What are the implications of land records and the value of an integrated record system?

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Land records are a cornerstone of capitalism and some would argue of civil society. The majority of people in the world lack any enforceable claim to their homes or the land they farm. Without land rights and records, there is a cycle of poverty and social inequalities. The lack of property rights strips the ability to generate equity that can be used to borrow against for an education or to start a business. The lack of property also strips a country’s economy of large amounts of wealth, and stifles the ability of its citizens to escape poverty.

Land records in the developing world are the means that make property into liquid capital, which can be transferred and borrowed against. Land records for the basis for taxation, with the revenues generated serving to maintain the community. The concept and complexity of this taxation, that assesses different tax rates based on the parcel size and use, have led to innovative computer-based land records that largely start with a map view. Recording property rights forms the first basis of a liquid economy, and putting those records in a system that can be queried and analyzed form a framework for better governance.

Relating to Citizens

Having land records of each citizen gives the government a good understanding of where their people are. Property rights form the need for an address, and the address allows a government to know where their citizens are. The citizens in turn are tied more directly to a place, which forms the framework for law and order.

Ownership creates a deeper connection to location that fosters a pride of place and increases the livability of communities. When citizens are given rights to land, they want to take care of the land and they put pressure on companies or individuals that impact the value of their land. In addition, when all citizens have the capacity to own land it reduces the chance for social injustice. If everyone has a means to own and enhance the land, there’s less chance for minority groups to be marginalized and stripped of rights.

Streamlining Record Systems

With land records integrated into a central GIS database the government can equitably share the burden of community building and public health and welfare with its citizens, and better manage revenue flow that supports this work by keeping track of property values. The system-based approach makes certain that each property is owner is paying their fair share and gives assurance to other land owners that this burden is shared fairly.

A centralized land database extends the use of property information beyond simply taxation purposes to other management issues, such as agricultural subsidies, urban and rural development plans, insurance underwriting, mortgage loan applications, utility services, forest management and citizen access to details about their community. An incredible number of land management issues are tied to property ownership, and GIS provides the framework to make this data more useful and accessible.

A National Cadastre

The lack of a centralized awareness of a myriad of real estate issues is largely the reason that the economic crisis took hold so deeply. The federal government regulates the mortgage market heavily, but the land records in the United States are mostly kept at the county level without integrated records at the regional or national level.

While the lack of property rights and land records is a damaging thing for the developing world, the lack of integrated and transparent land records at the national level can be equally as damaging to the developed world. Without a countrywide database of land records, there isn’t a strong basis to understanding the prosperity and state of the economy in regions.

The issue of property integrates the different geospatial disciplines of surveying, mapping and the enterprise integration of geospatial systems. The world has a long way to go in passing on the benefits of property ownership in concert with large-scale and standardized land records systems. The issue of property is critical to sustainability, and geospatial tools can help spread the benefits and help better manage this data.

References

Dreams of a National Cadastre Take a Commercial Turn, Spatial Sustain, June 24, 2009
Need for a Multipurpose Cadastre (1980) National Academies Press
Mapping the Invisible, Hernando de Soto, Keynote, 2009 ESRI International User Conference, [Video]
The Mystery of Capital: Why Capitalism Triumphs in the West and Fails Everywhere Else, Hernando de Soto, Basic Books, 2003

2009-10-14 13:34:14 | Christopher Barlow - Why Land Records are important to healthy market e

This past July I met with renowned Peruvian economist Hernando de Soto, author of The [url]Mystery of Capital[/url], at ESRI’s International User Conference. In his book de Soto postulates that a functioning land registry with current land information pertaining to property rights is the keystone to a well functioning market economy. For those that have studied economic theorists Adam Smith or Joseph Schumpeter, de Soto’s theory pertaining to land ownership and property rights is particularly revealing, especially in 2009 when we find ourselves coping with an economic recession. So why would Smith or Schumpeter agree with Hernando de Soto on land rights, and why is this relevant today? Smith, the father of modern economics, asserted in his seminal work The Wealth of Nations that countries accumulate capital through individuals’ land and labor. Hernando de Soto specifies that in many developing countries land rights are not secured through documented deeds or title, which limits the ability or interest of an individual to apply labor to that land – to improve land. Securing land rights thus becomes essential for a nation to accumulate capital. Relate this to Schumpeter’s thought on the role of entrepreneurs in forming market economies. He believed that Unternehmergeist, German for entrepreneurship-spirit, drove innovation in an economy. The self-interested individual contributes to national wealth creation. Schumpeter also theorized that economic cycles were greatly influenced by the availability of financial systems for granting credit. The solidity of these financial systems determines the health of a market economy – and entrepreneurs that have access to resources based on available credit are an economies bloodline. Interestingly most financial systems are tied to real assets, and in the case of most individuals, land is the primary asset that can be used to acquire credit. This forms the cyclical nature of capital. Matt Ball in his article states the need for a national cadastre. In a time when sub-prime mortgages, mortgage backed securities, interests, trusts, foreclosures, and credit default swaps all grabbed national headlines, all dizzying terms, the real issue according to many financial experts is that the financial sector cannot adequately determine the value of loans which are based on land as the principal asset. US counties and states individually maintain land records, but these systems are not tied into a national cadastral. A cadastral fabric for the nation would provide a macroeconomic vision for how physical lands relate or equate in value terms to each other. As Matt Ball noted, an interesting and revealing read on this subject is the 1980 study by the US National Research Council, [i][url]The Need for a Multipurpose Cadastre[/url][/i]. Nearly 30-years on, the proposed rationale for a national cadastral fabric rings clear in our current economic climate. For more on how Hernando de Soto’s theory on land rights is being applied in a developing country, read ESRI’s ArcNews article on the [url]Ghana Medeem projec[/url]t. ILS (International Land Systems), ESRI, and the Clinton Global Initiative are working together in Ghana to secure entrepreneurial school owners’ rights to their land so that they may secure microfinance loans to improve the local education system. Smith and Schumpeter would approve. Christopher Barlow works for ILS Inc. in Washington, D.C.

What are the implications of land records and the value of an integrated record system?

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