The Price of Land for Housing in Trinidad: The Role of Regulatory Constraints and Implications for Affordability

Abstract

Institutional and regulatory environments have a profound impact on land markets and prices. This paper argues that affordability of land and housing ownership in less developed countries is largely affected by cumbersome land transfer processes and an uncertain building permit approval process. It examines the impact of these constraints on land markets and affordability in Trinidad. By using Dowall's land market assessment methodology, the paper examines land price changes and land conversion patterns in the East-West Corridor region of Trinidad between 1989 and 1993. While prices of fully registered and serviced land have remained stable during this period (unlike many cases of 'skyrocketing' land prices reported in the literature), an examination of institutional and regulatory constraints suggests that land prices are likely to increase in the future when demand conditions become more favourable. These constraints have certainly played a significant role in the expansion of unauthorised housing settlements as documented by household survey results.

Marginal Benefits of Land Policies in Ghana

“…The use of contingent valuation methodology to specifically value the benefits of land policies in a developing country context, is not without precedent. Dowall and Leaf (1991) and Pamuk and Dowall (1998) have used the methodology to evaluate the effects of land policies on house prices in Jarkata and the East-West Corridor region of Trinidad, respectively. The detailed theoretical discussions behind the validity of this method in the valuation of land policies are presented in Dowall (1992).…”

Illuminating the formal–informal dichotomy in land development on the basis of transaction cost theory

“…Although property rights and transaction costs are interrelated concepts in NIE, however, the latter have not been the focal point in this type of research. Works that revolve around land markets are concerned mainly about the effects of transaction costs on the success of land registration programs (formalization of property rights) and/or on the efficiency of the land markets (formal or informal) in developing countries (Agboola et al, 2017;Antwi and Adams, 2003;Mooya and Cloete, 2007;Pamuk, 2000;Pamuk and Dowall, 1998;Trebilcock and Veel, 2008). In these studies, both property rights and transaction costs are at the center of investigative interest.…”

“…In these studies, both property rights and transaction costs are at the center of investigative interest. In contrast to the first two, the third debate is confined to few sporadic remarks on the effects of the transaction costs imposed by formal planning procedures on the inclination of people to informal sector (Alexander, 2001;Pamuk and Dowall, 1998). Alexander (2001), for example, pointed to the transaction cost-based selection of formal and informal structures in the land development process, indicating that "much land use planning for large scale development is undertaken by private firms, while landowners, firms and households engage in informal planning when institutionalized planning is too costly or too onerous" (p. 70).…”

Beyond Bureaucracy: How Prosecutors and Public Defenders Enforce Urban Planning Laws in São Paulo, Brazil

“…In developing countries, researchers who espouse this premise find that laws interact with under‐enforcement to generate a range of suboptimal outcomes. For instance, in Malaysia, Trinidad and Brazil regulatory constraints dampen supply, increase prices and render formal housing unaffordable to the bulk of the population (Malpezzi and Mayo, ; Pamuk and Dowall, ; Biderman, ). In Indonesia strict regulations are tempered by flexible enforcement so housing supply remains elastic and prices affordable (Monkkonen, ).…”