Millions of people around the world live insecurely because their home isn’t properly registered. They lack “property rights,” so they’re vulnerable to eviction from someone wanting the land. And, they’re frozen out from social services, because, according to the government, they don’t exist officially. The World Bank estimates only a quarter of land parcels worldwide (1.5 billion out of 6 billion) are recorded in full land systems covering ownership changes, land divisions, and additions.
Matt Alexander cofounded Suyo, a startup in Medellin, Colombia, to do something about that. Using technology, it helps householders register themselves more cheaply and links up families to low-cost financing. It launched two months ago after several years of experiments and testing in Latin America.
“Governments do not have the capacity to formalize property rights and maintain those property records,” he says. “Our take is there’s a need for intermediaries to help low-income families to navigate the property system and attain access to the legal framework that exists.”
Suyo sends out sales agents to informal homes. They do a full audit of the property, recording spatial data on a mobile app, taking pictures and asking the tenants about their ownership history. They collect sale documents and property tax and utility payment receipts, and they speak with neighbors who can give testimonials about the time families have spent in their homes.
It then combines that with official records and advises families on which property formalization service they need. It offers 14 of them, ranging from basic land titling to construction licenses and succession planning. Alexander says homeowners often have records of owning their land, but they can’t prove they own their building.
Suyo, previously TerraTek, began as a project backed by the Harvard Innovation Lab, Mercy Corps, and Habitat for Humanity. During a pilot in Bolivia, it formalized 1,300 properties in seven communities. Alexander spun out the new venture last October together with his friend Marcelo Viscarra. It currently operates on angel investment, founder contributions, and support from the Agora Partnerships Accelerator and Echoing Green. It hopes to close a full $500,000 investment round soon.
Alexander says it can cost anything up to $2,500 to fully register a home in Colombia. Householders need to deal with multiple people and agencies, including lawyers and architects, and the process is often too complicated for people to take care of themselves. Suyo, which he describes as a sort of “Turbo Tax for property formalization,” streamlines the process. He reckons it can save 40% overall the normal price. Suyo partners with microfinance groups who offer low-interest loans to pay off the bills.
The startup is set up as a benefit corporation. It aims to make a profit, but it’s larger goal is social. “We send a strong signal to our staff, investors, and customers that we are focusing on social impact,” Alexander says. “The b-corps structure enables our board to take into account the social benefits and consequences of our actions when making strategic decisions, as opposed to focusing solely on profit maximization.”
Suyo, which currently operates in Medellin and Cali, hopes to expand to further Colombian cities this year, before branching out across the continent starting in 2016. “We want to help one million people in five years,” Alexander says.