reviews the factors that affect supply: the availability of serviced land, as well as land and housing regulations. While these elements have been standard tools of housing policy, they are still the subject of considerable debate over their sequencing, policy content, and priority. There has been a great deal of emphasis over the last two decades on demand-side measures to improve property rights systems, develop housing finance, and even to introduce new subsidy systems. All these developments are important, but as this paper argues, less progress has been made in understanding and addressing the factors that constrain supply, which often thwart improvements on the demand side.

# **Property rights**

Clear, enforceable, and tradable property rights, along with systems for settling disputes and determining compensation for public acquisition, are necessary for effective housing market performance. Secure property rights improve market efficiency by reducing transaction uncertainty and making it easier to transfer rights, thereby increasing the volume and value of real estate transactions. In addition, clear titles are as important as collateral for access to finance and the development of housing finance. In developing countries, these benefits are often compromised by a regulatory environment that reduces the value of legally owned property and its use as collateral. Moreover, even where property rights are well established, they have little value without institutional structures for enforcement and adjudication.

Many cities have a continuum of tenure statuses with various bundles of rights, ranging from squatting to leasehold and freehold. Property rights systems tend to be fragmented and poorly developed, causing delays in public and private land acquisition and infrastructure provision, and inefficiencies in land and housing markets. Without effective dispute settlement institutions, the lack of clarity in real property rights leaves land in legal limbo, distorting land prices and hindering private real estate transactions, finance, and development.

The ambiguities and conflicts over property rights that are commonly found in informal settlements, and that lead to various degrees of tenure insecurity for their residents, reflect the shortcomings and inefficiencies of the system for enforcing and adjudicating existing property rights or for establishing clear rights in the first place. Registries tend to be incomplete and poorly maintained, property disputes account for large caseloads in the courts, and registration processes are often lengthy and costly. While the institutional aspects of property rights (definition, enforcement, and adjudication) are the critical elements for ensuring secure rights and reducing risks for real estate investment, most of the debate has been narrowly focused on titling and tenure security for slum dwellers.

## **_Do titles matter?_**

De Soto (2000) framed tenure security as a matter of property rights embodied in legal title, which converts the informally held housing and land assets of the poor to usable wealth. Titling essentially allows the poor to benefit from a flow of investment and credit and to become more 3