1. (FORMALIZING) INFORMAL HOUSING: addressing the elephant in the room
Victor Endo and Luis Triveño
The 18th Annual World Bank Conference on Land and Poverty, March 20-24, 2017 Washington DC

2. Informal settlements at global scale
1 billion people live in slums or informal settlements
2.5 billion in 2020
LAC : 30% families live in slums
Nicaragua 78%
Bolivia % (double the regional average)
Peru %

3. Informal settlements are vulnerable
Settlements occupy unsuitable areas
Steep hillsides
Flood prone areas
landfills
Homes built without license – no control of structural steadiness
Peru: If a 8.0 degree earthquake hits Peru, 80 % of potential economic losses would involve housing
From , minimum losses in the housing sector for 16 countries in LAC were estimated to be US$53 billion

4. The challenge How to apply risk reduction measures How financing ?
After the buildings have been constructed?
Without identification of landowner?
How financing ?
Peru 1999 – 2014
public investment in housing USD$ 3,300 Million
Minimum value of new housing needed in USD$ 34,000 Million

5. The Peruvian context Urban formalization programs since 1990’s
2004
Urban formalization programs since 1990’s
2.5 million urban registered titles
Formalization of soil only (not buildings)
Reversion to informality (40%)
Weak urban cadasters
2017
2010

6. So, how to invest in risk reduction?
Formalizarion of title
Formalization of building
Retrofit / housing improvement
A menu of combined formalization + retrofit products
Realign the incentives of homeowners and authorities by:
mapping the existing risk in housing stock
combining private and public resources to mitigate the risk when possible

7. Targetet formalization+retrofit solutions
Protocolization of title from private registered owner
Issuing title by public owner
Repairing absence of material title
Cure title by adverse possesion
Simplified notarial processe
Typologies of informal tenure
reinforcenment of masonry walls with size of section deficiency
reinforcement of concrete columns
reinforcement of existing column shoe
inclusion of concrete walls from existing columns
Typologies of vulnerable housing
A relevant analogy for the proposed solution can be found in the use of nanotechnology in biological
research (manipulating properties and structures at the nanoscale, often involving dimensions that are just
tiny fractions of the width of the human hair) for the development of targeted drug therapies or “smart
drugs”. Instead of traditional chemotherapy that sweeps good and bad cells, targeted drug therapies are
designed to operate on specific cells and have already shown to cause fewer side effects

8. A process for targeted formalization-retrofit solutions
Characterization of risk at micro-scale
Needs identification at plot level
Design of interventions
Use of available data to classify areas within settlements:
Seismic vulnerability studies
Formalization plans
Municipal tax rolls
Water, electricity plans
Socio-economic data
Risk-oriented cadastral survey
Tenure typology
Risk typology
Incremental implementation: 2 stages
Targeted interventions, examples:
Subsidy packages for integrated formalization + retrofit
Low-cost regularization of tenure + building by private actors
Urban densification / rental mkt

9. Expected outcomes Risk mitigation
Incentives for private investment in retrofit
Better public sector risk management policies
Incorporating informal assets in the market
Impulse to densification policies
Improve rental market
Increasing tax revenues and land management capabilities
result, lives could be saved and eventually assets could be preserved, reducing significantly the
government’s contingent liability. This solution is relevant for homeowners that aspire to a regularized
property to protect it and transfer it to future generations or to take out economic benefit from it. The
proposed scheme could also help government to leverage private resources (Peruvian households invest in
housing in one year what housing programs invest in more than one decade) to mitigate a risk for which
they do not have coverage. It is worth noting that because of its private nature, governments tend to have
coverages only for public assets (like schools, hospitals, airports, etc).

10. GRACIAS !

11. Combining existing data
Product: reference base map for field inspection

12. Plot level needs identification
Risk-oriented cadastral survey: low cost and scalable process
Second stage,
in-depth risk assessment produces “certificate of risk inspection”
collection of tenure data
First stage, external verification using reference base map