Does slum formalisation without title provision stimulate housing improvement? A case of slum declaration in Pune, India

Abstract

Though previous studies have examined how formalising land tenure affects housing improvements in informal settlements, the role of tenure security and its long-term influence remain unclear. In response, this paper quantitatively examines the extent to which formalising land tenure by way of slum declaration has stimulated housing improvements during the last three decades in the slums of Pune, India. Since slum declaration guarantees residents occupancy but not full property rights, this study focuses on how tenure security contributes to housing outcomes, such as materials, size, the number of floors and the amount of money spent for the improvements. Using original household survey data, analysis involving propensity score matching and difference-in-differences methods reveals that slum declaration has tripled a household's likelihood of having added a second floor and, albeit less clear, increased the average amount of money spent on housing improvements. At the same time, slum declaration has not induced any improvement in housing materials, largely since many residents of non-formalised slums have also replaced materials. These results indicate that slum declaration, even in the long run, has continued to influence housing investments in Pune's slums, in terms of both type and amount spent, though residents of non-formalised slums have also come to enjoy certain de facto tenure security. Among other implications for policy, these findings underscore that governments should at least provide legal assurance of occupancy rights in informal settlements, even if active interventions such as slum upgrading and titling are currently difficult.

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