Unraveling the self-made city: The spatial impact of informal real estate markets in informal settlements

Abstract

Informal real estate markets have developed as a result of deficiencies of formal real estate markets and play a crucial role in providing housing to the urban poor. This contribution combines an adaptation of Ostrom's rules with property rights theory to study the rules that have developed in the informal real estate, their spatial impact and implications of formal-informal interactions in an informal settlement in Nairobi, Kenya. It is argued that although the nature of formal and informal property rights regimes is highly similar, conflicts arise when the two concur as they are based on different forms of legitimacy: input and output legitimacy. To the formal market, the informal market is illegitimate as it infringes on formal property rights and planning regulations, whereas to the informal market, the formal market is illegitimate due to its excluding nature. The research opts for further research in the discipline of spatial planning in order to gain a better understanding of formal-informal interactions.