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Brazil: Brazil’s Urban Slum Improvements - Ruban Selvanayagam, Brazil Real Estate

Brazil’s Urban Slum Improvements – A Positive Sign for the Real Estate Industry?

Contrasted against picture perfect images of beautiful beaches, sunsets and luxury lifestyles, Brazil’s favelas (urban slum communities) have long been viewed as a negative reminder of the huge wealth divides that still exist.

Yet – despite often stereotypical images of communities being rife with crime, violence and drug trafficking – the reality is that the large majority of favela residents are hard working families who have an important role to play in the growth of what is now classified as a firm favourite ‘emerging’ nation.

In the past, the government have made several attempts to develop programmes to deal with the issue. It is debated by some that the effects of military rule over the country semi-paralysed the growth of urban housing and much of the problems that remain today would have been removed would the momentum created during those years have continued. Either way, as Brazil’s economy continues to show encouraging long term signs, the agenda of favela reformation has become more prominent in public policy with a number of initial steps being taken to deal with what is a massive and almost unprecedented task.

The first stage has to been to remove the core problems that have stifled the development of favela communities: gang leaders who effectively create microcosmic environments with their own forms of control and governance, often fuelled by the drug trade. An example of such progress was seen when a major military police infiltration programme was implemented in one of the largest favelas in Rio de Janeiro – ‘Alemão’ – in late 2010. According to Leonardo Schneider of the city’s housing union (Secovi-RJ) in an interview with the PINI construction magazine: “the arrest of the key traffickers has resulted in the real estate recovery already starting and we now expect that in three or six months both rental and sales values will have increased by 50%.” The area has also recently seen a government investment of R$ 27.9 million used to build 582 low income housing units.

A number of other examples in recent years are to be noted. In Paraisópolis – São Paulo’s city’s second largest favela (with 60,000 inhabitants) – the ‘Urbano Córrego do Antonico’ programme has seen improvements to the underground drainage system (water is now also filtered to mitigate the effects of pollution and contamination); the creation of spaces that avoid congestion issues; increased mobilisation for vehicles of various sizes; wide scale tree-planting and the creation of what has been termed as an ‘urban beach’ environment which, according to Fernando de Mello Franco of MMBB Architects: “aims to conceptualise spatial awareness, community integration and the ordinary life of the city.”

In Belo Horizonte (Minas Gerais), as a result of funding via the Programme of Accelerated Growth (Programa de Aceleração do Crescimento, PAC), the ‘Serra’ favela has seen a number of improvements including the relocation of over 700 dilapidated households as well as extensive land regeneration, wide scale greenery planting, leisure areas, a skate park and squares. These reforms have also assisted the local economy in the form of employment creation (the majority of the works were undertaken by community residents) as well as an increase in the amount of small businesses attracted to the area.

For the improvements to be sustainable it is argued that a number of key fundamentals are either needed to be maintained firmly or introduced. According to the regional director of the Rossi housing construction group, Rafael Cardoso: “the state governments of Brazil have a due responsibility to improve urban infrastructure – almost all regions where favelas are located have poor waste disposal, water, electricity and gas networks.”

Another important factor is to ensure that land is formally regularised in order for people to be able to gain property rights as well as to attract legitimate commercial activity that will serve regions (most current activity is either illegal or informal). Having such procedures in place will also assist with the prevention of unauthorised property construction. A referenced example of this has been the ‘City of God’ region in Rio de Janeiro which – after a number of significant reforms in recent years – now has a major bank serving the community; mainstream goods retailers and recently received an investment of R$ 8 million for street lighting improvements.

There is also a clear priority to completely overhaul housing conditions whilst providing options that work within affordability levels of residents. Whilst government plans with programmes such as the ‘Minha Casa, Minha Vida’ (‘My House, My Life’) have been welcomed, a significant majority of the people who they are targeted at have stated that they do not have sufficient means to be able to purchase a housing unit, despite the grants being offered (a result of inflationary pressure forcing the country’s home builders to raise their sales prices).

Ruban Selvanayagam

Ruban Selvanayagam is a Brazil Real Estate and Land Specialist providing free e-books, state guides, up-to-date statistics, strategies, interviews, articles, weekly broadcasts and more. Brazil Real Estate and Land Investment Guide

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