Formalizing Informal Housing: Addressing the Elephant in the Room
Victor Endo, Luis Triveno, Abel Alarco
In the next 20 years, the world would need to build as much urban housing as was built in the past 6,000 years. Incremental and self-construction of homes, which normally are not registered and do not comply with building codes, will continue to be the de-facto most important housing solution around the developing world. The existence of a fast, low-cost and transparent process for the regularization of informal constructions could play a key role in (i) incentivizing homeowners to invest their resources in upgrading their properties; (ii) increasing the property tax base for local governments; (iii) growing the demand for credit for home improvement; (iv) creating an attractive market base of housing units that comply with minimum standards for insurance companies; and (iv) granting legal security and giving families the opportunity to make the best possible use of their most important—and sometimes only—asset. In this paper we show the legal and economic viability for the introduction of a program for the formalization of self-built homes in Lima, Peru and provide guidelines for how it could be replicated in other Latin American countries.
Only personal, non-commercial use of this document is allowed.