1 World Bank Land Market Assessment Training – February 28 th Part 1 – spatial tools to analyze the impact of land markets on affordability and urban spatial structures By Alain Bertaud Other papers and reports available at:

2 Why analyze and monitor land markets?

3 The following statements indicate an urgent need for serious analysis: “We have a severe land shortage” “land is too expensive because of speculation” “the city is expanding in the wrong direction” “densities are too low” “densities are too high” “sprawl” “private sector is only interested in building for the rich” When do we know we have to look at land markets?

4 Some quantitative indicators may be available and point to a land market problem: land use indicators  increase in share of informal sector land development  decreasing numbers of housing built every year  large areas of vacant land inside the built-up area  increase in densities without increase in floor area ratio price indicators  rapid increase in real estate prices  increase in price/income ratio  low % of rental housing

5 First things we need to know about land markets How is the market segmented? Preparation of a housing typology identify and quantify the various housing product on the market (price, floor area, land area, location), relate it to income Assess variations in flows and stock per housing type Price of developed land as % of housing price? Price of vacant developed land compared to undeveloped land

6 Sequence of tasks and tools available: After informal discussions with key players: government officials, households, public and private sector, informal sector Step 1: overall physical view of market segmentation and identification of housing typology;  acquisition of satellite imagery Ikonos, Quickbird, Spot ($10, to $50 /km2, from a week to one year delay)  Google Earth (free, immediate, images usually 1 to 3 years old) Step 2: field survey to complete data base  Formal surveys;  visual inspection during site visits; Step 3: land use measurements  Using a CAD -GIS program (Autodesk Map, ArcView, ArcGIS) measure areas, lot size, land use types. Step 4: final analysis and diagnostic  Graphs, tables and maps supporting evidence showing that market distortion are causing inefficiencies  Identification of causes- example: poor regulations, insufficient primary infrastructure, land tenure fuzziness, etc.

7 Kabul -Informal housing developing on slopes (Ikonos imagery)

8 Kabul- Informal housing developing in cultivated fields

9 Kabul - Measurement of areas of different land use types

10 Kabul- Measure of development standards in informal settlements

11 Kabul Typology extracted from Ikonos image (similar image available on Google Earth)

12 Kabul Typology extracted from Ikonos image (similar image available on Google Earth)

13 a

14 Kabul – Residential typology The main outcome of the typology/market study was and evaluation of: The total population of Kabul, The built-up area, as opposed to the administrative area The proportion that was informal The total “replacement” value of the informal housing stock

15 Kabul density map

16 Kabul density map

17 Addis Ababa housing affordability derived from a land market study (2002). The analysis of land markets shows that the large number of households living in informal settlements is not due to a “lack of enforcement” of planning standards but to unaffordable standards.

18 Tianjin – selection of sites based on typology observed on Google Earth a

19 Tianjin- detailed view of sites selected for sample survey (Google Earth 2007, image 2005)

20 Zhengzhou – selection of survey sites based on residential typology (Ikonos image)

21 Zhengzhou – Site survey, location of site 6a (urban village) and 6b (privatized danwei housing)

22 Zhengzhou- Survey sites, size, land use and prices of dwelling units

23 Interviewing real estate brokers is another way to add price data to a housing typology Below, real estate prices related to location, floor area and floor number as displayed by a real estate broker in Suining (Sichuan Province, China)

24 Zhengzhou- Google Earth 2006 (image 2002), Ikonos 2004, Google Earth 2008 (image 2007). In the long run, it will be possible to create land use time series with Google earth images (providing the images are downloaded on a regular basis)

25 Cairo: Government planning and reality check with Google earth!

26 Cairo: Failure of government policy : informal sector growing within 7km from city center (top image), while government invest massively in infrastructure at 30 km from city center (bottom image).

27 Conclusions An understanding of the working of urban land markets can give specific insights to solve a number of very different problems:  Spatial structure  Housing affordability  Assets inflation  Rate of return of primary infrastructure, etc. The recent availability of high resolution Google Earth images allows to conduct land use and land market studies in a few days