Algiers fact of the day

There has not been a single property transaction in the Casbah in 40 years, said Mr. Ben Meriem, the head of the Paris institute. “No buyers, no sellers — for 30 percent of the buildings, we don’t even know who the owners are.”

Among the disused buildings, said Mr. Mebtouche, “eighty percent are owners who have abandoned their properties,” unable to pay for renovations.

Here is the longer NYT story by Adam Nossiter.  An excellent piece, though I would like to know more about the underlying regulations and incentives.

Comments

Not really pertinent to Algiers, but readers might find it interesting economically that the prevailing view in America is that an owner of real property (as opposed to personal property) cannot "abandon" it. The rationale is that real property has burdens for the owner that cannot be avoided simply by abandonment.

The experience of Detroit (and some other cities) says otherwise. Detroit has seized tens of thousands of properties for back taxes and retains them in a land bank

Seizure and abandonment are two different things, the former a third party (government) seizing (i.e, taking ownership of) real property to satisfy liens (for back taxes, etc.) while the latter is a voluntary attempt by the owner to avoid continuing responsibility for the burdens associated with the real property (such as attractive nuisance, hazardous or dangerous condition, etc.).

When properties are in a state of both unpaid taxes and disrepair, fortunately for the jurisdictions, seizure gives them an easier hammer. Because condemnation is a bitch.

Piece of writing writing is also a excitement, if you be acquainted with afterward you can write or else it is complicated to write.

"The rationale is that real property has burdens for the owner that cannot be avoided simply by abandonment."

I imagine the issue is primarily waste. Taxes would rarely exceed the value of property so the government can always seize, sale and obtain its owed taxes.

Stored waste on the other hand could easily have a negative value that exceeded the value of the land. IE Society can't allow a land owner to receive payments for some type of hazardous waste, then "abandon" the contaminated land at a later time. So owners are always responsible for the potential waste left behind.

In theory the owner should be responsible for waste left behind or even a building that is worth nothing but costs to tear down. But: people can die with no heirs, they can be too broke to fix up the problem (eg detroit). In old countries (I read about Greece in this context) it is often not even clear who owns the land or titles are all screwed up or got bombed in a war or lost in a fire.

Agreed, but the point was that, in general, society can't let abandonment be a method of transferring liabilities to the commons.

+1. Exactly. You even used the right term, the commons. https://repository.law.umich.edu/mlr/vol109/iss2/2

A betters trick still is to squat on some nice land, fill it with demolition waste and then take off and claim you had nothing to do with it.
https://www.express.co.uk/news/uk/1011899/travellers-site-flytipping-waste-disposal/amp

"IE Society can't allow a land owner to receive payments for some type of hazardous waste, then "abandon" the contaminated land at a later time."

Alas, thanks to generous corporate bankruptcy laws, insufficient performance bonds, and flaccid enforcement, that is precisely what happens to many, if not most, unprofitable mines and oil/gas wells. The taxpayers pay for reclamation, and the local communities eat toxic dust.

This might help:

"Public sector role in land development remains dominant in the country. Besides public roles in land development, the country relied on the public production of housing. This system of supply is even less
effective than is the public land development process. At present it appears that Algeria is intensively following this approach. It should be noted that due largely to its inefficiency this approach has been
abandoned throughout the Former Soviet Union and the reforming countries of Eastern Europe.
Evidence from countries like Algeria, where public ownership is high, or rent controls extensive is that the housing stock is under-maintained and run down. Central government support for households and/or industries to locate in particular cities has long been followed throughout the developing world, and extensive research has shown it to be ineffective.
Henderson (2000), among others, indicates that these policies can be sufficiently costly that they are detrimental for growth and contribute to corruption. Algeria is still pursuing such policies to locate population in cities other than the capital. Algeria’s current urbanization pattern is consistent with that of a formerly rigidly planned socialist economy. Such pattern can reduce growth. In short, locational choices for households and firms are rarely effectively made by the public sector."

http://um.ase.ro/no12/8.pdf

Did you say "regulation" with respect to land use in Algiers? Perhpas you meant corruption.

Sounds a lot like Haiti. There is no title system there, so nobody knows who owns what.

So I can put "functional title system and judiciary" down as a priority along with "water treatment plant." Has any public or private agency in the Haitian aid industry gotten to this yet?

Relevant:

https://www.amazon.com/Mystery-Capital-Capitalism-Triumphs-Everywhere/dp/0465016154

At the bottom of the article is a link to another article written in 2006 that says almost exactly the same thing. Not much change in 13 years.

For what it's worth, where I come from people put a down-payment on forty acres of foothills, cut the blue oak up and sell it for firewood, and then default on the loan.

On the other hand, did Tyler Cowen ever ever express any embarrassment for that post explaining who the losers and winners were from that bogus Mueller summary from Barr? I thought this guy was supposed to be smart, and although anyone can make a mistake, and buy the Brooklyn Bridge, shouldn't he be expressing some sort of regret for being such a willing tool?

Ah, the Casbah. It's probably best thought of as a self-regulating islamo-Anarchist pirate enclave, where government won't put any foot lest they come back out feet first. Property rights for the boldest, I would say. You take an empty shack, occupy it, and hope for the best. Make it look as run down as possible so no one else might want it. You have no title, so don't spend a lot of money on it.

As a regular MR reader living in Algiers for 6 years and counting, I, too, found this fact surprising and interesting. Unfortunately many of the comments above are not reflective of the reality here.

There are highly regimented property rights and inheritance systems in Algeria (those suggesting otherwise seems to be speculating baselessly); indeed they are at the heart of this problem. These systems are overburdened with red tape and difficult to navigate. The default inheritance model splits property across all heirs (and it apparently isn't legal to write a will which designates anything else), who must then come to agreement and navigate this complex system together to resolve a claim. Big families were common in the last generation (think 5, 6 kids and upward) so those who have passed away and left properties in recent decades have seen it split among many heirs. Rarely, they are able and willing to reach agreement and re-centralize ownership. (Will is often in short supply; many locals have viewed the cramped and eternally crumbling Casbah as an undesirable neighborhood for generations.) More commonly they are not able and willing, and ownership begins to pass to a third generation, after which re-centralizing ownership is effectively impossible... leaving homes to crumble. The legal default, coupled with the system's inefficiencies and the neighborhood's reputation, all cause the problem to grow exponentially.

A friend of mine comes from a Casbah family and has taken me to peer through the keyhole of her family home, which is filled with tumbled roof beams and pigeon droppings. A sad sight. She would love to reclaim it, but her grandmother says she long ago lost contact with the relatives who have claim to half of it, and even on their own side it must now be split among dozens of cousins anyway. It's lost forever, right in plain sight.

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