PROPERTY‐LED INFORMALITY: Shifting Informal Land Development from Popular Housing to Middle‐Class and Elite Speculation in Belo Horizonte

Abstract

Recent decades have seen a rising interest in the peripheral nature of urbanization processes. While research has put the spotlight on large‐scale, transnational and financialized real estate actors, less attention has been paid to informal land developers. Addressing that knowledge gap, this article underscores the key role of land developers in informal urbanization through a case study of Belo Horizonte, Brazil. A mixed‐methods approach provides new evidence of the widespread, variegated and spatially uneven development of irregular and clandestine subdivisions over the last two decades, revealing a heterogeneous landscape of informal developers. The study shows that informal development has been shifting from the typical popular and peripheral subdivision, which provided precarious yet affordable housing for working‐class families, to new forms of speculative investment for the middle and upper classes, such as country homes and gated communities in peri‐urban and rural areas. I argue that this shift is explained by both national and local changing regulatory frameworks and processes of economic restructuring, urban neoliberalism and housing financialization in the periphery. In light of this, I propose the notion of ‘property‐led informality’ to refer to a regime of informal urbanization increasingly dominated by commodified, rentiership and speculative land dynamics in the sprawling metropolises of the global South.

Informality through the state: How overregulation and tolerance shape informal land development in metropolitan Brazil

“…Therefore, land development control is better understood as a fragile and ambivalent state compromise between the need to regulate urban expansion and the increasingly market-driven interests behind informal urbanisation in Brazil. This study concludes that, by creating opportunities for rent extraction and capital accumulation which are explored by informal land developers, the state has been crucial for sustaining a regime of property-led informal urbanisation in metropolitan Brazil (Tonucci, 2023).…”

“…On the other hand, the contradictory overlapping of overregulation and tolerance creates several opportunities for rent extraction and capital accumulation (Banks et al, 2020) which are explored by informal land developers operating on the margins of the legal and the illegal. In that sense, the state has been crucial in creating the conditions for the emergence of a regime of informal urbanisation increasingly dominated by commodified, rentiership and speculative land dynamics in the periphery, which I have named propertyled informality (Tonucci, 2023). This has sustained a sprawling, splintered and unsustainable form of informal urbanisation which has been worsening conditions of access to land and housing, creating new forms of social and racial segregation, and producing environmental injustices.…”

“…Furthermore, although the market for informal land subdivision has constituted an important source of housing in Latin America for many decades (Abramo, 2019;Jaramillo, 2008), accounts of peripheral urbanisation in the region have paid more attention to the agency of residents and communities (Caldeira, 2017;Streule et al, 2020) than to state actors' roles. This is even more relevant in the face of the increasing commodification of informal land and housing in the Global South (Herlambang et al, 2019;Kan, 2019;Karaman et al, 2020;Tonucci, 2023).…”

“…The two types of developers which were inspected the most during the studied period were companies (42%) and individuals (40%), followed by the state (13%), especially municipalities. Informal developments range from precarious and peripheral subdivisions, which offer popular lots to working-class families, to country homes and gated communities, which serve as speculative investment opportunities for middle-class and elite actors (Freitas et al, 2023;Tonucci, 2023) In order to understand this process and to unpack the state-informality nexus, it is necessary to delve deeply into how the regulatory framework contradictorily shapes informal land development through both overregulation and tolerance.…”

“…Since 2009, the Metropolitan Region of Belo Horizonte Agency -MRBH Agency -has been responsible for land development control in the 34 municipalities that comprise Brazil's third largest urban agglomeration, inhabited by five million residents. Despite a comprehensive national regulatory framework and the land development control powers granted to this metropolitan authority in the MRBH, informal land development is still a widespread phenomenon, as irregular and clandestine subdivisions continue to push the boundaries of the region into far out peri-urban and rural areas (Freitas et al, 2023;Tonucci, 2023). Through a mixed-methods case study of the land development control policy led by the MRBH Agency from 2009 to 2018, this paper uncovers how the state, directly and indirectly, shapes informal land development in metropolitan Brazil.…”