Squatter to 40% of the residential areas.

Squatter settlements built on
illegally occupied land, usually through self-help, date back to the 1980s in
most countries in the region. Albania’s are more recent, dating from the early
1990s. Located in peri-urban areas on public or private land, they have become
home to hundreds of thousands of people. Although the initial developments may
have been the result of the authorities turning a blind eye, particularly
during the direct post-socialist inflow of migrants to cities, today their
scale presents a severe problem. For example, in Albania, informal housing
settlements contain up to a quarter of the population and 40% of the built-up
area in major cities. In Macedonia, they are home to 11% of the population in
the largest cities. In Belgrade, Hadas (2003) highlights that informal
settlements present a dark mosaic in the city structure and compose up to 40%
of the residential areas.

Settlements for
vulnerable groups such as Roma mahalas, refugees, and IDPs are often similar to
the squatter type but could have been established with the permission of
municipalities as a temporary, rapid response to the wars of the 1990s. These
settlements often exhibit deplorable conditions, with shacks built of recycled
materials, plastic sheets, and leftover construction materials (Hadas, 2003).
When they were built, residents were expected to live there for only a short
time before relocating to camps or collective centres. Unfortunately, the
informal settlements turned out to be a permanent solution, only attracting
more people. In countries such as Montenegro, Albania, Kosovo, and Bosnia and
Herzegovina, these slums are generally found in the urban periphery; in pockets
of marginal land close to industrial zones, railway lines, and waste dumps; or
close to collective centres for refugees.

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Illegal suburban
subdivisions are informal settlements, but they do not necessarily comprise
poor quality, under-serviced housing. Unauthorized housing and mixed-use
developments built through self-help methods on unlawful subdivisions of agricultural
land are widespread in the peri-urban areas. The land is developed without
official planning permission, the standard of infrastructure is low, and the
subdivision of land often does not meet planning standards for right-of-way,
road access, and provision of public spaces. In some cases, the process is
commodified and used by builders to provide housing to middle-class families at
below-market prices (Hadas, 2003). Residents build private roads, self-finance
connections to electricity and the water supply, and use different tactics to
negotiate legalisation. Sometimes such developments take over high-quality
public land and environmental reserves, and the problems become significant as
the settlements grow larger and denser. Informal settlements include housing,
tourist, and retail services, as the examples from Montenegro. Real estate is
traded without registration in the cadastre (land registry), owners do not pay
property taxes, and economic activities (tourism and retail) remain informal.
Informal settlements tend to cluster in two types of locations: the inner city
and peri-urban areas.

The centrality
of location often implies older, more established formations close to the old
city or its industrial zones. Residents benefit from proximity to employment
opportunities but often live in substandard housing on sites exposed to
environmental and health risks. Larger informal settlements often concentrate
in the periphery due to lower land values. These could be squatter settlements
on public land or illegal subdivisions outside urban boundaries that gradually
accommodate more diverse land uses, responding to the needs of local residents
and businesses (Simone, 2001).
The quality of housing is generally better. Some illegal or legally negotiated
connections to existing infrastructure might ensure much-needed electricity and
water. Residents of these settlements are relatively successful in resisting
attempts to relocate them after demolishing their homes. Encouraged by
legalization, homeowners and businesses begin to invest in roads, lighting,
waste management, and small-scale public space improvements.


Solution to informality in cities

Addressing the
problems of informal settlements requires a better understanding of the driving
forces contributing to their growth, as well as recognition of the interrelated
systemic problems caused by inefficient urban planning and land management
systems (McFarlane, 2012). The combined effect of the triple transition to a
democratic system, a market economy, and decentralised governance, coupled with
the challenge of war-related conflicts, is one of the major structural causes
of this phenomenon.

It is important
to note that urban planning has a critical role in guiding development and
defining appropriate strategies for integrating informal settlements to solve
the problem of inefficient planning processes at the local level. McFarlane
(2012) cites that urban master plans, complemented by detailed regulatory
plans, provide the essential legal framework for regularisation. In Serbia,
Montenegro, and Bosnia and Herzegovina, the lack of such plans is a particular
constraint. In the view of Simone (2001), local governments have been
relatively slow to develop a new generation of master plans, and the most
dynamic real-estate investments in the last 20 years have taken place through
ad hoc amendments to the socialist detailed neighbourhood plans. In larger and
older informal settlements, regularisation cannot proceed legally without a
detailed regulatory plan that documents the status quo and prescribes the
parameters of development. Many specifications like setbacks, the width of
major roads, floor-area ratios, and maximum heights may have to be negotiated
project by project. This practice causes delays, perpetuates informality, and
creates opportunities for arbitrariness and corruption. For example, in
Montenegro, detailed plans are available for only about one-third of the
territory (Simone, 2001).
The lack of plans is detrimental to the integration of informal developments.
Furthermore, the lack of institutional capacity to effectively control and
enforce compliance with detailed plans is an equally large challenge.

Ineffective Land
Management and Servicing In the absence of reformed planning and regulatory
instruments to guide allocation, the land has been invaded and developed at a
scale that may challenge any local government to provide roads and technical
infrastructure to hundreds of thousands of new residents. Due to decentralisation,
municipalities in the region have acquired many new functions without adequate
resources to fulfil their mandates. Simone (2001) also notes that this
financial weakness, coupled with an inability to borrow in capital markets and
a dependence on central government transfers, drastically reduces the capacity
of local governments to develop and maintain essential services. In Tirana and
Pristina, where the urban population has almost doubled, and a large share of
new development is informal, addressing the infrastructure deficit is
impossible under a regime of fiscal austerity. The process is constrained not
only by the lack of municipal funds and up-to-date plans but also by the
incomplete land-registration systems. Although most governments have recently
accelerated the development of modern cadastres, the coverage in most cities in
the developing nations still remains low.

interventions range from legalisation, with a less extensive role for public
institutions and a lower commitment of public resources, to more comprehensive
solutions with higher costs (Foner,
1990). In the context of fiscal
austerity, the targeting of such measures is particularly important. If the
three types of policy intervention are related to the typology of informal
settlements, the first type, legalisation, could be universally applied and is
appropriate for addressing the issue of integrating squatter settlements and
illegal subdivisions. By contrast, relocation, due to its high costs for the
public sector, should be reserved for socially disadvantaged households in
squatter settlements or refugee camps. Foner (1990) posits that broadly defined
criteria in the policy matrix explicitly relate social targeting to efficiency
considerations and the degree of informality. Detailed urban plans are legally
required in all cases, but the content and approach to the development of such
plans may have to become more strategic and participatory as opposed to
prescriptive or ad-hoc/opportunistic.

The informal
settlements in the post-socialist cities of southeast Europe are a distinct
manifestation of the post-socialist systemic transformation process,
exacerbated by a lack of effective urban planning and enforcement of existing
plans (Neuwirth, 2012). Informal land acquisitions, subdivisions, and other
self-help solutions are perhaps a natural coping mechanism for poor migrants
and refugees, as the rapidly growing informal housing in peri-urban areas. At
their best, planning reforms across the region in the last five years have
resulted in improved legislation, infrastructure, and services, as well as
community-driven attempts to regularise informal settlements (Neuwirth, 2012).
At their worst, governments have turned a blind eye to the informal cities,
which has constrained legalisation, exacerbated corruption, and forced the poor
into isolated areas.

In addition to
the constraints created by the lack of detailed regulatory plans and incomplete
cadastre systems, municipalities across the region face the challenge of
regulating development in the absence of clear planning frameworks. According
to Dinero (2005), frequent changes in the normative and legal bases; new
planning and construction laws, standards, and norms; and the lack of
institutional capacity for enforcement are significant constraints for the
small and underfunded departments dealing with building and occupancy permits (Dinero, 2005). In the global
business survey carried out in 183 countries by the International Bank for
Reconstruction and Development (IBRD), southeast European countries rank well
in terms of having a competitive environment in which to do business. However,
the survey places most of these countries at the tail end of the ranking with
respect to efficiency of the construction permit process. In Montenegro, for
example, the permit process involves 19 procedures, takes about 230 days on
average (20 days longer than construction), and costs nearly three times the
monthly salary.