Global Urbanization

Chapter 17. Thinking About Urban Services Needs in Fast-Growing Cities: Housing in S

C h a p t e r 1 7 Thinking About Urban Services Needs in Fast-Growing Cities: Housing in São Paulo Suzana Pasternak The prevalent forms of housing among low-income groups in Brazil vary according to the city and period considered. In each place and time, a specific form of housing has been prevalent in the urban landscape. Three basic types of housing stand out: slums (cortiços), squatter settlements (favelas), and peripheral land developments, with home ownership and self-construction. Interventions for the provision of low-cost housing have changed throughout history. Slave quarters gave way after 1888 to the solutions of industrialized cites: the spontaneously developed slums and the government -backed factory villages. Renting was by far the primary means of having a roof. From the 1930s onward, sharp industrial growth and expansion above 5 percent gave rise to increasing rural-urban migration and to the growth of large cities, especially in the southeast region. Interventions in the relationship between lessor and lessee discouraged the construction of rental housing units. The urban settlement pattern had three pillars: low-cost land development, home-ownership, and selfconstruction . The urbanized area expanded horizontally, thus increasing the city’s periphery. During the Vargas period (1930–1945), government concerns over housing issues prompted interventions in the rental housing market and the creation of construction programs sponsored by Retirement and Pension Institutes. During the ‘‘populist period’’1 (1945–1964), the ‘‘entrepreneur state’’ created the Fundação da Casa Popular (Popular Housing Foundation), for low-cost housing, which became the seed of the military government’s housing policy. After the military coup in 1964, the federal government set up an ambitious system to finance and Housing in São Paulo 295 build mass housing. The choice of housing policy to be the central axis of the government’s social policy was determined by the military government ’s need to legitimize itself with the low-income population. According to one of the creators of the system, Minister Roberto Campos, ‘‘the solution to the problem of home ownership has the specific allure of encouraging savings that would otherwise not exist, and contributes a lot more to creating social stability than rental property. Homeowners think twice before getting into trouble or vandalizing the property of others and become allies in order maintenance’’ (Banco Nacional da Habitação 1966, 20–21). In the beginning of 1985, when the so-called New Republic came about, the National Housing Bank was going through a deep institutional crisis which eventually brought it to bankruptcy; in 1986 it closed. The following year, CEF (Caixa Econômica Federal), a federally owned savings bank and commercial bank, incorporated the activities of the National Housing Bank. The federal government’s policy was primarily based on alternative programs, within an ideological framework of compensatory policies. During the Sarney administration, federal housing programs focused on the National Program for Collective Home Building (Programa Nacional de Mutirões Habitacionais). The Collor administration, which followed the Sarney administration, innovated very little in its two-and-a-half-year term. The state and municipal governments, however, made interventions in the low-cost housing market, adopting their own criteria. This was possible because of the decentralization provided for in the Constitution of 1988. With the inauguration of President Itamar Franco (1992), decentralization increased further. The Cardoso administration began in 1995 and sought to implement a new financial system, the SFI (Sistema Financeiro Imobiliário, or Real Estate Financial System). It also designed new capital funding systems, implemented mortgage securitization, and prioritized the granting of credit directly to the buyer (and not to a real estate developer or construction company, as was the case with SFH (Sistema Financeiro da Habitação, or Housing Financing System). Now, in the Lula administration (which began in 2002), the SFI has still to be fully implemented and decentralized policies continue to prevail. The problem of home financing remains unsolved. There are efforts in place to create a specific system for the medium- and high-income population based on the SFI—that is, on mortgage refinancing—and another system for the low-income population, with heavy subsidies. But social housing is still in very short supply. In short, there are macrostructural limitations that make squatter settlements a possible housing solution for the low-income population. 296 Cases in Urban Development The problem of squatter settlements has grown to unprecedented proportions...