Transforming paradigms: Land regulation for low-income groups in Brazil

A homeless man in Sousa, Paraiba in Northern Brazil where more than 2,500 Romani people have been living in deplorable conditions with little to no government intervention and employment opportunities. Government housing programs in Brazil have not lived up to people's needs and expectations, due to the lack of funds and poor implementation. Photo by: Danielle Pereira / CC BY-SA

When launched in 2009, the political zeal behind Brazil´s “Minha Casa, Minha Vida” (“My House, My Life”) – and its associated land regulatory premises – was spread as a viable means of handling the intense housing shortage defined by what remains a heavily disproportionate presence of self-constructed and invariably ramshackle “favelas” (slums) spread across the country.

Under the aim of creating a more sustained marketplace, the drive was largely prompted by unprecedented rural-urban migration patterns initiated in the 1960s. Over the years, living conditions in the largest cities of Rio de Janeiro and São Paulo have become increasingly cramped; economically wealthy municipalities paradoxically see the poorest income groups without access to the most basic of infrastructure facilities and many informal communities are still prone to ecologically related threats ranging from landslides to flooding.

However, perhaps unsurprisingly for a population accustomed to overhyped government promises, the practical implementation of “Minha Casa, Minha Vida” did not entirely live up to its manifesto in tackling these core questions, principally due to a lack of economic viability. 

One of the primary strands of the initiative, for example, the Residential Leasing Program (Programa de Arrendamento Residencial, PAR) has witnessed significant demand levels for housing units catered to Brazilian families earning below 1,600 Brazilian reals ($700) per month. The strategy here is based on land being acquired and even donated by local governments with a view to contract out development projects. 

Yet problems subsequently emerged by virtue of the constrained financial ceilings placed by the program itself combined with the heavy inflationary pressures on core construction inputs and an obvious desire to achieve a healthy margin — collectively producing qualitatively inferior delivery standards. To exacerbate the problem, as land prices grew in line with the country´s real estate boom, developments became mounted further away from central business districts — some even lacking the most basic of public services (“concentration camps,” “legalized favelas” and “dormitory housing condominiums” are just a handful of the colloquial descriptions being referred to such projects). The construction companies themselves are subsequently responding by applying very strict criteria prior to engaging with this segment and, somewhat confusingly, risking higher income target markets where demands are clearly lower.

Within the favelas themselves, while there have been a handful of reasonably successful low-income housing projects, the main focus has been on improving conditions by means of infrastructure developments and creating more secure living environments such as the police pacification forces in Rio de Janeiro. Such objectives, while obviously welcome, have nonetheless created unexpected speculation-related downsides in the form of exorbitant rents and confusingly high trading values.

Fortunately, there is growing agreement that a holistic, common ground approach to socially inclusive land management is needed. The vision is to create more efficient public management models that combine the forces of the construction industry’s ability to build homes at scale (concurrently increasing supply to mitigate excessive price rises) in line with the development of neighboring cities and other forms of cohesive peripheral land expansion, complemented by clear infrastructure and public service provision strategy.

All seemingly pleasant to the ear, but for such plans to work, land and public policy decision-making will need to be governed much more effectively than is currently the case — via vastly improved legal and regulatory frameworks and appropriately adapting new public management models that have achieved merited levels of success in the developed world. Such actions will also require a greater level of intersector development principally in relation to energy, health, education, security and social services provision as well as providing opportunities for commercial sector growth.

With low-income housing deficit estimations ranging from between 5 million and 15 million, the engrained mindset of simply leaving the population to build their own homes, even on the basis of legal land ownership, places the establishment of technical and qualitative benchmarks under major risk. A sustainable urban growth model in Brazil will therefore also require a visible evolution in overcoming the notably archaic way of thinking that governs the construction sector, particularly in relation to labor management.

Indeed, one of the principal challenges is not actually to get going on projects but changing how key decision-makers look at the future. Many view engagement in such reform as unrealistic given the ineffective results of mechanisms such as the Special Social Interest Zoning (Zona Especial de Interesse Social), where established regulation has effectively been engulfed by market forces, thereby continually ostracizing low-income groups. Outcomes like these should of course be used constructively and not as an excuse to settle for urban ecosystems characterized by entirely inefficient fundamentals, as is arguably currently the case.

The substantial level of government reserves specifically allocated for housing and urban infrastructure tells us that the growth potential is huge. Although such resources can only be tapped into effectively if there is a concerted effort to stop shoulder shrugging and understand what the real needs of the country´s majority urban population actually are, and subsequently ensure that they are convincingly attended to. Despite a significant challenge in overcoming the complex and absurdly bureaucratic nature of Brazilian land management and control, the impediments to such progress are not based on the capacity of the country to eliminate its urban favelas, but the lack of clear ambition to work toward such a direction.

Want to know more? Check out Land Matters, a new campaign to showcase innovative solutions in the areas of food security, economic development, conservation and more.

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