FIG Peer Review Journal


Informal Development in Greece: the Estimation of the Dead Capital, the new Legislation for Formalization and the Chances for Legalization (5514)

Chryssy Potsiou and Ifigenie Boulaka (Greece)
Prof Chryssy Potsiou
Assistant Professor
National Technical University of Athens, Greece
47 Vas Sofias Ave
Corresponding author Prof Chryssy Potsiou (email: chryssyp[at], tel.: +30-6944710817)

[ abstract ] [ paper ] [ handouts ]

Published on the web 2012-03-08
Received 2011-11-01 / Accepted 2012-02-02
This paper is one of selection of papers published for the FIG Working Week 2012 in Rome, Italy and has undergone the FIG Peer Review Process.

FIG Working Week 2012
ISBN 97887-90907-98-3 ISSN 2307-4086


This paper presents the new findings of a focused research made by the authors at the National Technical University of Athens on the problem of informal development in Greece (causes, size, impacts and tools for prevention and formalization). More specifically, this paper presents the results of a study focused on the estimation of the capital that is blocked in the informal constructions that by the current Greek legislation cannot be legally taxed, transferred, inherited, rented and mortgaged, which according to Hernando de Soto’s theory is considered to be “dead capital”. In addition to the above, the new legislation for the formalization of those informal constructions that are build in non-planned areas which was adopted by the Greek Parliament, in Autumn 2011, is briefly described, analyzed and criticized. The methodology followed for this research includes a brief literature research of previous publications on the specific topic; a case study for estimating the dead capital in an area with informal development in Attika, the greater region of Athens; on-site visits and interviews with property owners of informal constructions, the local authorities, the local real estate agents, the local constructors involved in informal and/or semi-legal construction, the Greek experts (civil engineers, planners, surveyors, etc), and the interested future entrepreneurs. First a brief investigation of the current situation of the informal development in Greece is given; an attempt to summarize the recent government’s environmental concerns is made and the new legislation in order to improve the environmental protection in Greece is briefly reviewed. Then, the dead capital blocked in informal development in the case study area of Keratea is thoroughly investigated and a rough estimation of the total dead capital blocked in the total informal development in Greece is attempted. The recent government’s reaction to informal development, together with the current problems and the relevant Greek legislation and adopted policies, is given. Some thoughts and proposals for major reforms needed to be done by the Greek government in order to rescue the real estate market in these areas and the economy from the heavy impacts of the current economic crisis are given.
Keywords: Land management; Security of tenure; Access to land; Spatial planning; Informal settlements; Valuation; Property taxes; Affordable housing; Legislation; dead capital, property formalization