State Intervention in Urban Land Market. The Reconstruction of Colombian Coffee Production Area: The Case of Armenia

Abstract

Following the dreadful earthquake that took place in the Colombian Coffee production area in 1999, which caused heavy casualties and widespread destruction, especially the housing stock, there was a great national effort of both state and private solidarity to aid the victims. The main items were resources in the form of subsidies to those affected in order that they could buy new homes through the private market. But no precautions were taken with regard to the land market, although the Colombian legislation has interesting management instruments for that purpose. This study estimates the amount of these subsidies that was actually appropriated by the landowners, in the form of rising land prices and did not reach the victims. The case is interesting because the observed phenomena may be able to be extended to the general system of subsidies that is central to government policy of social housing.