Abstract
This article analyzes two aspects of Mexican law that are relevant for planning practice in the country—eminent domain and expropriation. This article shows that the transition in Mexico from a semi-authoritarian to a democratic electoral political system brought not only substantial variability in the application of laws across states but also in planning practice. Democracy has generated a national debate about property rights issues and has reshaped the State–citizen relationship.
On February 5, 2017, the people of Mexico celebrated a landmark achievement when the Constitution reached a century since its enactment. It has been the most enduring legal framework and political system since Mexico officially gained its independence from Spain in 1821. 1 Previous constitutions enacted at different times (1812, 1824, and 1857) had short lives, relatively speaking. This article analyzes how the Constitution has shaped current planning law and planning practice in Mexico.
The objectives of the article are twofold: first, to analyze the main legal tools related to eminent domain and particularly those related to expropriation of land. Eminent domain is the legal power granted to the State to take private property to advance the public interest, and expropriation is a legal procedure by which government implements eminent domain. Second, to undertake an historical analysis of urban and regional planning in Mexico through a legal lens by looking at how expropriation has been applied across time and space. The main questions addressed are as follows: what are the main characteristics of eminent domain and expropriation laws? How have eminent domain and expropriation laws been applied in different historical periods and across space? How has the transition from a semi-authoritarian to a democratic electoral political system affected planning practice? The main hypothesis to test is that the transition from a semi-authoritarian to a democratic electoral political system
2
led to a decentralized form of governance affecting not only the existing legal framework but also planning practice. The hypothesis is formally stated as follows: Democracy→Decentralized governance→ Variability in the law and planning practice
The methodological approach taken in the article is a mixed one. Content analysis and a historiographic approach are used to identify some trends in eminent domain and expropriation laws. Resulting changes in urban and regional planning practice are also identified and discussed.
This article is divided as follows: the first section presents the theoretical underpinnings of the role of the State in establishing a social order through spatial practice linked to land and property rights. The second section of the article traces the historical evolution of eminent domain and expropriation laws. The next aspect discussed is the consolidation of the modern State and the role of urban and regional planning. The last section is a reflection about how planning law and planning practice were deployed and adapted to consolidate the neoliberal model of development, and how a democratic electoral political system has altered existing power relationships.
State Formation, Social Order and Property
The intersection of law–space–power through time is used as a conceptual backdrop to analyze eminent domain and expropriations. The premise of the article is that sovereignty is the main power that the State deploys over its territory and its population to establish a social order supported by laws that are applied by different governmental units. Therefore, property and its regulation are the means to achieve the desired social order. In other words, through the spatialization of the law (i.e., control and regulation of the land), the State establishes power and control over society. The law also affects social relationships not only between the State and society but also among people through rights to own and use property, and to exclude other users from benefiting from property. 3
A brief discussion of two contrasting philosophical arguments regarding the law–space–power triad can help to conceptualize and frame the arguments in the article. On the one hand, the laissez-faire liberalism minimalist view argues that the State should either stay out of social and market transactions or limit its role to enforcing contracts among private entities and assuring public order. On the other hand, territorialism is the view that the State should completely control or regulate as many aspects as possible of what happens inside its boundaries. 4 These contrasting philosophies are only theoretical because reality shows that many property systems operate somewhere in between. Nonetheless, both arguments can be used as points of reference to help assess Mexico’s legal framework.
In the laissez-faire liberalism model, power is placed with the private citizen to decide about property use. Property rights are absolute; therefore, the private citizen has the power to shape the spatialization of property. The spatialization power is the ability to determine the use, exclude people, sell, and convert the asset. Without these social relationship dimensions, property simply would be reduced to “location.” 5 The rationale behind this argument is that, if left alone, social agents make the best decisions about property use. Thus, decentralized rather than centralized hierarchical decision-making delivers better outcomes since owners can allocate land to the “highest and best use.” Social spatial relationships are only instrumental (means-end) between buyers and sellers, owner, tenant, and so on. 6
Territorialism is associated with the politics and control of three interrelated dimensions that define modern societies and the spatial organization of the international system: State, population, and territory. 7 The State is given the sovereign power to regulate and legislate its population (biopower) and its territory (property rights regime). Territorialism is antithetical to the laissez-faire liberalism view. Whereas the latter focuses on decentralized decision-making, the former is concerned with centralized hierarchical decision-making. The philosophical arguments of territorialism can be traced to Hobbes and the leviathan. Hobbes argued that society, if left alone, would be incapable of self-regulation; therefore, an institution or entity is needed to impose social order and peace to avoid chaos and the “war of all versus all.” The State is the embodiment of the leviathan in modern history, and the sovereign power gives it authority for exclusive control of a territory and its population to develop tools to control space and discipline society. 8 The law is one of the tools of power the State employs, not only for social control but also to control space and social relations through property rights. Territorial sovereignty “…defines people’s identity as citizens and forms the basis on which states claim authority over people and the resources within those boundaries…modern states have increasingly turned to territorial strategies to control what people can do inside national boundaries.” 9 The law as a tool of territorialism not only assigns roles and functions to the State but also establishes boundaries regarding what it can and cannot do to control and regulate land. Spatial practices are the result of the checks and balances between society and the State. The State could become a complete master over people’s life and space 10 or an entity that seeks to find a balance between the public good and private rights.
In the next sections, I will discuss the formation of the Mexican State and its spatial practices against this conceptual backdrop of the intersection of law–space–power. My aim is to demonstrate the complexity of planning by paying attention to two issues that move in parallel. First, the effort to establish the rule of law in Mexico has not been easy. Even today, the rule of law is a work in progress. Second, the incremental process to move away from the semi-authoritarian model of spatial territorialism into something resembling a laissez-faire neoliberal democratic model that emerged in the 1980s and still exists today. 11
The History of Eminent Domain and Expropriation Laws in Mexico (1821–1917)
The purpose of this section is to provide a brief history, as a contextual backdrop, to show that current issues related to property rights are path dependent. Planning laws and land use practice do not appear magically; rather, they are part of a structuration process where the interaction between human agency (free will) and structures (rules and constraints) gives form to planning. 12 Mexico acquired its independence from Spain in 1821, more than a decade after the war for independence started in 1810. Once independence was acquired, Mexico struggled with civil wars over what direction to take the new nation. To illustrate this point, from 1821 to 1850, coups were a constant, and fifty governments came and went. 13
After gaining independence from a colonial master, any country must deal with issues of State formation and establishing a social order in which property rights and the law are key elements. The new regime must make decisions related to competing claims for property. Amazingly more than two centuries since independence, some Mexican communities are still litigating land claims that date back to the colonial era. In brief, issues related to property rights and eminent domain somehow still affect planning processes today. The next paragraphs explain some important historical accounts to understand the evolution of eminent domain and expropriation laws.
The Constitution and Eminent Domain
As stated previously, a few constitutions preceded the current (1917) one. In this section of the article, I briefly analyze eminent domain in the 1824 and 1857 constitutions and the not-so-easy path Mexico followed to establish a liberal federalist republic in the mirror image of its successful northern neighbor based on the Jeffersonian ideas of an agrarian democracy. 14 Table 1 shows the main elements of each Constitution that are discussed next.
Eminent Domain Issues in Mexico’s Constitutions.
Source: Elaborated by the author based on Mexico’s Constitutions of 1824 and 1857.
The 1824 Constitution shows that individual rights were not a primary concern. Only three articles directly or indirectly deal with eminent domain and property. The Senate is the ultimate authority that delegates the use of eminent domain to the executive branch (Article 112) and compensates the affected party. Eminent domain, as a valid public interest, is exercised only for building “roads and channels.” Josefina Vazquez argues that the 1824 Constitution did not explicitly grant individual rights; only a few states guaranteed certain rights, among them property rights. 15
In contrast, the 1857 Constitution reflects the concerns of the liberal group that prevailed over the conservative one. The 1857 Constitution makes explicit the right of “men” by setting limits on State action. Three specific articles address the issue of reasonable cause and due process affecting property (Articles 16, 26, and 27). Article 27 is more explicit on eminent domain issues, stating that a property cannot be expropriated unless there is a valid public interest and compensation is provided.
Article 72 is important to highlight because of its impacts through the Leyes de Reforma (Reform Laws) on land expropriation, affecting mainly the Roman Catholic Church and communal property during the presidencies of Benito Juarez and Porfirio Diaz. To better understand, Article 72 requires more context regarding land tenure and population. Mexico’s population was unevenly distributed across the territory and extreme inequities in landholdings existed. 16 The Church and indigenous populations were the main affected parties of the Leyes de Reforma. The Church was one of the main landholders and a good proportion of its land was idle or unproductive. A “civilization” narrative considered the indigenous population to pose an obstacle to the goal of modernizing the nation; therefore, the indigenous peoples’ lands were taken and turned over to the “civilized” forces of modern capitalism. 17
Articles 117 and 101 deal with power distribution among the branches of government to regulate property rights and resolve disputes. The weakness of the executive branch is an important aspect to emphasize because of its paradoxical nature where caudillos (strong charismatic leaders) are the norm.
Eminent domain laws were one of the pillars of Mexico’s “modern” transformation. The eminent domain laws recognized in the 1857 Constitution were implemented to accomplish three main goals: (1) to diminish the power of shadow or de facto governments such as the Church—one of the main colonial remnants and a large landholder; (2) to consolidate the Mexican State based on classical liberal principles; and (3) to undertake a “modernization” project where land development played an important role.
The Ley Lerdo 18 (Lerdo’s Law, June 1856), known also as the “disentailment” law, was crucial to operationalize eminent domain and expropriation laws. Supporters argued the law was in the public interest because it (1) made “unproductive” land available for economic and industrial development and (2) developed a cadastre or property inventory to strengthen the government’s fiscal capabilities. 19
From 1857, when the Constitution was approved, until 1910, when the Mexican Revolution started, the country experienced a period of prosperity, particularly during the Porfirio Diaz dictatorship (1876–1910). However, prosperity was built on taking land from indigenous populations and concentrating land in latifundios (vast landholdings owned by nationals and foreigners). The 1857 Constitution attempted to erase the dual property system—communal and private—in favor of private land ownership. Communal land belonging to indigenous populations (e.g., the Yaquis in Sonora) was taken away and given to large landholders. Also, land considered “vacant” was privatized to promote settlements, mainly in the vast Mexican north. The Yaqui and Mexicali Valleys in the states of Sonora and Baja California, respectively, are two examples. The result is that by 1910, of 8,425 haciendas (plantations), 300 had a size of 10,000 hectares (24,170 acres), 116 reached 250,000 hectares (617,750 acres), and 51 had 300,000 hectares (741,300 acres) on average. 20 Foreign investors became among the main landholders, including land corporations such as the Richardson Co. in Sonora in charge of expanding agriculture in the Yaqui Valley. Railroads owned vast amounts of land through rights-of-way. The rail network expanded from 1,073 kilometers in 1884 to 19,280 kilometers in 1910. Mining and oil companies also owned large amounts of land. 21
The population in urban areas was small, accounting for only 20 percent of the total. The urban population in the three main cities was slightly above a half million: Mexico City had 334,721 inhabitants; Guadalajara 101,202; and Puebla 93,521. 22 Meanwhile, the use of eminent domain in an urban setting was applied more often in Mexico City. Porfirio Diaz, through his Treasury Secretary José Yves Limantour, started an urban development project in Mexico City using Ebenezer Howard’s garden city concept and replicating Hausman’s approach in the Paris Plan of removing “undesirable” features to beautify and sanitize the city. 23 New suburbs emerged, and a major sanitation program was undertaken to build the sewer system, among other urban initiatives. 24 Property that used to belong to the Church, such as monasteries and convents, were replaced by new urban projects, and new developers emerged. 25
In summary, this period of history is an example of how the law–space–power triad intersected to create a new social order and property system. The surviving colonial powers (the Church) were dismantled or subordinated to the power of the new liberal State. The Ley Lerdo and the Leyes de Reforma consolidated State power to establish spatial order. Both sets of laws were instrumental in establishing a new system of property rights based on land expropriated from the Church or taken from indigenous populations. Finally, the laws provided the means to promote the country’s “modernization” based on spatial policies such as promoting new human settlements in “empty” lands and transforming idle land into productive enterprises, among others. However, the ideal of constructing a liberal agrarian democratic State was an illusion. The country instead became a dictatorial regime that in the long run was unsustainable. In 1910, the Mexican Revolution started with the belief in restoring the liberal democratic State and succeeded in toppling Porfirio Diaz.
The Modern State, Eminent Domain, and Planning (1917–1980s)
The focus of this section is to discuss the consolidation of the modern State that, instead of becoming a liberal democracy, turned into a semi-authoritarian political regime. Octavio Paz, a Mexican writer and Nobel Prize winner, defined the Mexican State as a “philanthropic ogre,” and Mario Vargas Llosa, a Nobel Prize winner from Peru, described it as “the perfect dictatorship.” The peculiarity is that, while semi-authoritarian, the State also was pragmatic and accommodated social demands and mobility.
Like its predecessor, the State that emerged from the Mexican Revolution based its success on a new spatial order built on eminent domain and expropriation laws. The Constitution gives a great amount of power to the State to create a new social order in which the law and spatial policies were critical. Varley defined this model of planning as “undemocratic” because it manipulated the law to use land tenure policies and urban development as social control mechanisms. 26 I will discuss the main tenets of eminent domain and expropriation laws, explain how these were applied in different periods, and show their undemocratic nature.
The 1917 Constitution was a compromise among several groups of social actors, such as landless peasants, the emerging industrial working class, new capitalists that emerged from the revolutionary caudillos, and some old aristocrats who believed in democracy, among others. The goal was to establish a democratic system that the old regime did not allow and, above all, a strong State with vast powers to implement a new spatial order. Article 27 frames the new eminent domain and expropriation laws.
An exhaustive analysis of Article 27 is beyond the scope of the article, but it is important to scrutinize the concept of property and the rights associated with it, considering whether individual rights prevailed as in the laissez-faire liberalism model or if the State was empowered over the individual as in the territorialism model.
One of the main changes in the Constitution, vis-à-vis that of 1857, is that it redefines property rights. In the Constitution, property rights over land are neither absolute nor inalienable. Property rights are vested originally in the nation and transferred to individuals, and land use rights are defined by the State according to the public interest. Individuals who own land have surface rights but resources underground (e.g., oil and minerals) belong to the State which assigns exploitation rights. The Constitution also reinstates the dual property system where private and communal property (known as ejido) coexist. The ejido system is a land tenure system created during the colonial period that provided land to indigenous populations to be labored and owned collectively. In summary, the sovereign power of the State is above the individual interest. Eminent domain and expropriation laws, as in the previous regime, are used in a discretionary way to establish a new social spatial order.
Second, the compensation clause in Article 27 states, “Private property shall not be expropriated except for reasons of public use and subject to compensation.” Section VI of Article 27 establishes the criteria to determine the compensation. Compensation is based on the appraised value, often appraised as agricultural land rather than the future use, because implicitly the owner accepts that value for tax purposes. The only amount subject to negotiation or litigation is any change in value from the last tax appraisal until the time of the expropriation.
Third, the Constitution also states that due process must be followed to undertake an expropriation. Article 27 makes explicit that “The federal and state laws, within their respective jurisdictions, shall determine in what cases the occupation of private property shall be considered to be of public interest, and in accordance with such laws, the administrative authorities shall issue the respective declaration.” The authority rests in the executive branch at the federal or state level. Individuals can litigate in the court system different aspects related to the expropriation act: (1) compensation amount, (2) reversal of the expropriation, or (3) challenge the public interest or due process.
Fourth, the definition of public interest reflects how society and its priorities change over time. The use of eminent domain and expropriation laws reflects those changes. Eminent domain and expropriation laws were exercised more intensively for different priorities across time. For example, they were deployed as a means for social justice to “right wrongs” by reallocating or restoring land to populations that were dispossessed of their property in the previous regime. According to Lorenzo Meyer, 7.6 million hectares (18.3 million acres) were reallocated from 1917 to 1934, benefiting about 800,000 peasants. 27 The government of Lazaro Cardenas (1934–1940) reallocated almost 18 million hectares (44.4 million acres) to peasants, among them indigenous populations such as the Yaqui in Sonora, which happens to be one the most productive valleys in the country. 28 In addition, Cardenas used expropriation law against foreign capital that had enjoyed prerogatives in the old regime. One of the most famous expropriation cases was against oil companies in 1938. Oil companies refused to obey salary increases ordered by the Supreme Court and rejected the workers union. Cardenas issue the expropriation executive order by making the oil industry a centerpiece of economic development and a public interest. 29
National priorities shifted after 1940 and so did the use of expropriation laws. The period known as the Desarrollo Estabilizador (stabilizing development) that roughly lasted from 1940 to 1970 was characterized by high rates of growth, 6 percent per year, and stable public finance. Economic growth was based on industrial development through an import substitution strategy. Eminent domain and expropriation laws were employed during this time as a tool to develop infrastructure to support the industrialization process such as construction of dams, electrification, irrigation projects, and roads. From 1935 to 1960, public-sector investment in public works was key in the industrialization process. The share of gross fixed capital in transportation and communications infrastructure was on average 44.4 percent, industrial support 18.7 percent, and irrigation projects 16.3 percent. 30
The industrialization process went hand in hand with the urbanization process. The share of urban population kept growing from 17.5 percent in 1930 to 38.7 percent in 1960, 47.1 percent in 1970, and 55 percent in 1980. Mexico City maintained its dominant position in the urban hierarchy. 31 Eminent domain and expropriation laws since 1960 have focused on supporting the urbanization process. 32 Urban segregation patterns in Mexico continued, with areas within the city with high levels of access to public services and others, such as squatter settlements that lack basic urban services. The State has played an important role in the reproduction of those urban inequalities by failing to develop a strategy that will provide decent housing to a growing urban population and skewing investment that favors capital accumulation rather than urban social development. 33
The State had to play a balancing act in relation to urban development. On the one hand, it had to facilitate accumulation processes by investing in the built environment and making social capital expenditures by subsidizing urban infrastructure such as subways, roads, and so on, in the urban areas, particularly benefiting the middle and upper class. 34 On the other hand, it ignored and/or tolerated the growth of squatter settlements to maintain social stability and clientelist political support through the official Institutionalized Revolutionary Party, simply known as PRI. Peter Ward estimated that 50 percent to 60 percent of the urban area in Mexico City was developed informally at the margin of planning law and procedures. 35 Alegria and Ordoñez estimated that 31 percent of the housing units in the entire country lacked land title in 2008. 36 Eminent domain and expropriation laws were not applied consistently; rather, they were used as tool to achieve political goals, instead of creating a doctrine of property rights and clear rules to guide an orderly urban process. 37
During this period, the first law on urban planning and development (Ley General de Asentamientos Humanos or LGAH) was passed (1976–1978). Also, planning commissions were created to implement spatial planning to develop arid lands, to promote urban development in the border region, and to develop industrial parks, and so on. State achievements in this era were impressive in terms of the capital facilities (roads, dams, irrigation systems, etc.) and the rates of growth that moved the country on the path of industrialization. The rates of urbanization during this era were impressive as well. In 1940, the urban population was 3.9 million living in 55 cities, and by 1980, the urban population reached 36.7 million distributed in 227 cities. 38
Notwithstanding that checks and balances exist formally in the political structure, the executive branch in practice had far more power than the legislative and the judicial branches. 39 Therefore, the courts lacked the independence to uphold property rights laws or challenge the executive for overstepping its authority. The courts barely hear or deal with cases brought by private citizens challenging the exercise of eminent domain. 40 This era shows how the State deployed its sovereign power, granted by the Constitution, to control every aspect of the territory and the population. No aspect of life and space escapes from State’s control. Eminent domain and expropriation are what linked the legal with the spatial. Varley argues that the boundaries between the legal and illegal in this era are fuzzy. 41 The State applied eminent domain in a very pragmatic and utilitarian way by promoting not only economic growth and urban development following formal planning procedures, but also by tolerating land squatting as a social control and political strategy to stay in power.
Neoliberalism and the Assertion of Property Rights Claims (1980–Present)
The objective of this section is to discuss two epochs of neoliberalism. The first epoch focuses on a paradox that is the rise of economic neoliberalism coexisting with political semi-authoritarianism. This paradox is present during the presidential terms of Miguel de la Madrid (1982–1988) and Carlos Salinas de Gortari (1988–1994). The second epoch is the advent of a democratic electoral political system that affected the practice of eminent domain and planning. The argument is that changes in government, first at the state and local level and then at the national level, brought not only checks and balances that limited eminent domain power but also planning innovations that redefined the law–space–power relationship.
The 1980s and 1990s were convulsive times in Mexico. Two intertwined processes were taking place. First, the adoption of neoliberal economic policies, such as structural adjustments (open economy, fiscal discipline or balanced budgets, privatization of public enterprises, reduced subsidies, etc.) responded to a fiscal crisis during the 1980s that caused widespread significant social impacts. 42 Second, political forces demanded transparent and fair elections, the end of the one-party strong presidential system, and establishment of a democratic electoral process. Against this backdrop of social dissatisfaction as well as economic and political crises, President Miguel de la Madrid in January 1983 reformed Article 26 of the Mexican Constitution and created the Democratic Planning System (Sistema Nacional de Planeacion Democratica [SNPD]). The goals of the SNDP were to restructure the State–society relationship by incorporating forms of public participation in plan making, decentralizing decision-making, respecting freedom and individual rights, and empowering local governments, among others. 43 However, the SNPD was more symbolic than substantive.
President Carlos Salinas de Gortari consolidated the neoliberal State and introduced big reforms to change the direction of the country. President Salinas started his presidency with a lack of legitimacy because, in the eyes of many Mexicans, he got elected through massive electoral fraud. Therefore, President Salinas had to undertake major reforms and changes to survive and regain legitimacy. One strategy was to put the country back on a path of economic growth by embracing an export-oriented strategy through free trade and by signing the North American Free Trade Agreement. Another strategy was to regain support from poor people who had been turning against the PRI by undertaking a massive social development strategy. In the past, this population was the core support of the PRI because they were dependent in the patronage relationship. 44
The massive social development program, known simply as Solidaridad, was Salinas’ masterful plan to regain control and keep the PRI in power. Solidaridad was a place-based social development strategy, and the law was instrumental to achieve this goal. The program consisted of massive investment in marginalized communities through public works such as roads, water, sewage, and health, among others. The total estimated investment allocated to the Solidaridad program over five years was 7 billion US dollars. In relative terms, the investment represented 18 percent of the federal government’s total expenditures. 45 Also, an aggressive effort sought to regularize urban plots by granting land tenure to squatters. The Land Tenure Regularization Commission known as CORETT by its Spanish acronym was critical in this effort and future regularization programs since its creation in the 1970s.
Additionally, changes made in 1992 to Article 27 of the Constitution and the laws that regulate rural land (Ley Agraria) impacted property rights and eminent domain. First, restrictions were lifted so that communal land or ejidos could be sold with members’ approval. This change in the law made land available for urban development, particularly land located at cities’ peripheries. Some 90,000 hectares (222,394 acres) were subdivided without following any urban codes and only 30,000 hectares (74,131 acres) followed local land use ordinances. 46 Second, from 1989 to 2000, there was a strong effort to regularize and title squatter settlement lots through CORETT. Between 1974 and 2013, an estimated 2.5 million homes were regularized, making it one of the most aggressive programs in Latin America. 47 Land tenure regularization required the use of eminent domain and expropriation to achieve this goal. From 1974 to 1997, expropriations totaled 1,430 accounting for 126,051 hectares (31,1478 acres), and about 1.9 million land titles were issued. 48 Expropriations were justified by arguing that social housing is a valid public interest. Azuela and Saavedra estimated that between 1968 and 2004, 90 percent of the land taken for urban development purpose was ejido land. 49 In 1994, a reform to Article 107 (section II and XVI) explicitly limited eminent domain acts against ejidos by permitting them to obtain injunctions against expropriations (section II) and by impeaching or holding in contempt authorities who refused to follow the Court’s order.
Up to this point, I have focused on the first epoch and the paradox of how neoliberalism worked in parallel with semi-authoritarianism in the sense that expropriation decisions went almost unchallenged. The main reflection on this epoch is that the law–space–power relationship maintained some of the main characteristics of previous authoritarian regimes. The law is malleable and flexible to become an instrument of social control through space-based strategies (land, title, and public services) and to keep the semi-authoritarian power structure mostly intact. However, this epoch started to fade at the end of the 1980s, and, by the 1997 midterm election, began to be replaced by a democratic system. 50
The democratic movement demanded changes to the existing power structure that would redefine the law–space–power relationship. The democratic wave moved from the local to the national. The conservative National Action Party, known as PAN, which had a strong presence in northern Mexico, won its first statewide gubernatorial election in 1989 with Ernesto Ruffo in Baja California. Until then, the official party, PRI, had won every gubernatorial and presidential election since its founding in 1929. In 1992, the PAN again succeeded by winning the state of Chihuahua with Francisco Barrio as governor. The leftist Democratic Revolution Party or PRD won Mexico City in 1997 with Cuauhtémoc Cardenas and son of former President Cardenas famous for expropriating the oil companies. The official party, the PRI, lost its majority in Congress in 1997 and the legislative branch became a check on the executive. Finally, in 2000, the PAN candidate Vicente Fox won the presidential election. Since then, the executive branch has alternated among all the main political parties—PAN (2000–2012), PRI (2012–2018), and Movimiento de Regenaracion Nacional or MORENA (2018–2024) which is a group that split from the PRD.
This is a good place in the article to remind the reader of one question posed earlier: how has the transition from a semi-authoritarian regime to a democratic system affected planning law and practice? In the next paragraphs, I will look at specific institutions in the judicial, legislative, and executive branches to try to analyze how a democratic system altered the law–space–power relationship that frames planning practice.
Garza asserts that neoliberalism eroded the State’s capacity to steer development, thereby opening an era of spatial “laissez-faire.” 51 What Garza failed to say is that “laissez-faire” development still needs a “referee” to enforce contracts and rule on property right claims. The judicial system is that referee that would interpret property rights law regarding use rights and transferability. 52 Democracy has empowered property owners and social groups that in some instances have successfully opposed expropriation actions. The judiciary, particularly the Supreme Court, became a more independent branch. In addition, the judiciary has started to play an important role regarding eminent domain and expropriations. From 1917 to 1994, the Supreme Court ruled on only 63 expropriation cases. And, from 1995 to 2009, the numbers exploded to 1,238. 53 Clearly, the role of the judiciary has been crucial in the sense that the emergence of rule of law has become a check and balance on executive power in regard to using space/property rights as a political tool. The court has become instrumental in establishing some consistency in the use of eminent domain and expropriation, thus recalibrating the law-space-power relationship, and contributing to ending the semi-authoritarian model of land tenure regularization.
Now the attention is placed on the legislative branch as an institution that shapes urban planning’s legal framework. As discussed previously, a democratic system had empowered state and local governments. Therefore, the legislative branch at the state level would be expected to enact its vision or interpretation of Article 27 of the Mexican Constitution.
The 1993 Ley General de Asentamientos Humanos (LGAH), that replaced the 1976 law, and the 1992 reform to Article 27 (previously discussed) were both significant pieces of legislation. These legal changes made it possible to implement the neoliberal model of urban development through eminent domain and expropriations. The intent of the two pieces of legislation was to (1) exercise some control over urban development by requiring every city to develop an urban development plan (Plan de Desarrollo Urbano or PDU), (2) make land available for future development by establishing in the plan reservas territoriales (land reserves) for future development, and (3) use expropriation decrees to acquire the land and make it available to developers to increase the supply of affordable housing. Most of the expropriated land was considered ejido land. From 1983 to 1994, a total of 30,003 hectares (74,131 acres) was designated as land reserves. 54 From 1996 to 1999, a total 11,961 hectares (about 30,000 acres) was designated. 55 This opened up a window of opportunity for developers to invest in urban development to expand social housing that will be discussed later in the article.
The LGAH established some criteria that state and local governments must meet to exercise eminent domain based on public interests. Article 6 of the LGAH establishes ten categories of the public interest; states can add to those categories. State laws identified twelve planning dimensions or fields (see Table 2). The second column takes into consideration the parameters that the LGAH establishes as public interest although there are some aspects that stand out from the rest. Categories such as public institution, historic preservation, and transportation were the most common (twenty-four to twenty-five states) in the different state laws. Public utilities, urban growth management, and public safety and emergency response (twenty to twenty-three states) were next, followed by public space and sports parks (fifteen to twenty states). At the bottom of priorities are economic development, housing, and public health (fewer than fifteen states).
Public Interest and Expropriations.
Source: Elaborated by the author based on eminent domain laws of the different Mexican states.
Note: Most of the state constitutions are based on the 1993 LGAH.
A democratic system had the effect of shifting the center of power from the strong executive, who imposed discipline across the states, toward the state governors and legislatures. States now have more latitude to exercise eminent domain and adjust expropriation rules to their needs. Table 3 shows that state legislatures, while staying within the general principle of Article 27, added some variance to the norms and regulations.
Compensation and Expropriations.
Source: Elaborated by the author based on eminent domain laws of the different Mexican states.
Note: MEX law is very anti-owner and favors the state. The National Valuation Institute known as Indabin for the federal government reversing and its equivalent in TLX perform the valuation. ZAC law does not mention reversing the act of taking. Several states, such as COA, state that if the owner does not claim the compensation in the time established the money becomes part of the state treasury.
The first three rows present the different alternatives employed to determine the compensation to which a property owner is entitled once an expropriation is final. The three options are as follows: (1) appraised/fiscal value (normally as agriculture value), (2) market value, and (3) negotiated solutions. Most states (eighteen out of thirty-two) stay within Article 27 parameters (fiscal value plus the appreciation between the time of the appraisal and the expropriation). The state of Sonora (SON) adds 10 percent to the appraised value. Eight states adopted market value compensation. Five states adopted negotiated solutions. Negotiated solutions compare different appraisal values and if there is a variance in the estimated value, then compensation will be based on the average as is the case for the state of Aguascalientes (AGU). The state of Chiapas (CHP) designed a commission made up of the appraisal office and an appraiser selected by the affected party to determine the compensation. The state of Guerrero (GRO) uses the appraisal office and the expert hired by the affected party. Nayarit (NAY) and Coahuila (COA) use an appraisal by the government and the affected party; if there is not agreement, a third expert is involved. In the state of Queretaro (QUE) an expert assessor agreed to by the parties does the valuation.
The form of compensation for an expropriation is one element that often does not get enough attention in the literature, perhaps because it is assumed that full compensation occurs once the expropriation is legally completed. Table 3 shows that is not the case. There is not only a wide variance in the time frame of the compensation but also in the financial terms of the compensation. The time for paying compensation ranges from fifteen business days after final resolution, as in the state of Veracruz (VER), to twenty years as in the state of Hidalgo (HID). Hidalgo pays 3 percent at the time of the expropriation and the rest in yearly payments, not to exceed twenty years, and 4 percent interest on the unpaid balance. Eight states consider some other tangible good in lieu of monetary compensation, for example, permutas or exchange of ejido land as part of or instead of compensation was widely used during the 1960s and 1970s. Most state legislation allows the owner to litigate the value of the compensation, but the only amount subject to litigation is the difference in appreciation or betterment between the time the appraised value was determined and the moment of the expropriation. The owner is responsible for paying lawyers’ fees as well as those of the expert assessor.
The reversal of the expropriation is possible under eminent domain law in Mexico (Table 3). The norm in fourteen states is a five-year term to undertake the project, and if the project is not implemented for the public interest as stated by the expropriation, then the owner can start a reversal procedure. Eight states have less than a five-year term for reversal and only if the property is not used for the cited public interest. The state of Campeche (CAM) sets five years; in case the expropriation is reversed, the owner returns the money received plus interest accrued after the expropriation
Two other pieces of legislation put the nail in the coffin of the semi-authoritarian model of spatial planning. Reforms to Article 115 in 1983 and 1999 transferred more authority to local municipalities to undertake urban planning. The Bando de Policia y Buen Gobierno (Police and Good Governance Ordinance) 56 is the main legal instrument that local governments have at their disposal to implement planning and regulate development. Opposition parties such as the PAN and PRD won elections at the state and local level and tried to differentiate themselves from the PRI’s clientelist approach to urban government. Both parties tried to bring more consistency, certainty, and stability to urban development and do long-range planning that would continue across different administrations. Cases of local government innovation, such as the municipalities of Leon in the state of Guanajuato, and Juarez in the state of Chihuahua are well documented. These municipalities tried to undo the patronage relationship by establishing direct communication and negotiations between urban squatters and local authorities without the mediation of political parties or leaders. Varley 57 argues that these efforts were an attempt to instill “civic culture” and a “culture of legality.” Also, these local governments started to professionalize planning by creating local research capacity and expertise through the creation of autonomous local urban planning institutes known as IMIP or IMPLAN. 58 Today, there are sixty-six such institutes across the country and growing. 59
A last aspect to discuss is the role of the executive in the context of a democratic electoral system in the post-Salinas de Gortari (1988–1994) era, focusing on two issues relevant to expropriation and eminent domain laws. First, the power of the executive, as discussed previously, has been eroded and the center of power has shifted to local governments. Citizens feel more empowered, therefore megaprojects are more difficult to implement. Second, housing law reforms, expropriations, and the use of reservas territoriales were key to undertake one of the most aggressive social housing programs ever in Mexico.
In the past, officials implemented megaprojects with no trouble at all. An expropriation decree coming from the executive branch was uncontested and uncontroversial. However, in Mexico, as in any other democratic society, most spatial planning issues, once thought to be in the domain of technical reason, now have become “wicked” problems. 60 The construction of a new airport in Mexico City is an iconic case in point. The project has moved from being contested to being implemented to being cancelled. The administration of President Vicente Fox (2000–2006) embarked on a project to build a new airport on the outskirts of Mexico City. As with previous megaprojects, the federal government used eminent domain and expropriated 1,500 hectares (3,706 acres) from the ejido of San Salvador Atenco. The peasants from the town, supported by opposition political parties, mounted a successful social movement against the expropriation and derailed the project. Later, the administration of President Enrique Peña Nieto, a PRI president (2012–2018), through force and negotiations, convinced the landowners and started to build the airport. The present administration of Andres Manuel Lopez Obrador (AMLO), which made fighting corruption the centerpiece of its campaign, cancelled the entire project and instead is opting for adapting an existing air force base, known as Santa Lucia, as the new site.
What is interesting with the current AMLO administration is that his political party controls the executive and the legislative branch. The Supreme Court is the only check that exists on executive power. AMLO has gone back to the old times of using eminent domain and expropriations to implement his megaprojects such as the Maya Train and the new Santa Lucia Airport. These projects are causing not only social unrest due to expropriations but also face serious criticism for not complying with laws such as environmental impact statements. The COVID-19 pandemic and the midterm elections may put the brakes on the attempts to centralize power and return to an authoritarian rule.
The last point to analyze is the impact of the 1992 reform to Article 27. The law freed ejido land to become the main supplier for urban development. Reforms in 1992 and 1997 affected the LGAH, land reserves policies, and the National Institute for Social Housing, better known as INFONAVIT. INFONAVIT was created in 1972 with the goal of producing affordable housing for workers. The basic finance mechanism was that workers contributed to the housing fund through payroll deductions. INFONAVIT built the homes and, because demand exceeded supply, used a lottery system to assign housing units to eligible workers. Workers will pay off their mortgages through payroll deductions. Many problems were associated with this scheme. First, only a small proportion of workers were part of the formal economy; therefore, a large proportion could not access affordable housing. Second, the funds were not enough to build a massive amount of housing to keep up with the demand. Third, corruption was endemic in the system of credit and construction.
In 1992, reforms were made to the INFONAVIT system. The main change was that INFONAVIT would switch its focus from being a developer to becoming a lender or financier-like system. This opened the door for developers to build social housing and expand the stock. A new set of reforms were implemented in 1997 with President Ernesto Zedillo (1994–2000), making the system more flexible and workers could combine loans with other credit institutions beside INFONAVIT. The administration of President Vicente Fox (2000–2006) overhauled the finance systems, creating the Federal Mortgage Society and the Limited Financial Societies like Fannie Mae and Freddie Mac in the United States. Both were critical in developing new financial services and a secondary mortgage market. The impact is clear in that the number of mortgages went from 230,000 to 420,000 from 2001–2006. 61 The number of credits since then has been around 567,000 per year. 62 Housing stock increased from 23.2 to 35.6 million units (a net gain of 12.4 million units) during the 2005–2010 period. 63 In quantitative terms, the reforms made to INFONAVIT were a success to judge by the number of mortgages and housing units. The qualitative evaluation, however, shows some problems. A separate paper would be required to discuss this in more detail but there are some key aspects to mention here. The housing supply led by private developers followed a logic of economies of scale. Developers standardized designs, built on the periphery where land was cheaper, maximized the construction to land ratio, and supplied the bare minimum amount of land for amenities and other institutional uses. The result is that a new phenomenon has taken place in recent years—a massive abandonment of housing due to economic crises, poor accessibility to services and amenities, and high levels of crime, among other reasons. 64 Mexico now faces a problem of housing abandonment instead of a lack of affordable housing. The estimated vacancy rate in 2010 averaged 11.6 percent to 14 percent and some problematic cities, such as Ciudad Juarez, had a 30 percent vacancy rate. 65
Conclusions
The law is supposed to assign functions to different governmental entities and constrain their actions by protecting people’s rights—property is one of those rights. Also, the law in some federal systems creates checks and balances among the branches of government. The article analyzed the history of eminent domain and expropriation law that are key to urban planning. The analysis used a conceptual framework to study the intersection of the triad of law–space–power. This triad allowed me to study the role power structures played in the spatial ordering of a territory through the law.
The history of eminent domain and expropriation law showed that the path has not been easy to establish rule of law so that planning practice could become more predictable, stable, and with standard processes. The history of planning in Mexico shows that eminent domain and expropriations have been used in a very strategic instrumentalist way. The objective of those who take strategic instrumental action is to make another party do what is to their advantage; power is asymmetrical, and power is the means to achieve the ends.
The analysis showed that Mexico’s planning history is the history of a State that used the law in a very strategic instrumental way to control several aspect of its citizens’ lives and to establish a spatial/territorial ordering that would serve the interests of those in power—either during the era of the Porfiriato (Porfirio Diaz dictatorship 1876–1910) or during the “philanthropic ogre” and “perfect dictatorship” (the era of the PRI as State party 1929–1997). The law was the instrument of control rather than a constraint on the power of the State. This is in contrast with the US system, where individual property rights are protected by the Constitution, and controversies over what is a valid exercise of eminent domain (Fifth Amendment) or police power (Tenth Amendment) are litigated in the Courts.
The balance of the law–space–power relationship has been changing in Mexico since the 1980s. The article showed that as soon as a democratic system was instituted, the checks and balances started to work the way they are supposed to. Thus, the evidence supports the paper’s hypothesis. Property rights now are more likely to be litigated and democracy has made it more difficult to undertake mega projects that require expropriation of large amounts of land. A democratic society makes planning decision-making more difficult and cumbersome. Some segments of Mexican society would like things to be as they were and to restore power to the executive so things can get done more quickly. The current administration of AMLO certainly is attempting to place power back in the executive. The coming midterm election in 2021 will be key to see which direction the country will take and to determine the future of planning.
Supplemental Material
Supplemental Material, sj-pdf-1-jph-10.1177_1538513220984160 - Eminent Domain and Expropriation Laws: A Century of Urban and Regional Planning in Mexico
Supplemental Material, sj-pdf-1-jph-10.1177_1538513220984160 for Eminent Domain and Expropriation Laws: A Century of Urban and Regional Planning in Mexico by Sergio Peña in Journal of Planning History
Footnotes
Declaration of Conflicting Interests
The author(s) declared no potential conflicts of interest with respect to the research, authorship, and/or publication of this article.
Funding
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