The alternative to a shanty town is not a safe, well built suburb. It's homelessness or at least deeper poverty (pay more for housing = pay less for food).
You get shanty towns when people are too poor to afford anything else. People don't live in a shithole just for kicks, they do it because they have no choice. We shouldn't pretend this tradeoff doesn't exist.
Shanty downs reduce the incentive to build high quality structures. Basically there is little incentive to build structures out of sink with the property value of the land they occupy. And the value of land is dominated by the value of the infrastructure around it.
You can build a surprisingly nice house for 1,000$ worth of materials, but there is no incentive when you build in the middle of a shanty town.
Isn't the incentive to build a nice house for $1000 that you get to live in it?
Of course, that $1000 house costs a full year of wages from a person earning $3-4/day and spending almost all of it on essentials. And this ignores the fact that many shantytowns occur in areas where property rights are weakly enforced - build a nice house, and 20 people will show up claiming they own it. Even if you have the money, you might instead be spending it on your children's education or something of that nature.
Shantytowns are a result of poverty and nonexistent property rights. Building codes, even if they were enforced, would not magically enable shantytown dwellers to afford something better.
It's not just a question of weakly enforced property writes. If you have the nicest shack you are far more likely to be robbed etc.
Social disorder feeds off it's self, when you live in a shanty town and are likely to be robbed it is much more reasonably to spend an extra 5$ on alcohol and get to enjoy it vs invest it in stuff that you might not keep for vary long, do that once a week for 5 years and your talking about 1,300$. Some of the hidden advantages of building codes are allowing people to build nicer houses without standing out from their community.
I think we are in violent agreement - by "weakly enforced property rights" I was referring to the fact that you are likely to be robbed of your your house (or perhaps the $500 you saved up when you are halfway done).
The hidden advantage of building codes you describe only applies when everyone can afford that $1000 house.
You get shanty towns when people are too poor to afford anything else. People don't live in a shithole just for kicks, they do it because they have no choice. We shouldn't pretend this tradeoff doesn't exist.