What are the long run consequences of planning and providing basic infrastructure in neighborhoods,
where people build their own homes? We study "Sites and Services" projects implemented
in seven Tanzanian cities during the 1970s and 1980s, half of which provided infrastructure
in previously unpopulated areas (de novo neighborhoods), while the other half upgraded
squatter settlements. Using satellite images and surveys from the 2010s, we find that de novo
neighborhoods developed better housing than adjacent residential areas (control areas) that were
also initially unpopulated. Specifically, de novo neighborhood are more orderly and their buildings
have larger footprint areas and are more likely to have multiple stories, as well as connections
to electricity and water, basic sanitation and access to roads. And though de novo neighborhoods
generally attracted better educated residents than control areas, the educational difference is too
small to account for the large difference in residential quality that we find. While we have no
natural counterfactual for the upgrading areas, descriptive evidence suggests that they are if anything
worse than the control areas.