Access to Urban Land and its Role in Enhancing Business Environment: Multi-track versus Mono-route Land-use Markets

Author:Elias N. Stebek
Position:Elias N. Stebek (LL.B, LL.M, PhD), Associate Professor, St. Mary's University, School of Graduate Studies. An earlier version of this article was part of an unpublished research paper titled 'Access to Urban Land for Private Sector Development in Ethiopia' (dated June 9, 2015) which was submitted to Private Sector Development Hub, Ethiopian ...
Pages:1-36
SUMMARY

Access to urban land for business activities relates to access to working space, or using and/or controlling a unit of land based on open access, land ownership, land lease, business lease or premise rentals. Diversified and broad-based access to urban land with due regulatory control against speculation and holdouts enhances the dynamism and competitiveness of business activities, while on the... (see full summary)

 
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Access to Urban Land and its Role in
Enhancing Business Environment:
Multi-track versus Mono-route Land-use Markets
Elias N. Stebek
Abstract
Access to urban land for busin ess activities relates to ac cess to working space,
or using and/or controlling a unit of land based on open access, land ownership,
land lease, business lease or premise rentals. Diversified and broad-based
access to urban land with due regulatory control against speculation and
holdouts enhances the dynamism and competitiveness of business activities,
while on the contrary, mono-route land use markets such as municipal control
of urban land provision suppresses the supply and transferability of land use
rights thereby creating land use market imperfections. This article discusses the
role of access to urban land and its transferability in enhancing the business
environment, inter alia, as one of the major inputs in the production of goods
and services. Rising urban population and correspondingly increasing business
activities lead to urban intensification and urban frontier expansion to adjacent
rural areas which should be addressed with prudence and caution in the context
of accurate land information, efficient utilization of urban land, effective and
transparent land governance and due attention to good practices in comparative
legal regimes.
Key terms
Access to urban land, business environment, urban land law, urban
intensification, urban extensions, informal settlements, Ethiopia.
DOI http://dx.doi.org/10.4314/mlr.v9i1.1
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Introduction
Every person occupies a space during each second of his/her lifetime. While
most of the space we occupy at any given moment is public space (such as a
street or an open space), there are units of land over which individuals, groups
of persons, communities or juridical persons claim a spectrum of exclusive
rights of use and control. Access to land does not thus mean dominion over
Elias N. Stebek (LL.B, LL.M, PhD), Associate Professor, St. Mary’s University, School of
Graduate Studies. An earlier version of this article was part of an unpublished research
paper titled “Access to Urban Land for Private Sector Development in Ethiopia” (dated
June 9, 2015) which was submitted to Private Sector Development Hub, Ethiopian
Chamber of Commerce and Sectoral Associations.
2 MIZAN LAW REVIEW, Vol. 9, No.1 September 2015
commoditized land as its ‘master’, per se, but access to be at a certain space, or
use (and control) a certain plot of land (in common with others, as a member of
a certain group or exclusively as an individual). It also involves the security,
tenure and transferability of the access which is obtained.
In the context of business undertakings, the claim over well-defined and
secure rights to use (and control) a certain space on land takes the forms of
working space or business premises through open access, shared access, rental
tenancy, leasehold, ownership and other forms. While most business ac tivities
merely use premises or floor spaces, others invest on the land. “Access to land
with sufficient security to encourage investment for its efficient use and
development is a vital component in development strategies for individuals,
groups, cities and nations”.1 This is more evident “in urban areas where demand,
and therefore prices, of land for all uses are highest”.2
Land constitutes one of the factors of production, and access to land
facilitates access to a key resource in value adding economic activities. On the
contrary, inadequate access to land and restrictions thereof constitute entry and
transferability barriers to enhanced economic activities thereby adversely
affecting business environment and economic development. As Okoth-Ogendo
duly observes, land “is an economic resource and an important factor in the
formation of individual and collective identity, and in the day-to-day
organization of social, cultural and religious life”.3 Moreover, land is “an
enormous political resource that defines power relations between and among
individuals, families and communities under established systems of
governance”.4
The triadic functions of land as one of the foundations of our lives include (a)
its role as the source and foundation for our natural resources which constitute
inputs in the production of goods and services that relate to our basic needs; (b)
its services as sink in the course of waste disposal and recycling; and (c) its
function related to our aesthetic needs, amenities and reverence to nature. In its
first function, land is the foundation of business undertakings in relation to the
space, inputs and raw materials that are indispensible in all economic activities,
1 Geoffrey Payne (1996), Urban Land Tenure and Property Rights in Developing Countries,
A Review of the Literature, August 1996, Prepared for the Overseas Development
Administration, p. 13.
2 Ibid.
3 Okoth- Ogendo. Keynote Address at a Workshop on Land Tenure Security for Poverty
Reduction in Eastern and Southern Africa. Organized by IFAD/ United Nations Office for
Project Services/Ministry of Lands, Housing and Urban Development, Government of
Uganda. Kampala, 27-29 June 2006 [in Improving access to land and tenure security,
Policy, IFAD, December 2008, page 5].
4 Ibid.
Access to Urban Land and its Role in Enhancing Business Environment 3
particularly where the economy is factor-driven, a phase which countries
undergo before their eventual transition to technology-driven and innovation-
driven phases of production of goods and services.5 As noted by Kunte et al,
land represents 30 to 50% of the national wealth in developing economies.6 This
article deals with the significance of access to land, business premises and
working space and the need for ease in their transferability to the most efficient
user in the pursuit of enhancing conducive business environment. As the themes
are general and comparative, this article does not relate most issues with the
Ethiopian context. Other articles (such as the one which is concurrently
published with this article) can address specific themes regarding access to
urban land in Ethiopia.
The first section introduces the key issues that can be regarded as the
constituent elements in access to land. Section 2 deals with the influence of
access to urban land in improving ease in doing business and it also highlights
land market imperfections. The third and fourth sections of the article deal with
the challenges that are inherent in the course of enhanced urbanization through
urban intensification and urban land expansion. The fifth section highlights the
significance of land information and land governance in access to urban land.
Sections 6 and 7 deal with tenure under public ownership of land, the
misconceptions thereof, and a brief discussion on China’s pursuits in urban land
law reform with regard to tenure and transferability despite public ownership of
land. The eighth section highlights some comparative experience regarding the
scheme of incremental tenure titles for informal settlements.
1. Key Issues in Access to Land
Based on a ‘systematic exploration of the land issues from the perspectives of
private sector development,’ Muir & Shen suggest a taxonomy which captures
‘the multilayered and interrelated obstacles facing private investors seeking
access to land’.7 They indicate the following four key issues investors can face
in relation to access to land:
- “Access: Is the land I need available? If so, from whom, at what price, and
on what terms? How long will it take?
5 See the elements in factor driven, technology driven and innovation driven economies, in
World Economic Forum (2012), The World Competitiveness Report 2011-2012, Geneva.
6 Arundhati Kunte, Kirk Hamilton, John Dixon, and Michael Clemens (1998), Estimating
National Wealth: Methodology and Results, Departmental Working paper (World Bank,
Washington, DC).
7 Russell Muir and Xiaofang Shen (2005), “Land Markets: Improving Access to Land and
Buildings by Investors”, FIAS World Bank Group, October 2005.

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