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LAND USE POLICIES AND URBANIZATION OF INFORMAL
SETTLEMENTS: PLANNING INITIATIVES FOR ENVIRONMENTAL
PROTECTION AREAS IN CURITIBA, BRAZIL
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
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,
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
TABLE OF CONTENTS
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
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
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
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
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.
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
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
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
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
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.
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.
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.
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.
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;
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
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.
Informal Pattern Pn
Formal Pattern [buildings
Figure 2-1: Pattern of Development for Informal and Formal Settlements
Source: Grenville Barnes, Ph.D., 1998.
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
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
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
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
(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).
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
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
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.
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.
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.,
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
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)
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
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
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.
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
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
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,
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
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,
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
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,
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,
1980-1985: Third National Development Plan (IH PND-HI Plano Nacional de
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,
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
The III PND differed fundamentally from the first two National Development
Plans in its qualitative character. No quantitative measures or indicators were included in
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
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
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).
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,
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
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,
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
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
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
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
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
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
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
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
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
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
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.
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
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).
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
- 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
E 55 1 2
0-1 m.w. 1-3 m.w. 3-10 more Others
m.w. than 10
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).
E 37 90
0-1 m.w. 1-3 m.w. 3-10 more Others
m.w. than 10
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).
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
Table 5-6: Household Income in the Municipality of Curitiba and the Metropolitan
Region of Curitiba, 1991
(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.
Number of Percentage of
Metropolitan Region of Curitiba
Number of Percentage of
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