Attachment 1 - Statement of Objective (SOO) Property Governance.pdf

SECTION C—STATEMENT OF OBJECTIVES (SOO)

C.1 TITLE: Property Governance Activity

[C.2 DEVELOPMENT CHALLENGE]

[In Kosovo, weak systems of property rights in land, housing, and land-based resources (also referred to as land and resource governance)1 have resulted in high rates of informal property (whether ownership or renting), widespread gender discrimination, and low levels of information transparency, among other factors. Kosovo’s generally weak property rights system is a persistent source of corruption and gender discrimination while also discouraging market efficiencies and investment.

In Kosovo, poor land and resource governance and poor economic performance are intricately linked. From a purely economic perspective, property, as any capital, should be held and invested in by the person who can maximize its value. Put another way, less productive farmers may desire to sell their land while more productive farmers may want to expand their operations.

Over time, and in the aggregate, efficient allocations of land (i.e., capital) increases a country’s productivity and wealth. However, this process also requires the price mechanism in an efficient market, which, in turn, requires accurate, reliable, and reasonably transparent land information.

If a country suffers from poor land and resource governance, transparent and reliable information is not forthcoming and consequently these mechanisms are disrupted.

In addition, women in Kosovo are discriminated against with respect to land and housing despite non-discriminatory legislation2. Because of the importance of property in Kosovo’s society and economy, this discrimination acts as a significant drag on women’s overall empowerment and decision-making authority.

Informality for immovable or ‘real’ property (i.e., land and housing) remains a significant challenge in Kosovo. Informality is usually a function of insufficient or ineffective allocation of public resources, a flawed enabling environment that tilts the balance of incentives against registration of property rights (e.g., time consuming, slow, and expensive bureaucratic processes), or market distorting policies (e.g., excessive barriers to entry for critical land professionals or insufficient training and support to land professionals). Informality means, among other things, that the information in the land registry or cadaster is unreliable.

Consequently, property taxes are under-collected because taxes are a function of the value of the underlying property. That value must be assessed with accurate geospatial information and, with widespread informality, such information is lacking. This creates information asymmetries, whereby some people have privileged access to land and property information and can profit from that information while others lose income and opportunities and are vulnerable to

1 https://www.land-links.org/wp-content/uploads/2016/09/USAID_Kosovo_Country_Profile_2016.pdf 2 USAID Property Rights Program Endline survey found that 56.7% of respondents think that subordination/discrimination of women is an obstacle to them realizing their rights to property. In addition, women concealment from the Act of Death (a declarative document issued by municipal civil registry upon a death of a person, all the family members eligible to inherit immovable property) is a discriminatory act against the law (National Strategy for Property Rights).

https://www.land-links.org/wp-content/uploads/2016/09/USAID_Kosovo_Country_Profile_2016.pdf predation—a hallmark of corruption. In other words, informality in the property sector contributes to weak governance and vice versa.

As such, in Kosovo, informality occurs through one of the following four mechanisms.

- First, families do not initiate formal inheritance proceedings (called probate in the United States and other countries) upon the death of the property owner. Data from Kosovo Cadastral Agency indicate that approximately 30 percent of all applicants attempting to formalize and register rights are prevented from doing so because they have not initiated inheritance procedures. As such, rights for the property they possess are currently registered in the name of, and thus owned by, a deceased ancestor. The land and housing can be used or rented, but it can not be sold, used for mortgages, or disposed of by their heirs.

- Second, traditionally, Kosovo citizens regard oral contracts for land sales as sufficient.

The cultural norms and practices that recognize oral land contracts as binding and enforceable reduce the value of formality because perceived tenure security remains high.

In this way, documentation is not considered necessary to secure the transaction. In addition, discriminatory laws dating from the 1990s prohibited the sale of real property between Kosovo Albanians and Kosovo Serbs.3 This forced such transactions to be done informally. The typical approach to formalize previously prohibited inter-ethnic property sales requires the Kosovo Albanian buyer to initiate an uncontested claim requesting a court order to declare that the property sale contract exists and was freely transacted.

Widespread informality and weaknesses in the land and property information system obstruct this process and thereby inhibit advances in good governance and economic growth.

- Third, the land cadaster, the Kosovo Cadastral Agency (KCA), suffers from significant information gaps because of property documents removed during the conflict with the Republic of Serbia from 1998 to 1999, and

- Fourth, while a high number of newly completed buildings had construction permits and are in use by “the buyers,”, these buildings still do not have the final “occupancy certificate” released by the municipalities. As such, buildings are completed and occupied, but “the individual buyer” has no ownership title for the property they already bought, although for such buildings they are obliged to pay property tax to the municipality.

The crux of this inter-related, complex development challenge in Kosovo is widespread informality in the land and housing sector, pervasive gender-based discrimination, and corruption fostered by weak land information systems. These problems are most evident at the governance level that is the closest to citizens’ everyday life–the municipality. Municipalities lack clear procedures, tools, and practices for managing property-related tasks, such as by-laws or administrative instructions and other property-related mechanisms, which leads to weak implementation of laws at the municipal level.

Some progress has been achieved in recent years. In 2017, the Government of Kosovo (GoK) adopted the Kosovo National Strategy on Property Rights (NSPR). This marked the first

3 https://land-links.org/wp-content/uploads/2016/09/USAID_Property_Rights_Assessment_Kosovo.pdf https://land-links.org/wp-content/uploads/2016/09/USAID_Property_Rights_Assessment_Kosovo.pdf comprehensive assessment and strategy of the country’s property rights system since independence in 2008. The Property Governance Activity’s objectives are well-aligned with the NSPR objectives.

Moreover, USAID, in partnership with the GoK, worked to address some of the challenges through the Property Rights Program (PRP). From 2014 to 2019, the PRP worked to improve the property rights regime in Kosovo, strengthen the rule of law, and increase economic growth and investment. The PRP contributed to a reduced time to complete property transactions, incorporated new parcel information into the KCA, and trained municipal officials on property rights. Yet, the PRP’s national endline survey4 found that informality is still widespread in Kosovo: “while 80 percent of respondents consider themselves owners of property, only 37.5 percent of those who claim ownership have property registered in their name.” In other words,

62.5 percent of property owners are informal. While the Property Governance Activity is expected to continue to advance knowledge and practice from these investments, it will go a step further in bringing together the learning from market systems and private sector engagement approaches to help push USAID interventions from transactional to transformative.

Other donors are also engaged in Kosovo’s property sector. These include the World Bank’s Real Estate & Geospatial Infrastructure Project, the Swedish International Development Cooperation Agency and the European Union are also funding improvements in the property tax system, and the Japan International Cooperation Agency is training the KCA staff and other stakeholders.

The novel coronavirus disease (COVID-19) global pandemic will have unpredictable consequences for the dynamics described above. Risks include reduced incomes, increased conflict, and overall governance backsliding. These developments will need to be closely monitored and adapted to by the Activity.]

C.3 THEORY OF CHANGE

IF there is GoK commitment and resource allocation for government institutions (at the local and national level) to effectively implement property sector policies and legislation AND USAID/Kosovo facilitates a citizen-centered approach to actively deal with property rights processes THEN governance of the property sector would become more transparent and effective and enable economic growth for all.

[C.4 CORE OBJECTIVES]

The Activity will improve the property rights system in Kosovo in order to reduce corruption, increase women’s empowerment, and improve formal property rights and investments in real property. The Property Governance Activity will pursue this goal through three objectives:

(1) Increase formal property rights by standardizing processes and practices in municipalities;

(2) Increase civil society and citizen active engagement with institutions regarding property rights; and

4 https://www.land-links.org/wp-content/uploads/2019/06/3.-National-endline-survey-on-proerty-rights.pdf https://www.land-links.org/wp-content/uploads/2019/06/3.-National-endline-survey-on-proerty-rights.pdf

(3) Engage the private sector to strengthen Kosovo’s property rights regime.

The Activity, in partnership with a broad spectrum of local stakeholders, such as municipalities, central government, civil society, and the private sector, as well as other donors, will be focused on implementation of the property rights legislation, as well as building and strengthening the property rights system to improve its transparency, efficiency, and functionality.

The Contractor must present a technical approach with interventions that work toward the Activity’s objectives elaborated below while promoting a more citizen inclusive and unified property system in Kosovo. In doing so, the Contractor must propose interventions that are flexible, demand-oriented, data-driven, and will build upon consultations (the contractor must propose an approach that shows how insights from consultation will be incorporated from consultations during life of project) with all stakeholders, such as local authorities, civil society, the private sector, and other donors. The Contractor will seek to consolidate earlier gains in the property sector achieved by the Property Rights Program.

The Contractor must propose interventions that will improve the functioning of the property rights system, land administration, and property services, such as: request for property certificate, property verification, and geodetic measurements, registration of property, and issuing of the property ownership certification, including inheritance processes. In addition, this Activity emphasizes interventions at the municipal level, which is the level at which most people interact with the property rights system and where most challenges are experienced. The Activity scope expressly excludes any engagement at the national level with the Kosovo Property Comparison and Verification Agency.

This Activity is not a continuation or a replication of PRP and its approach. It is important to note that this Activity will not embed project staff in core institutions to perform the competencies and duties of staff employed by these institutions. Capacity building interventions must, instead, take the form of mentoring, advising, and other forms of technical assistance.

The interventions and results will contribute to improving citizen understanding, engagement, trust, and proper use of property rights. The Contractor, therefore, must elaborate how they will create linkages and reinforce complementarities between interventions and results associated with the three Objectives, where appropriate. All interventions should be developed in a manner that builds local ownership, institutionalizes new and recent achievements and good practices, and ensures sustainability.

The Contractor is strongly encouraged to develop and present innovative interventions for achieving results consistent with a people-centered service delivery improvement approach.

They are also encouraged to propose additional approaches, interventions, and results associated with improving the quality and accessibility of property services in Kosovo.

Objective 1: Increase formal property rights by standardizing processes and practices in municipalities.

Through this Objective, the Activity will focus on improving the quality and accessibility of property-related services for all citizens, with a focus on enhancing the performance and reach of local level institutions in providing property rights services at the community level. The Contractor must work on the property governance systems that would ensure better services for everyone, men and women alike. As such, the activity should be focused on simpler and cheaper, unified, and easily accessible systems and processes for property registration.

The Contractor must propose methods for decreasing the large-scale informality in the immovable property sector which has, to date, translated into a discrepancy between official cadastral records and de facto possession. In addition, the Contractor must work on strengthening the inheritance processes, since the cultural practice of transferring property only to men further limits women’s access to resources, contributing to women’s unequal position within the family, economy, and society. Moreover, this will be an opportunity to highlight the importance of implementing the laws and diminish the socialized gender roles and stereotypes that are prevalent among institutions and officials.

Interventions associated with this Objective will build upon and strengthen achievements made to date in this regard by institutions and service providers, while also addressing gaps and weaknesses with innovative approaches and tools for improving accessibility and quality. While the activity aims to benefit municipalities nation-wide, initial interventions in a particular subset of municipalities will need to be determined collaboratively with USAID. The Contractor must illustrate in their proposal the selection criteria that it will use to identify the initial and subsequent subsets of municipalities that ensure their buy-in and unification of property processes and practices.

Under Objective 1, the expected results are:

● Improved municipal capacities for property management;

● Improved processes and practices for building inspections (issuance of occupancy certificates) that would increase the number of registered properties (ownership certificates) in municipalities;

● Unified/standardized service delivery of property-related services in municipalities;

● Integrate gender equality throughout Kosovo’s property reforms; and

● Improved property inheritance processes.

Objective 2: Increase civil society and citizen active engagement with institutions regarding property rights.

Civil society must be engaged to foster greater citizen participation with government institutions, as well as increased transparency and access to information in the land and housing sectors.

Engagement of civil society and increased citizen participation with government institutions would increase transparency, encourage greater accountability, and increase the demand for clear and unique property formalization procedures. Implicitly, corruption will be minimized through increased transparency and accountability. Currently, government institutions do not effectively engage the communities and civil society (including civil society organizations focusing on women issues) regarding property sector service delivery challenges. Partnerships between the local institutions and civil society organizations, with a special focus on women CSOs, would help to improve transparency and citizen participation that would contribute to better service delivery.

Under Objective 2, the expected results are:

● Strengthen civil society and citizen oversight in ensuring transparency, accountability, and efficiency in property rights and inheritance processes and services;

● Increase civil society participation in municipal development plans to ensure transparency in municipal property and land use;

● Increase awareness and advocacy about the value of women’s property rights and inheritance as a means to improve their economic opportunities; and

● Increase the public’s understanding of the rules and regulations of the property sector as a means to improve the public’s advocacy to ensure access to services and protection of their property rights.

Objective 3: Engage the private sector to strengthen Kosovo’s property rights regime.

Private sector engagement is key for proper implementation of legislation and innovative solutions with respect to property rights. Partnerships among the private sector, civil society, and property claimants could bring innovative solutions in addressing Kosovo’s challenges in the property sector. Through private sector support (including businesses that are owned by women) in finding solutions for the property sector challenges, all citizens, especially women, will be better positioned to use property and land for economic activities and income generation.

Moreover, this Activity can help raise awareness and make a business case for the value and importance of women’s participation in economic opportunities. The Contractor must propose innovative ways for private sector participation in order to strengthen the property rights sector in Kosovo.

Under Objective 3, the expected results are:

● Increase private sector participation in providing inputs and advocating for any legal and system reforms;

● Increase private sector engagement in institutional modernization and automatization technologies of property systems and services; and

● Increase private sector engagement on municipal development plans for more transparent implementation of property regulations and incentivize private sector investments.

C.5 GUIDING PRINCIPLES

The Contractor must ensure that the following guiding principles steer the planning and implementation of this Activity:

● Government commitment (at the central and local level): The Contractor must use strategic communication among different institutions and actors, etc. in order to strengthen the linkages and coordination efforts among the national and the local level institutions. This means that the Contractor must adopt an ecosystem oriented approach, one that emphasizes and strengthens the relationships and interactions among the institutions, actors, networks, processes, tools, and incentive structures that collectively enable and empower people to make the law and institutions work for them in their daily lives. The Contractor must facilitate the interconnectedness among these institutions, actors, etc. in order to strengthen the quality and accessibility of varied property related services. This guiding principle must be heavily implemented under all objectives, where the government commitment in implementation of the legislation, addressing any sector reforms, and assuring the transparent and efficient governance of the property sector is crucial.

● Focus on citizens and creating partnerships: The Contractor should ensure that the activity will adopt the principles of citizen engagement and creation of partnerships among citizens and municipalities in order to address the property related challenges. The Contractor must propose innovative ways to engage and involve civil society and the private sector in order to foster transparency and greater citizen participation. Also, this would emphasize and strengthen the relationships and interactions among the institutions, citizens, civil society and private sector; and identify tools that would enable and empower people to register, inherit, and transfer their property in a more accessible, effective, and efficient way.

● Sustainability and Self Reliance: The Contractor must attain results that can be sustained beyond the life of the Activity. The Contractor must include local stakeholders, including the GoK and all relevant property institutions and actors to seek solutions for any development challenges to help ensure sustainability. This includes planning, setting priorities, implementing, financing, and sustaining any new proposed solutions. The Contractor’s implementation of the Objectives must consistently reflect self-reliance as the end goal of USAID assistance in Kosovo.

● Integration of Women, Youth, and Underserved, Disadvantaged, and Marginalized Groups: The array of underserved, disadvantaged, and marginalized groups in Kosovo is broad, and while the issues confronting them vary from group to group, they share in common an acute frustration of lack of access to property, even more so than the population at large. The activity will ensure gender integration and considerations. The Contractor must encourage government officials and citizens to further gender equality in the property sector.

The Contractor must meaningfully engage and emphasize practices of serving women, youth, and the underserved, disadvantaged, and marginalized groups throughout the life of the activity. In addition, the Activity must work to advance women and youth (and other underserved, disadvantaged, and marginalized groups) through inclusion initiatives (among both majority and non-majority communities), approaches, and outcomes as appropriate to each Objective. In addition, the municipal women’s participatory groups and civil society women’s networks that already are engaged in women’s rights and who monitor court decisions on women property cases might be part of the participatory processes, where further opportunities of cooperation might arise. Beside the participatory references, these initiatives might bring additional legal framework opportunities that might help women with their property rights. Moreover, the COVID-19 pandemic has created an emerging risk that developing countries with limited economic and health infrastructure will suffer the most with pronounced social inequality, particularly gender inequality.5 The economic crisis may worsen and deepen gender and social inequality, particularly if the responses to the pandemic and crisis are gender neutral. Thus, it is important that measures taken by the Activity are gender-sensitive and that the positioning of different groups in society and the economy are considered, avoiding further deterioration of the situation, especially for marginalized groups.6 Additionally, the shifting of power and control over land between men and women poses a risk of unintended consequences of increased gender-based violence, especially toward women trying to assert their rights to property. The Contractor must ensure that the representation, participation, and capacity building of underserved, disadvantaged, and marginalized populations, including women, men, and youth at all levels of interventions will be in line with USAID policies on gender equality, women’s empowerment, and positive youth development.

● Thinking and Working Politically (TWP): The Contractor must conduct regular contextual analyses in order to identify and analyze power dynamics, economic and social forces, and other interests that influence how the property system functions, and how the institutions perform and how services to citizens are delivered. The Contractor will employ a TWP lens in all relevant and appropriate aspects of its implementation approach to identify activities and solutions that are politically feasible as well as technically appropriate.

● Leverage Existing and New Resources: The Contractor must explore opportunities to leverage resources with other key stakeholders as part of its implementation approach.

Co-investment and co-design of interventions are not only critical to maximizing the impact of USAID and Kosovo resources already available, but can also serve as a valuable indicator of the alignment of Activity interventions with government, private sector, and international priorities and interests. Examples of this approach could include, but are not limited to, close donor coordination to leverage resources and synergies between programs that have similar objectives, inclusion or matching of GoK resources, or other development partner resources.

In addition, the Contractor must closely collaborate and coordinate with other donor-supported activities in alignment with the Activity’s objectives. This collaboration and coordination will be designed to avoid duplication of efforts, ensure synergies, maximize impact, and leverage investments.

● Linkages with other USAID activities: The Contractor must facilitate linkages with other USAID activities, such as Economic Governance Activity, the upcoming Local Governance, Transparency and Accountability activities, and the Justice Activity to identify synergies and leverage results and relationships to ensure a holistic approach to USAID’s assistance. The Contractor must have a strategic emphasis on strengthening property governance through transparency, efficiency, and accountability, while contributing to enhancing the responsiveness of government institutions toward the needs of citizens and communities. This Activity will contribute to strengthening Kosovo’s commitment and capacity on its Journey to Self-Reliance and, in turn, advance the

5 UNKT Rapid Kosovo Socio-Economic Impact Assessment (May, 2020) 6womensnetwork.org/wp-content/uploads/2020/04/Addressing-COVID-19-from-a-Gender-Perspective_04_04_20 20.pdf https://womensnetwork.org/wp-content/uploads/2020/04/Addressing-COVID-19-from-a-Gender-Perspective_04_04_2020.pdf https://womensnetwork.org/wp-content/uploads/2020/04/Addressing-COVID-19-from-a-Gender-Perspective_04_04_2020.pdf country along its path toward becoming a more just, prosperous, and cohesive society.

C.6 MONITORING, EVALUATION, AND LEARNING

The Contractor must enable adaptive management approaches to achieving the Objectives, informed by ongoing contextual analysis. The Contractor must conduct regular coordination meetings with the institutions, other donors, and actors to assess the effectiveness of the interventions, evaluate whether those interventions are succeeding, apply lessons learned, and adapt work appropriately. The Contractor must regularly revisit its progress and whether any assumptions continue to hold, keeping abreast of new developments that may create challenges or windows of opportunity. If circumstances arise, the Contractor must alter its interventions in a timely manner, as reflected in its Annual Work Plan and Monitoring, Evaluation, and Learning Plan (MELP), with the concurrence of USAID.

The Contractor must submit a Collaborating, Learning, and Adapting (CLA) Plan as part of its MELP. The MELP must emphasize the systematic process of collecting and analyzing performance data and other information to track progress toward planned results and must be used to proactively learn and adapt for future interventions. Specifically, the MELP must identify how the Contractor will select appropriate indicators of organizational performance change to track and finalize those indicators in conjunction with the benefitting organizations, encompassing both the organization’s performance in achieving targeted results and the organization’s performance in learning, adapting, and sustaining itself over time. Indicators should therefore span both short-term types (efficiency, project management outcomes, quality, effectiveness, etc.) and long-term types (learning, relevance, sustainability, etc.) of organizational performance.

Special focus should be placed on empowering local partners–both within and outside of government–to utilize diverse MEL approaches, and to integrate learning into feedback processes that are cyclical and well facilitated.

C.7 LINKS TO MISSION AND USG STRATEGIES

This Activity will advance USAID/Kosovo’s Country Development Cooperation Strategy (CDCS) 2020-2025 Development Objective 1: “Citizens are better served by accountable and effective governance institutions” and Sub-Intermediate Result 1.1 “Responsiveness of justice institutions strengthened” and related to the USG strategies the activity will advance the Integrated Country Strategy, more precisely objective 1.1 and with Joint Regional Strategy objective 4.2 “Promote good governance, fight corruption, and counter human trafficking.”

Moreover, it will strengthen Kosovo’s commitment and capacity on its Journey to Self-Reliance and, in turn, move the country along its path toward becoming a more just, prosperous, and cohesive society suitable for European integration.

C.8 KOSOVO AND EU ALIGNMENT

The Contractor must be cognizant of, and align with, relevant European Union (EU) agreements and frameworks. This includes the EU-Kosovo Stabilization and Association Agreement that requires Kosovo to contribute to political, economic, and institutional stability in Kosovo, as well as to the stabilization of the region by strengthening the policies and other measures to bring about sustainable economic and social development of Kosovo.

C.9 TECHNICAL APPROACH

Offeror’s Technical Approach to be included under this section when they develop their SOW/Technical Approach. This section will be removed in the final contract.