Introducing Deborah Thomas from Washington DC (The Unreal Estate in the United States – A Story of Lack of Choice)
February 12th, 2009
Last December, I presented my book at the World Bank sponsored by the World Bank Institute. That talk was special not only because Francis Fukuyama was on the panel and presented a historic development of property rights in economies around the world, and not only because the auditorium was filled to standing room only, but also because Deborah Thomas was there. I wrote about Deborah in my book (chapter 5)
She is a woman from the old segregated and distressed neighborhoods of DC whose financial worth equaled a welfare check … back in the day. She lived with her five children in a housing project, and her mother lived in similar conditions (rent-controlled housing). This living arrangement was all that was offered in the market for people like Deborah: social housing; never owning her own home or apartment, but instead a government- controlled subsidized rental.
One night, Deborah’s home caught fire. She was seriously injured as she tried to rescue her children, one of whom was blinded that same night. After her house was burned she was then officially declared homeless. She had no choice but to move into her mother’s apartment at 14th and W Streets, NW, in DC (across from today’s well-known bookstore/café “Bus Boys and Poets”) – the same apartment she had been raised in as a child, in a building that had been rent-controlled since the 1970s.
But her mother’s building was “Condemned.” A notice glued on the front door of the building declared that it was unsatisfactory for living purposes and that the 150 units had to be vacated in 30 days, with families bussed to shelters.
Deborah and her family were victims of what I call “Unreal Estate” – property so burdened with regulations and unclear rights about usage and responsibilities that it render the asset illiquid.
Unlike so many people who feel powerless to do anything but accept this fate, Deborah researched the regulations, looking for ways the law might allow the tenants to have a choice to purchase and become proud owners of their apartments. She learned that the tenants had the right of first refusal. With her leading the way, the tenants exercised that right. Today, their building and each apartment are valued so much higher, now that they have been pulled out from under public housing regulation and have renovated.
Deborah is no longer on welfare. Instead, she is a proud Middle Class lady in a community that she cares about and to which she belongs. Ownership of her apartment provides a reason to strive, work, save, and invest, and offers a better future for her and her kids.
Deborah’s story is one of HOPE that became REAL CHOICE and has led to a new PROSPERITY.
February 17th, 2009 at 10:57 am
Elena,
This is a very impressive story that shows the potential of institutional change in the management of urban properties.
The Bank has accumulated extensive experience on property rights regularization, cadastres and property registries modernization programs. One of the common elements of these reforms is that they show the need of new legal, regulatory and organizational frameworks, to promote behavioral change within existing institutions and generate positive performance at the local level, through formal establishment of practices and rules.
This institutional strengthening processes has started in various countries, with Bank support, and has provided significant experiences on the type of institutions that facilitate access to property rights of critical assets (in particular, immovable property), and the intensive use of such property rights in the market economy.
Specifically in LAC, the Bank and other development partners (IDB, USAID, Denmark, Germany, Switzerland) have been very active in financing investment projects for titling, registries and cadastres. Most of these projects have dealt with critical institutional development issues like the modernization of the relevant organizations at the national and sub-national levels; the improvement of the legal and regulatory framework to respond to the practices and rules that govern the informal allocation and use of land; the reengineering of titling, registry and cadastre processes to adjust them to the demand for massive regularization of land and houses; the implementation of change management strategies to set new incentives aimed at changing the way bureaucracies and citizens approach the land and housing regularization processes, among other institutional reforms.
This wealth of experience has to be systematically reviewed and articulated into a coherent framework, to fill a knowledge gap and bring together the experience of other development practitioners with that of Bank staff.
Market economy institutions can be improved by identifying the most effective operational and practical approaches to address the challenges identified in the WDR 08 “Economic Geography” and the UN “Legal Empowerment for the Poor” in specifically two areas:
• Legal, Regulatory and organizational reforms for efficient property rights allocation in urban settings.
• Good practices on Legal Institution – building a modern property rights systems in LCR.
I would encourage Ms. Panaritis to pursue her ground-breaking work around these topics that have a promise of social inclusion for millions of LAC citizens.
Regards,
David
March 6th, 2009 at 12:57 pm
Elena, an excellent and eloquent description of how over-regulation and misguided regulation affects people’s lives and livelihoods. Regulations of this kind have been used to devastating effect by developers, especially in cities like New York and Cambridge, Mass., which have rent control, to get rid of buildings housing low and moderate income people replace them with expensive and glitzy commercial and residential properties. Not too dissimilar to what we have seen in many African countries, except here the process is covered in a thin layer of legality, which is often unnecessary in some of the world’s poorer countries
July 31st, 2009 at 4:44 am
Prosperity Unbound » Blog Archive » Introducing Deborah Thomas from Washington DC (The Unreal Estate in the United States – A Story of Lack of Choice) great article thank you.
December 27th, 2009 at 7:27 am
Prosperity Unbound » Blog Archive » Introducing Deborah Thomas from Washington DC (The Unreal Estate in the United States – A Story of Lack of Choice) great article thank you.
January 8th, 2010 at 10:03 am
great article thank you
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