Housing and Land Markets

This commentary reflects on a profound impact that the fiscal crisis has on management of public property and overall lack of advanced asset management practices at local governments even though 65-99 percent of the value of the wealth owned on the taxpayers' behalf is concentrated in public land, built-up property and infrastructure.

Land assets have become an important source of financing capital investments by subnational governments in developing countries. Land sales, often with billions of dollars per transaction, rival and sometimes surpass subnational borrowing or fiscal transfers for capital spending. However, the use of land-based revenues for financing infrastructure can entail substantial fiscal risks and requires development of ex ante prudential rules for land financing comparable to those governing borrowing. This paper is part of a larger effort at the World Bank to develop knowledge products on subnational finance and fiscal reforms.

The article discusses the impact that the current international public finance crisis (which coincided with the downturn of real estate markets) has had on government property assets and related services, primarily at the level of sub-national governments. Using examples mainly from North American and European Union countries, the article illustrates how the crisis amplified the risks to which government assets have been exposed, even in more ordinary situations. The central challenge: will governments be able to mobilize the economic value of their assets strategically, to mitigate the crisis impact, or will the government property be wasted on temporary fixes?

The purpose of this guidebook is to provide practical advice to local governments (LGs) and their advisors on how to establish and maintain a process of planning and funding capital investment as a regular activity integrated with other activities of the LG and based on principles of good public management. The guidebook is addressed mainly to cities that have not yet established such a process. However, it also can be used by cities with established capital investment planning, because the guidebook addresses important aspects often not incorporated in existing practices, such as life-cycle costing or land financing.

Gender equality in property rights is a critical human rights issue and a key driver of overall economic development. This paper explores three issues in international development which are not often considered together or in terms of how they relate to each other. These issues are: (1) The rights of women to participate in property use and ownership with full legal and societal protection; (2) the importance to economic development of property rights in urban areas; and (3) the role of women in economic development. The final section offers recommendations for more effective development programming and implementation through the integration of these issues.

Governments of all levels in a number of countries have experimented with what can be called a government land development corporation. In the past, experimentations with this instrument of land management intensified, but their generalization and exchange of knowledge on the subject across borders is practically lacking. It reviews ten case studies prepared specially in a unified format and discusses similarities and differences among them, along with positive lessons and potential risks. The paper outlines a “conceptual design” of a new corporation or some guidance on which policy, governance, and business issues should be addressed before such a corporation is established.

In most countries, central as well as local (municipal) governments own or control large holdings of land and built-up properties and, in addition, have the responsibility to provide public infrastructure services within their respective jurisdictions—from roads, streets, water, and sewerage to social services, such as schooling. Management of government-owned property assets, including land, as a distinctive area of public management, is still in its infancy compared with traditional areas like public budgeting or public administration. What are the benefits of asset management for the global development community, including for the clientele of the World Bank and other international development institutions?

This report summarizes findings from the USAID-sponsored project on models of financing for slum upgrading in India, undertaken on behalf of SPARC, a prominent NGO involved in slum upgrading in India and internationally for over two decades, and the National Housing Bank of India (NHB), one of whose main goals is enhancing housing finance for low-income households. In preparing the recommendations, the Urban Institute and SDS India have worked together with USAID and an Advisory Group formed for this project. In addition to SPARC and NHB, the Advisory Group includes banks, housing finance companies (HFCs), foundations, microfinance institutions (MFIs), builders, and Indian research institutions addressing shelter and microfinance.