Trapped by the land? Change and continuity in the provision of social housing in Brazil

Rosana Denaldi

doi:10.1080/19463138.2013.770007

Trapped by the land? Change and continuity in the provision of social housing in Brazil

Denaldi, Rosana 2013-05-01 00:00:00 International Journal of Urban Sustainable Development, 2013 Vol. 5, No. 1, 40–53, http://dx.doi.org/10.1080/19463138.2013.770007 Trapped by the land? Change and continuity in the provision of social housing in Brazil Rosana Denaldi* Centro de Engenharia, Modelagem e Ciências Sociais Aplicadas, UFABC, Santo André, Brazil (Received 1 May 2012; ﬁnal version received 5 December 2012) Despite economic growth, institutional strengthening, improved regulatory frameworks for urban land mar- kets and availability of subsidized ﬁnancial resources for social housing, Brazilian urban development policy has continued to face challenges in providing access to housing for low-income groups in general, and families earning up to three minimum salaries in particular. In this article, we argue that state spatial policies have been severely weakened by the lack of leverage over urban land markets. In that respect, the renewed rolled-out developmental state that has followed the neoliberalization of spaces in the 1990s, as reﬂected in the Statute of the City, the creation of the Ministry for Cities and the launch of federal housing ﬁnance programmes represent advances, but have not been able to trigger structural change in the production of urban space. Keywords: Brazilian social housing; City Statute; land markets; urban development regimes 1. Introduction affordable access to low-income housing, and pro- ducing more inclusive cities. The aim of this article is to discuss an apparent In this article, we will forward a possible paradox in recent discussions on low-income hous- explanation for the above paradox on the basis ing policy and ﬁnance in Brazil, and to provide of the theoretical framework that was developed preliminary elements for a broader research agenda by authors such as Brenner & Theodore (2002) on the role of land and real estate markets in the regarding the crisis driven and contradictory pro- Brazilian development trajectory in general, and cess of restructuring of state spatial policies and in reproducing contradictory and exclusionary city regulatory strategies within the context of North development strategies in particular. Atlantic Fordism. More speciﬁcally, these authors More speciﬁcally, during the last decade, we argued that the crisis of spatial Keynesianism, have witnessed a renewed emphasis on the social which was aimed at providing a cohesive national function of the city, as reﬂected by the regulatory space economy through centralized and homoge- and institutional strengthening of urban markets neous institutions, has been followed by move- and the increased availability of subsidized ﬁnance ments of destructive “rolling back” and “creative for low-income housing. At the same time, there rolling out” of competitive and neoliberal state spa- is increasing evidence that the lack of leverage of tial policies, without resolving the contradictions the state (at its multiple scales) over speculative associated with the capitalist production of space real estate markets continues to generate impor- (Brenner & Theodore 2002). The recent sub-prime tant bottlenecks in providing more sustainable and *Email: r.denaldi@terra.com.br © 2013 Taylor & Francis International Journal of Urban Sustainable Development 41 crisis has also required intense governmental inter- the design of overall housing and urban devel- ventions, generating complex conﬂuences between opment policies, in this recent stage, particularly the state and the market in the “actually existing through such programmes as Minha Casa Minha neo-liberalism” (Brenner & Theodore 2002; Peck Vida (MCMV – My House My Life). We will also et al. 2009). provide anecdotal evidence of the contested nature Thus, in most European countries, the neolib- of urban and regional space, particularly driven by eralization that drove “die-hard” deregulation and the dynamics of the real estate markets. On the privatization movement of the late 1970s/1980s basis of our explorative analysis, we will make was followed by “third way” and rolled out “work- recommendations for a tentative research agenda fare” policies in order to minimize the contradic- on the role of land and real estate markets in the tions generated by the previous round of destruc- overall design and implementation of housing and tive deregulation, as well as to provide a basis for urban development policies. the competitive insertion of cities and regions in the world economy. 2. Setting the stage: a primer on the Brazilian In relation to the speciﬁc Brazilian context, macro-institutional framework on (low-income) we will argue that the lack of leverage of state housing provision and ﬁnance spatial policies over land markets has been an important driver behind similar processes of con- Until the 1930s – an era usually indicated as the tradictory and unstable rolling back and rolling initial stage of industrialization and the national out policies aimed at the production of urban and developmental regime – interventions were ad- regional space. While the Brazilian trajectory of hoc and characterized by an emphasis on legal housing and urban development policies of the approaches and investments in sanitation and pub- 1990s can be characterized in terms of a “rolling lic health. In its populist stage (the Vargas admin- back of the state” during the opening up and neolib- istration), the state initiated direct investments in eralization of the Brazilian development regime public housing, particularly through pension funds, during the 1990s, this was followed by a grad- but the scale of these operations was rather limited ual (and, as we will discuss, contradictory) rolling (Bonduki 2002). Successive administrations con- out and re-regulatory stage of state spatial poli- tinued to put a low priority on low-income housing, cies during the last decade. Nevertheless, the lack and it is was not uncommon to see massive eradi- of leverage over land markets continues an impor- cation of slums and substandard housing (Denaldi tant element in order to understand the persistent 2003). and contradictory pattern of socio-spatial exclu- In the Janio Quadros administration, the sion in many Brazilian cities and metropolitan Instituto Brasileiro de Habitação IBH (the areas. Brazilian Institute for Housing) was created in After this introduction, our argument will be 1961, which can be considered a precursor of the built up in three interrelated sections. First, we National Housing Bank (NHB). From that period will provide a primer on the evolution of the onward, the ideology of owner-occupied housing macro-institutional environment that has shaped was incorporated as part of broader strategy housing and housing ﬁnance policies since the towards political stability and sustainability. emergence of the national development regime in During the authoritarian stage of the national the 1930s. This is followed by a more detailed developmental regime (1964–1985), important description of the post-2001 period, characterized institutional changes were implemented, which by an emphasis on regulation of land markets, insti- implied transformations in the organization and tutional strengthening and democratization of the intervention of the State in the production of space urban-planning framework. Third, we highlight the in general, and in the provision of housing in contradictions and tensions that have emerged in particular. 42 R. Denaldi In this period, the Financial Housing System, participation in housing programmes fell from 61% the NHB, the credit associations and the Social (1980) to 20% (1990), while, during the same Service for Housing and Urbanism were created. period, the participation of the state governments Particularly the NHB performed an active role in increased from 9% to 17%, and those of cities from the provision of ﬁnance for housing, basic sanita- 30% to 64%. Nevertheless, this increase at the sub- tion and urban infrastructure, including projects in national scale did not compensate for the federal the area of transportation and energy. Its resources withdrawal, considering that total housing invest- originated from a compulsory deposit fund for ment decreased by 33% in this period (Ministério workers. This so-called FGTS fund would mainly das Cidades 2004, p. 10). ﬁnance homeownership for private or public hous- The extinction of the NHB, the crisis in the ing companies, while in a subsequent phase, it also housing ﬁnance system (based on compulsory offered credit for the ﬁnal buyers of housing. In the wage contributions, which reduced signiﬁcantly in sanitation sector, resources of the FGTS fund were the light of the chronic economic crisis in the allocated to state companies. Considering the fact 1980s) and the institutional fragmentation led to that the system depended on the ﬁnancial return a gradual withdrawal of the national government on public investments, either through the payment from the housing and urban development sector, of tariffs and charges by the ﬁnal beneﬁciaries of both in terms of maintaining the level of pub- water supply and sanitation services, or through the lic housing production and the overall reorgani- payment of annuities for housing loans, its expan- zation and redesign of housing policies. In fact, sion was more rapid in higher income regions, the 1990s witnessed an increasingly localized and where rates of return were guaranteed. fragmented pattern of low-income housing policies The NHB’s strategy was based on leveraging (Arretche 1996). In the absence of federal ﬁnancial the building sector, supported by stable sources resources, municipalities and state governments of ﬁnance aimed at the construction of housing increasingly took up the organization, management units. The NHB did not contribute much to the and ﬁnance of housing policies. Médici & Maciel supply of low-income housing; research on the (1996) recall that the rolling back and neoliberal- state production during that period has shown that ization of state spaces in the 1990s meant that a the bulk of new supply was allocated to middle- decentralization proposal was pushed forward, not income segments (Azvedo 1996; Bonduki 2002). only aimed at increasing the efﬁciency of public Likewise, the option of building large housing policies, but also to alleviate the budgetary pres- estates located in the outskirts effectively gener- sures that were being faced by the federal govern- ated suburban dormitory cities, triggering addi- ment in the midst of a renegotiation of its dramatic tional costs in terms of providing more expensive internal and external debt. urban services and infrastructure to the periph- At the same time, this period witnessed the ery, as well as environmental costs in terms of an strengthening of housing movements and the re- increasingly sprawling city growth. The homoge- democratization of the country. As such, some nous standards of these projects, which did not left wing local governments were keen on ﬁnanc- take into account the regional diversity of a con- ing and stimulating programmes aimed at self- tinental country, provided large-scale housing with help building and management (Denaldi 1997). nevertheless questionable quality (Bonduki 2002). As such, innovation took place in the context of Despite the critique on the performance of the the FUNAPS Comunitário – Fundo Comunitário NHB, its extinction in 1984 meant a signiﬁcant de Atendimento à População moradora em vacuum in the housing and urban development sec- Habitação Subnormal (FUNACOM) programme in tor. This period was characterized by continuous the municipal administration of São Paulo dur- institutional changes and “stop and go” initia- ing 1989–1992, and similar experiences in cities tives (Arretche 1996). Over the 1980s, the federal such as Fortaleza, Ipatinga and Diadema (Denaldi International Journal of Urban Sustainable Development 43 1995, 1997; Cabannes, 1997). These programmes designed (carta de credito), which was aimed at emerged as part of a demand from the commu- facilitating the acquisition of a house by low- nity to have access to funds for self-help and income groups, and ﬁnanced by the compulsory self-managed social housing projects. As such, contributions of the pension funds. Its impact was from 2000 onward, the national policy agenda on nevertheless quite insigniﬁcant. Over the period housing and slum upgrading has been adjusted 1995–2000, only 5.25% of the demand for credit accordingly. reached the speciﬁc target groups that earned up to During the period of the administration of three minimum salaries (Castro 1999). This also Fernando Henrique Cardoso (1994–2002), at least was a clear indicator of the challenges of vouch- at the level of discourse, progress was made, as ers systems and demand side credit in reaching the was reﬂected in the ofﬁcial documents of the more vulnerable target group in unregulated land Special Secretary for Urban Development of the markets. Presidency. Among others, the housing deﬁcit was During the second administration of Fernando being redeﬁned; for the ﬁrst time, the so-called Henrique Cardoso (FHC) (1998 onward), a series illegal, but “really” existing city was being rec- of interventions were undertaken aimed at strength- ognized, and national scale slum upgrading pro- ening the ﬁnancial markets in general, and the mar- grammes with explicit subsidies were elaborated. ket for housing ﬁnance in particular. For example, Nevertheless, considering the marginal amount of on the basis of a proposal that had been elabo- ﬁnancial resources that were allocated to the low- rated by the Brazilian Association of Real Estate income housing, targets were never met (Denaldi and Savings Institutions, the Real Estate Finance 2004). System was approved. It formalized and increased The redeﬁnition of the housing deﬁcit the ﬁnancial guarantees related to the foreclosure allowed for the diversiﬁcation of interventions. of housing and real estate. Castro (1999) argued Consequently, resources of the national budget that, during the FHC administration, Brazilian could be earmarked as a priority to slum upgrading housing policy followed, as a latecomer, an inter- programmes (instead of considering them as national tendency of creating secondary real estate alternative programmes). This led to the design of and mortgage markets, based on a strengthened nationally scaled upgrading programmes such as guarantee system and a more ﬂexible regulatory HABITAR – BRASIL. framework. It also provided incentives to the emer- However, the effective amount of subsidized gence of a system whereby cooperatives could ﬁnancial resources from the national budget was receive subsidies for the acquisition of housing small, and its allocation followed highly ad-hoc and units. localist patterns, driven by linkages between mem- In line with international experience, the cre- bers of federal parliament and vested city interests. ation of secondary mortgage markets represented A preliminary evaluation undertaken by the federal an important step in the blending of real estate, government in 1999 showed that, during the period housing and ﬁnancial markets – instrumental in 1995–1999, a total of less than R$5 billion (approx- providing liquidity, shorter pay-back periods and imately US$3 billion) was invested in programmes more favourable trade-offs between risk and return aimed at housing and basic sanitation. Moreover, in a market traditionally characterized by rigidities, part of these programmes were suspended in 1998, long maturation periods and high transaction costs considering the lending restrictions that were being and risks (Aalbers 2009). As argued by Shimbo faced by local and state governments in the con- (2010), this represented somewhat of a turning text of macroeconomic and ﬁscal restructuring in point in the sense that, from that period onward, the 1990s (Brasil 2002). Brazilian ﬁnance and real estate markets were With the suspension of supply side subsidies on the radar of volatile national and international and ﬁnance, a direct consumer ﬁnance system was investment capital. 44 R. Denaldi During the years of the Inácio Lula da local government over real estate and land markets Silva administration (2003–2010), a signiﬁcant through such instruments as the City Statute, a rolling out and re-regulation of state spatial poli- federal framework law approved in 2001. cies took place, whereby the housing and urban The overall housing policy framework was development sector also went through a process subdivided into two complementary systems, i.e. of re-organization and institutional strengthening. the National System for Low-Income Housing For the ﬁrst time since the national developmental (NSLIH), targeted at low-income segments (earn- regime and the performance of the NHB, pub- ing up to ﬁve minimum salaries), and a National lic ﬁnancial investments were being stepped up System for Market Housing (NSMH), aimed at again. providing solutions for higher income segments In relation to the institutional strengthening that could be attended by the market. and increased democratization of urban develop- In terms of the outreach of this system, until ment and housing policies, in 2003 the Ministry December 2010, the Ministry of Cities registered for Cities was created, which centralized directories that all states and 5370 municipalities had adopted for housing, basic sanitation, public transporta- the NSLIH (97% of the total Brazilian municipal- tion and mobility and territorial planning. At the ities). At the same time, 3385 cities had provided same time, tripartite councils were created involv- the Ministry a copy of the law that created a Local ing the local, regional and national level, increas- Housing Fund, while 90 had already completed a ing the level of participation and social control. local plan for low-income housing. In 2005, the National Housing Policy and Housing As mentioned, the investments in the hous- System were approved, followed by a ﬁrst ver- ing sector increased signiﬁcantly over the period sion of the National Housing Plan. The National 2003–2010, reversing a structural decline that had Housing System was designed as an instrument to characterized the sector since the extinction of the mobilize the stakeholders and the territorial scales NHB. Federal investments were stepped up from of power in the federation (local, state and federal). R$7.9 billion in 2003 to R$101.5 billion in 2010 It created a housing fund, which would allocate (Brasil 2010b). According to the same source, ﬁnancial resources in line with the guidelines of until 2010 the federal government had invested national policy. It is important to observe that R$187.5 billion in housing, covering 4.9 mil- the Ministry tried to establish a system of con- lion families, including those families that were ditionalities that was aimed at shaping a stronger attended through the Brazilian Lending and Saving housing delivery system. Law no. 11.124 of 2005, System and private banks. Excluding the latter, for example, established that, in order for state and R$102.5 billion and 3.6 million families had been municipalities to be part of the National Housing attended. The investment share of low-income seg- System, and to receive federal resources from the ments earning up to three minimum salaries, which National Housing Fund, they were obliged to elab- in Brazil concentrate about 89% of the national orate local or state plans on low income housing, housing deﬁcit, went up from 32% in 2002 to 66% linked to councils and funds that would count in 2010 (Brasil 2010c). with participation from housing and social move- This post-2003 increase in investment in low- ments. Moreover, from 2007 onward, the Ministry income housing production was enabled by a started a national awareness raising campaign, and new regulatory framework that allowed for the a capacity building strategy, backed up by spe- improved functioning of the private market, as well ciﬁc funds, aimed at up-scaling membership and as by the recovery of public direct investment. effective elaboration of low-income housing poli- More particularly, resolution no. 460 of December cies and programmes at the local scale. As will be 2004, regarding the federal pension fund, estab- discussed in the next section, this regulatory rolling lished new rules for the application of its resources out was also aimed at reinforcing the leverage of and revised the subsidy model so as to enable the International Journal of Urban Sustainable Development 45 inclusion of families earning up to ﬁve minimum both market lending and subsidized loans from the salaries (Brasil 2010c). state development banks), indicating a mismatch Subsequent resolutions, and those from the between demand and supply of direct subsidies and central Bank, provided increased legal security to grants (Denaldi et al. 2010). lending operations and obliged private banks to Likewise, and more seriously, as will be dis- utilize at least 65% of their savings deposits for cussed in Section 4, the MCMV programme tends housing ﬁnance (Royer 2009). Not surprisingly, to “delink” from the initial drivers behind federal lending operations during 2003–2009 sourced by policies in terms of reducing the housing deﬁcit the compulsory pension fund and private saving of the poorest segments. This is reﬂected in the and lending institutions increased by 583% and inclusion and increasing emphasis on target groups 1300%, respectively. that earn between 5 and 10 minimum salaries, and As will be discussed in subsequent sec- the projected construction of 200,000 housing units tions, although ﬁnancial allocations increased from that cost up to R$500,000 (about US$290,000) 2003 onward, it was particularly in 2007, with (Ministério das Cidades 2008). This tendency the launch of the National Growth Acceleration should be seen in the light of a long tradition Program (PAC), that public investments were whereby part of the regulatory and ﬁnancial lever- up-scaled (especially in slum upgrading pro- age of interventions were being captured by the grammes). Moreover, the launch of the MCMV private sector and medium income segments. programme triggered signiﬁcant effects on the private housing markets. While PAC allocated 3. “Rolling out” state spatial policies, R$16.8 billion in slum upgrading, beneﬁtting some re-regulation and the social function of the city 1.24 million families through 621 programmes, the MCMV programme generated investments At least in theory, the approval of the Statute of of around R$53.1 billion, allocated in the con- the City in 2001 (law 10.257 of July 2001) and struction of 1,005,128 housing units, of which the subsequent possibility to trigger the elabora- 772,000 were ﬁnished until the end of 2011 tion of a new generation of local master plans (Instituto de Pesquisa Econômica Aplicada 2011). provided a unique opportunity to reverse a histori- Despite of the considerable progress that has cal tradition of real estate speculation, socio-spatial been made in terms of targeting the population segregation and environmental degradation in the segments that make up the bulk of the housing (re)production of Brazilian cities. The cornerstone deﬁcit, the amount of subsidy is still relatively of this federal framework legislation was to pro- small in comparison with the housing demand and mote use values and collective access to the city, as deﬁcit that have been accumulated by the poorest opposed to the maximization of exchange values of the poor over time. It should be recalled that and the commercialization of urban space. still 90% of the housing deﬁcit, which amounts The City Statute became reality as a result to 6,272,645 units, is concentrated in the range of almost two decades of pressure and articu- of families earning up to three minimum salaries, lation driven by social movements, professional while 96% of the deﬁcit is comprised of families associations, lobbies and academics. The National earning up to ﬁve minimum salaries. (Fundação Movement for Urban Reform, participating in the João Pinheiro 2008), meaning that the bulk of National Forum on Urban Reform, performed a key the deﬁcit is concentrated in target groups with- role in the approval of the law. out sufﬁcient purchasing power, and in need of The City Statute not only deﬁnes the pos- direct subsidies and grants. However, only 9.5% sibility of a series of instruments that increase of the R$106 billion earmarked within PAC for the leverage of local governments over specula- housing and urban development represented grants tive real estate markets, but also requires that these from the federal budget (the other 91.5% being plans would be elaborated through participatory 46 R. Denaldi procedures. It represents a remarkable, and for- application of the statute is cumbersome, since it malized, break away from a long legacy of top evolves as a function of the political construction down and technocratic planning. Among others, of the local scale and urban space. it deﬁnes instruments such as special low-income Third, and in spite of the previously mentioned zoning associated with the provision of social hous- challenges, the city statute has made most of the ing, compulsory use of vacant land, linked to conﬂicts associated with the contested nature of progressive taxes and public appropriation of pri- cities and real estate markets more explicit and, as vate land, and development exactions to be used in such, has opened a concrete perspective for more the infrastructure provision within slum upgrading alternative representations of space (in terms of programmes. use as opposed to exchange values), and different While the introduction of the City Statute has spaces of representation that are not restricted to raised high expectations, at the same time a series the bi-lateral and non-transparent growth coalitions of issues have been raised on its effective capacities at local level (Klink & Denaldi 2011). to transform Brazilian cities. The more recent aca- In the next section, we will highlight how the demic debates suggest a complex and a somewhat previously mentioned federal programmes affect contradictory scenario (Klink & Denaldi 2011). this rather fragile mosaic of interests, agents and First, the application of the statute is in the agendas that at the same time mould and are hands of local governments, and by and large inﬂuenced by the production of urban space, with embedded in a highly contested built environment an emphasis on the role of real estate and land in cities and metropolitan areas, with vested inter- markets. ests of local elites in real estate and land markets, often supported by local media, utility compa- 4. Real estate, ﬁnance and the contradictions nies and growth coalitions aimed at maximizing in the production of space. The case of MCMV exchange values of land (Logon & Molotch 1987). (the “My House – My Life” Programme) Second, and related with the previous point, In March 2009, in the midst of the international despite the proliferation of new master plans, many real estate and ﬁnancial crisis, the federal gov- cities are facing challenges to effectively elabo- ernment launched the MCMV programme. Aimed rate, approve and use the instruments provided by at generating an anti-cyclical, almost Keynesian the City Statute. According to the IBGE 2001 data style response to the international collapse through referring to that year, 980 cities had approved a series of incentives to the building and con- master plans; by 2009, this number had increased struction sector, the programme was to provide to 2.318. At the same time, 87% of the cities 1,000,000 housing units to families earning up with more than 20,000 inhabitants – under the to 10 minimum salaries, either through incentives mandatory requirement to elaborate a master plan to the building and construction industry or to aligned with the principles of the city statute – individuals for the purchase of new units. had presented a plan (Santos & Montandon 2011). The launch of the programme represented a sig- Nevertheless, a recent evaluation undertaken by niﬁcant break with the roll-back neoliberalization the National Observatory of the Metropolis on the and delegation of housing and urban development limits and potentials of the City Statute at local policies to the local level (Bonduki 2009; Maricato level has shown a scenario of challenges, where 2009). In that sense: most of the municipalities either do not apply the City Statute’s instruments, or leave more detailed While allocating R$26 billion in subsidies, over deﬁnitions and utilization to speciﬁc by-laws, to and above to what already had been deﬁned in be deﬁned and approved later on. By and large, the context of the National Growth Acceleration most cities do not apply instruments of land value Program, the “package” ended up adopting the capture. Oliveira & Biasotto (2011) argue that the more optimistic scenario projected in the National International Journal of Urban Sustainable Development 47 Housing Plan. If this rhythm will be continued for low-income housing segments. Two speciﬁc ele- the next ﬁfteen years, as predicted in the Housing ments that underpin the design of the programme Plan (which is not happening in the case of the should be stressed, the ﬁrst relating to the targeting MCMV programme), it will be possible to have of the poorest of the poor, the other one to the loca- a real impact in terms of the reduction of the tion of programmes and projects in the light of the housing deﬁcit. That is, without any doubt, the signiﬁcant contribution of the “package”. Other lack of leverage over real estate markets. measures proposed by the National Housing Plan, In relation to the ﬁrst point, Bonduki (2009, aimed at reducing the cost of housing, such as p. 11) argues that a partial tax exemption on the production of low-income housing, and the cost reduction of The program ( ... ) attends to 14% of the accu- the security and guarantee fund, all generated a mulated deﬁcit. However, in relation to the target positive impact on access to social and market groups earning up to 3 minimum salaries, which, housing. (Bonduki 2009, p. 10) according to the National Housing Plan should be the focal point of the subsidy guidelines, with a projection of 400,000 units [allocated to this group], only 6% of the accumulated deﬁcit will Nevertheless, considering its lack of articulation be addressed. Moreover, this is only achieved if with the policies aimed at the social function of the the targets will be effectively implemented (which city and the national framework for social housing, will be one of the challenges of the program in light of the low institutional capacity of many the MCMV programme received critique, particu- municipalities). On the other hand, within the tar- larly in the light of the increasing interdependen- get groups that earn more than three minimum cies between real estate and ﬁnancial markets. salaries, the deﬁcit will not only be eliminated, Castro (1999) and Shimbo (2010), for exam- but there will be capacity to accommodate demo- ple, argued that the securitization, the emergence graphic growth, or acquire a second house. of new ﬁnancial instruments and the strengthening of the guarantee system and the legal framework The location of housing projects emerged as one of credit and stock markets, constructed since the the main polemics of the programme, also consid- 1990s, have prepared the scene for an interlinked ering the fact that the private sector, and not state circuit composed of real estate and ﬁnance. In the production, was privileged as the programme’s light of the earlier mentioned challenges to imple- main driver, with a suspicion that it would not ment the City Statute, and the relatively weak select appropriate site locations. leverage of the state over real estate and hous- The ﬁrst preliminary evaluations that have been ing markets, this interlinked circuit posed a serious undertaken conﬁrm that projects are being imple- threat to scale up social housing as envisaged by mented in inappropriate locations, on the out- the framework for national housing policy. skirts of cities and metropolitan areas, and distant In that sense, the recent scenario, characterized from the centres that concentrate opportunities for by increased macroeconomic growth and availabil- income and employment generation, services and ity of housing ﬁnance, provides a paradox, whereby urban infrastructure (Laboratório de Habitação e systemic increases in the real estate prices are com- Assentamentos urbanos 2011). When this is aggra- bined with impressive statistics on the delivery of vated by the lack of an appropriate socio-economic subsidized low-cost housing by the private sector. mix of target groups, the socio-economic vulnera- While the MCMV was launched at the time that bility of families increases. the National Housing Plan was ﬁnalized, it incor- Moreover, the MCMV programme has not porated only a few of this plan’s guidelines, one been discussed in the Tripartite National Housing example being the earlier mentioned creation of Council and initially did not allocate ﬁnancial a speciﬁc guarantee fund for the units that were resources for self-help and self-managed projects. ﬁnanced through the MCMV programme in order After pressure from the housing movements a to provide more security for the market to act in the speciﬁc modality – MCMV entities – aimed 48 R. Denaldi at the particular needs and conditions of non- of ﬁnished housing for families earning up to governmental organizations was created, including 10 minimum salaries. self-managed housing cooperatives and associa- In the meantime, there are signs that Brazilian tions. However, the volume of resources allocated real estate and housing markets have become over- to this modality was relatively small, while the heated. At national level, for instance, the volume market-oriented bias of the MCMV programme of total housing ﬁnance has increased sevenfold, generated a series of challenges to guarantee from R$16 billion in 2006 to R$114 billion in its operation. To illustrate, during 2009–2011, 2011. In the same period, the number of new real 82 projects have been implemented in the context estate projects launched has gone up by 310% of this sub-programme, which involved the con- (i.e. from R$10 billion to R$41 billion). Likewise, struction of only 9395 units costing R$270 million the number of units ﬁnanced has reached record (Ferreira 2012). Therefore, an important oppor- high levels, growing from 316,996 units in 2000 to tunity is lost to strengthen social and housing 1,043,000 in 2011. The building and construction movements that could perform an important role industry is facing difﬁculties to keep up with the in putting pressure to implement the instruments speed; while in 2008 the average delay in the deliv- of the City Statute and to guarantee more adequate ery of housing projects was 77 days, in 2011 this locations for the production of new housing units number was more than four months (129 days) so as to avoid the expansion of the outskirts and (Revista Exame 2012). further socio-spatial exclusion. At the same time, however, this scenario has Finally, ﬁnancial resources from the MCMV challenged conventional wisdom that a combined programme are not integrated and allocated in the strategy of increased availability of ﬁnance for context of the National Housing Fund. As such, housing construction and acquisition, more efﬁ- important opportunities are lost in the sense of con- cient housing delivery and a strengthened institu- solidating and strengthening the National Housing tional and regulatory framework will be sufﬁcient System and its mechanism of social participation to bring down housing and real estate prices. and control. Contrary to the expectation according to which Thus, while the programme performed an the City Statute, cheap ﬁnance for the building important role in absorbing the effects of the inter- and construction industry and public investment national crisis through expansionary monetary and in housing and urban development infrastructure ﬁscal measures in general and increased liquid- would drive down real prices for low-income hous- ity in the housing and urban sector in particular, ing, they have in fact increased. In general, while it could not be considered an urban programme consumer prices in the period January 2008 until along the lines of the agenda that had been gradu- march 2012 went up with 25%, according to the ally constructed through the City Statute, the Urban National Institute for Geography and Statistics Reform Movement and the Ministry of Cities. As a (IBGE), the average cost of a one-bedroom pop- matter of fact, its “fast track approach” shifted the ular house in the State of São Paulo increased with emphasis away from this more ambitious, but grad- 35% over the same period, indicating real estate ual agenda of the National Housing Plan that was price escalation of around 10%. Price increases focussed on the social function of the city and use have been fuelled by the willingness to pay of values of land. While the latter had an explicit potential users with access to easy credit, as well design in terms of providing ﬁnancial incentives as by the more sophisticated strategies (such as for cities that implemented the instruments of the marketing, promotion and image building) of the City Statute aimed at value capture, the increase internationalized real estate and building industry. of social housing and utilization of vacant land, Not surprisingly, therefore, the recent subsidy ceil- the MCMV has been characterized by its empha- ings (i.e. the housing price level that allows for sis on short-term results in terms of the production federal subsidies) of the MCMV programme have International Journal of Urban Sustainable Development 49 been adjusted upward in order to adapt to real ﬁrms, and less than 15% of the total number estate price escalation. In a scenario of escalating establishments in real estate were from the city of land prices and insufﬁcient subsidy, the private sec- São Paulo, in 2010, only a little bit more than 20% tor has also been “moving up the socio-economic of the developers were locally based, while ﬁrms ladder” in the market provision of social housing with headquarters in the city of São Paulo made (Shimbo 2011), particularly attending those fami- up more than 60% of the total number of estab- lies that are earning between 5 and 10 minimum lishments in 2010. Most of the latter are larger salaries. establishments that are registered on the São Paulo Sigolo (2010) has looked into the strategies stock exchange and linked to broader tendencies of residential real estate and construction compa- of ownership concentration in the building and nies in the Greater São Paulo in general, and in construction and real estate sector. the ABC region in particular, focussing on the Similar evidence in other cities suggests that, period from the mid-1990s until 2010. In terms in the light of real estate price escalation, the of the speciﬁc proﬁle of residential products that subsidies of federal programmes have not been have been launched between 2002 and 2010 in the appropriated by the poorest of the poor (earn- ABC region (metropolitan São Paulo), units have ing up to 3 minimum salaries), but by families become smaller, not only in terms of the num- earning up to 10 minimum salaries. The impres- ber of rooms (with a reduction in the participation sive growth of housing ﬁnance in Greater Rio, for of four-room apartments and an increase in two- example, has not been able to dampen patterns of room apartments), but also in absolute size (with a socio-spatial segregation (Governo do Estado do reduction of the market share of apartments big- Rio de Janeiro 2011). The combination of accel- ger than 100 m and an increased market share erated growth, driven by a series of private and of apartments launched between 51 and 70 m ) public investments in the petrochemical industry, (Sigolo 2010). At the same time, and still accord- steel metallurgy, logistics and urban infrastruc- ing to the same author, prices have been increas- ture (Silva & Fonseca 2013), combined with the ing consistently: in Greater São Paulo, the market lack of leverage of the state over speculative real share of apartments with a price/m of less than estate markets, which is aggravated by the upcom- R$2,500.00 have reduced from 26% to 19% in the ing large urban development events (particularly period 2008–2010, while the share of apartments the 2014 World Cup the Olympics in 2016), has withaprice/m higher than R$4500.00 increased provided a number of challenges to advance in from about 5% to approximately 30% of the total the direction of more effective low-income hous- amount of projects that were launched in the same ing policy, aligned with the principles of the City period. Statute. According to data developed by this author, Initial evaluations of the federal housing pro- the modern, more globally oriented ﬁrms, based grammes in Greater Rio show that, without this in the city of São Paulo and active in residential effective leverage over real estate markets, the real estate and construction, are increasingly oper- use of subsidies with ﬁxed ﬁnancial limits by the ating in the transformation of urban space in the MCMV programme has directed construction to outskirts of metropolitan São Paulo, particularly the more distant areas with deﬁcient infrastruc- in (previously) industrial spaces that are facing ture and community services, reinforcing a vicious pressures of productive restructuring, such as the cycle of socio-spatial segregation and environmen- ABC region, Osasco and Guarulhos (where the tal degradation (Rolnik & Nakano 2011). In the international airport of São Paulo is located). speciﬁc context of the city of Rio de Janeiro, To illustrate, while, in 2004, 70% of the real the spatial allocation of construction ﬁnanced by estate developers in the ABC region were local the MCMV programme follows a real estate price 50 R. Denaldi gradient (Cardoso et al. 2011); that is, while the this group’s absolute size and participation in units distributed to groups earning between 6 and the overall housing deﬁcit has actually increased 10 minimum salaries are located in the more central during the period 2000–2008 (Figure 1). And areas, the projects targeted at beneﬁciaries earn- things are likely to get worse; to illustrate, while ing up to three minimum salaries are in the distant real estate price escalation from January 2008 to western outskirts of the city. Ninety-three percent February 2012 in Greater Rio de Janeiro was of the programme is concentrated in this western around 165%, general inﬂation in the same period zone, which provides relatively worse conditions in amounted to 25% (Mendonça & Sachsida, 2012). terms of access to water, basic sanitation, health, education, mobility and employment. 5. Conclusion Still referring to the Rio case, Klink (Forthcoming 2013) argues that socio-spatial Our preliminary analysis suggests that Brazilian segregation through real estate markets is more cities and metropolitan areas are going through a persistent in dense metropolitan areas and city particularly complex scenario. In the last decade or regions than outside the metropolis. Data from so, the approval of the City Statute, the institutional the Ministry of Cities, based on the IBGE census, strengthening and democratization of urban man- show that, while the housing deﬁcit in the state agement, economic growth and the steep increase of Rio has actually been reduced from 505,201 in in ﬁnance for the subsidized construction or acqui- 2000 to 490,230 in 2008, the ﬁgure remained sition of low-income housing all provided a sce- constant in Metropolitan Rio (i.e. 375,314 units nario of optimism regarding the potential transfor- in 2000 and 375,461 in 2008). Moreover, the mative impact of a rolled-out and renewed national socio-economic composition of the housing deﬁcit developmental regime. An increasing number of shows that, despite economic growth and sub- studies, however, has provided evidence of a sidized housing ﬁnance, families earning up to remarkable persistence of the socio-spatial and three minimum salaries have not been reached; environmental contradictions that accompany the 100.00% 80.00% 60.00% >5 SM 3 A S SM 40.00% <3 SM 20.00% 0.00% 2000 2005 2006 2007 2008 Figure 1. Housing deﬁcit per income segment – metropolitan region of Rio de Janeiro. Source: IBGE census data (Governo do Estado Rio de Janeiro 2011). International Journal of Urban Sustainable Development 51 production of urban space in Brazilian cities and will be to use the available volume of subsided metropolitan areas (Rolnik & Klink 2011). ﬁnance and resources as part of an overall strat- Our initial hypothesis for this paradox, which egy aimed at effectively moving forward with the would have to be explored in more detail through implementation of the urban reform, the national in-depth theoretical and empirical work, is the per- low-income housing programme and the social sistent difﬁculty to control exchange versus use function of land and housing, particularly for those values of land, and the challenge to effectively segments traditionally excluded from the right to implement a regulatory structure for the land mar- the city. ket based on the instruments of the City Statute. This is not only reﬂected in the challenges to effec- Notes tively apply and use these instruments, but also 1. FGTS – Fundo de Garantia do Tempo de Serviço – Garantuee Fund linked to the effective number of aggravated by the present scenario of macroeco- years a worker has been employed. nomic growth and overheated real estate markets 2. Under self-management the production of housing in cities and metropolitan areas. units or the upgrading of an area is being real- Our initial evidence on the dilemmas to design ized with control of the allocation and management and implement a social housing policy that reaches of resources and public works by the beneﬁciaries, which are organized in community associations or the poorest of the poor needs further research. cooperatives. More particularly, the hypothesis that a growing 3. The ﬁrst federal programmes aimed at self- interdependency between real estate and ﬁnance, management were created in the decade of 2000. moulded by subsidized housing ﬁnance and hous- Examples are Program Solidarity Credit (2004) and ing policies that delegate responsibilities to private Social Housing Production (2008) and in 2009, the earlier mentioned subprogramme MCMV Entities, sector agents, deserves more in-depth study, espe- the later being the main programme presently in cially considering the recent international prolifer- operation. ation of real estate and ﬁnance driven social and 4. On January 2012, a minimum salary amounted to economic crises in the OECD countries. R$622,000, or approximately US$36,000. Finally, our analysis suggests that, despite 5. The programme MCMV has also received critique in the sense that federal government has set up a per- important shifts in the development regime over manent dialogue regarding the design and operation time (i.e. from a national developmental regime of the programme with 20 of the larger building and during 1930–1985, to a neoliberalized rolling back construction ﬁrms operating in the Brazilian mar- regime in the 1990s, to a renewed, rolled-out ket (each of them having a net worth on the stock and competitive developmental regime), there are exchange of at least R$300 million). According to the more critical view, this bilateral dialogue with important continuities in the production and repro- the sector has introduced a permanent escalating duction of urban space. In that respect, it should trend in cost and subsidy guidelines of the pro- be stressed that, contrary to the territorial organi- gramme. Source: Interviews with Luciana Versiani zation and intervention of the state under Atlantic (Coordinator MCMV São Paulo) and Marcia Bozza Fordism, the Brazilian developmental state has Haddad (Exective Manager MCMV – Corporate desk). always prioritized economic growth over social 6. The ABC region is composed of seven munic- reproduction, redistribution and social cohesion. ipalities located in the southeastern part of the As such, it has never been able to consolidate Metropolitan area of São Paulo and concentrate housing and urban development policies that reach important industries such as car manufacturing and low-income target groups. petrochemical industry. Finally, although this has not been the explicit objective, the arguments developed in this article Notes on contributor suggest an agenda for practitioners in the hous- Rosana Denaldi: Centro de Engenharia, Modelagem ing and urban development sector. 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ISSN: 1946-3146
eISSN: 1946-3138
DOI: 10.1080/19463138.2013.770007
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Abstract

International Journal of Urban Sustainable Development, 2013 Vol. 5, No. 1, 40–53, http://dx.doi.org/10.1080/19463138.2013.770007 Trapped by the land? Change and continuity in the provision of social housing in Brazil Rosana Denaldi* Centro de Engenharia, Modelagem e Ciências Sociais Aplicadas, UFABC, Santo André, Brazil (Received 1 May 2012; ﬁnal version received 5 December 2012) Despite economic growth, institutional strengthening, improved regulatory frameworks for urban land mar- kets and availability of subsidized ﬁnancial resources for social housing, Brazilian urban development policy has continued to face challenges in providing access to housing for low-income groups in general, and families earning up to three minimum salaries in particular. In this article, we argue that state spatial policies have been severely weakened by the lack of leverage over urban land markets. In that respect, the renewed rolled-out developmental state that has followed the neoliberalization of spaces in the 1990s, as reﬂected in the Statute of the City, the creation of the Ministry for Cities and the launch of federal housing ﬁnance programmes represent advances, but have not been able to trigger structural change in the production of urban space. Keywords: Brazilian social housing; City Statute; land markets; urban development regimes 1. Introduction affordable access to low-income housing, and pro- ducing more inclusive cities. The aim of this article is to discuss an apparent In this article, we will forward a possible paradox in recent discussions on low-income hous- explanation for the above paradox on the basis ing policy and ﬁnance in Brazil, and to provide of the theoretical framework that was developed preliminary elements for a broader research agenda by authors such as Brenner & Theodore (2002) on the role of land and real estate markets in the regarding the crisis driven and contradictory pro- Brazilian development trajectory in general, and cess of restructuring of state spatial policies and in reproducing contradictory and exclusionary city regulatory strategies within the context of North development strategies in particular. Atlantic Fordism. More speciﬁcally, these authors More speciﬁcally, during the last decade, we argued that the crisis of spatial Keynesianism, have witnessed a renewed emphasis on the social which was aimed at providing a cohesive national function of the city, as reﬂected by the regulatory space economy through centralized and homoge- and institutional strengthening of urban markets neous institutions, has been followed by move- and the increased availability of subsidized ﬁnance ments of destructive “rolling back” and “creative for low-income housing. At the same time, there rolling out” of competitive and neoliberal state spa- is increasing evidence that the lack of leverage of tial policies, without resolving the contradictions the state (at its multiple scales) over speculative associated with the capitalist production of space real estate markets continues to generate impor- (Brenner & Theodore 2002). The recent sub-prime tant bottlenecks in providing more sustainable and *Email: r.denaldi@terra.com.br © 2013 Taylor & Francis International Journal of Urban Sustainable Development 41 crisis has also required intense governmental inter- the design of overall housing and urban devel- ventions, generating complex conﬂuences between opment policies, in this recent stage, particularly the state and the market in the “actually existing through such programmes as Minha Casa Minha neo-liberalism” (Brenner & Theodore 2002; Peck Vida (MCMV – My House My Life). We will also et al. 2009). provide anecdotal evidence of the contested nature Thus, in most European countries, the neolib- of urban and regional space, particularly driven by eralization that drove “die-hard” deregulation and the dynamics of the real estate markets. On the privatization movement of the late 1970s/1980s basis of our explorative analysis, we will make was followed by “third way” and rolled out “work- recommendations for a tentative research agenda fare” policies in order to minimize the contradic- on the role of land and real estate markets in the tions generated by the previous round of destruc- overall design and implementation of housing and tive deregulation, as well as to provide a basis for urban development policies. the competitive insertion of cities and regions in the world economy. 2. Setting the stage: a primer on the Brazilian In relation to the speciﬁc Brazilian context, macro-institutional framework on (low-income) we will argue that the lack of leverage of state housing provision and ﬁnance spatial policies over land markets has been an important driver behind similar processes of con- Until the 1930s – an era usually indicated as the tradictory and unstable rolling back and rolling initial stage of industrialization and the national out policies aimed at the production of urban and developmental regime – interventions were ad- regional space. While the Brazilian trajectory of hoc and characterized by an emphasis on legal housing and urban development policies of the approaches and investments in sanitation and pub- 1990s can be characterized in terms of a “rolling lic health. In its populist stage (the Vargas admin- back of the state” during the opening up and neolib- istration), the state initiated direct investments in eralization of the Brazilian development regime public housing, particularly through pension funds, during the 1990s, this was followed by a grad- but the scale of these operations was rather limited ual (and, as we will discuss, contradictory) rolling (Bonduki 2002). Successive administrations con- out and re-regulatory stage of state spatial poli- tinued to put a low priority on low-income housing, cies during the last decade. Nevertheless, the lack and it is was not uncommon to see massive eradi- of leverage over land markets continues an impor- cation of slums and substandard housing (Denaldi tant element in order to understand the persistent 2003). and contradictory pattern of socio-spatial exclu- In the Janio Quadros administration, the sion in many Brazilian cities and metropolitan Instituto Brasileiro de Habitação IBH (the areas. Brazilian Institute for Housing) was created in After this introduction, our argument will be 1961, which can be considered a precursor of the built up in three interrelated sections. First, we National Housing Bank (NHB). From that period will provide a primer on the evolution of the onward, the ideology of owner-occupied housing macro-institutional environment that has shaped was incorporated as part of broader strategy housing and housing ﬁnance policies since the towards political stability and sustainability. emergence of the national development regime in During the authoritarian stage of the national the 1930s. This is followed by a more detailed developmental regime (1964–1985), important description of the post-2001 period, characterized institutional changes were implemented, which by an emphasis on regulation of land markets, insti- implied transformations in the organization and tutional strengthening and democratization of the intervention of the State in the production of space urban-planning framework. Third, we highlight the in general, and in the provision of housing in contradictions and tensions that have emerged in particular. 42 R. Denaldi In this period, the Financial Housing System, participation in housing programmes fell from 61% the NHB, the credit associations and the Social (1980) to 20% (1990), while, during the same Service for Housing and Urbanism were created. period, the participation of the state governments Particularly the NHB performed an active role in increased from 9% to 17%, and those of cities from the provision of ﬁnance for housing, basic sanita- 30% to 64%. Nevertheless, this increase at the sub- tion and urban infrastructure, including projects in national scale did not compensate for the federal the area of transportation and energy. Its resources withdrawal, considering that total housing invest- originated from a compulsory deposit fund for ment decreased by 33% in this period (Ministério workers. This so-called FGTS fund would mainly das Cidades 2004, p. 10). ﬁnance homeownership for private or public hous- The extinction of the NHB, the crisis in the ing companies, while in a subsequent phase, it also housing ﬁnance system (based on compulsory offered credit for the ﬁnal buyers of housing. In the wage contributions, which reduced signiﬁcantly in sanitation sector, resources of the FGTS fund were the light of the chronic economic crisis in the allocated to state companies. Considering the fact 1980s) and the institutional fragmentation led to that the system depended on the ﬁnancial return a gradual withdrawal of the national government on public investments, either through the payment from the housing and urban development sector, of tariffs and charges by the ﬁnal beneﬁciaries of both in terms of maintaining the level of pub- water supply and sanitation services, or through the lic housing production and the overall reorgani- payment of annuities for housing loans, its expan- zation and redesign of housing policies. In fact, sion was more rapid in higher income regions, the 1990s witnessed an increasingly localized and where rates of return were guaranteed. fragmented pattern of low-income housing policies The NHB’s strategy was based on leveraging (Arretche 1996). In the absence of federal ﬁnancial the building sector, supported by stable sources resources, municipalities and state governments of ﬁnance aimed at the construction of housing increasingly took up the organization, management units. The NHB did not contribute much to the and ﬁnance of housing policies. Médici & Maciel supply of low-income housing; research on the (1996) recall that the rolling back and neoliberal- state production during that period has shown that ization of state spaces in the 1990s meant that a the bulk of new supply was allocated to middle- decentralization proposal was pushed forward, not income segments (Azvedo 1996; Bonduki 2002). only aimed at increasing the efﬁciency of public Likewise, the option of building large housing policies, but also to alleviate the budgetary pres- estates located in the outskirts effectively gener- sures that were being faced by the federal govern- ated suburban dormitory cities, triggering addi- ment in the midst of a renegotiation of its dramatic tional costs in terms of providing more expensive internal and external debt. urban services and infrastructure to the periph- At the same time, this period witnessed the ery, as well as environmental costs in terms of an strengthening of housing movements and the re- increasingly sprawling city growth. The homoge- democratization of the country. As such, some nous standards of these projects, which did not left wing local governments were keen on ﬁnanc- take into account the regional diversity of a con- ing and stimulating programmes aimed at self- tinental country, provided large-scale housing with help building and management (Denaldi 1997). nevertheless questionable quality (Bonduki 2002). As such, innovation took place in the context of Despite the critique on the performance of the the FUNAPS Comunitário – Fundo Comunitário NHB, its extinction in 1984 meant a signiﬁcant de Atendimento à População moradora em vacuum in the housing and urban development sec- Habitação Subnormal (FUNACOM) programme in tor. This period was characterized by continuous the municipal administration of São Paulo dur- institutional changes and “stop and go” initia- ing 1989–1992, and similar experiences in cities tives (Arretche 1996). Over the 1980s, the federal such as Fortaleza, Ipatinga and Diadema (Denaldi International Journal of Urban Sustainable Development 43 1995, 1997; Cabannes, 1997). These programmes designed (carta de credito), which was aimed at emerged as part of a demand from the commu- facilitating the acquisition of a house by low- nity to have access to funds for self-help and income groups, and ﬁnanced by the compulsory self-managed social housing projects. As such, contributions of the pension funds. Its impact was from 2000 onward, the national policy agenda on nevertheless quite insigniﬁcant. Over the period housing and slum upgrading has been adjusted 1995–2000, only 5.25% of the demand for credit accordingly. reached the speciﬁc target groups that earned up to During the period of the administration of three minimum salaries (Castro 1999). This also Fernando Henrique Cardoso (1994–2002), at least was a clear indicator of the challenges of vouch- at the level of discourse, progress was made, as ers systems and demand side credit in reaching the was reﬂected in the ofﬁcial documents of the more vulnerable target group in unregulated land Special Secretary for Urban Development of the markets. Presidency. Among others, the housing deﬁcit was During the second administration of Fernando being redeﬁned; for the ﬁrst time, the so-called Henrique Cardoso (FHC) (1998 onward), a series illegal, but “really” existing city was being rec- of interventions were undertaken aimed at strength- ognized, and national scale slum upgrading pro- ening the ﬁnancial markets in general, and the mar- grammes with explicit subsidies were elaborated. ket for housing ﬁnance in particular. For example, Nevertheless, considering the marginal amount of on the basis of a proposal that had been elabo- ﬁnancial resources that were allocated to the low- rated by the Brazilian Association of Real Estate income housing, targets were never met (Denaldi and Savings Institutions, the Real Estate Finance 2004). System was approved. It formalized and increased The redeﬁnition of the housing deﬁcit the ﬁnancial guarantees related to the foreclosure allowed for the diversiﬁcation of interventions. of housing and real estate. Castro (1999) argued Consequently, resources of the national budget that, during the FHC administration, Brazilian could be earmarked as a priority to slum upgrading housing policy followed, as a latecomer, an inter- programmes (instead of considering them as national tendency of creating secondary real estate alternative programmes). This led to the design of and mortgage markets, based on a strengthened nationally scaled upgrading programmes such as guarantee system and a more ﬂexible regulatory HABITAR – BRASIL. framework. It also provided incentives to the emer- However, the effective amount of subsidized gence of a system whereby cooperatives could ﬁnancial resources from the national budget was receive subsidies for the acquisition of housing small, and its allocation followed highly ad-hoc and units. localist patterns, driven by linkages between mem- In line with international experience, the cre- bers of federal parliament and vested city interests. ation of secondary mortgage markets represented A preliminary evaluation undertaken by the federal an important step in the blending of real estate, government in 1999 showed that, during the period housing and ﬁnancial markets – instrumental in 1995–1999, a total of less than R$5 billion (approx- providing liquidity, shorter pay-back periods and imately US$3 billion) was invested in programmes more favourable trade-offs between risk and return aimed at housing and basic sanitation. Moreover, in a market traditionally characterized by rigidities, part of these programmes were suspended in 1998, long maturation periods and high transaction costs considering the lending restrictions that were being and risks (Aalbers 2009). As argued by Shimbo faced by local and state governments in the con- (2010), this represented somewhat of a turning text of macroeconomic and ﬁscal restructuring in point in the sense that, from that period onward, the 1990s (Brasil 2002). Brazilian ﬁnance and real estate markets were With the suspension of supply side subsidies on the radar of volatile national and international and ﬁnance, a direct consumer ﬁnance system was investment capital. 44 R. Denaldi During the years of the Inácio Lula da local government over real estate and land markets Silva administration (2003–2010), a signiﬁcant through such instruments as the City Statute, a rolling out and re-regulation of state spatial poli- federal framework law approved in 2001. cies took place, whereby the housing and urban The overall housing policy framework was development sector also went through a process subdivided into two complementary systems, i.e. of re-organization and institutional strengthening. the National System for Low-Income Housing For the ﬁrst time since the national developmental (NSLIH), targeted at low-income segments (earn- regime and the performance of the NHB, pub- ing up to ﬁve minimum salaries), and a National lic ﬁnancial investments were being stepped up System for Market Housing (NSMH), aimed at again. providing solutions for higher income segments In relation to the institutional strengthening that could be attended by the market. and increased democratization of urban develop- In terms of the outreach of this system, until ment and housing policies, in 2003 the Ministry December 2010, the Ministry of Cities registered for Cities was created, which centralized directories that all states and 5370 municipalities had adopted for housing, basic sanitation, public transporta- the NSLIH (97% of the total Brazilian municipal- tion and mobility and territorial planning. At the ities). At the same time, 3385 cities had provided same time, tripartite councils were created involv- the Ministry a copy of the law that created a Local ing the local, regional and national level, increas- Housing Fund, while 90 had already completed a ing the level of participation and social control. local plan for low-income housing. In 2005, the National Housing Policy and Housing As mentioned, the investments in the hous- System were approved, followed by a ﬁrst ver- ing sector increased signiﬁcantly over the period sion of the National Housing Plan. The National 2003–2010, reversing a structural decline that had Housing System was designed as an instrument to characterized the sector since the extinction of the mobilize the stakeholders and the territorial scales NHB. Federal investments were stepped up from of power in the federation (local, state and federal). R$7.9 billion in 2003 to R$101.5 billion in 2010 It created a housing fund, which would allocate (Brasil 2010b). According to the same source, ﬁnancial resources in line with the guidelines of until 2010 the federal government had invested national policy. It is important to observe that R$187.5 billion in housing, covering 4.9 mil- the Ministry tried to establish a system of con- lion families, including those families that were ditionalities that was aimed at shaping a stronger attended through the Brazilian Lending and Saving housing delivery system. Law no. 11.124 of 2005, System and private banks. Excluding the latter, for example, established that, in order for state and R$102.5 billion and 3.6 million families had been municipalities to be part of the National Housing attended. The investment share of low-income seg- System, and to receive federal resources from the ments earning up to three minimum salaries, which National Housing Fund, they were obliged to elab- in Brazil concentrate about 89% of the national orate local or state plans on low income housing, housing deﬁcit, went up from 32% in 2002 to 66% linked to councils and funds that would count in 2010 (Brasil 2010c). with participation from housing and social move- This post-2003 increase in investment in low- ments. Moreover, from 2007 onward, the Ministry income housing production was enabled by a started a national awareness raising campaign, and new regulatory framework that allowed for the a capacity building strategy, backed up by spe- improved functioning of the private market, as well ciﬁc funds, aimed at up-scaling membership and as by the recovery of public direct investment. effective elaboration of low-income housing poli- More particularly, resolution no. 460 of December cies and programmes at the local scale. As will be 2004, regarding the federal pension fund, estab- discussed in the next section, this regulatory rolling lished new rules for the application of its resources out was also aimed at reinforcing the leverage of and revised the subsidy model so as to enable the International Journal of Urban Sustainable Development 45 inclusion of families earning up to ﬁve minimum both market lending and subsidized loans from the salaries (Brasil 2010c). state development banks), indicating a mismatch Subsequent resolutions, and those from the between demand and supply of direct subsidies and central Bank, provided increased legal security to grants (Denaldi et al. 2010). lending operations and obliged private banks to Likewise, and more seriously, as will be dis- utilize at least 65% of their savings deposits for cussed in Section 4, the MCMV programme tends housing ﬁnance (Royer 2009). Not surprisingly, to “delink” from the initial drivers behind federal lending operations during 2003–2009 sourced by policies in terms of reducing the housing deﬁcit the compulsory pension fund and private saving of the poorest segments. This is reﬂected in the and lending institutions increased by 583% and inclusion and increasing emphasis on target groups 1300%, respectively. that earn between 5 and 10 minimum salaries, and As will be discussed in subsequent sec- the projected construction of 200,000 housing units tions, although ﬁnancial allocations increased from that cost up to R$500,000 (about US$290,000) 2003 onward, it was particularly in 2007, with (Ministério das Cidades 2008). This tendency the launch of the National Growth Acceleration should be seen in the light of a long tradition Program (PAC), that public investments were whereby part of the regulatory and ﬁnancial lever- up-scaled (especially in slum upgrading pro- age of interventions were being captured by the grammes). Moreover, the launch of the MCMV private sector and medium income segments. programme triggered signiﬁcant effects on the private housing markets. While PAC allocated 3. “Rolling out” state spatial policies, R$16.8 billion in slum upgrading, beneﬁtting some re-regulation and the social function of the city 1.24 million families through 621 programmes, the MCMV programme generated investments At least in theory, the approval of the Statute of of around R$53.1 billion, allocated in the con- the City in 2001 (law 10.257 of July 2001) and struction of 1,005,128 housing units, of which the subsequent possibility to trigger the elabora- 772,000 were ﬁnished until the end of 2011 tion of a new generation of local master plans (Instituto de Pesquisa Econômica Aplicada 2011). provided a unique opportunity to reverse a histori- Despite of the considerable progress that has cal tradition of real estate speculation, socio-spatial been made in terms of targeting the population segregation and environmental degradation in the segments that make up the bulk of the housing (re)production of Brazilian cities. The cornerstone deﬁcit, the amount of subsidy is still relatively of this federal framework legislation was to pro- small in comparison with the housing demand and mote use values and collective access to the city, as deﬁcit that have been accumulated by the poorest opposed to the maximization of exchange values of the poor over time. It should be recalled that and the commercialization of urban space. still 90% of the housing deﬁcit, which amounts The City Statute became reality as a result to 6,272,645 units, is concentrated in the range of almost two decades of pressure and articu- of families earning up to three minimum salaries, lation driven by social movements, professional while 96% of the deﬁcit is comprised of families associations, lobbies and academics. The National earning up to ﬁve minimum salaries. (Fundação Movement for Urban Reform, participating in the João Pinheiro 2008), meaning that the bulk of National Forum on Urban Reform, performed a key the deﬁcit is concentrated in target groups with- role in the approval of the law. out sufﬁcient purchasing power, and in need of The City Statute not only deﬁnes the pos- direct subsidies and grants. However, only 9.5% sibility of a series of instruments that increase of the R$106 billion earmarked within PAC for the leverage of local governments over specula- housing and urban development represented grants tive real estate markets, but also requires that these from the federal budget (the other 91.5% being plans would be elaborated through participatory 46 R. Denaldi procedures. It represents a remarkable, and for- application of the statute is cumbersome, since it malized, break away from a long legacy of top evolves as a function of the political construction down and technocratic planning. Among others, of the local scale and urban space. it deﬁnes instruments such as special low-income Third, and in spite of the previously mentioned zoning associated with the provision of social hous- challenges, the city statute has made most of the ing, compulsory use of vacant land, linked to conﬂicts associated with the contested nature of progressive taxes and public appropriation of pri- cities and real estate markets more explicit and, as vate land, and development exactions to be used in such, has opened a concrete perspective for more the infrastructure provision within slum upgrading alternative representations of space (in terms of programmes. use as opposed to exchange values), and different While the introduction of the City Statute has spaces of representation that are not restricted to raised high expectations, at the same time a series the bi-lateral and non-transparent growth coalitions of issues have been raised on its effective capacities at local level (Klink & Denaldi 2011). to transform Brazilian cities. The more recent aca- In the next section, we will highlight how the demic debates suggest a complex and a somewhat previously mentioned federal programmes affect contradictory scenario (Klink & Denaldi 2011). this rather fragile mosaic of interests, agents and First, the application of the statute is in the agendas that at the same time mould and are hands of local governments, and by and large inﬂuenced by the production of urban space, with embedded in a highly contested built environment an emphasis on the role of real estate and land in cities and metropolitan areas, with vested inter- markets. ests of local elites in real estate and land markets, often supported by local media, utility compa- 4. Real estate, ﬁnance and the contradictions nies and growth coalitions aimed at maximizing in the production of space. The case of MCMV exchange values of land (Logon & Molotch 1987). (the “My House – My Life” Programme) Second, and related with the previous point, In March 2009, in the midst of the international despite the proliferation of new master plans, many real estate and ﬁnancial crisis, the federal gov- cities are facing challenges to effectively elabo- ernment launched the MCMV programme. Aimed rate, approve and use the instruments provided by at generating an anti-cyclical, almost Keynesian the City Statute. According to the IBGE 2001 data style response to the international collapse through referring to that year, 980 cities had approved a series of incentives to the building and con- master plans; by 2009, this number had increased struction sector, the programme was to provide to 2.318. At the same time, 87% of the cities 1,000,000 housing units to families earning up with more than 20,000 inhabitants – under the to 10 minimum salaries, either through incentives mandatory requirement to elaborate a master plan to the building and construction industry or to aligned with the principles of the city statute – individuals for the purchase of new units. had presented a plan (Santos & Montandon 2011). The launch of the programme represented a sig- Nevertheless, a recent evaluation undertaken by niﬁcant break with the roll-back neoliberalization the National Observatory of the Metropolis on the and delegation of housing and urban development limits and potentials of the City Statute at local policies to the local level (Bonduki 2009; Maricato level has shown a scenario of challenges, where 2009). In that sense: most of the municipalities either do not apply the City Statute’s instruments, or leave more detailed While allocating R$26 billion in subsidies, over deﬁnitions and utilization to speciﬁc by-laws, to and above to what already had been deﬁned in be deﬁned and approved later on. By and large, the context of the National Growth Acceleration most cities do not apply instruments of land value Program, the “package” ended up adopting the capture. Oliveira & Biasotto (2011) argue that the more optimistic scenario projected in the National International Journal of Urban Sustainable Development 47 Housing Plan. If this rhythm will be continued for low-income housing segments. Two speciﬁc ele- the next ﬁfteen years, as predicted in the Housing ments that underpin the design of the programme Plan (which is not happening in the case of the should be stressed, the ﬁrst relating to the targeting MCMV programme), it will be possible to have of the poorest of the poor, the other one to the loca- a real impact in terms of the reduction of the tion of programmes and projects in the light of the housing deﬁcit. That is, without any doubt, the signiﬁcant contribution of the “package”. Other lack of leverage over real estate markets. measures proposed by the National Housing Plan, In relation to the ﬁrst point, Bonduki (2009, aimed at reducing the cost of housing, such as p. 11) argues that a partial tax exemption on the production of low-income housing, and the cost reduction of The program ( ... ) attends to 14% of the accu- the security and guarantee fund, all generated a mulated deﬁcit. However, in relation to the target positive impact on access to social and market groups earning up to 3 minimum salaries, which, housing. (Bonduki 2009, p. 10) according to the National Housing Plan should be the focal point of the subsidy guidelines, with a projection of 400,000 units [allocated to this group], only 6% of the accumulated deﬁcit will Nevertheless, considering its lack of articulation be addressed. Moreover, this is only achieved if with the policies aimed at the social function of the the targets will be effectively implemented (which city and the national framework for social housing, will be one of the challenges of the program in light of the low institutional capacity of many the MCMV programme received critique, particu- municipalities). On the other hand, within the tar- larly in the light of the increasing interdependen- get groups that earn more than three minimum cies between real estate and ﬁnancial markets. salaries, the deﬁcit will not only be eliminated, Castro (1999) and Shimbo (2010), for exam- but there will be capacity to accommodate demo- ple, argued that the securitization, the emergence graphic growth, or acquire a second house. of new ﬁnancial instruments and the strengthening of the guarantee system and the legal framework The location of housing projects emerged as one of credit and stock markets, constructed since the the main polemics of the programme, also consid- 1990s, have prepared the scene for an interlinked ering the fact that the private sector, and not state circuit composed of real estate and ﬁnance. In the production, was privileged as the programme’s light of the earlier mentioned challenges to imple- main driver, with a suspicion that it would not ment the City Statute, and the relatively weak select appropriate site locations. leverage of the state over real estate and hous- The ﬁrst preliminary evaluations that have been ing markets, this interlinked circuit posed a serious undertaken conﬁrm that projects are being imple- threat to scale up social housing as envisaged by mented in inappropriate locations, on the out- the framework for national housing policy. skirts of cities and metropolitan areas, and distant In that sense, the recent scenario, characterized from the centres that concentrate opportunities for by increased macroeconomic growth and availabil- income and employment generation, services and ity of housing ﬁnance, provides a paradox, whereby urban infrastructure (Laboratório de Habitação e systemic increases in the real estate prices are com- Assentamentos urbanos 2011). When this is aggra- bined with impressive statistics on the delivery of vated by the lack of an appropriate socio-economic subsidized low-cost housing by the private sector. mix of target groups, the socio-economic vulnera- While the MCMV was launched at the time that bility of families increases. the National Housing Plan was ﬁnalized, it incor- Moreover, the MCMV programme has not porated only a few of this plan’s guidelines, one been discussed in the Tripartite National Housing example being the earlier mentioned creation of Council and initially did not allocate ﬁnancial a speciﬁc guarantee fund for the units that were resources for self-help and self-managed projects. ﬁnanced through the MCMV programme in order After pressure from the housing movements a to provide more security for the market to act in the speciﬁc modality – MCMV entities – aimed 48 R. Denaldi at the particular needs and conditions of non- of ﬁnished housing for families earning up to governmental organizations was created, including 10 minimum salaries. self-managed housing cooperatives and associa- In the meantime, there are signs that Brazilian tions. However, the volume of resources allocated real estate and housing markets have become over- to this modality was relatively small, while the heated. At national level, for instance, the volume market-oriented bias of the MCMV programme of total housing ﬁnance has increased sevenfold, generated a series of challenges to guarantee from R$16 billion in 2006 to R$114 billion in its operation. To illustrate, during 2009–2011, 2011. In the same period, the number of new real 82 projects have been implemented in the context estate projects launched has gone up by 310% of this sub-programme, which involved the con- (i.e. from R$10 billion to R$41 billion). Likewise, struction of only 9395 units costing R$270 million the number of units ﬁnanced has reached record (Ferreira 2012). Therefore, an important oppor- high levels, growing from 316,996 units in 2000 to tunity is lost to strengthen social and housing 1,043,000 in 2011. The building and construction movements that could perform an important role industry is facing difﬁculties to keep up with the in putting pressure to implement the instruments speed; while in 2008 the average delay in the deliv- of the City Statute and to guarantee more adequate ery of housing projects was 77 days, in 2011 this locations for the production of new housing units number was more than four months (129 days) so as to avoid the expansion of the outskirts and (Revista Exame 2012). further socio-spatial exclusion. At the same time, however, this scenario has Finally, ﬁnancial resources from the MCMV challenged conventional wisdom that a combined programme are not integrated and allocated in the strategy of increased availability of ﬁnance for context of the National Housing Fund. As such, housing construction and acquisition, more efﬁ- important opportunities are lost in the sense of con- cient housing delivery and a strengthened institu- solidating and strengthening the National Housing tional and regulatory framework will be sufﬁcient System and its mechanism of social participation to bring down housing and real estate prices. and control. Contrary to the expectation according to which Thus, while the programme performed an the City Statute, cheap ﬁnance for the building important role in absorbing the effects of the inter- and construction industry and public investment national crisis through expansionary monetary and in housing and urban development infrastructure ﬁscal measures in general and increased liquid- would drive down real prices for low-income hous- ity in the housing and urban sector in particular, ing, they have in fact increased. In general, while it could not be considered an urban programme consumer prices in the period January 2008 until along the lines of the agenda that had been gradu- march 2012 went up with 25%, according to the ally constructed through the City Statute, the Urban National Institute for Geography and Statistics Reform Movement and the Ministry of Cities. As a (IBGE), the average cost of a one-bedroom pop- matter of fact, its “fast track approach” shifted the ular house in the State of São Paulo increased with emphasis away from this more ambitious, but grad- 35% over the same period, indicating real estate ual agenda of the National Housing Plan that was price escalation of around 10%. Price increases focussed on the social function of the city and use have been fuelled by the willingness to pay of values of land. While the latter had an explicit potential users with access to easy credit, as well design in terms of providing ﬁnancial incentives as by the more sophisticated strategies (such as for cities that implemented the instruments of the marketing, promotion and image building) of the City Statute aimed at value capture, the increase internationalized real estate and building industry. of social housing and utilization of vacant land, Not surprisingly, therefore, the recent subsidy ceil- the MCMV has been characterized by its empha- ings (i.e. the housing price level that allows for sis on short-term results in terms of the production federal subsidies) of the MCMV programme have International Journal of Urban Sustainable Development 49 been adjusted upward in order to adapt to real ﬁrms, and less than 15% of the total number estate price escalation. In a scenario of escalating establishments in real estate were from the city of land prices and insufﬁcient subsidy, the private sec- São Paulo, in 2010, only a little bit more than 20% tor has also been “moving up the socio-economic of the developers were locally based, while ﬁrms ladder” in the market provision of social housing with headquarters in the city of São Paulo made (Shimbo 2011), particularly attending those fami- up more than 60% of the total number of estab- lies that are earning between 5 and 10 minimum lishments in 2010. Most of the latter are larger salaries. establishments that are registered on the São Paulo Sigolo (2010) has looked into the strategies stock exchange and linked to broader tendencies of residential real estate and construction compa- of ownership concentration in the building and nies in the Greater São Paulo in general, and in construction and real estate sector. the ABC region in particular, focussing on the Similar evidence in other cities suggests that, period from the mid-1990s until 2010. In terms in the light of real estate price escalation, the of the speciﬁc proﬁle of residential products that subsidies of federal programmes have not been have been launched between 2002 and 2010 in the appropriated by the poorest of the poor (earn- ABC region (metropolitan São Paulo), units have ing up to 3 minimum salaries), but by families become smaller, not only in terms of the num- earning up to 10 minimum salaries. The impres- ber of rooms (with a reduction in the participation sive growth of housing ﬁnance in Greater Rio, for of four-room apartments and an increase in two- example, has not been able to dampen patterns of room apartments), but also in absolute size (with a socio-spatial segregation (Governo do Estado do reduction of the market share of apartments big- Rio de Janeiro 2011). The combination of accel- ger than 100 m and an increased market share erated growth, driven by a series of private and of apartments launched between 51 and 70 m ) public investments in the petrochemical industry, (Sigolo 2010). At the same time, and still accord- steel metallurgy, logistics and urban infrastruc- ing to the same author, prices have been increas- ture (Silva & Fonseca 2013), combined with the ing consistently: in Greater São Paulo, the market lack of leverage of the state over speculative real share of apartments with a price/m of less than estate markets, which is aggravated by the upcom- R$2,500.00 have reduced from 26% to 19% in the ing large urban development events (particularly period 2008–2010, while the share of apartments the 2014 World Cup the Olympics in 2016), has withaprice/m higher than R$4500.00 increased provided a number of challenges to advance in from about 5% to approximately 30% of the total the direction of more effective low-income hous- amount of projects that were launched in the same ing policy, aligned with the principles of the City period. Statute. According to data developed by this author, Initial evaluations of the federal housing pro- the modern, more globally oriented ﬁrms, based grammes in Greater Rio show that, without this in the city of São Paulo and active in residential effective leverage over real estate markets, the real estate and construction, are increasingly oper- use of subsidies with ﬁxed ﬁnancial limits by the ating in the transformation of urban space in the MCMV programme has directed construction to outskirts of metropolitan São Paulo, particularly the more distant areas with deﬁcient infrastruc- in (previously) industrial spaces that are facing ture and community services, reinforcing a vicious pressures of productive restructuring, such as the cycle of socio-spatial segregation and environmen- ABC region, Osasco and Guarulhos (where the tal degradation (Rolnik & Nakano 2011). In the international airport of São Paulo is located). speciﬁc context of the city of Rio de Janeiro, To illustrate, while, in 2004, 70% of the real the spatial allocation of construction ﬁnanced by estate developers in the ABC region were local the MCMV programme follows a real estate price 50 R. Denaldi gradient (Cardoso et al. 2011); that is, while the this group’s absolute size and participation in units distributed to groups earning between 6 and the overall housing deﬁcit has actually increased 10 minimum salaries are located in the more central during the period 2000–2008 (Figure 1). And areas, the projects targeted at beneﬁciaries earn- things are likely to get worse; to illustrate, while ing up to three minimum salaries are in the distant real estate price escalation from January 2008 to western outskirts of the city. Ninety-three percent February 2012 in Greater Rio de Janeiro was of the programme is concentrated in this western around 165%, general inﬂation in the same period zone, which provides relatively worse conditions in amounted to 25% (Mendonça & Sachsida, 2012). terms of access to water, basic sanitation, health, education, mobility and employment. 5. Conclusion Still referring to the Rio case, Klink (Forthcoming 2013) argues that socio-spatial Our preliminary analysis suggests that Brazilian segregation through real estate markets is more cities and metropolitan areas are going through a persistent in dense metropolitan areas and city particularly complex scenario. In the last decade or regions than outside the metropolis. Data from so, the approval of the City Statute, the institutional the Ministry of Cities, based on the IBGE census, strengthening and democratization of urban man- show that, while the housing deﬁcit in the state agement, economic growth and the steep increase of Rio has actually been reduced from 505,201 in in ﬁnance for the subsidized construction or acqui- 2000 to 490,230 in 2008, the ﬁgure remained sition of low-income housing all provided a sce- constant in Metropolitan Rio (i.e. 375,314 units nario of optimism regarding the potential transfor- in 2000 and 375,461 in 2008). Moreover, the mative impact of a rolled-out and renewed national socio-economic composition of the housing deﬁcit developmental regime. An increasing number of shows that, despite economic growth and sub- studies, however, has provided evidence of a sidized housing ﬁnance, families earning up to remarkable persistence of the socio-spatial and three minimum salaries have not been reached; environmental contradictions that accompany the 100.00% 80.00% 60.00% >5 SM 3 A S SM 40.00% <3 SM 20.00% 0.00% 2000 2005 2006 2007 2008 Figure 1. Housing deﬁcit per income segment – metropolitan region of Rio de Janeiro. Source: IBGE census data (Governo do Estado Rio de Janeiro 2011). International Journal of Urban Sustainable Development 51 production of urban space in Brazilian cities and will be to use the available volume of subsided metropolitan areas (Rolnik & Klink 2011). ﬁnance and resources as part of an overall strat- Our initial hypothesis for this paradox, which egy aimed at effectively moving forward with the would have to be explored in more detail through implementation of the urban reform, the national in-depth theoretical and empirical work, is the per- low-income housing programme and the social sistent difﬁculty to control exchange versus use function of land and housing, particularly for those values of land, and the challenge to effectively segments traditionally excluded from the right to implement a regulatory structure for the land mar- the city. ket based on the instruments of the City Statute. This is not only reﬂected in the challenges to effec- Notes tively apply and use these instruments, but also 1. FGTS – Fundo de Garantia do Tempo de Serviço – Garantuee Fund linked to the effective number of aggravated by the present scenario of macroeco- years a worker has been employed. nomic growth and overheated real estate markets 2. Under self-management the production of housing in cities and metropolitan areas. units or the upgrading of an area is being real- Our initial evidence on the dilemmas to design ized with control of the allocation and management and implement a social housing policy that reaches of resources and public works by the beneﬁciaries, which are organized in community associations or the poorest of the poor needs further research. cooperatives. More particularly, the hypothesis that a growing 3. The ﬁrst federal programmes aimed at self- interdependency between real estate and ﬁnance, management were created in the decade of 2000. moulded by subsidized housing ﬁnance and hous- Examples are Program Solidarity Credit (2004) and ing policies that delegate responsibilities to private Social Housing Production (2008) and in 2009, the earlier mentioned subprogramme MCMV Entities, sector agents, deserves more in-depth study, espe- the later being the main programme presently in cially considering the recent international prolifer- operation. ation of real estate and ﬁnance driven social and 4. On January 2012, a minimum salary amounted to economic crises in the OECD countries. R$622,000, or approximately US$36,000. Finally, our analysis suggests that, despite 5. The programme MCMV has also received critique in the sense that federal government has set up a per- important shifts in the development regime over manent dialogue regarding the design and operation time (i.e. from a national developmental regime of the programme with 20 of the larger building and during 1930–1985, to a neoliberalized rolling back construction ﬁrms operating in the Brazilian mar- regime in the 1990s, to a renewed, rolled-out ket (each of them having a net worth on the stock and competitive developmental regime), there are exchange of at least R$300 million). According to the more critical view, this bilateral dialogue with important continuities in the production and repro- the sector has introduced a permanent escalating duction of urban space. In that respect, it should trend in cost and subsidy guidelines of the pro- be stressed that, contrary to the territorial organi- gramme. Source: Interviews with Luciana Versiani zation and intervention of the state under Atlantic (Coordinator MCMV São Paulo) and Marcia Bozza Fordism, the Brazilian developmental state has Haddad (Exective Manager MCMV – Corporate desk). always prioritized economic growth over social 6. The ABC region is composed of seven munic- reproduction, redistribution and social cohesion. ipalities located in the southeastern part of the As such, it has never been able to consolidate Metropolitan area of São Paulo and concentrate housing and urban development policies that reach important industries such as car manufacturing and low-income target groups. petrochemical industry. Finally, although this has not been the explicit objective, the arguments developed in this article Notes on contributor suggest an agenda for practitioners in the hous- Rosana Denaldi: Centro de Engenharia, Modelagem ing and urban development sector. 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International Journal of Urban Sustainable Development – Taylor & Francis

Published: May 1, 2013

Keywords: Brazilian social housing; City Statute; land markets; urban development regimes

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Trapped by the land? Change and continuity in the provision of social housing in Brazil

Trapped by the land? Change and continuity in the provision of social housing in Brazil

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Trapped by the land? Change and continuity in the provision of social housing in Brazil

Trapped by the land? Change and continuity in the provision of social housing in Brazil

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