HOUSING DEVELOPMENT EXPERIENCE: THE BRAZILIAN WAY

Brazil! What’s the first thing that will come to your mind when you heard this word? For some fashionistas, it will be the country’s popular colors- green and yellow. For sports aficionados, it’s the Brazilian football and basketball team and the country’s hosting of 2014 World Cup and 2016 Olympics.

The national flag of Brazil. (Photo source: http://www.graafix.blogspot.com)

The largest country in South America and Latin America regions, Brazil is the 5th both largest and most populated country in the world. Its economy has been growing tremendously, being one of the fastest growing major economies in the world and thus, its economic reforms have given Brazil a new international recognition.

Brazil was also known to have illegal slum dwellers and it dominated much of the city’s landscape. But this is now becoming a thing of the past. The Brazilian government has been making progress in their projects to legitimize illegal settlements in big cities such as Rio de Janeiro.

TIMELINE OF URBAN DEVELOPMENTS IN BRAZIL

How it all started? After the 20 years of military dictatorship, a new Constitution was adopted in 1988 and it gave municipalities the lead to start its urban development policies in order to “assure the full development of the city´s social functions and the welfare of its citizens”.

This law is very successful in the progress of urban development because it doesn’t only empower municipalities to confiscate under-utilized land but also recognized the right to property for urban dwellers living on unclaimed land for more than 5 years.

In 2001, a new Federal Law was approved and it formalized the 1988 Constitution’s urban chapter into “City Statute.” This law allowed each municipality to promote inclusive land planning and enabling the poor citizens the right to dwell and the “right to the city.”

Rio de Janiero’s cityscape. (Photo source: http://www.stildefteri.com)

The main instruments in the City Statute are:

  • Social interest zoning,
  • Land regularization tools
  • Progressive property taxes for under-utilized land
  • Selling of building rights certificates
  • Integrated urban operations
  • Land value capture mechanisms

The City Statute also created the National Council which is composed of government representatives and civil society in its policy board.

In 2003, the Ministry for Cities was created and this ministry combined all areas of urban development under one roof- housing, sanitation, mobility and urban planning. The ministry improved the planning capacity at city government level and the results are impressive because the number of municipalities with master plan increased, with the help of the government.

In 2005, a new law was again approved and resulted in the creation of National System and National Fund for Social Housing. In this system, the government funds went directly to the municipalities to help in upgrading the slum areas, infrastructures, and social housing in one condition that local government units should be able to create their own local funds and create local advisory bodies with representation from the people.

With these developments, Brazil has been progressing in its housing developments for the poor and improving its city landscape and infrastructures. And now, they started a long term National Housing Plan in 2008 up to 2023. Indeed, a very great project of the government.

THE THREE HOUSING POLICIES

Brazil has 3 housing policies that will focus on planning and investments- Growth Acceleration Program – PAC in 2007, National Housing Plan – PLANHAB in 2006-2008, and “Minha Casa, Minha Vida” (My House, My Life) Program in 2009.

The Growth Acceleration Program is a historical benchmark for slum upgrading policies because upgrading the slum communities is considered as a vital bloc for the economic and social development of Brazil. In the period of 2007-2013, a total of US$ 30B was allocated for the upgrading of slum areas, improvement in sanitation, and housing construction projects alone and a total of 1.8M families will benefit from this.

The National Housing Plan is the long-term housing plan with participation from the society. Among its integrated actions are house improvement and construction, sanitation and infrastructure, environmental recovery, land tenure regularization, social equipments, and social work.

The Brazilian government’s housing development project, such as the “Minha Casa, Minha Vida” project , have transformed the slum community into a socialized housing project. (Photo source:www.artschoolvets.com / http://www.pt.org.br)

The “Minha Casa, Minha Vida” project aims to offer a stimulus package for new houses with high significant investments and a new model of subsidies and finance for low income brackets. It targets one million homes for low-income families that earn minimum wages and it was expanded into three million houses in its second phase. Its main objectives are to generate economic growth with social inclusion, to improve purchase power, and to create expansion of markets: downmarkets.

The project involves local government and the community working as partners because a family that earns US$800 will get almost full subsidy allocated by local government criteria. The project’s market basis, families that earns up to US$1800 will get subsidy + loan, with a reduction of insurance costs and access to the Guarantee Fund while those earning up to US$ 2,500 will have a reduction of insurance costs.

IMPACT ON BRAZIL

 

The projects have impacts on the development of Brazil. These projects saw the emergence of middle classes in Brazil. The slum upgrading and housing created investments, not social expenditures. It reduced poverty and expanded the consumer market. With the investments on housing, it created employment.

The return of investments increased Brazil’s GDP, with the construction sector contributing 62% of the GDP. And with the expansion of housing finance markets, the GDP increased from 1.6% in 2003 to 4.7% in 2011.

For the real estate sector, property prices increased in and outside the informal settlers after upgrading the assets 20 to 150% more valuable. And in the last 8 years, more poor Brazilians shifted from being poor to become consumers.

 

Watch out for our next blog as we discuss about an example of what developers can do for the urban renewal of Metro Manila

WITH SOURCES FROM:

  • Anacláudia Rossbach presentation during the OSHDP-HUDDC National Convention

THIS BLOG OR ARTICLE IS OWNED BY MR. RAMON C.F. CUERVO AND MAY CONTAIN LEGAL PROPERTY WHICH IS RIGHTS-PROTECTED. IT IS INTENDED FOR PUBLIC READING ONLY. COPYING, DISTRIBUTING, OR RE-PUBLISHING THE ARTICLE OR BLOG WITHOUT THE APPROVED CONSENT OF THE WRITER IS PROHIBITED. ANY ENTITIES WHO WANT TO SHARE THIS BLOG OR ARTICLE, PLEASE CONTACT THE WRITER AND ACKNOWLEDGE THE SOURCE: www.cuervopropertyadvisory.wordpress.com  AND WRITER: MR. RAMON C.F. CUERVO, WITH MR. RAPHAEL D. TORRALBA

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One Response to HOUSING DEVELOPMENT EXPERIENCE: THE BRAZILIAN WAY

  1. fantastic put up, very informative. I’m wondering why the other experts of this sector don’t notice this.

    You should continue your writing. I’m confident, you have a great readers’ base already!

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