Empty Plots Everywhere
Urban Crossroads #20
Amman has an abundance of empty plots. Until very recently, it was estimated that such empty plots took up about half of Greater Amman's 526 square kilometers. This ratio should have gone down as a result of the current building boom, though not by much.
Ideally, the subdividing of new plots in an urban center should take place in a gradual manner. As the population of the city grows and a need arises for more buildings, new areas would be subdivided to accommodate that need. Planning authorities also would put in place long-term strategies that define the directions of physical growth for the city, and identify areas to be subdivided in the future for residential, commercial, cultural, recreational, office, or industrial purposes. Accordingly, the physical expansion of a given urban center would be brought under control and kept in tune with the growth of its population and economic activities.
In Amman, the subdivision of plots has followed a different path. Although Amman is a city that has experienced tremendous growth (from about five thousand inhabitants in 1920 to about two million today), the subdividing of land in the city, especially since the 1970s, has taken place at a highly rapid rate that has surpassed its rate of growth. As a result, most of the areas of Amman located outside its boundaries from the 1960s have an abundance of empty plots.
Such a ubiquity of empty plots is not healthy. Infrastructure services need to be provided for underutilized areas. Moreover, these empty plots often end up as dumping grounds for the neighbors, who use them to get rid of garbage and even construction debris. In short, these empty urban plots provide for an inefficient use of land, and are eye soars in the city.
How did such a situation come into being? It is partly a result of accumulative inefficient planning decisions. Another reason is related to the fact that a number of the plots have multiple owners who inherited them from what originally was a single owner. When the inheritors are unable to agree on what to do with these plots, they are left as is, neither built upon nor sold to someone who would build on them.
However, another more complex reason for this state of affairs is related to economic developments. In developing world economies, at least in our region, land is a very attractive medium in which to place one's savings. True, an empty urban plot of land is almost always an unproductive form of investment. It also has very low liquidity in that one usually is not able to sell it immediately, and may even have to bring down its asking price in order to find a buyer, at least in a bearish market. However, land is considered a very "safe" form of investment. Unlike investing in a business venture or in stocks, a plot of land will never vanish and always will be there. This is an attractive argument in periods of uncertainty and instability, and this region has seen more than its fair share of such conditions.
In addition, the relative underdevelopment of the various sectors of the economies of developing-world countries does not provide for very attractive alternative investment opportunities, although this clearly is changing in Jordan, where the stock market has performed solidly over the past few decades. Still, putting one's savings in land has turned out to be a good form of long-term investment in the country, and many people have made fortunes (both big and small) through buying land and selling it for much higher prices a number of years later.
The extensive subdividing of land in Jordan is connected to developments in the Jordanian labor market that have taken place since the 1970s, when large numbers of Jordanians were attracted to the countries of the Gulf by high salaries. These expatriates have been able to save considerably, and as they searched for possibilities for investing their savings in Jordan, land was the most readily available option. In other words, land almost became a "currency" into which their savings could be converted. This has placed significant pressures on the relevant authorities to allow for the subdividing of additional tracts of land to meet this increasing demand. Such pressure came not only from buyers, but also from owners wishing to sell. Also, the authorities have not resisted such pressures since the taxes collected from the transactions of buying and selling land have provided a considerable source of income to the treasury.
In more developed economies, land is viewed in a purely utilitarian manner. One buys land there for specific purposes, such as for agriculture or to build upon it. The phenomenon of investing or speculating in land there is not a widespread one. Among other things, the supply of subdivided land is regulated to correspond to with the growth of the population and the economy. Also, the relatively high property taxes levied on empty plots in many developed economies makes them a financial burden rather than an investment.
Surprisingly, the oversupply of subdivided land in Amman has had some advantages. It has allowed Amman to absorb with relative ease the over 170,000 expatriates who suddenly had to move to the city from the Gulf - especially Kuwait - as a result of the 1990 - 1991 Gulf War. These expatriates found empty plots served by infrastructure and ready to be built upon. Still, it should be added that even then, the amount of subdivided plots was far larger than the sudden increase of demand on them.
It also often has been remarked that if those empty plots are built upon, Amman's infrastructure, especially its road system, would not be able to accommodate the resulting increased population densities. Amman's major streets are barely able to accommodate the current high levels of traffic, and increased densities in the city may bring about nightmarish scenarios in terms of traffic congestion.
Ideally, it would be wonderful if many of these empty plots were converted into open green areas. However, such an option is not realistic considering the astronomical costs of appropriating these plots. Also, the maintenance required for such a large number of open green spaces would be beyond the current capacities of the municipal structure. Still, the option of converting at least some of those plots into green areas should be considered seriously.
The empty plots of Amman eventually will be built upon. Whether this will happen sooner or later depends on Amman's growth rate and also on the rate at which newly subdivided plots are supplied. One would hope that by then an efficient public transportation system would be put into place to release increased traffic congestion and that some of the plots would be converted into green open areas.
September 23, 2004