The concept behind land sharing is that the landowner and the land occupants (squatters or tenants) reach an agreement whereby the land owner develops the economically most attractive part of the plot and the dwellers build houses on the other part with full or limited land ownership. Land-sharing offers several advantages as governments are finding it increasingly difficult to find land for sites-and-services and other public housing schemes in locations near income-generating activities, and eviction is increasingly becoming an unacceptable method to clear land for development projects. Through land-sharing both parties gain: the landowner can obtain the most desired land and the occupants can continue living in the area, with secured tenure.
The land occupants base their right to the land on possession. It is common in many rural and traditional societies that occupants obtain a right to the land by living on it and the claim on the land gets stronger the longer the land is occupied. Furthermore, urban development creates land values as a result of investments by the public sector rather than by the landowner. Occupants can, therefore, be considered as having a certain right to these increased land values as well
The are four basic characteristics of land-sharing projects:
- Densification. The occupants will be rehoused on a smaller area as the land will partly be developed by the land owner;
- Reconstruction. Densification typically implies that new buildings will replace older structures. It is often necessary to build row-houses or walk-up apartments to allow higher densities;
- Participation. The transformation of the plots will require a comprehensive negotiation process whereby the community will discuss the allocation of plots and the construction modalities with the landowner, often with the help of a mediator. It is necessary to include all dwellers in the project and to be able to reach agreements within the community;
- Cross-subsidy. External subsidies should be avoided as much as possible. The commercial development should generate a sufficient surplus to cover a deficit resulting from the community's inability to pay for much of the cost of land, infrastructure and possibly housing.
Both the landowner and the squatters benefit from land sharing. Squatters get to stay on the land legally while the land owner can sell or develop a portion of the land and avoid long legal battles.
Land sharing has been implemented with success in Thailand and to a lessor degree in the Philippines.