Consolidating a sustainable real property rights system

Challenge

With the creation of a reliable and accessible property rights system in Peru, the Project hopes to promote growth and reduce poverty in a sustainable way, as tenure security stimulates private investment and fosters the process of slum upgrading through increased access to water and sewage services, increased investments in housing structures,  and the reduction of households in unsuitable conditions.  Furthermore, as the result of an increased collection of property taxes, participating municipalities will need to become more accountable as new sources of revenue will increase citizens’ demand for service delivery.  

Approach

The government of Peru has maintained a close policy dialogue with the Bank in areas such as institutional reform and decentralization.  In order to achieve multi-institution participation and impact, project components were directly linked to the country’s development program and cross sector activities with the Ministries of Justice and Housing, as well as the armed forces (through the IGN). The Real Property Rights Consolidation Project, like the Urban Property Right Project before it, was built on multi-stakeholder engagement which included several government agencies and sectors.

Results

As part of the effort to consolidate a decentralized and quality real property rights system, the Project delivered the following key results:

• Through a manual digitalization and batch migration process, 3.4 million property registry records were migrated, allowing for the mainstreaming of the new registry model as it exceeds 25% of the estimated total property records in the municipalities of Lima-Callao, the most active and valuable property market in the country.
• Through the installation of 45 permanent continuous monitoring GPS stations and 4,995 control points to its geodetic network, the IGN has gained the capacity to provide geo-referencing services to government institutions and potential third-parties, thus providing new sources of revenue for the institution.
• As part of formalization activities, 307,193 titles were issued, 335,985 lots were formalized, 494,052 lots were diagnosed and 544,762 properties were cadastered in the regions of Ancash, Ayacucho, Cajamarca, Lambayeque, La Libertad, Piura, Puno, Cusco, Junín and Lima.
• Credit and Registry Culture Promotion activities were undertaken reaching over 85,000 high school students in topics related to registry culture, access to credit, and the benefits of formalization. Furthermore, over 140,000 property owners were also reached by the registry culture campaign and over 9,000 micro-entrepreneurs obtained access to credit information as well.
• COFOPRI entered into agreements with the Ministry of Education to include registry and credit culture in school curricula to help disseminate the negative impacts of informality and further discourage further informality. 

Bank Contribution

IBRD contribution to project activities was US$25 million.

Moving Forward

The Bank has emphasized to the Borrower that the sustainability of the Project is dependent on the continuance of COFOPRI as the lead agency in charge of preventing the return to informality, as well as the long-term modernization process of SUNARP.