internally good afternoon this session of our festival is about building african cities that is the title of this conference and i have here with me professor vernon henderson who investigates this topic i think that today knowing how african cities are perhaps helps us in knowing better the situation of africa at large and this also helps uh shedding light on things and comparing and contrasting our own situation with the situation of africa in order to tackle the topic better last year based on a number of studies the urban population of the african continent exceeded the rural population and this means that knowing african cities is helpful in order to know better or no more about growth in africa african cities now are the parts of africa that is worth exploring and it is what we should explore as was the case with the great explorations of the territory once upon a time oftentimes african cities are encircled by a belt of slums which almost have a life of their own they are difficult to visit they are difficult to get to know and that goes also for journalists and for missionaries because they have their own life they have their own dynamics they are almost a city within the city and yet these sectors these parts of the the huge cities uh i think of lagos and they think of kinshasa are very hard that govern in terms of number of inhabitants also in terms of the way by which they developed professor vernon henderson is here to tell us more about this topic so without further ado i give him the flaw and then we will open the floor to questions and comments thank you uh very much it's a it's a plethora to uh to be here at a festival of economics that sounds strange to economists mixing those two terms but it seems like it's really enjoyable events and and very stimulating i'm going to talk about my colleague this morning tony venables from oxford uh talked about a framework for a project that we're doing that uh involves global cities but also african cities and i'm going to take a small part of that which is the subject of building cities and talk about a paper uh that we're writing on that and some of the things that are in that paper all right but to do so i'm going to talk first more generally about some of the issues and then i'm going to talk quite specifically yeah look at this can we shut this off can you hear me now yeah okay i'm going to then talk about uh nairobi in some uh some detail um i haven't lived in nairobi so my two co-authors know nairobi somewhat better but i know nairobi from from the air and i've certainly been there so um if some of you are from nairobi or by any chance uh you'll know more than i do and about what's on the ground but uh we'll we'll get a pretty good view of it here okay so the idea here is that in developing countries about two-thirds of the nation's capital the private capital produced capital is actually buildings and the volume of building space literally cubic meters of building space is a measure of that that capital so then apart from that you have an investment in public infrastructure and the main form of that is roads and highways together these comprise a large part the majority in fact the vast majority of a nation's capital stock there's still machines but we can also identify industrial buildings to some extent so most of this capital is in cities and it's disproportionately in bigger cities so if you think of african cities they're growing very fast especially the bigger cities the the primate cities they're growing at about four percent a year in population and to do that we have to house them build roads and so on that involves a rapid deployment of capital through these cities according to investment flows so your city's changing very rapidly and we'll see that for the case of nairobi so we don't know much about this process how well it works is it making these cities more efficient so we can think of you know this issue do you build higher or denser in a city as it grows like a new york or do you sprawl out like a los angeles or an atlanta city that was on the slide this morning so we don't simply know very much about this so what why do we care well there's some basic kind of planning issues if you have this private capital stock this housing going out you have to match it with roads and utilities the cost of doing that is to be related to the degree of sprawl so that if you have sort of disconnected leapfrog development sprawling development you have to build your roads further out you have to spread your utilities that's a greater cost it is also a function of regularity if the city's laid out regularly it's easy to provide this if it's raid out laid out irregularly it's not in fact there's a developing literature on that comparing what's called meats bound of land use and planting with rectangular systems where meats and bounds is kind of ad hoc and rectangular is pre-surveyed and all laid out the this capital stock is your property tax base of cities but one of the key questions right now is how much of this capital stock that we're putting in is subject in particular to climate change so we have cities that are investing huge amounts in roads and buildings that could well be under water in years that's an issue right why is that happening why is that being committed and and uh is it people don't think there's going to be climate change or are there that's ignoring it and then the next question is is this uh deployment of of this resource uh this capital somewhat efficient so let's talk about that so in elementary cities we have a framework in our mind of this sort of downtown area that's highly commercial business services financial services packed into the downtown other professional services and then it's not in american cities but other cities in the developed world you have high income residents and then medium kind of low income and then on the outskirts on transfer doors you have manufacturing so regularity okay so oh there we go okay um it facilitates uh information exchange when we look at african cities they look very different they have a hodgepodge of land uses you have slums bordering on high-class commercial development they're irregularly laid out and we have a huge portion of the african population in in slums i'm gonna get an adjustment here you want me to speak into both it's better this one but okay um so how slums play into this house one's play into this is critical these are tracks of land under uh these are tracks these are tracts of land under uh poor institutional regimes all right that's better okay uh these are tracks of land under poor institutional regimes it means that particularly when we have plots of land near the city center and see this in a few moments that this process of trying within cities to allocate land to what's called the highest and best use and sort of the jargon is inhibited because it's very different difficult under those institutions to do the transformation that you would like and their potentially significant welfare losses from that so i'm going to do two images here um i can't tell how well you can see them so this is toronto this is the lake on which toronto sits this is the downtown area and i think you can see um that it's fairly well regularly laid out you can see the kind of streets uh going this way you can see this high building development right in the center with these high buildings clustered together and then as you move away from that the heights sort of decline so it's regularly laid out it has this intense um continuous development at the center this is nairobi and it's complicated there's this sort of line running here this part is the presidential palace and grounds and stuff so we're going to ignore that this is really the downtown that we're looking at and if you look at it it doesn't first of all it's kind of blurry but that's not the image per se it's the fact that it isn't organized in the same regular fashion so the roads kind of are are you know not laid out on a grid the tall buildings there are taro buildings there but they're kind of isolated and then you've got another tall building and then one over here so it's very hard to pick out it's much more a hodgepodge if we go here so this is a shot in nairobi there's a slum called cabera here that we're going to talk about today kibera really starts in this corner and then it runs a thousand acres this way so that's off the slide you'll see cabera again later this is the edge of kibera these white buildings are slums collecting in the from the satellite and the angle at which this is taken they're very dense uh you know settlement small shacks not much room between them little pathways and so on bordering on it because kibera this part of cabaret in particular is quite near the downtown are these formal sector development with tall buildings the cars here parked over here is more formal sector this area up here was a slum but and this part in here was all part of the slum but because the intense pressure from the market at least at this little edge of kibera not in the rest of kibera they've been able to do some conversion so these buildings here are under construction and they're going to be tall buildings going to be built this is 2013 and then this is a slide from 2015 with now this construction complete notice the slums are still there now they're not white that's just the way it's the angle the sun that day and the way it's hitting them so it's kind of harder to see them now because they're they're i'm not so lit up like that on the rooftops but they're actually all still there so they're kind of two views on existing slums near the downtown the first view and it's probably the in some sense the most common in the development development studies world is that these slums are places that where we need to upgrade which in some sense is correct but the problem here so what does upgrading mean it means improve uh the rights of tenants if these are tenants or if these are units that are in principle owned by the occupant to improve secondly it means trying to regularize the slum go into it try to widen those foot paths just mix things um so trying to convert some of the footpaths to viable roads since there aren't many real roads through slums try to provide better utilities better public services the problem with slum upgrading it locks valuable land especially for slums near the center into this low rent usage with low heights and it's definitely not what happened in the developed world we'll see that in a moment the other view is kind of a demolish rebuild not slums at the edge but slums near the downtown tear these down relocate the residents and rebuild what is going to be to a much higher height so for okay i think it's back yeah for nairobi it's as we'll see that a lot of this i'm maybe oh here we go okay uh sorry they're either movable or they're not particularly durable so it's not necessarily a big loss of physical capital and it's the route in in some sense followed by china so china over the last 20 years has torn down basically its entire cities it's retained some traditional neighborhoods but most of the cities have been torn down all the maoist housing is gone almost and completely rebuilt the cities restructured them moved people out to the outskirts took over the factories that were in the downtown and relocated them it is kind of the model for addis ababa that's going on right now and tony talked a little bit about that this morning the downtown of addis is slums in rent-controlled units that the government owns and the government isn't trying to induce people at this stage at least to move out to kind of hollow out the center so they can take that land and and develop it into commercial uh commercial use that does have a cost and that is you there's a cost of relocation but of course the bigger cost is potentially the loss of social networks right you have these slums they have social networks and when you relocate people you typically don't might be a good idea to do so but relocate them together so they lose their neighbors everything gets reconfigured and shaken up so um these are slums in london uh from a while ago slower process in london but these are in kensington and this in shortage both in central london uh these 1865 and the shot from 1890 and shortages just before this area was torn down and these kind of uh one-story two-story buildings that existed they're better construction than than in nairobi but existed they're all gone i mean we completely redevelop london all that low income tenement housing this kind of lower lower height housing it's all gone okay so that's some background i'm going to talk about the formal informal sector or slum sector i'm going to talk about institutions and then i'm going to talk about data on nairobi you're going to talk a little bit about it now i think what we have for nairobi is two time periods 2003 2004 and 2015. we have um data that tells us the building footprints outline of every building in the city and where it is and in 2015 we have that again with the height the height from lidar data which is like taken from an airplane with like ground penetrating radar that measures the height extremely accurately the data for 2015 we got from a commercial firm that actually sells the product so um it's expensive to do this so what they do is they get aerial photos they outline the buildings electronically create what we call building polygons and then they have to have the lidar data which is very expensive to have also and then they have to do kind of 3d modeling of this so this firm is a commercial firm it does it and the reason it does it is that they're clients in the city who want this information the city government to start with because it wants to know where its buildings are the utility companies also want this information because they want to know you know where utilities are going to have to go and potentially where sewer lines ought to go and so on we now discovered that looking into the future there's a potential to get this data for the whole planet and to map the whole planet today and going forward map it from 10 years ago so they're u.s satellites that probably uh seven or eight of them that circle the globe taking very high dilution uh images they cover some part of the globe every day or sorry every part of the globe every day at least one of those satellites you can put that together for each city then you have potentially thousands of images then there's a technology to take those images taken at different angles and so on from that to get building height so you can actually using these air force uh or and other satellites you can actually map the planet particularly it's going to cost a lot of money to do it but there's a commercial race now to do this it's called digital elevation modeling so hopefully in a couple of years i might be able to come back and say here's the planet right and here's what's happened on the planet over the last uh 10 years and then i'm going to end up talking about slums and the potential benefits of converting slums to a different use near the city center and talk about why that hasn't happened okay slums what is a slum right so we have two maps of slums that were done by different professional teams so there was a team from columbia university working with the japanese and working with international agencies that looked at and mapped nairobi using i mean they were on the ground they were using high resolution satellite data and they mapped what they thought were the slums in nairobi in 2004. a different team did that in 2011. this is people looking at images sending people on the ground to the neighborhoods what is a slum it's you know housing that's small low height laid out in an irregular fashion not well serviced the government all in nairobi calls it an unplanned settlements this type of thing but of course how one group defines it and how another group defines it is not exactly the same that we discovered is uh is building materials so in nairobi slums the vast or the majority 56 percent of them are made with corrugated iron sheets so this is kind of um i don't know what the right term is like a meccano set that you can screw together and then unscrew it and rearrange it and screw it together again and reconfigure it another about 20 are made of mud or mud and wood but once you go to the formal sector it's made of permanent material so it's made of stone and brick and and uh and block so you might think of this in some sense as slums really being too uh there or there being two technologies one is a slum technology where you can have low cost housing built at a low height it's very land intensive it's spread out on the land cheap materials that can potentially even be reassembled somewhat less risk of expropriation since you can take the thing down put it on your back if it's corrugated iron sheets so to speak and take it away if it's mud it's got a pretty high rate of depreciation anyways but you can't build high that's the problem and quality of the space is probably not very good so in thinking about that and we have a classic urban model that tony talked about a bit this morning in that access to the city center is is critical and there's a huge premium on that as you move away from the center land prices decline really radically we'll we'll look at some numbers on that so where are you going to build slums well they're land intensive so you're going to build them where land is cheap and that's going to be on the city edge so you know you start off with this very high rents at the city center they decline as you move out and then they kind of peter out into agriculture looking at the price of land in in agriculture so essentially slums are going to form on city edges and we'll see in nairobi that's where new slums tend to be going this if you have a growing city and rising land prices over time especially near the center absent costs of formalization or conversion from informal to formal settlement that i'm going to talk about over time you would be redeveloping these slums tearing them down and putting in formal sector housing and rather than upgrading them so we'll come back and talk about that the problem with this in a city like nairobi is the problems of land rights and and how land rights are defined so in africa a lot of the land originally was under communal rights was allocated by chiefs that works pretty well in a rural setting but it doesn't work well in an urban setting because then the chiefs have no authority and you're no longer in a village where everybody knows everybody for generations going back uh so in cities in um in um in in africa in british africa in particular which is where nairobi is so nairobi is in kenya kenya was a british colony nairobi is a colonial city it was um the british were going to put a railway through which they did from the coast to lake victoria which is in the interior and they were doing the surveying and they came up over the first row of mountains and this is a nice place it's sort of more temperate climate uh very pretty and that became where they put nairobi the capital so but when they did this the british had what's called an uh a dual mandate so they had their part of the city where there might be private property and it would be more planned and laid out and then they had that what was in those days called the native section and that was just left for self-governance in some sense so they didn't come in and try and impose any regime or any planning or anything like that it's part of the reason when we look at a picture of nairobi it looks so disorganized because you are mixing all these different sort of land systems together so there's it's difficult enough to convert from sort of communal use into something that is private property and that's becomes a lengthy legal process that some people try to pursue the other problem is we're going to see that in many cases the government has stepped in and seized lands and that becomes even worse problem so there are high costs to trying to take these slums and put them into some other some other use informal sector uh residential and commercial we think it's sort of fairly cheap to build high but it's what we call putty clay and economics you you build it you want to change it you got to tear it down bring in the wrecking ball and start all over again so it's a long-term commitment tony mentioned this this morning there's a role of expectations here these are irreversible decisions so if you think a city isn't going to grow very fast it's going to grow slowly if that's kind of the wisdom in the market then builders are going to build lower buildings because they don't expect this rise in prices and they're going to end up with a stunted city the second aspect is that of course as the city grows and land prices escalate at some point you're going to redevelop existing buildings that if given the price of land the buildings are too low land is too valuable and you want to build even higher and use more capital and so you're going to demolish and reconstruct and depending how fast land prices are rising that process may take 100 years it may take 50 years or potentially even less okay so for nairobi as i said i we have these two sets of footprints we're going to overlay them at some point here briefly at least and we're going to talk about which buildings were unchanged or how much was unchanged how much was redeveloped so where there was a building before now there's a building with a different footprint usually a bigger building there's going to be demolition in this case meaning old buildings that were torn down where it's a transition where there's yet to a new building to appear so that's going to be very modest and then there's infill which are new buildings where there wasn't a building in in 2004 we get volume by simply multiplying the footprint size by the height we're going to do this for two types of usage formal sector in in slums and i already said we have two different definitions of slums and we're going to use them both we have some other data a lot of data on nairobi now once you go there and you invest in it on sort of on the residential sector from a survey on rents that are paid and on heights in the slums and in the non-slum areas and we've scraped land price data uh from the web to get a sense of land prices in nairobi so here's uh some maps of of nairobi uh this is this kind of what we call the city boundary in 2004 it's where some smooth measure of cover kind of gets very low and you're really into agricultural areas nairobi runs east west quite a ways it's bounded on the north and south by a forest preserve so you can't really expand this way you can only go this way this is the center of nairobi the circle here is the area in 2004 around the center in which there were no slums these here are the slums that were mapped by this 2004 team based actually on images from 2003 so these blue areas this slum here is kibera um and that we're going to talk about somewhat extensively um what else can i say okay then we go and repeat this for 2015. this is kind of this former boundary here now with this sort of smooth belt surface boundary the city has expanded the area around the center where there are absolutely no some slums has expanded so somehow land has gotten so valuable there that they've resolved the institutional problems cabera is still there and we see this expansion of slums to the extent this is real and not just slums that weren't defined in 2004 is occurring kind of out here at the city edges um where we think it ought to be but then we still have these traditional slums here near the downtown so one of the issues and i'm going to talk about and i don't want to get into a lot of detail but we have slums and we have non-slums slums are these very carefully bounded areas that are just really intense housing and and some business activity not much else the formal sector is a residual it's everything else so yes it's commercial buildings it's in residential buildings but so all the roads now some of those are side roads and streets side streets that service the formal sector housing and commercial so that's really part of that but some of it is you know highways or four-lane streets that serve the whole population public parks garbage dumps government buildings utilities all kinds of stuff that isn't part of the private sector so that all falls in the formal sector which is a complication for us plus any land that's just undeveloped for some reason of conflict over property rights or something else nobody will will touch it um this is a 3d map of uh nairobi in 2015. this is uh a bunch of grid squares here 150 meters by 150 meters and it measures the average height in that grid square of the built surface right so how high on average are buildings this is the downtown within in within two kilometers this is the formal sector in blue the the uh slums in in orange uh so you see this i think you can see this very high concentration here of tall buildings near the center there's some on the outskirts too the slums this is kibera is a low height pretty uniformly these slums here to some degree these but up here we have some tall buildings in the slums and you look at the images and that's simply misclassification those are are clearly not slum areas so whatever this team was doing in 2011 you know they messed up at least in this part of the city in defining slums there's some blank areas in here there's a airport president's palace golf course i'm not sure what else i'm missing just stuff that either we can't map the president's palace is not routinely mapped maybe for security reasons and they're not going to assess property taxes on it okay so i'm going to run through some slides here that uh that show gradients so this is a tool that urban economists use it's kind of taking the city thinking of it as rings and as you move out from the center what happens so in any ring two kilometers three kilometers five kilometers there's going to be enormous heterogeneity as we can tell from this you know previous map but on average there's this pretty strong tendency so the first thing that we talked about already was that these are land prices this is the price per square meter of vacant land and it starts and at the center here this is distance to the center and declines pretty rapidly this is the price in in logs there's about a five-fold differential here between the city center and 10 kilometers out but the city goes 20 kilometers out there's going to be an even greater decline so this is a five times differential in the in the price and overall relative to the rural sector it might be 10 or 15 or more corresponding to that we have these height gradients so this is average height of buildings at each distance in the formal sector in blue so this is in meters so on average here it's like 22 meters near the center and then it drops to uh down here to eight meters which is somewhere between a one and two story building and then we have the slums and the slums are flat throughout that's the technology right there they're built with stuff that you can't use to build high if anything there's a actual modest increase in in in this and this is the height uh same picture except it's in floors from the survey data on residential uh houses in the slum in in the formal sector and again you have the same pattern a decline in height in the formal sector in a and um a flat height in the uh in the slums the second feature of this and it's kind of revealed in this with these uh what's called confidence intervals is that in the slums height is really uniform there's not much variation so if i looked at the rather than the mean height here i looked at the 25th versus the 70th percentile or the 10th versus the 90th there'd be very little difference in the formal sector there's going to be huge variation in height near the city center it's going to diminish but even out here there's going to be big variation in height depending on what the use of that building is and and when it was constructed so this is uh in intensity of use and i'm going to try and describe this to you because i want to talk about volume and changes in volume over time so this is literally cubic meters of built space in thousands on this axis here so we're talking you know 160 180 000 cubic meters of space for this area on the ground which is 150 meters by 150 meters so this is the volume that's generated in there the ground includes the building footprint includes roads all that kind of stuff and you can see this intense volume in the formal sector declines as we move away as height did from the center and then kind of bounces along and this is uh volume in the slum areas and actually it's quite quite close so that the slums don't have any height but they have this intense ground coverage um you know so 45 to 80 percent of the land is actually covered with buildings or in the formal sector would be much less than that so you kind of have this trade-off the slums give a lot of what's going to be low quality housing very tightly bunched together but it has no height in the formal sector buildings are spread out but they're much higher there does seem to be a a gap in here and there's some issue here about of course what's the formal sector we've taken out big roads and some of the bigger parks in a garbage dump this is the misclassification that you saw in that 3d slide coming in there suggesting a volume but it's really coming from from the formal sector that and just misclassified as as slums so that leads into something about the dynamics that i'm going to do a couple of slides on so this is um taking these images from 2003 2015 and basically overlaying them and defining buildings as either being unchanged the same building being infill where there was no building before or being redevelopment where you redeveloped a building and this is the height of each of these categories so the black is what you basically saw before it's unchanged buildings this sharp decline from the city center this is infill buildings they're all built at a low height in the formal sector even you know and even near the city center so why is that i'll also note that in terms of redeveloped buildings which are the blue which i think you see this line here that near the center redeveloped buildings are actually shorter than existing buildings which seems odd because i've been talking about how you're going to build higher but then once you get beyond a kilometer and a half out here there's a substantial difference in height between the new buildings which are built high relative to the unchanged so um what's going on near the center the center is committed 25 percent of it is roads that haven't changed their government buildings their historical buildings their high-rise things that were built uh in the 80s that aren't ready to come down or in the 90s so it's kind of committed if you want to do infill and intensify that cover in the center you're using things like parking lots little parking lots that weren't developed in 2004 kind of now disappeared and they have some small building in there and it can't be a tall building because to have a tall building you need to have a big piece of land because you need to have a big base it's the same thing with the redevelop near the center that you know you've got this existing building you tear it down you can enlarge its footprint a little bit encroach on the neighbors maybe tear something else down but it's again very hard to assemble a big plot to to rebuild to a higher height okay so final thing before i get into slums per se this is the uh the volume change in the formal sector just to give you a sense i haven't shown nine and ten kilometers out which i had before that's because the volume changes are 100 200 percent and if i show those i wouldn't be able to show the rest of this so this is demolition it kind of bubbles along its land in transition this is infill which is some substantial here but then gets much more substantial as you move away from the city center the blue again is uh is increased percentage increase in initial volume that's due to redevelopment and the black is the total so first of all if you look at the black say go out to five kilometers that's about a 55 percent increase in volume building volume in just 10 years so there's a lot of change going on here when you get near the city center a lot of that is from redevelopment 35 increase in volume just by taking old buildings tearing them down and somewhat higher okay so these cities are in motion they're being reconstructed uh and and nairobi's a good example of this okay slums back to this question what should we do with slums near the city center so the basic theme here is that they're they're built low and they're using a technology that's appropriate when land prices are low but not when they're high and secondly they're low quality in the sense that the space itself is low quality the materials the space that you're living in the way it's serviced whether what you know bathrooms kitchens and so on that you have and then once you step outside you don't have good streets that you can use it's very crowded your neighbors live on top of you so to speak very little open space things that people value as amenities so rents and slums are really low because not just because people's income are low and in fact there's a pretty close uh overlap in the income distribution between slum and non-slum i mean there's a difference but a large overlap so there's this going to be this rent differential that we'll talk about just reflecting quality so in the data that we saw already slums near the center are right next to the center are gone within two kilometers but when we look three to five kilometers out there's still a lot of slums apart from the growing slums on the city edge the remaining slums near the city center are have high cost to convert they have high what we call formalization costs and we think that's associated with government ownership so this bottom graph here is just distance to the center and we have some data in 2011 who owns the land in these slums these are ones near the city center or 100 percent government owned there's some decline in that and then as you this is private sector ownership the fraction that's owned in the private sector essentially zero near the center and then as you get to the slums near the edge they're classified as being privately owned which may be for the future is looks good i'm going to talk about these government slums so in nairobi uh the residents of slums are are renters so that's not the case worldwide they in some countries in slums people are in some sense have some claim to the land and they're living on a small plot they don't have well-defined land rights but they have what we call use rights and there's no other real claimant so there's they're not paying rents to somebody but in nairobi these are pretty much everybody's a renter it's almost 100 percent and they don't have any tenancy agreement there's been a lot written about slum lands in in nairobi um you know who runs the so-called government slums well there's landlords chiefs bureaucrats gangs as this quote here says there was a major government report done about 10 to 15 years ago or 15 years ago trying to look at the land allocation process in these slums subject to corruption outright plunder the kind of quotes that appear in the report which for a government report is is pretty strong so on these government lands that where the slums are near the center there are slumlords these are people operating uh housing units they according to studies done make enormous profits a 60 80 percent rate of return i think is some issue about whether those rates of return uh include bribes they have to pay so to be able to operate in essence illegally or quasi-legally they do have to pay bribes to to certain other parts of of the government but they have no claim to the land there they they don't own it if the land were to be redeveloped by the government they would have no claim to it and the value that it would generate so they don't want the land converted because they're operating here as slumlords and they're making uh they're making a lot of money that makes conversion a political problem and i'm going to talk more about that now you know you could try and buy these people out and i'll i'll bring that up again so cabera a bear is that thousand acres that we saw cabarro was uh given to the nubians by the british in 1912 they were part of the king's rifles i think it was called and this was their reward for loyal service to the british and the colonial enterprise so they were given this land on a grant but they british did not actually give them title so the nubians whatever the remnants of this army were came in and they occupied part of this thousand acres and built their houses on it and so on the rest um gradually over time became occupied by different people not legally and you know in a again a process of that's i guess very ill-defined in some sense some amount of corruption illegal claims people claiming they owned the land when of course they didn't after independence in kenya the government revoked the claim of the nubians to all the kibera lands whether they lived on them or not took over ownership of this land but i would say not responsibility the slum lords in this in kibera live outside the slum and they are mostly actually politicians so we have this basic problem that you have powerful people in the government who own the slum buildings and are opposed to any kind of conversion because of course they would lose this valuable operation business operation that they have if the land was converted so we thought about that and we did the kind of what we thought would be an interesting calculation we looked at the difference here in rents per square meter of space in the formal sector versus in the slums the formal sector follows that land price gradient that you saw high prices near the center low prices further out because value access to the center is highly valued in the slums the gradient is either flat or perhaps even increasing that may reflect the quality of the slums of the government slums near the center versus the private slums further out it may reflect the fact that some of the residents who live in these slums in say kibera are actually wanting to commute out towards the city edge rather than in towards the the city center we don't know but there's this basic difference in price per square meter of floor space reflecting you know what people are willing to pay there's this difference in volume here it looks like the other graph i showed you but we've adjusted it a bit we've tried to kind of repredict slums to remove some of the misclass so there's a bigger gap between the volume offered in the formal sector and in slums so what we did is the is the following we took the area of slums between uh one and five kilometers out we know the area of that we know the difference in the volume intensity of in the slums versus the formal sector with the formal sector generally being somewhat higher and we know the difference in in the rents so you go through a bunch of calculations you take the volume you convert it to price per square meter floor space which is what the rents are and we sum up the gains to formalization as a back of the envelope calculation what would you gain if you converted these slums to formal sector usage put it in present value terms as though this were going to be a permanent change from one regime to another discounted at four percent put it in u.s 2015 dollars the revenue gain is somewhere depending on what you assume let's say around 2 billion maybe a little more so it's a substantial revenue gain now i haven't talked about the cost side so you have to reconstruct all that formal sector volume that's going to be costly that laid out here but if you think of land values being about 35 of revenue it gives you some sense of how much land values would increase so there's a lot of money there potentially that should be to buy out these slum lords and maybe even some left over to help the tenants relocate so what i've talked to you about here at the end is this notion of cities redeveloping a dynamic process especially for fast-growing cities where income is growing fast you have you know if the city is evolving you have the kind of informal slum areas at the edge as we saw where they were growing in the original maps because they're low cost and and they're using land very intensively we have some process of time to time conversion in of slums to formal sector as the city overruns them in essence and we have redevelopment of the formal sector going on as the city grows building to higher and higher heights slums in some sense those near the city center under this sort of corrupt land practices and and um and inability really to convert to private usage are a misallocation they're representing very valuable land that uh that um you would have a better and higher use and as we saw in european cities and um there's a role of history here and a combination of poor land rights and corruption that inhibits that process so let me stop there thank you very much professor vernon henderson i must say that now we know much more about slums than we did before while listening to professor henderson i thought back of the slums and my knowledge of slums and if you know what it is to live in a slum you know how chaotic it can be and you know that even tiny plots are used to the maximum they are the people use every every corner of space in islam so it seems difficult to think in terms of allocating land there because everything is so chaotic so a question that comes to my mind is since we have this political interference and we have this exploitation on the part of politicians basically who own if we can say so the area and manage it so if it is so how how does what does that translate into and you also said that slumps are communities that was very interesting so if it is so do these communities have a negotiating power can they decide something uh so this is something that i would kindly ask you to comment on uh but in the meantime what do you think about it i would kindly ask the audience if there are questions from the audience too so i open the floor to possible questions from people here and then i will kindly ask you to give me a comment on what i have just said other questions good afternoon you mentioned in your contribution climate change and it talks about social networks the communities that exist and live in the slums so my question is uh would actually a plea would you please go back to these two topics because you mentioned these things but then you did not comment extensively upon them and i would like to know more about that so why people here think about uh possible additional questions i would like to give you back the floor professor because we asked basically two similar questions uh and i think you can comment on them together okay hopefully this will work the climate changes is somewhat easier in the sense that people have you know you can map the world you can map what would go under water if uh the polar ice caps melted faster than and were originally projected to melt which is what is happening and what types of climate change that brings on so i have two family members who are geologists who do climate um so i hear a lot about climate change so there are academics out there trying to do these exercises it's clear that somewhere in the middle of what the forecasts are there would be a lot that would go underwater and there are i'll give you an example in the united states new orleans right new orleans was was flooded right the levees broke and it was flooded and they've now rebuilt the city and and and fine i mean that was a city it meant something to the people there was perhaps an important thing to to do but with climate change trying to deal with those levees and sustain new orleans is going to be really hard and that's in a developed country you know you have the netherlands which has defined itself as resisting the sea whatever it is 35 percent of the netherlands i don't i've forgotten the number but about that that would be underwater without the without the barriers but developing countries don't have the money or the technology to do that and it's not clear that's money that would be well spent i mean for the netherlands it's like it's a existence an issue of existence right so you you do this so you can exist um you know we're if you take ho chi minh city and the coast of vietnam there's been enormous investments in the highway system along the coast and uh of course in ho chi minh city and that potentially is all going to be underwater large parts of ho chi minh city are going to be underwater and certainly that highway system that segments along the coast will be completely destroyed so should they have built the highway further in and away from that governments are not thinking carefully about those decisions so we ever get this universal map of volume i'll be able to tell you under various scenarios how much of the world's uh building space will be underwater in 50 years or 75 years from now whatever scenario you want on the slums and the social networks and the and the cost it it's really tough right so if i give this talk to um say a policy audience at the world bank i'll get sometimes really negative reactions because what i'm saying is that slums are this low-cost technology they're appropriate at the city edge and probably appropriate at some low income level but as incomes rise and we're not going to have slums anymore and certainly we're not going to have slums at the city center on really valuable land that has uh in some sense a much better use there is an implication right that you have neighborhood change and that happens in all cities to all neighborhoods in some sense they're neighborhoods that decline neighborhoods that are gentrified people get shoved out that has a cost there is a social cost to that of these people relocating it's something that is part of the process and of course they they have to deal with and they're going to be winners and losers in that process and it's tough so that when i say all right you know kibera ultimately in a proper scheme should come down a proper scheme would be something uh and there's been you know movements and indian slums to try and do a better job of this to redevelop slums but to ensure that you have something for the residents who are left or if you take the case of addis this is a city-wide program right to relocate people from the slums using government subsidies to put them in better actually better quality housing so you can hollow out that city center and use it for something that's the highest and best use the chinese did a similar thing they induce people the problem is that as you get near the end of the process and you know three quarters of your slum is located and you've got a quarter left and the quarter left don't want to leave and then the government gets impatient and they come in and they bulldoze and those people and the chinese certainly did that in some cases and those people do lose out but i'm thinking of a situation like kibera where there's a lot of land here and there's a lot of money at stake and there is a potential here to not just buy out these politicians and maybe you say they shouldn't be bought out but it's a practical matter of buying them out and of helping the residents relocate and and helping them move i don't know i'm happy to if you want to expand on the question i'm happy to talk more uh see you well i have always thought when thinking of slums of a specific case the case of one slum area in rwanda the capital of angola luanda the capital of angola and the islam was called roxantero because the inhabitants of the slums made reference to a hero of a telenovelas that were they could see on tv and it was a sort of modern robin hood stealing from the wealthy to give to the poor and so that area that slum at least in the mind of people was a sort of social recycling experiment meaning that people there became in a way more powerful thanks to the fact of living there and they benefited from the part from the fact of being part of a community of living in a city within a city this is what actually i was hinted hinting at when asking you the question before is it really so are these cities within cities do they have a bargaining power do they have an impact on the development of the big cities in in africa or not and they have a bargaining power in the sense there are a lot of people and um the majority of people and so in the political process to the extent that they're represented uh they have bargaining power what they should be bargaining for i guess is the question right so yes uh in some slums there's a real spirit uh the situation can bear is complicated because of the nubians but put that aside but these are also not the greatest places to live and the social conditions there may be a spirit but the conditions the health conditions that your kids are exposed to the poor quality of water and sewage the the cramming together of people is not a very healthy environment and you know we don't expect people in the developed world to to live like that and as these countries develop they surely people will not want to continue living like that you know if you can move them on mass you can potentially and try to it's not something you hear about but try to retain the social network try to retain some of the spirit i guess that's a possibility i don't know i just know that in the long term as these countries develop and they get richer people aren't going to want to be in slum housing they're not going to want to expose their kids to that and they're not going to want to live like that it's just not going to be the case actually there are so many questions that come to my mind but perhaps there are more questions from the audience i apologize because i arrived late so i did i was not here from the beginning and it might be that i missed something but my question is in this very moment there are their attempts at developing new towns because i i know that there are some projects of financing the building of new towns with the public money as well and i think of some european projects then i don't know whether this will be translated into something practical whether it's simply something on paper i don't know whether there are powers there that make compounds that is a sort of fenced areas with guards armed guards which is what you see also in some places in italy right now like where golf courses are are there additional questions i thought of a parallel with italy after the second world war i think of italy in the 50s and 60s when so many public housing was constructed social housing was built and actually the majority of uh houses here were built in that period so we did have a similar phenomenon i think and do you think that something similar is possible in africa or not can we draw a parallel with post-war italy uh those are um all tough questions so um new towns i'm i'm thinking of two different things right one is the kind of gated communities that you see springing up around the world of whether it's china or italy or the united states of relatively high income people fencing themselves off from the rest of the world living in in some sense in a in another world i guess that's a good way to put it uh in the united states people write about this as fear of crime fear of exposure to minorities you know the donald trumps of the world living in gated communities or something um so that's uh that's out there that happens i new towns to me has in some sense a different connotation it's an attempt by governments to try and direct urban growth to say all right our city's too crowded let's create some satellite cities around it and and let's do that and that's kind of a feature of some aspects of urban planning um the record on new towns is kind of mixed um if the government guess is wrong about where people want to live you have a you know unfulfilled uh new town we saw settlements in dar es salaam where the government had built or there was it was actually some of the financed with some pension fund monies but they were trying to build uh you know communities further from the center that were meant for civil servants were you know quite nice communities probably a little too nice but they were far from the center and in commuting time because the roads were very poor very hard to get to and nobody was moving to them so in essence they were unoccupied um so there is uh you know what if i i think in china you know they have this plan for beijing to try and extend it to the east and west because that would be environmentally better they have a great plan by city planners the government completely ignores it and is just building basically wherever they want so it's a lot of conflict between in some sense planners and and architects who have a vision uh in some cases some cases that's economically realistic in other cases it's not and when it is economically realistic perhaps it's not politically realistic in the sense that the government won't provide proper services for them uh it's it's kind of a similar comment on public housing yet uh we see this experiment in in um addis actually which is to move people out of public housing out of rent control slum housing in the downtown into buildings that they'll actually own that they'll then want to assume responsibility for um in terms of maintenance so the record of public housing in some countries is is pretty bad in the developed world and maybe i'm thinking too much of the united states where as you may know that in the 1960s the united states built these what we call vertical slums right they took people out of low-income neighborhoods particularly as with black migration into northern cities and put them in these huge high-rises that turned out to be incredibly unsafe and not very well constructed and those are all gone now they were all torn down because they were just not a good way to do housing so public housing if you're going to do it and the government's going to be involved has to be done carefully and you want people who really know about housing and housing markets to be to be running it but um is that a solution in africa it's i'm not sure it's an income phase thing it's you know the the slums on the outskirts here uh that are on on viable land for slums and they're built of not very good building materials it also reflects the fact that people's incomes are very low as they rise can we move them into better quality housing it's a question tony talked about the this this morning is the technology there it probably is but at what income level i'm i'm not sure so um there's certainly potentially a role for public housing but also a lesson that it has a very checkered record around the world perhaps because of misuse as a political animal i'm i'm not sure so if i may i would like to ask you another question in the mid 90s when the time of daniel ratmoy the president of kenya came to an end when kibaki was appointed in i heard that in kibera and i don't know whether this is true or not but then i also had the opportunity to read some studies about it so apparently the new president and the establishment were considering to redevelop kibera after hearing what you said today i can only imagine the type of conflict that arose in those days among the political circles if they really consider doing something of that kind i had the opportunity to see some programs i also had the opportunity to see some excavations where they were trying to develop the the sewage system so then i know that everything came to an end so do you think it is possible to redevelop islam's area without transferring huge amounts of people i do realize this is a difficult question but um i i think the situation and kubera is to some degree complicated by the nubians who have a i think a pretty well recognized moral claim to at least the land that their descendants sit on which is a part of kibera and an unwillingness so far of the government to give them property rights to these lands i mean they're not going to give them the thousand acres of caber obviously but they could give them the part that they live on and there's talk about that going on right now it hasn't happened i think that these politicians haven't gotten into the housing market and kibera make it very difficult i think there is a process where you could as i said potentially buy them out find a solution so that you could redevelop kibera so when you talk about redevelopment what do you mean i mean i'm talking about it really that you would probably take this land and convert it into formal sector housing some high-rise housing some commercial development it depends what what part of kibera and how close to the city center you are what would happen to the former residents it's possible some of them would buy in their educational levels if you look at the distribution of income of people in the formal and in the slum sector there's a really strong overlap it's possible that some of these folks could buy in and and could afford it um presumably a lot would not and and they would be shoved out and hopefully there would be compensation and so on so you could design in principle a comprehensive program to do this can you do this in the political and corruption climate of kenya you know it's a challenge any more questions well i believe we still have some time for maybe a final question on the final answer nobody's telling me that we have to close so ten minutes left all right then if there are no more questions from the audience i'll try i'll try and ask another question myself is there a lot of a difference between kibera for instance and other slums in the nairobi area i mean the social system that leads it to the birth of such slums and that regulates the the islam is it the same everywhere or it changes according to the islam and it does it depend on the distance from the city center does it depend on the ownership if there are of course a differences i mean yeah i think it depends on the ownership so these government so-called government-owned slums where the land rights are really confused the government's taken them over or expropriated them are the most complex situation i think in the slums on the edge that are so-called private ownership now i'm not entirely sure what that means and we're trying to clarify that but that's the way it's classified potentially there the people who are operating in those slums and own the land have an incentive to try and make those better places to live to regularize them to look to the future and potentially to start develop them to even a higher standard uh it's complicated because they are the places where migrants go now so there's enormous inflow of people into these new slums on the edge and an awful lot of change going on and there is in some sense an absence of governance there these are classified by the government as unplanned areas meaning have fun folks and we're not going to help you very much um so it's a complicated it's a complicated process but but it is very different by i think the type of slum who owns it the ones near the edge being newer and in some sense being evolving as as we kind of speak and the unwillingness of the government in some sense to i think to deal with the problem and and to just leave this and just call well these are unplanned areas i mean but that's where people are living right it's it's it's a mess a very very fun question very quick question from a political viewpoint these are huge numbers of people who live in the slums with a much higher intensity than i mean the intensity you have in downtown are these people are all voters i mean how do politicians leverage on them yeah they're voters i mean of course they're voters uh and kenya's is is a democracy i mean it's not a you know necessarily a wide open democracy but it's a democracy it's kenya's uh there's a lot of corruption i mean i have friends who were born there and grew up there middle class people they're trying to do businesses they're trying to you know be successful they have the education and the skills to do that and their attitude is this point is we're not looking for the government to help us we just want them to get out of the way so they don't hurt us and that's not a great state of affairs all right then thank you very much mr professor anderson that was a very very interesting conference at least for me for those of us who live in and work in africa being aware what happens in these areas where it is difficult to work and even i mean have access to this is was definitely very valuable for me thank you very much you