future of land titles informal settlements in prime areas : a dilemma for residents of Manzese, Dar es Salaam, Tanzania

Informal settlements in Dar es Salaam accommodate about 70% of its residents. This research is about effects of formalisation of property rights in informal settlements project in Dar es Salaam the case of Manzese which occupies a prime land. The settlement is located along the Morogoro highway between the CBD and Ubungo Industrial area. Nearby also are higher learning institutions which are walking distance from Manzese. The government of Tanzania embarked on formalisation project with the intention of to promoting economic empowerment of the house owners in the informal settlements. The project was expected to enable land owner to use their land as collateral to gain capital for improving their houses and or start small businesses and thereby reduce poverty. Formalisation does not always have positive impact on the poor. Formalisation encourages gentrification and thus displacing the poor. The poor occupying prime land cannot strive when demand for change of land uses in the area rising as value of their land is rising due to formalisation. This research is developed to examine how Land titling has affected livelihoods of the poor in the informal settlement occupying prime land. It looks at how the poor are coping with rising land value and pressure to change land use and sale. The study found out that Most are selling their properties and moving out giving way to new investments of commercial and office accommodation. This is resulting to diminishing of affordable housing for the poor; the tenants are forced into poorer housing conditions if they want to remain in the area in order to maintain geographical advantage. Many are moving to the periphery where they have to incur transport costs to workplace and services and other are forced to change their livelihood strategies completely. Land titling was expected to empower landowners to get loans to invest in their buildings and in businesses but this has proved unsuccessful as financial institutions do not accept Residential Licenses alone but look for the capability to repay the loan. A borrower must have a vibrant business with good cash flow records before loan is approved. Only .03% of land owners have used their Residential Licenses to obtain loans from formal financial institutions. The study revealed that land titling did not promote borrowing culture among the poor land owners. The poor are reluctant to use their properties as collateral because of fear of foreclosure in case they fail to repay the loan. The study also agrees with De Soto that titling turn properties into tradable assets, but this is limited to the informal settlement that is occupying prime land like Manzese because in Tandika the rate of sale and change of land use is quite low. The research gives some recommendation for further studies and what is needed to be done to reduce the adverse effects of formalisation of property rights in the informal settlements in prime areas.