Where Next for Housing the Residents of Rio de Janeiro Favelas?

POSTED BY Ruban Selvanayagam, March 14th 2013

As the ongoing preparations for the 2014 World Cup and 2016 Olympic Games slowly but surely gain pace, the city of Rio de Janeiro remains in limbo – on the one hand benefitting from an unprecedented level of growth but on the other, lagging in terms of embracing a more socially inclusive society.  Serving as a global example of the intensive effects of rural-urban migration that much of the developing world witnesses today, the city is well-characterised by huge housing wealth divides: favelas (slums) that exist within a walking distance (and sometimes closer) to multi-million dollar beach side apartment blocks.

Yet, the commendable level of progress in relation to base of the pyramid housing and infrastructure policy achieved in recent years should not be discarded.  Take the continued crime and violence pacification initiatives – now operating in 31 favelas within the metropolitan region – which have led to a growing level of confidence and safer living environments.  Complementarily, notable steps have been made in improving basic infrastructure (such as via the Morar Carioca program) – ranging from improved accessibility within the favelas themselves in addition to wider reaching water, electricity and other essential utility supply.

Nonetheless, such reforms – albeit largely in their infancy – are questionable as permanent and sustainable solutions.  With 5,348 habitants per km² (and rising), land remains in limited supply and, with the complex ownership laws that govern much of the territory where favelas are located, speculation has continued to rise.   In early 2012, for instance, we saw evidence of spaces of just 9m² being rented for R$ 250 per month and self-built favela units (that invariably breach basic building regulations), that not so long ago traded for R$ 50,000 (US$ 25,300), reaching an absurd R$ 250,000 (US$ 126,600) (see this blog post from our partner Brazil real estate and land blog).

Whilst the growth of  Minha Casa, Minha Vida (“My House, My Life”) state-funded donated housing developments has benefitted a handful of  families deemed as residing in “risk” areas, evidence emerged of such units forming part of a clandestine sub-market – controlled and managed by unscrupulous brokers looking to profiteer.  The August 2012 news report below (with English subtitles) demonstrates the issue:

The 2012 evictions of favela residents residing on land prioritised for the Olympic Games (with negligible compensation packages) demonstrated the real priorities of the Rio de Janeiro and national governments in relation to the issue of housing policy.  The most commonly heard of solution of peripheral relocation will only be successfully achieved if there is a concerted effort to not only develop infrastructure at a much wider level but also create new and good quality housing projects at scale that move beyond the token (often politically driven) gestures.   Housing improvements within the favelas themselves will depend on developing an effective strategy to manage costs effectively and convincingly enough for the government to liberate the billions of Brazilian reals reserved for such purposes.  This, however, has proven to be the major challenge when taking into account rising inflationary pressures on land and other construction input costs in addition to a range of legal complications.

For a closer examination into the issue of favelas in Brazil and an introduction to the Fez Tá Pronto base of the pyramid real estate program, please see the recently released affordable housing report bought in conjunction with @feztapronto.

Categories: Base of the Pyramid Housing, Bottom of the Pyramid Housing, Fez Tá Pronto Construction System - Luxury Low Income Housing, Global Affordable Housing, Impact Investment Housing, Low Income Housing, Minha Casa, Minha Vida - Brazil Affordable Housing

2 Responses so far.

  1. This continues to be a sad state and that is why our company is willing to bring our technology and financing to Brazil to construct approximately 72,000 (3bd/1ba houses/92m2) within the next 3 years; and at the same price that Caixa has already established for the State of Rio, Minas Gerais (Belo Horizonte), and their other cities within these states.

    We intend to hire unemployed, unskilled Brazilian citizens; thereby, we will have an unlimited pool of people to train and provide – not only with employment, but with life long sustainable skills and experience.

    I can be contacted at the above email for a demonstration and we are currently in negotiations with Caixa for participation in the Minha Casa Minha Vida (MCMV) project. We have prior large-scale construction (especially in Puerto Rico) and can greatly assist in the relocation of personnel and the construction of quality homes – regardless of the economic situation of each citizen homeowner.

    Look forward to helping soon.

    GlobalSphere – Brazil Inc.
    Paul-Emile Desrosiers, CEO

  2. Paul, what is the aggregated cost per m² (average) of these houses (land, infrastructure, materials, labour inc. social charges)..? Thanks, Ruban Selvanayagam

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