Cebu City Informal Settlements and Land Development - Case Study Example

Case Study: Cebu City informal settlement and land development [Name] [Professor Name] [Course] [Date] Abstract: This paper explores the issues of informal land developments for housing in the Cebu City, a city in Philippines that demonstrates one of the highest widespread informal land occupations, namely Duljo, Nivel Hills, Manggahan, Sitio Montebellio and Buhisan, in the world. It examines how the Cebu City urban poor are incrementally exerting a pull on middle-income households and how the low-income households are losing out in comparison to the upper and middle-income households in the purchase and sale of land specifically for housing purposes (Bongcac 2012). In all, this paper is twofold and attempts to explore the issues of land developments in Cebu City in a sited and localized way -- taking into account cultural, political, economic, historical differences and specificity. Further, it presents a partial view of Cebu City through the lens of the issue of informal settlements and land development that are clearly manifested in it (Felisa 2002). Cebu City Informal settlements and land development Cebu City, the capital of Cebu Province, is a secondary city in Philippines. Similar to many urbanized areas across the world, in-migrations is an outcome wherever there are employment opportunities. According to the 2007 Census, the city has an estimated population of 798,810 people. The census on population and housing in 2000 indicated that some 12,700 families have no access to housing, while 8.5 percent who owned houses are squatting in government plots (Eduardo & Rosalina 2012). Studies have shown that increased informal settlements within the prime commercial zones have been triggered by low incomes to purchase residential plots, high rents for houses that are near workplaces and close ties with community dwellers, or having relatives in the informal settlements (Eduardo & Rosalina 2012). According to some researchers, while the settlers have the knowledge of the government regulations on anti-squatting, they still believe that the state is humane in handling the problem of informal settlements as well as forecast the prospects of owning a house and land via the socialized housing program implemented by the local government in association with non-governmental organizations. Some land economists have however tended to agree that it is a great risk for the informal settlers to settle in government plots as they are aware of the consequences such as possible demolitions (Felisa 2002). Researches reveal that the low-income households are enticed to sell land cheaply because of crisis-sale, or situations when they need money quickly and secondly, due to the fear of reprisal as they are dealing in land they do not own. In some situations, they also sell land at low-cost as they perceive their values to be lower compared to that of the upper or middle income household. The analysis therefore concludes that the three aspects contribute to the residential segregation of the different income groups flanked by informal settlements in Cebu. Therefore, the low-income groups have tended to be concentrated on the low quality and least desirable sites since they no longer has the capacity to enter the broader informal land market for housing. Background of informal settlements in Cebu City Like many cities in developing countries, Cebu City has grown while lacking adequate infrastructure, which means the city is susceptible to serious environmental problems. Indeed, the sufficiency of housing has been instrumental in the expansion of informal settlements by the squatters, whose living conditions are typically substandard. In addition, most of the squatters in Cebu City are either unemployed or live on low-income jobs, including underground and micro-economy, meaning their livelihoods have been stagnated in the vicious cycle. Since the squatters lack access to higher income jobs, they live in desolate conditions characterized by poor quality environment and housing. Cebu City grew rapidly in the late 1980s and early ‘90s. Despite the national crisis that confronted the country at that time, Cebu City was able to pull round as showed by its promising economic progress. Characteristically, it is strategically located and serves as the commercial hub in the region with many of the establishments, including businesses, service institutions or schools and universities strategically situated across the city. The city’s tourism industry continues to prosper even as the city is considered a top tourism destination in Philippines. In addition, Cebu City has greatly facilitated port which along with other factors has placed the city into a leading transshipment point and hub of commerce, finance, transportation and recreation (Eduardo & Rosalina 2012). Most of the city’s migrations consist of large flow of migrants from the surrounding areas in search of jobs. Within the last three decades, informal settlements have extended across the city, congesting the squatter lots and slums. When the Cebu Urban Basic Services Program was implemented by the City Government in 1988 to help elevate living standards of the urban poor, the initiative rapidly expanded to address housing improvement following the establishment of Community Mortgage Program (CMP). To date, CMP has the largest collection rate among a number of other housing programs in Philippines, and is highly prized as it offers the urban informal dwellers access to housing, land and security of tenure without the necessity of collateral (Felisa 2002). Informal Housing in Cebu Studies have shown that the link between the urban poor and informal housing is a weak one. Indeed, increases in the prices of land along with the slow delivery of residential plots via formal channels have made the titled property excessively high priced and therefore unaffordable to the poor, as well as an unattractive option for the middle income groups in the Cebu (Eduardo & Rosalina 2012). Whenever the supply of land for development becomes restrained in expansion of the city, middle income groups tend to buy out poorest families, who live in the informal settlements; a process land economist have dubbed “downward raiding.” This means, a greater variety of social diversity live in informal settlements in Cebu. Even so, the repercussion of raising middle-income involvement in the city’s informal land market cannot be sufficiently explained. In addition, there is little literature to show the actual role that specific social groups play in purchasing, developing and selling plots of land. Informal Land Market in Cebu The informal land market in Cebu is lucrative and has been on a rapid growth over the last two decades. In 1992, it was estimated that some 58 percent of Cebu residents, or nearly 62,930 families from a possible 108,830 families lived on plots of land they did not officially own through the title deeds. This shows that as in a number of many other cities across the globe, land development through informal channels is the leading method of urban land development. Thus far, it is critical to note that it is fundamental to the understanding of modern-day urbanization processes. Some studies have showed that most of the Cebu residents entered informal market via purchasing land use rights from the users of land, informal land agreements with the landowner and via encroachment on marginal lands, such as pavements or river banks. However, land right purchase is the most predominant in Cebu. However, little has been documented on the actual dynamics of the informal land trade in the city, including the nature of price setting, land purchase and how divergent income levels profit from valorization of land. Generally, like in Cebu, there is little literature the world over of who makes most gains or who loses in the process of land valorization, which is also a dominant socioeconomic phenomenon in nearly all cities across the globe. Informal Development Informal development of urban lands was customarily viewed as a significant means through which the underprivileged occupants of Cebu city get access to housing. This seems to be no longer the case as more and more middle and upper income groups are increasing purchasing lands informally for housing. Even so, the motives of these income groups entering the informal market is because of the increased cost and less housing options in the formal markets (Arif, Sheela & Satterthwaite 2005). This implies that opportunities for upper and middle-income groups to purchase a house of land on the formal market are remarkably limited. There is also a shortage of centrally located low-priced housing schemes in the city. Some attempts have been made to curb this, which have however been less successful as had been projected from the outset. Private developers initiated two principle schemes for low-cost housing in between 1991 and 1992 called the Consolacion, some 20 kilometers away from the city and the Mactan Island near Lapu-Lapu City. To date, low-cost housing development is typically constrained by high land costs that have often compelled developers to watch out for cheaper plots on the urban periphery. Lack of enough credit and mortgage facilities has also been mentioned by researchers to have contributed to this perpetual problem. Others are low incomes and wages as well as existence of few developers who are interested in developing low-cost housing due to fluctuations in the prices and the availability of raw materials that increase production costs. For instance, in 1991, regional shortage of concrete was identified as a factor that led to the spiraled prices of concrete, possible bank penalties and extra labor costs. Plot Acquisition and Size A major aspect of social behavior in informal land market is the process of plot size determination (Arif, Sheela & Satterthwaite 2005). Indeed, land size is a valuable aspect in the informal market. Evidence within the informal settlements in Cebu City shows that, generally, the plot size can be linked to the income of the household, meaning families with higher incomes occupy larger plots than those with low incomes. Though this is not a surprising distinctiveness in Cebu City, it is fundamental in the assessment of how middle income households maintain substantial influence in informal development in irregular schemes. In addition, the disparity in the size of settlement plots is attributable to the purchase of larger plots at the onset and the increased purchase of plots after occupation. Within some zones of Cebu City, where informal settlement is predominant, farmers usually sub-divide their lands that they sell. Even as there are usually no fixed markers for the plots of land, the low income settlers have hardly been found to abuse this form of relaxed land allocation by the farmers though they tend to occupy an estimable space. At this preliminary phase of settlement development, land prices are often relatively low and even as the poorer families may occupy generous space at this juncture, the middle-income households will purchase the large tracts of land particularly in emerging settlements at the peripheries of the city (Racelis & Aguirre 2002). As noted earlier, these plots of land can afterwards be occupied, sub-divided or resold at a profit to the next buyers. In this case, smaller plots of land per square meter lessens, which also implies that smaller plots become proportionally much more expensive in Cebu City than larger ones. Payment of Plots The manner, in which plots are paid for, in Cebu City within the informal land market, is a vital aspect that also determines access to plots in the city. As there are no significant financial transfers or mortgage finance, the terms or payment and other conditions for sale are largely determined by the informal land sellers. In Cebu City, the vendors of plots are hesitant to accept extended payment schedules and often emphasize cash payments or smaller sequences of installments. Researchers have failed to establish the reason behind these kinds of arrangement; however, possible explanations are that occupation symbolizes ownership, in which occupation of the plot of land signifies final transfer. In some instances, vendors have been reported to insist that they have reservations they would ever be paid the remaining money once the land is occupied. In return, since there is lack of confidence in the transfer arrangement, it triggers the problem of land affordability in Cebu City. This means that despite the fact that plots of land may be relatively low-priced, raising the extra cash to purchase the land by the low-income households can be a great hassle. In fact, low-income families in Cebu City are less likely to save enough money that would allow them to buy the plots of land in cash (Racelis & Aguirre 2002). Occupation and Vacancy of Plots In Cebu City, the highly affluent purchasers of plots of land have the capability to choose among a range of options that may include speculation, disposal or occupation. With this regard, they perceive the buying of plots as not just fulfilling a certain basic need but as an investment symbolizing a range of opportunities (Felisa 2002). Many Cebu City residents who occupy larger plots of land take advantage of the extra piece of land to construct a more significant dwelling as a viable space for extension or for immediate family use. Vacant lands within the plot are allocated as a recreational space for gardening or sale. In most cases, they also offer space for business opportunities. For instance, in a settlement in Sitio Montebello, a number of occupants have constructed garages at the sides of their houses. In Duljo, Sitio Montebello and Buhisan, the extra space is applied for small enterprise purposes. Price setting and Sales Current debates on land issues in Philippines emphasize on increasing the potential of income-earning households to buy land. Valorization of informal settlement lands and their potential to fetch high prices to the landowners and agents has been a lucrative business in Cebu City. Such activities have been beneficial to the Cebu City poor who have land and look to raise capital for certain ventures. However, land sale within this informal market is a major concern for policymakers in Philippines as it is increasingly leading to displacement of the poorer residents (Racelis & Aguirre 2002). In conclusion, a critical feature of the informal land markets in Cebu City is however not exclusively valorization but also the determination of its value. According to studies, in the city’s informal settlements, the prices of land generally increase rapidly over time attributable to settlement consolidation, consequential increase of land tenure security and improved infrastructure (Racelis & Aguirre 2002). References Arif H, Sheela P & Satterthwaite D, 2005, How to Meet the Millennium Development Goals (MDGs) in Urban Areas, Environment&Urbanization, 17(1) Bongcac, DC 2012, Fernandez to focus on urban poor, Tom takes early medical leave, Online, Accessed on http://cebudailynews.wordpress.com/2012/10/23/fernandez-to-focus-on-urban-poor-tom-takes-early-medical-leave/ [24 March 2013 ] Eduardo, Z. & Rosalina BA 2012, Descriptive Study on the Informal Settlers in Cebu City, Philippines, Cebu, Cebu Normal University Felisa, UE 2002, Urban Governance, Partnership and Poverty Towards Inclusive Urban Governance in Cebu, Birmingham, The University of Birmingham Racelis, M & Aguirre A, 2002, Child rights for urban poor children in child friendly Philippine cities: views from the community, Environment and Urbanization, 14(97) 97-102 Read More