**5. The co-existence of formal and informal built-up properties in the peri-urban areas**

The formal and informal approaches of land transaction and development are the two contrasting ways built-up property formation ways that persist to exist in the peri-urban areas of Ethiopia (see **Figure 3**). The formal and informal channels of land transaction are being equally practiced side by side one

**27**

**Figure 3.**

*Urban Built-Up Property Formation Process in the Peri-Urban Areas of Ethiopia*

influencing the other. Peri-urban land which used to be agricultural land has been rapidly converted into urban built-up property both through formal and informal channels. Most commonly, the inability of the formal land acquisition and delivery system to meet the requirements is main reason for the emergence of informality. As it is elaborated in the earlier sections, all land including periurban in Ethiopia is state or public property and private property does not exist [13]. According to the formal law, urban land can be allocated to the individuals largely from peri-urban areas based on 99-year leasehold contracts for residential housing [15]. Individuals may also sale and transfer the leasehold right acquired from the state to the others. Therefore, compulsory and formal conversion of the individualized usufruct right of peri-urban landholders into leasehold right is persistently growing and the end result would also be continuous formation of

*Built-up property formation process in the peri-urban areas of Ethiopia. Source: author produced.*

However, the administrative allocation of urban land through lease system after expropriation seems to be inefficient and not affordable to the urban poor and even to the middle class. On the other hand, rapid urban population growth has been intensifying a great demand for cheap and easily available urban residential land. This demand is partly indeed met by informal supply and acquisition of land from peri-urban areas. Informal supply and acquisition of land includes activities such as illegitimate occupation, unauthorized construction of substandard houses and unauthorized subdivision and sale of land. Peri-urban land holders/farmers are the key actors in the process. Peri-urban farmers fearing expropriation (revocation of their agricultural use rights/holding rights) by the state without adequate compensation prefer to subdivide their farm land into building pieces and transfer their land in the informal (black) market [23]. In addition, other different groups of actors such as brokers, speculators, corrupt government officials, peri-urban residents have been willing to involve in the process of informal transaction and development of land in the peri-urban areas. This trend result in a rapid development of an informal land market, based partly on extra-legal, partly on not-legitimated, and therefore criminal, land tenure regulations. To legitimatize the transaction the parties involved the informal transaction of land use different mechanisms such declaring the transaction

new urban built-up property due to rapid urbanization process.

*DOI: http://dx.doi.org/10.5772/intechopen.86708*

*Urban Built-Up Property Formation Process in the Peri-Urban Areas of Ethiopia DOI: http://dx.doi.org/10.5772/intechopen.86708*

**Figure 3.**

*Land Use Change and Sustainability*

built on trust.

kept by one of the witnesses of transaction.

*4.2.4 Plot demarcation and dispute resolution*

and registered as residents of the village.

**in the peri-urban areas**

tion and regulation of the behavior of transacting parties.

usually greater than the real purchase amount with an intention to capture future increase in land value. The content of agreement also states that if the borrower could not pay back the loan within the agreed time, he/she agreed to convey his/ her piece of land to the lender in an exchange to the money borrowed. In addition, the content of the agreement contains a written description of the extent of the plot measured in meter or feet. Usually, elders of the village or leaders of traditional social institutions are often preferred as witnesses of transaction. The buyers and sellers receive copies of the agreement, and a third copy is made and

However, the contractual agreements signed by buyers and sellers either in the form of sale or loan or mortgage transfers have no legal ground due to two main reasons. First of all it is not allowed to transfer land through sale in Ethiopia [13] and second of all, contracts of transaction should follow registration by public body as a formal requirement and recognition of transaction. But land transaction the peri-urban areas through the informal channel do not fulfill the requirements. The main purpose of documentation and contractual agreement in the informal market is to avoid conflicts in the future between buyer and seller. The transaction is mainly

Plot demarcation and documentation will follow after the parties have reached in agreement on the price of the plot. The spatial extent of the plot can be demarcated by using visible markers such as poles plants, stone marks and fence. The spatial extent of the plots are demarcated and delineated by different actors involved in the transaction most commonly at the presence of three witnesses. Social norms like trust and reciprocity play a prominent role in the land transac-

As mentioned above the transacting parties in the informal market have no legal grounds and could not be able to take their cases to courts to seek justice in the formal judiciary system when dispute arises between the two transacting parties. The conflicting parties rather prefer to take their cases to the socially respected elders and leaders of "*idir*" and "*iqub*" in the village and the elders and leaders social institutions are quite efficient in solving such conflicts. When conflict arises the affected parties will take their cases to the elders in the village and the elders try to solve the problem by urging the conflicting parties to be governed by their agreement. If the parties could not be able to reach into agreement, they may face problems like being excluded from participating in different social affairs with the community. Moreover, traditional social institutions like "*ider* and *iqub*" play a significant role in making negotiations with government bodies claiming for formalization and organizing resistance against forced eviction. These institutions also provide the members (residents) an identity of belongingness to the area. It is only through these associations that the residents in this settlement area are recognized

**5. The co-existence of formal and informal built-up properties** 

The formal and informal approaches of land transaction and development are the two contrasting ways built-up property formation ways that persist to exist in the peri-urban areas of Ethiopia (see **Figure 3**). The formal and informal channels of land transaction are being equally practiced side by side one

**26**

*Built-up property formation process in the peri-urban areas of Ethiopia. Source: author produced.*

influencing the other. Peri-urban land which used to be agricultural land has been rapidly converted into urban built-up property both through formal and informal channels. Most commonly, the inability of the formal land acquisition and delivery system to meet the requirements is main reason for the emergence of informality. As it is elaborated in the earlier sections, all land including periurban in Ethiopia is state or public property and private property does not exist [13]. According to the formal law, urban land can be allocated to the individuals largely from peri-urban areas based on 99-year leasehold contracts for residential housing [15]. Individuals may also sale and transfer the leasehold right acquired from the state to the others. Therefore, compulsory and formal conversion of the individualized usufruct right of peri-urban landholders into leasehold right is persistently growing and the end result would also be continuous formation of new urban built-up property due to rapid urbanization process.

However, the administrative allocation of urban land through lease system after expropriation seems to be inefficient and not affordable to the urban poor and even to the middle class. On the other hand, rapid urban population growth has been intensifying a great demand for cheap and easily available urban residential land. This demand is partly indeed met by informal supply and acquisition of land from peri-urban areas. Informal supply and acquisition of land includes activities such as illegitimate occupation, unauthorized construction of substandard houses and unauthorized subdivision and sale of land. Peri-urban land holders/farmers are the key actors in the process. Peri-urban farmers fearing expropriation (revocation of their agricultural use rights/holding rights) by the state without adequate compensation prefer to subdivide their farm land into building pieces and transfer their land in the informal (black) market [23]. In addition, other different groups of actors such as brokers, speculators, corrupt government officials, peri-urban residents have been willing to involve in the process of informal transaction and development of land in the peri-urban areas. This trend result in a rapid development of an informal land market, based partly on extra-legal, partly on not-legitimated, and therefore criminal, land tenure regulations. To legitimatize the transaction the parties involved the informal transaction of land use different mechanisms such declaring the transaction as a gift, inheritance, repayment of debt and the like. Despite all illegality in the informal transaction of land, there is also an increasing trend and chance of formalization or legalization by the state. Therefore, this instance best explains the continuous breeding of informal land rights and then after the emergence of new formal property rights by means of formalization/legalization of informal land rights.
