(RREEF, 2010a)
Globalisation and its urban discontents
 Globally driven economic and spatial restructuring can
severely aggravate pre-existing social inequalities and create
new ones!
School of the Built Environment
Looking at the problem from another perspective
 26% of MRSP live in
Favelas and illegal
settlements
 Rising to 43% in peripheral
areas
 Overall 70% of land in the
city is covered by
substandard housing
 Affecting 57% of MSP
population
School of the Built Environment
Demographic shifts in Sao Paulo
(Torres et al, 2007)
 Increasing population in
peri-urban areas to 30% by
2000
 8.1% annual increase in
these areas
 -2.5% negative growth in
central areas
Rapid urban sprawl in Sao Paulo
(Torres et al, 2007)
Distribution of real estate projects
(Torres et al, 2007)
 Formal development companies
housing only 23% of additional
households during 1990s
 Peripheral areas dominated by
self built low income housing
 620000 abandoned buildings in
the centre more than estimated
housing deficit in MRSP!?
A complex and contested spatial
geography
(UN-Habitat, 2010)
• City of walled estates intermingled
with favelas
• Conflict with developers over
valuable central land
• Driving the poor out: the case of
jardim edite a ZEIS designated area
that did not work as planned
• Dynamics of the formal property
market driving urban sprawl and
reinforcing social and spatial
segregation!?
But what are the opportunities for the
low income population?
 Economic readjustments in peripheral/peri-urban areas
and connections to the main formal economy, e.g.,
informal workshops and service sector activities
supporting formal sector
 The role of land and property as assets for income
generation, Home-based enterprises
 Institutional constraints
 Property rights: tenure, development, use and exchange
School of the Built Environment
Towards an analytical Framework
The role of urban governance1
 A definition:
 Broader than government entailing the process of interaction between the public
sector and various actors and groups of actors in civil society
 Crucial to this are power relations and interactions between
agents that determine management and allocation of
resources particularly access to and use of land
School of the Built Environment
The role of urban governance2
• Devas (2001) identifies the necessity for congruence of
three critical factors:
– inclusive political process
– sufficient competence and capacity of city governance institutions
– pressure from civil society
• Globalisation creates particular conditions that have direct
and specific consequences on all of the above,
• But what are the possibilities for new forms of governance
that can be more responsive to future equity challenges?
School of the Built Environment
Developing an institutional
understanding of land markets
• In terms of NIE impact of transaction costs and institutional
constraints
– costs of negotiating and completing transactions
– Formal and informal rules and social structures for facilitating
and organising interests of actors and enforcing principal/agent
relationships
• From a more sociological perspective complex articulation
between structure and agency that must be seen within the
wider debate on social production of space
Capital Asset Framework
 Increasing low income capabilities to accumulate assets
and remove obstacles to its productive use
 This would mean ability to use, earn income from and
exchange property
 But does it mean increasing formal property rights or
rights over property?
 To answer this we must understand not only informal
property processes but also the social value of land and
property for the poor.
What about the Brazilian context?
• An array of national, state and municipal level institutional innovations for
more equitable growth:
– The statute of the City has provided the scope for greater socialisation of development
benefits:
– Zones of special Social interests
– Participatory planning
– Etc…
• But what has been the effect on the ground?
– How have the institutional and governance arrangements impacted the
implementation?
– Are good laws/institutions sufficient?
– What are the limits of participatory governance? How can we create the conditions
for effective implementation to balance differentials powers for influencing decision
making in a contested terrain?
• What type of institutional arrangements and implementation mechanisms on
property rights are best suited for enhancing low income capacity to benefit
from land development?
Key areas for a future research agenda
 Forms and processes of urban governance on land use
and property development
 Institutional context of formal property market and
underlying drivers for social production of space
 Informal market processes
 Interface of formal and informal markets particularly in
terms of how the former is impacting the latter
 The scope for low income asset consolidation and capital
accumulation
Thank you
References
 Devas, N. (2001) Does city governance matter for the urban poor,
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International Planning Studies, 6(4), 393–408.
Paine, K (2009) Londres – The place to be, Sciences Humaines, Les Grands
Dossiers, 17.
RREEF (2010a) Global real estate insights 2010, RREEF London,
www.rreef.com
RREEF (2010b) Latin American real estate markets in perspective, RREEF San
Francisco, www.rreef.com
Torres, H, Homberto, A and De Oliveira, M.A (2007) Sao APulo peri-urban
dynamics, Environment and Urbanization, 19, 207-223.
UN-Habitat (2010) Sao Paulo: a tale of two cities,
http://www.unhabitat.org/pmss/listItemDetails.aspx?publicationID=2924