Examines the economic and social impact of the "pirate settlements" that house nearly half of Bogota's families. Unlike the squatters common throughout the poorer countries, pirate settlers acquire their land legally and then move onto the site and build their dwellings gradually, as time and money permit. Freed from rent payments, they spend more on food and education. They often share part of their dwellings with roomers (inquilinos), whose rent payments thus remain within the low-income community. Under no feasible government policies will pirate settlements' growth slacken within the next decade. Far from misallocating scarce resources, as claimed, pirate settlements contribute significantly to capital formation, employment, and redistribution of wealth, and economize on scarce administrative and organizational resources. The government could benefit the lower-income half of the population by providing pirate settlers with (1) a land bank, (2) appropriate decentralized savings and loan mechanisms, (3) public services--roads, sewers, lighting, telephones--built gradually, and (4) technical assistance. (Invited paper, World Conference of Engineers and Architects.) 53 pp. Ref.
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