Urban Land Markets, Housing Development and Spatial Planning in Sub-Saharan Africa: A Case of Uganda : A Case of Uganda [1 ed.] 9781612090771, 9781607413707

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Urban Land Markets, Housing Development and Spatial Planning in Sub-Saharan Africa: A Case of Uganda : A Case of

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AFRICAN POLITICAL, ECONOMIC, AND SECURITY ISSUES

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URBAN LAND MARKETS, HOUSING DEVELOPMENT AND SPATIAL PLANNING IN SUB-SAHARAN AFRICA: A CASE OF UGANDA

SHUAIB LWASA

Nova Science Publishers, Inc. New York

Urban Land Markets, Housing Development and Spatial Planning in Sub-Saharan Africa: A Case of Uganda : A Case of

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Shuaib, Lwasa. Urban land markets, housing development, and spatial planning in Sub-Saharan Africa : a case of Uganda / Lwasa Shuaib. p. cm. Includes bibliographical references and index. ISBN H%RRN 1. Land use, Urban--Uganda. 2. Housing--Uganda. 3. City planning--Uganda. I. Title. HD984.Z63S58 2009 333.3096761'091732--dc22 2009011427

Published by Nova Science Publishers, Inc.  New York

Urban Land Markets, Housing Development and Spatial Planning in Sub-Saharan Africa: A Case of Uganda : A Case of

CONTENTS Preface

ix

Abstract

9

Chapter One

Introduction

Chapter Two

Historical Perspective on Land Use and Urban Spatial Planning

11

Theorizing Land Markets, Urban Planning and Housing Development

27

Chapter Four

Method

73

Chapter Five

Policy, Legal, and Institutional Framework

81

Chapter Six

Formal and Informal Urban Land Markets

91

Chapter Seven

Urban Land Values

123

Chapter Eight

Urban Land Markets and Housing Development

143

Chapter Nine

Land Markets and Spatial Planning in Kampala

157

Chapter Ten

Unlocking Urban Land Markets for Sustainable Urban Development

169

Conclusion

177

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Chapter Three

Chapter Eleven

1

Acknowledgments

183

References

185

Index

191

Urban Land Markets, Housing Development and Spatial Planning in Sub-Saharan Africa: A Case of Uganda : A Case of

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PREFACE Urban development in sub-Saharan Africa has posed more challenges in the recent decades shifting the focus from rural poverty to urbanized poverty. Because of a rapidly urbanizing sub-Saharan Africa coupled with failures in urban management, urban economies have grown slower than correspondent population increase, slum growth increased and poverty urbanized. Of all urban challenges, housing has posed serious challenges in sub-Saharan Africa yet the prime basis of urban housing is land. Land management is key to urban development due to its influences on the social, economic development and urban environmental management. Land and housing are important sectors as urbanization and urban development accelerates. Whereas land is generally known to be supplied by the Government, City Authority and or developed under schemes approved by the public authorities, in practice majority of urban land developers in sub-Saharan Africa acquire land from the informal sector. Urban problems are interrelated but housing is the most important largely due to its share on land for urban development but also an indispensable requirement. The role of the informal land markets has become important in shaping the development pathway of cities in sub-Saharan Africa. Because of Informality, gaps exist between the formulated spatial plans and actual developments. These themes are explored in the book through analysis of urban land market dynamics, housing development and spatial planning. Focusing largely on the urban land market in Kampala while making reference to regional city experiences, there is evidence of „intensified´ urban land markets which are driven by informal mechanisms of exchange. Reproduced from formal systems, there is continuous interaction between the informal and formal urban land markets propelled by agents and social networks, information flow

Urban Land Markets, Housing Development and Spatial Planning in Sub-Saharan Africa: A Case of Uganda : A Case of

x

Preface

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mechanisms and leading to distorted land values, economically inefficient market operations, informal subdivision and planning breakdown. Although the factors for failure of planning are several, the contribution of the informal land market cannot be underestimated. To enable responsive planning in the region, there is need for unlocking informal land institutions, rethink land management policies and build on the informal land markets for better urban communities while coupling with formal systems.

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ABSTRACT Land management is a key issue to urban development due to its influences on social and economic development, as well as on urban environmental management. Land and housing are important sectors, as urbanization and urban development accelerates. Ideally, all seekers of land in urban areas are supplied land by the government, city authority, or develop under schemes approved by the public authorities who are managers of urban land. In practice though, some urban landowners acquire their land directly from public authorities, while many others acquire their land from informal sectors, especially in the cities of subSaharan Africa. Although all urban problems are interrelated, housing is usually considered to be the most important, largely due to the share of land used for urban development. Urban development challenges continue to characterize cities of the sub-Saharan countries, and the role of the informal land markets is increasingly becoming important in shaping the pathway of development of such cities. This is due to the fact that an informality gap exists between the formulated plans and actual developments on the ground. Drawing on earlier works in this region, and experiences in Kampala, this book analyzes urban land markets and focuses the discussion on the emergence of informal urban land markets, housing development, and its influence on spatial planning, as well as the implementation of these plans. Focusing on the urban land market in Kampala, while referring to other regional cities experiences, there is growing evidence of „intensified´ land markets, but this is largely driven by informal mechanisms of exchange. Emerging from formal systems, there is growing evidence of a continuous interaction between the informal and formal urban land markets propelled by agents and social networks, as well as information flow mechanisms, subsequently leading to distorted land values, market operations, informal subdivision, and planning breakdown. Although there are several factors that lead to the failure of planning, the contribution of the informal land market cannot be underestimated. Thus, to enable responsive planning in the region, there is need for recognition of existing informal institutions, as well as a need to rethink land management policies and build on the informal land markets for better urban communities.

Urban Land Markets, Housing Development and Spatial Planning in Sub-Saharan Africa: A Case of Uganda : A Case of

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Chapter One

INTRODUCTION

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ABSTRACT This chapter provides the contextual and historical settings of land management, land markets and urban development. The chapter begins with discussions regarding land management approaches, factors before focusing on land exchange for housing development. The chapter highlights the critical issue that plagues all urban land uses; residential use places the highest demand on urban land, and thus it‟s important for the physical space, as well as from a socio-economic point of view. The premise is that urban land management has, for a long time, focused on residential use, along with other land uses, but needs reform to respond to the housing needs in the cities of sub-Saharan Africa. The challenge of housing is manifested in the existential needs that are evident in the cities of sub-Saharan Africa characterized with crowding of housing, brown agenda, and the many urban dwellers living in slums. Evidence shows that slum growth in sub-Saharan Africa is equivalent or greater than urban growth. This chapter sets the basis for the book and centers the discussion around the thesis that land management approaches in subSaharan Africa need to be more innovative and responsive to existential needs of the urban dwellers.

URBAN LAND MANAGEMENT IN SUB-SAHARAN AFRICA Land management is a key issue to urban development because it influences the social economic development and environmental status of any urban area. Urban systems play a major role in integrating the national economy with the social and economic developmental needs of the population.

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Shuaib Lwasa

Inefficient management of land in cities tends to result in considerable human suffering, and consequently, loss of the creative potential through marginalization of large sectors of the population. As noted by Luke and Kimani-Mukindia (2000),,land management in urban centers mainly concerns expression of activities on land with an aim on development through substantial investments on the land, and/or changing existing uses. Land management issues therefore include infrastructure development and social service provision, all of which are accomplished within the land use planning and housing frameworks. In sub-Saharan African cities though, the challenge of inclusive urban development has remained intractable, leaving the majority of urban dwellers in poverty and slum conditions (Rakodi 1997; Rakodi 2001; Obudho and Peter 2002; Rakodi and Lloyd-Jones 2002). Although all urban problems are interrelated, housing is perhaps the most important, largely due to its share of urban land. Housing as observed by Sengendo, 1993, is a process that involves mobilization of resources for „housing‟ oneself. Housing is an important aspect of land management and urban development because the area where housing is developed, how housing is developed, and the land required or demanded for housing are all important considerations in urban land management. Land exchange mechanisms are therefore instrumental in housing development. The control on non-control of land exchange has implications on the nature of housing development. Assessment of land markets on their performance is therefore necessary for improvement of urban land management (Dowall, 1995). Assessment of the operations of the informal land market and relations to housing development has proved essential in critiquing the spatial plans implementation in sub-Saharan Africa. Transcending the understanding of informal land market operations, the study examines the role of land markets in influencing planning of cities. It is recognized that the factors which have been fronted by various scholars for disabling planning are various, but the contribution of the informal land market has received little attention in literature, apart from looking at land markets as saviors of the urban development pathway. This chapter presents the background to the research and outlines the issues which were investigated.

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Introduction

3

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POSITIONING THE RESEARCH PROBLEM AND FOCI Land and housing are important sectors as urbanization and urban development accelerates. Ideally, all land seekers in urban areas should get their land from the government, or develop land under schemes approved by the public authorities, since they are supposed to be the providers and managers of urban land (Kironde, 1994). Such schemes should involve application for exchange of land, surveying of the land, registration of changes in ownership, and authenticating of the land title by a government agency concerned with land administration. Howerver, the situation in many urban areas of sub-Saharan Africa is far from the latter ideal. Kironde (1994), for example, notes that no more than 10% of urban landowners get their land directly from public authorities (here, taken as government agencies involved in land administration and management, including municipalities and approved land agents which constitute the formal sector). The majority of land seekers get their land from the informal sector with adapted formal land markets‟ procedures and character in operation. In Kampala, the operations of this informal sector have taken precedent as a consequence of both forces of demand and supply, as well as the institutional setup. The institutional setup that is concerned is the system of land tenure and 1 ownership prevailing in the country . Institutional arrangements involve the formal procedures for exchange or acquisition of land. The demand for land at the „right‟ or „unright‟ locations has exceeded the supply made available by Kampala City Council ((KCC) and other public authorities. On the supply side, the existence of land held under customary and freehold has led to land available for exchange to those in search for it. In the face of the inflexible and time consuming steps of acquiring land through the formal sector, many developers have opted for the informal sector, which takes relatively less time and allows flexibility in both the transaction and subsequent development of the land. Since the majority of developers acquire land through the informal sector, it is implied that more land is released on to the market through the informal land market. Subsequently, housing development continues to occur informally with little or no regard to the development regulations and control, despite the existence of planning schemes. Continued „informalization‟ of land management and the subsequent housing development have weakened the

1 Whereas the organization relates with the institutions, the latter is more than the organizational structure (IADB and IDRC (2002). Organizational Assessment: A framework for Improving

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Shuaib Lwasa

capacity of KCC to manage land, paving the way for informal land markets‟ intensification. This has presented enormous problems to planning, and continues to raise the question as to whether the prototype planning and guidance system adopted from the Global North is an appropriate tool for implementation of plans in the Global South, particularly sub-Saharan Africa. As a result, a gap exists between the formulated plans and the actual developments on the ground. This is due to the fact that although there is evidence of planning in the cities, such planning is dotted around cities in well planned enclaves surrounded by informal imprints as a result of a mismatch between the designed physical plans and development imprints (Pareto, 2004). Additionally, planning in Kampala has been done in respect to the analysis of problems, as well as exploring options in pursuit of general goals and specific land development objectives, as reflected in the various planning schemes. Thus, planning outputs exist, but the apparent staying power of planning activities to the production of outputs, and the direct implementation remains an outstanding issue for the planning profession and in urban development. Where the direct application of plans have been pursued, the land issue becomes an intervening factor and in many cases, deters development guided by the existing plans. In many ways, the land market operations and associated issues of ownership type have placed administrative constraints that have informally dictated how development proceeds, rather than operating within the planning frameworks. This is particlualry common where developers have „perpetual rights‟ over land. They exercise their rights by allocating the land to the „best‟ activity, which is profitable in economic and social terms, creating a disjuncture between the plans and developments in sub-Saharan cities, inclusive of Kampala. Therefore, the gap between what the planning authorities would like land 4 management and development to be and what it actually is is getting wider. Effective public intervention is required, and one such policy requirement is the understanding of the operations of the informal land markets (Dowall 1995; Nkurunziza 2008; UN-Habitat 2008). Both the rate at which urban development in Uganda, and in particular, Kampala, is growing, and thus the demand for residential land, is unprecedented. The lack of knowledge and up to date information about land or market conditions of the informal sector is a serious predicament. Although the precise causes of planning failures are subject to debate, the lack of accurate and up to date information about the

Performance. Ottawa Washington, International Development Research Center InterAmerican Development Bank.

Urban Land Markets, Housing Development and Spatial Planning in Sub-Saharan Africa: A Case of Uganda : A Case of

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Introduction

5

land market disables effective and responsive urban planning in sub-Saharan cities. As noted by Pareto (2004), only 30% of the developments in Kampala are formal, while the rest are informal. This implies that the operations of the land acquisition processes and subdivisions of this informal land market are known, but not adequately documented. There is inadequate information about the flow of information between land agents (whether formal or informal), buyers, sellers, determination of prices, and supply of land, despite the level of operation in the urban land markets of Kampala. The processes of plot subdivision and occupation associated with maintaining vacant land have been observed in Kampala, and require investigation in order to understand the residential development patterns and their effect on sustainable urban development. In this book, three main issues are examined. First, the land market operations; second, housing development processes through the stages of design and building, focusing on the housing decisions and the driving forces of the decisions; and third, the impact of the informal market on the planning process and implementation of those plans. The primary question of the informal land market concerns efficiency in promoting the exchange of land rights and its relation to residential development patterns and planning. Analysis is on a comparative basis for the segmented markets of medium-high income and low income. In these income ranges, there is a wide range of actors, agents and social relations, degrees of formality and legality variations, size of holdings, and different methods of financing land acquisition, as well as the complex patterns of negotiations.

AIMS OF THE RESEARCH The main aim of the research is to examine the relationship between the operations of informal land markets and housing development for planning policies that are responsive to the land market conditions. The specific aims of the research are: 1. To assess the operations of the informal land markets and compare it with those of formal land markets in Kampala. 2. To analyze land values and the factors that determinine the value in the different sub-markets of the informal sector 3. To examine the modes of land supply and conversion of buildable land for residential purposes

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Shuaib Lwasa

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4. To assess the implications of informal land market operations on the spatial planning process in Kampala for effective and responsive planning The first objective is aimed to address elicit information on the nature, trends, and character of informal and formal land markets. It recognizes that though, in the case of formal urban land markets, the „rules‟ of the game are known and well documented, which are also characterized by divergent procedures, which explain the continued fusion of informal and formal systems. The issues of land subdivision and the exchange of use rights with associated information requirements are considered. The second objective examines the multi-dimensional nature of land values, including the economic, social, and environmental values. The land value is analyzed through a spatial-temporal analytical framework that also considers the „urban gradient‟ theorem of value comparisons on the basis of distance. Land supply in urban systems is a complex set of processes and steps that are also dynamic, given the externality factors of tenure, institutional set up, and socio-economic conditions. In the third objective, the research underpins the release of buildable land for residential housing, conversion rates, and compares formal land supply systems with informal supply systems. Issues of housing development and attendant utilities are also examined. The relation with spatial planning systems and analysis of the interactions are examined. In objective four, the critical issue is the research question regarding the effectiveness and efficiency of informal urban land markets, and how they are related to spatial planning and guidance systems. The required interventions to address the mismatch between spatial plans and urban development is also addressed.

THE SCOPE OF THE BOOK Urban land markets have been analyzed from the perspective of land tenure providing a partial analysis of the market operations and dynamics (Ahmad 1989; Payne 1997; Rakodi 1997; Nkurunziza 2008). This is due to the rights held by land owners, which are defined by tenure systems. This research recognizes the significance of tenure and extends the analysis to land exchange (market), and how it influences residential housing development and implementation of the spatial plans. The research recognizes that residential

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.

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Introduction

7

development through supply of land by informal land markets is an important driver for plot subdivision, price setting, and housing development decisions. The research analyzes the planning system and how it is affected by the land market operations. In order to expound the issues of urban land markets, Land Tenure, locational characteristics of plots and socio-economic factors are considered as externalities to the operations of the urban land market. The purpose for this scope is to understand the operations of informal land markets and their relation with housing development with intent to derive interventions in planning activities that would make plans more realistic and reflective of the market conditions for the future guided developments. Land in urban areas is an important element for physical development of the urban space. Unlike rural areas where productivity of land is measured according to yields per unit area (Chapin and Kaiser, 1979), land in urban areas form the basis of the activities in terms of land use from which returns on investment are feasible. Thus, the exchange or non-exchange of land between individuals and institutions, and between individuals and individuals is a key element in the development of urban areas. This exchange is also important in influencing the kind of use for an urban space. Experiences in Kampala show observed increase and „intensified‟ exchange of land rights with more land units put on the market, while several remain hoarded, soaring land values and prices. This phenomenon requires critical examination for understanding the dynamics due of the effects on the development of the city. Therefore, the scope and context of this research is premised on three important factors, which are further named and discussed in the succeeding paragraph. First, land has been commodified in urban areas of Uganda, and particularly in Kampala. Although the land market in Uganda has existed for a long time, since the beginning of the 20th century (Kaggwa, 1994), its functioning has not been as active as the experiences the last two decades indicate. Land is exchanged and acquired for many reasons, which indicates that land is more or less like an exchangeable commodity. Land rights are acquired for housing development, speculation, and asset accumulation, but different land rights determine different levels of commodification (Coccato, 1996). Second, land exchanges are predominantly occurring through the informal sector, which has developed parallel to the formal sector. Studies by Kaggwa, (1994); Nyakaana (1996); Mundeme (2002); and Nkurunziza (2008) have expounded the reasons for the development of the informal sector, but a deeper understanding of the operations of the informal sector, focusing on land

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markets, is necessary for useful explanations of planning and development of urban areas in the developing countries, and in particular, Uganda. Third, plan implementation has proved to be more difficult, so even if a plan is implemented after developments have taken place, the procedures involved are costly, and also usually generate political controversy (Rakodi, 2001). The gap between what urban managers want the urban areas to be and what the urban areas actually are is widening (UN-Habitat, 2008). From the public point-of-view, cities have become unlivable, and this is attributed to current development experiences. Therefore, on the basis of these reasons, it is imperative that research is conducted to gain a deeper insight in to the operations of the urban land market and its influences on the spatial planning system. Research in land market assessments, and review of the planning frameworks in sub-Saharan Africa, including Uganda, would aide in understading the operations of the urban land market.

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STRUCTURE OF THE TEXT This book recognizes that the goal of planning is not limited to making plans, but also includes building an environment that closely adheres to the local goals and objectives (Bennett, 2003). The goals set to be achieved via planning have not been achieved in many cities of sub-Saharan African countries, and there are many possible explanations for the failure of planning, including institutional weaknesses, financial limitations, human resource constraints, and politics; however, the effect of the informal land market is not well understood. Whereas the influence of the planning system on allocation of land to suitable uses is a known fact in the developed world, in cities of the developing countries, there is a different experience drawn on the operations of the informal land market and their influence on the development sequence (Dowall, 1995; Wadley and Smith, 1998; Kombe and Kreibich, 2000). Informal settlements are growing faster than we know, and the processes of densification and re-densification is thus on the increase (Brockerhoff, 2000; UN-Habitat, 2002; UN-Habitat, 2008). Literature from Tanzania (Kaggwa, 1994; Kironde, 1997), Kenya (Yahya, 1990), and Uganda (Kaggwa, 1994; Nawangwe, Nuwagaba, et al., 2002), indicates the growing importance and dominance of the informal land market sector. In Tanzania, the focus of the literature has been on the informal land management systems, examining how land is put to use through informal management regimes, actors involved, and the resultant character of

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Introduction

9

settlements. A comparison of the formal and informal land management regimes also shows how such land management influences land use change in Tanzania. While in Uganda, the relationship between land tenure and land use has been analyzed, focusing on modes of land acquisition, actors and differential prices (Nkurunziza, 2008). Most of this literature focuses on land utilization after acquisition, but this book examines the activities prior to utilization, including the operations of the mechanisms of exchange (market), subdivision, plot occupation and the actors in the market. The text in this book transcends the aspects outlined, and further relates the land market operations to spatial planning, examining the modes of land supply as seen from the planning point-of-view, and supply from the market point-of-view. The book is organized into eleven chapters. Chapter one introduces the research and aligns the discourse with the theoretical and practical realities. Chapter two provides the historical perspective of land management and spatial planning which, though is based on Kampala, differs only slightly from many cities of sub-Saharan Africa. Many cities have indeed grown or developed following a similar path, as the case in Yaounde and Douala (Prain, Karanja, et al., 2009), Nairobi (Obudho and Peter, 2002), Zambia (Rakodi, 1990), Kumasi (Oestereich, 1997) and Dar es Salaam (Kironde, 1997; Kironde, 2000). This provides a background of the spatial development through historical periods of traditional planning and formal planning, which was institutionalized during and after the colonial period. Chapter three theorizes urban land markets and develops the understanding of formal and informal systems, as well as the segmented land and housing markets, which are important in examining the dynamics. Based on the experiences of Kampala, the chapter also reviews the chronology for development of urban land markets in Uganda and Kampala, in particular. Chapter four focuses on the methods for the research and gives a brief description of the areas of study. Chapter five considers the legal and policy frameworks under which the studies are analyzed, briefly discussing the laws governing housing, land markets and planning, as well as the policies for urban development. This forms a basis for formal land markets, which are compared with informal land markets in the subsequent chapters. Chapter six presents the discussion on formal and informal land markets, providing a detailed analysis of their operations. Chapter seven focuses on land values by providing an analysis of monetary values and social values, and how they are determined. It also examines the dynamics of the spatial character of land values. Chapter eight discusses land markets and housing development, delving in to the conncetions of the two, and how markets have influenced the current housing

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imprint. Chapter nine presents the connections between land markets and spatial urban planning, providing insights in to the causality relationships. Chapter ten focuses on how informal and formal land markets can be unlocked for sustainable urban development by providing pointers to intervention entry points. The last chapter presents the conclusion drawn from the analysis of the research findings.

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Chapter Two

HISTORICAL PERSPECTIVE ON LAND USE AND URBAN SPATIAL PLANNING

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ABSTRACT This chapter presents a brief history of the growth planning of Kampala, and how these plans have influenced land use patterns. The purpose is to place urban planning in to historical context to link the earlier efforts of planning with the current legacy, and the imprint of developments in cities of sub-Saharan Africa focusing on Kampala. Most important is the different planning schemes prepared during different time periods on the basis of which development control was enforced.

HISTORY OF KAMPALA Since the last decade of the nineteenth century, Kampala has developed as a commercial capital for Uganda (Kendall, 1955). Before the colonization of Uganda, areas with high concentration of human settlement in central Uganda and Buganda, in particular, which could by definition be equated to contemporary urban areas, were only limited around kings and chiefs palaces. Their sizes were a reflection of the power and extent of influence of the king or chief. The original nucleus of an urban area was the site of the royal palace of the king of Buganda, around which other major units of the traditional capital were grouped. These nuclei settlements and their location around the king‟s palaces are attributed to the fact that prior to the 1890, all political

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power in Buganda was vested in the king, who had a government formed by chiefs (Norstrand, Development, et al., 1994) The location of palaces were never permanent until the reign of king 1 Mwanga, when the site of the Capital (Kibuga ) became fixed due to the 2 introduction of the institution of private mailo land (land which was given out to the chiefs and individuals around the palace). Part of the present Kampala city at Mengo represented the Kibuga. When, in 1890, Lord Lugard set up a fort at Old Kampala Hill, it was just across the Kibuga (Buganda King‟s palace and capital) at Mengo. The establishment of the fort at Old Kampala gave way for the capital of the Buganda Protectorate. Around this fort, an administrative post and an Asian shopping area developed very fast, and with time, the capital Kampala became congested. In 1905, the administrative and government offices were transferred to the adjacent Nakasero Hill, which was more spacious. Similarly, developments on Nakasero Hill took place very fast, and in an unplanned manner. According to Kendall (1955), it was said that Nakasero Hill was:

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“a few good buildings (mad walls and nice enclosures), but as a whole, the place is an incongruous mess with scarcely any paths” in 3 1894” .

Kampala, which was established on Old Kampala Hill, spreading to Nakasero Hill, remained occupied by the European administrators, Arabs and Asian merchants and traders, while Mengo (known as Kibuga) remained occupied by the king, his Ganda chiefs and subjects. Thus, Kampala-Mengo presented a duality, having traditional settlements on one hand and modern settlements on the other hand. This duality is still vivid in the character of Mengo in terms activities and the spatial character, as compared to other parts of Kampala city. Kampala then changed status through the hierarchy of urban typologies from a township in 1906, to a municipality in 1949, and a city in 1962, while Mengo became a township in 1939, and municipality in 1962 (Norstrand, Development, et al., 1994).

1 Kibuga is a luganda word for a „town‟ in Norstrand, 1994 2 Mailo is a word for land which was given after the 1900 agreement between Buganda and British Protectorate government. The land was allocated in quarters, halves and full square miles thus the emergence of „mailo‟ 3 Kendall, H. (1955). Town Planning in Uganda: A brief description of the efforts made by Government to control development of urban areas from 1915 to 1955. Kampala, The Crown Agents.

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Therefore, settlement planning can be traced as far back as the traditional institutions, although modern planning is only traced from the inception of the colonial government. The development of Kampala as an administrative and commercial center first occurred without planning until the initial effort in 1905. As observed by Kendall (1955), town planning first became active when government passed a law that stated no private building could be erected on the government square (site reserved for government) for the then future development site of the government on Nakasero Hill. Planning of Kampala under different schemes and levels followed in subsequent decades based on the city‟s growth.

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GROWTH AND EXPANSION OF KAMPALA The declaration of Uganda as a protectorate ushered in new administration and policy for urbanization. This was sealed by the 1900 Agreement between the British and Buganda, which defined rights over land mainly between the kingdom institution, individuals, and the protectorate government. After the establishment of a Fort at Old Kampala, the township grew in terms of population and geographical expanse from a township extending 0.69 sq km gazetted in 1902, 12.95 sq km by 1929 and 195 sq km by 1968, growing into a metropolitan area of about 839 sq km (Norstrand, Development, et al., 1994; Lwasa, 2004). This expansion of the city was mainly through annexing adjacent townships to the Kibuga and Kampala Township at Old Kampala. Through this period, planning schemes were prepared for the city and a town planning committee was established in 1913, culminating into the Town and Country Planning Act of 1951, which was revised in 1964. As the city boundaries were extended, the urban population in Kampala also kept increasing, growing from 2,850 in 1912, 24,100 in 1948, to 458,503 by 1980, 774,241 by 1991, and 1, 189,142 by 2002. The average growth rate for Kampala was 3.1% between 1969 and 1980, increasing to 4.9% between 1980 and 1991, and it grew at a rate of 5.61% between 1991 and 2002, as indicated in table 1. Though its growth rates are lower than some of the other urban centers, its growth is proceeding with non-corresponding availability of serviced land and utilities (KCC and Bank, 2000; Rugadya, 2006). The growth path of Kampala shows a process of urbanization that was largely driven by public policy. Although immigrants flocked into the city, it was largely due to the deliberate effort of the colonial government through its urbanization policy. Meanwhile, for the rest of Uganda, urbanization occurred mainly

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through establishment of administrative centers, which also acted as centers for exchange of produce. This was also punctuated by the building of the East African railway, along which several urban centers were established. Over time, the proportion of national urban population has grown from 6.6 % in 1969 to 12% in 2002 (UBOS, 2002). Table 1. Growth Rates of Selected Urban Centers in Uganda Source: UBOS 2002

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Urban center Kampala Jinja Masaka Mbale FortPortal Mbarara Entebbe

1948-1959

1957 – 1964

1969 – 1970

1980 - 1991

10.5 4.7 10.0 5.5 -0.5 14.3 7.5

6.8 2.0 8.9 3.6 5.7 8.8 3.7

3.1 -0.6 7.8 1.7 11.7 3.5 0.1

4.9 2.8 4.9 6.1 1.8 5.1 6.3

1991 – 2002 5.61 2.4 1.8 2.3 1.8 4.5 2.5

From the time of Kibuga and the subsequent establishment of the Kampala administrative area at Old Kampala Hill and then Nakasero, Kampala city grew from these two locations outward in a radial form following the major road network as indicated in figure 1. The growth on the eastern side of the city was faster than that of the west because much of public land existed on the eastern side of the city from Nakasero Hill. The major roads which form the inlet-outlets of the city include Jinja, Masaka, Bombo, Gayaza, Kira, Gabba, Entebbe and Hoima roads. The development along these major routes have tended to be along the sides of the roads. There are several possible explanations for this pattern of development; transportation services to and from the city, availability of services and infrastructure, and the land market operations provide an explanation for this pattern of development. The major land uses along the major routes include light industry mixed with commercial uses and residential use. In the context of urban growth and residential development, there tends to be some level of segregation by class with the poor neighborhoods located mainly near the city center fading, out to high income neighborhoods from the city center. Although this distinction has been made, many areas still exhibit a mixture of classes and quality of housing, which is another manifest of the land market and has influenced the marginalization the poor. The poor are

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often invaded by high income class people who buy the interests of the poor, pushing the poor further in to marginal areas, mainly wetlands. The overall pressure of growth of the city is such that growth has mainly been alongside the roads with the road reserve often developed extending in to the periphery areas. The eastern areas adjacent to Kampala city in Kira Town Council are facing insurmountable pressure from the expansion of Kampala.

Source: Generated by researcher from Geospatial Database. Figure 1. Map showing radial growth of Kampala city.

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PLANNING OF KAMPALA DURING AND AFTER THE COLONIAL PERIOD

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The planning of Kampala has been traced shortly after the signing of the Uganda Agreement in 1902. This is due to the fact that trading interests made it imperative for government to find a site more suitable than the fort area in Old Kampala for trading purposes (Kendall, 1955). Although the beginning of the township is cited from 1890 after the establishment of Fort Lugard, interest and action on planning did not suffice until the agreement on land which 4 established Crown land . By 1903, freehold plots, or temporary licenses, or leases of up to 99 years were made available on Crown land to the traders across Nakivubo Valley as an encouragement to set up businesses (Kendall, 1955). It was further noted that by 1912, considerable development had taken place in this locality. This influenced the nature of land use in Kampala through conversion of wetlands to urban areas which were built up. By 1915, Kampala consisted of a central hill (Nakasero) with a circle of hills around it, and at the foot of this central hill was a swamp where the Indian bazaar and commercial area of the town existed. In the report to Government on the planning of the town, five important issues connected with the development of the city were raised (Kendall, 1955): 1. The necessity of securing the town‟s development on health lines; 2. The protection of the town‟s present water supply and the quick substitution of a public supply from lake Victoria; 3. The drainage of the marshes; 4. The removal of the ginnery located in the town, and in the mean time, the compulsory disinfection of certain stations of all raw cotton from infected districts before being brought into Kampala; 5. Systematic examination of rats for plague, establishment of an infectious hospital and a properly equipped observation camp. It is important to note from the issues of the report that in the early stages of the development of Kampala, drainage of swamps (particularly Nakivubo) was one of the prioritized activities. This activity had, and still maintains, implications to land use dynamics in Kampala. It also has and maintains implications presently on the crowding in Kampala. The allocation of plots in 4 In the 1900 agreement, land which was left for the protectorate government managed on behalf of Queen Elizabeth of England became „Crown land‟

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Nakivubo set a precedent of development in the wetlands within Kampala as early as 1912, which partly explains the high density settlement in the wetlands due to residential housing development. The report further suggested a town planning and housing policy, which would be followed not only in Kampala, but in all new trading centers in Uganda. It noted that:

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“The importance of the subject lies in its bearing on the healthy prosperity of the town and the advisability of a different policy to be adopted in the future, not only for Kampala, but also for all the numerous trade centers that are bound to arise very soon in Uganda” (Kendall, 1955).

The report further pointed to the evils arising out of sub-letting and subdivision of plots. That overcrowding and slum conditions would be caused by the rapaciousness of landlords who obtain the original grant of land from the Government at a low rent, and to extremely sub-divide and sub-lease the plots. The report recommended that the township issues be dealt with by a town planning committee consisting of the principal medical officer as chairman, the chief sanitary officer, the land officer, the director of public works, the medical officer of Kampala, and the district commissioner of Kampala as members. Such a town planning committee would be permanent to deal with controlling developments of the town on health lines. In order to prevent the subdivision of plots and slum overcrowding, the report strongly recommended that plots larger than 50´ x 100´ ft be leased to any persons desirous of building a shop, and under no circumstances should they be permitted to sub-divide a plot. Strict control over the use of plots would then be maintained (Kendall, 1955). It was from these early beginnings that the standard shop plot was established. Likewise, the spatial planning of Kampala evolved from this time, and this was subsequently followed by planning schemes for Kampala as it also went through its growth pattern as indicated by the 1912 planning scheme in appendix 1. The 1919 Planning Scheme: Following the recommendation of the 1912 planning report, a Central Planning Board was constituted at the end of 1918.. This board considered the preparation of the plan for Kampala. It was agreed that the bazaar or commercial area be located on the south-eastern part of Nakasero Hill, and that the Asian housing area be situated across the Kitante Valley. Various boundaries of the green belts were also suggested. Meetings were arranged and attended by representatives from church missionaries, Chamber of Commerce and the Indian Association. The views therein discussed were carefully noted, and together with the plans, a report was

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drafted and sent to the government for a decision. Three alternative schemes were prepared, labeled, and dispatched to the Secretary of State, and in early 1920, scheme “C” was approved. Guidance of development in Kampala continued provided by the planning board, but in spite of the time spent on the matters, there was no real master plan produced, and/or adopted.

Appendix 1. 1912 Planning Scheme.

Kendall (1955) notes that decisions were made as problems arose, with little consideration given to orderly development of the town in the future, an approach and practice that still characterizes spatial planning in Kampala. The absence of a master plan created a lack of continuity, and adhoc decisions became the rule rather than the exception. This is evident by the continued adhoc planning and beliefs that such cannot be reversed (Pareto, 2004). Kendall further notes that there was an evident lack of coordination between government departments in regard to overall planning, and that the local authority was driven to making decisions owing to pressure from developers, and in some cases, these decisions were not satisfactory from the long term planning point-of-view, which is still the case, considering the pressures on land markets and developers. The board was concerned with the prevention of

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the outbreak and spread of contagious diseases connected with prevention of slum conditions. Despite all these efforts, slum conditions continued to develop in Kampala, and disease outbreaks occurred on several occasions. But the experience of the planning in 1919 also indicated a shortfall of planning that involved qualified planners. For example, the board representation did not have a planner, and this created a problem in making unsatisfactory decisions. It was also noted that the failure to produce a master plan was a weakness on the part of the planning efforts that had been initiated. This created a phenomenon that would perhaps come to dominate the planning in Kampala, but also in Uganda. The 1930 Planning Scheme: By 1929, Kampala had expanded so fast, and in many ways, so unsatisfactorily, that the Government invited a planning consultant and valuer to come to Uganda to prepare a report and plan for the expansion of Kampala and Jinja. The consultant was asked to advise the government in regard to the general layout of Kampala and Jinja with special reference to the future expansion, location of public buildings, coordination of arrangements for the layout of roads, drains, sewers, electric light and power lines; the problem of a native location; the best means of refuse disposal; revision of the existing rule of the township, and the preparation of a Town Planning Ordinance. The report and plans detailed the planning issues that the consultant handled and his recommendations resulted in the present day imprint of the commercial, residential areas on Nakasero Hill, as well as the road network. Kendall observed that the consultant was far sighted as far as the road network and zoning were concerned. Kampala has undoubtedly developed along the broad recommendations in his report, seen in appendix 2. Thus, the 1930 scheme had a profound influence on the development and land use, let alone the beauty of the town, as exemplified by Nakasero Hill. Important to note is that for the first time since the initial ideas on planning in Kampala, the location of the native‟s was put into consideration. Despite this, the Kibuga was still excluded in the planning schemes that had been prepared. Planning was centered on Naksero and Kololo Hill, where land was controlled by the Crown Government; yet, the developments in other parts of the town on Mengo, Mulago and Namirembe Hills were mainly left to missionaries and private individuals who had been allocated land. Although the land in the schemes was allocated in the in wetlands to commercial and industrial use, the segregation of the Kibuga in the early planning activities had a profound impact on the developments in the wetland areas of Kampala.

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The 1951 Planning Scheme: By 1950, building development was at its height, as observed by Kendall (1955), such that it became imperative for a plan to be quickly prepared and approved. These plans would allow development to follow orderly lines, as set by the scheme. During the preparation of the scheme, steps were taken to set rules for the architectural development of the civic center.

Appendix 2. 1930 Planning Scheme.

The zoning plan and the provisions of the scheme divided the area in six residential zones, commercial, and industrial sites. Other sites were set aside for forests and open spaces, both public and private, but owing to the topography of Kampala, forests and open spaces were located in the valleys and low-lying areas, while the elevated sites on the slopes of various hills were zoned for residence. The 1951 scheme further stressed the duality of Kampala with the exclusion of Kibuga and many parts to the west of the municipality. The municipality grew eastwards, mainly because that is where Crown land existed. This bias characterizes spatial planning and urban development in Kampala, and has continued to influence the nature of land management. The Kibuga remained excluded from the municipality township, except for the

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king‟s palace and the Buganda parliament. This segregation and separation of roles by the municipality further increased opportunities for haphazard developments, many of which were undertaken in the wetlands. In a way, the eastward development of the municipality reflected public planning policy by the colonial government, while propagating the urban land market operations that had emerged in Kampala. The 1972 Planning Scheme: The 1972 planning scheme was a comprehensively prepared scheme with sectoral plans and elaboration of implementation schedules. Its comprehensiveness did not only include sectors, but also area coverage. The scheme was done with a vision for future growth of the city beyond the then present day boundaries. The scheme was aimed at several issues, including allocation of sufficient land for the expected growth, development of a pleasant and healthy city, balanced policies for development, reconciliation of interests of the communities and individual land owners, and maximum convenience to the people to promote ease of movement. Because of the comprehensiveness, the scheme had written reports on policies concerned with housing, the central business district, standards for social facilities, transportation, land use policies, and the land policy recommendations for Kampala. The planning scheme had an elaborate strategy for residential development and housing policies. Zoning for residential areas was done on sites including; Kololo, Lubaga, Natete- and around Kawempe township as indicated appendix 3. The scheme recognized the need for segmented housing policies following the criterion of social class and affordability. The scheme recommended a policy that would foster government-private partnerships. The policy recommended low-cost housing using the sites and services scheme, but it also recognized the need for paying attention to the peri-urban areas. These periurban areas had already developed in a haphazard manner and required improvement by providing adequate services (KCC and Bank, 2000). Residential allocation mainly remained for the middle and upper slopes of the hills, but as plan implementation slowed, developments continued in low lying areas. The implication of these developments is manifested in the current imprint of spontaneous developments, even when such developments are medium- to high- valued housing, they still are characterized by slum conditions.

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Appendix 3. 1972 Planning Scheme.

Coupled with the dynamic land market in Kampala, land subdivision and eventual development has continued almost unabated with less than 30% of development plans being approved (Lwasa and Nyakaana, 2004; Pareto, 2004). Other sectors were also well covered and proposals were made, but housing and industrial related activities took a big proportion of the land allocations, and therefore have had a profound influence on the development pattern of Kampala. The 1994 Structure Plan: The preparation of The 1994 Structure Plan largely borrowed from the experiences of the past schemes and the increasing calls for integration of environmental issues in planning. The procedures during its preparation involved a wide and comprehensive approach in terms of sector and stakeholder involvement. The Kampala Urban Study, which preceeded the structure plan preparation, exemplifies the change in procedure. Inclusion of environmental issues and the general planning model of Gentrification for residential housing that was proposed meant a rethinking about Kampala as a dense, centrally but adequately serviced city to ensure convenience and orderly development.

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The written provisions for development control and standards adopted by making the structure plan in to law further reflected the changed procedures in planning. Just like the 1972 scheme, the 1994 structure plan (in figure 2) was done not only for the Kampala district, but also included areas outside the district as well. These areas mainly include the natural features in the form of wetlands that form the boundaries of the district. Kampala is almost completely surrounded by Wakiso district and is adjacent to fast growing centers, such as Kyengera, Kira, Maganjo, and Makindye Sabagabo. The purpose of the written provisions was to set out a comprehensive code governing administration and enforcement of the Kampala Structure Plan. Land development standards were developed that provided definitions of the permitted constructions for each land use. The major land uses permitted included: Residential use Small-scale commercial use (limited to home-based shops and offices, professional offices, retail businesses, and other commercial uses of a similar scale) Small-scale industrial uses including, but not limited to home-based workshops, studios, cottage industries, home-based agriculture and non-noxious light industries Institutional or social uses including educational, health, religious and government uses Environmental uses including conservation of valued environmental components such as wetlands, forests, aquatic resources and watersheds. Open green or recreational uses including parks, playgrounds and parishes, as well zone sports facilities Standards on plot sizes (minimum 200 square meters), road access, and plot coverage building setbacks, small-scale industrial uses, and mixed commercial use were also formulated. Subdivision of land was also provided for in the written provisions specifying the principles on the basis of which such can be done. From the proposals of the different schemes, starting with the 1931 scheme, development control was emphasized. It was introduced for purpose of controlling architectural and structural standards for a healthy and safe development process.

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Kampala Structure Plan 1994

Legend Major Roads

Proposed Land Uses Commercial Environmental Industrial

N

Industrial Poten

W

E

Open Green Residential

S

Utility Scale: 1:100000

institutional 1

0

1

2

3

4

5

6

7

8

9

10 Kilometers

Map Prepared by Researcher

Source: Generated by researcher from digital AutoCAD files of plan drawings.

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Figure 2. Showing the 1994 Kampala Structure Plan.

For the 1994 structure plan, conformity of division and parish plans with the district plan were emphasized and recommendation of KCC to continue coordinating the divisional and parish committees (Norstrand, Development, et al. 1994). It is important, though, to note that the existing planning, building, and engineering standards were inappropriate in respect to the needs and available resources of the majority of Kampala‟s residents. Despite this preceding urban study, which revealed the existential needs of the urban population, urban planning continues to start from „principles‟ and „standards‟, rather than from needs of the population; yet the population is unable to afford standards such as plot sizes, housing standards, building materials and the development control procedures which increase transaction costs. Thus, development planning has proceeded on a piecemeal basis, and although KCC is in charge of the development of the city, the developers have taken an upper hand in determining the type, kind, and quality of developments. Currently, no one knows the proportion of the 1994 structure plan that has been implemented. There is continuous debate and disagreement as to whether politics or planning failures, and/or financial problems have led to the general failure of the plan‟s implementation. Developments are mushrooming when and as developers decide, and although the efforts from KCC to stop such

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illegal developments are manifested, the pressure that developers have put on planning is enormous. From the foregoing, it is noted that Kampala´s growth has been characterized by expansion into peri-urban and rural areas. Subsequently, planning ahead of development seems to have only occurred up to 1950, though before that, unplanned settlements were mushrooming. Therefore, it can be concluded on the growth of Kampala that the many planning challenges faced by the city are largely derived from its history of growth that were characterized by a dual city comprised of Kibuga and the administrative capital developed with the establishment of Fort Lugard. This historical influence is still valid in the developmental trends of Kampala and pose serious challenges for managing land, planning for the provision of public utilities, and services. Though planning schemes exist, a sizeable proportion of the city is developed by individual „plans‟ that do not, in any way, conform to the required and desirable standards. As observed by Sengendo and Koojo (2004), there is planning without planning.

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Chapter Three

THEORIZING LAND MARKETS, URBAN PLANNING AND HOUSING DEVELOPMENT

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ABSTRACT This chapter theorizes urban land markets and spatial planning, preceded by structuring the research in a conceptual framework as a basis for the discussion. Literature on studies concerning land markets is reviewed, including theories of urban land values. The chapter is divided into three parts: A review of the literature,for providing an understanding of urban land markets in general, and informal land markets in particular. This part also includes a review of the historical development of land markets in Uganda and Kampala in particular. The second section reviews the theories relevant to the research issues. The third section develops a conceptual framework to position the discussions in subsequent chapters of the book.

URBAN LAND MARKETS Land markets in urban areas play a vital role in a wide range of contexts, not only by providing access to land to those who do not own it, but also by improving the operation of other markets (Dowall, 1995). The possibility to exchange land between users is of importance for a number of reasons, including:

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a) Allowing flexibility in adjusting land area used with low transaction costs b) Enabling land owners the limited available liquidity for productive investments rather than locking it up in land c) Facilitating easy reallocation of land toward more efficient users other than current owners d) Providing entry points for the landless as a stepping stone toward land ownership Mundeme (2002) observes that a “market” is a set of arrangements in which buyers and sellers are brought together through the price mechanism; whereas the Appraisal Institute (1996), defines a “property market” as an interaction of individuals who exchange real property rights. Urban land markets fall under the definition of property markets, but these two definitions tend to consider land transactions as simply existing due to the demand and supply mechanisms. In reality, however, although the price factor is necessary in defining the urban land markets, exchanges through gifts and inheritance are strongly prevalent in African cities (Kaggwa, 1994). Thus, in the context of this research, urban land markets are considered to be exchanges of land rights between individuals or groups for purposes of urban functions operating within a geographical area that is termed urban. Among such urban functions is housing from which cities derive their major urban land use. This understanding allows a wider scope within which „transactions‟ that do not involve a monetary price can be included.

THE NATURE OF URBAN LAND MARKETS Urban land markets are characterized by the peculiar aspect of not being influenced in the same way as other commodities by the forces of demand and supply (Darin-Drabkin, 1977). Demand for and supply of land is always related to the characteristics of specific locations. Subsequently, location affects land values in accordance with the use to which the land is put. Some of the unique qualities of land which distinguish it from other goods include the following: Land is physically immovable and is not influenced by time, as other commodities whose quality depreciates with time. It is important to distinguish between raw land and developed land, where raw land is

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physically undepreciable, where as structures built on land are depreciable, the land on which they are built is undepreciable. It is important to note that sometimes the depreciation of a structure may increase the value of the land because of an expected change in use when a new structure would be built as a replacement. Land is not transportable, even when the use can be changed, thus, it is hardly possible to think in terms of a regional land market, but it would instead be a localized market. Land is limited in quantity and its supply cannot be increased, although the intensity of use may be increased. This acts as a substitute for additional quantities of land. Land is not only used for production purposes, but it is also used as a long-term investment, or as a basis for saving. The scarcity of land and its undepreciable character makes it profitable to hold large reserves without necessarily using them for production. These unique characteristics of land yield a permanent disequilibrium in the urban land market, especially between demand and supply (Emery, 1995). Drabin-Drakin (1977) further notes that as demand for land increases, its price rises, but paradoxically; this higher price does not necessarily always increase the supply, but may reduce it as landowners where development is likely to take place will withhold the land from the market in expectation of prices rising in the future to bring even large profits. Thus, the dynamic approach of taking in to account prospective developments influences the land market and the role of public authorities, which can help in understanding the operations of the urban land market.

LAND MARKETS AND LAND RIGHTS Land markets exist on the basis of the transactions between individuals, companies, and organizations regarding transfer of rights over land. Land markets are a product of the emergence of property rights (Gershon and Antonio, 1995). Once rights, which permit transferability, are established, then a market emerges for the transferable rights. Therefore, any arrangement which brings individuals or organizations to transfer rights can be conveniently referred to as a market (Harvey, 1996). It is important to note that Neo-classical economics has classified land as a factor of production, but

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the transferability of land has turned it into a „commodity‟ (Fujita, 1990; Coccato, 1996; Payne, 1997). With an assumed increase in security of tenure and development of a settlement over time, land becomes marketable in many cities of sub-Saharan Africa. The process of land subdivisions in settlements has been described as a process of land „commodification‟. According to Harvey (1996), characterizing land as immovable distinguishes it from other exchangeable goods or items. Property can be owned, and it is the 'property rights' that are exchanged, as it is not possible to hand land over, as would be the case with movable goods. The rights are usually specified in a written statement, which accompanies the transaction. This statement defines the exact rights which are being transferred. Separation of rights on land is more common than it is with personal property. The largest collection of 'rights' which one can hold in real property is the 'fee simple absolute', that is the unencumbered freehold; however, the 'rights' inherent in this ownership can be transferred to other people (Mugambwa, 2002). These 'rights' can be adjusted according to the individual preferences of the seller or buyer, as is the case with a restrictive covenant. It is important that four aspects of 'real property rights', of which land is inclusive be emphasized. First within ones 'rights' to land ownership is the 'fee simple absolute'. This states that the owner can posses, use, abuse, and even destroy ones property. One can sell their rights in such a way as to restrict their future use, or he/she can bequeath them to distant heirs. Despite this, one‟s rights are limited; an individual can only use his/her property subject to other people's property rights (for example, easements may exist giving other persons the rights to drains and water systems), and he/she is subject to the legal restraints imposed by Planning Acts, building regulations, and similar legislation. Second, an interest in land comes in to existence because certain rights are desired;but rights would not be wanted unless their owner could exclude others from them. Thus, the concept of rights is essentially a legal one: it presupposes that there is a sovereign power which will, if necessary, protect the rights vested to the owner. Being a legal concept, a right must be clearly defined, which implies limitations to the rights, thus, a right is merely exclusive, not absolute or unlimited; in fact, different rights are really only differences in 'exclusiveness'. This aspect of sovereign power points and relates to what is referred to as the formal sector and formal land market (Kironde, 1997). The idea of a sovereign power, which can protect ones' rights, presupposes an agency, which in this case can be a government or traditional institution, as is the case of Stool land in Ghana. Thus, in its effort

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to protect, in transactions, government acts as either a go between, and/or an agency which sanctions once the transaction is completed. Third, where rights are well defined and costs of negotiating and enforcing contracts are small compared with the benefits of the transaction, an exchange system based on prices works smoothly. However, where rights are not well defined, the process varies from location to location and problems within the markets do occur. These problems include speculation, double and multiple sales, double and multiple claims, and a distorted gradient of land values within an urban area. Fourth, because land is durable, the rights existing to it have a long lasting scale. Due to this aspect, owners can hoard land, while speculators take on an active role in the land market. These conditions differ according to different market segments of the urban land markets. Kasanga, et al (1996) observed that although the focus in land market transactions is land, it is not always the proper focus; therefore, it is more useful to take the unit of analysis not as the physical land itself, but rather the 1 rights to that land. Associated with each physical unit of land is a set of rights that permits the holder of the land to enjoy the benefits that accrue from its use. In a land transaction, it is the set of rights to the land that is exchanged, which are different from rights associated with other goods. Transferability of rights leads to emergence of a land market. The case of customary, mailo and freehold in Uganda, present a prime ground for rights that can be exchanged.

TYPES OF LAND MARKETS Given the nature of exchanges and the purposes for which exchanges occur, there are mainly two types of land markets. These include rural land markets and urban land markets. Though Salazar and Bhadra (1993) categorize land markets as urban, rural, and peri-urban land markets, within the urban land markets sub-categories exist in the developing countries to include low-income, middle-income, and high-income sub-markets. However, the focus of this book is on urban land markets for which two sub categories are further identified; formal land markets and informal land markets (Mundeme, 2002). Mundeme further observes that the term “formal land market” refers to a regularized land market system operating within the realms 1 A land right is a generally recognized and sanctioned entitlement to undertake specific actions to enjoy the benefits that flow from the use of the land.

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of the government land delivery/allocation system, regulations, planning, land use conditions with laid-down procedures, and bureaucracy, as well as “certificates of titles”. This formal system may be based on formal laws, as well as recognized customary law. In a formal land market, land is usually allocated rather than sold, though cases do exist where selling occurs through bids. On the other hand is the type of urban land markets, which is termed “informal land market”. Due to the slow working process of the formal land market, a growing number of land seekers increasingly find the informal sector more responsive to their demands for housing land (Mabogunje, 1993; Kombe and Kreibich, 2000). Informal land markets refer to markets that operate outside the formal public/state mechanism of land delivery, registration, control, and planning regulations by way of a number of channels, including purchase (Kombe and Kreibich, 1998; Kironde, 1996). Informal land markets also exist in planned and surveyed urban areas, as is the case in Tanzania, Uganda, and Ghana. Informal land transactions are characterized by the following; those that take place within the framework of private agreements between a seller and a buyer; transactions that bypass urban development processes, which at times lead to conflicting land use developments, transactions that bypass public authorities procedures, transactions that do not involve the survey of land, transactions that often involve underhand dealings and conflicts, and transactions that are not registered that normally pose risks to the buyer. It is these types of land markets that are the focus of this book, though in practical terms, it is difficult to distinguish between informal and formal land markets. This is due to the fact that there is a tendency to identify formality in the informal, and informality in the formal.

OPERATIONS OF INFORMAL URBAN LAND MARKETS In cities of developing countries, experiences show that informal land markets are largely being pioneered by the private sector resources, and initiatives involving individuals and groups of individuals, or institutions. The informal land market operates on the basis of some form of rules (norms) and structures defined at a grass root level, but with no written provisions (Kombe, 1995). In spite of the fact that the informal land development sector operates outside the formal statutory urban land management provisions and processes, there is growing evidence suggesting that the sector has adapted, or at least evolved, some normative urban land management principles. Informal land

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Theorizing Land Markets, Urban Planning and Housing Development 33 markets and housing development operations have devolped a remarkable degree of spatial orderliness, methods for land alienation, security of tenure, and land servicing. The operation of informal land markets generally involves several actors, different sources of resources, processes, and norms, or `rules of the game´ (Kombe, 2000; Rakodi, 2000). Since Informal land markets have evolved from the formal procedures and involve large proportions of the urban populations, these markets have been regarded as having a potential for offering the most reasonable prices available for urban land, although they typically provide inadequate services (Allyson, 1996). It should be noted that there is little literature on the evolution of informal land markets in Africa, let alone the understanding and appreciating of the different actors, processes, resources and norms. In a country such as Uganda, where urban authorities have limited rights over land or where land rights are held by individuals, it necessary to understand and appreciate the informal land markets and explore the potentials of integrating their operations with the formal land supply for responsive planning.

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URBAN LAND MARKETS AND LAND MANAGEMENT In managing the development of urban land, the central government has reserved powers related to the land market (Kironde, 1997). Transactions are approved by the authorities if they are to take place, but the system tends to be very slow, inflexible, and far from the realities taking place in various urban areas. No more than 10% of urban landowners in developing countries get land directly from public authorities (Kironde, 2000). The majority of land developers get their land by buying it from those who `claim´ ownership (for the case of public land, or land to which ownership is unclear), or real owners. In the formal system, one cannot develop a piece of land unless one‟s rights on the demarcated plot are legally specified and protected. Legalization of ownership for a piece of buildable land (which could have been accessed through private transactions, inheritance, state allocation, illegal subdivision, or customary allocation) is subject to a set of procedures including having the land registered (adjudication, demarcation, surveying, documenting) and obtaining titles, an even more difficult process. This process has shown inefficiency in delivery of land for development in urban areas. The inefficiency of the formal sector in terms of time, costs involved, and the complex bureaucracies has led to emergence of the informal sector, which is barely regulated. The informal sector has been described as one which derives

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precisely from a lack of regulation, and created by regulation (Gareth and Ward, 1994). Under this informal land market, land is quite often freely available, albeit through illegal modes of acquisition, subdivision, and development. This is due to the fact that the informal land markets involve less time for transactions, less cost, and/less or no complex bureaucracies leading to fast housing development. Informal land transactions are based not on the sale of the land title, but the sale of land use rights (Allyson, 1996). Rights to land are usually established through occupation and use of the land. However, it is often understood by the seller and the buyer that the legal title may belong to a third party unconnected with the seller, and therefore the buyer may, at some point, risk eviction by the legal owner. The informal market therefore refers to the passing on and sale of use rights on land, and the land rights purchase is the most common form of informal land acquisition. Informal land markets are segmented along the social groups or lines, which include the high-middle income subdivisions and low-income groups as sub-market segments (Kironde, 2000). High-middle submarkets are identified with their pattern of ownership, practices of illegal subdivisions and promoting residential land, as well as their discretionary practices of speculation and relative profitability of land versus other investments. On the other hand, the low-income groups‟ sub markets can be identified by the way land is introduced on the market through illegal company-led or private landlord subdivisions, squatter invasions, and ways through which community land is introduced to the market. In this situation, land remains affordable, although it may be relatively expensive since it is introduced to the market illegally, without services. Among the low-income households, land is subdivided until further subdivision is no longer practicable. They tend to subdivide and sell off their land whenever they are in financial difficulties; while in middle-high income markets, plot sizes are larger, the land is fenced, and some land is set aside for infrastructures, particularly roads. In the low-income sub markets, therefore, land holding and wealth are perfect substitutes for each other, making land a commodity exchangeable at all times. This has resulted in the informalization leading to more densification of informal settlements, encouraging speculative land hoarding by would-be or current land developers, and expansion by owner-occupiers as demand for rental housing increases (Kombe, 2000). Densification and re-densification of these settlements takes place only after the settlement has shown a demonstrated location advantage, or accumulated an array of urban services and pulled a critical mass of households (Jurgen, 1997). The land market as the best allocator of resources has, therefore,

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Theorizing Land Markets, Urban Planning and Housing Development 35 brought about more densification of informal settlements by encouraging land subdivision by would be or current land developers and expansion by owner– occupiers as demand for housing increases. Therefore, this implies that besides influencing the clearing of land for residential development, the informal land market also accelerates the development of an upcoming residential settlement. Land in an informal land market is a valuable commodity, and the size of plots indicates allocation of resources to different social groups. As noted by Ernst, 1993, assets that are produced and those that represent the use of savings, come into being as a result of future transactions. The informal land market system relies on voluntary exchange to transfer property to higher valuing users. The benefits of buying large plots lie not only in the potential economic gain, but also in the fact that as the plot size increases, the price of the land per square meter reduces (Allyson, 1996). Affluent buyers can choose between a range of options including occupation, disposal, or speculation so that the purchase turns out to be an investment. However, most people occupy land for reasons other than financial investment (especially residence), therefore, individuals and households have different stakes in the value of urban land and utility levels on land holdings. This largely depends on when they moved into the settlement. The location of any activity is therefore determined by the desire to maximize utility, in the case of residential use. Urban land uses as an activity system is mainly determined by activities competing for sites through the forces of demand and supply. Demand being the quantity of land required for a given price and supply being the amount of land available at that price, which could be „zero‟ in monetary terms, for the case of inheritance and bequeathing. The greater the benefit (utility) to be obtained from using a site for any particular purpose, the higher the price or value the would-be user is willing to pay. One of the consequences of informal land market dynamics is development of a land management system that involves locally defined norms, regulations, and control mechanisms for development. It is common in informal settlements to find „standards‟ on access road widths, plot sizes, and informal housing designs (though these are mainly found in high-middle income groups) that the group tends to follow. However, the „standards‟ are not necessarily followed by everyone, especially when the settlement reaches a saturation level. This points to a critical aspect of urban land management and development of informal subdivisions, and it also suggests the importance to distinguishing between the formal and informal land markets, an attempt that tends to be difficult, as discussed later in chapter six. A useful examination of the connections between formal and

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informal land markets is to not only compare the informal and formal land markets along the line of time, costs and, bureaucracy aspects, but also the setup, institutions, and networks in the operations of the two sectors. The research regarding the urban land market segments described in the preceding discussion examines the operations of the informal land market, as well as the social and economic factors underlying such operations to influence housing development processes.

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URBAN LAND SUB-MARKETS Most literature agrees on the crucial role of informal land sub-markets in the supply of ownership alternatives for different social groups, especially for the poor, but studies indicate that sub-markets do not only influence ownership options, but also exert a determinant influence in the development of nonownership alternatives such as rental and shared housing (Rakodi, 1990). For example, easy access to land in the form of squatter settlements or informal subdivisions can hinder the expansion of rental housing by keeping rents low (World Bank 1992, 96). Conversely, constraints in the supply of cheap land can lead to increase in higher rents (Ching and FU, 2003). Research on housing sub-markets in developing countries has increased considerably, marking a shift in the approach from studies of homelessness, to studies of lodging (Stephen, 1997). The consideration of informal housing as submarkets has led to a better understanding of the processes by which the poor access land and shelter in the developing world. Many of these studies have been carried out in large metropolitan agglomerations, particularly in some Latin-American and African countries, yet, the nature of sub-markets in medium-sized and smaller urban entities is beginning to get ample attention. Although sometimes it may develop in a form of large-scale capitalist exploitation, there is consistent evidence that rental sub-markets in poor communities may play a role that goes beyond mere speculation (Rakodi, 1990). On one hand, they cater to the poorest segments of society, increasing the range of choices for those who cannot afford the price of ownership, and for those who are in search of better opportunities. On the other hand, rentals have a supportive role for poor households, contributing to income generation, and even financing housing. In addition, rental sub-markets may play a crucial role boosting the micro-scale economy on a neighborhood level, while shared sub-markets complete the spectrum of non-ownership alternatives for poor families. Despite wide-spread evidence of this phenomenon, there is

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Theorizing Land Markets, Urban Planning and Housing Development 37 remarkably limited coverage in literature on this issue (Aina, 1989; John and Giaccotto, 1991; Gareth and Ward 1994). The influential role of land sub-markets and their dynamics of commercialization have been a subject of analysis (Coccato, 1996). The diversity of the supply of informal rental housing is clear evidence that no single solution can cater for the needs of the urban poor. It is only through better understanding of these options that more effective responses can be forwarded to improve the living conditions of a significant portion of urban population. Informal urban land sub-markets play a major role in encouraging rental housing, especially in low-income areas. Thus, housing processes among the poor need to be understood in the context of land exchange and management mechanisms on land.

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HOUSING DEVELOPMENT Among the factors influencing housing preferences, location and affordability are the most influential, as observed by Wadhva (1988, 1989b). Housing preferences can be related to the households‟ formation with three distinguished determinants: socio-demographic and economic characteristics, the level of affordability, and the perception of housing opportunities and prices. At an early stage in the life cycle of households, individuals base their preferences on their housing background and their primary housing needs. In the second stage, their preference is influenced mostly by the perception of affordability and the awareness of housing opportunities in the market. Finally, the third stage comprises a process of housing adjustment driven by changes in aspirations and mismatches between housing type and need (Mehta and Mehta ,1989: 131). The second and third stages are influenced by land acquisition and therefore, the land market. Affordability is usually seen in terms of land for housing and the nature of the neighborhood from which potential land for acquisition is identified. While housing adjustments often involve adaptation to an existing neighborhood or to perceived future status of the neighborhood. In low-income informal sub-markets the 'consumers' are the poorest of the poor. In such circumstances, tenure choice is often reduced to rent-free and sharing arrangements. Coulomb (1989: 47) further notes that the issue is whether the majority of renters are forced in to rental accommodation because there is no alternative open to them. In the same line, Edwards (1990: 257) asserts that housing choice is a positive function of income; those with lower income face a smaller range of alternatives. However, he recognizes that there

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is no direct correlation between tenure and social class, nor even between tenure choice and income groups. "Families earning the same level of income choose different types of housing, and others with very different incomes choose the same form of tenure" (Edwards, 1982: 150). Labeled 'commodification' by Mehta and Mehta (1989), this tendency of commercial penetration in to informal settlements is widely reported in the literature (Payne, 1997). Various studies have observed and documented the process of consolidation that turns the former informal housing in to a commodity. Ramirez, et al. (1992: 95-102) suggest that with increased security of tenure and improvements over time, housing becomes marketable. They indicate that the whole process of housing production in informal settlements is, at the same time, a slow process of housing commodification, however, and commercialization occurs in areas other than consolidated settlements. Pasternak (1992: 150) gives a good example of commercialization of the „land and hut' sub-markets in Sao Paulo, Brazil, even during invasions. More complex sub-markets, such as rentals, seem to require at least some degree of consolidation (Edwards 1982: 145). From this discussion it is evident that housing development in the developing countries is occurring through various processes in which different social groups make choices; however, the lowincome groups, especially the very poor, have limited choices, thus taking the renting option. This phenomenon has attracted rental housing promoted by middle-high income groups, and has accelerated the urban land markets. As noted by many scholars, the challenge of a paucity of data on land management in sub-Saharan Africa has not provided a basis for understanding the dynamics in the cities. This framework of analysis is useful to enable the analysis of the urban land market dynamics in the region.

DIVERSIFIED HOUSING MARKETS AND POLICY Diversity of the housing supply is the key for a successful housing sector, according to the World Bank (1992: 15), but it also points to the need for diversity of the urban land markets. This affirmation marks a departure from the traditional approach regarding informal settlements, centered mainly on ownership-oriented options such as upgrading, and sites and services. It also implies the tacit recognition of informal rental sub-markets as a component of the overall housing market. Nevertheless, the consideration of these submarkets in housing policies is still at a very early stage in most developing countries. In the context of comparative research in Mexico, Santiago de

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Theorizing Land Markets, Urban Planning and Housing Development 39 Chile, and Caracas, Gilbert, et al, (1993: 160) assert that at present, few Latin American governments seek balance in their housing policies and most consistently favor a single-faceted housing solution. They encourage owneroccupation, sacrificing other forms of housing tenure for the favored option. The effect is to narrow the range of housing alternatives, which inevitably leads to a decline in the living standards of the poor. There are also recent works which stress the importance of a diversified housing sub-markets in sub-Saharan Africa. Rakodi (1990, 1992, 2000) in a comprehensive review of housing sub-markets, remarks that housing policies must be addressed concurrently to all different sub-markets, and should not consider any segment in isolation. In particular, she considers rental submarkets, "a neglected segment of the market". Similarly, diversification of housing alternatives, shifting the scope to rental housing, has been recognized for improvement of urban housing. Because home-ownership is becoming more difficult and renting is likely to become the predominant form of housing in most Third World cities, housing policy might well focus more in promoting rental markets. Efforts will then be redirected to stimulate the production of rental housing, including both informal housing, such as the rental of rooms in a small house, and more formal rental units, such as apartments. In Uganda, the housing policy follows an „enabling approach‟ in which government facilitates housing through fiscal, legal, and taxation strategies in order for individuals to own houses. The drive for households to build houses has been largely influenced by this policy of withdrawal of government as a housing provider. This has fueled the housing markets and the associated land market in Kampala.

ACTORS IN HOUSING DEVELOPMENT Land development in urban areas can be an expensive and lengthy procedure. Approval of subdivision plans and building design through the formal channels can take months and prove costly, as it involves the payment of several fees. For example, the commissioner for lands must approve official land transactions with approved surveys in Tanzania, as noted by Kironde (1997). He further observes that this formal system is usually very slow, inflexible, and far from the realities in various urban areas. In the formal system, one cannot develop a piece of land unless one‟s rights on the demarcated plot are legally specified and protected. Mabogunie (1993) argues that the policy ambiguity of most African countries about ownership of urban

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land has denied the legal recognition of existing adaptive informal land market transactions common in African countries. Legalization of ownership for a piece of buildable land (which could have been accessed through private transactions, inheritance, state allocation, illegal subdivision, or customary allocation) is subject to time consuming, complex, cumbersome, and expensive procedures. Mabogunje (1993) notes that in Ghana, besides gaining access to public residential plots (a lengthy demanding process by itself), the process also includes registering the land (adjudication, demarcation, surveying, documenting), and obtaining titles, an even more difficult process. To develop the land, various development controls regulations, which increase transaction costs, have to be followed. In Ghana, due to the complexity of the procedures and institutional inability, access to land involves twenty major steps, and it can take several years. The procedural complexity, and therefore prohibitive costs involved in obtaining documents (titles) which legalize ownership of urban land has forced the urban land market to further proceed in the informal or illegal way. Gareth and Ward (1994) argue that the unregulated markets (informal) derive precisely from regulation, and regulation may expose the actors to costs that they did not have to face before; thus, the informal land market is created by regulation. Land development through informal channels is the predominant method of urban land development, with various actors. Most people enter the informal market in one of the three ways: Informal rental agreements, either with the land owner or a care taker The purchase of land use rights from the user of the land Encroachment on marginal areas The important behavior peculiar to different income groups is timing of occupation of the plot after sale. Low income developers occupy the plots immediately by constructing a house, while middle-high income groups take their time, and this is often to find empty plots. The question is, why do land use rights‟ owners wait for some time before occupying the exchanged plots? Land holding creates a significant bottleneck in the supply of buildable land. This also implies that land hoarded may eventually be developed for uses other than those designated in a plan. Retention of valuable residential land as a garden or as a potential expansion area constrains land supply. In addition, the presence of middle-income groups with in an informal settlement affects the density and rate of densification with in settlements. Informal land markets have distinctive characteristics that make them different from the formal land market systems. These are either detrimental to

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Theorizing Land Markets, Urban Planning and Housing Development 41 the operations and actors in the market, or of benefit in the bid to maximize profits. Wuballem (1997) observes that one of the characteristics of informal land markets and development is the extreme prevalence of speculation. Speculators hoard large tracts of urban land and create artificial scarcity. This escalates prices so that land is no longer accessible to low income urban households. Kironde (1994) noted that land is introduced to the market through speculation, in that how much a developer releases on to the market depends largely on demand for it, which rises due to hoarding, and therefore there is short supply, pushing the prices high. Unlike formal land markets, which are assumed to be competitive, in informal land markets, there is no indifference between land holding and wealth. Both of these are perfect substitutes for one another, depending on the market conditions, which drive most informal land markets. As a consequence, a frequent problem encountered in informal land markets is conflicting and unrecorded ownership claims (Malpezzi, 1996), and double or multiple sales of the same plot of land. This is a result of commodification because land is a substitute of or monetary gain, and therefore, there is no indifference between the land holding and its market value. Double or multiple sales delay development. While speculators may not be current occupiers of the land and may never have occupied it, thereby viewing land as a potential source of wealth; but for the occupiers or new buyers, as the length of occupation increases, the possessor values the land above its market value due to increasing sentimental attachment. An important consequence of the continued informalization of urban land markets has been the subdivision of land and expansion of unguided/unplanned urban land development (Wuballem, 1997). The defacto bypassing of burdensome regulations has resulted in relatively increased efficiencies in meeting the demand for buildable land, which eventually is translated in to meeting the shelter needs of not only low-income, but also middle and higher income urban residents. However, the potentially significant operations associated with such unregulated land development need not to be over looked. It is, therefore, important to consider the question of who builds the city in the wake of different and emerging mechanisms of exchange in land rights. Bruijin (1991) advances two models that attempt to explain the actors in city development. The first model assumes housing and city building, or development in a public land delivery system. In this model, land markets operate within the legal framework, where public allocation of land is the mechanism through which developers gain access to land. In this system, plans

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and regulations influence how public agencies, parastatals, individuals, and government participate in urban development. Adherence to the regulations is key in such a system. This model is presented in figure 3.

Source: de Bruijn, 1991.

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Figure 3. Actors in Urban Development under Public Land System.

As shown by this model, urban development in a system of public land supply is largely based on the controls and regulations of land rights, exchange and development. However, such a system can also involve developments outside the regulations, which is mainly true with land invasions or illegal settlements on public land. This experience is well documented in Latin America, where large invasions have occurred (Stephen, 1997). The system does not cater to the majority of urban dwellers who ,in most cases, are the poor. As a result, they devise alternative ways of acquiring land, including invasions. The second model advanced, by de Bruijn, is based on a market economy. In such a system, plans and regulations may exist, but the interplay of these plans and regulations is best explained by the land market operations. One important feature of this system is its operation within and alongside the public land system. Whereas the public system provides land for public agencies and developments, the land market will provide land access to the private sector and its individuals. The public sub-system in this model acts as an influencing factor to the operations of the land market and benefits through taxation, as seen in figure 4.

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Theorizing Land Markets, Urban Planning and Housing Development 43

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In this model, it is important to note the influence of different actors with increase in market and transaction activity. Compared to the first model, the second model has a unique characteristic of the inclusion of squatters, self builders, and individual owners; however, both models do not include the land and the systems through which rights are held.

Source: de Bruijn, 1991 Figure 4. Actors in Urban Development in Market Economy.

These externalities (to the de Bruijn models) are very crucial in the development of cities, especially in Uganda, where land rights have been partly vested in the private individuals. This is an important issue in theorizing housing development in sub-Saharan Africa. Because of the externality factors as represented in the conceptual model of the research, the demand for land in currently non-developable locations tends to exceed that which is made available. On the supply side, the existence of land held under customary and private ownership, leads to land being available for exchange to those in search of it. Gareth and Ward (1994) noted that the informal land sector is highly productive and sensitive to lower-income needs, although it works under distorted conditions. They are considered to be segmented with a wide range of actors and social relations. Further subdivision means more accessibility of land for the poor, but the consequences of this on proper urban

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development are far reaching. Developments continue without proper services and access roads, and development is in marginal areas. According to Chapin and Kaiser (1979), land development systems focus on processes that convert, or reconvert space and adopt it for human use in the pursuit of activities defined by activity systems. In land development systems, there are several actors or agents, including pre-development owners, developers, consumers, financial intermediaries, and public agencies. Chapin and Kaiser have demonstrated that the urban development processes are economic in nature, and the organizing concept is the market mechanism with the sorting process, which allocates space to activities. This involves allocating space in both quantitative and locational aspects to various users, according to supply and demand relationships in an equilibrium system. This conception contends that any land activity allocations by planning systems need to consider the land markets, which is the economic aspect of urban development. There is little evidence in regard to consideration of land markets in what Chapin calls, the „sorting process‟. The consequence is an imprint of developments created by various actors with differing characteristics, interests and various decisions within the sorting processes framework. According to Sengendo (1993), housing development is a process by which people, companies, and government become involved in and are organized in order to mobilize resources for the attainment of housing. This process brings together resources, such as land, building materials, finance, and people. This includes the actions, associated decisions, and operations that lead to construction of a structure. Housing development, which occurs in the form of self-construction, involves a series of stages, actions and decisions at the different stages. These stages include: land acquisition, purchase of building materials, construction, furnishing, and taking residence after completion. This process also includes the provision of other amenities like garbage collection, water provision, access ways, and other utilities. This, however, is an ideal, conveniently staged process, but housing development is a continuous process with little or no breaks, and the process differs greatly between social groups. Kombe (1997) advances a model that describes the pattern for informal settlement growth and development in which the housing development can be placed. Kombe describes three stages of informal settlement growth. The first stage is the infancy stage, in which land development starts to take place in the urban periphery. This is the starting stage, predominantly agriculture or bush land, with scattered houses mostly owned by indigenous land occupiers, but

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Theorizing Land Markets, Urban Planning and Housing Development 45 where land is increasingly being cleared by non-settlers, landlords for nonsubsistence farming activities. The second stage is the consolidation stage which characterizes informal settlements in intermediate areas. This is the “booming stage”. In this stage, areas where land use intensification, as well as changes of the use of land from agricultural to residential, are rampant. There is also a gradual displacement of the indigenous (often poor) people by immigrants from the inner city. The third stage is the saturation stage, which is often the development in the inner city informal areas where land markets have heated up. Kombe‟s stages of the informal settlement growth and development starts from the time when land is opened for uses other than agriculture, until the settlement starts to consolidate and fill-ins and extensions eventually occur. The extensions and densification is reflected in Olivergren‟s (Wuballem, 1997) works when he notes that flexibility in housing development provides opportunities to adjust what is built and when and how it is built. It also allows for continuous redesign and experimentation during progress, and following completion. What people build is a reflection of themselves and their own particular existential situation, and that informal housing development is more user controlled. Perhaps this explains the retention of open land for future extension, so as to allow experimentation and redesign. In comparison to other regions, Doebele (1987), observes that in Bogota, low income houses are built of cement blocks with iron rods left exposed to permit the easy addition of a second level. However, lack of money means it will be some time before the second story can be finished. In Uganda, this is only true for commercial land use, and to a lesser, degree residential housing. The incremental development can be related to a situation where one room is build, and after some time, another is added. It is after acquiring a plot of land that people engage in “brick-by-brick” capitalization, gradually accumulating the materials for a house or in later stages, the addition of a rental unit that not only brings in income, but also adds to the housing stock. Therefore, it is common to find various actors in the housing development. In the case of Kampala, the involvement of private individuals, including the poor, is an important aspect of housing development and partly explains the current imprint of unplanned settlements.

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LAND MARKET OPERATIONS AND PLANNING In the preceding discussion of land and housing development, the fact that the land development process is directly affected by the land market systems emerged; however, the land development process may or not be a response to the planning system. If the land development system is a response to the planning system, then in planning, there are two important stages that are of concern. The first stage is that of establishing available land and modes of supply on which projected activities can be allocated. The concern here is the availability of land to accommodate the activities. According to the planning system, land which is open and suitable for development is ideally available (in supply) for development, while the demand, on the other hand, is the current size of a household, or projected population. One, however, notes that what may be ideally available (as defined by the planning system) and suitable, may not necessarily be on the market. The market conditions do not, therefore, reflect a true supply of buildable land due to the different modes of supply. Therefore, the demand for land is occurring in the face of very different modes for supplying urban land than those that have prevailed in the past. It is important to note that the supply of land is not fixed by outside forces, but is a product of human decisions and relations. This is due to the influence of attitudes and social values on how land is released on to the market, and this factor cannot be neglected. The question, therefore, is of what importance are these human decisions in planning if the plans are to be realistic and reflective of the market conditions (Wadley and Smith, 1998)? The second important stage is the implementation of the designed spatial plans. The definition of planning as a process of identifying problems and exploring options in pursuit of general goals and specific land development objectives is limited to the planning activities; yet the purpose of land use planning is to make the environment to be built conform as closely as possible to public objectives. Chapin and Kaiser (1979) propose that planning needs to be broadened with the concept of planning and guidance system, which goes beyond the preparation of plans. It includes direct application of the outputs of a number of planning activities. This is supported by Wadley and Smith (1998) and UN-Habitat (2008), who observed that given the demographic shift to an urbanizing world and deteriorating conditions under which slum dwellers live, there is need for innovative planning. The goal of land use planning, therefore, is not only limited to the making of plans, but is also focused on attaining a built environment as nearly in keeping with goals and objectives as is feasible. Explicit attention to the design of coordinated implementation of

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Theorizing Land Markets, Urban Planning and Housing Development 47 plans is where implementation actions are needed in land use planning and guidance system approach to land development. As noted earlier, land holding and land exchange are strong that strongly inluence land development. Land exchange involves the transfer of use rights, and land development is done immediately to ensure security and use of the rights bought in the land. This phenomenon has left an imprint of settlements developed according to the developers‟ plans, whether they infringe on the public interests or not. Experience in Kampala shows that developing a piece of land is done up to the last inch of its boundary, leaving no space for utilities. In addition to that, the access roads (if any are provided), are as narrow as 10 feet wide as subdivisions are completed. The consequence of this phenomenon has led planners to only fix or add to the developers‟ building plans on the official plans, thereby partly shifting the planning responsibility to the developers. This also implies that land development in Kampala is continuously being done through „self planning‟ and adhoc planning.

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MANIFESTATION OF LAND MARKETS IN KAMPALA The emergence of land markets is closely related to the evolution of property rights over land. Whereas in the rural context the establishment of property rights emerged out of the productivity and pecuniary gains for agricultural development, in the urban context, with the appearance of permanent and more secure walled settlements, dwellers have been allowed to reap economies of agglomeration, which created a need to define property rights over tracts of land and the structures on them (Troutt, 1994, #6; Kaggwa, 1994, #1). The limited space within the walled city created a scarcity of land, wich created the prerequisite for the constitution of a market. In Uganda, as observed by Kaggwa (1994), the enforcement of individual tenure systems was an important factor in the evolution of property rights. The land mark event of the 1900 Buganda Agreement introduced the freehold form of tenure, which later acquired the name Mailo land tenure. This new system, Mailo, brought in a new dimension of individual ownership of land in the communal setting since an individual‟s right to land was no longer dependent on occupation or usage. Absence from the location no longer impaired ones´ right to land. The individual was neither compelled to give up excess land or unused land for the benefit of the landless. The individual could own as much land as possible and if he couldn‟t utilize it, he could grant other people user rights on a temporary or longer-term basis in return for a fee: either Busuulu

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(actual money for rent or use of land), or envunjjo (payments through goods produced on the land). This kind of tenure system encouraged the commodification of land due to the value attached to land by the Mailo system, which was not only in monetary terms, but also social in nature. This form of tenure was envisaged as a system that would encourage agricultural production since the individual farmer would invest in the land and technology to develop it if the occupier was sure of the rights over the land. In the urban context of Uganda, as the city of Kampala grew and developed from a dual evolutionary structure of the local 2 Kibuga and Kampala Townships, expansion of the boundaries brought in peri-urban areas and added potential land for exchange in the urban system (Norstrand, Development, et al., 1994). These two structures are largely seen as the “Informal” and the “Formal”, or as the “Traditional” and the “Modern”. The importance of this dual structure of the city to the study lies in the fact that the Kampala Township introduced the formal planning schemes and procedures alongside the informal planning schemes and procedures of the Kibuga. There has been continuous merging of formally planned areas with informally developed areas, creating dualism in Kampala city, in which a strong informal land market emerged and can be considered active.

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EVOLUTION OF PROPERTY RIGHTS As Coccato (1996) observed, in the early stages of agricultural development, individuals were assigned long-term (or even inheritable) use rights to land, with a restricted ability to transfer such rights. This arrangement, while providing sufficient incentives for investment, avoided the social tensions engendered by the emergence of a landless class. The loss of efficiency from restricted transferability was insignificant in such circumstances, since differences among individuals in a management capacity mattered less in these times of relatively simple technology. However, as technology advanced, and the differential endowments of management skills, labor, and other non-land productive assets among individuals assumed increasing importance, the lack of transferability of property rights adversely affected productivity, even if individual use rights were secure over the long term. Because larger economic benefits could be realized by making land 2 The Kibuga was the urban African community in present Kampala around which Modern Kampala grew and developed.

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Theorizing Land Markets, Urban Planning and Housing Development 49 transferable from low to high productivity individuals, transferability became possible, despite the costs associated with the growth of a landless class (Charles, 1964; Balchin and L.Jeffrey, 1979). Social tensions were attenuated when the urban economy began growing, absorbing the landless in activities with a high marginal productivity of labor from the peri-urban areas. Thus, in most socities, the emergence of land markets and the consolidation of property rights over land created a powerful class of rural landowners who became urbanites in the expansion of urban areas. In Uganda, the emergence and evolution of property rights can be conveniently analyzed by use of the historical time-periods because of their significance to issues pertaining to land. These developments are discussed below in the different stages of the evolution.

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Property Rights in the Pre-Colonial Period According to Troutt (1994), prior to 1900, Buganda in which Kampala falls, exhibited the general conditions of many African land tenure systems. Populations were fairly sparse and there was no commercial agricultural orientation or land market. Individuals gained land rights by virtue of their membership in a particular group. Every individual had a right to occupy and use some area of land. This right derived primarily from one of two sources and the nature of the rights gained was basically the same under these two arrangements. First, if the individual resided in a village occupied and controlled by a particular clan, sub-clan, and lineage, he gained land rights through his memberships in that kinship group. Each clan, sub-clan, and lineage had inalienably attached to it an estate which was believed to derive from an original grant from the King earlier in Buganda´s history. The estates of most clans were scattered throughout the Kingdom and were held and managed by the kin-group leadership. Individuals were granted use rights to land on the basis of their group membership, but their bundle of rights did not include any transfer or subdivision rights. Second, if an individual resided in a village presided over by a politically appointed chief, he gained land rights because of his position as a subject of that chief. The King and chiefs held rights to estates in their official capacity as political leaders; thus, county and sub-county chiefs had several estates located within their locale, while the King had the greatest number of estates scattered throughout Buganda. While a given chief was viewed as the “owner” of the estates in his office, he technically possessed only usufructuary rights and allocated some rights over

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his estates temporarily to sub-chiefs, deputies, and political clients. Such rights ended when the estate‟s holder left that particular office due to death, promotion, or demotion, with the estate being passed on to his successor in office rather than to his heirs. A chief granted use and occupational rights in land to individuals based on their position as his political clients. Thus, the village was a group of people linked by ties of political allegiance. It was the duty of the chief or kin-group leader to grant each household to exercise his political authority over the people in his jurisdiction. Individual land rights included those of undisturbed occupation, grazing, water collection, as well as tree use and firewood collection, all on the condition of correct social and political behavior. A household was generally secure in its tenure as long as the occupants occupied and cultivated the land. If a family ceased to cultivate a parcel, that parecl reverted to common availability for distribution to other households. Likewise, the villager was free to leave the group and join another if he so desired. This implies that before the 1900, individual rights to land that would permit exchange between individuals did not exist. Land rights were restricted to bundled use rights including cultivation, grazing, water collection, tree use, and firewood collection; thus, no land market existed then.

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Land Rights during the Colonial Period Troutt (1994) observes that the years between 1884 to 1900 were turbulent, characterized with three civil wars and a series of disturbances. This followed the arrival of the Roman Catholics and Protestants in 1887 and 1888 respectively, who vied for followers between themselves and the Muslims (whom had arrived earlier). She further notes that it was in this atmosphere that the Buganda Agreement of 1900 was reached. This agreement had far reaching and permanent effects on traditional Buganda land tenure. It introduced formalized individual ownership rights over roughly half the land area of Buganda. The rights conferred under the Agreement created a fundamental shift from the traditional system. In the initial allocation of Mailo land, 8,000 of the total 17,295 square miles were allocated to private individuals to be held in freehold form known as Mailo (local word for “Mile”) tenure because allocations were made in fractions or multiples of square miles. The King and the big chiefs were also allocated about 1,000 square miles, and in total about 4,000 individuals received a total of between 8,000 and 9,000 square miles. Each individual received estates in a private

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capacity with a provisional certificate for a specified acreage of land. Certificate owners chose the land they wanted and the remaining land was designated Crown Land. Individuals who did not receive mailo had other arrangements through which they could gain access to land. Mailo tenancy for short-term or long term access to land evolved, which are known the Bibanja holders today. The distribution of Mailo land in Buganda necessitated a cadastral survey unparalleled in Africa at that time (West, 1972 in Troutt, 1994). It was impossible to coordinate property boundaries with the physical characteristics of the land during the allocation since at the time of allocating the land, facilities for surveying did not exist. Thus, it took almost 30 years before the surveys were completed, by which time the original allocations were long out of date due to transfers and divisions of land through inheritance, gifts, and sale. However, important to note is that the paper allocations raised the concept of negotiable property rights. Individuals who did not receive Mailo land had other arrangements through which they gained access to land. These included tenancy (obupangisa), which was short-term and included permission to cultivate a crop for a single season. The other was the long-term tenancy in exchange for annual rent. This occurred to people who, at the time of the allocation, were already residing on the land allocated to a few individuals.

Post-Colonial Period After the introduction of the Mailo system, several developments occurred, and the most important that related to land was the de jure abolition of the Mailo system in 1975 under the land reform decree. Land that was not placed under the Mailo system was considered to be the British governments´ share of the land area in Buganda. Under the 1903 Crown Lands Ordinance, occupation and use of Crown land by customary tenants became regulated by a system of Temporary Occupation Licenses. In theory, for an annual fee, an applicant could receive rights to occupy and cultivate up to five acres of Crown land. In practice however, the licensee typically paid an unauthorized sum to the sub-county chief, who would effectively “sell” him the plot of land. The Ordinance was rarely enforced, so the customary tenants were left to assume private rights in the land of a form generally equivalent to effective ownership. Further exchanges were also reported by Fortt (1973). Customary ownership even became more concrete when the Crown Land Ordinance was repealed in 1962 and vested the former Crown land to the Buganda land

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Board. Under the Crown Land Ordinance of 1903, individuals were free to purchase freehold title to Crown land. All freehold land was subject to forfeiture for failure to occupy or develop it. Freeholds were primarily purchased by religious missions. The realization that the Mailo system represented a substantial departure from the traditional system prompted the passing of the 1908 Land Law, which defined the land owners´ rights and duties. This law gave Mailo owners full ownership rights, including the right to transfer land to any African through sale, gift, or will, but preserved traditional joint use rights of water resources and roads. Neither the 1900 Uganda Agreement, nor the 1908 Land Law addressed the relationship between Mailo landowners and the tenants who occupied areas of their land. Therefore, Mailo land owners “governed” tenants according to traditional customs, and tenants accorded them the traditional types of dues and services expected in return. The services included both economic remuneration (originally in the form of a month of labor services called busulu), rendered to the land owners´ crops; and the tribute (envujjo), or respect traditionally paid to a chief or other leader. The envujjo, or tribute, which included such things as generally treating one‟s landlord with politeness and respect, tipping one‟s hat at him when passing by his house, pushing his bike uphill for him, and bringing him a small share of one‟s farm produce, played an important role in formalizing and solidifying the tenant-owner relationship on Mailo land. By staying on good terms with the landlord, a tenant was more assured of retaining undisturbed occupation of his tenancy. Because of the economic returns from having tenants, it was beneficial for a Mailo owner to attract tenant households on his idle land in order to maximize the economic and non-economic benefits; but in 1902 tenants started paying a fixed rent to their landlords in the form of traditional labor. More importantly, under the Busulu and Envujjo law, Mailo owners lost the right to evict tenants in most cases, which, by law were supposed to be tried in a court of law. The law also controlled the rents that the tenants paid on the Mailo land. These developments indicate how rights evolved in Buganda and were legitimatized as full rights that could easily be exchanged.

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The Manifestation of Land Markets in the Central Region of Uganda The Mailo land estates began to be broken up through subdivisions immediately, through inheritance, gifts, and sales. Sometimes gifts of land were made to relatives during the owner‟s lifetime, but inheritances and sales accounted for most of the subdivisions (Mukwaya, 1953; West, 1972 in Troutt, 1994). The Mailo system encouraged more individuals to view their land as not only a source of rental income, but also an immediate source of capital through the sale of part of or all of the land. Thus, while land continued to be viewed as an asset conveying social and political prestige, it also came to be widely perceived as an economic asset. These views, which were combined with peoples cash incomes from production and sale of commercial crops, encouraged the emergence of land markets in Buganda. Most Mailo allotees viewed their endowment not as a productive enterprise, but as a form of dormant wealth, and the protectorate government encouraged them to sell parts of their holdings to exploit the market. Individuals who understood the meaning and values of the rights embodied in Mailo interests were able to acquire land quite easily from those who did not, and a market in Mailo land developed quickly upon the completion of the original allocations in 1905. After this early burst of market activity, the volume of Mailo land transactions fluctuated with economic conditions (Troutt, 1994). Subsequently, rental markets also gained momentum. The perpetuity of tenure that the Mailo tenants received under the Busulu and Envujjo law caused Mailo owners to charge substantially increased prices for the initial granting of a tenancy on their land as they rightly identified the granting of a tenancy as an effective loss of their land. Prospective tenants‟ desired to avoid these costs led to the introduction (or at least the proliferation) of another type of land market transaction; the sale of the Mailo tenancy, or use rights, which was illegal having been prohibited under the Envujjo and Busulu law. Thus, before and after 1900, land exchanges took place `informally´. A tenant would sell his rights to another and claim that the new `occupant‟ would use the land temporarily. There would be no formal record of the transaction, but the new papers would show tenancy in the names of the new holder. Similarly, part of the tenancy might be sold off, and the landlord persuaded to acquiesce in the deal through an offer of part of the selling price. Over time, the effective rule which deferred from the de facto rule continued to be practiced. As the de facto rule relaxed, the importance of introducing the incoming tenant to the Mailo owner for approval remained. This practice also spread widely, and it

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reflects the current land market activity in both rural areas and peri-urban areas. While the predominance of land market activity was significant in rural markets, existing urban areas (which were mainly Kampala and Kibuga, with a few trading centers where agricultural produce was exchanged) mainly had formal land markets introduced by planning. Two major effects of the rural land markets were distribution of land ownership and a huge increase in the number of land owners. As the land market emerged, the large original Mailo estates were broken up in to relatively smaller Mailo tracts. Inheritances and gifts were important, but the greatest role was by the land market (Troutt, 1994). These allowed individuals who were not related to the original Mailo allotees to become owners. Additionally, the land markets so created reinforced the gradual fading of the idea that the primary, or only value of land ownership derived from the social prestige and political benefits that land traditionally bestowed. The emergence of the land market increased peoples awareness of land as an economically productive asset, and the land market served as a medium through which individual‟s earned a return on the otherwise idle land. With increasing land prices, it became increasingly costly for people to hold unused land when they could sell it. Relative to this potential, the value of social prestige faded, although the political and social importance of land still remains.

Land Tenure after 1975 One marked feature of the land issues in Uganda and Buganda, in particular, was the 1975 Land Reform Decree (LRD), which abolished individual ownership of land and vested ownership of all land in the government of Uganda. Land titles were to be converted by their former owners to 99-year leaseholds from the state. Further, the LRD repealed the 1928 Busulu and Envujjo law, exposing tenants to eviction by their landlords, provided the landlord demonstrated intent to develop or improve that land and paid the tenant compensation. The LRD also addressed public lands, which remained the property of the state. Customary tenants on public lands who had behaved largely according to an evolved form of traditional (informal) rules were turned in to tenants at sufferance who could be evicted by the state with a six months notice. The implication of the LRD included the end of the De jure land owner‟s perpetuity of tenure, being replaced by 99-year leaseholds. Mailo tenants were also exposed to the possibility of eviction, and customary tenants

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Theorizing Land Markets, Urban Planning and Housing Development 55 were similarly placed at risk of expulsion from the land. However, the LRD remained largely unimplemented, although it affected all parties‟ perceptions of their stand relative to others (Mugambwa, 2002). Thus, the overall effect of the LRD was a clouding of people‟s expectations about land dealings by introducing a great deal of uncertainty and confusion about the rights and exposures of individuals in various tenure positions (Troutt, 1994; Mwebaza and Gaynor, 2001). Despite the clouding of expectations and uncertainty about the rights over land, people continued to deal in land as they did before the LRD. Although it generally shrank the land market activity, it did not completely deactivate the operations of the land markets.

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The Land Act 1998 The confusion, uncertainty, and declining investments, especially in the rural areas, remained a concern of all governments after the LRD. Since the LRD had also remained largely unimplemented, it was very clear the question of land was never solved. Several studies, some of which were commissioned by the government, were done to try and come up with possible recommendations on the unresolved questions about land. All these efforts culminated in to article 237 of the Constitution of Uganda, which vested the land the citizens of Uganda owned in accordance with four main forms of tenure; customary, freehold, Mailo, and leasehold. The Act, however, introduced new dimensions of rights and ownership. It clearly defined all rights to be enjoyed by owners of land in any of the forms recognized. It also allowed transferability of the defined rights across all forms of tenure. The most marked dimensions were two fold: First, the separation of ownership of land from ownership of developments on land made by a lawful or bona fide occupant. This was intended to enable the holder (subject to the customary and statutory rights of those persons lawful in occupation of land) to exercise all the powers of ownership. Second, the introduction of certificates of customary ownership and institutions, such as the Land Boards, to oversee the land matters. This was intended to improve security of individuals` rights over land that they had occupied for a long time. Although the act is still under implementation, its implications to urban planning and development, as well as the environment and social matters, are well documented by Mugambwa (2002). These implications are the focus of the proceeding chapters.

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Property Rights: A Categorization As Payne (1997) observes, rights to land and property exist within a regime of rights in general, and therefore the key factor in any system of property rights is the relationship of an individual to the group, and of different groups, to each other and the state. Thus, the concept of land rights is an expression of the values to which a society adheres or aspires. As such, land tenure systems and rights vary enormously from those who, on one hand, regard land as a sacred trust to be protected for future generations, to those, on the other hand, who regard land as a commodity to be enjoyed or exploited like any other commodity. Property rights are largely dependent on the system of holdership or otherwise land tenure. Payne (1997) distinguishes land tenure from property rights in his conceptualization that property rights can be recognized as interest in land or property vested in an individual or group, and can apply separately to land or development on it. Payne further notes that rights can cover access, use, development, or transfer, and exist in parallel with ownership. On the other hand, land tenure is considered to be the mode by which land is held or owned, or the set of relationships among people concerning the use of land and its product. Payne (1997) identifies six categories of rights that characterize the urban areas of developing countries. He notes that the wide spread designation of all urban settlement processes in to formal and informal, or legal and illegal, grossly over-simplifies what is invariably a continuum of tenure categories in which there is little black and white, but a great deal of grey. The rights categories are described below. De facto Security – No Title: Rights associated with this form of tenure according to Payne (1997), may result from squatting, land invasion, or other processes of illegal plot occupation and development. No legal rights are accorded to this category, though in practice, residents may occupy their plots for many years and use them for a variety of purposes. Transfer rights may accrue over time through adverse possession so that plots may acquire sufficient value to support an active market. The main disadvantage of this category lies in the lack of clarity of the tenure status, and prospects for security depend largely upon numbers. When large portions of a city‟s population live in such settlements, sufficient pressure can be exerted on local political leaders to provide adequate levels of security to justify considerable investment in housing by residents. Official Recognition – No Title: This category represents a significant increase in legal status, although it falls short of providing actual titles. Such a status can be achieved through default occupation over time, or by active

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Theorizing Land Markets, Urban Planning and Housing Development 57 efforts of residents, developers, and local politicians. It may be expressed or perceived through the provision of improved infrastructure and public facilities (Payne, 1997). He further observes that in Delhi, during the 1970´s, it was common for unauthorized settlements to be `regularized‟ by the local authorities and be provided with services, but no formal tenure status. In this category, perceived rights are usually sufficient to release substantial levels of investments in housing improvements. This form of tenure, with the associated rights, represents an intermediate stage on the road to formal title provision because it provides a strong incentive for residents to invest in home improvements and economic activity. Although it activates the market, official recognition without title can, however, have serious implications on the efficient urban management. Occupancy and Use Rights: These forms of tenure represent a compromise between full, formal title, and de facto security, and are usually intended to retain long-term control over land by the owners, which is usually the state (Payne, 1997). Where land has been nationalized, use rights or occupancy permits are granted to residents, however, these forms can also be granted by private individuals or institutions with a view to maintain ownership over the land. These forms are very common in Uganda, especially with public land and the Mailo land tenure systems. They offer some security, though they often restrict the bundle of rights offered to the grantee (Payne, 1997). However, as Angel (1993) notes, as pressure on urban land increases, the customary systems on which they rely may prove ineffective, and more formal systems are needed. As such, these forms of tenure and rights are very temporary in nature. Communal or Cooperative Ownership: These forms of ownership occur when communities opt for them because they feel beleaguered, and may therefore be highly motivated politically and less pragmatic to the changing needs than the market-based systems. None-the-less, for a majority of the members, these forms represent a means of achieving a sense of community and control over their lives, which they would otherwise be denied (Payne, 1997). Transfer of rights are variable under these forms of tenure and may include the rights of first claim, use rights, and development rights. These forms of tenure provide full legal titles and clarity of rights. Transferability can be achieved with a balance, which encourages development over time. Equity is also achieved by reducing entry costs and distributing added value among the group members. Many options are possible, and the most common options are cooperatives with long leases, companies with shares and long leases, leases with sub-leases, and condominiums.

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Customary Ownership and Rights: Because traditional forms of tenure have been in existence for a long period of time, they have evolved into diverse and dynamic systems, although they share some common characteristics. Under normal circumstances, ownership is vested in the tribe, group, or community and land is inalienable where individuals only enjoy rights over it. These rights can vary considerably and relate to access, passage, use, cultivation, grazing, or development. Communal systems have shown themselves to be flexible in responding to social needs within their group, and this has helped many low-income urban households to obtain land and housing on terms which they could not otherwise afford. Urban areas tend to be more socially dynamic with a larger number and a range of groups competing for available land; therefore, they tend to be less suited for urban areas due their reduced efficiency. From the foregoing discussion, it is evident that property rights are considered to exist as a bundle of rights that can be summarized as (Mugambwa, 2002): Privilege/right to occupy Privilege/right to use, right to fruits, privilege not to have use restricted Security, privilege of continued occupancy, immunity from eviction Privilege of privacy, right to exclude others Privilege to modify or manage, duty of maintenance Privilege/right of transfer or disposal, as gift, inheritance, sale or rental In Uganda, in the pluralistic systems of tenure, each institution has overlapping rights bundled according to the institutional rules of the game. The overlaps are caused when people move between them in terms of their relations to land and transactions in which they engage, or because a particular piece of land may lie between two systems, which may be subject to conflicting rights and duties. For example, a Mailo piece of land, with occupiers having use rights are otherwise known as Kibanja owners.

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THEORY OF LAND MARKETS In this section of the chapter, existing theories on land markets are reviewed to provide a framework for the analysis and explanation of land market operations. The social, political, and economic conception of land market operations is the focus of this section in attempting to explain land values which are both monetary and non-monetary. This theorization provides underpinnings for both land and property rights in order to place the research in a theoretical and conceptual framework.

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Economic Aspects of Land Exchange The theory of urban land use and city size is an especially appealing topic of research because much of traditional economic theory cannot be readily applied (Balchin and L.Jeffrey, 1979). Although traditional economic theory aptly describes competitive markets typical of most Western societies, it is essentially designed to deal with problems where space is an issue. Hence, many of the basic assumptions of this theory are no longer appropriate for spatial problems, such as land use (Aina, 1989). First, it is generally noted that households, as well as many firms and government agencies, choose one and only one location, which implies in the terminology of traditional economic theory, that there is a strong non-convexity in consumers' preferences and production technologies (Ching and Fu, 2003). Second, since the essence of cities is the presence of many people and firms in close quarters, externalities are a common feature. Public services, such as information exchange through face-to-face communication, are one of the major reasons that people and firms locate in a city. Third, the existence of distance among cities implies that the producers of local goods (both public and private goods) can enjoy a monopolistic situation. This is true for producers of neighbourhood services within each city; hence, oligopolistic or monopolistic competition is a common feature of urban markets. Finally, buildings and other urban infrastructures are among the most durable of all human products, and this limits the usefulness of classical static theory. Because many spatial phenomena, such as urban sprawl and renewal, can be treated in a satisfactory way only within a dynamic framework, it is necessary to combine land use theory with capital theory for a proper understanding of land markets (Fujita, 1990; Clapp, 1995; Ching and Fu, 2003).

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BID-RENT FUNCTION THEORY In the theoretical explanations of urban land economics, most of the famous classical theorists discourse is perhaps the bid rent function approach, which was introduced into an agricultural land use model by von Thönen (1826) and later extended to an urban context by Alonso (1964). This approach is essentially the same as the indirect utility function approach, which was introduced into an urban land use model by Solow (1973). Hence, it is closely related to the duality approach of modern microeconomics. The main focus of urban economic theory is, of course, land, but in economic terms, land is a complex object endowed with dual characteristics as noted earlier. First, land is a commodity in the usual economic sense, and second, unlike other commodities, land is completely immobile. Hence, each piece of land is associated with a unique location in geographical space. These dual characteristics of land induce strong non-convexity in consumers' preferences (as in production technologies). Each household generally chooses to reside at one and only one location, which implies that the preferences of each household exhibit strong non-convexity. The capital of an economy is its stock of real goods with the power to produce further goods in the future. Viewed as such, capital would compromise land, which is considered in classical economic theory as a separate factor of production, for land would qualify as part of the stock of real goods, capable of producing further goods (Ernst, 1993). Land as an asset is not excluded from assets capable of producing other goods. It is used in production in a number of ways, though for some instances, marginally. All land types change in value due to economic re-appraisal and non-economic events, as well as changes in prices. Ernst (1993) notes that at first sight, the value of land appears to present less problems and it is difficult where there is little, if any market activity in the sale of land by which to establish appropriate prices. But as exchanges of land increase and urban economic activity intensifies, land becomes an important commodity in urban places. Brian, Berry, et al (1970) advance that land values are a function of the location of the lot within the city and the amenity value accorded the site. They argue that profitability of the land to the owner is reflected in the land value, which declines with distance from the city center. They deduce that: R (u) = Roe –AU where,

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R(u) is land value at distance (u) from city center R(o) is a constant of integration interpreted as land value at the city center e is the natural base of logarithms A is the exponent U is the distance from the city center If there were only one potential buyer of a particular property with a maximum price higher than the seller‟s minimum price, the market price will be fixed somewhere between the two points by bargaining. Balchin and Jeffery (1979) advance their theory that utility or profitability is largely determined by accessibility. The greater the accessibility of a location and the lower the net economic cost of movement in terms of distance, time, and inconvenience, the greater the comparative advantage and demand for land at that location; in other words, the greater the accessibility of the land to the user, the higher the value of the land in question. Users able to put the site to its most productive use would be prepared to pay the highest price; therefore, a potential purchaser will bid a price determined by expectations/utility/profits from the land, while owners will similarly differ on how much they should receive for giving up interests in their property. Fundamentally the subjects of real property transactions are not the land, but interests in rights over land, which is known as property, although property is a concept used more broadly to include assets in form of estate such as housing and farms. Land is merely a medium in which property rights subsist. Balchin and Jeffery (1979) note that the land market deals in rights and interests in land. Transactions involving heterogeneous units of high value in many submarkets reflect variations in buyers, sellers, local knowledge, and unique locational factors. Transactions occur between sellers and buyers of land, and in the long-run, those users who bid the highest price for these interests will control the interests. Alonso (1960, 1964) develops a model of the interaction of land values and land uses. He builds on the base of individual behavior to attain a model of aggregate market equilibrium where supply and demand quantities, as well as prices, are equalized. The users bid for land based on their bid price curves, and landlord sell or rent the land to the highest bidder. Supply and demand prices are equalized in such a way that no landlord can increase revenue by changing the price of land and no user can increase the household‟s satisfaction by moving to another location or buying more land or less land. He concludes that the steeper the household‟s bid price, the nearer to the city center a household will locate, and vice versa. Alonso explains transactions on the land market as how the preferences on the demand side (derivative from

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the activity system) and the land location (distance) opportunities on the supply side (derivative from the land development system) are mediated through the market mechanism to establish land uses in urban centers. However, the neoclassical economics on which the bid rent function relies heavily, assumes that the buyers and sellers have perfect information, that market transactions are costless, supply responds easily to demand, and all these are assumed to be transmitted through the price signals. In the real markets however, this does not hold. Rakodi (2000) observes that „New Institutional Economics‟ (NIE) recognizes the invalidity of neoclassical economics in regard to land and suggests that for a market to work well, appropriate institutions (ground rules for transaction) are needed. She further notes that the institutions are the rules of the game of a society, or more formally, are the humanly devised constraints that structure human interactions. Such institutions are composed of formal rules (state laws, common law, regulations), informal constraints (conventions, norms of behavior and self imposed codes of conduct), and the enforcement characteristics of both (North, 1995: 23). Where informality in land markets exist, rules that govern the markets can provide incentives as well as impose constraints. A distinction is drawn between institutions and organizations; the later being the players, or groups of individuals bound by a common purpose. Thus, the NIE recognizes the socially-embedded nature of markets and the influence of non-economic, as well as economic determinants of relationships between actors and their behavior with regard to the decision whether to sell, not to sell, subdivide/or develop the land, or with respect to price setting. The formal rules governing the supply and exchange of land are those provided by the legislative framework for tenure, transactions, registration, land use planning and development control, public land acquisition, and land taxation (Rakodi 2000). However, to access land through the legal land market is often times consuming and cumbersome, especially where it can only be allocated by government agencies. Typically, a large number of steps are involved, giving rise to significant transaction costs (delays, fees, opportunity costs of time, bribes) which constrain supply and drive prices up (Mabogunje, 1993; Rakodi, 2000; McAuslan 1992). The result of land supply shortfalls created by the formal rules gives rise to divergent rules that are created by legal actors and the rules people actually observe in practice. An alternative land supply evolves, often involving a range of different actors and channels, from squatting, customary allocation, commercialized, and non-commercialized; illegal subdivision of either private or public land. These channels often have their own unwritten rules of information dissemination, choice of whom to sell

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Theorizing Land Markets, Urban Planning and Housing Development 63 to, covenants, and methods of land alienation. These create inefficiencies, despite being applauded that they have redistributed land to the poor. The issues of informality and efficiency in informal land markets are further expanded in the next sections of this chapter. This research is positioned in this theoretical framework and examines the relationship between land prices and distance, as well as land characteristics in the informal setting. However, there is a difference between areas in terms of the transactions that are derivatives of the activity system. In Uganda, such a development system, which creates supply for land, exists in two distinguishable forms, which are the formal sector and the informal sector. The informal sector predominates, and because of its nature, does not create uniform opportunities for land acquisition. Thus, different land units of similar qualities and in more or less the same location, are each likely to attract differing bids due to the peculiarities within the informal land market. Whereas the research recognizes that prices are set according to economic factors of demand and supply together with the utility functions, it considers the view that in informal land markets, the social, cultural, and political factors are significant in influencing the bid for land units. It is due to these factors that a certain monetary or non-monetary value is attached to a plot/piece of land. This, in turn, influences the placement or non-placement of the plot/piece of land on market. These externality factors are important in limiting the land on market, just like they influence the actual bid price if a monetary value is attached to a piece of land. Using this framework of monetary and nonmonetary values, and bid price, the study analyses the operations of the informal land markets, their peculiarities, and differences from the formal land markets.

EFFICIENCIES AND INEFFICIENCIES OF INFORMAL LAND MARKETS The analysis of operations of informal land markets has generated two views on their efficiency, which is largely because of the perspectives in which the informal land markets are analyzed. These perspectives include the economic and the social-political points of view. The first view is that informal land markets are actually working well in cities of the developing countries (which is efficient), and this largely derives from the social point of view (Gareth and Ward (1994). Often land is quite freely available, albeit

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through illegal modes of supply and acquisition. Jurgen (1997) observed that the efficiency of the informal land markets does not only allocate land at lower prices due to subdivision, it also ensures that the poor access land, which also works towards social benefits and redistribution of wealth. He advances that market economies tend to accumulate wealth, power, and property in the hands of a few while excluding the majority of the population, and certainly the poor, from access to land. Although the notion wealth is held in few hands, the inaccessibility of land to the poor is a matter of degree, thus, he sees informal land markets as responses to inefficiencies of formal land markets. Efficiency is when resources allocated for development are not even with the initial assignment of transaction costs. When transaction costs are low, transfer will occur with the owners‟ valuation of the land in excess of its market value (Denis, 1993). This view holds that when transaction costs are low, then the market is efficiently allocating the land to use. It therefore views the informal market as efficient because compared to the formal land market; the transaction costs and time are lower. Clapp (1995) states that land markets diverge from an ideal market, especially with respect to information availability. Information, which plays an important role in land markets, is imperfect, though participants must collect it on each neighborhood and each property type within the neighborhood. Imperfect information means high transaction costs, including prices for the land such that pieces of land with some characteristics and size will have a different cost, even if in the same neighborhood. This is due to the intertemporal land pricing by the owner, with the intention to exploit market power. In support of this view, Turnbull, Sirmans, et al. (1997) observes that the owner withholds land in order to increase the land price in each period. The consequence is that the bid rents of the consumer stay either stationary or grow exogenously over time, driving land prices. The suppliers fear is that sequential release of land to the market by increasing total land supply reduces real land rents and prices over time, which dampens the effects of exogenous growth in land demand. An examination of the prices in relation to sizes apparently suggests that land exchanged through the informal land market is cheap. However, this may not be the case, as observations indicate that as plot sizes reduce in informal land markets, and price per m2 sometimes increase. This reflects some inefficiency of the informal land markets. Malpezzi and Asad (1996), on the other hand, argue that the informality of urban land markets has rendered their operation inefficient and entails severe distortion in land values. This derives from the economic point of view, which is due to the fact that lots of similar characteristics in the same neighborhood

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often sell at different prices, which are usually high. This does not reflect efficiency because they are not low. Allyson (1996) supports the view that low income households lose out to middle income and upper income households in the purchase and sale of land for housing. He points out that slow delivery of residential plots through formal channels has made titled land property unaffordable to the urban poor, and an increasingly less attractive option to middle-income groups in many African and Asian countries. When the supply of land is constrained in an expanding city, middle income groups often buy out poorer families living in informal or squatter settlements in a process known as “down raiding”. This affects the price of land and the size of plots in these informal sub markets. Therefore, the informality of urban land markets, which by and large cater to land and housing needs of the majority (especially low-inocme) of urban residents is a result of the ineffectiveness of existing official land tenure and regulatory arrangements (Wuballem, 1997). He observes that informal land markets, which deal with urban land, whose owners cannot back their claim of ownership with any formal/legal documents, incur additional transaction costs that arise from a sense of insecurity. This view holds that there exist uncertainties in informal land markets, which occur before the transaction, during the transaction, and after the transaction.

UNCERTAINTIES IN INFORMAL LAND MARKETS When analyzing the relationship between the land prices/land markets with residential housing development, there are uncertainties tied to pervasive neighborhood effects that developers face. The effects of neighborhood characteristics play an important role in influencing prices. Turnbull (1997) observes that the first developer or developers to purchase a lot and build a house suffer a first mover disadvantage due to neighborhood effects because it is not known how the neighborhood will develop over time and how it will enhance consumer utility. These types of uncertainties faced by the consumer are, however, solved as the development proceeds and the neighborhood takes shape, which is when success or failure of the subdivision becomes established. The fact that subdivision takes place sequentially means that the developer must confront the attendant sequential release of relevant information to the series of potential land purchasers. Land price dynamics usually reflect this phenomenon, and as a result, prices become higher for identical plots of land because consumption risk is lower with information that

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reduces uncertainties. In other words, land prices in new subdivisions rise over time relative to comparable land in the market as the uncertainties and vagueness of the residential development process are resolved. Owners and developers typically release multiple lot tracts of land to the market at one time. The tracts are usually small when compared to the total urban residential land market, justifying the competitive market assumption, but are sizeable enough to fully exploit the economies of scale associated with the development of the neighborhood and attendant infrastructure. Uncertainties also exist after a successful transaction. To complete any transaction, protection of property rights is important. The informal system has developed a means of protection of property rights during and after the transactions. In the informal systems, transaction procedures involve locally devised means of subdivision with no surveying, private covenants that bring in local/neighborhood administrators, friends, illegal agents, relatives, the seller and the buyer. These procedures are intended to discourage theft or nonconsensual transfers. This is done for main reasons: first, land itself is not the good that is exchanged, rights over the land are the actual goods that are exchanged; secondly, protection discourages theft or other non-consensual transfers. Sirmas and Thomas (1994) argue that since land market systems rely on voluntary exchange of property rights to higher valuing users, an essential ingredient of such a system is government protection of property rights. A land title system can be designed to protect the last rightful owner, who is defined as the person who last acquired the land via a sequence of consensual transfers (theoretically dating back to the point where someone first transformed the land into private property). It can also protect the current owner, assuming that he or she acquired the land by a consensual transfer. The aspect of protection of property rights by far forms the point of disjuncture between informal and formal land markets. Formal land markets involve legally approved means through government agencies. Therefore, the question about informal land markets is; how the buyers get consensual transfers to guard against theft or multiple sales? Kironde (1997) observes that the informal land market has developed means to protect the transfer of property rights. These means of protection include private covenants drawn between the seller and buyer with local leaders, friends, and agents as witnesses. This has made the informal land market transactions adaptive. Thus, from the above discussion, there exist both theoretical and practical problems with the land markets. Urban land market theories are largely drawn from economic theories which do not necessarily converge on the nature of land markets. Whereas land was generally considered as a factor of production

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Theorizing Land Markets, Urban Planning and Housing Development 67 by classical economics, arguments by neoclassical economics do not refute this notion, yet they subscribe to an understanding that land can be a commodity that enters the market differently compared to other commodities, like labor. Thus, whereas the price of goods and services is an effect of the costs on labor and capital, the price of land/rent is the effect of such goods. This unique feature has commodified land, and combined with the institutional rules of exchange, created enormous problems in the management of land.

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URBAN PLANNING THEORY As observed by McLoughlin (1969), the actions taken by individuals and groups in their own interests can bring about conditions which give rise to serious social, economic, and aesthetic problems connected with the use of urban land. In this respect, planning seeks to regulate or control the activity of individuals and groups in such a way as to minimize the bad effects which may arise, and promote better „performance‟ of the physical environment in accordance with a set of broad aims and more specific objectives set out in a plan (McLoughlin, 1969; Wilson, 1971; Darin-Drabkin, 1977). McLoughlin (1969) further observes that effective and responsible regulation and control can occur with a full understanding of the process of change. This process of change is not confined to the behavior of individuals or groups, but extended to encompass the whole fabric of spatial relations between activities and the complexities of their interactions. Therefore, there is a need to know the repercussions of housing development (or a factory, a shopping scheme, a sports stadium, or a one way street) that are likely to arise, and in what order, with what magnitudes, and in which location (McLoughlin, 1969). Practical knowledge of this kind must be related to sound theoretical principles, and in particular, the principles are related to location theory (McLoughlin, 1969; Darin-Drabkin, 1977). Some of the theoretical issues of location have already been discussed in the previous section on land markets, but in this section, location is considered in the context of land use allocation in planning. Location forms the basis of land use allocation, control, and guidance in the planning environment. Planning links the individual/group actions with the social purposes that are behind the planning techniques (McLoughlin, 1969). Through the works of von Thünen, Weber, Burgess, Christaller, and Hoyt, location behavior problems are explained with theoretical discourses which emphasize land, markets and distance. These discourses offer an environment and theoretical

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basis for the rationalizing of location (particularly allocation of uses) by individuals, households, and firms, in which the actors aim at maximizing profits. The discussion on the detailed theoretical assumptions of the works by the aforementioned scholars is not treated here, but a thread through the theories on how they are used in planning will be the focus of this section. Urban planning can be viewed as a system that casts in a similar way to the city (McLoughlin, 1969). Cities are dynamic systems evolve in response to many influences, as observed by Mitchell (1961) (McLoughlin, 1969):

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“…will be plans for the nature, rate, quantity and quality of urban change-for a process of development. They will be expressed in dynamic rather than in static terms. They will start with present conditions and point to the direction of change”.

From this observation, it is noted that plans are essentially envisaged to show the steps through which the city ought to pass the chart and the wellbeing of the city rather than at some distant future date. The basic form of plans should be statements which describe how the city should evolve in a series of steps over time, therefore, planning should have a similar form to the dynamism of cities. McLoughlin (1969) and Jain (2003) notes that the planning process must have a similar „shape‟ to the human eco-system which it seeks to control. Planning is driven by modifying actions taken by individuals and groups within society, and these many kinds of actions are merely the critical points in cycles which Chapin (1965: 33) called behavior patterns. McLoughlin (1969) points out that the planning cycle has a sequence of steps and actions within steps. There are six stages: Stage 1 is the scanning of the environment (McLoughlin 1969), also known as identification of the problem (Chapin and Kaiser, 1979; Bennett, 2003). At this stage, the needs and wants are scanned in the environment and a decision must be met to adopt planning. The decision to plan is made on the basis of values held by the individual or group, and this is what I advance as „experiential‟ knowledge, which planning professions should be aware of during the preparation of spatial plans. The foremost problem is to identify the „real world‟ system, and the planning system with which planning should deal. Additionally, the planning roles are defined, purposes determined, relationships with other kinds of planning are determined, and the means for proceeding with planning are defined, but all of these factors are kept under periodic review. Stage 2 concerns the formulation of goals, which is of great importance, since much of the planning process depends directly upon them (McLoughlin,

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Theorizing Land Markets, Urban Planning and Housing Development 69 1969). Once goals and objectives of planning have been determined, decisions will have to be made. Without a clear idea of the goals and objectives, the choice of the course of action to be followed is indeterminate, and it is argued that purposless planning may result. (McLoughlin, 1969; Wilson, 1971; Chapin and Kaiser, 1979; Mabogunje, 1993). It is important to note that it is neither possible to discuss courses of action, nor to evaluate them, except in relation to goals and objectives. Stage 3 in the planning process is the derivation of possible courses of action. Individual and group action is usually tightly constrained by financial difficulty and legal requirements, personal or group tastes, and preferences. In planning these conditions which shape individual action, these things are considered when generating possible courses of action (McLoughlin, 1969; Wilson, 1971). Plans will always impinge upon the decisions by a multitude of the public, private agencies, and communities. These decisions arise in a great variety of ways in response to many kinds of stimuli, such as public policy, government policy, market, and technology (McLoughlin, 1969). The generation of a possible course of action requires a model of the system, which will show changes of the state through time under the influence of a range of „policy variables‟. Stage 4 in the planning process is to compare and evaluate the range of alternatives which have been developed. This can be done in exploratory stages in successively greater detail (McLoughlin, 1969). The evaluation must be preceded by two important questions: first, what elements of the plans are to be used in the evaluation; and second, how are these elements to be measured? In the evaluation, the planner must optimize on behalf of the society, just as an individual or groups attempt to optimize. In the evaluation, the planner must evaluate the changing needs and preferences at various points in the future since he is evaluating not one decision at a point in time, but a trajectory of change through time. Although this implies that the evaluation is dealing with the control of a complex and probabilistic system, the planning process can still yield results since the evaluation is done according to the goals and objectives. Stage 5 in the planning cycle, as in the individual or group behavior pattern, is taking of action (McLoughlin, 1969; Arimah and Adeagbo, 2000). An important distinction needs to be made between the individual‟s action and the planner‟s action. Whereas the individual takes a single action which he hopes will improve his position for some considerable time, the planner tries to control the outcomes of a large number of actions, which results in a continuous flow of change through time. He considers the „action‟ phase as a

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permanent feature of planning for which the mechanism will be development control. There is a need to note the importance of actions as the principal determinants and shapers of systemic change in an urban system. Stage 6 concerns the changes that occur in the urban system once the developments, which will have been known in advance, enter the system during the plan formulation stage (McLoughlin, 1969). These developments are continuously checked with the control system as they occur, but as time passes, so does the environment. As such, some patterns of change, especially the broad outlines, would have been foreseen, while the details will have been foreseen with uncertainty. The uncertain changes are influenced by the alterations in tastes, preferences, needs and desires of individuals, groups, communities, and the whole society as driven by the political, economic, and social conditions. Thus, to complete the cycle, the control mechanisms need to be overhauled; that is, the plan must be reviewed and modified to suit these changed circumstances, and the whole process would be repeated, as described. Both the plan output and its control mechanisms are reviewed from time to time, and in most cases, the cycle will return to stage 2 (McLoughlin, 1969; Wilson, 1971; Chapin and Kaiser, 1979). The foregoing discussion of the planning theory describes the rational procedural theory commonly used in planning. However, this procedural theory, though followed in developing countries, has failed to yield practical results as far as guiding developments is concerned. This is due to the fact that behavior partners have not been adequately factored in planning. Experience shows that adhoc and „self‟ planning are occurring frequently and superseding formal planning in many cities of the developing world. This pattern of planning is largely attributed to the behavioral patterns and actions that planners may have failed to anticipate. Based on the land market theory and urban planning theory, the conceptual framework below synthesizes the subsystems of the city development as influenced by urban land markets in development for the purpose of framing the study concepts.

CONCEPTUAL FRAMEWORK The research framework is based on the conceptual model, which is schematically represented in figure 3.1. The reviewed literature has enabled the conceptualization of the study for a better understanding, operational isation of the concepts, and their relations.

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Theorizing Land Markets, Urban Planning and Housing Development 71

Figure 5.A conceptual model showing the major concepts of the research.

These concepts include housing development, planning system, and land markets. A literature review was also done to establish the interconnectedness

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between these concepts through the actors in the planning, development, and the land market systems. This section also highlights the different experiences in different countries in relation to the operations of land markets, in general urban land markets in particular, and urban development. In the conceptual framework, figure 5, there are three basic concepts; development system, land market system, and the planning system. These concepts, according to the research, are linked with processes that indicate the relationships between them. The development system, which is largely driven by the actors of development, influences land values through neighborhood development and construction. The response from the land market system to the development system is the land use changes and conversions that take place due to allocation of land by the price mechanism. Likewise, the planning system influences the land market system by determining land values, where an area is planned with utilities, especially a road, the accessibility to this road, or utilities that lead to the rise in prices, and if the planning system fails. When planning, it is always a concern of the planner to estimate and budget land for development. However, what goes on in the informal land market, like hoarding, means that the planning system gets inaccurate information on „supply‟, just like the different modes of supply. The consequence is that the plans are unrealistic given the development system and subjects the urban develpment to ad-hoc planning. Externality factors of land tenure, social cultural factors, and locational characteristics of individual plots of land influence all these systems. Therefore, the research does not only explore and understand the informal land market, but also the relationships between the three systems. In the conclusion of this chapter it appears that land is a unique commodity that is not transportable, even when the use can be changed. Thus, it is possible to think of a localized market. Land acquisition and housing are also complementary processes, with demand for land derived from the need for housing. Because there is limited land supply from the sector, an informal urban land market has emerged to provide land for housing across the different social groups. Involvement of the private individuals, including the poor, is an important aspect of the housing development, and partly the explanation of the current imprint of unplanned settlements in many developing countries. However, the influence of the informalization on planning cannot be underestimated. Planning has been disabled partly due the operations of the informal land markets. This research adopts the conceptual model discussed in the previous section of this chapter to analyze the interactions of informal land markets with urban development and planning focusing on residential housing.

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Chapter Four

METHOD

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ABSTRACT This chapter presents a description of the research methods. Due to the diversity of urban land market conditions and a gamut of potential data for analysis, a case study approach was employed that comprised a comparative analysis of four settlements at different stages of development, adopting the Kombe model of informal settlement growth and development. To provide a basis for interpretation and conclusions drawn, this chapter describes the research procedure and processes followed in conducting the research, including problem definition, variable determination, sampling, data collection, analysis, and a description of the area studied. The representation of settlements was the basis for site selection from which a sampling frame was designed. Various methods were employed including statistical sampling, Geographic Information System for sampling frame, interviews, Key Informants for data collection, and a four stepwise analytical framework.

DESCRIPTION OF THE SETTLEMENTS The representative settlements included administrative parishes selected for analysis. Kampala is the commercial and administrative capital city of Uganda, with over 40.7% of the total urban population of the country (UBOS, 2002). As the capital city, it has attracted development over the years making it the fastest growing industrial city of the country. Urban sprawl has occurred very quickly in tandem with the population and demographic changes of the city. The four parishes, shown in figure 6, were selected on the basis of their

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level of development, and each of them generally depicts a certain social group and urban sub market. Kikaya parish is about 8 km from the city center and is a recently attractive residential area with the intensification of the urban land market. Bukasa parish, on the other hand, is about 9 km from the city center and represents one of the settlements that has long provided residential housing; however, the housing in this parish is mainly for high income social groups. Meanwhile, Natete parish depicts a settlement of mixed social groups and intensified development. Having been near the cradle of the Buganda Kingdom, it has experienced land exchanges that may have been much quicker than any of the other selected parishes. Bukesa parish is near the city center and it is the closest parish to the civic area that is predominantly residential. It was selected for the purpose of a comparative analysis of land values for residential use on a gradient, but also for being largely a formally developed settlement.

Location of the Study Parishes in Kampala

MPERERWE KAWEMPE II

KOMAMBOGA KYANJA

KANYANYA KAZO

KAWEMPE I KIWATULE-KIW

KIKAYA BUKOTO II

BWAISE I

BWAISE II

KYEBANDO UPPER ESTATE

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BUKOTO I UPK MAKERERE III

BWAISE III

MULAGO III

KASUBI

KYAMBOGO

KAMWOKYA II KAMWOKYA I

NAGURU II

MULAGO I

MAKERERE II

NAGURU I

UNIVERSITY(M WANDEGEYA KOLOLO II LUBYA

NABISUNSA BANDA ITEK

NTINDA

MAKERERE IMULAGO II

UNIVERSITY(M

KOLOLO I MBUYA I

KOLOLO III NAKAWA INTS. NAKAWA

NAKULABYE

KAGUGUBE

MBUYA II

NAKASERO I

NAKASERO III

KOLOLO IV

BUKESA NAKASERO II

NAMIREMBE

KISWA

INDUSTRIAL A

MUTUNGO

OLD KAMPALA NAKIVUBO

BUTABIKA

CIVIC CENTRE NAKASERO IV KISENYI I

LUNGUJJA BUSEGA MENGO

KISENYI II

NATEETE

KIBULI NSAMBYA POLI NSAMBYA RAIL

WABIGALO

BUGOLOBI

KISUGU

KISENYI III KATWE II

RUBAGA

KABALAGALA

NDEEBA

KATWE I

LUZIRA PRISO

NSAMBYA CENT KIBUYE I

LUZIRA

BUKASA

NSAMBYA ESTA

KIBUYE II KANSANGA MAKINDYE I

NAJJA-NKUMBA

MUTUNDWE

KABOWA

MAKINDYE II NAJJA-NKUMBA LUKULI

LUWAFU

GGABA

Legend Major Roads

BUZIGA SALAAMA

Study Parishes BUKASA BUKESA KIKAYA NATEETE N

Other Parishes in Kampala W

0.5

0

0.5

1

1.5

2

2.5

3

3.5

4

4.5

5

5.5

6

6.5

7

7.5

8

8.5

9 Kilometers

E

S

Map Prepared by Researcher

Figure 6. Settlements representative of the formal and informal developments in Kampala.

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RESEARCH DESIGN The research design was a case study that involved a combination of statistical techniques and geo-spatial techniques at various stages of research. A sample survey was drawn randomly and was based on housing and cadastre geospatial layers as the sampling frame, with support of the SPSS program for sample selection. The digital files of houses in selected settlements of lowincome and middle-high income were utilized. A reconnaissance survey was carried out in Kampala city to identify and select the parishes for the sample selection. A total of 8,134 houses were derived from the digital files of housing units in the selected settlements from which a sample was drawn. On the basis of the selected housing units, developers and or owners were interviewed to elicit data on the land market operations. A purposive sample was also selected on the land agents in Kampala. This applied to both land and property agents, as well as land brokers, to complement the randomly selected sample. Sampling Frame: Sampling followed a multi-stage approach. Based on a Settlement Development Model as adopted from Kombe (1997), settlements were classified on the basis of the development model deriving three classes, namely Infancy, Consolidation, and Saturation stages. This was accomplished during the reconnaissance survey in Kampala city. Three of the selected parishes were observed in terms dominance of the development stage characteristics, while the fourth parish was purposively selected to represent the assumed high-value city center for a comparative analysis of values according to distance from the city center. Thus, the parishes of Kikaya (Infancy), Bukasa (consolidation), Natete (saturation), and Bukesa (highvalued) were selected as the sites to be studied. AutoCAD data on housing structures from 1993 was used as input data for determining the sampling frame. Sample Size: For a randomly drawn sample, a scientific method for determining the size was appropriate. Therefore, the sample size was statistically determined on the basis of the hypothesis that: “Land price per square meter is determined by distance from the city center”.

Therefore:

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( d)

n = Zs

2

Where n is the sample size, Z is the tolerable margin of error at a specified level of confidence (0.99) calculated as 4, s is the standard deviation of the measured observations from the pilot sample which is 85 meters and d is the Z value corresponding to the level of confidence at 2.8. An initial sample of 30 houses were selected randomly to test the interview instrument and to also act as a basis for sample determination. From the results of the hypothesized observation, a sample of 3,540 housing units were determined statistically and were randomly drawn from the sampling frame using the SPSS program; but given the resources available, a 7% representative sample of 239 was taken. The data on the housing units was exported to SPSS from GIS and random selection function was applied to select the sample size.

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⎛ 2 . 8 × 85 n = ⎜ 4 ⎝

⎞ ⎟ ⎠

2

= 3540.2

The sampling frame was then developed from the housing units in the four selected parishes using the digital topographical maps of the study areas. This was due to the fact that the location of the houses was considered an essential part of the variability of observations on the variables. AutoCAD files were converted to GIS, and the housing units were polygonized followed by the assigning of unique numbers to the housing units (appendix I). The sampling frame comprised of 8,134 housing units based on polygons generated from the digital files of the topographical maps. The housing units were acquired from the digitized topographic maps of the areas at a scale of 1:2500. Additionally, a total of 7 land agents were purposively selected and interviewed during the study. While divisional planners of Makindye, Kawempe, Central, and Rubaga, as well as three landlords from Kikaya, Natete, and Bukasa formed the key informants on issues concerning planning and guidance in the city. Methods of Data Collection: Although the sampling frame was comprised of housing units on which a sample was drawn, data was sought from developers, owners, and tenants on the land. Information was also sought from landlords who were not owners of the sampled units, property agents, and authorities involved in decision making on the land, as well as planners in the different divisions of the city.

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Method

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Figure 7. Flow chart of the research method.

Different methods for data collection were applied, and these are described below.

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Questionnaire Administration: Questionnaires were administered to elicit data on the land market issues. The type of data collected by this method included modes of land acquisition, land prices, market information acquisition, housing processes, and issues concerning planning permissions. This was preceded with analysis of the research indicators to ascertain the variables to be measured and form a basis for the construction of the interview schedules and questionnaires. Field research assistants were deployed after browsing through the questionnaires with the researcher to collect data. As a guide, maps were printed showing the sampled housing units and used by the field assistants to locate the sampled housing units. In-Depth Interviews: In-depth interviews were also conducted with key informants who included land agents, brokers, and land owners who had not been selected in the sample to elicit key data on price setting, roles of actors, and mechanisms for land exchange. This method was also applied to planners to collect data on the planning process as well as integration of land market information in planning and housing development standards. GIS, GPS and Satellite Image Analysis: Geographic Information System and Remote Sensing techniques were applied to collect spatial data on land use and classify the most current land use. Data on plot subdivision was collected by use of a Trimble GeoXT Global Positioning System receiver by measuring the coordinates of the corner points of the subdivision with an accuracy of submeter. Outlines of the plots were derived from the corner points and the plot areas computed were measured in relation to prices. A high-resolution image of QuickBird (61 cm) was used to classify land use in 2002 for comparison with land use in 1991. Literature and Documentary Search: Data and information from existing sources formed another input for the research. Secondary sources were extensively used for theoretical frameworks and conceptualization. These included materials from related studies, official documents from the agencies involved in land issues, as well as the policy and legal documents. Documentary sources were used to gather data on land values from legal property agents through their records and the procedures for land management and development. Data on land values from the formal land market was also collected from secondary materials and records from the Land Administration office at the Ministry of Lands, Housing and Urban Development. This was from the registry in the Land Valuers office, which was searched for the current land values based on registered land exchanges. Additional data on land values was also collected from private companies that are involved in

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land exchange and land valuation. The two sources of data were compared to provide Open Market Values (OPV) for land in various locations of the city. Data Analysis: Data collected through administration of the questionnaire was coded and entered in the SPSS program, which was used for analysis. To summarize, correlations between the variables were generated. Statistical techniques used in analysis include: frequency generation, cross tabulations, correlation coefficients, regression, and ANOVA. Spatial data collected by GPS was input in to ILWIS and ArcView software, and polygons were generated from the point coordinates. Spatial interpolation was also employed for land value estimates based on the distance gradient model from the city center. The result was then used in GIS statistical analysis and overlays. Analyzed data and information is presented using tables, maps, charts, and matrices. These are employed for both statistically analyzed data and spatially analyzed data in order to portray the informal land market operations in Kampala. Synthesized data derived from statistical and content analysis is explained in the discourses under the thematic topics of subsequent chapters.

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LIMITATIONS ON INTERPRETATION OF FINDINGS Issues concerning land and individuals are very sensitive in Kampala, but this is also true in other cities of sub-Saharan Africa. People are always suspicious of any individual that is questioning land. As such, one of the limitations is the issue of non-response. On several occasions, outright refusal to divulge information was met when approaching potential respondents; while on the other, hand respondents refused mid-way through the interviews. Suspicions are centered on interviewers being government agents for taxation, land acquisition, or eviction, while some respondents suspected interviewers are land dealers/speculators with intentions of selling the peoples land after making measurements. Recenlty, several land agencies sprang up and taken the land market by storm. The most sensitive issue surrounding land is the value for such land, thus, non-responses concerning the value at acquisition and estimated current value were registered during interviews. The limitation of outright refusal was, however, overcome by the substitution of sample respondents taking note of the unique number of housing units which were included in field maps generated with GIS. When sampling, random procedure was used, but due to sensitivity, substitution was found to be a useful technique to reduce the lack of response. However, this further creates limitations for any inferences drawn due to a

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partly prejudiced selection of substituted respondents. Secondly, there were several sampled houses where potential respondents could not be reached, which was mainly in the high-income residential neighborhood. With the wall enclosures, respondents could not be easily reached, but the people who were reached were was house maids, house boys, or garden people.. Even when several call backs were made, it was futile to reach the potential respondents. This reduced the original sampled number of respondents from 239 to 180. a proportion of 24.6%. This problem was reduced by ensuring maximum coverage of respondents in the other settlements. Another limitation of the study involves non-response vis avis the conclusions drawn. This is particularly evident when land values are derived from interviews conducted using the questionnaire. With a 24.6 % reduction of the respondents, it is possible that the conclusions drawn are affected due to representativeness. Thus, careful judgment is necessary when referring to the results of this research.

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Chapter Five

POLICY, LEGAL, AND INSTITUTIONAL FRAMEWORK

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ABSTRACT Issues concerning land, especially those dealing with ownership, transfer, and administration are largely driven by policy and legal instruments. This chapter analyzes the policy, legal, and institutional frameworks that relate to land markets. The purpose is to fit the urban land market operations into formal frameworks that affect their operations and compare the formal with informal land markets. There are several policy and legal instruments guiding land management, planning, and the development of the city. The legal instruments include the 1995 Constitution of Uganda,, The 1998 Land Act, and The Registration of Titles Act CAP 230, all of which are concerned with administration and management of land in Uganda. Other legal instruments include the Town and Country Planning Act of 1964, the Local Government Act, and The Public Health Act, which guide planning, while the 1994 Kampala Structure Plan is the instrument for guiding development in the city. These legal and policy instruments are analyzed to form a basis of fitting the research results into the land policy frameworks. The discussion that proceeds summarizes these legal and policy frameworks by trying to fit the land market operations into the existing legal and policy instruments, while gaps and loopholes are also identified. The policy and legal frameworks‟ analysis is considered necessary for comparison of formal and informal land markets.

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LEGAL FRAMEWORK ON LAND The most fundamental legal basis for land management and land issues is the 1995 Constitution of Uganda. According to the 1995 Constitution, Article 237, clause (1), Land in Uganda belongs to the citizens of Uganda and shall vest in them in accordance with the land tenure systems provided for in the Constitution. The Constitution also recognizes that Government, or a local government may, subject to article 26 of the Constitution, acquire land in the public interest; and the conditions governing such acquisition shall be as prescribed by Parliament. The Government, or a local government, as determined by Parliament, by law, holds in trust for the people and protects natural lakes, rivers, wetlands, forest reserves, game reserves, national parks, and any land to be reserved for ecological and touristic purposes for the common good of all citizens. In clause 3 of Article 237, Land in Uganda is owned in accordance with the customary, freehold, Mailo, and leasehold land tenure systems. The Constitution of Uganda recognized the transformation of land under customary tenure to freehold land ownership by registration. The clause was meant to improve security over land, but also created a condition 1 for comodification of land. The relationship between bonafide and lawful occupants on land was also highlighted in the Constitution with a provision that gave Parliament powers to enact an appropriate law under clause (9) of article 237. This would offer the lawful, or bonafide occupants of Mailo land, freehold or leasehold land security of occupancy on the land through regulating the relationship between the lawful, or bonafide occupants of land referred to in clause (8) of article 237, and the registered owners of that land, and providing for the acquisition of registrable interest in the land by the occupant. The Constitution does not only give power to the people on the land, but it also intended to reverse the implications of the earlier laws, as well as ensuring that land could be owned by not only bonafide occupants, but also women. This article in the Constitution also forms the basis for the formulation and enactment of laws regarding land ownership, administration, and management, whose framework culminated into the 1998 Land Act. The 1998 Land Act, as noted earlier, introduced the rules of ownership of land, and the most marked was the introduction of land rights held by bonafide occupants that were defined bonafide on the basis of the time period of occupancy on land. The 1 A bonafide land owner is one who had stayed on land for over a period of ten years, in retrospect, from the time of promulgation of the Constitution of Uganda in 1995.

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1998 Land Act, which has just been reviewed and amended to include coownership of land by spouses, elaborates on how land owners can claim their rights and defines the different types of land rights. On the other hand, the Registrar of Titles Act CAP 230 spells out the procedures for land alienation and exchange. This legal instrument lays the procedure for formal land rights exchange and alienation. The process involves 45 steps, which are briefly described below: Applicant must have a piece of land held under customary tenure Applicant visits the District Land Board in his district, and with assistance of the land officers, fills in the Land Form 2 (scan from RTA) and attaches a sketch map of the pieces of land to the form A land officer at the district cross checks on the land applied for using a general map (on which all land already applied for would be indicated) so that land is not applied for twice After cross checking and finding that the land in question has not been applied for, he indicates on the application that the land is available and free for leasing. He also demarcates the particular piece which has been applied for on the map The applicant pays a sum of one thousand shillings, as provided for by the law as a deposit fee Application is registered and given a reference number Application is sent to the District Land Board (DLB) Secretary who coordinates and arranges for the DLB to visit and inspect the land applied for (site) The DLB visits the site (inspection, transport, and allowance should be provided by Government), though as of late, the applicant provides both if the DLB finds that the land is free of disputes and really belongs to the applicant, they sign the application form and advise the Uganda Land Commission (ULC) to grant lease to the applicant The Secretary to the DLB writes a cover letter to ULC through the Land Officer The application is received and registered in Kampala by ULC The application is put on the agenda for discussion by the commission in its next convenient session

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Shuaib Lwasa ULC sits at least once every two months, though this depends on availability of funds to consider pending applications and other matters Decisions of the commission come out in the form of minutes The approved application is sent to valuation section (Lands Department) in Kampala for determination of terms of assessment of premium and annual ground rent ULC writes a cover letter to the Land Officer of the district where the application originated, giving the decision of the commission, specifying the minute number, the area approved, the number of years granted, user premium valued, and the annual ground rent The Land Officer writes out a lease offer to the applicant, giving a detailed account of the conditions of how the lease is to be held and the fees to be paid Applicant pays fees A permanent file is opened up The District Land Officer requests the Senior Staff Surveyor stationed in the district to survey the land The Senior Staff Surveyor forwards the requests to survey to the Commissioner Survey and Mapping (Entebbe), who actually issues the instructions to survey Instructions to survey are received at the district survey office Survey is carried out by surveyors from the District Survey Office The survey results are checked and confirmed by the Senior Staff Surveyor Deed plans of the surveyed land and its survey file are forwarded to the Commissioner, Survey and Mapping (Entebbe) for cross-checking and plotting Signing of Deed plans by the Commissioner Singed Deed plans are forwarded to branch office Land Officer writes instructions to prepare lease agreements to Commissioner Land Registration (Kampala) through the Commissioner Land Administration Commissioner Lands checks if payment of the required fees were met (Kampala) Registering of lease instructions in Land Office – Kampala Registering of lease instructions inland Registration Department – Kampala

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Lease instructions perused by Registrar of Titles – Kampala Typing and checking of lease documents Payment of stamp duty, which is 5% of premium and 2 ½ % of ground rent Payment of income tax – amount depends on income tax liability of the lessee. It is assessed by Income Tax Department Execution (final signing) of the lease document by the parties (ULC, the lessee and witness) Issuing of Leasehold Certificate of Title Certificate of Title should be dispatched to the branch, office but the registered proprietor normally picks it up Typing of Memorandum of Registration – notification of the certificate issued to branch office and other departments Full Term: Inspection of the development carried out on the leased land is carried out by Land Inspectors stationed at the branch office where the land is situated The signed inspection report by the Inspector is sent to ULC through Commissioner Lands (Kampala) Inspection report s signed by the Chairman and Secretary (ULC) Full Term: Endorsed on the certificate of Title by the Chief Registrar of Titles after payment of 3,000/= Three thousand shillings, as statutory fees Certificate of Title (Full Term) should be dispatched to the branch office, but normally proprietor picks it Memorandum of Registration of Full Term should be typed As indicated by the aforementioned steps, the process is cumbersome for several reasons. First in the process, documents have to be moved from office to office, some of which are in distant locations; for example, there is forward and backward movement of applications or files between offices in Entebbe and Kampala which are 42 km apart. The implication of this physical movement of application includes loosing applications, delays, and sometimes deliberate delays from the officials involved. The costs for the transfer then become exceedingly high on the part of the individual interested in the transfer of the land. Transaction costs in formally recognized procedures tend to be prohibitive and discouraging, compelling actors to seek for alternative ways of land rights transfer. Second, the files and applications movements between offices have implications on the time of transaction. Greenwood (1990)

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observes that the time taken to complete a transaction can be in the order of six months to two years, depending on the individual whose land has to be titled or transferred. On the other hand, the legal instruments for planning include the Town and Country Planning Act (1964), the Public Health Act, and the Local Governments Act. The latter gives powers to local councils, especially Town Councils, to prepare schemes and implement plans. It also provides for the establishment and decentralization of physical planning activity. Meanwhile, the Town and Country Planning Act of 1964 caters for the receiving, review, and approval of plans by the responsible minister supported by the Town and Country Planning Board. This Act lays the procedures for preparation of planning schemes, deposition for public review, and final approval for implementation. While the Public Health Act details the planning standards and requirements for the protection of public health in the development process, Chapter 269, articles 13 – 15, specifies the building codes and standards to be followed in development. The Act also elaborates on the standards concerning plot coverage, house designs, drainage, ventilation, and engineering requirements. All of the above legal instruments notwithstanding, other legal instruments that affect planning include The National Environment Statute of 1995, which established the National Environmental Management Authority with mandates of environmental planning, regulation, and enforcement of environmental protection. The existence of various legal instruments has, in some cases, created confusion on managing land, not only in urban areas, but in the country as a whole. For example, where as the Land Act of 1998 and the Constitution stress the ownership vested in people, the National Environment Act infringes on the rights through enforcement of regulations on wetland use and management. Some people‟s land exists in wetlands and they may not use it due to the restrictions, even though they have full rights. This has implications on harmonization of the laws.

URBAN DEVELOPMENT POLICY FRAMEWORK Legal and policy frameworks have been formulated to guide development in the city. The Constitution of Uganda recognizes the power of urban authorities to plan and implement development schemes as per Clause 7 under Article 237. According to the Constitution, Parliament makes laws to enable urban authorities to enforce and to implement planning and development;

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therefore, urban development policies are derived from the legal framework provided for by the constitution. The policies are largely in the form of physical plans prepared at Structure Plan level and Detailed Scheme level. As discussed earlier, planning schemes of Kampala have been prepared since 1902, but the most recent plan is the 1994 Structure Plan, which had expired, but has recently been extended by KCC as per Council Minute WPP.9/51/2004, and is waiting for approval by the Town and Country Planning Board. The 1994 Structure Plan proposals were preceded by a detailed and elaborate study into the multi-faceted and multi-dimensional urban problems of Kampala. The he proposal the 1994 Structure Plan outlines the sectoral proposals with standards for development, agencies/actors involved in development, and establishment of one-stop centers for processing of development plans. In particular to residential housing development, the 1994 Structure Plan outlines the procedures for development and a summary of steps when development permission is required for development of land and subdivision of land under the 1994 Structure Plan is given below: a) The intending developer submits an application for development permission with address and location of proposed development, full name postal address, and telephone number of person responsible for the development, and/or full name, postal address, and telephone number of person applying on behalf of the developer. Additionally, particulars of the developer‟s interests (e.g. Mailo owner), description of the proposed development, purpose of current use, availability of access, existing utilities, and a site plan. b) The application is scrutinized, and if it does not contain the required information, the officer responsible may decline to accept it advising the applicant on what remains to be supplied. c) If the application does not comply with the plan, the development standards, building standards, or any other relevant requirement, the officer will advise the applicant in writing if the applicant requests and the applicant may amend the application. d) The application is then referred for review to a committee of technical personnel, including the planner, architect, engineer, surveyor, National Water and Sewerage Corporation, Uganda Electricity Distribution Company Limited, now privatized and called UMEME, Commissioner of Lands, parish zone council, and any other authority likely to have interest.

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e) Within 60 days of acceptance of an application, the applicant will be given a copy of the review report, including recommendations. f) If the report is agreeable to the applicant, the report is forwarded to the development authority for its decision. g) If the applicant does not agree with any of the recommendations, the report is not forwarded to the development authority. h) Upon receiving the report and recommendations, the development authority will make consultations with the councils at different levels. i) Within 30 days of receiving the report and recommendations, the development authority will grant or reject development permission with or without conditions. j) The development is supervised by the technical personnel, and if it is satisfactory, the development authority will issue certificates of occupancy; whether temporary or full permission for occupancy Although the steps outlined here suggest a rather long process that possibly would take time for a developer, the outline is only intended to provide a detailed process and highlight activities through which development plans have to be approved in Kampala. In essence, most of the activities outlined are undertaken in one office, as well as meetings at a technical level, council committee level, and general council level for final approval. The primacy of Kampala is an important basis for the current national planning policies aimed at strengthening the medium sized urban centers as a counter measure to the problem of rapid urbanization with limited industrialization. Although often ignored, urbanization policies existed before the colonialists‟ policies as exemplified by the kibuga in Buganda, which was a relatively organized traditional township that mainly functioned as the seat of the King of Buganda (Norstrand, Development, et al (1994). Elaborate national urbanization policies started with the colonial governments by location of periodic markets, trading centers, and urban centers mainly for administration and collection of produce in various parts of the country. These policies were strengthened by the National Development Plan of 1946, followed by other development policies which were more like projects that the colonial government of Uganda deemed desirable to undertake. Urban planning in Kampala dates back to 1913 when the British colonial government employed a planner to advice on the development of a number of urban centers following the establishment of the protectorate. In the 1930‟s, development plans for the urban centers of Kampala and Jinja were prepared with the idea of possible extension of the urban

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boundaries. As a result of these efforts, the department of Town Planning was established in 1953; however, as noted by Obudho and Peter (2002), it was restricted to an advisory role. This policy ignored the fact that rapid settlement was taking place on the periphery of the administrative boundaries in Uganda. It also ignored the issue of land, which, by the 1900 Agreement, had established perpetual rights held by individuals especially, from the Central region. After attaining independence, the Department of Town and Regional Planning was established to coordinate urban and rural planning policies. Currently, there is no policy on urbanization in Uganda, except for laws of the Local Government Act of 1995 and the Town and Country Planning Act of 1964. However, these two laws have influenced or been influenced by the current land management mechanisms and regimes in Kampala and Uganda in general.

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LAND MANAGEMENT POLICIES Although an effective urbanization policy is one of the key factors in national development, one does not exist, and even one did exist, it may not guarantee an orderly and sustainable process of urban development. Likewise, the land policy is under formulation and has interestingly followed the enactment of the National Land Use Policy 2008. The Local Government and Land Commission Acts have devolved power to local governments for effective planning, implementation of plans, and delivery of services to the urban populations. Land management is a key issue of urban development due to social and economic development needs, which have a spatial dimension. The urban system plays a major role in linking and integrating the national economy. Inefficient cities result in considerable human suffering, and consequently, a loss of creative potential through marginalization of large sectors of the population. Over-congested areas lead to high overheads and unbalanced rents and land prices, although the land rents and prices can have feedback effects on congestion. As noted by Luke and Kimani-Mukindia (2000), land management in urban centers mainly concerns expression of activities on land with an aim of developing it by making substantial investment in the land, and/or changing existing uses. There are several land management issues, including infrastructure development, social service provision, land use planning, and housing. Housing is a key land management issue, therefore, where it is developed, how it is developed, and the land

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required or demanded for in order to develop housing are all important considerations in land management. In the conclusion of this chapter, it is noted that the existence of policy and legal frameworks in guiding land management has not, in any way, deterred the informal mechanisms of land management, including land exchange modalities. In essence, the emphasis on land rights and individualization of the different type of rights has actually intensified the urban land market by commodifying land. Although, it is important to mention that commodification of land is not an evil because of its potential to unlock the urban and national economy, which is discussed later. Similarly, urban development policies are necessary for effective guidance of development, as is the case of the 1994 Structure Plan for Kampala. Thus, legal and policy frameworks, or formal sector, have been overtaken by the informal sector, and as discussed in subsequent chapters, there is a grey line between the two sectors. There is a gap in terms of the lack of an urbanization policy, though frameworks exist for urban administration and governance.

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Chapter Six

FORMAL AND INFORMAL URBAN LAND MARKETS

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ABSTRACT This chapter presents a discussion of the research results from the statistical and content analysis of the data on informal and formal land markets. The chapter focuses on the operations of both the formal and informal land markets, and making a comparative analysis of the processes in the two different urban land markets and how they relate to housing development. As a point of departure, a discussion of the formal land market operation is presented and compared later with the informal land market. Issues under discourse include market information, land values, flow of information, agents involved, negotiations, land subdivisions, and the „rules of game‟ in land exchange. The interrelationships between the two subsystems are also discussed in this chapter including an analysis of land values, housing development, and planning implications driven by the land market operations. The chapter also includes the discussion with the congruence of the formal and informal land market operations.

FORMAL LAND MARKETS As Rakodi (2000) and Mudeme (2002) observe, urban land markets involve transactions that bring individuals and institutions together in the transfer of land rights existing within urban areas. The formal land markets are taken as any such transactions that operate within the established laws and

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statutory framework for the transfer of land rights. The land rights transfer laws define the framework within which the information flows and is transferred to potential buyers, pricesdetermination, negotiation process, and completion of the transaction. A discussion of the formal procedures of land rights transfer is given below so as to form a basis for comparing it with informal land markets. The discussion in this section provides a basis for a comparison of the informal and formal land markets.

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Actors in the Formal Urban Land Markets In the formal land markets, different actors are involved in the transfer of land (Kironde, 2000). These actors are diverse and may have conflicting agendas. Because of the „unclear‟, or often non-adhered to procedures in formal land exchange, different actors have emerged with different roles. In Uganda, a number of agencies are involved in the transactions regarding land. The Uganda Land Commission (ULC), KCC, Buganda Land Board, and the Ministry of Lands, Housing, and Urban Development, all have mandates over land as defined by the policies and regulations (1995 Constitution of Uganda; The Land Act, 1998). KCC and ULC are responsible for the land owned by the state within Kampala. These two agencies manage and administer land through allocation, leasing, and auctioning to developers; land for which the use is predetermined. Because of the limited land owned by the state in Kampala, much of the allocation by these agencies is focusing on industrial land rather than residential land. Although their roles are clearly spelled out, there are discrepancies between what their mandate states and what is being done. The formal process has been blended with informal procedures due to the numerous actors including speculators and semi-legalized land agents, who have modified the institutional rules in urban land transactions. Particularly, this is done on the information flow in the market, non-free bidding, pricing systems, and the final allocation of land to the wining developers. As previously noted, formal land transactions involve two sub-categories, the public sector, and the private sector. Under the public sector, land is not only owned by the state and administered on its behalf by the city authority, but planning for its use is also normally practiced. Urban development strategies are normally determined by the city authority and through land use zoning. Land is then allocated to individual or institutional developers. The actors in this sub-category include the UCL, KCC, the Ministry of Lands (because the commissioner for lands must always sanction the final allocation

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or transfer), land agents, and municipalities. However, with the new Constitution and the Land Act of 1998, clarity in land ownership, as well as administration, is of conflicting roles. The district land tribunals and land committees have overlapping roles with the agencies and actors mentioned here. The existence of overlapping roles has created even more problems in the formal land market and customized informal procedures within the formal land market. This often results in the confusion of problems within the formal land market, as it seems informal. Such confusion includes allocation of land to different individuals/firms by different agencies. According to the Land Officer of KCC, land can sometimes be allocated twice by ULC and KCC District Land Board. On the other hand, the private sub-category of formal land markets is responsible for the transactions between individual owners and buyers. This sub-category accounts for the biggest proportion of land transactions in Kampala, with 54.8% of the land owned being under Mailo, 11.5% freehold, 10.2% leasehold, and 18.5% Kibanja. The transactions in the sub-category are largely dependent on market conditions. The category actors include real estate corperations, housing corporations, and land subdivisions by private owners. In Kampala, due to the predominating ownership type of Mailo, the private owners are the most significant actors in this category. About 65% of the land in Kampala is owned under the Mailo type, and of this, a big proportion is owned by the Buganda Kingdom. Private land transactions and exchanges are significant. For example, according to the results, the majority of the land owners acquired land through purchases. A further examination of the data also indicates that of the respondents who purchased land, 55.7% own it under the Mailo type of ownership, compared to 18.9% who hold land rights as Kibanja. This, however, could be an indicator that a significant proportion of land transactions occur within the formal land markets; but as shall be discussed in the next section of this chapter, private individual subdivisions occur outside the formally set „rules of the game‟. The ideal situation would be that transactions and rights transfer are done according to the formal established laws and regulations, since much of the land is owned by private individuals, and under Mailo (which is supposed to be backed by official documents). However, the research suggests that there is evidence of illegal individual land subdivisions, which causes informality to occur in the formal land transactions (Araby 2003).

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Rules of the Game in Formal Urban Land Markets The „rules of game‟ for exchange of land rights in the urban context derives largely from the current land law, which is the Land Act of 1998, and the Registration of Titles Act CAP 230 under the Revised Laws of Uganda in 2000 (which is the law concerning the transfer of land rights). The land Act of 1998 defines the different property rights among which perpetual rights (in terms of the Mailo, freehold, and lease holdings) are recognized. Two subcategories under the formal urban land markets arise due to the three categories of land holding types. The first sub-category involves the transfer of rights between individuals and organizations for privately owned land (mostly Mailo, but also freehold). Under this category, the holder is free to exchange the rights held in any piece of land, and may express his willingness to exchange the rights in any way, without any intervention by the state. However, the requirement for such a transaction is that the exchange should be formalized and sanctioned by the authority concerned with land administration, which is the Commissioner for Lands under the Registration of Titles Act (CAP 230, Part VI Sec 92-100; Uganda Government, 2000). The procedure involves the filling, signing of transfer forms by the seller and the buyer for the process of verification for mortgages, surveying, adjudication, and final sanctioning by the authority takes course. The transaction is climaxed by the change of the names of the holder of land rights in the said land on the officially recognized land title (the document which states who owns the land, whom the land was exchanged from, any encumbrances, and mortgages). The sanctioning of the land title is subject to payment of a fee determined according to the transfer value. In this way, the rights of the parties involved are protected by law. The second sub-category involves the transfer of defined land rights between institutions and individuals. The defined rights are usually time dependent, and largely include use rights and ownership of developments on land. This category usually involves the leasehold type, the freehold type, if it is between individuals and the institution, and sometimes Mailo, where parts of the rights are exchanged on a time-dependent basis by a Mailo land owner on lease. Under this category, the procedure is often longer, for it is ideally supposed to be transparent, especially when the land belongs to the state or any agency of the state, such as a municipality or city. The procedure involves information flow to the public by any means on the availability of such transferable rights so that bidding/application may be done by the interested parties. After bidding/applying, the authority concerned, in this case, Kampala

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City Council (KCC), and or Uganda Land Commission (ULC), selects and allocates the land to either the highest bidder or preferred bidder. The selected bidder is either publicly announced, if it is an open bidding process, or informed about the decision of the authority, who is then expected to pay before the lease documents are signed. This process may even take longer if the bid process involves negotiations on the value of exchange. The process is climaxed with the final allocatee receiving lease documents which specify the period of the lease and the rights over the land, and sometimes the types of developments permitted on that land as per the lease (in case of KCC, which is also the planning authority). From the findings, all of these steps have ceased to exist. Different channels of information flow have emerged, and there is clearly no open system for availability or non availability of public land. Although there are differences in the land holdership types, under Mailo, the holder has full rights in the sense that use, free transferable rights at any time, exclusion of others except easements, are enjoyed by the holder. This implies that the holder can, at any one time, express his willingness to exchange part, or all the rights enjoyed. This form of holdership forms the most important factor in the formal land transactions. The research established that the most predominant form of ownership for land is Mailo, with 57% of the surveyed sample population compared to 11.9 % owning land as freehold, 10.6% as leasehold, and 18.5% as Kibanja (use rights). As noted earlier, formal land transactions would occur mainly on land held under Mailo and leasehold. It is noted that Kibanja (or use rights) holdership exists on the other three types of land ownership, and with the Land Act of 1998, could also enter formal land transactions since there is a definition of bonafide occupants and the certificate of occupation on land. In practice, however, there are few, if any, issued certificates of occupation, as the implementation of the Land Act of 1998 seems to be moving at a snails pace. Therefore, formality in terms of ownership would further be examined by the time of acquisition of the land, and whether the owner posses a title or certificate or not. Before the Land Act of 1998, land rights under Kibanja were only defacto (particularly of use rights), but with the enactment and implementation of the Land Act of 1998, bonafide owners are recognized by law, and thus any transactions on such land would, in literal terms, be formal. This is, however, dependent on the bonafide owner to have fully secured his full rights from the Mailo, or freehold owner in the form of an ownership certificate. The legal framework, therefore, recognizes that land exchanges or transactions have to occur where the land rights are clearly defined, and this is determined by a legal document which could be a land title or certificate of

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occupation. There are legally recognized established institutions through which such documents and processes for land exchange has to undergo. The Uganda Land Commission (ULC) mainly deals with administration on land owned by the Government, the local government institutions, such as municipalities, and the city of Kampala. In the case of Kampala City, there are difficulties in land administration because most of the land in Kampala is Mailo, or is under the Buganda Land Board. Only about a quarter belongs to the Government administered by the Kampala District Land Board and Uganda Land Commission, while a limited amount is freehold land (Pareto, 2004). Thus, the legal framework for land transactions, and therefore, land market operations in Kampala involve a set of procedures, organs, and institutions which have different responsibilities in land administration. Land administration is mainly implemented on land held under Mailo, leasehold, and freehold; however, leasehold land is very limited which brings the focus on Mailo and freehold. This does not imply that leasehold land has no significance in the residential housing development process. With the proportion of land held under leasehold, its influence cannot be underestimated; therefore, the formal institutions are written rules, such as land policies and regulations, which, may constrain and/or initiate decisions in the land supply for development (Omar and Yusof, 2002). The findings of the research further reveal differentiated processes for transfer of land rights in the formal sector. The Land Officer of KCC notes that steps are different for the Buganda Land Board (BLB), ULC, KCC, Railways (an agency with land in Kampala which has been introduced in the market inadvertently), and Mailo. The Buganda Land Board mainly controls land that belongs to the King and the Kingdom of Buganda, and this land is held under the Mailo system. Leases can be offered to individuals and institutions using this land, although one of the conditions is that such land should have been developed in the first place. However, much of the land controlled by BLB is already being used by individuals with rights that have been transferred through inheritance, and rights that were granted by the King at some time.

Information Flow in the Formal Urban Land Markets The traditional land economics theories of Alono (1964) and Mills (1969) all assume absolute freedom of market entry, which implies a perfectly contestable urban land market; contestable in the sense that the market offers

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firms no more than the normal profits. Perfect contestability represents the ideal competition, and the consequent efficiency in resource allocation. It is further observed that free entry ensures that the market land rent captures all the economic profit of the land-use activities so that developers can expect no more than a normal profit (Lanjouw, 1999; Ching and Fu, 2003). This, as will be discussed later, influences the land prices, which are assumed to be at equilibrium or efficient, but in the formal land market, perfectability in information acquisition is not contestable. Information concerning availability of land, price, and land rents is assumed to be available and accessible by all potential buyers of land. Indeed, in the formal land market, this would be the ideal, but findings established that information is actually not freely available due to the limited land available under formal arrangements. According to the land exchange regulations, available land is supposed to be advertised in the news papers by KCC or the ULC, which used to be the case in 1980‟s (KCC Land Officer). Otherwise, there exists a registry of land allocations in the land office, which would be open to the public at a search fee. This implies that the legally recognized channels of information flow are through the advertisements or the registry in the registry section of the Lands Office. The survey established that 1.9% of the land owners acquired information from newspapers and other media, which are the information transmission channels for formal land markets. This implies that few potential land buyers get information from formal sources. Although information on land exchanged through formal land markets is supposed to be acquired through legally established channels, this is not the case. This may be due to limited land under the KCC and ULC, although there is some land available on which the channels could be used. Due to competition, barriers on information acquisition exist, and these barriers inhibit some potential buyers from acquiring the information (Ching and Fu, 2003). One such barrier to proper information flow is the existence of an informal channel of information circulation within the formal land acquisition process. This channel usually involves individuals in strategic positions whom acquire the information and pass it on to a few people known to them, or their friends, or relatives. This type information channel inhibits information flow to many potential buyers of land, and is used as a means for reducing competition during application/bidding. Interviews of selected land agents revealed that it is common for land under public ownership to be introduced to the market using informal information channels. A network of agents, friends, and workplace teams continue to exchange information on land in public offices outside the

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formal channels. Potential entry barriers to the land market create imperfect contestability of the formal land market, and this can spread imperfect contestability of the overall land market (Ching and Fu, 2003). A well functioning land market should have ease of entry and ease of performing transactions. These depend on adequate land information, secure tenure arrangements, and an appropriate registration and recording mechanism (Emery, 1995; Kironde, 2000; Luke and Kimani-Mukindia, 2000). Thus, information on land is vital in the land markets. The other information barrier on land under the formal land market is the relative inaccessibility of the government gazette. This is the official communication channel by government and its agencies on the many issues for which information to the public has to be transmitted. However, the results of the research indicate that information through such channels is often posted too late to allow a fair participation of the public in land exchange processes. Although much of the land under the formal market is not for residential, the barriers in the formal land market are a constraint to a free market that could possibly allocate land efficiently as envisaged by the economic perspective.

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Land Values under Formal Urban Land Markets Urban land has economic, historic, antiquity, and social values (Araby, 2003; Ching and Fu, 2003). In a free market for land administered by the public sector, land values are usually determined by a valuation process defined by regulation and sanctioned by an authority mandated to do land valuation. The potential buyer, referred to as the bidder, usually expresses interests in acquiring a piece of land indicating the price that he would offer if the land is introduced to the market through auctioning or tendering. The seller (which could be the city authority or government agency) also sets a minimum value, which is not known to the potential bidder. In the bidding process, the bidder can negotiate with the seller on the final price of the land. This stage of price setting is reached when, and if, the bid passes the first stage of the process, which is whether the bid price is above the minimum value. In Kampala, public sector land is supplied through application and bidding, so prices are largely set through written bids, or by valuers, and are much less determined by physical negotiations with the seller. Although valuation normally considers historic, social, and antiquity values, these values are not necessarily reflected in the land rent (Araby, 2003).

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Table 2. Land Values for Selected Parishes as of August, 2004 Parish

OMV per Acre

Cost per Sq meter (Ug Shs)

Predominant Land Use

Bunga

120,000,000

29,653

Resdiential

Mpererwe

25,000,000

6,178

Resdiential

Kawempe II

100,000,000

24,710

Inudustrial

Nakasero IV

1,200,000,000

296,525

Commercial (Civic)

Kiwatule

100,000,000

24,710

Residential

Naguru II

450,000,000

111,197

Residential

Naguru I

180,000,000

44,479

Residential

Nakasero III

1,500,000,000

370,657

Commercial (Civic)

Mbuya I

130,000,000

32,124

Residential

Bugolobi

130,000,000

32,124

Residential

Bukoto II

60,000,000

14,826

Residential

Mutungo

120,000,000

29,653

Residential

Makindye I

120,000,000

29,653

Mixed Residential Industrial

Wandegeya

350,000,000

86,487

Commercial

Kasubi

30,000,000

7,413

Mixed Residential Commercial

Bukoto I

120,000,000

29,653

Mixed Residential Office

Kyebando

60,000,000

14,826

Residential

Kazo

30,000,000

7,413

Residential

Kawempe I

60,000,000

14,826

Residential

Bukasa

200,000,000

49,421

Residential

Buziga

130,000,000

32,124

Residential

Kyanja

30,000,000

7,413

Residential

Kikaya

35,000,000

8,649

Residential

Natete

60,000,000

14,826

Mixed Residential Industrial

Komamboga

35,000,000

8,649

Residential

Kololo II

600,000,000

148,263

Mixed Residential Office

Kololo IV

350,000,000

86,487

Mixed Residential Office

Source: Associated Consultants Ltd OMV (Open Market Value).

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Thus, the price merit on which a piece of land is exchanged is only a reflection of the market economic value. Table 2 shows the land values of assessed plots in different locations for selected parishes in Kampala. Assessment was done on an open market value for both Mailo and leasehold land, but for leasehold premiums, rent can be much lower than the open market value, which has accelerated and intensified the land market.

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Completing a Land Rights Transaction in the Formal Urban Land Market A comparative assessment of the formal procedure, as laid down by law and the actual procedure that acts in the land markets follow the steps that the different buyers went through were investigated. An examination of the mode of acquisition and whether owners have land titles or certificates indicated that 83.8% who acquired land through inheritance have land titles, compared with 16.2%, who do not have either of the two. This indicates that land owners have gone through steps for completing the transactions, but experiences of completing the transactions, including having the rights legally defined by a title, indicate a tedious time and resource consuming process on the part of land owners. Because of the lengthy process and the fact that most transactions are done in one office, there has been overwhelming public outcry in the Lands Office, especially in the Mailo office. It is often congested with clients having cases dating as back as far as two years.

Land Alienation in Formal Urban Land Markets Formal processes of land alienation can be distinguished on the basis of the types; freehold, Mailo, and leasehold land. For each of these types, the process of acquiring land involving alienation (subdivision and determining defined rights) is somewhat different, but all are legally controlled by the Registrar of Titles Act. In summary, under the Registration of Titles Act CAP 230 (2000), several legally, and therefore, formally, recognized steps in land transfers exist. The process of land titling, including transfers, is currently cumbersome, tedious, and lengthy. It is important to note that too many stages involved in the system create loop holes for mistakes, deliberate alterations, or otherwise to the discretion of the involved individuals. Greenwood (1990) outlines the steps of titling land held customarily under the administration of

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the Uganda Land Commission. Although these steps are for customary tenure, several of theses steps also apply for Mailo and freehold land. For Mailo, the difference is that ownership is already determined, though it has to be adjudicated, and exchange costs must be submitted with the application. For the case of freehold and Mailo, alienation involves steps described earlier, which by no doubt, is a lengthy and resource demanding process. Within the legally recognized procedure, informal processes have been introduced, given both the overwhelming work for the staff involved for selfish benefits, and file numbers. Sometimes the files containing the documents are often mixed up with the piled paper records, making files difficult to retrieve. Thus, the staff deliberately creates reasons for demanding unofficial payments from the clients to either find the files, or follow the process. The informal process so created has led to the emergence of a network of various agents who have close relations with the lands office to follow up on files. Such agents have increased at an alarming rate, causing several public outcries for improving, and/or overhauling the lands office. It is sometimes extremely difficult for actual owners to process their titles and transfers due to the various reasons created by the officials and non-officials of the land office. Thus, publicly owned land is often allocated to friends and close allies, who then put it on the open market. There is an element of speculation in the informalization of the would-be formal process of alienating land. For publicly owned land, alienation is mainly done through the process of allocation to a successful applicant who may subdivide the land, depending on the intended uses. The scarcity of available land created by deliberate refusal to provide information on land has also led to informality rules in the process of land allocation. As one key informant noted, sometimes it is the potential allocatee who searches and finds the land before applying for such land, but it is also the land officers who divulge such information to agents in the network for land dealings. The release of information to the network agents is meant to reduce on competition and/or a transparent process, but also provide a negotiation advantage to the land office for a higher (often market) value. Therefore, informality exists strongly in the formal land market in Kampala.

INFORMAL LAND MARKET OPERATIONS The constraints in making land easily available through the formal mechanism have, over the years, forced many people to seek access to land

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outside government channels (Mabogunje, 1993; Kironde, 2000; Rakodi, 2000). As a consequence, a dual land delivery system exists in most African cities, inclusive of Kampala (Nkurunziza, 2008). The formal land delivery system entails transactions in estates laid out or approved by the public authorities, and for which there are (eventually) title certificates, deeds, or conveyance documents. A somewhat parallel, but often fusing procedure of land acquisition has emerged to supplement the formal land markets. This system is referred to as informal land market, which is based largely on institutional settings, or unwritten „rules of the game‟. The informal system of land exchange has emerged as an important system through which a great proportion of the urban population acquire land for residential housing, especially in the developing countries (Kombe and Kreibich, 2000). Bruce (1993) points out that when land assumes value by virtue of productive improvements on it, or has value conferred on it by investment or by location near markets and service centers, indigenous law gradually comes to recognize sales of land. In the following sections, a detailed examination of the operations of the informal land markets in Kampala is discussed.

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Actors in Informal Land Markets There are different actors with varying roles at different stages in the process of exchanging land rights within the informal land markets operations. The most obvious actors are the potential buyer and the seller of the land. The seller expresses interests in exchanging part, or full rights, and through other actors the potential buyer expresses his desire to buy the rights on the market. In addition, there are two categories of actors who are important in land transactions, and these are the local brokers and land agents. Local brokers are usually individuals within the settlement who spend most of their time in the settlement knowing which land rights exist for exchange, who owns them, and for what price the land rights are being offered. The land agents are the semilegal agents and the legally established land agents. In this discourse, the semilegal land agents will be referred to as land brokers, and the others as land agents for matter of differentiation. Land brokers have emerged as a result of a lack of a regulatory framework for formal land agents, and are now widespread in different settlements dealing in not only land, but also housing and property related transactions. The formal land agents are still relatively few, and it is not clear as to whether there is a law which governs their establishment and activities, although there is a proliferation of established

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land and property agencies in Kampala. Recently, there have emerged land and property companies who are now responsible for the real estate developments in and around the city. These actors are very influential in the transactions and eventual transfer of land, especially in determining land values, information flow, and general influence of the market conditions. Land agents tend to control the land market through information they hold on existing land rights for exchange. Aside from this, their existence and proliferation has contributed to the intensification of the land market in Kampala. The other actors in the informal land markets include the Local Council 1 (LC) officials, who are the local village administrators positioned in such a way that they have a role in the completion of, or at least the first stages of the transactions. LC‟s are vital during the actual locating of the land under exchange and at the time of sealing the transfer of the land rights. Their role on the informally designed covenant puts them in strategic position in the process of land rights transfer, but their demands, such as a percentage of the final land price, can act as a barrier during the transaction. This explains why some people opt to use other actors in the conveyance covenants rather than involving the LC officials. Buyers would rather occupy the plot immediately, fence it off, or find a caretaker. The very nature of prohibitive costs of the formal land market, in terms of transaction costs, is the very factor created by the LC actors that may eventually be a barrier to the exchange of land rights. To the urban low-income communities, the fee charged by the LC officials can be prohibitive, while at the same time, it can act as a shield in case of any double or multiple sales. LC chairmen and other secretaries on local councils play roles of verification of the land, writing the covenants, and sometimes authorization letters for the developer to use the land subject to KCC approval. Another group of actors who are not in the limelight of the land market operations are the city officials, particularly the development control officials, land administrators, and enforcement officers. In their respective capacities, they have different role, all of which have a bearing on the exchange of land. They can influence the mode of subdivision, the plot sizes, and the alignment of roads and road reserves. This occurs when and if they are consulted in the process, especially when some potential developers are conscious of the planning regulations. A common aspect of this group of actors is the fact that 1

The system of administration in Uganda starts with village leaders elected by the population who form a committee of 10 individuals referred to as Local Council to perform administrative duties in a village

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sometimes, if not all of the time, they make entry in the transactions after the transfer of land rights. This is mainly to determine road alignments and creation of easements for infrastructure development in a settlement. The actors in this category do not necessarily come in the limelight, but their involvement usually starts the parallel process of formalizing land rights transfer in case such rights can be formalized.

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Rules of the Game in Informal Land Markets One peculiar characteristic of informal land markets is the existence of informal regulations, herein referred to as „rules of the game‟. The rules of the game are the mechanisms, procedures, and control measures that form a framework for the operations of the market, in this context, the informal land market. These rules, explained by the New Institutional Economics, determine and influence the land market conditions in urban areas, Kampala inclusive. Since they are unwritten, a systematic discourse for their understanding is only starting to become available in literature. However, an attempt has been made to discuss the undocumented and often disregarded „rules‟ of the informal land markets, as experienced in Kampala. There are several forms of rules and procedures that operate in informal land markets. The first set of rules involves „selective sales‟, which involve the seller determining whom to sell the land to. Since, as earlier noted, most land in Kampala is under Mailo and owned by the Buganda kingdom and individual owners, it is generally true that the majority of land owners are irrespective of the type of ownership under which they possess land are Baganda. This is especially true with the traditional indigenous population of the peri-urban areas, including those in proximity with the CBD. The Baganda do exercise freedom to selectively determine whom to sell land to and how much of the land to sell. It is also often echoed by the Buganda leaders, urging their subordinates not to sell land to non-Baganda, since it is considered as selling the Buganda Kingdom. This rule implies that limited land will be on market for sale, and it explains the current land supply constraints in the city. As noted by one of the indigenous landlords in Kikaya, the landlords are very cautious on whom to sell that land to. As noted by landlord Proscovia Namayanja; “Land is considered to be sensitive and a symbol of identity for the Baganda.”

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This stems from the emergence and evolution of land markets in Buganda, as earlier observed in chapter 2, as well as the predominance of Mailo land ownership. The fundamental of this rule, as explained by the landlord, is to keep Buganda for Buganda, however difficult it is, as well preserve the dignity of Buganda. This is also true for other tribal groups and regions in Uganda. As a result, landlords release small pieces of land on to the market to selectively determined buyers. However, with the many actors in the informal land markets, including the land agents and the financial need of the landlords, it is often common that the non-targeted people also acquire land from the indigenous landlords. The `selective sales´ rule has had a profound influence on the development of housing and settlements. The second ‟rule of the game‟ in informal land markets involves the conveyance methods employed by the informal land market actors. The informal land market actors have improvised means to transfer land rights. The means have evolved largely from the formal procedures and employ methods similar to the formal procedures. Land rights conveyance in this respect is related to the security over land rights transferred. Thus, informally prepared covenants or agreements form the most common means of transferring rights over land. During interviews with landlords and buyers who acquired the land, it was found that covenants are very vital in affirming one‟s claim for the rights over a piece of land, for this can create disputes and conflicting interests over land if not used. Disputes often emerge out of multiple sales and obviously clashing interests in the rights over a piece of land. As noted by one developer, “Individuals sell same pieces of land to different people due to demand. These multiple sales are a very common phenomenon due to the speculation, but also to the unscrupulousness of some landlords.”

Capitalizing on the superficially high demand for land, some landlords have developed a tendency of selling same plots of land to different buyers, causing land rights conflicts. The study established that 12.1% of the respondents had experienced problems of multiple sales. Upon probing, one respondent explained that he had bought the land first and took two years before developing it, and later the former owner sold it to another person. In both cases, covenants were prepared by the landlord transferring the same rights for the same piece of land but to different people. This is when the role of the LC officials as actors becomes important. Although, as discussed later

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in this chapter, they can be party to such multiple sales, the LC officials often are brought into the transaction to protect the land rights of buyers. Due to the peculiarity of informal land markets, means for solving problems, such as multiple sales, have been devised. Land owners who experienced multiple sale problems solved the problems either through courts of law, Local Council courts, or land tribunals. It is noted here that land tribunals are a recent institution for solving land disputes (Government of Uganda), where as courts of law represent the formal institutions for settling land disputes on which the land rights are clearly and legally defined. Using courts of law in the case of informal land transactions usually defines the land dispute cases as civil with implications on the time for such proceedings. Thus, land owners prefer using LC courts where Land Tribunals have not been established and only go to courts of law if they are not satisfied with the LC 2 courts. Therefore, Local Council courts, though semi-legal , largely represent the informal institutions (because they are not legally mandated to handle land disputes) for settling land disputes. With the evidence of high purchases of land, and therefore an intensified urban land market in Kampala, speculation and greed are abound, leading to the emergence of institutions to manage such problem of multiple sales. Besides covenants, other conveyance methods are used to transfer land rights under the informal land markets. From the research, it was established that security over land rights transferred is confirmed by landmarks indicated by a plant known as Draceana fragraris (the local name is Luwanyi) in the local language. The research established that 16.6% of the respondents used this method, erecting of fence or hedge represented by 5.1%, immediate occupation represented by 4.5%, and surveying represented by 33.8%, while the remaining percentage was non-responsve. Kombe and Kreibich (2000) noted the institutional setup in informal land markets congruent with the institution setup in formal land markets,. The difference between these is that the actors in the exchange of the land are greatly involved in conveyance and ensuring the security over the rights. Although surveying as a technique for securing the land rights seems to be popular, the other techniques are used at the time of the transfer of land rights and the survey is done at a later stage. As a check on possible double or multiple sales, buyers immediately fence off their land on completion of the property rights transfer. On occasion, some 2 Mugambwa, T. J. (2002). Source Book of Uganda's Land Law. Kampala, Fountain Publishers. The courts of law were unable to handle land disputes due to lack of legally defined rights over land for many people. As a result, individuals opted for the civil institution of the local administration system to settle land disputes

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buyers immediately deliver building materials on site, partly to check if there is any claim over the same piece of land. Alternatively, a caretaker is identified and given powers to look after the piece of land before the buyer develops it or even sells it off. These measures can all be applied sequentially during and through out the transaction process within informal land markets. There is often some degree of doubt about the trustworthiness of the seller, despite the preliminary stages of the introduction of the potential buyer by the agent to the seller. Therefore, institutional rules of the game in informal land markets are very vital in the definition of land rights particularly of exclusion. These mechanisms of securing land rights are a product of lack of separation of legally defined land rights, and since most people get the land through the informal land market, their existence signifies the operations of the informal land market. Another „rule of the game‟ in informal land markets that was identified is the rule on roles of actors during the transaction process. It was established that the actors in informal land markets are many, with various roles, operating at different stages in the transaction process (Kironde 2000). The focus of this discussion is on the roles rather than the actors, whom are discussed in the next section. Obviously, the most important actors are the seller of the land and the potential buyer; however, before these come in to contact (at least physically), there could be several other actors whose role is to be the broker between the seller and the potential buyer. The roles of the brokers (this includes all actors who may or may not necessarily be brokers/agents) can differ according to the nature of the transaction. For transactions involving buyers, who give almost full power to the broker to complete a transaction, the roles include: search for land, checking for the rightful owner, types of rights transferred, negotiations, price finalization, and ensuring security over the land rights. However, the role could also include effecting the payments for the land rights exchanged. In this case, the buyer only gets a conveyance document after the transaction has been partly (because formalization can be done at a later stage) or fully completed. If the potential buyer is involved greatly in the transaction, the agents‟ roles are likely to be search for the land, checking for rightful owner, and types of rights transferred, in which the agent is fully active, and later acts as a confidant in the negotiations. This is perhaps the most crucial part of the transaction process, as this is where both the seller and the potential buyer get support from confidants whose role is to convince the second party on what is to be exchanged. The confidant of the seller will always ensure to emphasize how good the plot is, how fair the price is, and the number of “potential

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buyers” (whom sometimes may be non-existent) who have expressed interest in the land at stake. The issue here is that the confidant, who sometimes may be the agent, or relative, or even local broker (such as the Local council leaders) acts as a person with a stake in the rights being negotiated. The reward is always a percentage of the final price determined by the negotiations, and how influential his contribution was in convincing the buyer. On the other hand, the confidant of the potential buyer will have his roles negotiated for a lower price, emphasizing where a similar plot at a lower price has been identified and known. In a similar way, the confidant will always leave the scene with some reward from the buyer, depending on how influential the confidant was in convincing the seller. All of these actors eventually have to bear witness of the transfer and provide their signatures on the covenant. As a rule, before the transaction is finalized or completed, the LC officials must sanction it, sometimes by preparing another covenant on which members of the committee are signatories, or endorse the covenant prepared by the seller and the buyer. Thus, in the initial stages of the transaction, the covenant between the buyer and the seller is a temporary measure before the LC officials also play their roles. The role of the LC officials embedded in the endorsed covenant is to provide future protection of the land rights exchanged between the seller and the buyer. Their roles can also, at times, be similar to those of the land agent or broker. Perhaps the most crucial role of the LC officials is the actual location of the piece of land in relation to the plots around it. These officials are often used when the area is relatively open with relatively large parcels of land adjacent to each other, with no clear boundaries. Since some buyers may take years before building on the plots, landmarks or plot boundaries may become unclear, but when the LC officials are involved in the transaction, they often keep records of the transactions and sketches of the plots transferred. Associated with LC officials are the local agents or brokers, who are usually individuals of the village with knowledge of existing plots on the market, boundaries, and information on sale conditions. Experiences and findings indicated that these local agents/brokers are often relatives, LC‟s or individuals who spend most of their time within the village, and therefore have knowledge on land for sale, prices, boundaries, and sellers. They also often exercise roles similar to those of the land agents. The foregoing discussion on rules in the informal land markets indicates institutions, which facilitate and/or constrain human behaviors in the market process. They also concern the individual behaviors in a broader social, political, and economic context (Omar and Yusof, 2002). This gives insight

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into the theorization, as well as the practical issues of land market interactions in the context of property markets. Graaskamp (1992) notes that institutional arrangements are concerned with the collective behavior of people so that their decisions and actions can be modified collectively (Omar and Yusof, 2002)). The different actor roles signify the importance of security over rights being exchanged, but also the mitigation over problems of conflicts and speculation over land in Kampala. Commodification of land is the resultant effect of the institutions at play, and this has a bearing on the processes of land exchange and of housing development.

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Information Flow in Informal Land Markets As noted earlier in the preceding discussion, information about the urban land markets is not necessarily and readily available for intending buyers and developers. There are barriers that prevent the proper release of this information to potential buyers, which is partly created by the different actors and their roles. In informal land markets information on land market conditions is communicated and accessed through various channels formed by a network of relations between different actors. The research revealed that 19.1% of the land owners acquired information on the sale of land from friends, 17.8% from local brokers, 14.0% from land agents, 10.8% from the sellers themselves, 7.0% from relatives, and 3.2% from local council officials, while only 1.9% acquired such information from news papers or other media. The distribution of sources of information to so many actors and media implies a peculiar attribute of informal land markets, which is the network of relations between different actors in the urban land market. Information flow is determined by the relation an individual, particularly the potential buyer, has with one who possess the information on the potentially existing land for sale. Interviews with landowners revealed that inquiries on existence of land by the potential buyer were proportional to the freely provided information by a broker or relative about an existence of land for exchange. A further examination of information flow by submarket reveals that informal relations are perhaps more active in the high income submarket than in middle or low income submarket. This is due to the fact that in high-income neighborhoods, there is a tendency for encouraging developers of the same social characteristics. Results also indicated that in the high income submarket 42.9% of the land owners acquired information on the sale from friends, compared

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with 28% in the middle-income submarket, and 24.4% in the low-income submarket. The analyzed data further reveals the predominance of the informal means of informal acquisition, mainly through friends and inquiries from brokers. A statistical contingency correlation measure was calculated and shows a positive association of 0.29, though at a low significance level of 0.698 between the source of information and the land submarket. The implication of this correlation is that the source of information on transferable land rights is associated with the submarket in which a potential buyer intends to acquire land rights. It is possible then that potential individual buyers know where information is likely to be acquired for every submarket. On the other hand, the network of relations in information flow within submarkets may also indicate barriers to information acquisition. This implies that if a potential individual buyer does not have a friend with information on transferable land, he may not get the information on the existing land for sale in a submarket. Although there is no causality, this phenomenon partly explains the characteristics of the sale of land, but at different prices. Thus, information flow in an urban land market is equally important and influences those who acquire the land, and at what price the land rights are exchanged.

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Standards in Informal Land Markets Informal land markets have developed standards as part of the exchange mechanisms in the transfer of land rights. Standards are mainly in respect of the plot sizes and the road widths in a settlement. According to one of the landlord‟s interviewed, standards have been applied in the neighborhood in regard to the plot sizes, as indicated below.

“Before 1997, the LC officials had set up some standards on plot sizes. Any plot on sale was to be not less than 50 ft wide and 100 ft in length. This was when the settlement had not been intensively subdivided for developement. As the subdivisions increased and the demand increased, the standards were dropped because of the financial returns. Likewise, it was not permitted to leave land for roads that is less than 10 ft wide.” (Proscovia Namayanja, an indigenous landlord) This excerpt, as revealed by one of the indigenous land owners in the Natete study area, indicates the level of sophiscation and sensitivity of actors

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in the informal land markets. A plot of size 50 by 100 ft is the equivalent to approximately 450 square meters, which is more than the plot size standard for low-income areas, as per the 1994 structure plan for Kampala. The issue of standards in respect to roads partly explains the findings of the research, which revealed a mean of 3.78 meters in width for the roads with a standard deviation of 1.93 meters, which indicates an almost normal distribution of the values around the mean. The interpretation is that the values of road width do not differ greatly, signifying the importance of this standard in informal land market in having access to plots of land. However, it must be noted that the statistical interpretation of the road width does not reveal the reason for such a standard. In the informal land markets, there is maximization of monetary return from whatever available piece of land is for sale. Keeping the informal standard of 3.78 meters of road width means less land „lost‟ during subdivision, and higher returns on the land price. Evidence of non-observation of the standard on road width emerged with land buyers previously acquiring plots of land without access. The research revealed that 13.4% of the buyers acquired the plots of land without access roads during the transaction. The access was acquired later, either by the seller providing a strip of land, if the surrounding land was still in his possession, or the buyer bought a strip of land from another individual. Experiences of buying a strip of land indicated an even more lengthy process of convincing the owner to provide access, as this would mean maximization of returns from the buyer who desperately needed access to his plot. Unlike the informal standard of the plot (which, given the level of settlement, development is over ruled), road width standard of the informal land market is far below the formally recognized minimum standard of 10 meters in width for access roads in residential areas. This also has had profound influence on the nature of housing development in relation to attendant utilities of housing.

Transaction Costs in the Informal Urban Land Market A transaction involves all activities necessary for the transfer of land rights from the buyer to the seller. It first starts with contact between the seller and the buyer, or either party‟s agent, to the stage where the exchangeable rights are clearly defined and legally protected (Mabogunje, 1993; Kironde, 2000; Mundeme, 2002). It is important to note that in some cases the variability of legality, given the informal land markets and their operations, which have semi-legal security. while many transactions remain for a long

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time without legality. The emergence of informal land markets has led to flexibility and ease in the transfer of land rights (Mabogunje, 1993). The research reveals that a transaction costs of approximately Shs 320,000 (~ $ 160 December 2008) on average to be completed, including acquisition of the title, certificate of occupancy, or covenant. In terms of time, 33.1% of the respondents completed the transaction in less than a month, 25.5% took between a month and three months, 8.3% took up to six months, and 7% took over six months. A further analysis of the data indicates that most respondents who completed the transaction in less than one month were in all three of the submarkets. In the low-income submarket, 34.8% completed the transaction in less than a month, compared with the 19.6% who completed the transaction in up to 3 months, while 13.0% took over 6 months. Additionally, 10% payment of the price for the exchange of land has to be given to the LC‟s, which is considered beneficial by the parties exchanging land rights. It is normally followed because of any eventualities or uncertainties, and can protect the buyer and seller in case of double sales or a third party claiming rights in the same land. However, it can also be disadvantageous by creating prohibitive procedures to the buyers and sellers of land rights (Sivam, 2002). The fee charged is considered high by some individuals and not justified or legally established. However, for people in the informal land markets, especially for the low-income societies, the benefits are considered to outweigh the costs. It allows the developers to start housing development much quicker than the time the formal transaction would have taken. An important feature of transaction costs in informal land markets is what can be differentiated here as the “Financial Transaction costs” and the “Rights Transaction costs”. Financial transaction is understood here as the activities involving negotiations and completing a payment between the buyer and the seller. This is usually crowned by signing of a covenant between the parties with or without the involvement of the local leaders and witnesses. The financial transaction is just one step in determining the rights exchanged by the parties. Even when land is just exchanged or swapped, a financial transaction is always completed. On the other hand, the rights transaction transcends the financial transaction to involve the activities which fully define and consolidate the rights over a piece of land exchanged. A number of activities are done to ensure that the buyer fully establishes his rights over the land. These include, but are not limited to; immediate fencing of the plot, construction of at least a foundation on the plot, and/or putting up a temporary structure usually occupied by a care-taker. These activities need to be

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considered as part of the transaction, since the buyer and the seller remain engaged in order to fully define the rights of the buyer. It should also be noted that the process of defining the rights by these means also demonstrate the devised mechanisms of adjudication by the informal sector. Particularly, financial transaction costs have profound influence on the start of housing construction, while rights transaction can be completed even after development of housing.

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Completing a Land Rights Transaction in the Informal Urban Land Markets Land transactions in an informal setting can take various forms and stages, depending on the characteristics of the different actors in the market. Though the transactions are not legally protected, the informal land market has devised its own quasi-legal procedures to authenticate ownership, transfer, and sale of urban land (Kombe, 1995). Such informal regulatory measures have enabled control of the incidence of fraudulent transactions to manageable proportions. Although the steps are discussed as a sequence of activities that seem to follow one another, in practical terms, such a system do not necessarily suffice, as there is an equal a series of loops that skip certain stages and feed backs depending on the locality, actors involved, and the general characteristics surrounding the transaction. However, an attempt to discuss the steps sequentially is done for a better understanding of the process. The process is explained below. a) A landlord, with intentions to sell part or all of his land, expresses his interests to introduce the land on to the market. This is done by notifying friends, relatives, and local agents about his intentions. The use of a network of friends, relatives, or agents is usually intended to reduce the fast flux of intending buyers, who could create fear for assumed reduction of the land value. b) An intending buyer is informed about the existence of the land for sale by a friend, relative, or local agent, who may or not have been informed by the intending seller. This phenomenon is characterized by a network of relations between the informants and the intending buyers. Sometimes the intending buyers would have notified the agents, friends, and relatives of their desire to acquire land, and they

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Shuaib Lwasa would have given their specifications in terms of desired location, characteristics and value range. c) If the specifications and value range are acceptable to the intending buyer, arrangements for a verification visit are done. Depending on the informant and the relations between the informant and the intending buyer, such a verification visit would involve a cost bone by the intending buyer, either as a fee for the service of identifying the land, or as a token, in case it is a relative or friend. d) During the verification visit, contact may or may not be made between the intending buyer and seller. The seller must be identified because verification is intended for purposes including ensuring that 3 the plot is on sale and there is a rightful owner, actual price given by the owner or his representative, and mode of ownership with supporting documentation. At this stage, preliminary negotiations may be initiated, and if need be, an appointment between the intending buyer and the seller is arranged for further negotiations. e) Once the appointment is arranged and agreed upon, the intending buyer usually initiates a second level verification as a way of investigating the particulars about the land. This is done by engaging the Local Council leaders, local elders, and individuals around the area to verify the ownership and encumbrances, if any, on the land. This information is always, though not commonly, known by individuals in a settlement and it may take a while before complete information is ascertained. Where it involves an agent who may have ulterior motives, the agent launches a campaign barring the intending buyer to ascertain information about the land from the local council leadership and/or the individuals in the settlement. f) Assuming that the information concerning ownership and encumbrances is ascertained and the intending buyer has concretized his interests in buying the land, the buyer would now arrange to meet the seller to seal the transaction. This stage is crucial because it involves negotiations on price and terms of payment. Both parties usually arrange to attend the meeting with their own confidants, whose role is to negotiate the prices and payment terms. As noted earlier, the confidant of the buyer will try to negotiate the price

3 Plot is commonly used in Uganda as a piece of land big enough for structural development and not for agriculture purposes.

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downwards, while it would be vice versa or simply maintaining the same status quo for the seller. g) At this stage, some other important aspects regarding the land are also agreed upon. The location of the plot of land, its size, neighboring plots, and important land marks are identified. This is normally done by visiting the plot of land again and actually measureing it, sometimes with the involvement of the buyer and the seller themselves. Just like in the formal land markets, the size of land and its actual boundaries are crucial in the informal land markets. Sketches similar to those of surveyed plots are drawn and clear neighboring plots with ownership indicated. This is meant to ensure that the location mentioned in the sales agreement corresponds with the location on the ground of the exchange plot of land. h) Once the price negotiations are done and measurements and sketches finished, a sales agreement is prepared, based on a down payment according to the agreed terms. The confidants become the witnesses to the agreement or covenant, and a few more may be mobilized for this purpose. Usually these witnesses either charge a fee (such as an agent), or are given a token of appreciation, since this agreement would mean binding themselves to testify in the future in case of any problems. i) At this stage, the buyer will have secured his financial rights on the land, and such rights would be defined by the covenant signed between him and the seller. In some cases, the buyer may still have some serious doubts about the full rights that he may have acquired. Therefore, as a matter of fully securing these rights, some contingent measures are done, including fencing off the plot of land to check if there are any other claimants over the same land, and/or ferrying of materials to the site, which may or not be used immediately for construction. In some cases, the seller would have to compel the buyer to construct or show intentions to develop the land. In the case of a fraudulent seller, any land left undeveloped for a period of time would have to be put back on the market. j) To avoid future problems, such as double sales, claims, and boundaries of plots, the final stage of the transaction (for plots of land that do not have title deeds) may involve securing the Local Council‟s authority over the land. This is, however, not an institutionalized authority, but rather a measure for future diffusion of problems over the same piece of land. Three copies of a final sales agreement that

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includes signatures of the Local Council and a stamp is prepared, with a copy remaining at the LC office and the remaining two copies given to the buyer and the seller. This agreement also signifies the registration of the transaction by the LC, and is a means of introducing a new land owner to the local leadership. k) Depending on the tenure and rights acquired, the buyer would then think of formalizing his rights by either securing a lease or a title deed for the land. This, however, can take several years, not only to be started, but also to be realized. Formalizing land rights is another lengthy procedure which is described under the discourse of the formal land market processes. The steps above describe the process through which rights under the informal land market are acquired. This is only a simplified process conveniently divided into seemingly discrete stages which, in practice, has a lot of loops and feed backs. For example, the negotiations for prices and terms of payment may be repeated even after the first installment of the payment. On the other hand, defining plot boundaries can also change with time as payments are completed, with reduction or increment of the plot of land depending on the relations that ensue after contact between the buyer and the seller. For some buyers, even if the land exchanged does not have a title deed, they may opt to survey the land using the conventional means and obtaining a lease immediately during and after the transaction. Thus, rather than taking the steps as a series of sequential stages with one following the other, it is necessary to note that it is a process involving a network of relations between the different actors in the market.

Modes of Land Supply in Informal Land Markets The supply of buildable land in Kampala was found to occur in different modes, depending on the sub market and nature of the actors involved. Land supply is largely controlled by land owners and/or speculators who release relatively small pieces of land on to the market either as shock absorber for economic and social perturbations, or as a result of information from the land market that would offer them a better return. From the GIS analysis, it is clear that land under agricultural use is the most vulnerable to conversion, but the land use map also indicates that despite an intensified land market, tracts of land still remain under agriculture, and therefore unconverted due to the

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various modes of land supply at the neighborhood level. The mode of supply is mostly determined by nature of acquisition. As noted earlier, 71.4 % of the respondents acquired land by purchase, compared to 25.5 % through inheritance. The proportion of the purchased land is indicative of the release of buildable land by owners and/or speculators, but does not occur at once and in a short period of time. The findings further show that owners and/or speculators release bits of land to either benefit from the market conditions, or to keep some land for better market conditions in the future. Another common mode of land supply is the formal land subdivision and sale. This mode of supply involves owners who prefer to get higher values and have land titles for the land. Land is subdivided creating access to the plots before introduction to the market. This is a common practice in the highincome sub market, and also occurs in the middle-income sub markets. In general, the demand for titled land in Kampala has dictated a mode of supply for buildable land. This mode also tends to follow the formal procedure of plan approval, but it is common for the developers to determine what kind of land use to undertake, depending on return value to investment and standards, which is largely based on informal rules. Perhaps the most common mode of supply is the informal subdivision of any land that is put on to the market by owners or speculators. Through this mode, most of the actors in the transaction are involved in the subdivision by physically measuring the plot sizes. Under this mode of supply, pieces of land are released according to the intending buyer‟s ability, capability, and intentions. Thus, the dynamics of plots size is evident, leading to a mixture of developers, and allowing the sellers to have advantage of the demand for high values. Informal subdivisions have a feature of dynamic demarcations, provision of access roads, and sale of similar pieces of land for variant values. Thus, by creating different plot sizes, land supply modes have tended to influence the nature of the neighborhoods, and sometimes dictated the type, size, and nature of housing.

Land Alienation in Informal Urban Land Markets Modes of supply were considered to examine how land is introduced on to the market for exchange. Modes of supply are also related to the processes of land alienation. Land alienation involves a process of subdividing land and providing a definition of rights for the interested individuals or institutions. The process of securing land rights in informal land markets usually involves

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subdivisions on land, or transfer of rights on already alienated land. As noted earlier, the most predominant form of land ownership is Mailo, and therefore most informal land transactions are done on Mailo land or freehold land. This is due to the fact that leasehold land is controlled by law and the rights are 4 time dependent, but it also must be noted that kibanja ownership (which virtually exists on all the other forms of ownership) is the main driving force for the informal land transactions. Use rights on kibanja land are defined by the parties involved, largely depending on the underlying form of ownership under which a piece of land is held. The process of land alienation in the context of defining use rights is thus a multifaceted process without established steps, but rather adapted steps, either from the formal process of alienation, or through experiences in the activities of the informal land market.

COMPARISON OF INFORMAL AND FORMAL LAND MARKETS

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This section focuses on the similarities, as well as the differences between the formal and informal land markets in Kampala. The issues examined include the operations of the land markets, highlighting points of congruence as similarities and dissimilarities.

The Congruence of Formal and Informal Land Markets Certainly the discourse of the informal land markets indicates a divergence of actions from the formal land markets, not as a replication, but rather imitation. This implies that there is a lot of overlap amidst diversity between informal and formal land markets. It is therefore important to note the congruence of the informal and formal land markets. Despite their point of departure being the lengthy steps and process of the formal land market, on one hand, and the relatively short procedures of the informal land market, the two sectors continuously converge into each other. This convergence and merging of techniques, information, and mechanisms is discussed in the subsections below.

4 Kibanja is a local word for usurfractory rights on land.

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The Informality of the Formal It should be noted that even in the so-called formal land markets, informal procedures do exist and are characterized by the mechanisms for exchange of land, as noted earlier. One such important characteristic is how information on land flows in the formal land market. As noted earlier, information on available lease plots does not get through the proper channels, but rather through informal channels of selectively informing buyers, friends, and relatives, as well as a network of co-workers. As observed by Pareto (2004),

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“The process of requesting a land grant is seriously compromised by the lack of information on the land occupation situation – Although the records should indicate what land is free and what is already leased, control the annual payments and the renewal/expiration of leases, it is virtually impossible to make a general search on the records (although individual searches can be done for specific plots). This lack of data management causes KCC to lose revenue from ground rent, maximize the value of the premiums (by conducting public lease auctions) and making the remaining vacant land available to the public. This lack of data management also prevents the section to control the expiration of short leases (initial lease) and to verify whether development (regular or irregular) has been made, and whether annual ground rents are being paid regularly.” The lack of information on leases and plots available creates a situation exploited by individuals close to the system to access the records to their advantage. Land records are kept manually in register books, and searches are very difficult to make. There are no maps in existance that show which KCC plots are leased or available. The lack of a proper data management system prevents identifying the remaining plots available for lease and controlling the payment of ground rents. It also prevents the release of the remaining idle land in to the market and adoption of an open process of public land lease auctions, which would be a more transparent and lucrative process for KCC. The maintenance of this process makes KCC vulnerable to claims of favoritism in granting leases, and to the irregular occupation of KCC land. The second important aspect of informality in the formal land market is the processing of land allocations and subsequent transfer of ownership rights through the open market. Obviously, the land values on the open market are much higher, and therefore, more beneficial to the allocattee; but such a transfer of rights also involves capitalization on lack of awareness about the land on the part of the

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eventual transferee. Thus, formality and informality is only distinguished by the entry of land on to the open market.

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Formality in the Informal The informal land market also interfaces with the formal land market. This interface is mainly through imitation of the procedures, techniques, and mechanisms adapted by the informal land market. Since the formal land market is characterized by lengthy procedures, the informal land market has tried to shorten these procedures. The issues of covenants (for the sales agreement and transfer in to the formal), the involvement of the LC‟s (for adjudication and sanctioning of the agreement), the verifications (as is the case for searches of encumbrances), the plot demarcation and identification of neighboring plots with their owners (as is the case for a conventional survey), and most importantly, the final stage of formalizing the informal is a clear indication of formalism in the informal. Thus, it emerges that the demarcation between the formal and informal is a matter of degree and point of entry for any transaction. The only difference then is that informality has tried to fuel a quiet revolution in which the landless, vulnerable, and hitherto marketmarginalized communities have access to land in proportions that are affordable. Therefore, it explicitly arises that it is only a matter of entry point; informality exists in the formal land markets and a degree of formality also exists in the informal land markets.

Dissimilarities between Informal and Formal Land Markets Despite the various issues which are common in both formal and informal land markets, more so on which they are congruent, there are some differences between the two systems of land exchanges. First, the most obvious and significant difference of the two sectors is the legal basis on which each operates. The formal land markets have a legal basis and framework as, spelt out in the Land Act of 1998, Registrar of Titles Act, and the Survey Act. On the other hand, the informal land markets operate on the basis of unwritten rules peculiar to the particular neighborhood and community. Another difference between the two systems concerns the level of involvement of the buyers and sellers of land in the transaction. In the formal land market, buyers and sellers may not be involved in issues of adjudication, surveying, and

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alienation. This is mostly done by representatives, usually lawyers and/or surveyors. In the informal land market, the level of involvement of the buyer and seller is greater, especially in the physical alienation and the informally instituted adjudication measures, including fencing. However, as noted earlier, this feature in the informal land market is adopted from the formal land market, but driven by possible double claims over the land. When it comes to the time of transaction and steps involved, the informal land market has far less steps and procedures than the formal land market. The steps in completing a transaction in the formal land market are far more lengthy and prohibitive to many people than in the informal land market. The movement of files from land office to survey office and back takes quite some time, and likewise involves considerable costs. In regard to the financial transaction, in the informal transaction it is possible only the LC would seal the transaction. This difference is responsible for the high rates of housing in the informal compared to the formal market.

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Chapter Seven

URBAN LAND VALUES

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ABSTRACT This chapter presents a discussion of the complex urban land values and the dynamics of such values. The focus is on the socially, economically, environmentally, and culturally determined values of land in Kampala. The chapter provides data on spatial patterns of land values and how they differ on a land gradient. The chapter provides an analysis of the relationships between distance and land values, revealing a unique situation of distorted values on three different transects. The factors for value determination are also examined before providing a conclusion on the land value theory using the data findings.

LAND VALUES IN THE URBAN LAND MARKETS The volume of property units transacted indicates demand for property in the market (Omar and Yusof, 2002). As shown in table 3, the number of plots transacted increased with time, with 10.83% of the plots having been acquired between the period of 1940 – 1970, increasing to 15.92 % from 1971 – 1980, 22.29 % from 1981 – 1990, to 34.39% between the years 1991-2000, and 5.73% from 2001 – 2003. It should be noted that the classification of the years does not have an equal interval, mainly due to the fact that land was acquired as far back as 1940. However, the pattern in the statistics reveals a trend of an increasing activity in exchange for land rights. The early years of 1940 – 1970 were years when, for example, the envujjo and busulu laws were still in place, while the Baganda were not selling to non-Baganda and foreigners. Although

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the transactions seem to have increased in the following period, 1971 – 1980, they were still low, mainly because this was the period of economic crisis and low economies of scale. The plots acquired then increased in the period from 1991 – 2000, and this is attributed to the revival of the Ugandan economy and the enabling approach in housing as government policy. During this period, the national economy was growing at an average annual rate of 6.5% (IMF, 2003). Increased industrialization, domestic production, and the growth of the service industry, all of which are largely centered in Kampala, have pushed up the demand for housing by different groups and classes of the population. This has subsequently increased the demand for land for residential housing, leading to the transformation of peri-urban areas, hitherto, typical rural areas. Table 3. Number of Plots Acquired per Year Period

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Year period 1940-1970 1971-1980 1981-1990 1991-2000 2001-2003 Non response Total Source: Filed data.

Number of respondents who bought land 17 25 35 54 9 17 157

Percentage 10.83 15.92 22.29 34.39 5.73 10.83 100.00

Demand for residential housing is largely responsible for the appreciation of land values in Kampala. Coupled with the constrained supply of land, the prices for land have increased sharply. As shown in table 4, the land value per square meter increased from Ug shs 17 between 1940 and 1970, to Ug Shs 62,735 between 2001 and 2003. This implies that land values have a temporal variation, and this has been influenced by the inflation rate, which has subsequently led land to become an investment more than it has ever been before. However, when inflation is removed from the data, land values show an increase from 1971-1980, slightly dropping from 1981 – 1990, and then increasing again to the present. Figure 8 also shows the adjusted average costs, which have a smoothened trend that is increasing over time. This trend of land values changes is actually related to the economic fluctuations that have been experienced in the last 3 decades in the country. Thus, it is possible that the drop in the period 1981–1990 coincides with the period of war and instability,

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when investment and development was equally low. Yet the leapfrog of land values from the period 2000-2003 similarly indicates the economic rejuvenation, and thus activation of the land market. From the study results, it was established that 31.8 % of the respondents had land elsewhere in Kampala, and that 20.8 % have intentions of developing it either for commercial or residential purposes. This aspect reveals that there is speculation in the informal land markets. Speculation is promoted by land owners who would wish for an appreciation in the value of the land (practically hoarding land) for future economic gains, but it is also promoted by land agents and local brokers. Table 4. Land Values per Square Meter in Different Year Periods Year period

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1940-1970 1971-1980 1981-1990 1991-2000 2001-2003 Source: Filed data.

Cost per sq meter (Ug Shs) 16.74 605.01 3,321.54 3,626.50 62,735.55

Adjusted1 Cost per sq meter (Ug Shs) 16.74 10.38 9.95 19.55 53.46

It should be noted that land values are not only economic in nature, but the value in land can also be historic, antiquity, and social (Omar and Yusof, 2002). Some of the respondents who had other land have the intention to bequeath the land to their children. This is an important social value accorded to the land by the owners. Associated to bequeathing land to children is the social value of ancestral and burial grounds for families. There are several families with their ancestral grounds within Kampala. Such sites have a value of being used as burial grounds for families to which the attachment is so socially strong that relocation is always the last option. These values have always constrained the exchange of land and contribute, to some degree, the limited supply of land for residential housing development. Indigenous land owners have always reserved land for this purpose, even when they sell much of it; a sizeable piece of land will remain to serve the purpose of ancestral burial grounds for the family.

1 Column for adjusted cost is based on removed inflation from data on the basis of 1940-1970 period as data year period.

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Land Value per Square Meter by Period

141,000 131,000 121,000 111,000 101,000 91,000 81,000 71,000 61,000 51,000 41,000 31,000 21,000 11,000 1,000

Cost per sq meter Area square meter Adjusted Average costs 1940-1970 1971-1980 1981-1990 1991-2000 2001-2003

Adjusted Total costs

Year Period

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Source: Filed data. Figure 8. Comparative view of land value per square meter and area of plots bought by respondents (adjusted values indicate land values after removing Inflation).

On the other hand, limited evidence of historic and antiquity values was elicited from the research. This does not imply that land with historic or antiquity value does not exist. The Old Fort Lugard, for example, around which Kampala township was established, has antiquity value. One significant social antiquity feature is the Bahai Temple, which occupies much of the Kikaya hill. As a religious center, the temple occupies land that mainly remains undeveloped and open, but not put on market for exchange. The Bahai Temple has thus contributed to the constrained supply of land in this neighborhood and the surrounding areas. Yet these suburbs have shown signals of change as more developers come in and settlements take shape. Another important non-monetary value attached to land is the identity of cultures. Buganda culture and Baganda partly identify themselves according to wealth in terms of land. It is thus an important value for which political and social economic controversies have prevailed through time.

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A Spatial Pattern of Land Values The analysis of research results on land values indicate a spatially differentiated pattern of land values. As noted earlier, from the works of Alonso (1964), land values are expected (as according to the theory) to be high in the city center and decrease out of the city center. The research results indicate a similar trend, but with very significant differences. As indicated by the analysis of the data represented in the table 5, the average land values for Bukesa parish (which is nearer to the city center) are much lower than the average land values for Bukasa parish. A comparative analysis of the summary using the settlement stage further reveals a slim difference between Kikaya parish (which is generally at infancy) and Bukesa parish (which is generally at saturation stage) in terms of average land values.

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Table 5. Average Current Land Values by Settlement Stage and Parish Settlement Stage Infancy Consolidation Saturation Missing Values Grand Total Average Land values Source: Filed data.

Bukasa 0 32,021,053 8,074,667 30,250,000 20,790,000

Natete 0 1,666,667 408,226 0 461,365

Kikaya 3,111,389 2,102,857

Bukesa

6,500,000 3,105,111

3,783,083

17,586,430

518,723

3,904,749

3,783,083

3,783,083

Similarly, efficiency (in the context of providing land at low costs) of informal land market is questionable with evidence from this data. Irrespective of the settlement stage and distance from the city center, land values can be high in the informal land market. Figure 9 shows the comparative average land values by parish and settlement stage. The revelation of this chart is that even when a settlement (parish, in this context) is consolidated, it can have areas of saturation or infancy. For example, Bukasa has areas that are at saturation stage and contribute significantly to the high average land values in the area, though it is predominated by consolidating areas. Although the influence of the sample size on these values can not be underestimated, the overall indication of the differences is such that land values do not necessarily follow the spatial trend, as explained by the Alonso Model. For example, Bukesa, which is at saturation stage, compares closely with Kikaya, which is

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predominantly at the infancy stage of development. Being within the city center, it would be assumed that Bukesa land values are higher than those of Kikaya, some distance away from the city center.

Source: Filed data.

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Figure 9. Average land values by settlement stage and study sites.

Although speculation influences land values, the role of locational characteristics (such as status of a neighborhood), proximity to utilities, and services do play an important role in determining land values in Kampala. Land value variations indicate spatial differentiation and the notion of land values, decreasing with distance to the periphery seems to be less strong in Kampala. An analysis of the land values using the distances of the sampled plots from the center plot in the city indicates a weak, but positive correlation between land values and distance from the city center. The analysis is based on the actual observations from the sampled plots and actual location of plots from the city center. As indicated in figure 10, a statistical analysis reveals a weak positive relationship of R2 = 0.312 between distance as the independent variable and land values as the dependent variable. Average land values per square meter are used for this analysis in order to reduce the large land values of actual prices. Figure 10 also indicates outliers of the plotted values, which are explained by the various factors that influence land values. Thus, although in general terms, distance from the city center can influence land values, it is not necessarily true for all cases, particularly on disaggregated urban land uses such as residential land values, as shown by the outliers.

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Source: Filed data. Figure 10. Scatter plot and line of best fit of distance and land values.

A further analysis of the spatial patterns of land values by use of GIS and interpolation of sampled land values reveals a differentiated pattern of dependent land values. Interpolation of land values was done using the sampled plots from all the settlements. Bukesa values were used as the center values for residential uses, largely because Bukesa, unlike other parishes of the Central Division, is residential. The cross-section of the Natete study area shows that land values decrease away from the city center. According to figure 11, the trend of land values decreasing away from the city center can be seen in the Natete cross-section, but the trend of land values of Kikaya and Bukasa are the opposite. Land values on the latter sections increase away from the city center, stabilizing at some distance of 4.5 to 8 km, and decreasing after 8 km. This phenomenon is dependent on various issues, but mostly on externality factors of socio-economic issues, locational characteristics, and land tenure systems. For example, settlements in Bukasa and Kikaya are mainly under the

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Mailo tenure (for private individuals), while the Natete settlements are mostly Mailo, except for the Buganda Kingdom (in which, as stated earlier, the Kabaka has no direct interests). But, the steepness of the curve for Bukasa compared to Kikaya is worth recognition for a proper examination of the dynamics of land values in the city. The steep slope of the Bukasa values reveal a distortion of the land value gradients compared to Kikaya, even when they have similarities in externality factors. A critical analysis leads to a conclusion that land values are also dependent on the social class.

Spatial Pattern of Land Values (Along Cross-Sections of Bukasa, Natete and Kikaya Study Areas from Bukesa)

16,000,000 VALUE KIKAYA VALUE NATETE

12,000,000 10,000,000 8,000,000 6,000,000 4,000,000

11.50

10.75

10.00

9.25

8.50

7.75

7.00

6.25

5.50

4.75

4.00

3.25

2.50

1.75

0

1.00

2,000,000

0.25

Estimated land Values (by Interpolation)

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VALUE BUKASA

14,000,000

Distance from City center (Km)

Source: Filed data. Figure 11. A comparative analysis of land values and distances from the city center in the three areas studied.

The table 6 linear models were constructed for explanation of the three different scenarios. Therefore, Figures 12, 13, and 14 depict the trends with estimated values of correlation using the general linear model. In two of the three scenarios, the analysis indicates a positive correlation in which distance determines the land values from the city center.

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Table 6. Estimated Land Values by Interpolation and Distance

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VALUE BUKASA 3564701.5 4105961.0 4626923.7 5139942.0 5933672.0 6765466.7 7554983.5 8301874.0 9033823.1 9762528.7 10424095.3 11030764.3 11593138.9 12115671.4 12612051.8 13074238.3 13313408.5 13368444.0 13432049.6 13500887.2 13570939.9 13636560.5 13689415.6 13720398.4 13725184.3 13709616.5 13680918.2 13643843.4 13645514.5 13669958.3 13697457.8 13728965.8 13766846.1 13813173.0

VALUE KIKAYA 3264363.1 3356816.3 3495534.6 3663298.9 3872550.9 4091261.3 4332467.0 4560086.7 4765685.0 4961563.4 5148006.8 5323170.0 5491036.2 5650935.2 5803368.3 5947715.7 6086226.7 6217706.1 6341670.0 6355617.5 6319363.8 6248328.4 6170598.5 6110917.2 6078203.7 6055507.0 6037997.6 6022450.3 6006485.8 5989033.8 5969030.0 5945604.2 5917564.5 5883297.6

VALUE NATETE 3475071.5 3052194.0 2913375.8 2832734.5 2753047.4 2676176.9 2601122.2 2525153.3 2447841.3 2368406.9 2287368.8 2204826.6 2119555.3 2032022.9 1942136.4 1849804.1 1755620.5 1658437.6 1560247.0 1467273.2 1380594.8 1286522.2 1174261.6 1106032.9 1086168.9 1089894.3 1093344.8 1096778.2 1100397.3 1104390.7 1108945.1 1114376.1 1121106.7 1129646.3

DISTANCE 0.25 0.50 0.75 1.00 1.25 1.50 1.75 2.00 2.25 2.50 2.75 3.00 3.25 3.50 3.75 4.00 4.25 4.50 4.75 5.00 5.25 5.50 5.75 6.00 6.25 6.50 6.75 7.00 7.25 7.50 7.75 8.00 8.25 8.50

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Shuaib Lwasa Table 6. (Continued)

13872610.8 13950941.5 14060236.7 14022381.6 13874573.7 13692373.3 13435155.6 13039858.1 12365732.9 11953088.4 11969585.2 12000961.0 12084833.8 12502482.5

5840274.4 5784589.7 5710258.1 5604169.3 5441855.3 5162450.2 4662601.6 4530524.7

1141064.8 1157121.8 1159339.1

8.75 9.00 9.25 9.50 9.75 10.00 10.25 10.50 10.75 11.00 11.25 11.50 11.75 12.00

Figure 12 indicates a regression value that connotes a negative correlation between land values and distance, particularly the Natete parish.

VALUE NATETE

4,000,000 3,500,000

VALUE NATETE

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DISTANCE Line Fit Plot for Natete

3,000,000

Linear (VALUE NATETE)

y = -249688x + 3E+06 R2 = 0.8915

2,500,000 2,000,000 1,500,000 1,000,000 500,000 0 0.00

5.00

10.00

DISTANCE

Figure 12. Scatter plot of estimated land values along Natete Cross Section.

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DISTANCE Line Fit Plot

18000000.0

16000000.0

14000000.0

VALUE BUKASA

12000000.0

10000000.0 VALUE BUKASA Linear (VALUE BUKASA)

8000000.0

6000000.0

y = 598581x + 8E+06 R2 = 0.4889

4000000.0

2000000.0

0.0 0.00

2.00

4.00

6.00

8.00

10.00

12.00

14.00

DISTANCE

DISTANCE Line Fit Plot 7,000,000 6,000,000

VALUE KIKAYA

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Figure 13. Scatter plot of estimated land values along Bukasa Cross Section.

5,000,000 4,000,000

VALUE KIKAYA

3,000,000

Linear (VALUE KIKAYA) y = 163465x + 5E+06 R2 = 0.3083

2,000,000 1,000,000 0 0.00

2.00

4.00

6.00

8.00

10.00

12.00

DISTANCE

Figure 14. Scatter plot of estimated land values along Kikaya Cross Section.

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This result generally concurs with the Alonso (1964) mode,l and in terms of housing and planning, is an area for largely low-income groups and on land held mainly by the Buganda Land Board.Figures 13 and 14 indicate a positive correlation between distance and land values. However, despite this correlation, the two models do not show the generalized model of reduced gradient away from the city center; therefore, these trends connote a distorted gradient of land values. Hence, it is possible that the general land use land value gradient model does not represent the disaggregated land uses. On the basis of the data analyzed and the above figures, some comments on the Alonso model can be raised. First, the theory asserts a non-convexity of consumer preferences as an assumption that households would not locate to another area in order to increase their satisfaction. The research reveals that individual households do have plots of land elsewhere for other proposes, including residence. Second, based on the results from the figures, it is clear among the middle-high income groups that bid prices tend to be steeper away from the city center; thus, market operations and opportunities are mediating the nature of land use in the study areas. Average costs of land per square meter were estimated and grouped by parish and bought for prices of the informal land market. For the formal sector, cost for land in the same parishes were collected from the Chief Valuer‟s office as the current values. The costs of the formal and informal sector were then compared using ANOVA to test the possibility of having equal means. According to the analysis, cost of land per square meter using the land values from the valuation office were compared by the costs of land per square meter from data collected in the field. It is assumed that the values costs are the formally determined costs, while the other costs are the informally determined costs. Means are compared if the samples are considered different, with an assumption that their means will be equal. In this context, equal means would imply non-efficiency in economic terms for informal land markets. From the analysis results, the variance of 40,8455,463/= is high, implying that the two sample are different from each other and that average costs per meter of land are higher in formal land markets compared to informal land markets. This is also indicated by the covariate value of 23.082 at a significance level of p = 0.017. The conclusion from this statistical analysis is such that efficiency occurs in informal land markets, thus the hypothesis is accepted. The analysis presented in the preceding section gives an overall status of the dynamics of land values in the differentiated urban land market of Kampala. When looked at in the spatial context, the urban land market of Kampala depicts both efficiencies and inefficiencies from the economic and social perspectives. It also spatially

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segregates settlements by social groups and partly explains the current housing pattern and its relation to the different social groups in not only the study areas, but in Kampala city as whole.

FACTORS THAT DETERMINE LAND VALUES

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This section analyzes and examines the factors that determine land values. The discussion considers the different sub-markets and complements to the analysis of land values as influenced by distance from the city center. Land prices are influenced by many factors, including the changes in urban economy, changes in society, and macro-economic factors (Drabin-Drakin, 1977). However, these factors change in importance due to changes in urban growth trends. An understanding of how these factors are inter-related and the role each plays in determining land prices is important to understanding the functioning of the urban land markets. The nature and extent of these relationships vary through time, and it is necessary to develop a dynamic approach to the analysis of land prices. The discussion below attempts to underscore the inter-relations between factors that influence land values in Kampala. As shown by the different land values from the settlements, efficiency in the urban land market is an ideal far from reality. For example, two different pieces of land of the same size and similar characteristics can attract different economic values, as is the case of Kikaya and Bukasa. In the conceptual framework, these factors were considered as externality factors only for purposes of a concise discussion on the market activity. Location, social cultural factors, and systems defining land rights have an influence on the economic land values. There are several factors which were identified as being crucial in determining economic land values. First, the issue of speculation and the actors in the speculation about a piece of land is a crucial factor in determining economic land values. Speculation, in which the land owner or land agent hoards land with the expectation of an increase in the economic value in the future, actually reduces the amount of land on the market. But speculation also leads to the party involved in selling land to exogenously assume an increased land value. Speculation can hike land economic values due to the market perceptions of the sellers and the buyers, as well.

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Second, land tenure and the land rights that owners enjoy greatly influence land economic values. Since land is held under a system with differing modes of ownership, the rights are a manifest of those defined by the modes of ownership. For Mailo, land is held in perpetuity, though depending on the method for acquisition, rights can vary between perpetual and temporary (Nawangwe, Nuwagaba, et al., 2002). For leasehold land, rights are defined according to the time period of the lease, while for freehold land, the rights are perpetual. The predominance of private ownership and perpetuity of rights in Kampala has created a situation where the landlords, and therefore sellers, capitalize on the market for economic gains. The value of rights bought or held in perpetuity is high compared to temporary rights. Land tenure is an influencing factor in the determination of land values, and it has led potential buyers to look for land with perpetual rights, i.e. Mailo or transferable freehold rights. Associated with the tenure is a unique factor of the influence of the social-cultural setup of the settlement. Being located in Buganda, which was discussed earlier in the discussion on the evolution of the land markets, profoundly has an influence on land values in Kampala. One elderly landlord mentioned that cultural ties and prestige in Baganda are linked to land ownership. This landlord also mentioned that some landowners in Baganda are not selling land because it is tantamount to selling their identity in Buganda. Third, the factor of expected change in land use can also influence the value of land. This is usually due to intended public projects, which are associated with development. This factor sets in speculation for future gains and accelerates the subdivision on land in any area. Examples in and around Kampala City show that land subdivision accelerated whenever development projects were proposed. The construction of a Northern by-pass cutting through the mid-northern settlements of Kampala, for example, accelerated the land market in east Kampala City. The other example is the National Stadium at Bweyogerere, just on the eastern border of the city, which also experienced an accelerated and activated land market in the area. Because of the expected land use change associated with development projects, speculation and subsequent rise in land values ensue. There are locations in Kampala where land values have risen as a result of these land use change expectations. These areas can, however, only be described nominally as data on the land values in those areas would not be available. But if surrogate indicators are used, the nature of housing in parts such as Kulambiro, Kisasi, where the Northern bypass is planned, show a change in the values and reshaping of neighborhoods. The indigenous land owners have succumbed to the pressures of the

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intensified land market in these peri-urban areas, giving way for fast developments in housing. Fourth is a land quality which varies and differs from one settlement to another. They largely involve environmental conditions, aesthetics, availability of services and utilities, and certain locations, such as a lake view. Of course, poor land quality, like that in wetlands, would be expected to have low values, however, this is not always so. The current land market activities with their encumbrances in information flow associated with ignorance and social ties have hiked the land values for pieces of land in wetlands and other locations with poor land quality. On the other hand, good land quality leads to high values of land, as is the case of lake view sites, higher slopes, and land with generally no environmental problems (Associated Consultants, 2004). For example, the existence of water supply and electricity, as well as public transport, tends to influence the value of land. The location of residential housing is largely dependent on the availability of these services, which add value to the quality of land. Associated with quality is the status of the neighborhood in which a piece of land not yet exchanged and developed can also have influence on land values. As observed by Sirmans and Turnbull, et al. (1997), when a neighborhood is in its infancy, the first settlers have to take a risk because the neighborhood would not have a definitive development path and pattern. The attendant utilities and facilities would not be in place. The first settlers in a neighborhood pay less compared to developers in the subsequent stages of a neighborhood‟s development. But as the developments take shape, utilities are extended, the buyers, and therefore developers, at this stage of consolidation pay higher than the first settlers. Data indicates that the neighborhoods at the stage of consolidation and saturation have land values which are relatively higher than values in the infancy stage neighborhood, but status of the neighborhood can also be looked at from the social perspective. Neighborhoods can be categorized as high, medium and low-income. In high-income neighborhoods, land values are higher, especially if the neighborhood has entered its consolidation and saturations stages. The analyzed data reflects that land values are higher in the consolidation stage of development than in either the infancy or saturation stage of development in table 7. This phenomenon is explained by the high expectation of the potential developers, as well as the sellers of land. At the consolidation stage, the settlement would have taken shape, services and utilities almost available or within relatively easy reach (space still available, sizes of plots relatively bigger), and general neighborhood security by occupation is defined. The buyers tend to settle in for such a neighborhood.

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A further analysis of the data shows that there are differences in crude average costs for plots of land by sub-market categorization. High income submarkets indicate high average costs of approximately 218,500,000/=, while for low income sub-markets, the average is as low (based on the data analysis) as approximately 1,900,000/=, although in practical terms, the average costs are high for the low-income population. The average costs for plots bought in the middle-income sub-market do not differ much from the low-income submarket. A difference of approximately 900,000/= between the two submarkets is depicted by the data analyzed, as compared with the high income sub-markets shown in table 8. The implication is that the social groupings do influence the land values from a general point of view. Table 7. Average Costs of Land by Stage of Settlement Development

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Settlement Stage Code 1 2 3 Source: Filed data.

Settlement Stage Infancy Consolidation Saturation

Average cost of plots as bought (USh) 2,923,684 62,812,000 5,598,411

It is also important to note the interactions between the income groups and the settlement development paths, which define the dynamics of the land values across all the income groups in the urban land markets. Thus the factor of neighborhood status plays an important role in the determination of land values in Kampala. Table 8. Average Costs of Land by Sub-Market Sub Market Code 1 2 3 4 Missing Source: Filed data.

Submarket Name Low Income Middle Income High Income Undefined

Average Cost of plots as bought (USh) 1,980,250 2,999,466 230,100,000 1,150,000 15,885,000

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The fifth factor for the determination of land values is culture. Here, culture refers to the attachment people have on land through inheritance, exchange, and gifts. Through history, Kampala is known to have developed around the previous seat of the King of Buganda, who had his chiefs and subordinates settle around his capital. For many of these chiefs and subordinates, the King offered them gifts in terms of land, especially after the 1900 agreement, as explained earlier. However, much of the land still remained in the control of the King and the Royal Family. Most prominent is the land on which palaces in and around Kampala are located, mainly the land on hill tops. There is also land reserved for the burial of the kings and princes. In terms of development of settlements, these areas tend to be „hard areas‟ because they are difficult to be changed due to the cultural attachment and cultural value they posses. Their value may not be a monetary value, but cultural value. Perhaps it is the cultural value that explains the remaining lush green areas in Kampala, which are the palaces and burial grounds for the kings. The issue of culture is also linked to the sales of land owned by the Baganda landlords, who believe that selling land is like selling their cultural identity. Thus, it is often common for the Buganda government to advise the Baganda not to sell their identity, further increasing the monetary value of the land. Sixth is public law, which is largely through the property and land valuation system. Government and municipalities are often involved in cases of compensation, land acquisition, or for taxation purposes. The valuation of land is done by the Chief Government Valuer, or any valuer assigned by the Chief Government Valuer. In an interview with the District Land Valuer of Kampala, valuation usually uses two broad methods; first the capital method, and second the rental value method. However, between the two, a mixture or congruence exists in practical terms. In other words, a property or land may be valued on the basis of both the capital method and the rental value method, depending on the purpose of the valuation. Using the capital value method, land is valued according to the developments on it which may range from agricultural activities, planted trees, and houses, to other forms of property including the area of coverage for the land. In this, case the total values of the developments are included in the valuation process using the most current price index. In the case it is for taxation, a percentage is calculated for an annual property rate, or ground premium. In the case it is for compensation of the owners, the calculated total capital for the developments are used together with other costs, including destabilization rates. It is important to note that valuation is done mainly for publicly owned land to determine the value of the

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lease and premium to be paid annually. Valuation for privately owned land is done for taxation purposes, and where development projects are planned, that would require land acquisition. It is often common, as explained by the land agents that the valuation process does not give the true economic and market value of the land and property. Because of this issue, land owners prefer to use the informal land market taking advantage of the imperfection and speculation to maximize the values as much as possible. The seventh factor for determining land values, which by character of the informal land market compares with the ownership of land, is the issue of accessibility. This issue is of importance, especially to residential housing developers. The price of the land to the buyer is always a function of distance to the nearest services and utilities, especially transportation. Developers value the cost for transportation between home and place of work. In Kampala, public transportation is relatively within reach to many because of the nature of the road network, which is radial. This implies that transportation is available to all or most of the parts of the city in all directions, but this is only true in relation to the trunk roads from the city. Connections through secondary roads to neighborhoods can be equally difficult and require longer travel time. Associated with the difficulty on secondary roads is the issue of the conditions of the roads, many of which are in poor condition, and almost inaccessible. Road maintenance in Kampala is not done regularly, leaving the roads in poor condition. This hampers public transportation, even when the neighborhood is within a 10 km radius from the city center. Thus, accessibility of a place is important for a required decision on residential location. This, in turn, influences the value that the sellers will attach to the land. Easily accessible areas have higher values than uneasily accessible areas. But this is not a rule throughout the city, as cases of relatively inaccessible areas can have equally high land values compared to accessible areas. The implication of this anomaly is that accessibility is just one factor considered in the determination of the land value. The value of land, therefore, is a function of a gamut of weighed actors, some of which can be quantified, while many remain social considerations to which socio-cultural attachment is of paramount importance. The foregoing discussion indicates the complexity of land and land value determination in Kampala. The main reason for this is that land is both a commodity and a factor of production, which distinguishes it from other durable goods (Henderson and Ioannides, 1983). The weights of these components vary between different parcels of land, which could go for pure consumption purposes, such residential housing developments, or to complete short term investment motives and speculation. The proportions of these

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components cannot be observed except for the extremes; speculators are those who simply purchase the property and hold on to it for a short period of time, usually before the completion date, seeking positive capital gains, or end-users who remain as owner-occupants for decades. There is a positive correlation between speculative activity and property price, which leads many to believe that speculative activity is the culprit of property price surge. The argument is that speculators hold back units from the market that effectively reduces the supply and then raise the asking price. Likewise, the locational characteristics, socio-cultural issues, public projects, and expected land use changes do play a role in determining and raising the value of land. It is concluded, therefore, that speculation is the most significant factor in land value determination in Kampala, but other factors are equally significant.

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Chapter Eight

URBAN LAND MARKETS AND HOUSING DEVELOPMENT

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ABSTRACT This chapter analyzes the conversion of buildable land for residential purposes, presenting analysis on housing development. It focuses on the interrelationships between the land markets and the processes of housing development in both the formal and informal urban land markets. Processes of housing development are considered in a general context before analysis of the different segments and social groups. Issues under discourse in this chapter include „housing starts‟, construction phases, occupation, and spatial patterns that characterize distinctive segments in the market. The section concludes with a discussion of the land use changes driven by the forces of the land markets and housing development.

HOUSING DEVELOPMENT PROCESS Systems or modes of housing provision can be defined by the processes through which such is achieved. A useful analytical tool for identifying and examining these processes is the concept of structures of provision, which is based on the identification of social relations and interactions of agents involved in all aspects of housing, which is the production, exchange, and consumption, as noted by Ball (1983, 1986, 1992),a d Healey and Barret (1990),. Keivania and Wernab (2001) observe that the most comprehensive formulation of this conceptual tool of analysis is elaborated in the works of

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Healey and Barret (1990), which identifies the relationship between the interests, strategies, and actions of agents involved in land development, and the socioeconomic and political framework, including values regarding land, property, buildings, and the environment which governs or structures their decisions. The need to understand the `relation between structure‟ and agency, in terms of the way individuals develop and pursue their strategies, is important. The former relates to the framework created by the economic and political organization of the country, interventions of the state at the macro and micro economic levels, and the social and economic values of the society regarding the built environment. The latter, on the other hand, relates to land owners, investors, developers, consultants, public sector planning officers, politicians, community groups and any other agents involved in land development. The relationship between the structure and agency, moreover, is not seen to be static or one sided. Rather, such a relationship is defined as being dynamic, whereby the agents are not just passive players within the structure without any influence on its form and extent, instead they are actively and continuously involved in reshaping the structure through individual and organized pressure in pursuit of their welfare. This is affected and shaped by the external pressures of the structure. At any given point in time, therefore, the form of the structure and its relationship with agents is determined by the balance between the need and the needs of the individual agents involved in this sector of the economy. In this regard, the results of the study indicate that 65.6 % of the house types are self contained bungalows of differing quality, 10.8 % are traditional 1 house types, 10.2 % are tenements (mizigos ), 5.7 % are storied houses, and a seemingly negligible 2.5 % are single roomed houses, though it indicates the extent of informal modes of provisioning. From the analysis of the data, it was established that on average housing development takes 2 to 3 years to build. This is because 26.7 % of the houses were finished in 2 years, 20 % in 3 years, and 13.3 % were finished in 4 years. A further analysis of the data reveals that over 26 % of the respondents started the construction of the houses in less than 1 year of the plot acquisition, while 20% started construction in 4 years, and 29.3 % were completed in 5 to 7 years. The period taken to finish the houses is also partly explained by the type of housing, with bungalows taking longer for completion. This description allows us to look at housing as a process which involves other components, among which is land acquisition and mechanisms 1 This is a type of housing with one room often constructed as continuous block of tenements.

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used to acquire land. The period for starting a housing construction after plot acquisition is an important indicator of the adapted methods of defining and securing the rights exchanged in informal land markets. Buyers of land are not always confident of their rights, unless some measures are pursued to ensure that there is no other claim over the same land. Immediate occupation, by starting to construct, or at least put up the foundation, is a remedy to potential multiple sales in the future and/or claims over the piece of land. The importance of housing starts in the land market was echoed by the land agents and developers during the in-depth interviews, where a construction start would act as a step of adjudication in which ownership and rights over land are determined. It also helps to check on multiple sales and possibilities of claimants of land rights on a piece of land other than the would-be current buyer. Thus, the time taken to start housing construction from the time of acquiring a plot plays a significant role in the process of land alienation within urban land markets. It is noted that this is not exclusive for informal land markets, as actors in the formal urban land market employ similar methods. This is due to the bureaucracies of land transfers and the problems of multiple titling, as observed by Greenwood (1990). However, there are mistakes, some of which are deliberately introduced in the land registers, which has compelled developers to take risks, but also employ techniques of establishing their rights. Compared to time taken to start the construction of a house, house completion takes an even longer time period. From the results of the research, it was established that 60% of the houses are completed in not less than 3 years. Although it is difficult to have a definitive stage at which one could consider having finished the house (due to the numerous changes and rebuilding), and at the same time, given the average sizes of houses built, especially in middle and low-income groups, 3 years is a relatively long time for completing a house. This is attributed to the sources of housing finance that largely come from the savings of the households and families.

House Sizes As noted earlier, most house sizes were determined by the size of the plot bought by developers. Thus, the process of land alienation in the informal land market largely influences the sizes, and possibly types of houses. Although other factors, such as finances and plan design, have an influence on the size of houses, the plot sizes have an upper hand in determining the sizes. The

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means through which land is introduced to the market (in piece meal) for financial and personal reason of the land owners has an implication to the sizes of land sold. Analysis of the data indicated determination of house size by plot size associating with the income submarkets. In low-income and high-income sub-markets, 41.3 % and 50% respectively, of the house sizes were determined by the plot sizes compared to 33.7 % in the middle-income submarket. For respondents whose house sizes were not determined by the plot sizes, availability of finances and house plans were the influencing factors. The research revealed that 29.9% of the house sizes were determined by the financial capability of the household, while 19.4% of the house sizes were determined by the plan of the house. These factors indicate a dynamic process of housing development in which externality factors, such as social, cultural, and economic issues play a role in the housing development process.

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Informal Housing Development From the results of the research, it was established that 58.6% of the respondents acquired permission to start building their houses, and 30.6 % did not get permission to build. From thess statistics, it can be observed that a considerable number of houses in Kampala are built without formal permission. Although there is a possibility of formalizing the building process in the course of construction, the non-adherence presents problems on standards and informal settlements, and in general creates an imprint of poorly developed settlements. Due the informality in housing development being experienced, and the somewhat defective enforcement for monitoring in Kampala City Council, alternative means to get permission are sought. The results indicate that the officials responsible for monitoring and controlling developments in the settlements are given an illegal fee to allow developments to take place. It was also established that 9.6% of the respondents made payments to the enforcement officials, who in turn leave the construction to proceed without proper permission. Other officials mentioned include the 2 Parish Chiefs and the Building Inspectors, while 12.7% of the respondents mentioned that they proceed with building houses as the need arises. However, construction is done in a coordinated manner to avoid confrontation with the KCC officials. Construction is usually done over weekends, and/or public 2 Representative of Kampala City Council at the second level of administrative structure, which is referred to as parish.

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holidays, and if the builders are fast, within days a simple, small house would be complete and occupied. As noted by landlord John Kikwanguyira,

“Houses usually built during the weekend are built so fast that occupation takes immediate effect. Some often come overnight to avoid any possible confrontation with KCC officials”. This process reveals the structure of housing provision by the actors in the housing market within urban areas. The issue of permission to build was one of the sensitive issues under study. The low response to the question is therefore an indicator of fear for identification of respondents to the officials, and potential subsequent penalties for divulging such information; but the issue also reveals the powerful mechanisms of informality in housing development. Officials of the KCC are sometimes party to the illegal developments in the settlements and the activities of the land exchange.

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Housing and Attendant Utilities Decisions to locate ones residence and choice of land to buy depends on several factors amongst which certain basic utilities must be in place. Utilities including roads for access, water, sewerage, and electricity as locational decision factors for residential housing are very important in housing. The research reveals that for accessibility of the plot, 72.6% of the plots had access at the time of exchange, while 14% did not have access at the time of exchange. A further analysis of the data indicates insignificant variations of access between submarkets. In the low-income submarket, 74.5% of the plots had access, compared to 91.8% in middle-income submarket, and 77.8% in the high-income submarket. That data also indicates a correlation of 0.242, a significance level of = 0.178 between the submarket and the proximity of piped water at the time of starting to construct the house. Although the proportion of the plots that didn‟t have access is low, this highlights access to plots as one of the critical issues of the urban land market in Kampala. First, because with an intensified urban land market, as indicated earlier, reserving land for utilities, such as roads, is relegated to the secondary level in order to maximize the monetary exploit. Second, because non-access of the plot weakens the new plot owner relative to the speculation by the owners around the plot from whom access must be acquired. In some cases, this phenomenon has created conflicts that culminate into outright refusal of the

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neighbors even to sell a strip of land to provide access to a plot. One of the settlements in Bukasa is quite a unique situation, as it was established on two plots and was accessed through a third plot, which had a driveway through its gate. As shown on the figure 15, an informal arrangement through which accessibility is shared by households exists in a high-income market segment. The three houses are accessed through a single driveway that has its gate on house number 1428. This example further indicates that informality of housing is not only in low-income submarkets, but in high-income submarkets as well. Water is perhaps the most significant of all utilities considered under this discourse for decisions regarding the location of the residential place. The availability of water within acceptable distance, either for connection to a supply network or a nearby source, is significant in influencing decision on location. From the research, results show that 65.0% of the plots were in proximity to water at the time of starting to construct, while 29.3% were not. A further analysis of the data indicates variations of access between submarkets. In the low-income submarket, 59.6% of the plots had piped water, compared to 67.4% in middle-income submarket, and 100% in the high submarket. That data also indicates a statistical association of 0.213 at a significance level of 0.319 between the submarket and the proximity of piped water at the time of starting to construct the house. Besides accessibility, another utility that was examined as a locational decision factor included electricity. The results indicate that 83.4% of the plots had access to electricity power at the time of starting the construction, while 11.5% did not have power. However, households can afford to stay with out electricty for some period before it is installed, even when the house is being occupied. Power availability in the house is not really a pre-requisite for a locational decision at the time of exchange of the plot, but rather at the time for occupation. Thus, an indication of the proximity of power grids to the plot suffices in influencing the decision to locate or not to. On the other hand, since power can be extended by extending the grid network, only within certain limitations (distance and costs for installation of an extension) will it seriously affect the decision for the location of the house. In the case of middle-to-highincome submarkets, proximity to a sewage network is also considered in determining the location and actual acquisition of the plot. Only 8.9% of the pots were in proximity to a sewage network, while 81.5% were not. This indicates that Kampala has a limited part of the city served by sewage utility.

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Informal Planning for Accessibility in Bukasa 1232

1466 1467

Access to Houses 1425, 1422, 1412 and 1415 1434 1475 1476

1468

1435

1433 1469 1470

1432

1429

1437

1471

1436

1474 1430 1428

1438

1473 1472

1431 1425

1424 1422

1439

1401

1440 1441

1418 1442

1448 1443

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2564 1447 1449

1402

1420

1501

1406 1444

1446

1400

1404

1403 1405

1399

1408 1415

1413

1416

1445

1407

1409 2562

1398

1411

1412

1410

Legend 1380

2575

1368

1396

1397

1394 1395

1392

1393

1450

1479

1498

1367

1364

1365

Roads

1379

1366

1369 2573

Houses Sharing Common Access 1378

1372 1371

2560

1373

N 1370

Houses in Buaksa

W

1376

E

1375

S 30

0

30

60

90

120

150 Meters

Map Prepared by Researcher

Source: generated form field observations using GIS data. Figure 15. showing informal planning for accessibility in Bukasa parish.

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With alternative means of managing human wastes, which seems to be very common across the submarkets and the non-availability of the utility in many parts of Kampala, sewage utility is not so significant in determining the decision to exchange and locate a house, but it has some significance in the high-income submarket. From the discussion above, it can be noted that utilities are of some significance in influencing the decision to exchange or not to exchange a plot in the urban land market of Kampala. But the most significant utility of all is accessibility of the plot, mainly because of its direct relation to the land market operations. Speculation, need to maximize the market value, and the fluid behavior of the actors in the urban land market explain the significance of access as a utility.

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Planning Implications of Current Housing Development Processes As identified in the preceding section, informality of the housing process is manifested through individually established procedures for development of housing. Just like the permission to start building, other established standards for development are also not seriously adhered to. Informal housing has brought forth various mechanisms and standards in the housing processes. Because of the general lack of awareness concerning existence of the zoning plans, developers in the informal housing sector have instituted informal planning mechanisms which largely imitate the formal development process. The actors of the informal housing continuously interact with some actors of the formal housing, mainly the planning authority, and such interaction occurs informally in most cases. Because land is a critical issue and generator of finances, even to the city council, any opportunities for an actor to take advantage of the financial accrual will be exploited. In respect to the zoning plans, it was established that 54.1% of the developers did not consult the zoning plan before building the houses, while 26.1% consulted the zoning plans. This statistic is an indicator that over 50% of housing in Kampala occurs informally, creating an informal city. A further analysis of the data reveals that developers from the low-income and middleincome submarkets generally do not consult the zoning plan. The fact that 50% of the city is an informal city, since non-consultation of the zoning plan implies that the formal process was not followed, it has two serious implications. The first implication is the loss of revenue by the city council in

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which the greatest proportion of the developments do not pay development and permission to develop fees. This has even far reaching implications, including inability to service neighborhoods, a fast sprawl of unplanned settlements, and a much serious problem of managing a wildly growing city. The second implication of non-consultation of zoning plans is the problem of inequality amongst groups in the submarkets. The concern here is inability of the poor and the middle-income population to bear the costs of processing building plans. Besides having financial constraints, the lengthy procedures and transaction costs are usually translated into a cost on housing finance. There are differences in the consultation of zoning plans for housing in the different submarkets. Whereas the high-income submarkets relatively consult zoning plans, in the middle and low-income submarkets, few developers attempt to consult the zoning plans. The non-consultation of the zoning plans is indicative of the inability of the developers, especially low-income developers, but also is also an elusion of the formal process by the middle and higher-income submarket developers. The structural problems of the formal process are the partial explanation to the existence of the high-income developers bypassing the planning, building regulations, and codes. This has serious planning implications in that developments are likely to increasingly occur in an informal way, just like the current phenomenon. The consequences of the informal city are far reaching and challenging, ranging from infrastructure provision, sanitation-health, adequate and decent housing, urban environmental services areas, and probably irreversible (in terms of socioeconomic costs) development patterns. Data revealed that 55.4% of the houses do have enclosures, while 40.1% don‟t have enclosures. This distribution would imply that houses in the low-income submarket also have enclosures, a phenomenon which has some validity given the generalization surrounding the classification of urban land submarkets in Kampala. A further analysis of the data through crosstabulations clarifies the picture of enclosures in that middleincome submarkets tend to have enclosures more than any other submarket. The data shows that 74.7% of the middle-income submarket houses have enclosures, compared to 19.1% of the low-income houses, although the highincome submarkets have a representation of 88.9%. Different types of enclosures are used by developers including walls, hedges, fences, and a combination of a fence and hedge. From the data analysis, the wall enclosure and hedges are the most commonly used enclosures, with a distribution of 26.1% and 19.7% respectively. As a measure of defining land rights extent in the initial stages, enclosures have remained a significant feature extended into general security and privacy. Though security and privacy may be important to

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the developer, the type of the enclosure does have implications to the health of the household and the community through accessibility. Enclosures are an indicator, though not necessarily of the underlying processes and conditions of the informal land market. Due to these conditions and processes that include speculation, double sales, and sensitivity of land (in terms of social attachment and economic value) developers tend to construct houses with enclosures to fully delineate the spatial extent of their land rights. The planning implication of this problem is the issue of accessibility of places and individual houses. It is currently a serious problem in Kampala because the roads are as narrow as 10 feet (barely 3 meters). Where the road maintenance is lacking or being done by the developers, passage through the roads becomes a nightmare. As noted earlier, building regulations are concerned with several aspects of housing development, including house size, structural stability, height, plot coverage, and public health issues. These aspects of housing development are rarely or fully considered in the informal housing process. Regulation aversion across the submarkets is also a common phenomenon, while alternative mechanisms have been instituted informally to fill the gap created by the formal processes.

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Housing and Land Consumption Housing as a process occurs with availability of land, as mentioned earlier. The process of housing therefore is an indicator of land consumption, since demand for housing is a derivative of demand for housing. A GIS based analysis of land consumption was done to estimate land supply and rates of change for residential housing development. Classification of the satellite image for QuickBird (KCC, 2002) and use of the 1991 land use map for Kampala (Van Nostrand, 1994) formed the data sources for the analysis. Analysis is based on the land use classes, as defined by 1991 data set. As table 9 indicates, by 1991, Agricultural land use formed the major use in the settlements occupying 58.8%, as compared to residential at 26.6% of the total land for the land use classes analyzed. The proportion of land under agricultural is explained by the area coverage of agricultural land in Kikaya and Bukasa settlements in 1991, where it was still predominant. By 2004, however, the proportion coverage has changed with residential occupying 56.3%, compared to agriculture occupying 16.5% of the total land area under assessment. The data reveals an increased exchange and conversion of land for mainly residential uses, and that supply is mostly from convertible land use of agriculture.

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Table 9. Area Coverage (Hectares) of Land Use by Settlements in 1991 Sum of HECTARES

WARD_NAME

LANDUSE

BUKASA

BUKESA

KIKAYA

NATEETE

Grand Total

Agricultural

289.0

0.9

415.2

48.3

753.3

Institutional

15.3

1.5

19.5

Mixed_Use Residential

172.0

Water

83.6

59.6

14.1

559.8

34.3

94.7

340.4 83.6

Wetlands Grand Total

36.2 34.3

62.0

448.8

32.3

32.3

209.5

1280.2

Table 10. Area Coverage (Hectares) of Land Use by Settlement in 2002 Sum of HECTARES

WARD_NAME

MAJOR_USE

BUKASA

BUKESA

KIKAYA

NATEETE

Grand Total

Agricultural

33.548

0.736

144.199

24.592

203.075

9.676

10.889

27.624

283.518

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Commercial

1.213

Environmental

202.618

4.274

49.002

Extractive

13.288

0.316

2.234 1.524

1.524

1.463

29.984

6.086

37.533

5.07

0.517

5.587

Industrial Institutional Mixed Use Other

8.509

Recreational Residential

15.838

8.509 1.539

299.937

Transportation

48.465

218.28

4.03

Utilities

1.693

Grand Total

559.593

0.495

2.034

127.664

694.346

11.356

15.386 1.693

62.036

448.769

209.534

1279.932

Tables 10 and 11 further reveal the developmental stages of the settlements in 1991 as compared to the development stages in 2002. The data is also indicative of the dynamics and nature of the land markets in the different study areas. The urban land consumption appears to have accelerated in Kikaya, as compared to the other settlements. Land consumed for residential purposes changed almost 20 times more in 2004, as compared to

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1991. Although there is considerable growth in all of the settlements, the land use changes in Kikaya provide evidence for the informal land market.

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Table 11. Showing Land Area Coverage and Proportions of Change

Land Use

Area (ha) 1991

Agricultural Environmental Institutional Mixed Use Other Residential Grand Total

753.3 32.3 36.2 34.3 83.6 340.4 1280.2

%

Area (ha) 2002

%

58.8 2.5 2.8 2.7 6.5 26.6 100

203.1 283.5 37.5 5.6 8.5 694.3 1232.6

16.5 23.0 3.0 0.5 0.7 56.3 100

Percentage Change -73.0 777.4 3.6 -83.7 -89.8 104.0

Estimated Annual Rate of Change -6.6 70.7 0.3 -7.6 -8.2 9.5

In terms of change and rate of change in land for residential purposes, a comparison of the 1991 land area coverage for residential purposes with the 2002 land coverage reveals a big change in land for residential uses. According to table 11, land for residential purposes changed by 104% in 2002 from 1991, and grew at an estimated annual rate of 9.5%. This rate of change in residential land use also signifies the dynamics of the informal land markets as underlying driving force for housing development and land use change. A further analysis of the data indicates a positive, but moderate correlation of 0.34 between the amount of change and land values (as independent variable). This further implies the role of land values in influencing land use change. From the analysis above, an interaction of land value dynamics and land use change is evident. Housing demand is strong in driving demand for land and subsequent conversion of land on the market for residential use. Settlements that display supply of buildable/convertible land, and at the same time a stage in development that would give potential developers the utility required, have tended to be dominated by informal land market activity. The settlement of Kikaya, which at the time of research was at the infancy stage in development, tends to have attracted land exchange activity, and therefore experienced rapid change. The importance of externality factors, including tenure and location, cannot be disjointed from this phenomenon. A comparative analysis of Bukasa settlement (which was done by externality factors) is similar to Kikaya, which reveals differentiated land values.

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Land Use of Study parishes 1991

KIKAYA

BUKESA

NATEETE BUKASA

Land Use of Study parishes 2002

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KIKAYA

BUKESA

NATEETE BUKASA

Legend Major Roads

Mixed Use Other

Land Use

N

Recreational

Agricultural

Residential

Commercial

Transportation

Environmental

W

Utilities

Extractive Institutional

1

0

1

2

E

Districtbound.shp

Industrial

S 3

4

5

6

7

8

9

10

11

12

13

14

15 Kilometers

Map Prepared by Researcher

Source: Land use maps of 1991 and 2002. Figure 16. Land uses in 1991 and 2002 for the study areas.

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Land values in Bukasa are on average higher than land values in Kikaya. Similarly, the two settlements are predominated by the Mailo tenure system, which would imply attraction of the informal land market activity; but due to the land values, the two settlements display a further differentiated land supply mechanism and land use change process. However, in general, the analysis of land consumption is only revealing the dynamics of informal land markets in terms of changes in land values, differentiated land values (even when the land is similar), a diversity of actors, and various roles in land exchange, as well as a spatial segregation of settlements due to land values.

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Chapter Nine

LAND MARKETS AND SPATIAL PLANNING IN KAMPALA

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ABSTRACT This chapter discusses the relationship between land markets and planning from two perspectives. The first perspective is one in which it is presumed that the land market would be significantly influenced by planning, and the second, which is the core of the chapter, is when the land market operations greatly influence planning. The chapter also dwells on the current processes of development as they relate to planning and plan implementation. Aspects of participation by the community in plan formulation are examined for an in-depth analysis of connections between land market actions and planning response.

URBAN LAND USE ZONING Through history, spatial plans that spell out land use zones in Kampala have been prepared, as discussed earlier. All of these plans zoned the planned areas according to use and specified standards for development. The plans exhibit elaborate processes of plan formulation that involve in-depth studies, elaborate proposals, and clear development standards. Kampala‟s planning has followed the two seemingly independent but interrelated urban systems of the Kibuga and the planned city. These two systems have been described as a duality that is dominated by informal developments evolving out of the Kibuga alongside the formal city (Kendall, 1955; Norstrand, Development, et

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al., 1994). In this chapter, the focus is on the most recent land use plan of 1994, which has been guiding development in Kampala for the last 14 years. In the planning report, it was indicated that once the plan is approved, it turns into law, which the developers must follow for development. Thus, following the land use plan in development can be an indicator of guided development. However, the research established a discrepancy in terms of guidance of development by the 1994 spatial plan. According to the results, 16.4% of the developers had their houses in zones other than the residential zones. Although this appears low, it shows a considerable divergence from the guidance in development. A further analysis of the data revealed that 25.5% of the houses in low-income submarkets are located in zones other than the residential zone, as compared to 12.5% in middle income sub-markets and high-income land markets. This is explained by the intensification of the informal land markets in Kampala. The summarized statistics above only indicates the location of houses in residential zones, but in the underlying processes of the land exchange, housing starts and informal planning are evident in all of the settlements. The data reveals decisions in housing that are largely exclusive to developers and do not take the existing plans in to consideration.

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Use of Land Values in Planning It is a known fact that planning influences land values in cities of the developed world, or in cities where strict urbanization policy, planning, and development control is relatively more effective. But in cities of sub-Saharan Africa, such as Kampala, where there is an absence or lack of urbanization policy, laxity in development control, and inadequate planning, land values tend to influence development. Planners often formulate plans following some agreed process of analysis in which various issues that would affect the envisaged development plan are identified. Formulating structure plans and detailed scheme factors that would affect the development of an urban area are identified. These include physical factors (topography, drainage, natural constraints, environmental aspects, and soils), social factors (demographic changes, social groups, and established communities), economic (sources of employment, industrial development, and land values), and other associated factors, such as availability of infrastructure. It‟s often common in planning to only use land values as indicative of available land for development and possibly the suitable areas for different social groups.

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According to the Assistant Chief Town Planner of Kampala, the preparation of the 1994 Structure Plan employed land values in assessment of the different social groups as a basis for allocation of land to different uses. It was also generally used as a descriptive of the land value status outlook for Kampala. What this analysis, however, does not incorporate is the underlying processes and action of the land market, including the motivations of the actors involved. Significant of the underlying processes is the issue of land exchange and subdivision by the actors in the land market. Land exchange in Kampala is synonymous with subdivisions, and the biggest proportion of exchanges and subdivisions occur outside the formal procedure. The flexibility of the informal land markets in subdivisions has led to subdividing of land into plots that are far below the standards laid out in the development plan. As noted by a key informant in Bukasa, `almost every available´ piece of land has a market value, irrespective of the size. It is further noted that the issue of marketable land rights explains the informally adapted access road standard of 10 feet all over Kampala. There are exceptionally few land owners of Mailo who subdivide using the formal procedure. Even when some follow the formal procedure of subdivision, the surveyed access is usually 10 feet, which is intended to maximize the market value for the plots subdivided. The analysis of land values in plan formulation does not incorporate the actions and motivations of the individuals involved. From the key informants, it is noted that whether land is exchanged under mailo or kibanja, there is a sense of perpetual ownership of the `poloti´ (literally meaning plot, but having hidden and underlying meaning of `own´ perpetually), especially with the definition of land rights for the bonafide occupants by the 1998 Land Act. With this sense of ownership, whether actual or just felt, developers tend to determine the type, kind, and nature of development, largely depending on the return for value (investment). Results show that 24.6% of the developers had their own designed building plan and in the low-income submarket; the proportion is even as high as 39.1%. The potential return for value is influenced by the neighborhood status, developments immediately around the piece of land, and individual interest. With all of these motivations, developers further adapt an informal procedure for development, which could only be formalized at a later stage, or even by making use of the loop holes in the development control mechanism. It is more common to find planners only incorporating the ideas of developers in to the plan than it isvvice versa. This is very common with access roads, which are established and opened by developers, only to be incorporated on the topographic maps of the planning office in Kampala City Council.

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Statistical analysis for relationships is useful in providing the evidence of the relationships, and as shown in table 12, land purchase, as the mode of acquisition, was correlated with variables of adherence to plans including building permits, source of building plans, consultation of existing plans, and availability of enclosures. The results in table 12 show significant variables that were analyzed for causality.

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Table 12. Correlation Matrix from a Factor analysis using the principle component analysis

Was the plan designe d during construc tion?

If own plan, any factors that determi ned the final design?

Was the plan designed during construction?

1.000

If own plan, any factors that determined the final design?

Where did you get the plan from?

Do you have a certific ate of occupa tion from KCC

Did you consult the zoning plan before building?

Does your development have an enclosure?

.276 P .003

.150 P .071

.109 P.145

.068 P .255

-.047 P .323

.276 P .003

1.000

-.192 P .030

.154 P .067

.086 P .200

-.198 P .026

Where did you get the plan from?

.150 P .071

-.192 P .030

1.000

.166 P .052

.261 P .005

.358 P .000

do you have a certificate of occupation from KCC

.109 P .145

.154 P .067

.166 P .052

1.000

.397 P .000

.034 P .369

.068 P .255

.086 .200

.261 .005

.397 P. 000

1.000

.146 P .076

-.047 P .323

-.198 P .026

.358 P .000

.034 .369

.146 P .076

1.000

Did you consult the zoning plan before building? Does your development have an enclosure?

a Only cases for which how did you acquire the plot? = purchased are used in the analysis phase. P Indicates the statistical significance of the correlation.

There is a significant impact of land market on the land use zoning in Kampala. Planning has become adhoc and left in the hands of the developers, to a large extent. The planning office is overwhelmed by the speed of

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developments and placement of activities almost anywhere. With few staff to monitor developments and the laxity in enforcement section coupled with lack of coordination and deliberate flouting of the guidance system, developments in Kampala are ahead of planning. The `invasion´ of wetlands, construction in road reserves, and placement of commercial developments in residential areas appears to be explained by adhoc planning and the role of individual developers. Non- adherence to the existing plans is a serious issue for planning policy change since the relationship between informal land supply mechanisms, exchange of use rights, and ineffective land use controls and development in Kampala are evident, as results of the research show. As shown from the factor analysis table, correlations exist between purchase as a mode of land acquisition and informal mechanisms of housing development. There are high significances, for example, source of the building plan strongly correlates with having a wall enclosure at a significance level of 0.0001; but these correlations are only indicative of associations and could not suffice for causality. The resultant analysis of the component extraction reveals even stronger correlations. A further statistical analysis indicates a strong correlation, R2 = 0.706, between mode of acquisition with a source of building plans, availability of certificate of occupation, consultations with zoning plans, and having an enclosure. The interpretation of the statistical results is that there is evidence of non-adherence to existing plans to be explained by the informal land supply and exchange mechanisms. The fact that developers get information through informal networks and transact with some KCC officials for building plans reveals an important explanation of the continued failure for plan implementation. Thus, it can be statistically concluded that informal land market operations disable planning.

Participation in Plan Formulation As an indicator for following the guidance of plans, awareness of the existence of the plan was assessed to establish how the developers perceive the planning process. It was established that 75.9% of the respondents did not hear about the 1994 Structure Plan and its formulation. Lack of awareness about the structure plan cuts across all the sub-markets, and offers a further explanation of non-adherence to the physical plans. Additionally, a lack of awareness about the existence of the 1994 Structure Plan implies that few people were involved in its formulation. The data further reveals that 40.5% of the respondents were not involved in plan formulation. Although this may be

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explained by a selection of representatives, the low participation, at whatever level, may partly explain the non-adherence to the plans during development. It is also clear that the failure of the plans is not only explained by participation; there are other institutional, administrative, and financial constraints, but lack of participation implied that at a local level, where most subdivisions and developments occur, developers often undertake such activities according to their own interests and motivations, and are not guided by the spatial plans. The percentage of non-response on awareness about the plans is explained by the sensitivity of land with several respondents sensitive almost on every question. Lack of participation is an indicator of both lack of awareness and/or deliberate non-participation by the people, since planning is taken to be a technical process.

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Land Subdivisions and Planning Land subdivisions are supposed to be undertaken according to the written provisions and schedules which were laid out procedures of the 1994 Structure Plan. Similarly, where land is Mailo, subdivision is also supposed to follow the Registrar of Titles Act. Experiences indicate that in both cases, informal activities play a role, but the most significant land subdivision process is the process allowed by KCC, as per the 1994 Structure Plan. In this process, the role of the Parish Committees (now Parish Development Committees) is outlined in the written provisions of the 1994 Structure Plan. The intentions of the written provision were to establish a `One-Stop Center´ for plan processing, as described by van Nostrand (1994). Figure 17 shows a schematic view of the flow of activities for a land subdivision. One significant issue from the work flow is the activity of surveying, which in a way, would formalize the otherwise land held under defacto ownership and kibanja. Land rights held under defacto and kibanja systems usually do not have land titles, and this automatically disengages the activity flow. Land held under the described systems forms the biggest proportion in the settlements, and therefore, subdivision has mainly occurred either with or without consent of the planners.

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Approves Subdivision Plan

Surveying Surveying Section(HQ) (HQ) Section

Analyse and approve subdivision

Forwards copy to Surveying Section, keeps copy

Promotes demarcation survey, checks survey

Information Information Unit Unit

Parishand and Parish Division Division committees committees

Prepares Subdivision Plans

KCC KCC

Urban Urban PlanningUnit Unit Planning (Division) (Division)

Workflow – Land Subdivisions & Small Plans

Updates cadastral maps & records

Issues new land deeds

Source: Pareto (2004).

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Figure 17. Process of Land Subdivisions in Kampala City Council.

The implications of the later phenomena are two fold. First, with the consent of the planner, it is likely that the developer‟s plans would only have to be incorporated on the plans with modifications (giving a developer an upper hand in planning and zoning). Second, the subdivision without the consent of the planner implies that developers determine land uses, plot sizes, standards, and layout of the plots. At a local level, this has also happened with consent and participation of the local leaders (LC‟s) who determine what the sizes of the plots would be, and the layout. This has serious consequences on the plan implementation and the nature of the neighborhood development. For Mailo land subdivision, the process is even longer and follows the laid out procedure in the Registrar of Titles Act. The subdivisions have to pass through the planning office before surveying, and eventual updating of the cadastral maps in the Lands and Survey Office. This process is found cumbersome by the developers and owners of the land, and consequently find an easier and shorter route of informally subdividing and eventually allowing the formal procedure to proceed when the land has sometimes been developed. Mailo land subdivisions and generally other land subdivision make the bulk of the planners work in Kampala (Pareto, 2004).

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Applicant Applicant

Approves subdivision

Calculates surveying costs

Information Information Unit Unit

Receives title of property

Recommends approval

KCC KCC

Analyses if application conforms with plans and planning provisions

Pays conversion taxes

Pays surveying costs

District District Surveyor Surveyor

Submits application form + approval of change by registrar of titles, pays fee

PlanningUnit Unit Planning (Division) (Division)

Workflow – Mailo Land Subdivisions

Promotes Survey

Surveying Section issues deeds, certifies subdivision plan

Government valuer calculates Taxes

Updates cadaster maps and plans

Land Registrar registers subdivision – Issues certificate of property

Other agencies/units

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Source: Pareto (2004) Figure 18. Activity work flow for mailo land subdivision

The planning activities of the Urban Planning and Land Management Department of KCC are currently focused on small scale planning, plot subdivision, and consolidation, and on supervising development (building) applications. The preparation of small development schemes and land subdivision/ consolidation schemes is initiated at Municipal Division level and processed at the KCC headquarters. The plans and/or plot subdivision schemes (layout of streets, access ways, and other urban infrastructure) are designed by developers and approved by the parish and division authorities in a bottom-up process, though quite often the parish development committees have been rendered non-operative. The proposed plan still goes through the scrutiny of the physical planning section and of a technical planning committee that includes the planners from headquarters and the divisions to recommend the 1 approval by the Council . After approval, the implementation is conducted by the Surveying Section and Works Department of KCC. The topographic and cadastral maps of Urban Planning and Land Management Department are updated by the Cartographic Office. 1 Council of KCC is the decision making body. It is comprised of 31 elected officials from different parts of the city. This body is the planning authority of the city.

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The development control section of the KCC Urban Planning and Land Management Department manages the process of issuing building licenses and controlling development through a process schematically represented in figures 19 to 21. The licensing process is partially decentralized, yet only the acceptance of the applications and initial technical assessment is done by the Divisions. In practice, all decision making is still concentrated at Headquarters and done by Council. After assessment by the technical staff of the divisions, the development plans are again re-examined by planning-development control section at Headquarters and have to go through the Works Committee, and the building licenses are only issued after the Council‟s endorsement. During the development works, the division‟s Development Control Inspector follows the construction until it is finished and the certificate of occupancy is released. Building inspections, however, often rely on the developer because the inspectors have no means of transportation. This constraint prevents coordinating site visits and monitoring their jurisdiction for irregular occupation and development; but this is only and ideal situation, quite often, building occupancy certificates are not sought for by the developers. This is largely because the developments plans are neither scrutinized by the planning authority, in other words, developments are informal. The underlying implication is that building plan processing and certificates of occupancy have a transitive relationship with the nature of land acquisition and exchange.

PlanningClerk Clerk Planning

Applicant Applicant

Building Licensing Workflow – Submission of Plans

Submits 2 copies of application form and plans, copy of proof of ownership

Receives receipt with number of application

Pays fee

Checks documents and calculates fee

Cashier Cashier

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Development Plan Processing

Registers Application. Inserts copy receipt & No on application

Returns receipt w/ number of application

Forwards forms and plans to technical unit

Issues receipt

Source: Pareto (2004). Figure 19. Showing part of the building plan processing procedure.

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Checks for issues Satisfies issues

Registration Registration Section Section TSPPD TSPPD

Collects Forms, Plans and reports

Forwards forms and plans to technical unit

TechnicalUnit Unit Technical

PlanningClerk Clerk Planning

Applicant Applicant

Building Licensing Workflow – Technical Analysis

Planning, heath and building control officers check conformity to district plan, heath and building norms and regulations

Prepares Schedule of plans recommended for approval, submits Submits to KCC for endorsement

Technical officers issue reports. Recommend for approval

Checks ownership./ right of occupation Sends confirmation

Source: Pareto 2004. Figure 20. Showing part of the building plan processing procedure.

Updates register control Returns copy of plans and autorization

Prepares dossier with copy of plans, & forms to archive

Approves Plans

PlansOffice Office Plans (HQ) (HQ)

KCC KCC

PlanningClerk Clerk Planning

Applicant Applicant

Receives copy of plans and authorisation to start works

Information Information Unit(HQ) (HQ) Unit

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Building Licensing Workflow – Issue of License

Registers Dossier Sends tech forms to Info Unit

Archives dossier

Updates building licenses database Informs Works Committee

Source: Pareto 2004 Figure 21. Showing part of the building plan processing procedure.

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More often than not, when land is acquired through informal means, subsequent developments and processes tend to be informal and can only be formalized at a later stage after development. In the conclusion of this chapter, data reveals a very strong relationship between land exchange mechanisms and informal developments in the city. Most striking is the informalization of the formal procedures as developers, planners, and building inspectors inadvertently or deliberately adapt the processes for convenience. It should also be concluded that planning and development is in the hands of developers who determine the type, nature, and standards of development.

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Chapter Ten

UNLOCKING URBAN LAND MARKETS FOR SUSTAINABLE URBAN DEVELOPMENT

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ABSTRACT This chapter presents the emerging issues from the discourses on informal land markets, housing development, and implications to planning. The chapter focuses on the critical issues that have emerged from the analysis and discourses and raises interventions that would enable sustainable urban development through land markets. The chapter also presents recommendations on the importance of informal land market integration into planning. The long mentioned need for effective and efficient urban land markets is raised here, with some practical possible interventions. This is envisaged as necessary for making urban planning in sub-Saharan Africa more responsive to the current development needs and trends.

EMERGING POLICY ISSUES Operations of the Land Markets in Kampala: From the analysis of data, it emerges that the land market operations in Kampala have `intensified´, which is reflected by the increase in land transactions due to the demand for housing. Settlements that are in the infancy stage of development have tended to attract the market activity. Notable in the intensification of the land market operations in Kampala is the issue of continuous interaction of the formal and informal land market operations. This is exemplified in the adaptation by the informal sector of several normative values cherished by the formal sector, though they

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differ in nature. However, the interaction of the two sectors is also indicated by the informal mechanisms that exist in the formal land markets. There are many actors in the land markets, and they continuously interact informally through information flow mechanisms, perception of land values, roles at various stages in transactions, and the regulations that have been devised. This is an important policy issues that needs attention in two ways. First is the need to reassess the significance of the informal land market operations from the perspective of how they have promoted social efficiency. In this way, efforts can then be focused on how to enhance the informal land market, not only for social efficiency, but also economic and environmental efficiency. Second is to reexamine the formal procedures so that the informal market operations are absorbed by a more efficient and transparent formal system. Significance of Land Sub-Markets and Land Values: It also emerges that land values transcend economic gains or monetary values. Land values include social values attached to land. The determinants of the land values are several, including culture, stage of development, speculation, and negotiation ability of buyers. Land values are also mostly perceived informally for different pieces of land, depending on anticipated future developments or infrastructure projects by the different actors in the land market. It further emerges from the research that the value of land is a function of an interaction of several factors that are dependent on the sub-market, actors, and the neighborhood stage of development. The existence of a compendium of factors creates a dynamic urban land market responsive to the social classes and needs of such social classes. The key policy issue here is the need to delayer land rights and establish innovative ways of valuing the rights. This would unlock the urban land market and possibly make it more responsive and efficient to the needs of the different social classes. Modes of Land Supply: The mode of supply of buildable land is predominated by informal subdivisions, which also exist within formal land subdivisions. The critical part of the modes of supply involves the means through which land is introduced on to the market for exchange, the roles for the different actors including agents, landlords, buyers, and the administrative machinery (including both the local and city administrators) concerned with the transfer of land rights. The major output of this mode of supply is reflected in the variations of plot sizes, as well as the ranges in costs of land exchange. The key policy issue is the need to consider these modes of land supply, not only as existential, but also as important in urban development. Integration and enhancement would follow so that it counteracts the speculative habits of the different actors and reduce on the constrained supply of land. Coupled with

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Unlocking Urban Land Markets for Sustainable Urban Development 171 delayering of land rights, this can invoke the urban land markets in a much better way to promote sustainable development. Housing Development and Spatial Planning: It is important to further note from that the formal land markets have failed to meet the needs of a sizeable proportion of land developers in Kampala. The gap so created has paved way for an informal and socially regularized land market system, which derives partly from the regulation in the formal sector. This phenomenon has led to a process of housing development that is not only characterized by unguided developments, but unusually difficult to describe in terms of sequence of activities. Housing starts, occupation, and completion does not follow the logical sequence throughout for the developers, but rather indicates diversity due to developer preference, the issue of rights definition, and capability on the part of the developer. Thus, housing development has tended to follow a largely informal process creating an imprint of haphazardly developed housing. As a consequence in Kampala, non-core activities and the requirements of the bureaucratic processes of KCC (especially development control) take up most of the planning time, which leaves no time to work on large scale planning, prepare detailed action plans, or to support research and development activities. Large scale or long range planning has been replaced by piece meal planning, which is not only uncoordinated, but dictated upon by the operations of the land market. The guidance and control system has only remained on land held under the public system, or Mailo system, which supports at least the official documentation of proof of ownership. It is the land market which drives the different regimes of planning, which are both informal and formal planning. All of these challenges relate strongly to the institutional setup, which needs reform for innovative planning. This is a key policy issue, where the spatial planning authority needs to change the procedures and follow the legally established rules while accommodating the emerging rules of the informal sector in order to avoid the constraints of formal rules.

UNLOCKING URBAN LAND MARKETS From the analysis and the emerging policy issues, it is important to note that the land market operations in Kampala present constraints to a proper development of housing in the city. Plans have been prepared, but no one knows the extent to which such plans have been implemented. Although there are several factors that explain the failure of plan implementation, the

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problems posed by the land market operations have become significant in Kampala. In light of these problems and challenges, recommendations for consideration in dealing with housing development in Kampala are summarized below. In reference to the existing plan for Kampala, which is The 1994 Structure Plan, guidance and control of land developments was conceived to progress utilizing a `One Stop Center´ for plan processing at the parish level. This would involve Parish Development Committees operating within the neighborhood to allow close monitoring of development. This meant that development proposals would have to be screened and examined by the local parish development committee for consideration before the district council sanctions such developments. Because land market operations have intensified while the plan approval process has not currently been taken on by the Parish Committees, the Local Administrative Machinery (LC‟s) has been compromised by the operations of the land market through charges on covenants. On the other hand, the operations of the land market disfavor sustainable urban development because the market is „locked‟ to work efficiently. To unlock the urban land market, one strategy is to reform and change the planning procedures with the same structure of parish committees as a means of integrating the informal land market into the planning process. This is recommended on the basis that the biggest proportion of informal land transactions is done with full knowledge of the local leaders. Second, under the decentralization policy, Parish Development Committees (PDC‟s) have been established mainly to initiate and oversee development planning at the Parish level. Building on these structures, the PDC‟s can be charged with overseeing the land subdivision and exchange transactions. This would be used for maintaining standards, checking double sales, fraud, and contributing to development control so as to have a guided development that follows the designed plans. Information concerning the arrangement would have to be provided to ensure that individuals become aware of the `One Stop Center´. In light of the foregoing, it is mandatory that limited public regulation of land administration be deployed to support the incremental formalization of the informal land markets and housing development sectors. This is because it is not possible to have a quick change, but the strategic combination of the informal and formal land

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Unlocking Urban Land Markets for Sustainable Urban Development 173 management systems is considered an unavoidable policy. The challenge is, therefore, to balance between private actors in the management and planning of urban land. This would also unlock the urban land market by making the informal sector responsive and galvanizing the flow of information to enhance efficiency of the market operations. Another recommendation is to recognize existing informal institutions. The social regularization process and its institutions, unlike the formal sector, have tried to cope with the changing social, economic, and political situation, and even adapted some of the prevailing normative values (Kombe and Kreibich, 2000). This implies adopting a progressive policy that includes identification and backing of neighborhood institutions. These institutions include the interaction between authority of local leaders and council agents of the KCC, who do most of the enforcement, development control, and general planning of the neighborhoods. Unlocking the urban land market through recognition of the institutions would enable neighborhood level mechanisms of urban development, enhancement of standards, and coordination for better urban communities. By institutionalizing the rules of the game of the informal sector, it would allow re-engineering of the planning colloquium to start from the existential needs of the urban population rather than starting from the principles and standards of the dominant planning systems that are largely from the Global North. There is need to provide a supportive legal, fiscal framework and incentives as an intervention for integrating informal land markets in planning and urban land management. The new Physical Planning Bill of 2008, which was set to replace the Town and Country Planning Act of 1964, needs to allow local people to cause prepare or prepare their own development plans and submit such plans to the planning authority. This is ideal for regularizing land development in informal areas, quite in consonance with the spirit of supporting informal land development, particularly empowering communities to take up more responsibilities in guiding housing and land development. Such an undertaking would remove the adhoc type of planning driven by perpetuality over land rights. This would unlock the urban land markets and enable sustainable urban development. It is also recommended to consider a review of the land laws to delayer the land rights which are now considered a „continuum‟

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Shuaib Lwasa (IISD, 2008) to have specific clauses so as to legitimize informal land subdivisions, especially kibanja ownership type, as an integral part of the urban land-development process. Delayering land rights and subsequent valuation of all type of rights would allow efficient exchange, since owners would know what kind of rights they posses, and the values for them. For example, a piece of land could have a freehold title with an owner, but the same piece of land would also have part or in whole a kibanja owner, and yet the developments on the same land could be of a different owner, as it is in some cases within Kampala. Delayering would mean that each of these types of rights would be recognized and valued, as well as documented. This way, the rights can then be exchanged with ease and known to all claimants. It is important to build on the on-going systematic demarcation in which land is surveyed and registered in whatever ownership type by the Ministry of Lands and Housing and Urban Development. Concurrent with the legitimization is the need to define a simplified statutory framework, which actors with in the informal land market have to comply with. Thus, the local authority would be responsible for putting the institutional structure in place for steering the informal land regularization process and defining a mechanism for sharing costs and benefits. By integrating informal land subdivision into the urban land management, it would enable the reconsideration of land use planning as a public process through which individual land is appropriated followed by the superimposition of regular plot sizes and forms in an area. There is also a need for putting in to place a mechanism to control developers who do not comply with community norms. The case of public action is therefore both economically and politically legitimate. Whilst the need for the public sector to cooperate with local level actors in the informal sector is indisputable, it is necessary to preserve the dynamism of the informal markets. This includes, for example, maintaining the entrepreneurial capacity of the informal sector by allowing the diverse actors involved in land markets to continue playing their roles (Komb and Kreibich, 2000) Another recommendation concerns information flow in the land markets. There is a need to create channels of communication of information concerning land. Making these channels clear and accessible would reduce the informalization of the formal sector, but it would also improve the efficiency of the urban land markets. This is a key issue in the unlocking of the urban land markets. In both formal

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Unlocking Urban Land Markets for Sustainable Urban Development 175 and informal land markets, it was established that information is not freely available, and because of that, the costs of current urban development are yet to be estimated, but with no doubt, are enormous. Whereas we have an idea what these societal costs are, it is not known what release of the information could do to unlock and galvanize the urban land markets. Information is a vital resource in efficient operation of the urban land markets. Associated with information is the need to establish mechanisms of continuously updating the land value information for urban land market assessment. For plans to be responsive in this context, up-to-date information on values is required. Given the nature of land market influence on land use changes, and the strong indication that the peri-urban areas will change more rapidly than the possibly gentrification of the core-urban areas, an urbanization policy is necessary to regulate urban sprawl. An urbanization policy that will address issues of conversion of land to an urbanized area (unlocking the land markets), support of secondary towns to play functional roles that would attract excessive rural fertility or labor to large towns, placing control and regulation of urbanization in a regional planning unit, industrialization policy linkages to urbanization and land use information management and its provision. These are key ingredients of a system that would enable land markets and planning to operate. Another important area for policy is capacity building. Based on the informalization of the formal sector and the continued informalization, even at high-government levels, capacity building for planning and plan implementation management needs to be addressed. Plan implementation management has tended to be left for planners with a thinking that the responsibility rests to professional planners. However, the planning profession in sub-Saharan Africa is also largely practiced on principles and processes that do not directly address the needs of the majority. This has led to persistence of the problems in urban areas of sub-Saharan Africa. There is a need for innovation in planning by building new systems that would address the existential needs of the urban populations based on the experiential knowledge built in the last decades about the nature and challenge of urban development in sub-Saharan Africa. Other officials including managers, leaders, and law enforcers need capacity to manage plans and definition of roles. This will help in the continued

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conflicts of plan implementation management. It is also important for the public sector to manage land more efficiently, as in the delivery and control of developments, capacity building is a necessity. From land information management, planning and plan implementation, including statutory development control measures, the capacity of the public sector to manage these processes is very important. It is therefore recommended that in consonance with the earlier recommendations, capacity in terms of training, facilitation, and equipping the public sector personnel should be perused. This would be for Kampala City Council, or the metropolitan area, ministry, and other agencies for harmonization of operations. In conclusion, it is important to note that detaching urban land markets from regulation is not only unavoidable, but also impractical in light of the mechanisms and institutions that have emerged in the informal land markets of Kampala. By progressively integrating the informal land market operations and mechanisms, the urban land markets would be unlocked, and this would have a profound impact on the nature of urban development. It has taken several decades to construct the cities in their current form, but deconstructing it would take much longer and would require enormous resources. By starting to innovate around urban land markets, the future of the estimated 1 billion slum dwellers would change positively. Additionally, housing development and urban planning can only make meaning if placed in a context of legal and policy frameworks. The recommendations presented in this chapter reflect that the problems of urban planning emanating from urban land markets largely hinge around the regulatory mechanisms of the urban land market. The solution also lies in harmonizing the regulatory frameworks of the formal sector with the mechanisms of the informal sector.

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Chapter Eleven

CONCLUSION ABSTRACT

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Drawing from the discussion and the emerging policy issues, as well as the recommendations, this chapter provides a conclusion and brings about some thoughts on the possible areas for further research.

Operations of the Informal Land Market: Most literature on housing in sub-Saharan Africa and Kampala points to land tenure and incomes as the explanation for the nature and character of housing in Kampala. Although the issue of land values is hinted on, it has not been analyzed to be an influential factor for the imprint of housing in Kampala. The analysis of land market operations in this research reveals a strong relationship between land markets and the development of housing, especially the nature and type of housing. Land markets in Kampala have often been taken for granted and been a synonym to land tenure, but their operations are less understood. There is quite a distinct type of land market, described as informal in nature, which has increased land exchange transactions through proliferation of land agents, brokers, and currently registered land agents. The operations of the urban land market of Kampala also reveals that there are several actors possibly known, including agents (whether legal or unregistered), confidants of buyers and sellers, sellers, buyers, and informants. It can therefore be concluded that the land market is not only active, but has intensified in all the segments within urban areas and across all types of land ownerships. Given the problems of the land registry, speculators, and conmen have capitalized on the situation and taken center stage roles in the urban land markets within Kampala. This

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explains the increased disputes, double sales, and forging of land titles. There is no uniformity in the operations of the informal land market, but mechanisms of operation tend to differ according to locality and the submarket in question. Compared to the formal, informal land markets are quick in transactions, have devised security mechanisms, and have enabled many intending developers a chance to acquire land for housing. Perhaps more striking is the back and forth interaction of the formal and the informal land markets in Kampala. There exist formality rules in the informal transactions, just like informal rules of the game occurring in the formal land market. The two types of land markets complement and supplement each other in Kampala, depending on locality and sub-market of operation. Therefore, at the broadest, the distinction between informal and formal is a matter of the entry point for actors in a transaction. Land Markets and Housing Development in Kampala: The nature of housing development and imprint of settlements in the study areas and Kampala at large is explained by several factors, but the influence of the informal land market cannot be underestimated. Since the biggest proportion of developers acquire land through the informal land market, the subsequent development processes and decisions are also largely done informally. Housing is often started immediately after completion of the exchange in the transaction, though the transaction may still be far from completion, depending on the externality factors and eventualities of the informal land markets. Thus, the informal housing settlements are partly explained by the market which influenced the nature of exchange and subsequent processes of development. Housing is a major land activity in urban systems exhibiting dynamic processes of production, exchange, and transformation. Another issue arising out of the research is that analysis of land markets by the generalized model of urban land value relation to land use does not bring out the relation of housing to land markets. The distortions of land value gradients on residential land is a strong indicator of land use-segmented markets with differing spatial character. Thus, exchange of land in the informal markets of Kampala does not only influence the process of housing, but the nature and spatial character of residential housing. Land Markets and Planning: Due to the nature of housing development as driven by the informal land market, planning has been largely impaired or disabled. This is especially true with large scale planning, or forward planning and development control, which is the direct implementation of a designed plan. Land under various ownerships, especially Mailo and defacto kibanja, may not necessarily be on the market, even when the current use is convertible. Speculation takes control and land allocation eludes the planning

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authority in general terms, and more so the developments control mechanism. Where some control by the planning authority is exercised, implementation is impaired by the interests and return to value motivations of the developer. Land use allocation has therefore been taken on largely by developers of all categories and status. This creates a need to understand the operations of the land market in plan formulation process and where possible, integration of the operations in the planning procedures explored. In general, the much acclaimed rule that planning influences land values is only true in Kampala, to a limited extent. The research reveals that land values (which determine the return to investment) largely influence development in Kampala, but this is only one factor amongst several, including social considerations for the influencing of development. Contradicting the Alonso model of land use and land values in urban areas, the research indicates a peculiar phenomenon of increasing land values along one cross-section through the city. This is particular to residential land values, though if land values for commercial uses are included; it is possible that the Alonso model prevails. Significant to this end is the possibility that land value gradients from the city center differ in character according to the different land uses. The most significant urban land use, which is residential, has revealed these differences. The implication of this finding is that urban land values are differentiated according to particular use and segment of market, besides distance. There is evidence that the general Alonso model of land value gradient does not explain the land value distortions for the different land uses. There is need for further investigation of a segregated model on the basis of land use, especially for residential land use. Just like in many developing countries, in Kampala, urban land development is increasingly operating outside the official system under the influence of unregulated land markets. A sizeable number of land seekers get land from the informal sector, which is more responsive to their demands for housing land, while the public sector is finding it increasingly difficult to manage urban growth according to its legal norms and the needs of the citizens. Building upon the subsisting socially devised mechanisms of land development, opportunities can be provided for successful public intervention. The lessons from the informal land development in typical urban settlements justify the recommendation of a policy, which can integrate the informal with the formal system. Like other market systems, the subsisting informal land markets largely operate on the exchange of value against value. The initiatives undertaken by developers to protect individual property underline the important function of

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land markets for the accumulation of wealth in a society. It is also important to note that the sustainability of land markets depends on security of the rights exchanged. Values held over land by developers and the community is prevailing in informal land markets. Optimal land development, more so housing development, indispensably entails public guidance. The external costs resulting from uncontrolled informal processed in land transactions and development, has outstripped the short-term private gains. Thus, supervision and guidance of the urban land markets by policy is an indispensable domain of the government and KCC. Such supervision and guidance has to provide a clear separation of ownership rights and land-use prescriptions. This is considered a precondition to develop the largely untapped potential of the informal land market. In general, the experiences in Kampala, as revealed by the research, indicates that there has been a shift in responsibility of planning the city. The developers have taken a center stage powered by the land market and taking charge of the city by largely carrying out planning and development. The intervention of officials of the planning authority at different levels is merely a formality, for developers ideas often prevail. The planning officials have also tended to resign to the ideas of the developers with such reasons as being owners of the land. However, planning need not continue in this manner, responsive planning should take advantage of the informal mechanisms of land exchange, regularization, and development by improving on this system of operation.

AREAS FOR FURTHER RESEARCH In conducting this research, several issues have been identified with a potential for further research to understand the urban land market dynamics. These issues include the following: Influence of land markets on social segregation: Studies on the spatial character of Kampala have tended to concentrate more on social groups by income and less on housing as a basis of existence and dynamics of social groups. It is also true that these studies look at household or individual income as the determinant of the type of housing and location of such housing, but a study that examines how land markets marginalize certain social groups would be beneficial in

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furthering our understanding of the spatially segregated social groups in Kampala. Spatial character of land values in Kampala: The character of the spatiality of land values in Kampala needs further investigation. The disconformities of land values and distance from the City Center in Kampala, as advanced by the Alonso model, is perhaps an indication of a uniquely spatially influenced phenomenon with a high potential for spatial econometric techniques. Institutionalizing local-based land administration mechanisms: The study findings indicate strong locally based mechanisms for regularizing land and the land market. It would be appropriate to have further studies that examine how such mechanisms can be institutionalized for better and more responsive planning. Participatory planning that takes into account owners land market conditions and social groups: Related to the institutionalizing of informal mechanisms, participatory planning is a much talked about approach in planning today which has not adequately taken root. It would therefore be appropriate to study its applicability, specifically targeting land owners and land market actors in alienation of land. Implications of current land administration to land disputes: The intricacies of the formal process of land administration and the networks of the agents and land officers is an issue which tends to generate disputes due to multiple sales and fraud, let alone causing legally conflicting claims over land. Thus for policy reform in land administration, studies into land administration and disputes need to be done to inform such policy reforms.

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ACKNOWLEDGMENTS Many people have contributed towards the research and success of this book. My sincere gratitude goes to Associate Professor Hannington Sengendo, Professor J. B. Nyakaana and Dr. Jackson Kombe for the kind assistance. To my colleagues in the department of Geography, Makerere University for assistance through interactive exchange of knowledge and ideas, particularly Dr. Charles Amooti Koojo, Mr. Derek Muhwezi, Mr. Bamutaze, Mr. Paul Mukwaya and Mr. Joseph Ssemambo. Many thanks to Mr. Julius Wasubire, Mr. Fred Sseguya Mubeezi and Mr. Rashid Ssekitto for the support during the research. The residents of the study areas of Kikaya, Natete, Bukasa and Bukesa for receiving us warmly while collecting of data. I owe many thanks to Kampala City Council‟s Urban Planning and Land Management Department for accessing archives and data. My heartfelt thanks to Hajat Mariam Kanabeesa (RIP), my wife Janat Nnakangu, my son Farouq, daughters Fahima and Fatumah to whom I dedicate this book for enduring the busy schedule for the support, encouragement and prayers. I am grateful Shuaib Lwasa 10th December 2008

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Mugambwa, T. J. (2002). Source Book of Uganda's Land Law. Kampala, Fountain Publishers. Mundeme, S. (2002). Formalizing Informal Land markets in Tanzania: The Role of the Private and the Public Sector. Urban land Management in Africa. K. Volker and H. A. O. Washington. Dortmund, Spring Research Series. 40: 380. Mwebaza, R. and R. Gaynor (2001). Land Sector Analysis: Land Market, Land Consolidation and Land Readjustment Study. Kampala, Ministry of Lands, Water and Environment, Uganda: 36. Nawangwe, B., A. Nuwagaba, et al. (2002). Land Tenure and Administrative Issues in Kampala City and Their Effects on Urban Development. Kampala: 182. Nkurunziza, E. (2008). "Understanding informal urban land access processes from a legal pluralist perspective: The case of Kampala, Uganda." Habitat International 32: 109–120. Norstrand, J. v., M. O. L. H. a. U. Development, et al. (1994). Kampala Urban Study Final Report; Structure Plan: Part II. Kampala, KCC: 245. Nyakaana, J. B. (1996). Kenya´s Development Centre Policy: the case of Eldoret. Amsterdam, Netherlands geographical Studies. Obudho, R. A. and J. Peter (2002). The Role of Urbanization and Suburbanization Processes in Urban Land management Practice in East Africa. Urban land Management in Africa. O. H. Washington, Volker Kreibich. Dortmund, Spring Center. 40: 379. Oestereich, J. (1997). Property Rights and land management; Some remarks on basic concepts, proceedings of the international workshop on formal urban land management and informal responses. Dortmund Germany. Omar, I. and A. M. Yusof (2002). "Indigenous land rights and dynamics of the land market in Kuala Lumpur, Malaysia." Habitat International 26: 507 / 521. Pareto, E. V. (2004). TSPPD - Procedures, Systems and Organization Project: Consultancy for strategic framework for Reform implementation support. Kampala, City Council of Kampala: 40. Payne, G. (1997). Urban Land Tenure and Property Rights in Developing Countries: A Review. London, Intermediate Technology Publications. Prain, G., N. Karanja, et al., Eds. (2009). African Urban Harvest: Agriculture in and around African cities, 2002-2006. Lima, Urban Harvest. Rakodi, C. (1990). "Self-help housing: The debate and examples: Upgrading in Lusaka, Zambia and Hyderabad India." Habitat International 13(4): 5 18.

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Rakodi, C., Ed. (1997). The Urban Challenge in Africa; growth and management of its large cities. Tokyo and New York, United Nations University Press. Rakodi, C. (2000). Interactions between Formal and Informal Urban Land management: Theoretical Issues and Practical Options. Urban land Management in Africa, Nairobi, Spring Series. Rakodi, C. (2001). "Forget planning, put politics first? Priorities for urban management in developing countries." JAG 3(3): 15. Rakodi, C. and T. Lloyd-Jones, Eds. (2002). Urban Livelihoods. A PeopleCentered Approach to Reducing Poverty. London Earth scan. Rugadya, M. A. (2006). SITUATION ANALYSIS REPORT AND ACTION PLAN FOR KAMPALA CITY COUNCIL: Kagugube 1 and Mbuya 1Parishes. CITIES WITHOUT SLUMS SUB-REGIONAL PROGRAMME FOR EASTERN AND SOUTHERN AFRICA. Kampala, Kampala City Council: 71. Salazar, A. and D. Bhadra (1993). Urbanization, Agricultural development and land allocation. Washington USA, World Bank. Sengendo, H. (1993). Community participation and housing cooperatives: A basic foundation for housing development projects. unpublished paper. Kampala. Sirmans, C., G. Turnbull, et al. (1997). "Residential Development, Risk and land prices." Journal of regional science vol. 37(No. 4): Pages 613 - 628. Sirmans, C. F. and J. Thomas (1994). The economics of land transfer and title Insurance. Connecticut, USA, Center for real estate and urban economic studies. Sivam, A. (2002). "Constraints affecting the efficiency of the urban residential land market in developing countries: a case study of India." Habitat International 26: 523 –537. Stephen, R. (1997). where do rents go? Private ownership in an open urban model. Connecticut USA. Troutt, S. E. (1994). Rural African Land Markets and Access to Agricultural Land: The Central Region of Uganda. Agricultural Economics, University of Wisconsin-Madison: 155. Turnbull, G., C. Sirmans, et al. (1997). "Residential Development, Risk and land prices." Journal of regional science 37(4): 613 - 628. UBOS, U. B. o. S. (2002). 2002 Uganda Population and Housing Census. Entebbe, National Census Office: 12. UN-Habitat (2002). "Urbanization by Implosion." Habitat International: 12.

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UN-Habitat (2008). The State of African Cities. A framework for addressing urban challenges in Africa. Nairobi, United Nations Human Settlements Programme: 206. Wadley, D. and P. Smith (1998). "If planning is about anything, what is it about?" International Journal of Social Economics Vol 25(6/7/8): 10051029. Wilson, A. G., Ed. (1971). Urban and Regional Planning. London, Pion Limited. Wuballem, F. (1997). Formal urban land management and informal responses; A cross country literature review. International Workshop on Between the State control and the market - Informal responses to formal land management, Dortmund. Yahya, S. (1990). Residential Urban land Markets in Kenya. Manchester, Manchester University.

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ABOUT THE AUTHOR Shuaib Lwasa is a researcher and an academic with Makerere University in the Department of Geography. He has taught at University and undertaken research on housing, urban poverty and environment, urban planning and information systems for spatial planning in Uganda and East Africa for a period spanning over 10 years.

Urban Land Markets, Housing Development and Spatial Planning in Sub-Saharan Africa: A Case of Uganda : A Case of

INDEX

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A accessibility, 43, 61, 72, 140, 147, 148, 149, 150, 152 accommodation, 37 accuracy, 78 activation, 125 adaptation, 37, 169 adjustment, 37 administrators, 12, 66, 103, 170 advertisements, 97 aesthetics, 137 affirming, 105 Africa, i, ii, v, ix, 1, 33, 51, 175, 186, 187, 188, 189, 190 agent, 107, 108, 111, 113, 114, 115, 135 agriculture, 23, 44, 114, 116, 152 alienation, 33, 63, 83, 100, 101, 117, 121, 145, 181 alterations, 70, 100 alternative, 18, 37, 42, 62, 85, 146, 150, 152 ambiguity, 39 analytical framework, 6, 73 annual rate, 124, 154 ANOVA, 79, 134 appendix, 17, 19, 21, 76 applications, 84, 85, 164, 165 argument, 141 Asian countries, 65

assessment, 84, 100, 152, 159, 165, 175, 186 assets, 35, 48, 60, 61 assignment, 64 assumptions, 59 attachment, 41, 125, 139, 140, 152 attitudes, 46 authority, xi, 18, 50, 87, 88, 92, 94, 98, 115, 150, 164, 165, 171, 173, 174, 179, 180 availability, 13, 14, 46, 50, 64, 84, 87, 94, 97, 137, 146, 148, 150, 152, 158, 160, 161 average costs, 124, 134, 138 aversion, 152 awareness, 37, 54, 119, 150, 161 B background, 2, 9, 37 bargaining, 61 barriers, 97, 98, 109, 110 beauty, 19 behavior, 40, 50, 61, 67, 68, 69, 70, 109, 150 beliefs, 18 bias, 20 binding, 115 boys, 80 Brazil, 38 breakdown, x, xi

Urban Land Markets, Housing Development and Spatial Planning in Sub-Saharan Africa: A Case of Uganda : A Case of

192

Index

bribes, 62 browsing, 78 building code, 86 bureaucracy, 32, 36 buyer, 30, 32, 34, 61, 66, 94, 98, 102, 107, 108, 109, 110, 111, 112, 113, 114, 115, 116, 117, 121, 140, 145

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C CAP, 81, 83, 94, 100, 185 capacity building, 175 capital gains, 141 case study, 73, 75, 185, 189 categorization, 138 category a, 93 category d, 104 causality, 10, 110, 160, 161 Census, 189 certificate, 51, 85, 95, 112, 160, 161, 165 channels, 32, 39, 40, 62, 65, 95, 97, 102, 109, 119, 174 children, 125 Chile, 39 circulation, 97 City, ix, 3, 95, 96, 136, 146, 159, 163, 176, 181, 183, 187, 188, 189 clarity, 56, 57, 93 classes, 14, 75, 124, 152, 170 classical economics, 29, 67 classification, 123, 151 clients, 50, 100, 101 codes, 62, 151 colonization, 11 commodity, 7, 30, 34, 35, 38, 56, 60, 67, 72, 140 common law, 62 communication, 59, 98, 174 community, 34, 48, 57, 58, 120, 144, 152, 157, 174, 180 comparative advantage, 61 compensation, 54, 139 competition, 97, 101 competitive markets, 59 complement, 75, 178

complexity, 40, 140 components, 23, 140, 144 concentration, 11 conception, 44, 59 conceptual model, 43, 70, 71, 72 conceptualization, 56, 70, 78 concrete, 51 confidence, 76 conformity, 24 confrontation, 146, 147 confusion, 55, 86, 93 congestion, 89 Congress, 185 congruence, 91, 118, 139 consent, 162, 163 conservation, 23 consolidation, 38, 45, 49, 75, 137, 164, 187 Constitution, 55, 81, 82, 86, 92, 93, 185 construction, 44, 72, 78, 112, 115, 136, 143, 144, 145, 146, 148, 160, 161, 165 consultants, 144 consumers, 37, 44, 59, 60 consumption, 65, 140, 143, 152, 153, 156 content analysis, 79, 91 contingency, 110 control, 2, 3, 11, 12, 17, 23, 32, 35, 57, 61, 62, 67, 68, 69, 70, 103, 104, 113, 119, 139, 158, 159, 165, 171, 172, 173, 174, 175, 176, 178, 187, 190 convergence, 118 conversion, 5, 6, 16, 116, 143, 152, 154, 175 correlation, 38, 79, 110, 130, 132, 134, 147, 154, 160, 161 correlation coefficient, 79 correlations, 79, 161 costs, 31, 33, 36, 40, 49, 53, 57, 64, 67, 85, 101, 103, 112, 121, 127, 134, 138, 139, 148, 151, 170, 174, 175 cotton, 16 creative potential, 2, 89 critical analysis, 130 crops, 52, 53 cultivation, 50, 58 culture, 126, 139, 170

Urban Land Markets, Housing Development and Spatial Planning in Sub-Saharan Africa: A Case of Uganda : A Case of

Index cycles, 68

E D

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193

data analysis, 138, 151 data collection, 73, 77 data set, 152 dating, 66, 100 death, 50 decentralization, 86, 172 decision making, 76, 164, 165 decisions, 5, 7, 18, 19, 44, 46, 69, 96, 109, 144, 148, 158, 178 definition, 11, 28, 46, 73, 95, 107, 117, 159, 171, 175 delivery, 32, 33, 41, 65, 89, 102, 176 demographic change, 73, 158 density, 17, 40 dependent variable, 128 depreciation, 29 derivatives, 63 developed countries, 187 developing countries, 8, 31, 32, 33, 36, 38, 56, 63, 70, 72, 102, 179, 187, 189 differentiation, 102, 128 diffusion, 115 dignity, 105 discourse, 9, 60, 91, 102, 104, 116, 118, 143, 148 disequilibrium, 29 displacement, 45 distortions, 178, 179 distribution, 50, 51, 54, 109, 151 divergence, 118, 158 diversity, 37, 38, 73, 118, 156, 171 division, 24, 164, 165 dominance, 8, 75 drainage, 16, 86, 158 dualism, 48 duality, 12, 20, 60, 157 duties, 52, 58, 103 dynamic systems, 58, 68

ears, 144 economic activity, 57, 60 economic development, ix, xi, 1, 89 economic theory, 59, 60 economics, 60, 62, 67, 96, 185, 189 economies of scale, 66, 124 Egypt, 185 elaboration, 21 elderly, 136 electricity, 137, 147, 148 emerging issues, 169 employment, 158 encouragement, 16, 183 end-users, 141 England, 16 environment, 8, 46, 55, 67, 68, 70, 144, 186, 190 environmental conditions, 137 environmental issues, 22 environmental protection, 86 equilibrium, 44, 61, 97, 187 evolution, 33, 47, 49, 105, 136 exclusion, 20, 95, 107 exercise, 4, 50, 55, 104, 108 exploitation, 36 expulsion, 55 external costs, 180 externalities, 7, 43, 59 extraction, 161 F fabric, 67 factor analysis, 161 failure, x, xi, 8, 19, 24, 52, 65, 161, 162, 171 family, 50, 125 farms, 61 fear, 64, 113, 147 feedback, 89 feet, 47, 152, 159 fencing, 112, 115, 121 fertility, 175

Urban Land Markets, Housing Development and Spatial Planning in Sub-Saharan Africa: A Case of Uganda : A Case of

194

Index

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finance, 44, 145, 151 financial difficulty, 69 financial intermediaries, 44 financing, 5, 36 firms, 59, 68, 93, 97 flexibility, 3, 28, 45, 112, 159 fluctuations, 124 focusing, 1, 5, 7, 9, 11, 72, 92 forests, 20, 23 formal sector, 3, 7, 30, 33, 63, 90, 96, 134, 169, 171, 173, 174, 175, 176 fraud, 172, 181 freedom, 96, 104 fruits, 58 fuel, 120 funds, 84 fusion, 6

guidance, 4, 6, 46, 67, 76, 90, 158, 161, 171, 172, 180 H hands, 64, 160, 167 harmonization, 86, 176 health, 16, 17, 23, 151 height, 20, 152 Hong Kong, 186 hopes, 69 House, 145 households, 34, 35, 36, 37, 39, 41, 50, 52, 58, 59, 65, 68, 134, 145, 148 human behavior, 108 human interactions, 62 hypothesis, 75, 134

G

I

garbage, 44 generalization, 151 generation, 36, 69, 79 Germany, 187, 188 gift, 52, 58 goals, 4, 8, 46, 68, 69 goods and services, 67 governance, 90, 187 government, 3, 12, 13, 16, 18, 19, 21, 23, 30, 32, 33, 39, 42, 44, 51, 53, 54, 55, 59, 62, 66, 69, 79, 82, 88, 98, 102, 124, 139, 175, 180 government policy, 69, 124 GPS, 78, 79 grass, 32 grazing, 50, 58 green belt, 17 grids, 148 group membership, 49 groups, 28, 32, 34, 35, 38, 40, 56, 58, 62, 65, 67, 68, 69, 70, 74, 105, 124, 134, 138, 144, 145, 151, 158, 180 growth, ix, 1, 11, 13, 14, 15, 17, 21, 25, 44, 49, 64, 73, 124, 135, 154, 179, 189

ideal, 3, 44, 64, 93, 97, 135, 165, 173 identification, 68, 120, 143, 147, 173 identity, 104, 126, 136, 139 image, 78, 152 IMF, 124, 186 imitation, 118, 120 immigrants, 13, 45 immunity, 58 implementation, xi, 2, 4, 5, 6, 8, 21, 24, 46, 55, 86, 89, 95, 157, 161, 163, 164, 171, 175, 178, 188 incentives, 48, 62, 173 income tax, 85 independent variable, 128, 154 India, 187, 188, 189 indication, 120, 127, 148, 175, 181 indigenous, 44, 102, 104, 105, 110, 136 industry, 14, 124 inefficiencies, 63, 64, 134 inequality, 151 infancy, 44, 127, 137, 154, 169 inferences, 79 inflation, 124, 125

Urban Land Markets, Housing Development and Spatial Planning in Sub-Saharan Africa: A Case of Uganda : A Case of

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Index informal sector, ix, xi, 3, 4, 5, 7, 32, 33, 63, 90, 113, 134, 169, 171, 173, 174, 176, 179 information exchange, 59 infrastructure, 2, 14, 57, 66, 89, 104, 151, 158, 164, 170 inheritance, 28, 33, 35, 40, 51, 53, 58, 96, 100, 117, 139 insight, 8, 108 inspectors, 165, 167 instability, 124 institutions, x, xi, 3, 7, 13, 32, 36, 55, 57, 62, 91, 94, 96, 106, 108, 117, 173, 176 instruments, 81, 86 integration, 22, 61, 78, 169, 179 intentions, 79, 113, 115, 117, 125, 162 interaction, ix, xi, 28, 61, 150, 154, 169, 170, 173, 178 interactions, 6, 67, 72, 109, 138, 143 Inter-American Development Bank, 4, 186 interface, 120 interrelationships, 91, 143 interval, 123 intervention, 4, 10, 94, 173, 179, 180 interview, 76, 78, 139 investment, 7, 29, 35, 48, 56, 89, 102, 117, 124, 140, 159, 179 investors, 144 iron, 45 isolation, 39 J judgment, 80 jurisdiction, 50, 165 K Kenya, 8, 187, 188, 190 L labor, 48, 52, 67, 175 lakes, 82

195

land acquisition, 5, 9, 34, 37, 44, 62, 63, 78, 79, 97, 102, 139, 144, 161, 165 land tenure, 3, 6, 9, 47, 49, 50, 56, 57, 65, 72, 82, 129, 136, 177 Land Use Policy, 89 land-use, 97, 180 Latin America, 39, 42 laws, 9, 32, 82, 86, 89, 91, 93, 123, 173 leadership, 49, 114, 116 leasehold land, 82, 96, 100, 118, 136 legality, 5, 111 legislation, 30 lending, 186 licenses, 16, 165 life cycle, 37 lifetime, 53 limitation, 79, 80 line, 36, 37, 90, 129 linear model, 130 liquidity, 28 living conditions, 37 living standards, 39 local authorities, 57 local government, 82, 89, 96 lower prices, 64 lying, 20, 21 M machinery, 170 maintenance, 58, 119, 140, 152 Malaysia, 188 management, ix, x, xi, 1, 2, 3, 4, 8, 9, 20, 32, 35, 37, 38, 48, 57, 67, 78, 81, 82, 86, 89, 90, 119, 173, 174, 175, 186, 187, 188, 189, 190 mandates, 86, 92 marginalization, 2, 14, 89 market economy, 42 market segment, 31, 34, 36, 148 measures, 104, 107, 113, 115, 121, 145, 176, 186 media, 97, 109 membership, 49 Mexico, 38

Urban Land Markets, Housing Development and Spatial Planning in Sub-Saharan Africa: A Case of Uganda : A Case of

196

Index

microeconomics, 60 minimum price, 61 missions, 52 model, 22, 41, 42, 43, 44, 60, 61, 69, 73, 75, 79, 130, 134, 178, 181, 187, 189 models, 41, 43, 134 momentum, 53 money, 45, 48 monopolistic competition, 59 motives, 114, 140 movement, 21, 61, 85, 121 Muslims, 50

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N national parks, 82 negotiating, 31 negotiation, 92, 101, 170 Netherlands, 188 network, 14, 19, 97, 101, 109, 110, 113, 116, 119, 140, 148 newspapers, 97 Nigeria, 185 normal distribution, 111 normal profits, 97 nucleus, 11 O objectives, 4, 8, 46, 67, 69 observations, 64, 76, 128, 149 opportunity costs, 62 order, 5, 7, 17, 39, 44, 52, 59, 64, 67, 79, 86, 90, 113, 128, 134, 147, 171 orientation, 49 outliers, 128 P Pareto, 4, 5, 18, 22, 96, 119, 163, 164, 165, 166, 188 Parliament, 82, 86 passive, 144 penalties, 147

perceptions, 55, 135 peri-urban, 21, 25, 31, 48, 49, 54, 104, 124, 137, 175 permit, 29, 45, 50 physical environment, 67 politeness, 52 political leaders, 49, 56 politics, 8, 24, 189 poor, 14, 36, 37, 38, 39, 42, 43, 45, 63, 64, 65, 72, 137, 140, 151, 187 population, ix, 1, 13, 14, 24, 46, 56, 64, 73, 89, 95, 103, 104, 124, 138, 151 positive correlation, 128, 130, 134, 141 poverty, 2, 190 power, 4, 11, 19, 30, 60, 64, 82, 86, 89, 107, 148 precedent, 3, 17 preference, 37, 171 premiums, 100, 119 pressure, 15, 18, 25, 56, 57, 144 prestige, 53, 54, 136 prevention, 18 price index, 139 prices, 5, 7, 9, 29, 31, 33, 37, 41, 53, 54, 60, 61, 63, 64, 65, 72, 78, 89, 97, 98, 108, 110, 114, 116, 124, 128, 134, 135, 185, 189 primacy, 88 privacy, 58, 151 private ownership, 43, 136 private sector, 32, 42, 92 production, 4, 29, 38, 39, 48, 53, 59, 60, 66, 124, 140, 143, 178 productivity, 7, 47, 48 professions, 68 profitability, 34, 60, 61 profits, 29, 41, 61, 68 program, 75, 76, 79 proliferation, 53, 102, 177 property rights, 28, 29, 30, 47, 48, 49, 51, 56, 58, 59, 61, 66, 94, 106 public health, 86, 152 public interest, 47, 82 public sector, 92, 98, 144, 174, 176, 179

Urban Land Markets, Housing Development and Spatial Planning in Sub-Saharan Africa: A Case of Uganda : A Case of

Index Q questioning, 79

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R radius, 140 rain, 9 range, 5, 27, 35, 36, 37, 39, 43, 58, 62, 69, 114, 139, 171 real estate, 93, 103, 186, 189 reality, 28, 135 reason, 111, 140, 146 recognition, xi, 38, 40, 57, 130, 173 reconciliation, 21 redistribution, 64 reflection, 11, 45, 100 reforms, 181, 186 region, x, xi, 38, 89 Registry, 186 regression, 79, 132 regulation, 34, 40, 67, 86, 98, 171, 172, 175, 176 regulations, 3, 30, 32, 35, 40, 41, 42, 62, 86, 92, 93, 96, 97, 103, 104, 151, 152, 170, 185 relatives, 53, 66, 97, 108, 109, 113, 119 rent, 17, 37, 48, 51, 52, 60, 61, 67, 84, 85, 97, 98, 100, 119 replication, 118 representativeness, 80 reserves, 29, 82, 103, 161 resource allocation, 97 resources, 2, 23, 24, 32, 33, 34, 35, 44, 64, 76, 176 retention, 45 returns, 7, 52, 110, 111 revenue, 61, 119, 150 risk, 34, 55, 65, 137 rural areas, 7, 25, 54, 55, 124

197 S

sales, 31, 41, 53, 66, 102, 103, 104, 105, 106, 112, 115, 120, 139, 145, 152, 172, 178, 181 sample, 75, 76, 78, 79, 95, 127, 134 sampling, 73, 75, 76, 79 sanctions, 31, 172 satellite, 152 satisfaction, 61, 134 saturation, 35, 45, 75, 127, 137 savings, 35, 145 scarcity, 29, 41, 47, 101 scientific method, 75 searches, 101, 119, 120 security, 30, 33, 38, 47, 55, 56, 57, 82, 105, 106, 107, 109, 111, 137, 151, 178, 180, 187 segregation, 14, 19, 21, 156, 180 seller, 30, 32, 34, 61, 66, 94, 98, 102, 104, 107, 108, 111, 112, 113, 114, 115, 116, 121 sensitivity, 79, 110, 152, 162 separation, 21, 55, 107, 180 sewage, 148, 150 shape, 65, 68, 69, 126, 137 shaping, ix, xi sharing, 37, 174 shelter, 36, 41 shock, 116 short supply, 41 signals, 126 significance level, 110, 134, 147, 148, 161 skills, 48 social benefits, 64 social class, 21, 38, 130, 170 social group, 34, 35, 36, 38, 44, 72, 74, 135, 138, 143, 158, 159, 180, 181 social relations, 5, 43, 143 societal cost, 175 software, 79 South Africa, ii space, 1, 7, 44, 47, 59, 60, 137

Urban Land Markets, Housing Development and Spatial Planning in Sub-Saharan Africa: A Case of Uganda : A Case of

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198

Index

speculation, 7, 31, 34, 35, 36, 41, 101, 105, 106, 109, 125, 128, 135, 136, 140, 147, 152, 170 speed, 160 sports, 23, 67 Spring, 187, 188, 189 SPSS, 75, 76, 79 stability, 152 stages, 5, 16, 37, 44, 45, 46, 48, 49, 68, 69, 73, 75, 100, 102, 103, 107, 108, 113, 116, 137, 151, 153, 170 standard deviation, 76, 111 standards, 21, 23, 25, 35, 78, 86, 87, 110, 111, 117, 146, 150, 157, 159, 163, 167, 172, 173 state laws, 62 statistics, 123, 146, 158 stock, 45, 60 strategies, 39, 92, 144 stress, 39, 86 structuring, 27 sub-Saharan Africa, ix, xi, 1, 2, 3, 4, 8, 9, 11, 30, 38, 39, 43, 79, 158, 169, 175, 177 subsistence, 45 substitutes, 34, 41 substitution, 16, 79 superimposition, 174 supervision, 180 suppliers, 64 sustainability, 180 sustainable development, 171 swamps, 16 systemic change, 70

thinking, 175 Third World, 39 thoughts, 177 time periods, 11 trading, 16, 17, 54, 88 training, 176 trajectory, 69 transaction costs, 24, 28, 40, 62, 64, 65, 103, 112, 151 transformation, 82, 124, 178 transition, 187 transport, 83, 137 transportation, 14, 21, 140, 165 trees, 139 trust, 56, 82 trustworthiness, 107 U UN, 4, 8, 46, 189, 190 uncertainty, 55, 70 uniform, 63 United Nations, 189, 190 updating, 163, 175 urban areas, xi, 3, 7, 8, 11, 12, 16, 21, 27, 32, 33, 39, 49, 54, 56, 58, 86, 91, 104, 147, 175, 177, 179, 187 urban population, 13, 24, 33, 37, 73, 89, 102, 173, 175 urbanization, ix, xi, 3, 13, 88, 89, 90, 158, 175, 188 V

T Tanzania, 8, 32, 39, 187, 188 taxation, 39, 42, 62, 79, 139 telephone, 87 tenants, 51, 52, 53, 54, 76 tenure, 6, 30, 33, 37, 38, 39, 47, 48, 50, 53, 54, 55, 56, 57, 58, 62, 82, 83, 98, 101, 116, 130, 136, 154, 156, 177, 187 theft, 66 theoretical assumptions, 68

validity, 151 variability, 76, 111 variables, 76, 78, 79, 160, 186 variance, 134 variation, 124 ventilation, 86 village, 49, 50, 103, 108

Urban Land Markets, Housing Development and Spatial Planning in Sub-Saharan Africa: A Case of Uganda : A Case of

Index W

witnesses, 66, 112, 115 women, 82 World Bank, 36, 38, 186, 187, 189 writing, 87, 103 Y yield, 29, 69, 70

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war, 124 water resources, 52 weakness, 19 wealth, 34, 41, 53, 64, 126, 180 welfare, 144 wetlands, 15, 16, 17, 19, 21, 23, 82, 86, 137, 161

199

Urban Land Markets, Housing Development and Spatial Planning in Sub-Saharan Africa: A Case of Uganda : A Case of