Cantagalo - a hillside comunidade saddled between the upper-class neighborhoods of Copacabana and Ipanema and therefore highly visible to tourists - is an ideal crash test dummy for De Soto-style titling. In distributing land titles to the 20,000-odd Cantagalo residents, the government is demonstrating to foreign eyes that is has embraced the "slum"-upgrading strategies of the Peruvian economist. The same strategies, of course, that are peddled by USAID, the World Bank, and neoliberal development think tanks.
De Soto's titling initiatives intersect perfectly with the Western understanding of property possession. To us, land ownership is the cornerstone of of citizenship, and without it, you are "illegal", "informal", or "irregular". Once one has that magic piece of paper in hand, however, everything changes, and one is instantly transformed into a tax-paying, law-abiding, legal resident of your respective nation.
In the case of Rio de Janeiro, titling would appear to sense. It's a means of capturing "dead" capital (have you seen the prices some of the comunidade houses go for these days?), re-directing utility taxes extorted by the drug traffickers back to the state, and - most importantly - granting security of tenure.
So what's the problem? Let's take a look at three major problems pertinent to Rio's comunidades that titling proponents claim legal home ownership solves.
Lack of capital - Those who subscribe to De Sotoism call attention to the fact that "illegal" settlements are teeming in "dead" capital. Meaning, a house without a title has inherent monetary value, but can't be leveraged to accumulate capital because it lacts legality and cannot be mortaged, bought, or sold on the legal real estate market. By "legalizing the illegal", De Soto projects, homeowners are created from squatters.
The problem is, the results of De Soto tilting don't always corroborate this theory. Instead of providing the "illegal" resident with instant capital which can be liquefied and used to, say, take out a mortgage on a small business, titling can cause market speculation that may drive newly-"legalized" residents from their homes. In Cambodia, for example, private investment and real estate speculation has driven up the cost of land slated for titling so high that the original residents cannot afford it.
De Soto's titling theory also assumes that that "legalized" homeowners will have instant access to loans and credit from banks which would not have materialized without a deed. This argument is fallacious in two ways. One, it assumes that the "slum-dweller" is an unnattrative candidate for a loan, and that there aren't alternative methods of obtaining a line of credit. In the comunidade of Rocinha here in Rio, for example, the Northeast Bank operates a branch which extends loans to residents. On the global scale, the success of the Grameen Bank lends further credence to the counter-argument that "informal" residents are indeed good candidates for microloans.
Utility provision - Those in favor of titling point to the fact that in many "informal" settlements, residents do not pay for utilities and instead "steal" them from providers or "legal" residents. In the case of Rio, we know this is untrue. Utility provision and maintenence is co-opted by the dominant drug faction or militia group, and often, these groups charge a higher fee for services than would the city. Would titling guarantee that drug lords and militia heads would cease to extort taxes from comunidade residents if the initial utility provider was the state or a a formal private entity?
Likely not. Internet and electricity providers, for example, know well that their services are illegally split and wired by traficantes. Is Light or Velox going to do anything about it? Only if they want to risk a confrontation with a drug lord by entering a comunidade to protest. Legal utility provision is not going to materialize until the drug gangs are disbanded and purged from the comunidades.
Even in cases where drug traffickers have been driven out of neighborhoods, there is still no guarantee of legal provision of utilities, given the strong presence of militia in certain areas. The case of Cosmos in the militia-ridden West Zone is illustrative; in expelling the traficantes, the police create a security vaccuum which milita quickly occupy. The militia then supplant the traficantes as the main governing body and continue to charge residents utility fees that ends up in militia - not Light or Velox's - pockets.
Security of tenure - Lasty and sadly, titles simply do not always guarantee tenure, hence the legal predicament in which Vila Autodromo residents find themselves. In Rio, apparently, all it takes is administration's word over another to render a deed invalid.
This is a lot of whining, and not a lot of solution-suggesting. So what would I propose? I'm not against titling per se, but I do believe that deeds are essentially useless without simultaneously providing comunidades with better access to educational and career opportunities, medical services, and infrastructure. Brazilian property lawyer and urbanist Edesio Fernandes lends excellent insight on the need for both titling and upgrading here.
If our Western selves truly believe that land ownership is the be-all, end-all of citizenship, it's only because we have taken for granted the rights that should come with it.
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