Land reforms

The Government this week withdrew the controversial State Land (Special Provisions) Bill following much controversy. Proponents of the Bill backed it on the basis that it would have provided land deeds to over two million families, largely involved in agriculture, while the detractors faulted the Government for attempting to create a Land Bank that would identify land for privatisation or foreign investment. 

The arguments from both sides are old and have been heard by the public before. In fact the Government obtained Cabinet approval to establish a Land Bank in February 2017, ostensibly to find property to build 620,000 houses by 2019. This later morphed into a wider effort along with part of the Millennium Challenge Corporation (MCC) grant to be used to establish a Land Bank. With the withdrawal of the Bill it is not clear what will happen to these plans now.  

Experts have acknowledged that legal reforms regarding land is necessary, particularly to give market value to paddy lands, which cannot be monetised easily. They argue that land reforms will give farmers and other unbanked communities more autonomy in deciding their finances and promote their financial stability. Others worry that establishing a Land Bank will allow the Government to arbitrarily decide how the land will be used with little or no consultation from stakeholders. This is a valid concern.        

Land banks are not financial institutions. They are public or community-owned entities created for a single purpose: to acquire, manage, maintain, and repurpose vacant, abandoned, and foreclosed properties – the worst abandoned houses, forgotten buildings, and empty lots. At least that is their task in other countries.  

The public – for good reason – is often suspicious of any Government role in the real estate market. In the case of abandoned properties on State land the Government can reclaim ownership. Still, it is critical that the operation of a land bank be fair and predictable. To build public confidence in a Land Bank, the adoption of well-considered policies and priorities that govern to whom – and for what purpose – properties are sold or transferred. Terms and pricing policy must be clear and uniform, as well.

The land held by Land Banks is typically scattered among neighbourhoods throughout the community, or in this case possibly the country. So, the Land Bank has neighbours, sometimes thousands of them. The most successful Land Banks engage those neighbours on the policies and practices that determine the outcomes for those neighbourhoods. 

Public acceptance of the hard choices that will inevitably need to be made regarding property held by a Land Bank is much more likely when those neighbours have a voice – a formal voice – in policy and operations. 

By formalising that process, through regular neighbourhood meetings, and in some cases with the formation of a Community Advisory Council, Land Banks get public input on terms that make that input more meaningful than if that input comes in the form of uninvited anger or frustration with land use decisions.

The best Land Banks do not work alone, but rather develop strategic partnerships with non-profits, community organisations, lenders, and local governments – all in an effort to leverage the resources available to deal with the most distressed land in the community. 

As with most Government policies there was not enough engagement from non-political actors in this latest Bill. It is important that policymakers learn from this experience and make an effort to be more inclusive in taking reforms forward.