<%BANNER%>

UFIR



DARK ITEM
Land use policies and urbanization of informal settlements
CITATION SEARCH
Full Citation
STANDARD VIEW MARC VIEW
Permanent Link: http://ufdc.ufl.edu/UF00100721/00001
 Material Information
Title: Land use policies and urbanization of informal settlements planning initiatives for environmental protection areas in Curitiba, Brazil
Physical Description: Book
Language: English
Creator: Macedo, Joseli ( Dissertant )
Stroh, Robert C. ( Thesis advisor )
Hyden, Goran ( Reviewer )
Oliver-Smith, Dr. ( Reviewer )
Barnes, Grenville ( Reviewer )
Tanzer, Kim ( Reviewer )
Publisher: State University System of Florida
Place of Publication: Florida
Publication Date: 2000
Copyright Date: 2000
 Subjects
Subjects / Keywords: Architecture thesis, Ph. D   ( lcsh )
Dissertations, Academic -- Architecture -- UF   ( lcsh )
Genre: bibliography   ( marcgt )
theses   ( marcgt )
government publication (state, provincial, terriorial, dependent)   ( marcgt )
non-fiction   ( marcgt )
 Notes
Abstract: The United Nations concedes that the conditions of life for the one billion urban dwellers living in developing countries today are not well known. The information available on informal settlements, the dominant form of low-income housing in developing countries, is inadequate and insufficient. The development of a solid theoretical foundation is necessary to understand the complex informal settlements formation process and to develop policy that is realistic within the social, economic, and political contexts. Successful housing programs require more than four walls and a roof. Better performances are typically accompanied by support mechanisms in terms of government policy, employability enhancement, empowerment of the people and their communities, preservation of environmental quality, and development of social and economic support services. This dissertation analyzes the effectiveness of planning interventions in controlling and managing land invasions within the metropolitan region of Curitiba, Brazil. The philosophical, theoretical, cultural, and historical issues of informal settlements in Latin American countries in general, and in Brazil in particular, provide the research background to support a holistic approach. The analytical framework is based on development policies, including internal and external factors that have influenced and guided them. An analysis of initiatives to urbanize informal settlements determines the extent to which land use policies induce plans and support viable solutions. A holistic approach is necessary and aims to arrive at a conclusion in the framework of social, economic, environmental, legal, and political conjunctures of the informal settlements problem. The evaluation of existing policies, plans, and programs that make housing affordable or at least provide adequate infrastructure systems to sustain human settlements, will assist in determining which policies are more appropriate in satisfying the basic needs of urban dwellers. The comprehensive approach within a planning framework should serve as a foundation upon which other disciplines can build and encourage other scientists to develop creative ways to apply knowledge to the betterment of people's quality of life.
Subject: KEYWORDS: development, favelas
Statement of Responsibility: by Joseli Macedo.
Thesis: Thesis (Ph. D.)--University of Florida, 2000.
Bibliography: Includes bibliographical references (p. 210-219).
System Details: System requirements: World Wide Web browser and PDF reader.
System Details: Mode of access: World Wide Web.
General Note: Title from first page of PDF file.
General Note: Document formatted into pages; contains x, 220 p.; also contains graphics.
General Note: Vita.
General Note: Item removed from public access on 2/13/2012 per author. This dissertation was processed during the early electronic theses and dissertation processing by UF and this is not the final version that was submitted to the graduate school. The author will send the corrected version soon.
 Record Information
Source Institution: University of Florida
Holding Location: University of Florida
Rights Management: All rights retained by author. Full-text is licensed for access by UF students, faculty, and staff (and others in a UF library).
Resource Identifier: oclc - 45825974
alephbibnum - 002566153
notis - AMT2434
System ID: UF00100721:00001

Downloads

This item has the following downloads:

Joseli_Dissertation ( PDF )


Full Text












LAND USE POLICIES AND URBANIZATION OF INFORMAL
SETTLEMENTS: PLANNING INITIATIVES FOR ENVIRONMENTAL
PROTECTION AREAS IN CURITIBA, BRAZIL














By

JOSELI MACEDO


A DISSERTATION PRESENTED TO THE GRADUATE SCHOOL
OF THE UNIVERSITY OF FLORIDA IN PARTIAL FULFILLMENT
OF THE REQUIREMENTS FOR THE DEGREE OF
DOCTOR OF PHILOSOPHY

UNIVERSITY OF FLORIDA


2000


































Copyright 2000

By

Joseli Macedo














ACKNOWLEDGMENTS


During the time this research project was being developed and this dissertation

was being written, I counted on the generous academic, professional, financial and

emotional support of some special people and institutions.

In addition to my dissertation committee members, Dr. Grenville Barnes, Dr.

Goran Hyden, Dr. Oliver-Smith, Dr. Stroh, and Professor Kim Tanzer, who have helped

me define and shape this project and provided valuable feedback, I have received the

advice and guidance of Professor Wayne Drummond and Dr. Charles Wood. I also

appreciate all the help received from Dr. Raymond Issa and Suzanne Lawless-Yanchisin

in the College of Architecture. Dr. Ron Nutter has introduced me to the work of Sarah

Lawrence-Lightfoot, which inspired part of this dissertation, and Dr. Gary Siebein to the

world of philosophy, broadening my horizons by teaching me that philosophy is in fact

the first thing a fledgling Doctor of Philosophy needs to learn; I have benefited from their

counseling. Jeffry Wade has helped me find the best legal terms in English to express the

idiosyncrasies of Brazilian legislation and was instrumental in helping me focus. I am

indebted to my role models Jamie Jacobs, Mirna Lobo, and Johanna Looye for holding

the highest academic and professional standards and encouraging me to excel in

everything I do.

The field research in Curitiba was made easier and oftentimes a real pleasure

thanks to the assistance and hospitality of my fellow urbanists at COMEC. I am thankful

to Maria Luiza Arauijo, Rosa Costa, Ariadne Daher, Valter Fanini, Liria Nagamine,

iii









Marcia, Alexandre Pedrozo, Gil Polidoro, and Zulma Schussel for their generosity in

sharing time and information. At IPARDES, I received assistance from Rosa Moura,

Maria de Lourdes Kleinke, and Cl6vis Ultramari, and in the Municipality of Piraquara

from Euro Ribas. Additional inspiration while in Curitiba came from the students who

were organizing the Cooperativa; meeting fellow planners who still believe we can make

this a better world renewed my strength and put me back in touch with my college dream

of what it is to be a planner.

The University of Florida, through the Shimberg Center for Affordable Housing,

awarded me assistantships during my doctoral program that supported my studies. I have

also received a dissertation fellowship from the Lincoln Institute for Land Policy; I am

grateful for the confidence Martim Smolka, Director of the Latin American and

Caribbean Program, deposited in me and in my work.

On a more personal note, I am thankful to my family and close friends. I could

write another 200 pages if I were to relate all the instances when they cheered me on and

encouraged me to keep going. Jose Jodo, my father, Sam, my mentor, and Annelies, a

good friend, to whom I could always turn. Cristiane and Rossana, my sisters, and Marta,

my friend, who unwittingly became my research assistants; and my childhood friends,

Carla, who preserved my sanity during the qualifying exams, and Angela, whose example

and encouragement has kept me healthy during the entire doctorate. Each and every

member of the St. Augustine's Spanish Choir, and Fathers Gillespie and Tim, for

providing an environment where I could always find peace and inspiration; I am blessed

to have crossed paths with them. Paulo, my eternal accomplice, who, continuing his









father's tradition, always encouraged me to pursue the path of higher education; he never

ceased to believe in me and sincerely rejoiced in my accomplishments.

And finally, I would like to acknowledge the courage of residents of informal

settlements the world over. I could write a thousand dissertations and never come to

understand, truly, what it is like to live the life they live, day after day. The struggle is

interminable, and all we, students of urban problems, can do is learn from them and work

hard and apply our knowledge to helping them design the best solutions. And hope for a

better tomorrow.

















TABLE OF CONTENTS
page

A C K N O W L E D G M E N T S ................................................................................................. iii
A B S T R A C T ........................................................................................................................ix
CHAPTERS
1 IN TR O D U C TIO N .............. ........................................... ....................... ....... .
S co p e o f W o rk ........................................................................................................ .. 2
M eth o d s ............... .................................................................... . . ............ .................. 4
M ethodological Justification................................... ...................... ...............5......
Relevance to the Field ................................ .............................8
R e search O bjectiv e .................................................... .. ..................................9.. .. ... 9
2 INFORMAL SETTLEMENTS: A GLOBAL PHENOMENON.............. ................11
The G enesis of Inform al Settlem ents ........................................................................... 13
H historical Perspective .............................. ............................................. 18
The Phenom enon in B razil....................................... ......................... ................ 22
3 ENVIRONMENTAL PROTECTION: A GLOBAL NECESSITY .........................29
The Deterioration of the Urban Environment in Developing Countries...................30
Informal Settlements in Areas of Environmental Protection..................................31
The Environment, Development, and W ater .................................... ................ 32
Water and Health ............................................... 34
Protection and Conservation of W ater Sources ................................ ................ 36
4 CONTEXT: A RESOURCE FOR UNDERSTANDING.......................................41
T h e C u ltu ral C o n tex t .................................................................................................... 4 2
The Political Context .................................................. 44
1920 to 1964 : P opulist P olicies......................................................... ................ 45
1964 to 1984: M military R egim e ......................................................... ................ 46
1984 to Present: D em ocratic R egim e ................................................ ................ 47









T he H historical C ontext .............................................................. .............. ................ 50
1972-1974: First National Development Plan (I PND-I Plano Nacional de
D esenv olv im ento) ............... .. .... ......................... ................ .. .. .. .............. 50
1975-1979: Second National Development Plan (II PND-II Plano Nacional de
D esenv olv im ento) ....................................................... ...... .. ....... .. ....... .......... ... 5 1
1980-1985: Third National Development Plan (III PND-III Plano Nacional de
D esenvolvim ento) .................................................. ... ........... ........ .... . .......... 54
1986-1989: First National Development Plan of the New Republic (I PND-NR-I
Plano Nacional de Desenvolvimento da Nova Republica)................................56
T he In stitutional C ontext ............................... .........5...... ........................................ 59
Fundacgo da Casa Popular (FCP): the Affordable Housing Foundation ............62
Banco Nacional da Habitagdo (BNH): the National Housing Bank...................64
Caixa Econ6mica Federal (CEF): the Federal Savings Bank...............................75
T he L egal C ontext ................................................. .. ..................... .. ..... .... ........... 77
B razilian Environm ental Legislation ................................................ ................ 77
5 MARGINALITY IN THE PERFECT CITY ............... ....................................79
T h e U rb an P o o r ............................................................................................................ 8 3
Curitiba and Its M metropolitan R egion ..................................................... ................ 85
P planning the P perfect C ity ........................................ ....................... ................ 90
A affordable H housing ... .................................................................. ............... 94
Inform al Settlem ents ................ .............. ........................................... 106
W after Supply W atersheds ................................... ...................... ............... 115
Portrait of an Inform al Settlem ent ....... .......... .......... .....................1... 18
The M unicipality of Piraquara ...... ............ .......... .....................1... 22
The Area Known as Guarituba...... ......... ........ ..................... 124
L and U se and Invasion...................................... ........................ ............... 125
The U urbanization Process ........................................................ 127
Land Use and Legal Occupation...... .... .... ..................... 135
6 ENVIRONMENTAL POLICIES AND LEGISLATION ............... ..................... 138
Intern action al Influ en ce ............. ......................... ............................. ....................... 139
Environmental Policy and Basic Sanitation....................................... 142
A Brief H history of Sanitation in Brazil ....... .......... ....................................... 143
The N national A genda ................. .............................................................. 145
T h e L o cal A g en d a ................................................ ........................................ 14 7
National Environmental Legislation...... ........ ...... ..................... 150
1934-1981: Isolated Efforts ........................................................ 151
1981-2000: Concerted Efforts ...... ............ .......... ...................... 153
Regional Environmental Legislation ....... ... ...... ...................... 157










7 LAND USE POLICIES AND LEGISLATION...... .......................................165
Land Use Policy and Land Tenure...... ............ .......... ...................... 166
Land Tenure and Self-H elp....................................................... ............... 167
Land M markets, Legal Solutions ....... ........ ........ ...................... 168
Legal Problem s, Illegal Solutions ....... ... ...... ...................... 170
L and Policy in B razil ............................................. ... .... ...... .. ............ .. ........ ..... 172
Solo Criado (Transfer of Development Rights)...... ................. .................. 174
Favela U rbanization .................................................................. ............... 176
8 H O U SIN G PO LICIE S .................... ............................................................... 178
H housing Policy in B razil ................... ............................................................. 179
The N national H housing Policy.................................... ...................... ............... 185
L ocal P policies and P program s ...................................................................................... 189
9 A NEW PHILOSOPHY OF DEVELOPMENT..................................................... 191
In teg rate d P o licie s ...................................................................................................... 19 3
Integrated Planning ...................... ........... ............................. 198

C ITE D R E FE R E N C E S .................................................. ............................................ 2 10
BIOGRAPHICAL SKETCH .................. .............................................................. 220





























viii















Abstract of Dissertation Presented to the Graduate School
of the University of Florida in Partial Fulfillment of the
Requirements for the Degree of Doctor of Philosophy

LAND USE POLICIES AND URBANIZATION OF INFORMAL
SETTLEMENTS: PLANNING INITIATIVES FOR ENVIRONMENTAL
PROTECTION AREAS IN CURITIBA, BRAZIL

By

Joseli Macedo

May 2000


Chair: Robert C. Stroh, Ph.D.
Major Department: College of Architecture

The United Nations concedes that the conditions of life for the one billion urban dwellers

living in developing countries today are not well known. The information available on

informal settlements, the dominant form of low-income housing in developing countries,

is inadequate and insufficient. The development of a solid theoretical foundation is

necessary to understand the complex informal settlements formation process and to

develop policy that is realistic within the social, economic, and political contexts.

Successful housing programs require more than four walls and a roof. Better

performances are typically accompanied by support mechanisms in terms of government

policy, employability enhancement, empowerment of the people and their communities,

preservation of environmental quality, and development of social and economic support

services.









This dissertation analyzes the effectiveness of planning interventions in

controlling and managing land invasions within the metropolitan region of Curitiba,

Brazil. The philosophical, theoretical, cultural, and historical issues of informal

settlements in Latin American countries in general, and in Brazil in particular, provide the

research background to support a holistic approach. The analytical framework is based

on development policies, including internal and external factors that have influenced and

guided them. An analysis of initiatives to urbanize informal settlements determines the

extent to which land use policies induce plans and support viable solutions.

A holistic approach is necessary and aims to arrive at a conclusion in the

framework of social, economic, environmental, legal, and political conjunctures of the

informal settlements problem. The evaluation of existing policies, plans, and programs

that make housing affordable or at least provide adequate infrastructure systems to

sustain human settlements, will assist in determining which policies are more appropriate

in satisfying the basic needs of urban dwellers. The comprehensive approach within a

planning framework should serve as a foundation upon which other disciplines can build

and encourage other scientists to develop creative ways to apply knowledge to the

betterment of people's quality of life.














CHAPTER 1
INTRODUCTION

The immense growth of inadequate human settlements and substandard

agglomerations all over the world, developed countries included, is alarming. The

increasing number of people living in less-than-desirable conditions attests to the absence

of effective solutions and the need for adequate and affordable shelter. The United

Nations concedes that the conditions of life for the one billion urban dwellers living in

developing countries today are not well known. The information available on informal

settlements, the dominant form of low-income housing in developing countries, is

inadequate. It is estimated that at least 20 percent, but maybe as much as 50 percent of

urban dwellers, live in slums or squatter settlements (UNCHS/Habitat, 1996).

Policies and initiatives to control and diminish the proliferation of informal,

insalubrious, and environmentally unsafe settlements have been implemented with

differing degrees of success. Evaluating successful and unsuccessful policies that have

made these initiatives viable is a way to determine how to repeat the successes and avoid

the failures. Whether the root of the problem lies in the government policies put in place

to provide low-income populations with shelter, or in the inappropriate implementation of

well-intentioned programs, it becomes important-if not indispensable-to devise ways

to provide access to land and the means to build housing so that the entire population is

sheltered.






2



Scope of Work

This research project investigates the effect of land use and environmental

policies on informal settlements located in the metropolitan region of Curitiba, Brazil.

The area to be studied is located within the watershed that serves as the main water

source for the entire city, primate in the state, and most of the metropolitan region. This

area has been invaded very recently and planning interventions are currently attempting

to regulate the land, urbanize the area, and provide basic infrastructure while protecting

the watershed. Emphasis is placed on past and present governmental land use policies

and environmental legislation, their performance as far as meeting the needs of the

population, and their conformance to the existing urban and regional comprehensive

plans. The recent movement towards decentralization is explored and initiatives

stemming from decentralizing policies are compared with those implemented under

federal plans.

The subject area of human settlements encompasses a variety of issues, among

them land tenure, citizens rights, environmental conservation, social welfare, land use

legislation, and economic development, to name a few. The nature of the topic at hand,

as is the case with all research in urbanism, is comprehensive. Evidently, for the

purposes of this dissertation, the argument needs to be limited. The study focuses on

urban areas and the effectiveness of planning interventions in controlling land invasions

in environmentally sensitive areas within the metropolitan region of Curitiba, Brazil.

Intense migration to this primate city in the last thirty years and, more recently,

settlements established in areas inappropriate for habitation from both a human and an









environmental viewpoint, concentrate in this region two of the most pressing urban

problems today, namely, uncontrolled growth and environmental degradation.

Shelter scarcity is rooted in land availability and access; an analysis of land use

policies to find out how they affect the development of informal settlements is needed to

shed some light on the underlying problem. In analyzing an area within the watershed of

a city of two million inhabitants, there is a pressing need to determine whether an

environmentally sensitive area may be occupied while still maintaining the quality of its

resources or the ecocentric alternative-preserving the land and not allowing its

occupation under any circumstances-may be more appropriate, if not more politically

wise.

The impetus for this study comes from a desire to better understand the social,

cultural, and legal conditions that allow the development of informal settlements. Have

land use policies and affordable housing programs promoted or hindered the development

of informal settlements? What policies have allowed informal settlements to consolidate

and thrive as successful developments? What policies and planning initiatives have

physically and socially integrated consolidated informal settlements into the urban grid?

Legislative measures are critical to this analysis. Even if sometimes, particularly in Latin

American countries, enacted legislation is unenforceable, legislation provides the

foundation for a concerted effort to improve the status quo. The case chosen to

exemplify the issues discussed in this research project calls for an understanding of the

legal processes that are available to, for instance, regulate land tenure. How can

legislative measures protect the public patrimony and landowners while granting property

rights to those who invade public and private lands? How can legislation aiming at









environmental conservation accommodate the occupation of environmentally protected

areas?

Looking at access to land through the lens of urban planning will allow the

inclusion of technical, institutional, and normative values needed to deal with the

problem. A holistic approach is necessary and aims to arrive at a conclusion in the

framework of social, economic, environmental, legal, and political conjunctures of the

informal settlements problem.


Methods

The nature of urban planning research dictates that issues be approached within a

broader context than that of traditional scientific research, comprising various aspects

intrinsically related to the problem at hand. One could not address urban problems such

as the effect of land use and environmental policies on human settlements, and housing

delivery and affordability without placing them in an urbanistic framework. The nature

of this interdisciplinary study is both practical and theoretical, and its foundation

comprises physical, environmental, social, cultural, economic, legal, and political aspects

of the informal settlements phenomenon as applied to favelas and low-income housing

developments in Curitiba, Brazil.

The philosophical, theoretical, and historical issues of informal settlements in

Latin American countries, more specifically Brazil, will provide the research background

to support a holistic approach. The analytical framework is based on development

policies, including internal and external factors that influence and guide said policies.

The analysis of initiatives to urbanize informal settlements determines the extent to which

land use policies induce plans and support solutions. Environmental legislation is









included in the analysis as a crucial element affecting informal settlements in the study

area. Most fieldwork consisted of information gathering concerning the effects of

policies and laws on planning initiatives, data collection on existing informal settlements

and relocation initiatives, and site visits to favelas located in environmentally sensitive

areas regardless of all restrictions and mandates intended to protect the integrity of such

areas. Other information gathered includes data on development and housing programs,

social initiatives, and environmental legislation, land use and housing policies

specifically put in place to support recent planning initiatives.


Methodological Justification

Case studies were, for some time, considered to be a lesser research method in the

field of social sciences. More recently, they have been identified as the most appropriate

tool to understand complex social phenomena (Yin, 1994). A distinctive form of

empirical inquiry, case studies rely on analytical, not statistical, generalization-the

investigator generalizes a particular set of results to some broader theory. Here a case

study will be used to generalize a theoretical proposition. A single-case design is

appropriate when the case represents a critical test of existing theory, is an extreme or

unique event, or serves a revelatory purpose (Yin, 1994). The case addressed in this

research project fulfills all three criteria for single-case design:

it challenges the premises of current planning practice;

it is an extreme and unique event in that it is the informal settlement that has

grown more rapidly in the region and it is located in the main water supply

watershed for a city of 1.5 million inhabitants; and









it serves a revelatory purpose because it depicts a classic case of planning gone

bad, that is, a daunting predicament taking place despite and, to a certain extent,

because of all past planning initiatives.

Qualitative and quantitative research methods are not mutually exclusive (Cook,

1979; Bernard, 1994). Through an analogy between the discipline principles of social

science investigators and the statistical concept of degrees of freedom, Campbell (1979)

demonstrates the inherent complementarity of qualitative and quantitative methods by

describing how qualitative, common-sense knowing is not replaced by quantitative

knowing. He proposes a more sensible joint use of the qualitative and quantitative modes

of knowing and recommends that case study researchers keep good records on the

analogous aspects of their problem-solving activities as well as a record of all the theories

considered in the creative solving process.

Informal settlements cannot be truthfully and correctly represented unless the

social, human, political, legal, environmental, economic, and cultural aspects that

intertwine in this context are taken into consideration. A comprehensive research

strategy, such as case study research, is the most adequate because it allows "...an

investigation to retain the holistic and meaningful characteristics of real-life events..."

(Yin, 1994, p.3). Case studies have challenged established methods of social science

research. It has been said that social scientists have a general tendency to "focus their

investigations on pathology and disease rather than health and resilience" (Lawrence-

Lightfoot and Davis, 1997, p.8). This is particularly true in prior studies of informal

settlements, always presented as a social ill, an urban cancer, a result of the housing









problem. The negative connotation given to informal settlements has always placed

narratives in a pathological context.

Case studies require that the investigator be recognized as an active actor of

intervention (Lawrence-Lightfoot and Davis, 1997). The researcher cannot study a case

without engaging in acts of social transformation, creating opportunities for dialogue, and

facing ethical dilemmas in the process. As such, the narrative of a case study documents

human behavior and experience within the particular context in which the phenomenon

being studied is inserted.

The sources of evidence used in this case study include archival records,

documentation, personal observations and interviews. Archival records and

documentation corroborate evidence and augment information from other sources. The

basic principles orienting the data collection process included multiple sources of

evidence and the creation of a case study database. Multiple sources allow for a broad

range of issues to be addressed, and the creation of a case study database aids in keeping

the collected evidence separate from the case study narrative. Direct observation

provides additional information and adds new dimensions for understanding the context

and the phenomenon being studied. Interviews are essential sources of case study

evidence because, as for most case studies, this one is about human matters.

According to Yin (1994) exemplary case studies go beyond methodological

procedures and have five global characteristics: significance, completeness, alternative

perspectives, evidence, and engaging composition. This case study is significant in that

the subject matter is of general public interest and the underlying issues are, in theoretical

as well as in practical and policy terms, globally important. Completeness is achieved by









a comprehensive collection of relevant evidence; explicit attention is paid to the

distinction between the phenomenon being studied and its context. Alternative

perspectives, including rival propositions, and adequate and compelling evidence are part

of the narrative. And finally, inspiration drawn from the portraiture method (Lawrence-

Lightfoot and Davis, 1997) makes for an engaging composition that adequately

communicates the results.


Relevance to the Field

The scientific relevance of this research project is denoted by the absence of

effective and successful solutions for the Latin American housing problem. The

increasing number of informal, insalubrious, and environmentally unsafe settlements and

substandard agglomerations throughout the developing world verifies the truthfulness of

this statement. It is necessary to study the reasons for the difference in performance of

particular initiatives and policies and the means by which success can be achieved and

duplicated in other locations.

Research conducted in the last 15 years demonstrates that the housing problem,

historically a problem of underdeveloped countries, has reached global magnitude

(UN/DPI, 1996). Inadequate, non-affordable, or non-existent shelter presents a challenge

to the scientific community who can develop technical solutions for the expeditious and

economical construction of housing units, as well as to the political community who can

create programs and opportunities for land ownership and the development of affordable

housing. However, successful housing programs require more than four walls and a roof.

Better performances are typically accompanied by support mechanisms in terms of

government policy, employability enhancement, empowerment of the people and their









communities, and development of social and economic support services, all of which call

for a comprehensive approach to analyzing housing-related issues.

The development of a solid theoretical foundation is necessary to understand the

complex process of informal settlements formation and to develop policy that is realistic

within social, economic, and political contexts. This understanding will contribute to the

elaboration of policy that is sufficiently concrete and specific for implementation at the

national and local levels.


Research Objective

The ultimate intention of this dissertation is to propose an urbanistic philosophy

for the development of human settlements, taking into account the environmental, social,

economic, and political aspects that make the consolidation of these agglomerations

feasible and affordable within existing land policy frameworks.

The evaluation of existing policies, plans, and programs that make land

accessible, shelter affordable, and that provide adequate infrastructure systems to sustain

human settlements, assists in determining which policies are more appropriate in

satisfying the basic needs of urban dwellers. The characteristics of and problems

generating from informal human settlements are generally common to most developing

countries, so the identification of policies that foster better performance in Brazil should

be applicable to other developing countries. The results of this research project should be

applicable to any urbanized area where the need for affordable housing exists and where

the current systems are deficient, from the physical and environmental, social, economic,

legal or political points of view.









Policy recommendations to respond to basic shelter needs of people unable to

gain access to land or to participate in the formal housing market are part of the

concluding chapter. Planning initiatives that facilitate the integration of informal

settlements to the urban area are proposed. This research shall contribute to filling the

gap in our knowledge of land use and environmental policies as they apply to the housing

problem, or better yet, to its solution. Although the specific case study analyzes land use

and environmental policies in Brazil, the research results should be useful to a wider

audience. The comprehensive approach within an urban planning framework should

serve as a foundation upon which other disciplines can build, encouraging other scientists

to develop creative ways to apply knowledge to the betterment of people's quality of life.














CHAPTER 2
INFORMAL SETTLEMENTS: A GLOBAL PHENOMENON

Such settlements are known as 'ranchos' in Caracas, 'callampas' and
'campamentos' in Chile, 'favelas' in Rio de Janeiro, 'barriadas' and
'pueblos jovenes' in Lima, 'villas miserias' in Buenos Aires, coloniess
proletarias' in Mexico City, 'barong-barongs' in Manila, 'kwettits' in
Rangoon, 'gecekondu' in Istanbul, and 'bidonvilles' wherever French is
spoken. (Dwyer, 1975, p. 3, note)

The phrase informal settlements has been accepted as well as refuted by scholars

in numerous disciplines. According to Leeds and Leeds (1978), the occupation of land

that does not belong to the person settling on it is what distinguishes informal settlements

from other settlements. The inappropriate invasion of land characterizes these

settlements as an illegal form of land use because occupation is neither based on the

ownership of such land, nor in payment of rent to its legal owners. In a study identifying

the significant variables that determine the character of squatter settlements, Leeds argues

that the "only uniform identifying characteristics are their illegal and unordered origins

by accretitive or organized invasion and, because of their origin, their continued

juridically ambiguous status as settlements" (Leeds, 1969, p.44). Much controversy

could be created in trying to devise a precise definition for informal settlements, but it

seems reasonable to typify them as having two or more of the following characteristics:

illegal occupation of land, shelter built through self-help, low-income household, and

absence of infrastructure and services (Gilbert and Gugler, 1987).

For the purposes of the present argument, planned settlements are equated with

formalized land rights. References to planned settlements include those that not only









were planned before implementation, in the sense of having an area geometrically

subdivided and demarcated, but also those that comprise lots that, having been bought

and sold within the prevailing legal system, abide by the land use and zoning regulations

of their respective urban areas. Other types of occupations and arrangements are

considered informal. Throughout this document, informal settlements are equated with

unplanned settlements, with little or no infrastructure, spontaneously or purposefully

occupied.' This characterization includes all settlements comprising groups of any type

of shelter located on land that does not constitute formalized and regulated property

according to what is recognized in the urbanized areas of the Western hemisphere to be

privately owned. This land, untitled or titled to someone other than the occupant, may

have been paid for by the dweller or not, but there is no formal, legal title deed

documenting the transaction. This generalization is necessary because of the many types

of holds on lands that exist today: some are called squatments, others illegal or irregular

subdivisions, yet others invasions. Since most differentiation is made based on whether

the land legally belongs to its occupant and not on how it was appropriated, the statement

above is pertinent. The wordfavelas will also be used throughout the document, since

this is the most common term used to characterize informal settlements in Brazil, the

country on which this research focuses. Without prolonging the etymological discussion

too much, it is worth mentioning the other side of the spectrum. Nezar Alsayyad



' Some scholars assert that the majority of informal settlements are of an non-
spontaneous nature; they are created illegally but in a planned and premeditated manner,
by coalitions of economic and political interests (Burgess, 1981; Ward, 1983). In his
essay "Junctions of Town and Country," Spiro Kostof (1989) discusses the distinction
between the processes of spontaneous and planned settlements; he argues that there is no
aspect of human settlement that is not, at least in part, the result of premeditated action.









(Bourdier and Alsayyad, 1989) argues that in Third World countries the overwhelming

majority of the urban poor live in "traditional settlements" and that we refer to these as

"squatter" or "informal" settlements because we fail to see that behind those structures,

deemed "inadequate" by us, are traditional modes of existence, traditional lifestyles and

traditional economies (Bourdier and Alsayyad, 1989, pp. 530-531).


The Genesis of Informal Settlements

The relationship among people, land, and shelter is complex and differs between

nations depending on their history, culture and legal system (Eliade, 1957; Doebele,

1983; Rykwert, 1988; Payne, 1997). Even though some societies still operate under

customary tenure systems, most have, for both social and economic reasons, regulated the

ways in which land may be held (Payne, 1997). Regulated systems, however, have led

people who do not conform to them to create extra-legal systems, thus abandoning the

formal approaches to settlements (UNCHS/Habitat, 1982; De Soto, 1989).2

Informal settlements are not simply a result of massive rural-to-urban migration

or the perception that urban areas offer a better quality of life, let alone the allure of the

bright lights of the city. Informal settlements are products of national and regional

inequalities due to the changing economic nature of nations and the lack of appropriate

policies to mitigate the effects of change. Modernization and industrialization act as

catalysts for the reorganization of labor and economic relationships within rural and


2 The terminology distinguishing "informal" from "formal" sector was first introduced by
K. Hart's classic paper "Informal income opportunities and urban employment in
Ghana," published in 1973 in the Journal of Modem African Studies (v.11, pp. 61-89). A
remarkable amount of research and writing on the informal sector was produced in the
1970s. For a discussion of the reasons for the rapid diffusion and official adoption of the
formal/informal distinction, see Bromley, 1978. For a comprehensive review of research
and analytical approaches, see Moser, 1978.









urban areas. The economic push and pull associated with these processes is related to

employment and is affected by geographic, infrastructure and service factors. A

significant economic push from rural areas can be attributed to the exclusion of small

farmers from the agricultural economy by large landholders. With massive numbers of

displaced small farmers relocating to urban core areas for access to wage employment,

uncontrolled and unplanned urbanization was inevitable. The housing supply in

urbanized areas was inadequate, and with the low wages these workers were earning,

formal housing was not affordable; their only option was squatting.

The advent of informal settlements has also been attributed to the inability of

governments to provide affordable housing to low-income families, particularly in the

largest urban centers of developing countries (Abrams, 1964; Turner, 1977). Payne

(1997) argues that what seems to be an inability of governments to control or regulate

land through direct action may be a reflection of the strong demand for land as much as a

lack of government commitment or capacity to act. Rising costs and delays in executing

formal land transactions have also been blamed for the proliferation of informal

settlements in various countries. Under some formal systems, the cost of transferring the

rights of land exceeds the market value of the land itself (Dale, 1997). For lack of a

better option, these settlers, often migrants in search of employment and better living

conditions, occupy vacant land, public or private, and build shelter for themselves.

Informal settlements are the alternative for those too poor to participate in the

formal market of planned and serviced housing. The manner in which these settlements

materialize is similar across the majority of developing countries. For instance, in

Bogota, Colombia, some settlements-Barrio of 65 and Las Colinas-started as planned









rental housing built by the property owners, but expanded into abutting municipal land

where squatters built their own shacks; others-El Carmen and El Gavilan-were

occupied after illegal sale of subdivisions (Dwyer, 1975). Yet others started with the

opportunity to occupy publicly owned vacant land in river valleys, hills and deserts, such

as the 'barriadas' of Lima, Peru (Turner, 1967; Turner and Mangin in Oliver, 1969;

Dwyer, 1975).

The characterization of planned and informal settlements in Latin America is tied

to the way they are defined. In terms of the urban built environment, perception is what

determines their qualification. Informal settlements usually denote a spatial

concentration of poverty. The perception that other city dwellers have of those who live

in poor settlements feeds the ill will towards them. These settlements are viewed as

social blight, urban cancer, a break in the cityscape, and this image is projected onto the

residents regardless of their education or employment status.3 This view entails serious

misconceptions and reinforces existing prejudices in such a way as to broaden the gap

between what is perceived to be planned and legal and what is considered spontaneous,

informal, and therefore, illegal.

Informal settlements are inadequate because they generally lack minimum health

and safety standards. The random occupation of land by migrant and otherwise displaced

families creates one of the biggest challenges to urbanization. Even when the land

becomes subject to regularization, it is almost impossible to make the area comply with



3 Ana In6s Sousa, president of the Nova Holanda Neighborhood Association, is a nurse
and professor at UFRJ (Federal University of Rio de Janeiro) who was born in the favela
and has no intention of leaving, even though she could afford another place to live
(Pedrosa et al., 1990).









established land use and zoning standards, especially when the settlements are already

consolidated. Some families occupy land in areas suitable to urbanization, but the

majority invades areas that are completely unsuitable for occupation, such as riverbanks

and riparian areas prone to annual floods, steep slopes prone to landslides, and landfills,

because those are the only vacant areas in close proximity to urban areas and job

opportunities.

To the casual observer, some planned settlements may resemble informal

settlements. Developers and landowners sometimes contribute to the establishment of

formal settlements that have the same characteristics of informal settlements, but that in

fact were laid out, subdivided and sold, albeit through an informal document, to the

dweller. These areas, lacking infrastructure and other urban services, have been defined

as quasi-legal subdivisions (Harth-Deneke, 1981; Setzler, 1997). They are characterized

by their peripheral location, a process of progressive or staged development, and striking

variations in the quality of housing due to differences in investment. Some of the

settlements labeled informal were actually planned, being irregular only in the legal

sense; some consist of stable, solid dwelling structures, which are continuously improved

and far from being blighted (Leeds, 1981; Ward, 1983).

Insecurity of tenure may prevent people living in informal settlements from

investing in their dwellings and community amenities. If one were to define planned

community as real estate built by construction professionals on serviced land and

purchased by residents, the distinguishing factor between a planned and an informal

community would be the illegality of possession of the land and the risk involved in

investment when tenure is not yet established or guaranteed (Leeds, 1981). On the other









hand, a strong incentive to occupy land illegally is the low cost of establishment and

maintenance. Housing units in this type of settlement are also exempt from property

taxes, fees, and licenses to which other legal units are subject; self-help and mutual-help,

the most common building methods, are more affordable than hired labor; and extra

rooms may be rented out to supplement the family's income.

Providing basic services to destitute populations illegally occupying land presents

a quandary. The rate at which informal settlements receive urban services such as road

grading, water, sewerage, and electricity has been considered a measure of the outcome

of invasions (Roberts, 1992). Many municipal governments have not provided or

improved basic services to poor communities because they did not want to encourage or

legitimize extra-legal settlements. Regardless of political implications, lack of basic

sanitation affects the health and welfare of both the resident population and communities

around informal settlements. Protecting the health of the urban poor in informal

settlements through the provision of basic services may appear to be prohibitively

expensive, but the health and environmental consequences of allowing these populations

to live in squalor will eventually prove even more expensive (UNCHS/Habitat, 1991).

Nowadays, with the continuous growth of most urban areas, informal settlements

spring up in cities where, 30 years ago, the phenomenon was thought of as a social ill,

something that only happened in the largest cities of the developing world. And despite

the extensive research done on the subject, it seems better solutions have yet to be

devised. The pattern of development is the opposite of a formal settlement (Figure 2-1):

one, two, or a group of families occupy land not belonging to them, sometimes overnight,










and construct their dwellings.4 In time, additions to the original unit are made;

eventually, the used wood boards and tin sheets are replaced with masonry; formalization

and regularization follow the installation of infrastructure; more families move into the

area, the consolidation is completed and eventually security of tenure may be obtained.



occupation
buildings
infrastructure

Informal Pattern Pn
planning
tenure security


occupation

Formal Pattern [buildings
infrastructure

planning
tenure security



Figure 2-1: Pattern of Development for Informal and Formal Settlements
Source: Grenville Barnes, Ph.D., 1998.


Historical Perspective

The intense development of informal settlements in Latin American urban centers

has increased steadily since the beginning of the twentieth century due to migration from

rural to urban areas. Some of the larger metropolitan centers in Latin America

experienced this phenomenon in more extreme patterns than others. The history of some


4 Sometimes the number of families invading land at once is daunting: in February 2000,
approximately 10 thousand families occupied a tract of land near Lima, Peru. For more
information on this event, see Peruvian newspapers Diario Gesti6n
(http://www.gestion.com.pe) and La Republica (http://www3.1arepublica.com.pe).









invasions suggests that the form of squatter settlements depends largely on the responses

of landowners and different factions of the state, especially local factions (Roberts, 1992).

Both public and private areas are invaded. In Latin American countries where

governments still own large tracts of land, as urban centers expand these public lands are

invaded by families that are not served by formal urban housing markets. In Brazil today,

most invasions occur on private property, since publicly owned land is scarce, and new

legislation has made it a punishable crime to occupy government land.5 Sometimes

invasion of private land is actually promoted by landowners, particularly in cases where

profit can be made; some invaded areas have low real estate value, so receipt of due

compensation for what could be characterized as a taking may be advantageous to

property owners who could not realize any profit if they were to place their property in

the market. As for public land, invasion might not only be encouraged but also

consummated by politicians attempting to expand their constituencies, particularly during

election campaigns (Valladares, 1978).

There has been great variation in how governments and private owners respond to

invasions on their land. Reactions range from calling in armed enforcers to protect the

property, through accepting the invasions with resignation, to actually greeting the

invasions as a chance for indemnification, accrual of property value, or the gaining of

political mileage. The support, indifference or resistance of powerful politicians, either

holding or running for office, also plays a crucial role in the response to invasions of land

holdings.



5 For a comparison of invasions in public and private land, see Chapter 5 in this volume,
Marginality in the Perfect City.









In the 1960s and 1970s, researchers began arguing that self-help was the most

effective way to shelter low-income populations (Abrams, 1964; Turner, 1977). William

Mangin (1967) and John Turner (1968, 1972, 1977) were the first to characterize squatter

settlements as a solution to the housing problem. In her study of favelas in Rio de

Janeiro, Brazil, Perlman (1976) concurred. This argument influenced other authors who

pointed out some of the advantages of favelas as far as their dwellers are concerned:

functionality, architectural creativity, location, free rent, no taxation, no license fees, low

transportation costs, and sublease of extra rooms (Parisse, 1969; Perlman, 1976). Today,

at least in the larger urban centers of developing countries, this has become a prima facie

argument.

In the 1970s and 1980s, largely due to international pressure against dictatorships,

most Latin American countries still under non-democratic regimes adopted democratic

forms of government. Informal settlements were affected by the end of military rule in

these countries; residents of these settlements represented a large segment of the

population that suddenly became potential voters, and politicians became interested in

catering to their needs and requests. In Brazil, with the support of the Catholic Church, a

trend widely known as participatory planning evolved. Residents of informal settlements

were to be involved in the design and development stages of projects to provide

infrastructure and other social services to their communities. Some of these projects were

so successful that in less than ten years the upgraded and urbanized areas could no longer

be recognized as having started as favelas (Santos, 1981). The greatest hurdle for the

complete consolidation of these areas was the demand by dwellers for security of land

tenure.









The deterioration of living conditions of the poor, not only in Latin America, but

also in virtually every developing country in the world and in some developed countries,

became a great concern to the international community during the 1980s. The United

Nations General Assembly designated 1987 as the International Year of Shelter for the

Homeless, aiming to call attention to the plight of millions of people living in dire

conditions and to obtain political commitment to improve the conditions of settlements

and shelter for the homeless. The objective of this initiative was to challenge nations to

devise realistic national shelter strategies and execute them, urging the participation of

governments, non-governmental organizations, and the people themselves. A gradual

shift in thought had already begun before this international initiative, but a new consensus

has emerged since then.

Various hypotheses explaining the phenomenon of informal settlements have been

developed and discussed by scholars; some have been observed in practice and evaluated

while others remain conjectures:

Informal settlements may be the solution, not the problem (Mangin, 1967).

Neither governments nor the private sector have been able to duplicate the

success, defined as sheltering families, of these informal arrangements.

Relocating families from informal settlements to formally built housing

projects has proven futile (Valladares, 1978). Understanding, instead of

neglecting, these settlements would facilitate their transformation into viable,

healthful environments (Peattie, 1987).

Provision of shelter for the poor has been more effective when realized as a

gradual process. Housing built incrementally instead of being provided by









governments in the form of public housing projects is a more effective means

to provide shelter to low-income populations. Instead of programs to build

housing, government policies should focus on building institutions and

facilitating land development (Rodwin and Sanyal, 1987).

Presently, new schemes involving from land tenure and regularization to social

and economic strategies are being tried in different places all over the world. Lessons

gleaned from experiences in various developing countries can be tried and sometimes

widely applied elsewhere; the diversity of alternatives is immense and there are as many

potential solutions to the shelter problem as there are ideas of how to solve it.


The Phenomenon in Brazil

Oh Sao Paulo! ... All dressed up in velvet and silk but with cheap stockings
underneath-the favela.
(Carolina Maria de Jesus. 1962. Child of the Dark.)

The first favelas appeared in the largest Brazilian urban areas at the end of the

nineteenth century, first in Rio de Janeiro then in Sao Paulo. By 1948, there were 105

favelas in the city of Rio de Janeiro. In percentage terms, Rio's favela population

represented 6.7 percent of the total population in 1950, 9.3 percent in 1960, and 13

percent in 1970. The estimates for 1979 suggested there were approximately 1.5 million

people, or 25 percent of the city's population, living in 375 favelas (Valladares, 1983). In

1983, Rio's planning agency identified 377 favelas in the city; this same agency

presented a study in 1993 where the total number of cadastered favelas is said to be 573,

representing 17.7 percent of the population (IPLANRIO, 1993). All these estimates and

counts vary with the criteria adopted, particularly the definition of favelas. A more recent









estimate states there are approximately 1,200 favelas in Rio de Janeiro (Pamuk and

Cavallieri, 1998) (Figure 2-2).




25


20




.U-
._ 10




0
1950 1960 1970 1979 1993 1998

Figure 2-2: Percentage of Population Living in Favelas in Rio de Janeiro, 1950-1998.
Source: Valladares, 1983; IPLANRIO, 1993; Pamuk and Cavallieri, 1998 (graph by
author).


In an attempt to provide shelter to the working class doomed to end up in the

favelas of Sdo Paulo, the populist government of the 1930s and 1940s adopted the policy

of providing housing for the emerging workforce and building housing for factory

workers known as Parques Proletarios (Proletarian Parks). These were planned

communities with units subsidized by the government or by the businesses employing the

residents. This type of housing development has been criticized because of the potential

for conflict it creates between employers and employees (Blay, 1980). Even with the

provision of housing for workers by private sector firms, the accelerated growth of

industrializing urban centers gave rise to informal settlements. The number of people

flocking to cities combined with the inability of governments to provide affordable









housing to the masses resulted in people occupying vacant land, public and private, to

build their own shelter.

In the city of Sao Paulo, the state capital, approximately 1.3 percent of its

inhabitants lived in favelas in 1958, 1.6 percent in 1975, 2.5 percent in 1976, and 4.1

percent in 1978 (Valladares, 1983). In terms of land ownership, the data for the two

largest cities in Brazil is telling. A study completed in 1964 showed that 23 percent of

favelas in Rio de Janeiro were on land belonging to the Federal government, 27 percent

on State government property, and 44 percent on private land (Valladares, 1978).

Similarly to Rio de Janeiro, most informal settlements (55.9 percent) in Sao Paulo were

on private land and 37.1 percent on public land, according to a 1974 study conducted by

the Welfare Secretary (PMSP/Secretaria de Bem-Estar Social) (Valladares, 1983).

In the 1970s, the theory of social marginality gained prominence in Brazilian

academic circles (Cardoso, 1971; Kowarick, 1975; Perlman, 1976; Santos, 1979);

scholarly work was centered on the integration versus the non-integration of low-income

urban population with special attention paid to unemployment and informal settlements

(Valladares, 1983). Following the theory of marginality, the argument hinged around the

theory of capitalist accumulation (Castells, 1977) and debate focused on the market

forces that were pushing the poor towards the periphery of urban areas.

The customary approach to development then was to build planned housing on the

fringes of urban areas to shelter the families being displaced by slum clearance projects.

The intention was to provide people with basic infrastructure and decent housing;

however, these new projects were located too far from the centers of employment, and

without affordable transportation available, most families sold or "passed on" their









subsidized houses and went back to the better located informal settlements (Valladares,

1978, p. 13). The fact was that, even with no or precarious sanitation services, dwellers

would rather stay in their better located shacks than move to a sanitized lot in the

periphery; there was a comparative advantage to having access to external economies

(Azevedo, 1979).

Eventually nonetheless, urban areas of some cities grew so dense and the price of

land turned so competitive, that development in the periphery became the new pattern of

occupation. The first housing projects to emerge in these areas, where land was less

expensive, were those built or subsidized by the government; informal settlements

followed suit. The growth towards the periphery of the largest metropolitan centers

reached an unprecedented scale in the 1970s, but it actually started in the 1930s. This

trend toward the perimeter has also been attributed to pressures to develop the transport

infrastructure and to real estate speculation (Santos, 1981).

Favelas in Brazil differ from city to city and within the same city. The

topography of the occupied land offers the most striking differences. The favelas on the

hillsides of Rio de Janeiro, today recognized internationally and even made into subjects

of numerous works of art, are the first image conjured up in people's minds when one

mentions the phenomenon. Favelas on riverbanks and swamplands have a completely

different feel to them. Nonetheless, a closer look will reveal that not only are the housing

units very similar, but also the social structure, people's demeanor, textures, smells, and

sounds are remarkably alike.

Be it on a hillside, the bank of a river, or in swamplands, favelas are characterized

by a seemingly lack of physical organization. Because lots are occupied at random,









therefore not demarcated, there is no alignment of houses; however, a cursory analysis of

their placement might reveal some type of community organization, even a hierarchy of

sorts. The dwellings sometimes are mere shacks, built of the most varied materials, from

cardboard and tin to bricks and mortar (Figure 2-3). Favelas could be considered the

most effective expression of construction materials recycling; the reuse of wood boards,

rooftops, and any other type of material that is applied to erect the structure turns each

unit into a colorful example of make-do architecture. On the whole, it is aesthetically

pleasing, a beautiful testament to the creativity and resilience of human beings.

This most interesting pattern created by the seemingly casual placement of

dwellings is the first hurdle to physical planning strategies. Even if housing units can co-

exist in apparent disorder, supplying infrastructure to them cannot only be a challenge to

public works engineers, but also prove prohibitively expensive. The current process of

urbanization and regularization usually requires some sort of ordering and re-alignment

of units to make installation of urban services feasible and more economical. Besides the

physical challenge of reorganizing the urban pattern of favelas, there is also an

institutional challenge since it is common to find more than one housing unit per lot so,

even if land tenure is not regularized, the simple task of assigning an address to each unit

might become a complicated matter.

Most recently, the emphasis of housing programs in Latin America has been on

regularization and urbanization of existing extra-legal settlements. There are numerous

reasons for this new approach. One is that resources are scarce, and the full-fledged

programs delivering formally built housing to low-income families have become

prohibitively expensive and thus unfeasible. Another reason is that experience has









proved planners and architects wrong and they have come to realize that location, mainly

because of transportation costs to employment centers, was more important to urban

dwellers than the quality of the housing they occupied or the tenure status of the land

where they built their shelter.

An example of a program to regularize and urbanize existing settlements is the

Favela-Bairro Program in Rio de Janeiro, Brazil, where approximately 25 percent of the

population lives in 1,200 informal settlements (Pamuk and Cavallieri, 1998). Whether

upgrading existing favelas, which allows residents to maintain their social networks, is a

better approach than relocating families to formal housing, thus uprooting residents from

their consolidated neighborhoods, has yet to be confirmed. Theoretically, the idea of

leaving the community's social fabric intact seems sensible and more cost-effective than

the relocation plans of the 1960s and 1970s.6 Realistically, the political and

environmental feasibility of allowing these communities to remain where they are may

dictate the course of action.

Instead of vanishing, informal settlements are being transformed. The Favela-

Bairro program, established in 1993, set out to upgrade 90 of the more than 500 favelas

housing one-third of the squatter population of the city over a five-year period (four

phases between 1995-1999). The program, which reached only four percent of Rio's

favelas during its first phase, was partially financed by an Inter-American Development


6 In an interview published in 1997 in the supplement to The IDB, a publication of the
Inter-American Development Bank, Sergio Magalhdes, Rio de Janeiro's Housing
Secretary, stated the cost of providing running water, sewer and storm drainage, of
paving and lighting streets and sidewalks, stabilizing hillsides, landscaping, collecting
trash, providing day-care and land titling for the dwellings in the above mentioned
program is less than $3,500 US dollars per family-about one-fifth the cost of building
new housing on the city's outskirts.









Bank (IDB) loan. Funds were allocated for physical improvements, sanitary education

programs, and institutional strengthening within the municipality; the amount invested in

the first phase was $180 million US dollars of a total investment of $300 million US

dollars (IDB supplement, 1997). What differentiates this program from others is that the

goal is not to simply upgrade favelas, but to integrate them into the urban fabric. Another

distinguishing factor is that the project was done in partnership with the community; the

city pays for the collective services and the residents are responsible for improving their

own houses. In the short four-year history of the program, there are noticeable

improvements in the favelas that are being upgraded (Pamuk and Cavallieri, 1998).

Today, the first favelas can no longer be considered informal settlements. Most of

the original informal settlements have gone through urbanization and regularization

processes, and ownership of the land and the dwelling on it is established and secure.














CHAPTER 3
ENVIRONMENTAL PROTECTION: A GLOBAL NECESSITY

The need to protect the environment has received wide attention in the

international community for the last 20 years; however, isolated initiatives have not yet

produced the critical mass to generate a global impact that will effect change in long-

standing development practices. The United Nations Development Program 1990 report

states that the basic objective of development is to create "an enabling environment for

people to live long, healthy and creative lives" (UNDP, 1990, p.9). In its 1994 report, it

is stated that we should strive for sustainable development that is environmentally

friendly. Some economists have become disenchanted with the view of development as

an expansion in material prosperity, that is, development cannot be measured simply in

terms of economic growth and per capital income.

The recognition that the Earth's environment is sensitive to human activity and

that natural resources are not, as was once believed, infinite, was a first step in the right

direction. In recent years, the concept of sustainability has pervaded professional and

academic circles concerned with the fate of our planet. There are as many definitions of

"sustainable development" as there are environments to be protected and preserved.

Sustained development has been said to be possible only if "it is seen as a process of

evolutionary change that rests on the capacity of nature and people for renewal"

(Gunderson et al., 1995 p.6). Whatever is meant by sustainable development, whether it

is a contradiction in terms or not, it seems it has been embraced not only as an acceptable

practice, but also as something for which all should strive.

29









The Deterioration of the Urban Environment in Developing Countries

In many developing countries, the incipient poverty and rush to modernize in the

face of continuous population increase has encouraged the adoption of the cheapest, most

expedient methods of extracting minerals, raising crops, building dams and roads.

Concern about environmental degradation generated by these actions has often been

pushed to the background (Falkenmark and Widstrand, 1992). More recently, the effects

of urbanization on the deterioration of local environments and their consequent

repercussions to global environmental change have been heeded, including the socio-

economic impacts of urban environmental degradation and the importance environmental

issues bear on cities attempting to reach sustainable levels of development (Burgess et al.,

1997).

One of the serious problems faced by developing countries with limited resources,

insufficient investment in urban infrastructure, and uncontrolled urban expansion is the

pollution, depletion, and sometimes destruction of water resources. National statistics

usually do not reflect the stress on water resources in local areas exerted by rapid and

poorly regulated urbanization and industrialization. For instance, the national averages of

population pressure on water resources appear moderate in most Latin American

countries, but a majority of Latin Americans lives in urban areas, which are often plagued

by serious water pollution from industrial and household wastes.

By the end of the century, a majority of the Earth's inhabitants will live in urban

areas, with most of the growth occurring in the developing countries. In the 1950s, just

over half the people in more developed regions of the world lived in urban areas and the

largest urban centers were in more developed countries (MDCs). Today that figure is 70

percent and in another 30 years it should be 80 percent (Kinnersley, 1994). During the









1990s, 18 of the world's 21 megacities-those with more than 10 million population-

were in developing countries (Burgess et al., 1997). At the onset of the 21st century, there

is no doubt that not only the largest, but also the fastest growing urban centers in the

world will be straining the environment of less developed countries (LDCs).


Informal Settlements in Areas of Environmental Protection

The development of human settlements initiated the threat to water sources. The

aqueducts designed and built by the Romans made the use of marginal land possible

conducting water from distant sources and allowing people to congregate in denser

settlements. Urbanization, therefore, is made possible by the presence of water and, in

turn, changes the hydrological cycle of urbanized areas. The byproducts of urbanization

can affect entire ecosystems. Stormwater runoff from urban areas carry polluting

materials such as suspended solids, oxygen-demanding organic materials, nutrients, toxic

metals and refractory organic compounds (Kuhner et al., 1977). With many cities

currently built out, especially overcrowded megacities of developing countries, urban

expansion is now taking over natural and agricultural lands that are not suitable for

urbanization in the periphery of these centers.

Today, the establishment of settlements within environmentally sensitive areas is a

leading cause of watershed contamination. Increasing population concentration in urban

areas has contributed to the contamination of fresh water by pathogens, as well as to the

depletion of water sources. As population pressure continues to mount, health conditions

are destined to deteriorate because of poor sanitation and malnutrition. New settlements

in naturally hazardous areas, such as wetlands and floodplains of major rivers, create

enormous potential for disaster. Informal settlements, because they have neither









sanitation nor other infrastructure services, both contribute to and suffer from the health

consequences of an unsafe water supply. The United Nations has estimated that between

30 and 60 percent of urban populations in developing countries live in such informal

settlements and that, if the current growth rates remain, these populations will double

every 10 to 15 years (UNCHS/Habitat, 1991).


The Environment, Development, and Water

Water is one of our most valuable and precious natural resources, and as such, it

needs to be conserved and have its quality preserved. Only 2.5 percent of the world's

water in not salty, and two-thirds of that is confined in icecaps and glaciers. The

remaining one-third is subject to the continuous hydrological cycle (Figure 3-1), with 20

percent ending up in areas too remote for human access, and 60 percent coming at the

wrong time and place in the form of monsoons and floods, and thus not being collected

for use. So, of the total amount of fresh water in the planet, less than 0.08 of one percent

remains to be used by people, with about 70 percent used in agriculture and 30 percent

used for households and industry (World Water Council, 2000).

The depletion and contamination of water bodies is caused by an array of human

activities, such as the clearing of land, withdrawal of fresh water, and disposal of wastes.

These and other activities, particularly urbanization, introduce disturbances in the water

cycle that resonate throughout the Earth's environmental systems. These disturbances are

accelerated by the world's continuing population growth.

The underlying issue is the shared purpose that water bodies serve. Water as a

natural resource is a life-support system requiring high standards of purity, but this is the

same system used for waste-disposal, and the toxicity of wastes is becoming more and









more hazardous. Water infrastructure affects human health most positively when it

makes water easy to get for daily use and easy to dispose of, reliably, after use. A World

Bank estimate has suggested that nearly 30 percent of the global disease burden may be

caused by inadequate infrastructure, namely, poor water supply and sanitation systems

(World Bank, 1993).

Levels of urban per capital water consumption vary greatly throughout the world

both in developed and developing countries. However, neither personal hygiene nor

public health requires water for domestic consumption to exceed 100 liters per capital per

day (Kirke and Arthur, 1984). The average daily consumption in developing countries

varies greatly due to not only differing behavioral and cultural practices, but also

availability of potable water. Figures in liters per capital per day (lcd) range from 15 lcd

to 70 lcd as a minimum and 35 lcd and 190 lcd as a maximum.1 In modem sections of

metropolitan areas, rates of water-use range from about 200 lcd up to 600 lcd

(UNCHS/Habitat, 1984).

Adverse impacts of land development may be minimized through structural and

management techniques. However, in some cases, restricting new development in

protected areas is the only means to successfully avoid pollution and contamination of

water sources. Another serious problem is depletion, which sometimes may have

irreversible consequences. An extreme example is Mexico City. In the early 1990s,

pumping of ground water was being increased at rates 40 percent faster than that of

natural recharge (Kinnersly, 1994). By adopting a new paradigm, where a user



' The liters per capital per day figures (lcd) were obtained from World Health
Organization statistics cited in Saunders and Warford, 1976, p. 43.









association manages the Hermosillo aquifer, Mexico reduced pumping by 50 percent, so

that now abstractions are equal to aquifer recharge (World Water Council, 2000).


Water and Health

The lack of safe drinking water and adequate sanitation is one of the major health

and economic consequences of surging world urbanization (UNCHS/Habitat, 1991).

Public health considerations lead to public water supply and sewerage being widely

regarded as a community or social service. A regular supply of potable water is essential

for survival, and quantities in excess of the minimum amount to support life offer a

variety of health benefits and improvements to living standards. The most widely used

qualitative standards for water supply, based on a number of chemical, physical, and

biological indicators, are those of the World Health Organization.

International and domestic efforts have made clean drinking water available to 1.3

billion people and sanitation services to an additional 748 million people in the 1980s;

however, these efforts were successful only in rural areas (UNCHS/Habitat, 1989). In

urban areas, the number of residents without access to water grew by 31 million during

that decade, while those without sanitation grew by 85 million. By 1990, at least 377

million urbanites lacked basic sanitation services (UNCHS/Habitat, 1991).

The satisfaction of basic needs, including adequate shelter, water supply and

sanitation is strongly linked to health. In many countries, the definition of housing

services subsumes those of fresh water supply and sewerage. There may be a major

divide within the same urban area between those with ready, comfortable access to safe

water and sanitation and those who live without them.









The health status of the population of many developing countries today is no

better than that of nineteenth-century Europe when the principal concern with water

supply was the potential that existed for transmission of waterborne diseases. Human and

animal wastes flowing into rivers or reservoirs introduce pathogens that cause a myriad

of serious water-related diseases, including typhoid, cholera, gastroenteritis, hepatitis,

tuberculosis, trachoma, amoebic infections, bacillary dysentery, diarrhea, and intestinal

worms. These maladies may account for over three-quarters of all disease in developing

countries, and a large share of deaths (Falkenmark and Widstrand, 1992). While poor

water quality causes some diseases, others are aggravated and spread because of lack of

water, of whatever quality, within reach for basic hygiene. A troublesome aspect is that

having too much water nearby can propagate some of these diseases while having too

little may spread others.

Precautions and remedies for diseases linked to water may be devised according

to the following classification:2

water-borne: water carries the infection, such as typhoid and cholera;
water-washed: lack of washing affects skin or eyes, as in scabies or trachoma;
water-based: via parasitic worms depending on aquatic life-cycles, as in
schistosomiasis and guinea worm;
water-related insect vectors: such as malaria and yellow fever.



There are complex relationships between water and human health. Water acts

simultaneously as a life-supporting system and a spreader of infection. The main

purposes of networks of water pipes and sewers, water and sewage treatment plants,


2 This classification is attributed to G. White et al., 1972 cited in Kinnersley, 1994 p. 19.









reservoirs and the like are to guard against all these hazards to public health and, beyond

that, to make good water and sanitation accessible to the people for their ready and

comfortable use at home and at work.

On the issue of water quality, caution needs to be exercised. Water treatment,

sometimes deemed more economical than the prevention of water contamination in the

first place, is not the solution for clean and safe water supplies. Although water is

believed to be rendered safe by appropriate treatment, there are serious problems still to

be resolved, for instance the fact that some viruses (e.g. infectious hepatitis) and some

trace chemicals (e.g. synthetic organic chemical compounds) cannot be removed by water

treatment. The development of water treatment technology, particularly disinfection with

chlorine developed at the beginning of this century, has rendered professionals and

technicians too confident about using polluted sources.


Protection and Conservation of Water Sources

Protection of water sources by means of development management and land use

control is the soundest practice in both economic and ecological terms. The fringe

benefits to the environment are numerous, such as preserving the lands within aquifers

and watershed areas, avoiding the use of chemicals in water treatment prior to

consumption, and protecting the aquatic biota. Water conservation practices such as

reducing water-use rates and system losses are also beneficial for they prevent, or at least

delay, the need for new, costly water sources.

The key to understanding how population affects and is affected by the global

water systems is an understanding of how the water system operates. The water cycle

propagates environmental disturbances onward like a chain reaction; these disturbances









cause secondary effects on the groundwater table, the fertility of the soil, the seasonal

variation of river flows, and the chemical and biological characteristics of the moving

water (Figure 3-1).

Physical, chemical, and biological processes control the transport of

contaminants. Pathogenic contaminants originating from sewage disposal (on-site septic

systems and landfills) include protozoa, bacteria, and viruses. The movement of each

contaminant will vary based on its chemical composition and its reaction to the

surrounding aquifer materials.3 Pollution of rivers and other surface waters is often

difficult to identify at first sight but more imperceptible threats may arise from substances

leaching through the strata from a variety of activities. These polluting substances move

slowly through the permeable layers and spread over a wide area, which makes the

threats to ground water "assuredly invisible" (Kinnersley, 1994, p. 137).

Centralized supply systems are common in almost all urban areas. Water is

extracted from either surface water sources (rivers, lakes, reservoirs and springs) or

underground sources (aquifers and infiltration galleries). Extracted water is usually

treated, although high quality underground sources may need no treatment, and

distributed to the main parts of the city by a primary network of underground pipes and to

sub-areas and groups of houses by secondary and tertiary mains.

The source of all groundwater is recharge from precipitation or surface water that

percolates downward into the aquifer.4 For some time there existed the notion that the


3 For a full description of physical, chemical, and biological processes see Witten and
Horsley, 1995, pp. 17-21.

4 Groundwater is defined as "the water that fills, or saturates, open spaces in consolidated
or unconsolidated rock formations in the subsurface environment below the water table."
(Witten and Horsley, 1995, p.5)







38
filtration occurring during percolation through the various layers of soil and substrata was

enough to purify the water before it reached underground deposits. That notion has been

disproved (Jaffe and DiNovo, 1987; Kinnersley, 1994; Witten and Horsley, 1995); it

takes little to contaminate groundwater supplies. In addition, it is very difficult to remove

certain contaminating substances once they reach the water table.

Preventing the contamination of water sources is a more effective way to deal

with problems before they occur, especially given the slow movement and minimal

reduction of contaminants in groundwater and the high cost of water treatment. Water

sources must be protected for public health and welfare reasons, but also for economic

reasons. The cost of remedying water contamination is higher than the cost of having its

quality preserved through effective protection programs (Witten and Horsley, 1995). The

benefits of water-supply networks or projects to improve sanitation do not lend

themselves so readily to pricing. The value of better health or lower mortality, even if it

could be assessed, may not be dependent on safer water supply alone. Although difficult

to quantify, there are much greater benefits in investing in water supply and sewerage

systems simultaneously than in doing so separately; so it may be more effective to look at

levels of investment in all the appropriate basic needs services together than to examine

them individually (Thomson, 1984).

Water quality benefits can be classified into the following major categories

(Heaney and Waring, 1980):

public health: to avoid health effects on man from water pollutants such as
organic and inorganic chemicals and microbiological pathogens;
recreation: to increase the recreational potential of outdoor environments;
aesthetic: to reduce disutilities resulting from undesirable and unpleasant
qualities; also related to recreation, property values, and social benefits;









property values: to maintain the real estate value of land;
economic: to reduce cost of water treatment and the damages caused to
downstream users in the absence of treatment;
social: to increase humanistic pleasure, albeit not quantifiable in monetary
terms.
The isolation of water sources through acquisition of surrounding land used to be

the most common practice to protect watersheds. With the accelerating pressures of

urbanization, it has become increasingly difficult, especially from the economic

development perspective, to maintain this precept. Watershed management strategies

have been devised to protect water supplies from contamination while allowing

watershed development, however, precise methods of assessing land use effects on water

quality and predicting the health effects of drinking treated water from a polluted source

do not yet exist (Burby et al., 1983).

Much of the pollution of urban water supplies in developing countries is tied to

the explosive growth of informal squatter settlements in the periphery of most cities.

These settlements often spring up on low-lying lands and riparian areas; the stormwater

and the human and solid wastes proceeding from them flow untreated into the urban

water source (Falkenmark and Widstrand, 1992).

Based on the premise that economic efficiency is a key policy in most countries,

international agencies recommend the following steps when formulating a water

conservation strategy (FAO, 1995):

assess data availability
determine the value of water in different uses
project water demand
assess the economic efficiency of existing water allocation
evaluate analytical methods used for water resource inquiries







40
review and evaluate the ability of water pricing and the cost recovery policies
to meet national objectives
assess the availability and adequacy of private and public capital for
investment in water systems
review institutional, legal and regulatory systems


It is recommended that policy-makers establish a clear political mandate for

environmental protection, strengthen existing legislation and agencies involved in

monitoring and compliance activities, enforce penalties and regulations, examine

economic incentives, mandate environmental impact assessments for major development

projects, establish appropriate standards, and finance environmental programs (Witten

and Horsley, 1995). In addition, producing reliable and consistent data on supply, use,

and treatment of water is critical for the development and management of water resources

systems and programs.

The recent impetus, notably sponsored by international and non-governmental

organizations, to protect the environment in general and natural resources in particular,

has generated unprecedented global interest in environmental issues. Bringing the

environment to the forefront of development discussions has compelled individual

countries, and their governing bodies, to heed international pressure and adopt policies

and legislation that address environmental matters. To understand how these new

practices are being implemented, it becomes necessary to use the context in which

transformation occurs as a resource.














CHAPTER 4
CONTEXT: A RESOURCE FOR UNDERSTANDING

Any research being conducted within a phenomenological framework must

address the historical, political, institutional, legal, social, cultural, and environmental

contexts within which the documentation of the phenomenon is carried on. Thus, the

experience is framed and shaped by the setting, allowing for the verification of the

qualitative aspects of the research.

To analyze the particular case, which is the object of this research, the context in

which that phenomenon is placed will be explained. The framing of the cultural

environment of Brazil will establish the boundaries in contrast with other developing

countries in the world where the same phenomenon has been observed. A historical

perspective on the political climate that has guided policies and institutionalized the

system in recent times will grant the reader a better understanding of the institutional and

social contexts. Finally, the outlining of the legal framework within which this

phenomenon is allowed to develop will clarify the most recent changes affecting the

phenomenon of informal settlements in Brazil.

The emergence and growth of informal settlements in Brazil can only be

discussed within a framework established by the political and cultural particularities of

the country and the main events that dictated policy-making in the last 80 years. One of

the main practices observed, regardless of the prevailing regime, is that of clientelism. It

becomes important to discuss this practice prior to introducing the housing discussion









because it is intrinsic to every institution in Brazil, and affordable housing can only be

addressed within an institutional framework.

Housing research only started its consolidation as a field of study in Brazil in the

1970s, coinciding with the increasing housing crisis in the country. Although some

studies were carried out during the 1950s and 1960s, only when informal settlements-

known as favelas-became a scar in the urban fabric did housing become a specific area

of study. Scholars from fields as diverse as sociology, anthropology, architecture,

geography, economics, law and urban planning, especially some international scholars,

contributed to the research impetus. As with the favelas, studies about the development

of low-income housing in the periphery of urban areas, including illegal subdivisions,

only began to be analyzed after they had become an irreversible problem. This suggests

that not only the academy, but also policymakers are always late in dealing with urban

problems.


The Cultural Context

In the context of developing countries, Brazil is listed by the World Bank among

the world's upper middle-income economies.' Although it has the world's eighth largest

economy, Brazil presents most of the serious problems encountered in all of the

developing countries. There are ten metropolitan areas with more than one million

inhabitants in Brazil, but only Sdo Paulo and Rio de Janeiro-the dominant cities-have

been researched and analyzed extensively, receiving more empirical attention than any

other "secondary" city (Klak, 1990).


1 The World Bank's main criterion for classification is gross national product (GNP) per
capital. Low- and middle-income economies are referred to as developing economies,
therefore, Brazil will be referred to as a developing country.









The south and southeast regions of the country have had the highest urbanization

rates (Table 4-1). The southeast region has always had the highest rates of all regions

while the south region crossed the 50 percent threshold during the 1970s. The 1991

Census found that 75.6 percent of the total Brazilian population lived in urban areas

(IBGE, 1991). Only five years later, that number had gone up to more than 78 percent.


Table 4-1: Urbanization Rates for South and Southeast Regions of Brazil, 1960-1996
Regions Urbanization Rates (%)
1960 1970 1980 1991 1996
South 37.10 44.27 62.41 74.12 77.21
Southeast 57.00 72.68 82.81 88.02 89.29
Brazil 44.67 55.92 67.59 75.59 78.36
Source: IBGE. 1960 to 1991 Census (Censo Demografico) and 1996 Population Count
(Contagem da Populacgo).


As in most urban centers of the developing world, in Brazilian cities the levels of

utilities and services available to the population decrease as distance from the center

increases. A real estate market that institutes a steep land cost gradient and the virtual

absence of government programs that facilitate access to affordable housing drive low-

income populations toward the periphery of urban centers, where more land is available

at lower costs. However, even in those cities where public transportation is available and

reliable, commuting costs might make it unfeasible for families to commute from the

periphery to the centers of employment most often located in the urban core. Unable to

commute to the core-where they have access to employment opportunities, social

services, and other urban amenities that attracted them to a metropolitan region in the

first place-and unable to afford adequate housing close to or within the urban core,

migrant and poor families invade land and settle in favelas. This is the preferred









alternative since basic infrastructure and other services are usually not available in the

periphery; however, the competition for urban land has become so fierce that many

favelas are found today in the periphery of major urban centers.

Favelas are a common sight in virtually every Brazilian city, evidence of the

extreme social and regional inequalities found in the country.2 In a great number of

Brazilian cities, these unsuitable dwellings are the only housing alternative available to

low-income families. In recent years, the poorest segments of the population have not

been able to afford traditional low-income housing. In order to reach the poorest groups,

sites-and-services and upgrading of squatter areas have been successfully utilized.

Changes in construction standards as well as minimum lot size and other site

specifications have also facilitated access to shelter. Nonetheless, the number of people

migrating to Brazilian urban centers continues to grow, and with it, the housing deficit.

To understand the magnitude of this on-going problem, one must look at its roots.

The nature of the Brazilian political system, the development plans implemented in the

last 50 years, the housing policies devised since lack of sufficient shelter was recognized

as a national concern and, more recently, environmental legislation enacted to protect

natural resources now being depleted by the advancement of urbanized areas into natural

areas establish the context for understanding the nature and dynamics of the problem.


The Political Context

Clientelism is an all-pervading part of a society's political culture. It has a long

tradition in many societies and is a function of the lack of impersonal rules and collective


2Thomas Klak (1990) presents a comparative study of cities in different regions of Brazil
in his article "Spatially and Socially Progressive State Policy and Programs: The Case of
Brazil's National Housing Bank."









action. Usually, clientelist patterns prevail throughout the hierarchy of social strata

(Gilbert and Gugler, 1987). Brazilian society has had clientelism embedded in its

political culture throughout its history, from colonial times, when the king of Portugal

claimed full personal power, to recent times, when the new bureaucrats and political

leaders reward personal loyalty and use their positions to further their interests (Shidlo,

1990). Today, along with populism, clientelism is one of the principal forms of political

participation in Brazilian politics (Gay, 1994).

The core of the clientelist system is the exchange of economic and social favors to

a poor and socially fragmented population in return for party support, characterized by

unequal power and status between actors, reciprocity, and contractual informality (Gilbert

and Gugler, 1987; Shidlo, 1990). There is abundant evidence that Brazilian politics,

especially in regards to housing, has been and still is of a clientelist nature (Azevedo and

Andrade, 1982; Chinelli, 1979; Faria, 1994; Gay, 1990, 1994; Valladares and Coelho,

1995). The literature on the subject provides historical and empirical evidence that

clientelism is alive and well in Brazil; it happens both at personal and institutional levels,

and it affects individuals' lives as well as entire sectors of the population.


1920 to 1964: Populist Policies

The best-known Brazilian politician to exchange votes for service delivery to the

poor was Getulio Vargas, the populist leader of the 1930s and 1940s, who reinforced his

power as President by tolerating squatter settlements and, when politically expedient,

extending public services to them. During his campaign in the late 1940s, national

investment in urbanization of settlements was increased, no doubt, to improve his

potential electability (Miller, 1997). The Vargas regime expanded state intervention,









monopolizing all mediations between society and the political elite and mobilizing the

urban population (Shidlo, 1990).

One of the novel institutional developments during these populist times was the

establishment of the first national institution designated to promote the affordability of

housing: the Affordable Housing Foundation (FCP-Fundacgo da Casa Popular). The

creation of the FCP and its distribution policy were heavily influenced by political

considerations and clientelism became a characteristic of the state housing market as

demand exceeded supply (Shidlo, 1990). A number of housing units were set aside so

they would be available to public servants and to exchange for political favors. Planning

decisions, such as where to build as well as the selection of buyers, were made in a

completely clientelist manner (Azevedo and Andrade, 1982). Planning policies were

affected in that the decisions of where to build the housing complexes seemed to be

politically motivated and not based on need. To witness, Sao Paulo, the most urbanized

state at the time, was ranked third in number of units built by the end of 1960, none of

them in the city of Sao Paulo, the state capital (Azevedo and Andrade, 1982).


1964 to 1984: Military Regime

The clientelist model was said to be extinct with the crisis of populism and the

military coup of 1964, which was to bring an entrepreneurial, technocrat, and politically

neutral solution to the housing issue (Azevedo and Andrade, 1982). Notwithstanding,

data on development and housing policies corroborate the fact that certain sectors of

society were still coddled during the period the country was under military rule. The

military government was committed to consolidating power by exploiting the monopoly

of the state in key areas, such as housing; so, political support was won through selective









and partisan distribution of public housing (Shidlo, 1990). Housing was a political

resource, an instrument of power and influence.

The National Housing Bank (BNH-Banco Nacional da Habitacgo), created in

1964 to finance housing for low-income families, gave the government the opportunity to

control from the center the allocation of a crucial resource. The Bank's policy shifted

though, and in 1967 the first programs to finance middle-income housing were

implemented. One could argue this decision was an attempt to replenish their coffers and

balance the defaults on loans to those who were insolvent (Azevedo, 1979); on the other

hand, granting low-interest financing privileges to influential sectors of the society is not

an unreasonable argument (Portes, 1979; Bolaffi, 1980; Valladares, 1983). The

advantages awarded to those with higher incomes resulted in 50.2 percent of the total

number of units financed by the BNH being in higher income programs by 1974

(Valladares, 1983).

The lack of subsidized and affordable housing and the soaring prices of land

forced the poor to find solutions to their need for shelter outside of conventional markets

(Valladares, 1978). Constructing their own homes with whatever materials were

available on unoccupied public or private land was the chosen alternative. Available land

was gradually invaded by individuals or a few families at a time, but many invasions

were actually promoted by landowners, politicians and their local ward heelers who

exchanged material benefits for support and assistance.


1984 to Present: Democratic Regime

The end of the military regime introduced electoral politics to then widespread

informal settlements, and governments quickly recognized the opportunities that low-









income communities offered for social control, political manipulation and vote catching;

they could no longer afford to ignore the demands from residents for services and land

titles (Moser, 1982; Gilbert and Ward, 1985; Hardoy and Satterthwaite, 1989).

The return to democracy and direct elections brought on a new political reality

and individual actors identified opportunities for gain. Politicians started interacting

directly with the population, particularly during election campaigns, exchanging promises

to extend infrastructure and transportation lines for allegiance. Elected officials consider

squatters an important political constituency, attempting to comply at least in part with

their demands. Entrepreneurs develop and sell lots, formally and often informally, in

unauthorized subdivisions on the fringe of urban areas. They delude local planning

authorities and buyers while protected by politicians and high-ranking government

officials (Chinelli, 1979; Gilbert and Ward, 1985).

The settlers accepting favors are not naive; they know perfectly well the

opportunistic nature of these promises and they use the patron-client networks and the

political interest groups to their maximum advantage. When demands are made on behalf

of the community, they are either carried out through a community association or through

a self-appointed political leader and his/her organization. These demands usually

concern land tenure formalization and municipal services; ironically, as needs are being

met, these brokers lose power. The existence of such agents offers evidence that the

populations in self-built settlements are, contrary to prevalent belief, organized and

concerned with political activity at the local level (Butterworth and Chance, 1981). It

also shows that people find a way to deal with the exclusionary nature of Brazilian

politics and manipulate the system, even if they cannot significantly change the status









quo. Favela leaders have learned to manipulate their relationship with politicians and

administrators to the favela's maximum advantage (Gay, 1994).

Clientelist politics offer the urban poor an opportunity to attain the economic

resources they need. Social, economic, and political inequality, which first brought up

patronage politics, may be the very reason that clientelism survives in contemporary

Brazil (Gay, 1990). Some scholars have argued that major political parties or

governments requiring the political support of the poor is one of the factors allowing

informal settlements to develop in the first place (Gilbert and Gugler, 1987; Roberts,

1992).

Clientelism influences policy in that arbitrary decisions are being made

concerning matters that affect communities and citizens at all levels, from the local

squatter who has befriended a party worker to an entire stratum of the population as

illustrated in the BNH's policy changes mentioned above. Even if clientelism has

benefited people who would not have their basic needs tended to otherwise, it is far from

qualifying as a necessary evil. The fact that it is so ingrained into the country's political

culture and social customs makes it that much harder to eliminate. Nonetheless, a system

that ensures access to land and basic services, as well as the equitable allocation of scarce

resources should be the goal of a serious government that is interested in protecting

citizens' rights. Clientelist practices could be reduced through the implementation of

privatization policies. Increased market competition should improve economic

performance of social policy agencies and reduce the patron-client character of the

allocation of resources. Another way to reduce clientelism may be through increased

accountability at all levels of government, including local agencies; having to justify









decisions and conducting needs assessments as part of planning projects and allocation of

services and resources would curtail opportunities for favoritism. Only a "fairly dramatic

shift in the distribution of economic and political power in Brazil" would eliminate the

attractiveness of clientelism as a rational proposition (Gay, 1990, pp. 664-5).


The Historical Context

Brazil had three National Development Plans (PND-Plano Nacional de

Desenvolvimento) introduced under the auspices of military administrations, or as they

were referred to then, the Governments of the Revolution, during the 1970s and 1980s.

After the end of the military regime, the First National Development Plan of the New

Republic (I Plano Nacional de Desenvolvimento da Nova Republica) was instituted.


1972-1974: First National Development Plan (I PND-I Piano Nacional de
Desenvolvimento)

The first National Development Plan (I PND) in Brazil was instituted during the

third Government of the Revolution, the Medici administration.3 The two main stated

objectives of the plan were, not only to keep Brazil among the top ten nations in the

world, but to increase its GDP so it would become the world's eighth largest market

economy, and to increase the per capital income to $500 US dollars by 1974. The focus

of this first plan was economic development and modernization, following the first two

military administrations whose focus had been economic reconstruction and accelerated

economic expansion. Among the objectives, education and employment are cited as part

of the social integration policy, land policy is not mentioned, and housing is included in



3 Instituted by Law N 5727 of November 4th, 1971 (Republica Federativa do Brasil,
1971).









the intended expansion of social development programs with a promise to create a special

fund for families with incomes below the levels served by the Housing Finance System

(SFH-Sistema Financeiro da Habitacgo). The Plan cites the number of housing units

built through SFH by 1970, 126 thousand, and sets the goal of 238 thousand units, an 89

percent increase, by 1974.

The bulk of investments was allocated to energy, transportation, and

communications projects. Regional development projects address land redistribution

programs in rural and undeveloped areas, particularly the Northeast and the Amazon, and

define a growth process based on development poles intended to curtail the indices of

rural-to-urban migration that had been consistently increasing since the 1950s.

The time of the first PND was later dubbed the "Brazilian miracle." With

financial resources being constantly and forcefully injected into the country, the plan's

objectives were surpassed: per capital income reached $700 US dollars by 1973 and the

country went from ninth to eighth in the GDP ranking (II PND-1975/79, 1974).


1975-1979: Second National Development Plan (II PND-II Plano Nacional de
Desenvolvimento)

The second National Development Plan (II PND) was instituted during the fourth

Government of the Revolution, the Geisel administration.4 The two main stated

objectives of the plan were to consolidate Brazil's position as the eighth largest economy

in the world in terms of GDP, and to increase the per capital income to $1,000 US dollars

by 1979. The objectives of this second plan continued to include development and

accelerated growth, but focus shifted to developing its own energy resources as a matter


4 Instituted by Law N 6151 of December 4th, 1974 (Republica Federativa do Brasil,
1974).









of national security, a repercussion of the global oil crisis. Policies for social integration

and the more equitable distribution of wealth were still included, but focus was on the

potential to become a new world power integrated into the industrialized world, with the

recognition that the same rates of growth experienced during the first plan would be

difficult to attain. Poverty was recognized as a problem that needed to be addressed,

along with the precarious situation of the population in the largest urban centers.

The strategy for national integration through regional development projects

continued its purpose of balancing growth in the various regions of the country,

particularly the Northeast, the Amazon, and the Midwest, which detracted from the

Southeast and South Regions where the largest urban centers and percentages of

population were concentrating. To this purpose, the plan's demographic policy proposed

to foster but re-direct population growth, decentralizing investment and allocating funds

for urban improvements in medium-sized cities and secondary poles. The basic goal of

the proposed urban policy was to distribute settlements in the interior of the country,

defining the social and economic functions of each city subject to the overriding national

and regional development objectives. The stated intention was to impose a rational

model, rather than allow planning to be guided by evolution trends; functionality,

efficiency, and orderly and disciplined growth were the prevailing aim. General priorities

of the urban development policy were: mass transit, land use, zoning, sanitation, and

social facilities. Specific priorities for each region included slum clearance and crime

prevention for Rio de Janeiro and So Paulo.

The social development strategy included improving the distribution of wealth,

not only by means of continuous accelerated growth, but also redistributive policies, such









as an employment policy to curtail underemployment and a salary policy to ensure salary

parity.5 Land policy is not mentioned, and housing policy is a general objective within

the social development strategy to conceive programs that will benefit the lower-income

brackets of the population through improvement of basic urban services.

Reducing pollution and preserving the environment and natural resources,

especially in the largest urban centers, were recognized as important aspects of urban

development in view of increasing and unbalanced urbanization rates. A basic premise

stated in the plan was that restricting the access of underdeveloped countries to the stage

of industrialized societies under the pretext of reducing the worldwide pollution problem

was not acceptable and that the burden should fall on industrialized nations, the ones

primarily responsible for the increasing worldwide pollution.6 Preservation of natural

resources included soil, vegetation, and wildlife. Water conservation was mentioned as

part of the necessity to control the "pollution of poverty," that is, requiring basic

sanitation infrastructure to prevent "the endemic diseases which go with poverty" (II

PND, 1974, p. 36); and industrial effluents in urban centers.

The second PND cites the number of housing units built through the Housing

Finance System (SFH-Sistema Financeiro da Habitacgo) by 1974, 209 thousand (the

goal set by the first plan was 238 thousand units), and estimates 383 thousand units, an 83

percent increase, by 1979. The investment allocated by the 1975/79 budget for urban

social development, including all housing and urban development funds, is about 15


5 Interestingly enough, the indicator used by demographic agencies to determine the
welfare of working families is the number of durable goods in the household. Whether
these durable goods are in a "durable" shelter is not of concern.
6 Paraphrased from original text in Portuguese (II PND-1975/79, 1974).









million dollars ($15,270,000 US dollars) while the allocation for energy, transport, and

communications is above 60 million dollars ($61,020,000 US dollars) (II PND-1975/79,

1974).


1980-1985: Third National Development Plan (IH PND-HI Plano Nacional de
Desenvolvimento)

The third National Development Plan (III PND) was instituted during the fifth and

last Government of the Revolution, the Figueiredo administration.7 The main stated

objective of the plan was to create a developed and free society, benefiting all Brazilians,

within the shortest period of time. This plan recognizes that the enormous economic

expansion of the last ten years had not benefited all social classes equally, and that the

average income of low-income populations had not risen as rapidly as that of other strata.

The focus was on democratizing work opportunities and improving the standard of living

of the poor through redistribution of wealth and control of inflation. Among the

development policy objectives, access to education, employment, housing, food,

transport, and health, sanitation and welfare services are the highest priority. Emphasis is

given to the development of agriculture and cattle raising, and the expansion of the social

infrastructure aimed at creating more jobs and reducing the rate of urban growth.

The III PND's macroeconomic policies included anti-inflationary, financial, and

foreign trade policies aiming at eliminating the instability caused by the oil crisis and its

repercussions, and stabilizing the balance of trade. The sectorial policies established

hierarchical priority sectors: agriculture and supply, energy, and social services, the latter

including education and culture, health and sanitation, social welfare, and affordable


7 Instituted by Resolution No 01, of May 20th, 1980 (Republica Federativa do Brasil,
1980).









housing and community development. The stated priority for basic and environmental

sanitation was to provide a stable water supply to Brazilian cities, to implement flood

prevention projects, to complete or expand drainage systems, and to execute projects to

prevent or resolve present and imminent water and air pollution problems, particularly in

more densely populated urban areas and their outskirts.

Concerning affordable housing, the III PND aimed at reducing the housing

shortage to a minimum, and adjusting standards and financing requirements to the

serviced population by reducing construction and financial costs through government

subsidies. The regional and urban policies emphasized national integration and reduction

of economic and standards of living inequalities among regions. These two objectives

were to be achieved through development of rural areas and small and medium-sized

cities, and control of the rapid growth of metropolitan areas by means of decentralization

policies that promoted geoeconomic and geopolitical stability.

Other policies included priority measures to protect the environment and natural

resources, emphasizing preventative action both in unexplored and densely populated

areas, improving and enforcing legislation, and educating the population. The plan also

asserted that the responsibility for policy-making belongs to the Federal government, but

that states and municipalities are ultimately responsible for the monitoring and execution

of policies.

The III PND differed fundamentally from the first two National Development

Plans in its qualitative character. No quantitative measures or indicators were included in

this plan.









1986-1989: First National Development Plan of the New Republic (I PND-NR-I
Plano Nacional de Desenvolvimento da Nova Republica)

The first National Development Plan of the New Republic (I PND-NR) was

promulgated as part of the new democratic process initiated in 1984 with the end of the

military regime that had directed the country for 20 years.8 The three strategic goals of

the plan were political and institutional reform, economic growth, and eradication of

poverty. At the dawn of the New Republic, 68 million Brazilians lived in households

with incomes up to three times the minimum wage, and more than 18 million workers

earned less than minimum wage.9 The plan recognized that economic growth did not

"automatically" produce social development as past plans had stated, and that a concerted

effort was necessary to change the social structure so it would parallel the levels of

industrial maturity the country had recently reached. Three steps were suggested to

recapture economic development, including the reorganization and probable privatization

of public companies, the renegotiation of the foreign debt, and the reduction of inflation.

The stated intention of this plan was to define the participation of the State in the

newly instated democracy, to devolve economic development to the private sector, and to

concentrate efforts and resources on social programs dedicated to reducing the health,

nutrition, and housing problems of the poorest Brazilians. These social priorities

included provision of health care and basic sanitation services (four million new water


8 Instituted by Law N 7486 of June 6th, 1986 (Republica Federativa do Brasil, 1986).

9 The "minimum wage" is an officially established unit of monthly salary. It is widely
used in Brazil as a basic parameter and will be mentioned throughout this document.
This salary unit is adjusted periodically according to inflation and cost of living indices.
A dollar amount is not provided because the purchasing power of a Brazilian minimum
wage is not equivalent to US standards and would not serve as a good basis for
comparison.









and sewerage connections in urban areas), distribution of free food to undernourished

children (44 million between the ages of zero and 14), and building two million new

housing units (42 percent for families earning up to three minimum wages). Other social

priorities included provision of education to 25 million children between seven and

fourteen years of age, and creation of 1.3 million new jobs per year, assuming a six

percent minimum growth of the annual GDP.

The plan's focus was on reform: administrative, agrarian, budget and financing,

tax, and the Housing Finance System. The plan recognized the fact that said system had

become unfeasible in recent years and was no longer serving low-income populations,

nor middle-income populations, efficiently. The Government of the New Republic

declared housing to be a "fundamental social right" to be granted to the population and

established a housing policy to increase services rendered to low-income families living

in substandard conditions through serviced lots, self-help, house improvements, and

infrastructure programs in an attempt to reduce intra-urban inequities. The sanitation

policy also pledged to reduce inequities and offer better infrastructure to low-income

families through the implementation of basic sanitation projects in urban areas including

four million new water and sewerage network connections.

The environmental policy outlined in the I PND-NR heeds citizens' pressure to

preserve the nation's natural patrimony and includes maintaining essential ecological

systems, preserving biodiversity, utilizing species and ecosystems in a non-predatory

manner, and offering adequate environmental quality to urban populations. These goals

should be achieved by means of research programs to define areas to be protected,

environmental impact assessments, preservation of headwaters and water supply recharge









areas, reduced use of chemical fertilizers, educational programs, and energy conservation

programs, to name a few. In terms of legislation, the plan proposed to institute specific

legislation to protect the two largest rainforests-Amazon and Atlantic-including

designation of some areas for preservation, and to revise the legislation concerning

protection of headwaters and watersheds so that the governments would have the means

to control effluents.

The regional development component of the plan gave priority to the Northeast

region. Provisions were made for the Amazon and the Midwestern wetlands, the least

populated regions. For the Southeast and South regions, the most urbanized, the goal was

to improve quality of life by containing the growth of metropolitan areas, revitalizing

declining or stagnant areas, eradicating poverty, promoting improvement and

conservation of the environment, increasing agricultural output and integrating

agribusinesses to urban centers, and preserving water sources through watershed

management.

For the first time in the history of National Development Plans, specific

objectives targeting urban development were outlined. The growing speed and intensity

of urbanization was recognized and the plan set out to improve the quality of life of urban

populations, establish mechanisms to control urban land values, increase community

participation, and balance urbanized areas by promoting investment in small- and

medium-sized cities. Policies targeted investments in housing, basic sanitation,

transportation, education, health, nutrition, and safety. Decentralization was the basic

strategy, and the success of an urban development policy was understood to be dependent

on the success of a rural development policy that included agrarian reform. Priority









programs included integrated planning within metropolitan regions, improvement of

small- and medium-sized cities, and urban development research.


The Institutional Context

Housing is but one component of a large and complex system, and must be

approached as such. Separating the topic of housing from its context of community

development has not yielded good results. The physical circumstances of how people

live gives a rather immediate and pervasive insight into both the prevailing culture and

cultural politics that shape our cities and other patterns of settlement (Rowe, 1999).

In Brazil, as in most countries in Latin America, urban populations started to

increase geometrically in the 1960s. Rates of urbanization went from 56 percent in 1970,

to 68 percent in 1980, 75 percent in 1991, and 78 percent in 1996 (Figure 4-1).





80

70

1960 60
50
40
a- 4


o 20

10

0
1960 1970 1980 1991 1996

Figure 4-1: Urbanization in Brazil, 1960-1996.
Source: IBGE, 1997a (graph by author).









The demand for housing, especially low-income housing, could not be met, and

favelas began to form in urban areas. The debate concerning favelas was the catalyst for

addressing the housing issue in a systematic manner, and most discussions were about

integrating the poor into urban areas. The first studies about favelas appeared at the time

when the theory of marginality was in vogue in Latin America.10 This discussion

permeated social science circles in the 1970s and hinged on urban unemployment and

favelas as the marginalizing forces preventing the incorporation of low-income

populations into the housing market. The theory of capitalist accumulation was

substituted for this trend when the discussion shifted to the problem of labor exploitation

and research focused on low-income housing built in the periphery of urban areas and on

self-help housing (Valladares, 1983).

The relocation of favela dwellers to low-income housing projects was the first

policy adopted. The intense growth in the periphery of major urban centers started in the

1930s, intensified in the 1950s, but it was only in the 1970s that the scale and speed of

the phenomenon became obvious." The Proletarian Parks (Parques Proletarios) built in

the early 1940s, during the populist Vargas administration, were the first mass attempt to

eradicate favelas from urban areas.


10 A pioneering study about favelas was commissioned by the Brazilian newspaper 0
Estado de Sao Paulo to SAGMACS (Sociedade de Analises Graficas e Mecanograficas
Aplicadas aos Complexos Sociais), in 1960 (Barbot, 1960). This study, entitled
"Aspectos Humanos da Favela Carioca," (Human Aspects of Rio de Janeiro's Favela)
was published as a two-part supplement to the newspaper 0 Estado de Sao Paulo on
April 13th and 15th, 1960. Other studies are described in Pearse, 1962; Medina, 1964;
Machado da Silva, 1967; Parisse, 1969; Leeds, 1969; Salmen, 1969 and 1970;
Valladares, 1976 and 1978; Perlman, 1976; and Santos, 1977 and 1980 (Valladares,
1983).

11 The proliferation of low-income housing projects in the periphery of urban centers is
discussed by Maricato, 1976; Santos, 1977 and 1980; and Bonduki and Rolnik, 1979.









Until 1946, when the Affordable Housing Foundation (FCP-Fundacgo da Casa

Popular) was established, there had been no governmental intervention in the housing

market. In the 1960s, with the installation of a military regime, a National Housing Bank

(BNH-Banco Nacional da Habitacgo) was created to, first and foremost, increase the

number of affordable housing units available to low-income families.

The Catholic Church was the first to suggest urbanization of favelas instead of

relocation through its Favelas Pastorate (Pastoral das Favelas). Dom Helder Camara, one

of the founders of the National Conference of Brazilian Bishops, suggested the process of

urbanization was in fact the "humanization" of favelas. With the end of the military

dictatorship in 1984, favela dwellers become once again important political and electoral

tools, thus influencing housing policy decisions.

The changes in the Brazilian Housing Financing System (SFH-Sistema

Financeiro da Habitacgo) generated a halt in the production of housing in general. This

financing system used to be run by the National Housing Bank (BNH-Banco Nacional

da Habitacgo), responsible for the financing of housing for all income levels of the

population. The modifications affected particularly low-income housing. Without

financing for construction, and with the decrease in purchasing power resulting from the

high inflation and recession in the country, low-income households have been denied

access to adequate housing.

New programs emphasizing basic needs and infrastructure rather than formally

built housing were established as part of a strategy by government housing institutions

seeking endorsement from the populations of low-income settlements. Today, after the

extinction of the BNH and, no doubt, due to the country's economic situation, emphasis









is being placed on basic sanitation and infrastructure, and urbanization of substandard

residential areas.


Fundafiio da Casa Popular (FCP): the Affordable Housing Foundation

The first national institution charged with providing affordable housing to low-

income populations in Brazil, the Affordable Housing Foundation (FCP-Fundacao da

Casa Popular), was established during the populist regime, in 1946, by Federal Decree.12

The Populist Republic was sensitive to the housing problem faced by low-income

families, but failed to give high priority to social issues, including affordable housing,

because the distribution of housing funds among regions and municipalities and housing

units among applicants was dominated by clientelist practices (Azevedo and Andrade,

1982).

Only a few months after its creation, the FCP had the scope of its activities

expanded to include public works, social services, financing, and research. These

changes turned out to be too ambitious and were corrected by additional legislation in

1952. The requisites to apply for FCP financing included professional activity, and

family income and size. No minimum limits were established, so the poor were not

excluded, however, no maximum limits were imposed either, so middle- and upper class

families could benefit from the system, even if they had other means to acquire housing.

Limits were imposed by restricting information, limiting the number of applications and

housing units offered, and shortening deadlines. Favoritism started to pervade the system

and clientelist practices set in, making it impossible for FCP to establish itself as a mature


12 Decreto-lei N 9218, signed on May 1st, 1946.









institution with declared objectives, an organizational purpose, and a comprehensive

vision of the housing issue.

A proposal to turn FCP into a mortgage bank, which would have instituted a new

housing policy paradigm, was discussed in 1953 but not approved for lack of political

support. The last attempt to reform the FCP was made during the short-lived Quadros

Presidency in 1961 when a new housing plan would have changed the prevailing housing

policy and the Brazilian Housing Institute (IBH-Instituto Brasileiro de Habitacgo)

would have been created. By then, the country was in turmoil and a crisis was imminent.

President Quadros resigned, the plan was never implemented, but many of the directives

outlined in the IBH's plan were used for the creation of the future National Housing

Bank.

The Affordable Housing Foundation was not the only institution involved in the

provision of housing. Retirement institutes (Institutos de Aposentadoria), employees'

associations, and state and local institutions were also building and financing new

housing to various levels of household income. In fact, despite being the national

institution responsible for providing affordable housing, FCP was responsible for only ten

percent of the total number of housing units built during the populist period, an average

of less than one thousand units per year (Azevedo and Andrade, 1982). Even in the face

of this bleak scenario, the FCP was the only institution at the national level responsible

for facilitating access to housing for low-income families until the establishment of the

military dictatorship in 1964 when the National Housing Bank was created. The housing

deficit then was estimated to be seven million units (Otero and Amaral, 1971).









Banco Nacional da Habitaciao (BNH): the National Housing Bank

The creation of the National Housing Bank (BNH-Banco Nacional da

Habitacao) marked the beginning of a new housing policy.13 The Bank, a central source

of capital for low-income housing, was the chief institution within the Housing Finance

System (SFH-Sistema Financeiro da Habitaco), giving the government the opportunity

to control from the center the allocation of a crucial resource. It was conceived as an

independent entity within the Ministry of Interior, while working closely with the

Ministry of Planning. Operating in tandem with the Federal Service of Housing and

Urbanization (SERFHAU-Servigo Federal de Habitacgo e Urbanismo), it allocated

investments on a national scale. The BNH was the institutional leader; therefore urban

policies became subordinate to housing policies. The BNH's intent was to fulfill the

growing need for affordable housing in the country through a technical-as opposed to

institutional-approach, but also as a way to demonstrate concern on the part of the

Federal government. What was unique about the BNH was the fact that, as a bank, it

linked the public sector, the financing agent, with the private sector, the housing policy

executor.

Historical summary

The original idea for a Bank to help solve the housing problem was developed in

1953, during the second Vargas presidency (1951-1954). The monetary correction




13 The National Housing Plan (Plano Nacional de Habitacgo) was instituted by Law N
4380, dated August 21st, 1964, which created the National Housing Bank (BNH-Banco
Nacional da Habitacgo) and the Federal Service of Housing and Urbanization
(SERFHAU-Servigo Federal de Habitacgo e Urbanismo).









component was added to it during the Quadros Presidency (1961).14 Shortly after the

1964 military coup, Sandra Cavalcanti, the future first president of BNH, justified to

President Castelo Branco the creation of a Bank to address the housing problem in a letter

accompanying a draft of new legislation that instituted the Bank and outlined its

objectives.15 The political argument hinged on the increasing social tensions in the

favelas and the ease with which this despondent population could swing to the left. The

volatile situation represented a potential conflict for the newly instituted military regime,

which needed to prove it could deal with pressing social issues. Home ownership was a

critical component of the plan, for the architects of this intricate system believed

ownership made a better contribution to social stability than rental properties. As a

result, virtually all housing financed by the BNH was intended for owner occupancy.

This held true whether the dwelling was a single-family house or a unit in a multi-family

structure, whether the housing was built by a public, non-profit company or by a private

company. Since then, home ownership has remained a major tenet of Brazilian housing

policy.

The BNH's initial objective was to build housing for families with incomes

between one and three minimum wages.16 Meeting the growing demand for affordable

housing would in turn create new construction jobs and improve the economic situation.


14 Monetary correction (corregdo monetaria) was an indexing device used to compensate
for the high rates of inflation.

15 The text of this letter, including the President's markings, was released by Sandra
Cavalcanti, BNH's president, in March of 1974 (Batley, 1983).
16 BNH's stated objective was of "orienting, disciplining and controlling the housing
finance system" to "promote the construction and acquisition of houses, especially for
low-income groups" (Federal Law N 4380 of August 21st, 1964).









The resources during the first two years of operation, an initial capital of less than one

hundred thousand dollars and a one percent payroll deduction from workers' wages, were

scarce (Azevedo and Andrade, 1982). In 1966, a new source of income was established,

also based on payroll deductions, and it became the principal means of financing the

fledgling housing policy.17 From 1964 to 1969, about 600 thousand new housing units

were financed by BNH (Otero and Amaral, 1971).

Between 1967 and 1971, the BNH expanded its scope and created programs to

finance urban infrastructure and construction materials,18 programs to finance housing for

families in higher-income brackets, and the mortgage market to transfer resources to the

private sector (Valladares, 1983). The creation of these programs caused BNH

investment in housing to decrease by 17.6 percent in only two years, from 93.2 percent in

1969 to 75.6 percent in 1971, while investment in supplementary programs increased by

16.9 percent in the same period (Azevedo and Andrade, 1982).

The high incidence of payment defaults during the first five years of the Bank's

operations caused investments to diminish for families in the one-to-three minimum wage

income bracket after 1970. The Bank gradually shifted the bulk of its activity to middle-


17 The Guarantee Fund for Time in Service (FGTS-Fundo de Garantia por Tempo de
Servico), a compulsory savings fund, was created through Federal Law N 5107 of
September 14th, 1966. Under the FGTS, employers are required to deposit eight percent
of the employee's earnings in the Fund. Money can only be drawn from an FGTS
account under specific circumstances, such as purchase of a new home or upon
termination of employment. FGTS funds started being deposited in the National Housing
Bank in April of 1967.

18 Some of the programs created were Fimaco-Programa de Financiamento de Material
de Construcgo (Construction Materials Financing Program), 1967; Finansa-Programa
de Financiamento para o Saneamento (Sanitation Finance Program), 1968; and Planasa-
Plano Nacional de Saneamento (National Sanitation Plan), 1970. Each had subprograms
with specific characteristics and conditions.









income families with the first programs to finance middle-income housing implemented

in 1967. One could argue the objective of this change in policy was an attempt to balance

the defaults on loans to those who were insolvent and to receive the returns on capital

invested, thereby reinstating the Bank's institutional credibility by meeting the

expectations of the federal government (Azevedo, 1979). On the other hand, it could also

be argued that granting low-interest financing privileges to influential sectors of the

society was exclusively a political decision (Portes, 1979; Bolaffi, 1980; Valladares,

1983). In 1972-1973 the Bank serviced loans for approximately 360,000 dwelling units

(US Dept. of Housing and Urban Development, 1977). The advantages awarded to those

with higher incomes resulted in 50.2 percent of the total number of units financed by the

BNH being in higher income programs by 1974 (Valladares, 1983).

Affordable housing became a low priority during General Medici's administration

(1970-1974) and in 1974 the BNH reached its lowest record in number of units financed:

a total of only 7,263 units (Azevedo, 1979). The high rate of default in the lower income

levels and the higher interest rates allowed for the middle-income market-10 percent a

year against one to three percent a year for the low-income market-redirected the

Bank's investment to middle-class financing. Between 1970 and 1974, more than 560

thousand middle-income households received BNH financing while only 76,746 low-

income housing units were financed (Azevedo and Andrade, 1982). In effect, the BNH

was evolving into a national urban development bank: the entire urban infrastructure,

including streets, schools, stores, and community centers had become eligible for BNH

financing. Urban development programs intensified in 1972 with the creation of three









urban development funds.19 The percentage of BNH resources invested in housing fell

from 93.2 percent in 1969 to 59.8 percent in 1974 while investments in urban

development went from 4.1 percent in 1969 to 25.2 percent in 1974 (Azevedo and

Andrade, 1982; Valladares, 1983).

A new initiative to swing the pendulum back was the establishment of the

National Affordable Housing Plan (Planhap-Plano Nacional de Habitagao Popular) with

the objective to eliminate the housing deficit for families with household incomes

between one and three minimum wages in 10 years. To offer an alternative to these low-

income families and to expand the number of families served by Planhap, a program to

finance serviced lots (Profilurb-Programa de Financiamento de Lotes Urbanizados) was

created in 1975.20 One of the basic intents of the Profilurb was to prevent squatting in

areas with no infrastructure, a rapidly growing process in medium- and metropolitan-

sized Brazilian cities. Only when programs based on self-help construction were

established, did the access to housing improve for low-income families (Azevedo, 1979).

By the end of 1975 the BNH affirmed that 34.5 percent of the more than 10

billion dollars it had invested in its programs had gone to affordable housing. Portes


19 The programs to spur urban development included three regional Urban Development
Funds, one for the Northeastern region, one for the combined East, West Central, and
South regions, and one for the Amazon; and the Urban Community for Accelerated
Recovery Project (CURA-Comunidade Urbana para Recuperagao Acelerada).

20 The Profilurb program financed the lot serviced with power, water, sewerage, and a wet
core for families with incomes between zero and three minimum wages. This initiative
was intended to supply basic sanitation infrastructure, making the homeowner
responsible for the construction of the housing unit itself based on individual priorities
and financial resources. Profilurb's creation may be attributed to BNH's recognition that
households with a monthly income below 1.5 minimum wage cannot afford to buy a
house (Valladares, 1983), and the necessity to offer an alternative within the Housing
Finance System (SFH-Sistema Financeiro da Habitagao) to those populations who
could not afford projects facilitated by the Housing Companies (Cohabs).









argues, however, that affordable was a euphemism used by the Bank to group low- and

middle-income households: only nine percent of total investments went to families

earning between one and five minimum wages (80 percent of the population), and 68

percent of BNH's budget was spent financing middle-income housing to private

cooperatives and pension funds, and military credit funds (Portes, 1979). Between 1975

and 1978, the number of "affordable" housing units financed by the Bank corresponded

to 67 percent of the Bank's production during its entire existence, a total of 469,599 units

(Azevedo, 1979). By 1980, that number almost reached 750 thousand units,

corresponding to 74.6 percent of the total number of units financed (Azevedo and

Andrade, 1982). Also during this period, BNH investment in housing programs

increased, but only from 57.2 percent in 1975 to 66.9 percent in 1978, while investment

in urban development remained constant, on average, around 30 percent (Azevedo and

Andrade, 1982; Valladares, 1983).

An evaluation of BNH's performance based on number of financed units reveals

that its social objective to increase the supply of affordable housing was not met; of the

total number of housing units financed by the Housing Finance System (SFH-Sistema

Financeiro da Habitacgo) until 1980, 65 percent served middle- and high-income

families. Between 1964 and 1980, almost three million housing units were financed, but

only one million of them were for low-income families (Azevedo and Andrade, 1982).

The discrepancy is even worse, if percentage of investment for each income bracket is

considered: low-income households received only 25 percent of the total resources

allocated by BNH, and the lower range of this bracket, those earning between one and

three minimum wages, only 10 percent. From 1964 to May of 1985, 4.4 million









mortgages were signed through SFH, two-thirds of them for households with incomes

above five minimum wages, representing 33 percent of the urban population, and only

one-third for lower income households, representing 67 percent of the urban population (I

PND-NR, 1986).

After 1983, high rates of inflation, economic recession, rising unemployment and

falling wages negatively impacted the main sources of SFH funds, namely, the deposits in

the Guarantee Fund for Time in Service (FGTS-Fundo de Garantia por Tempo de

Servigo) and voluntary savings accounts, and also considerably increased the rate of

default, affecting the financing institutions belonging to the Savings and Loans system.21

The BNH was abolished in November of 1986.

The Housing Companies

The Housing Companies (Cohabs-Companhias Habitacionais) were created to

execute BNH's stated objective to meet the housing needs of low-income populations.

BNH was the policy and financial arm of this program and the Cohabs the executors.

Housing programs for low- to middle-income households were administered by

cooperative housing companies, often sponsored by labor unions and other associations.

Privately owned entrepreneurial companies built housing to be sold to upper-income

individuals.

The Cohabs were constituted as public-private partnerships; state and municipal

governments retain control of their stocks but private companies may participate in their


21 The voluntary savings accounts were deposited in institutions belonging to the
Brazilian Savings and Loans System (SBPE-Sistema Brasileiro de Poupanga e
Emprestimo). The participating organizations invested the funds and were expected to
produce good returns on investment to their depositors.









initiatives. Although Cohabs were specifically created to serve low-income families,22

this segment of the population could not realistically participate in their traditional

programs. All programs and projects executed by Cohabs with FGTS funds had to be

approved by BNH, the fund's administrator. Those elements not financed by the Bank

became the responsibility of the state or municipality. Cohabs supervise, manage, and

commercialize the units among the registered low-income families. They are not-for-

profit organizations; their support comes from fees charged for technical and supervision

services.

During the 20 years of BNH's operation, Cohabs were fully financed by the Bank,

followed the same policies and thus, the same patterns of expansion and crises. From

their conception in 1964 to 1969, Cohabs experienced moderate expansion, but from

1970 to 1974 the rates of default increased enormously, as did the number of units built.

The recovery which occurred after 1975 seems to coincide with Cohabs' new preference

for financing the higher income brackets within the low-income classification, that is,

households with incomes between three and five minimum wages rather than those

earning from one to three minimum wages, and also with real estate speculation which

made rents paid for subsidized housing higher than their monthly mortgage payments

(Azevedo and Andrade, 1982). After the Bank's extinction in 1989, Cohabs continued

operating and are still thriving. Their structure remains basically the same, and the funds






22 The BNH initially defined as low-income those families with household income
between one and three minimum wages; later that range was extended to include families
with monthly incomes of up to five minimum wages.









come from various financing agencies, alternative financing mechanisms, private

sponsorship, and creative new programs such as the Solo Criado program.23

Perspective

To put BNH's operations in perspective, one must be reminded that during the

military regime (1964-1984) all systems were heavily centralized in Brazil (Table 4-2).

Investment of the banking system's assets was planned by the BNH in cooperation with

other central planning agencies of the Brazilian government. Major development

decisions were made by the BNH itself, specific investment decisions were made in

accord with the general allocation and policies of the National Housing Plan, and some

minor decisions were made locally. Savings accounts were maintained in savings banks,

a traditional public institution in Brazil, and in mutual savings and loan associations.


Table 4-2: Summary of BNH's Development and Transformation

Period Activity
1964 to 1967 creation, organization, and development of basic structure
1967 to 1971 operational changes, direct financing bank, infrastructure programs
1971 to 1979 indirect financing bank, restructuring, focus on urban development
after 1979 attempt to democratize, focus on squatter settlements



The BNH guaranteed the savings, supervised and controlled these agencies,

redistributed savings to them for their general mortgage loan applications, guaranteed

their liquidity, and generally operated as the central bank of the system; rather than

creating a large, centralized bureaucracy, the BNH operated its programs through local



23 A complete explanation of Solo Criado is included in Chapter 7 of this volume, Land
Use Policies and Legislation.









public and private institutions. These savings banks and associations provided mortgage

financing for individual homeowners to purchase or build a house. Planning and overall

supervision of the housing financing system rested with the BNH; however, execution of

the Bank's activities was decentralized to states and cities.

The expansion of BNH's investments to include infrastructure as well as housing

was possible due to the growth of savings in the banking system. During its initial phase,

the new banking system was heavily dependent on involuntary savings generated by the

Brazilian employment security savings. The scarcity of resources available to the Bank

necessitated voluntary savings,24 which later became an almost equal source of capital,

accounting for $2.4 billion US dollars as compared to $2.9 billion US dollars from the

employment system (US Dept. of Housing and Urban Development, 1977).

The BNH loaned its money at interest rates which varied according to the price of

the dwelling being financed, ranging from one to ten percent. Thus the loans granted to

upper-income families offset the low-interest rates at the other end of the economic scale.

In Brazil, it is generally accepted that a family can spend up to twenty percent of the

household income on mortgage payments. At the time BNH was in control of housing

finance, loan payments, like interest-bearing deposits, were subject to monetary

correction, an indexing device used to compensate for the high rates of inflation. The

monetary correction system was the main innovation introduced by the BNH to housing



24 These were deposited in a national savings network, the Brazilian Savings and Loans
System (SBPE-Sistema Brasileiro de Poupanga e Emprestimos), created in 1967 as a
way to supplement funds available to the BNH and help it overcome its initial financial
difficulties. Through institutions such as SBPE and programs such as Recon, BNH funds
were allocated to the most privileged families reaching 50.2 percent of the total number
of units financed by 1974 (Valladares, 1983).









finance; it helped the capital market because it stimulated savings, causing a substantial

increase in financial investment and limiting price increases.

A reasonable argument justifying the periods of growth, stagnation, and decline of

BNH can be built based exclusively on economic reasons. However, it would not be

unreasonable to hypothesize that political interests dictated the path housing policies

were following and the unsatisfactory results of housing programs geared to low-income

households were a consequence of equating policy to politics (Azevedo and Andrade,

1982). Thus, increased investment in the low-income housing sector may have come at a

time when the country was prosperous, but the reason investment was increased was, in

fact, that populist or authoritarian regimes were attempting to gain popular support.

After the BNH disintegrated in 1986, monies available for housing programs

plunged to approximately one-third their former levels. Funding then became the direct

responsibility of the Guarantee Fund for Time in Service (FGTS), the national retirement

fund that was created in part to fund the original BNH. Administration of housing

programs now falls to municipal administrators. State and local housing organizations-

the affordable housing companies (Cohabs)-share some responsibilities with the

funding agency that prepared them for these tasks from the initial phases of the BNH.

States and municipalities are obliged to contribute to the funding of local projects by

providing land and infrastructure and choosing private companies to fill federal contracts.

After notification of funding approval, the national office of the Federal Savings Bank

(CEF-Caixa Econ6mica Federal),25 now in charge of the Housing Finance System




25 The CEF is one of the institutions participating in the Brazilian Savings and Loans
System (SBPE-Sistema Brasileiro de Poupanga e Emprestimo), along with Real Estate









(SFH-Sistema Financeiro da Habitacgo), delivers the approved funding for the housing

proposal to its local office. Here, agents are responsible for the administration of

projects, including the distribution of aid. This increase in responsibilities is paralleled

by the development of a local bureaucracy that has been prepared to assume

administrative duties.


Caixa Econ6mica Federal (CEF): the Federal Savings Bank

The Federal Savings Bank (CEF-Caixa Econ6mica Federal) is a public financial

institution subordinated to the Finance Ministry.26 During the Housing Finance System's

(SFH-Sistema Financeiro da Habitacgo) tenure, CEF was one of the institutions

comprising the SFH, along with the National Housing Bank (BNH-Banco Nacional da

Habitacgo), the Savings and Real Estate Credit Societies (SCI-Sociedades de Credito

Imobiliario e Poupanga), the Savings and Loan Associations (APE-Associac6es de

Poupanga e Emprestimo) and the Housing Companies (Cohab-Companhia de

Habitacgo). The extinction of the BNH in 1986 caused the SFH structure to collapse and

all assets and liabilities were transferred to CEF. The National Monetary Council

(Conselho Monetario Nacional) took on the responsibilities and obligations of the extinct

BNH as the main component of the SFH.

The years following the extinction of BNH saw a succession of institutional

reforms which created and extinguished task forces and Ministries and caused policies

and projects related to housing and basic sanitation to be passed from new Ministry to



Credit Societies (SCI-Sociedade de Credito Imobiliario) and Savings and Loans
Associations (APE-Associado de Poupanca e Emprestimo).
26 The CEF was created by Decree N 759/69.









extinct commission to reinstated Ministry.27 In 1990, the Social Development Fund

(FDS-Fundo de Desenvolvimento Social) was created and a new housing plan was

launched: the Immediate Action Housing Plan (PAIH-Plano de Acgo Imediata para a

Habitacgo). The Affordable Housing Special Fund (FEHAP-Fundo Especial de

Habitacgo Popular) was formed in 1993. Numerous housing and basic sanitation

programs have been established since then and the CEF continues to be the system's

financing arm operating with funds from the FGTS.

The total FGTS reserve is R$50 billion. In September of 1997, FGTS

withdrawals surpassed deposits and the fund has had a negative monthly balance since.28

By May of 1998, the net difference between deposits and withdrawals reached the one

billion Reais mark for the previous 12 months. This drop in deposit amounts is due to not

only higher unemployment rates in the country, but also an increase in informal

employment. The net deficit is attributed to declining deposits as well as an increase in

the number of retirees and households withdrawing funds to purchase a house. In 1995,

10.6 percent of withdrawals were for acquisition of homes; in 1997, that amount was 16.9

percent.


27 The Housing, Urbanism, and Urban Development Ministry (MHU-Ministerio da
Habitacgo, Urbanismo e Desenvolvimento Urbano) is created to substitute the Urban
Development and Environment Ministry (MDU-Ministerio do Desenvolvimento
Urbano e Meio Ambiente) in 1987. In 1988, the MHU is converted into the Housing and
Social Welfare Ministry (MBES-Ministerio da Habitacgo e Bem-Estar Social), and
extinct in 1989 when housing goes under the auspices of the Interior Ministry. In 1990,
as a result of administrative reform instituted by the Federal government (Collor
administration) the Social Action Ministry (MAS-Ministerio de Acgo Social) is created
and in 1993 it is renamed Social Welfare Ministry (MBES-Ministerio do Bem-Estar
Social) (MPO/SPU, 1996).

28 The facts presented here were gleaned from CEF data included in an article published
in the Gazeta do Povo, Parana's leading newspaper, on June 28th, 1998, p. 39.









The Legal Context

The necessity to protect and preserve the environment had never been

acknowledged by a Brazilian Constitution until 1988. The inclusion of a chapter

exclusively dedicated to the environment was both a result of international influence and

the need to more amply ratify the concepts of environmental protection first spelled out in

the National Environmental Policy enacted in 1981.29

Numerous international treaties and principles documented in conferences

sponsored by the United Nations had, since the early 1970s, motivated nations to address

environmental protection and conservation issues. The impetus created within the

international community brought about initiatives and agreements that resulted in

enactment of unprecedented legislation. Even though Brazil was not on the forefront of

these international initiatives, Brazilian legislation eventually caught up with the new

paradigm being adopted around the world. These changes culminated and were solidified

by the 1992 Earth Summit in Rio de Janeiro.


Brazilian Environmental Legislation

Before the 1988 Constitution only isolated measures and resolutions that affected

specific natural resources had been enacted. The Constitutions of 1946 and 1967 simply

designated responsibilities and realms of authority to Federal, State, and Municipal

governments accordingly. There were additional pieces of legislation that addressed

individual problems such as the 1961 National Health Code, the 1965 Forest Code, and



29 Federal Law N 6938 of August 31st, 1981, known as National Environmental Policy
(Politica Nacional do Meio Ambiente). Legislation enabling this law was passed through
Federal Decree N' 88351 of June 1st, 1983.









the 1967 National Sanitation Policy. Environmental issues were only addressed within a

more comprehensive framework by the 1981 National Environmental Policy.

Since then, Federal legislation addressing specific natural resources has continued

to focus on the protection, preservation, and conservation of the environment. Parallel

resolutions and decrees have addressed monitoring, accountability, and enforcement by

means of local authorities, environmental groups, and citizens associations and

organizations. A number of non-governmental organizations (NGOs) have also been

involved in initiating legislation and holding government authorities responsible for

enforcing and expanding the scope of initiatives. In addition, State and Municipal

legislation has supplemented national policies and increased the number of protected

areas and natural resources.

Evidently, Brazil has not had a long history of environmental legislation. The

1981 National Environmental Policy and the provisions in the 1988 Constitution were

only the first steps towards a more comprehensive approach to environmental issues in a

legal context. It took 10 years to enact legislation that in fact protects the environment

and natural resources, including provisions for prosecution of crimes against the

environment. Known as the Environmental Law (Lei Ambiental), this statute was

approved in February of 1998. Since then, States and Municipalities have enacted local

legislation addressing specific environmental issues.30



30 These most recent initiatives are discussed in depth in Chapter 6 of this volume,
Environmental Policies and Legislation.














CHAPTER 5
MARGINALITY IN THE PERFECT CITY

Brazil is the eighth largest economy in the world today, classified by the World

Bank among the upper middle-income economies, but 17.4 percent of its total population

and 13.1 percent of its urban population live below the national poverty line. If

international poverty lines are considered, world development indicators place between

23.6 and 43.5 percent of the Brazilian population below the line (World Bank, 2000).

Brazil's wealth is concentrated in the Southeast and South regions, where the largest

cities are located and where the rates of urbanization are higher (Tables 5-1 and 5-2).



Table 5-1: Resident Population in the South and Southeast Regions of Brazil,1960-1996
Regions Resident Population
1960 1970 1980 1991 1996
South 11,753,075 16,496,493 19,031,162 22,129,377 23,516,730
Southeast 30,630,728 39,853,498 51,734,125 62,740,401 67,003,069
Brazil 70,070,457 93,139,037 119,002,706 146,825,475 157,079,573
Sources: IBGE. 1960 to 1991 Census (Censo Demografico) and 1996 Population Count
(Contagem da Populacgo) (tabulation by author).



Table 5-2: Urbanization in the South and Southeast Regions of Brazil, 1960-1996
Regions Percentage of Population in Urban Areas (%)
1960 1970 1980 1991 1996
South 37.10 44.27 62.41 74.12 77.21
Southeast 57.00 72.68 82.81 88.02 89.29
Brazil 44.67 55.92 67.59 75.59 78.36
Sources: IBGE. 1960 to 1991 Census (Censo Demografico) and 1996 Population Count
(Contagem da Populacgo) (tabulation by author).









The 1996 Population Count found Sdo Paulo, Minas Gerais, Rio de Janeiro,

Bahia, Rio Grande do Sul and Parana to be the six largest Brazilian states (Figure 5-1).

Altogether, these six states comprised more than 60 percent of the country's total

population. In fact, the state of Parana joined the top-six group for the first time, while

the top five have occupied that ranking since 1940. Growth rates decreased for all states

in the South and Southeast regions between 1991 and 1996, except for Parana.

Rural exodus deeply affected the state of Parana in the 1970s. The substitution of

agriculture by livestock, the advancement into capital-intensive crops for export, and the

eradication of coffee plantations by the "black frost"' of 1975 caused the displaced labor

force to move en masse to urban centers. During the 1970s, the urban population of

Parana's capital, Curitiba, doubled, going from 550 thousand to 1.1 million. In that

decade, Curitiba had the highest growth rate of all Brazilian capitals-5.34 percent per

year, while the state of Parana had the lowest rate of all states-0.97 percent per year

(Figures 5-2 and 5-3). By 1980, migrants constituted 30 percent of the total population of

Curitiba.2 The growth rates for both the state of Parana and the city of Curitiba declined

even further between 1980 and 1991; however, this was a result of a national trend since,

relative to other states, rates have remained constant. Between 1986 and 1996, the largest

number of migrants entering the South region came from the Southeast Region: nine

percent of the total number of internal migrants in the country (IBGE, 1997b).


1 The black frost, as it became historically known, was a spell of intense, bitter cold and
consequent frost that destroyed most crops in the state of Parana during the winter of
1975.

2The Brazilian Institute of Geography and Statistics (IBGE-Instituto Brasileiro de
Geografia e Estatistica) classifies as migrants people living in the city for less than ten
years (IBGE, 1991).














6-

5-

4-






0





Figure 5-2
Sources:


I


10.00
9.00
8.00
7.00
6.00
5.00
4.00
3.00
2.00
1.00
0.00
-1.00
-2.00
-3.00
-4.00


1970/1980 1980/1991 1991/1996


Growth Rates for the Municipality of Curitiba, 1970 to 1996
IBGE. 1970 to 1991 Census (Censo Demografico) and 1996 Population Count
(Contagem da Populacgo) (graph by author).


- Brazil total
-Brazil urban
Brazil rural
Parana total
- Parana urban
- Parana rural


1940/50 1950/60 1960/70 1970/80 1980/91 1991/96

Figure 5-3: Population Growth Rates, Total, Urban and Rural, for Brazil and the State of
Parana, 1940 to 1996
Source: IBGE. 1997 Statistical Abstract (Anuario Estatistico) (graph by author).









Not unlike other countries in the world at the same stage of development, Brazil

has seen a constant increase in urban population and consequent decrease in rural

population. The prevailing global trend is increased urbanization, however Brazil's

urbanization rates are some of the highest among developing countries, approaching and

sometimes surpassing rates in developed countries. For instance, Australia and New

Zealand are 85 percent urbanized, the United States is 78 percent urbanized, and Japan

and Taiwan are 77 percent urbanized. The percentage of population living in urban areas

in the Philippines, Pakistan, India, and China is 42, 35, 26, and 22 percent respectively

(World Bank, 2000). Today, almost 80 percent of the Brazilian population lives in urban

areas. The urbanization rates for the South region and for the state of Parana parallel the

national rates, fact that has only been observed after 1980 indicating a more intense

urbanization process in the past 20 years (Table 5-3).



Table 5-3: Percentage of Urban and Rural Population for Brazil, the South Region and
the State of Parana, 1940-1996
1940 1950 1960 1970 1980 1991 1996
Brazil total 100 100 100 100 100 100 100
urban 31 36 45 56 68 75 78
rural 69 64 55 44 32 25 22
South Region total 100 100 100 100 100 100 100
urban 28 29 38 45 63 74 77
rural 72 71 62 55 37 26 23
Parana total 100 100 100 100 100 100 100
urban 24 25 31 36 59 73 78
rural 76 75 69 64 41 27 22
Sources: IBGE. 1996 Population Count (Contagem da Populacgo) and 1997b Statistical
Abstract (Anuario Estatistico) (tabulation by author).









In 1996, the Metropolitan Region of Curitiba concentrated 27 percent of Parana's

total population and 32 percent of the state's urban population (IBGE, 1997a).


The Urban Poor

One of the most telling indicators of urban poverty is the number of homeless

people and the number of families living in substandard conditions in urban areas. The

housing deficit estimates in Brazil vary widely depending on the criteria used for the

calculations. While one study conducted by the Jodo Pinheiro Foundation indicates the

deficit to be over four million housing units, the United Nations calculates it to be above

15 million (Ribeiro and Azevedo, 1996). Once substandard housing units are included in

the calculations, the numbers are staggering. In 1994, a study determined the housing

deficit to be 14.1 million, estimating the number of people in need to be over 50

million-one-third of the country's population. The number of substandard housing units

was estimated to be 4.3 million, plus 12.4 million overcrowded units.3 This research

project also determined that 77 percent of the housing deficit affected families earning

less than three minimum wages, and the totality of families affected were in income











3 The results of a research project commissioned by the Development and Support to
Construction Industry Institute (IDACON-Instituto de Desenvolvimento e Apoio a
Construcgo) conducted by economist Ant6nio Evaristo Teixeira Lanzana were reported in
article published in the Folha de Sdo Paulo on November 13th, 1994, p. 1-6, entitled
"Brasil vai precisar de 18,4 milh6es de habitac6es ate o ano 2000" (Brazil will need 18.4
million housing units by the year 2000).










brackets below five minimum wages, which is a reflection of the distribution of wealth in

Brazil (Figure 5-4).4






25/ 22

20-
o
e 151



E 55 1 2
0
0-1 m.w. 1-3 m.w. 3-10 more Others
m.w. than 10
m.w.
Number of Monthly Minimum Wages (m.w.)

Figure 5-4: Number of Brazilian Households by Income Level
Source: IBGE. 1991 Census (Censo Demografico) (graph by author).



This appalling situation is no longer the privilege of large metropolitan centers.

In the state of Parana-the sixth most populous state of the Union-not only the

metropolitan region of its capital, Curitiba, but also medium-sized cities throughout the

state are experiencing a growing number of informal settlements in the periphery of their

urban centers. The income distribution in the State of Parana is worse than the country as



4 The "minimum wage" is an officially established unit of monthly salary that will be
mentioned throughout this chapter. Because of the high inflation rates, which prevailed
in Brazil until 1994, a fixed currency value would not be appropriate. Minimum wages
are adjusted periodically according to inflation and cost of living indices. A dollar
amount is not provided because the purchasing power of a Brazilian minimum wage is
not equivalent to US standards and would not serve as a good basis for comparison.









a whole: while 57 percent of all Brazilian households earn less than one minimum wage,

in Parand that number is 62 percent. Most housing assistance programs target households

making up to three minimum wages. Again, Parand does not fare well compared to the

nation: 87 percent of households in the state would qualify for assistance programs,

compared to 83 percent in Brazil (Figure 5-5).



1,600-/
0 1,400
m.. wm1,200
S1,000
800 600
0 600
400 200
E 37 90
0
0-1 m.w. 1-3 m.w. 3-10 more Others
m.w. than 10
m.w.
Number of Monthly Minimum Wages (m.w.)

Figure 5-5: Number of Households in the State of Parand by Income Level
Source: IBGE. 1991 Census (Censo Demogrifico).



Curitiba and Its Metropolitan Region

Curitiba, founded in 1693, is Brazil's eighth-largest city (IBGE, 1997a). The

capital of the state of Parana-one of Brazil's wealthiest states-since 1854, Curitiba is

its primate city, concentrating 16 percent of the state's population. The municipality of

Curitiba has a total area of 430 square kilometers, and almost 1.5 million inhabitants

(IBGE, 1997a). The metropolitan region of Curitiba, with a total population of 2.4

million (IBGE, 1997a), was one of nine metropolitan regions implemented by the second









National Development Plan (II PND).5 Today, it comprises 25 municipalities (Figure 5-

6). Curitiba alone concentrates 61 percent of the total urban population in the

metropolitan area and together with 10 other municipalities, namely, Almirante

Tamandare, Araucaria, Campina Grande do Sul, Campo Largo, Colombo, Fazenda Rio

Grande, Pinhais, Piraquara, Quatro Barras, and Sao Jose dos Pinhais, clusters 93.7

percent of the total RMC population (Table 5-4).

The population of Curitiba doubled between 1970 and 1991 (Figure 5-7).

Demand for the growing labor pool was created through massive incentives given to

industries to locate in Curitiba. Nonetheless, as with so many other fast-growing cities in

developing countries, Curitiba became haunted by poverty. Recent estimates of the

number of people living in substandard housing fluctuate between 10 and 15 percent of

the total population in this model city (IPPUC, 1991).




2.000.000 L

1.500.000

(- 1.000.000.1

S500.000


1970 1980 1991 1996

Figure 5-7: Resident Population for the Municipality of Curitiba, 1970 to 1996
Sources: IBGE. 1970 to 1991 Census (Censo Demografico) and 1996
Population Count (Contagem da Populacgo) (graph by author).



5 The first nine metropolitan regions to be created and implemented in Brazil were: Sao
Paulo, Rio de Janeiro, Belo Horizonte, Fortaleza, Porto Alegre, Recife, Salvador, Belem,
and Curitiba. All of these major cities are also the capital of their respective states and, in
most cases, the primate city in the state.










Table 5-4: Resident Population, by municipality and location of household, 1996

Municipality Urban Rural Total
Adrian6polis 1,691 5,648 7,339
Agudos do Sul 919 5,524 6,443
Almirante Tamandare 80,058 9,352 89,410
Araucaria 68,648 8,036 76,684
Balsa Nova 2,829 5,916 8,745
Bocaiuva do Sul 3,061 5,522 8,583
Campina Grande do Sul 22,984 8,460 31,444
Campo Largo 63,747 19,225 82,972
Campo Magro n.a. n.a. n.a.
Cerro Azul 4,089 13,018 17,107
Colombo 145,988 7,710 153,698
Contenda 5,469 6,863 12,332
Curitiba 1,476,253 -- 1,476,253
Doutor Ulysses 523 5,139 5,662
Fazenda Rio Grande 40,499 4,800 45,299
Itaperugu 9,008 8,595 17,603
Mandirituba 5,324 9,894 15,218
Pinhais 82,787 6,548 89,335
Piraquara 28,109 24,377 52,486
Quatro Barras 12,272 1,629 13,901
Quitandinha 2,932 11,126 14,058
Rio Branco do Sul 15,401 7,811 23,212
Sdo Jose dos Pinhais 151,209 17,826 169,035
Tijucas do Sul 1,703 9,856 11,559
Tunas do Parana 1,057 2,369 3,426
TOTAL 2,226,560 205,244 2,431,804
Source: IBGE. 1996 Population Count (Contagem da Populacgo).
Note: The Municipality of Campo Magro seceded from Almirante Tamandare in 1995.
No statistical information was available for Campo Magro as a separate entity at the time
of this printing, but the numbers for Almirante Tamandare represent the total for both
municipalities in 1996.









As in all other metropolitan regions of Brazil, the RMC has experienced higher

growth rates in the periphery than the core. The RMC has had the highest growth rate of

all metropolitan regions in Brazil, 3.4 percent, and most of the recent growth has

occurred in the outskirts of the city. Curitiba today is 100 percent urban, and the

municipalities surrounding it are the ones absorbing new population. Thus, the periphery,

which comprises the other 24 municipalities in the Metropolitan Region of Curitiba, has

had the highest growth rates ever: 5.12 percent (Table 5-5).

The Metropolitan Region of Curitiba (RMC) contained 11.85 percent of the

state's population in 1970 and 23.48 percent in 1991 (IBGE, 1991). In absolute numbers,

that is an increase of 1,225,598 inhabitants in the region's urban areas in that period.

With the average family being 3.25 persons, this increase in population means a demand

for 377,107 houses.



Table 5-5: Resident Population, Average Annual Rate of Increase, and Percentage of
Population for the Metropolitan Region of Curitiba (RMC) and the
Aggregate Total of all Brazilian Metropolitan Regions, 1991 and 1996

Region Total Rate Percentage of Population
1991 1996 (%) 1991 1996
Curitiba (RMC) 2,057,578 2,425,361 3.40 100.00 100.00
Core 1,315,035 1,476,253 2.38 63.91 60.87
Periphery 742,543 949,108 5.12 36.09 39.13
Metro Regions 45,503,464 49,117,413 1.57 100.00 100.00
Core 27,796,736 29,002,336 0.87 61.09 59.05
Periphery 17,706,728 20,115,077 2.63 38.91 40.95

Source: IBGE. 1997 Statistical Abstract (Anuario Estatistico).
Note: the aggregate total includes 10 metropolitan regions-Belem, Fortaleza, Recife,
Salvador, Belo Horizonte, Vit6ria, Rio de Janeiro, Sdo Paulo, Curitiba, Porto Alegre-
and the Federal District, Brasilia.










Curitiba fares well in terms of average monthly income if compared to national

rates; nonetheless, 65 percent of the population still earns less than five minimum wages,

which would be considered low to moderate income (Table 5-6). According to the 1991

Census, the average income for the Metropolitan Region was five minimum monthly

wages, while the average income for the city of Curitiba was 6.1 minimum monthly


wages.


Table 5-6: Household Income in the Municipality of Curitiba and the Metropolitan
Region of Curitiba, 1991


Average Income
(in minimum wages)

no claimed income
0 to 1 m.w.
1 to 2 m.w.
2 to 3 m.w.
3 to 5 m.w.
5 to 10 m.w.
10 to 15 m.w.
15 to 20 m.w.
more than 20 m.w.
Total


Curitiba
Number of Percentage of
Households Households
13,658 3.90
33,147 9.45
65,305 18.63
53,156 15.16
63,467 18.10
66,140 18.86
25,928 7.40
11,436 3.26
18,367 5.24
350,604 100.00


Metropolitan Region of Curitiba
Number of Percentage of
Households Households
21,798 4.24
63,667 12.39
114,669 22.32
84,856 16.51
88,203 17.16
80,128 15.59
28,768 5.60
12,290 2.39
19,483 3.79
513,862 100.00


Source: IBGE. 1991 Census (Censo Demografico).








6 In 1991, the Metropolitan Region of Curitiba still comprised only 14 municipalities,
namely, Almirante Tamandare, Araucaria, Balsa Nova, Bocaiuiva do Sul, Campina
Grande do Sul, Campo Largo, Colombo, Contenda, Curitiba, Mandirituba, Piraquara,
Quatro Barras, Rio Branco do Sul, and Sdo Jose dos Pinhais.









Planning the Perfect City

Curitiba, as most cities developed during colonial times in Brazil, has its planning

rooted in the French tradition. In 1855, the French engineer Pierre Taulois was hired as

chief surveyor of public lands and in 1857 he suggested the first changes to Curitiba's

urban space. These comprised mostly the imposition of an orthogonal grid that

obliterated the original circular pattern and dictated the quadrangular pattern to be

followed hence. The first large sanitation project executed in Curitiba was the channeling

of the Belem River, the culprit of every flood in the city. An added benefit of this project,

completed in 1886, was the implementation of the city's first public park, which

transformed a swampy, flood-prone area into a recreational area. The first basic

sanitation infrastructure standards were established in the Municipal Code of 1895.

The French influence returned during the 1940s. Alfredo Agache, a renowned

urbanist and architect, founder of the French Society of Urbanism, arrived in Curitiba

with the charge to devise an urban plan such as the ones he had developed for two other

Brazilian cities, Rio de Janeiro and Sao Paulo. The plan for Curitiba took two years

(1941-1943) to be developed. It suggested a radial road system departing from

downtown and leading social and commercial activities to structured secondary centers,

defining the orientation of the city's internal connections as well as its linkages with other

important centers in the State, along the coast, and to neighboring States. Economic

problems and the intense and rapid growth of the city prevented the plan from being

implemented exactly as conceived; however, some of its major elements still remain,

such as boulevards, stormwater systems, minimum setbacks for new construction, and the

location of future landmarks, namely the campus for the Federal University of Parana