7.28.2007

why are there squatters?




(This entry is meant partly as an answer to Peter Anglionto's comment in a previous post and also as an expansion of the ideas from the last entry. Get a cup of coffee, this is a long one.)

The national government declared the other day that it would spend US$ 1.1 billion to resettle squatters in Metro Manila. The government plans to construct 265,955 housing units with each housing unit costing an estimated $4,200 (about PhP 185,000 per).

That news came right on the heels of the MMDA vowing to eliminate squatters from the Metro within 3 years.

All of this might be part of the posturing for the ASEAN Ministers Meeting next month but they are, nevertheless, the latest in a long, long history of attempts to remove and relocate informal dwellers (most precipitated by impending international conferences) and part of the long history of informal settlers in the metropolis.

So why are there squatters? This is, of course a multi-faceted problem, but the usual quick answers are:
  • because of poverty
  • because of lax law enforcement
The two answers are both partly true but the first only addresses the economic status of the informal dwellers (they can't afford to rent from the formal housing market), while the second only addresses the state's inability to prevent squatting in the first place (it can't protect land).

Although poverty does explain the economic choice of the poor in the city (to find housing in the black market for shelter) you still have to ask, why do the poor choose to be in the city in the first place? Why don't they opt to stay in the rural areas? Why the extreme concentrations in the metropolis? Wouldn't the poor be slightly more comfortable in the countryside where there would at least be land to till for subsistence farming?

As to lack of enforcement, many (like Peter) blame the Lina Law (the Urban Development and Housing Act -R.A. 7279) which decriminalized squatting and imposed requirements for relocation before eviction. The provisions, they say, are onerous (at least to the landlords) and abet squatting.

But we must remember that squatting and squatter colonies existed in the metro prior to the passage of RA 7279. There were squatters back when it was still illegal a crime to be a squatter. At the end of Marcos' first term (1968), as much as a third of the population of the NCR were illegal settlers. Even Marcos, with his full dictatorial powers, could not evict the existing squatter colonies and Imelda had to resort to hiding the slums behind the facade of whitewashed enclosing cement walls whenever she hosted an international event. (A cosmetic approach that apparently hasn't lost its appeal.)

You can argue that our feudal, patronage politics encourages large squatter populations, keeping them as voting bailiwicks. As true as that may be, it still doesn't answer the question of why people opt to move into the city and into squatter colonies rather than, as above, staying in the countryside (where, apparently, fewer people go hungry).

So, why are there squatters? Why do the poor choose to huddle into our urbanized areas? The answer to that question also answers why the metropolis experienced explosive growth (in urbanized area and population) in the last half century.

(I couldn't track down any relevant figures in the 2000 census, but in 1958, more than half of the residents in the NCR were migrants from the rural areas. I would venture that the current percentage would be larger given the metro's average population growth rate of 12% since 1948.)

The answer, I venture, is about the relative economic productivity of each square meter of land in the metropolis. The 639 square kilometers of Metro Manila account for a fifth of the nation's GDP. Each square kilometer in the metropolis produces US$ 158,000 per year while the rest of the country's land (and here, I am assuming all other land is flat and arable) produces $1,720 (barely one percent vs. the metro). Which means, in theory, that living on a square meter of land in the metropolis provides the potential of making an average of more than PhP 7,000 per year, while the equivalent in the countryside offers a measly PhP 77.

Of course, these are all gross numbers and averages but the numbers do point to the relative opportunities provided by Metro Manila vs. the rest of the country.

In network terms, the metropolis is a highly connected (economic) hub in a scale-free network. A condition we have to consider if we are to find effective solutions.

Why are there squatters? Because an individual has better chance of earning a living in the city than in the countryside, even if that means living in makeshift shanties on illegally occupied land.

Which then points us to the problem that has plagued our endless squatter relocation programs -taking people out of squatter colonies and moving them back to the provinces (the "balik-probinsya" programs so popular among our local governments) -will not work because the economic logic (the opportunity to make money) will always trump the logic of moving away from the city, even if you provide a shortcut to land or home ownership.

The national government gave no specifics about how it would effect the PhP 50 billion relocation program, but it did specify that the allocation was for building homes. Given our stubborn track record, it would be no stretch to imagine that this means finding building relocation sites outside of or at the periphery of the city. Which is, to say, it will probably also fail.

The squatter problem is intertwined with the challenge of managing and coping with the rapid growth of the metropolis. Which brings me to Peter's question in his latest comment, who exactly in government is in charge of or is planning for this growth?

Apparently, no one directly. I know of no subcommittee of the cabinet that integrates the key issues that characterize urban growth: land use, transportation, housing and economic development.

Ideally it should be the Housing and Urban Development Coordinating Council* -but they seem to be focused only on making housing affordable and providing affordable housing. There seems to be no coordination with the DPWH, that builds highways, or the DOT that manages transportation, and of course, land use is the purview of local governments who report to the DILG.

So, no one apparently. Which is probably why we got into this mess in the first place.

Oh, one more thing to keep in mind. We are not alone. The images above are of squatter colonies from megacities all over the globe. The UN estimates that there will be 2 billion slum dwellers in the world by the end of the decade. We share the problem, and quite possibly the solutions, with the rest of the world.

For further reading, I highly recommend Robert Neurwith's "Shadow Cities." Neurwith lived for two years in four of the biggest slums in the planet (Rocinha, in Rio, Brazil; Kibera, in Nairobi, Kenya; Sanjay Gandhi Nagar, in Mumbai, India; and Sultanbeyli, in Istanbul, Turkey). He spends the first part of his book reporting on the daily life in these neighborhoods then discusses the issue of squatting from the questions and theories of land ownership.

You can catch excerpts and reviews of Neurwith's book from the Global Business Network, from Boingboing, and from WorldChanging.



*I believe the name puts the cart before the horse. If I had my druthers, that acronym should be UDHCC.




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P.S. -I'd like to express my appreciation to Peter, Eugene and Fred (my "regulars") who take precious time out of their day to read and react to my kilometric and often dense posts. It makes the time I spend researching and writing these entries all the more worthwhile. Thank you, gentlemen.

13 comments:

Urbano dela Cruz said...

btw, eugene,

to answer your question in the last post:

To decongest Metro Manila could, theoretically, plan and build new cities for 800,000 people every five years -and then redirect all would be migrants to the new cities. You could spend all the money in the world to make sure it had full infrastructure, streets, transportation and quality housing.

You could even locate companies to provide jobs for all the workers in that population.

You will, though, not be able to transfer the potential for making money that a city of 11 Million provides.

Juned said...

If you look up history. You will find out that each growth of a city is accompanied with mass migration or concentration of population in the citys. Its where the money is. Rome had their share and Babylon had theirs. Julius Ceasar' house was a stone throw away from one.
BTW, I like the new look. I have been reading to much from the newsreader for some time. :)

Urbano dela Cruz said...

hey juned,

you're right. all growing cities inevitably grow slums. if you also look into the history of the concept of land ownership, you'll realize that all land ownership begins with squatting (as Neurwith so ably discusses in his book).

i like the new look, too. thanks! though I'm still trying to figure out where to put my blog roll.

Eugene said...

Thanks for elaborating, Urbano. I assume that no city in the world has conclusively managed the slums and population explosion problem?

I suppose we can say that any proposed solution should consider the fact that rural folk will always migrate to the urban areas.

Speaking of slums. Have you seen the stretch of PNR railway beside the South Superhighway in Manila and Makati? ALL the squatter homes are gone and everything looks clean and orderly. Now if DPWH can upgrade the dilapidated railways and train coaches.

Urbano dela Cruz said...

Eugene,

nope. not a single city. some interesting models have come up china has urban villages which are more an accident of land tenure and residency rules than actual policy, mumbai is looking to totally redevelop dharavi (the largest slum in asia).

The UN and other multi-lateral agencies have been pushing the sites-and-services/urban upgrading approach. but the process is slow.

that's good news about the rail corridor (though I wonder if it was good news for the relocated).

this came out on businessweek a month or so ago:

PNR remits $14.7M to South Korean consortium,

"State-owned Philippine National Railways (PNR) has remitted $14.7 million in advance payment, representing 30% of the total cost of $49.096 million, to the South Korean consortium tapped to build the 34-kilometer Caloocan-to-Alabang rail line."

Urbano dela Cruz said...

follow up

read up on how cities in China are actually encouraging even more rapid urbanization.

peterangliongto said...

Nice one.

I actually think that an interesting bit of urban management (not really the objective but an effect) Marcos did in his years was starting the policy to encourage manpower exports. As a connected economy , even more so now, we actually have an alternative outlet for rural migration to a certain degree. In any case as economies change, rural to urban migration seems quite unstopable as the requisite productivity needed in order for the ordinary citizens to stay alive gets transfered from planting camote to answering calls from abroad about planting camote hehe.

Anyway my focus is that while we do have the existing squatter problem (and I do agree it's a worldwide economic phenomena of development), with the metro, income levels are actually sufficient to address this on a market basis. Pinpointing the key areas where legal, administrative and structural obstacles lead to market failure are what I like to focus on.

In general I'm not a great believer in government subsidies specially when the GOP is running a deficit, addressing MM squatters in this manner not only drives federalists and seccesionists crazy, it is as you pointed out not even very effective anyway.

The current PagIbig ammortization levels already support ammortizations of 3500 a month, which by using usual standards of 30 to 40% of take home pay as shelter budget means that the minimum wage earner can get financing for a Php 500,000 home w/out equity. Basically this is rent to own. And ironically monthly prices at very similar levels to squatter shelter expenditures taken on a total cost of living basis (rent, overpriced utilities, etc) or even absolute rental basis!

Anyway I understand your point on Chinese urban movement management as per the economist article (btw the header in the editorial is also very interesting from a growing manila point of view!), while strong government is helpfull it's not always going to work out. Since we don't even have it (strong government or money for that matter) here greater focus addressing the need for letting regulated market forces address the informal settler issue will be the key.

Urbano dela Cruz said...

Peter,

Marcos' labor export policies did have some impact on our urban development - I think less on urban growth as on urban violence. he found a way to ship off all those would be jobless young men, which, in most other societies, was usually grist for the revolution mill.

(check out Neil G. Ruiz's excellent presentation on the role of labor export in phil. development policy.)

I'm with you on your general distaste for market-distorting subsidies or regulations (like rent control).

In general, governments seem to fare better when they provide direct subsidies that encourage the market (like rent vouchers -although it does have its issues).

BUT!

There are though, very large investments (like infra) that free markets, by themselves, will not be able to provide. (As you say, there is no 'patient capital').

I do think, given the massive backlog in affordable units, that housing (particularly urban housing) is one of those areas that requires government intervention.

That said, government intervention and free markets are not mutually-exclusive categories.

Your comments point to the efficacy of getting the government to work with the real estate market rather than fully stepping into the building and construction business.

We've created (and in many cases) pioneered new public-private partnership models to bring the government's resources to play into areas underserved (or unserved) by the market.

c.f. -our BOT models for transportation. maybe we should cook a BOT model for housing. (and include homeowners association training in the mix -to address building maintenance issues.)

The strides Pag-ibig and NHMFC are taking in providing affordable loans are also laudable. (Kudos to Miro Quimbo and Bong Bongolan.)

My concern is that unless the programs for home ownership are somehow tied to location incentives (see location efficient mortgages) and our infra investments, the new housing may wind up more costly to the owners because of the attendant transportation costs. (some estimates hold that transport expenses eat as much as 30% of household budgets)

which is to say, we really need to integrate our efforts in Land Use, Transportation, and Housing.

Eugene said...

It's a pleasure reading your blog. While I'm not a true-blue urban planning enthusiast, I'm interested enough about the subject to enjoy reading your posts. I learn a lot from it. :-)

No plans in continuing Metro Manila Makeover? I'm a confessed "roof-surfer" when it comes to Google Maps/Earth, hence Vista Pinas, so it's nice to see some other kind of perspective in using Google Maps/Earth. :-)

peterangliongto said...

I completely agree on a holistic way of planning for development. My take is that for now, we can talk about changing policy, laws and government (like my wish for a stronger integrated urban planning body so people don't have to talk to so many agencies with conflicting views and requirements, etc) or we can limit it to what to do using what we have.

If the GOP does not have budgets for more subsidies and has difficulty getting congress to change laws, then it can focus on things like BOT (which enjoys some success but also has quite a bit of limitations) and coordinate this with the other agencies and LGU's who can strike it down from a purely local politics move (e.g. mrt4 and manila). But if we decide to just accept that the government will take some time to move on such things then the least gov't can do is get out of the way so that market can work whatever efficiency the system may allow. This is not to say the big infrastructure projects needed should be shelved but in the meantime there are ways it can help the problem along by changing some rules and procedures e.g. lowering parking requirements for a bp220 condo, what deadweight!

Anyway assuming no stronger mmda to cut red tape or rezone the rich villages 100 meters away from existing transport infrastructure like mrt stops, and no money for subsidies and's sovereign guarantees for BOT projects (as mrt 7 is doing that's why it's held up), at the very least then at least do not put in more distortions in the market which cost the GOP cash they don't have anyway , right. That way certain capital can fund certain projects that do address the squatter situation.

peterangliongto said...

Just posting an interesting link regarding this topic. It's the point of view of UP versus their own squatters.

http://www.upd.edu.ph/%7Eovcca/articles_20050921-02.html

PURIST said...

WALA NG PATUMPIK-TUMPIK. OK!
DAPAT ANG MANGYARI AY "COMPLETE ELIMINATION OF MIGRANTS ESPECIALLY PEOPLE FROM SOUTHERN PHILIPPINES!"

Sila lang naman itong SOBRANG UNCIVILIZED at binababoy nang husto itong isla natin, Ang Pilipinas!
At hindi tulad ng mga ORIGINAL LUZON SETTLERS!

Dapat mag-stay na lang itong mga "UNWANTED" sa Visayas at Mindanao upang sa ganon mapaunlad nila yung lugar nila at hindi na sila maging pesante DITO. Kasi sa totoo lang ginagawa nilang MALAKING SLUM AREA itong NCR At ibang lugar pa sa LUZON!

At kung hindi nyo pa alam ang totoong simbolo ng TATLONG BITUIN SA BANDILA NG PILIPINAS.. ANG ibig sabihin nun' SI GAT ANDRES, Gregorio del Pilar at si Emilio Aguinaldo(ang 3 lider ng KKK)Kung hindi kayo naniniwala i-research nyo pang mabuti!

At masasabi nyo na hindi TALAGA RECOGNIZED AS PART OF THE OUR FIRST CONSTITUTION ANG VISAYAS AT MINDANAO KUNG DI'

ANG LUZON LAMANG!

wanwan said...

nice blog

My opinion is, wala sanang squatter kung maayos ang pagpapatakbo ng gobyerno sa bansa,wala sanang squatter kung ang bawat tao ay may trabaho at walang mayamang mapang-abuso sa mahihirap.

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