Land readjustment pitfalls in portugal and the role of equity

Planning has not always preceded the development of urban land. The rapidly increasing growth rate of urban territories can easily lead to the emergence of pieces of fragmented, unqualified and unconnected urban fabric. Land readjustment is a century old technique that is attracting growing interest worldwide as a means of achieving planned, equitable and efficient urban development. This practice has been adopted and adapted by various countries in order to accommodate differences in both legal frameworks and public-private relationships. Various levels of success and degrees of implementation have been reported as well as pitfalls and obstacles, some of the latter being common in and/or experienced by more than one country alone. In the case of Portugal, land is predominantly privately owned and the public administration has played a passive role in the urban planning process, limiting itself to the issue of permits for isolated private operations. In the light of the principle of equity, Portuguese law establishes that urban development plans are obliged to provide land readjustment mechanisms to eliminate, or at least mitigate, the inequalities they themselves bring about. After more than a decade of existence/practice, however, the application of these mechanisms still has not achieved a satisfactory output, and has come up against a number of obstacles and problems. These, in short, are related to property structure and records; land owners’ engagement; technical expertise; availability of public funds; time consuming processes; ineffective dispute resolution instruments; and lack of reliable land evaluation mechanisms, truly embedded in the planning process, for calculation of reference values for both property and building rights in the context of the distribution of benefits and charges. To address the latter aspect in particular, a methodology for the fair distribution of benefits and charges was developed and applied to the urban expansion of the Portuguese city of Sines. This paper will share how land value appraisal combined with property size was used as a distribution driver, together with a universal and 1 CESUR/IST – Center for Urban and Regional Systems Research Group on Urban Planning and Environment, Instituto Superior Técnico, Technical University of Lisbon, Lisbon, Portugal – bcondessa@civil.ist.utl.pt 2 CESUR/IST, Lisbon, Portugal pjcambra@gmail.com 3 CESUR/IST, Lisbon, Portugal – ams@civil.ist.utl.pt 4 CESUR/IST, Lisbon, Portugal – antunes.ferreira@civil.ist.utl.pt free property valuation tool – the national online property tax calculator. The global market value of the proposed urban plan was estimated and to each landowner was assigned a share of this value according to the surface area of each one’s property. Also, the market value was estimated for the units one had the right to build. The distribution of development costs (infrastructure, public space) was made in proportion to the latter, that is to say, the higher the value of one’s building, the higher the charges to be paid. For each proprietor a balance was made between the assigned plan value, the actual value of their building units and the development fee, resulting in a lump sum payable or receivable. This approach made it possible to achieve better communication with and understanding of landowners, bringing transparency and equity to a process locally perceived as somewhat blurry. Better understanding and grasp of the land readjustment model by private and public stakeholders can be a step forward in achieving cooperation and plan implementation.