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LESSONS FROM BRAZIL scaling up slum upgrading and prevention through national policies and program LESSONS FROM BRAZIL scaling up slum upgrading and prevention through national policies and program Alessandra d’Avila Vieira National Housing Secretary Ministry of Cities September, 2013

BRAZILIAN CONTEXT q q 8, 5 million km² 3, 914 municipalities with less than BRAZILIAN CONTEXT q q 8, 5 million km² 3, 914 municipalities with less than 20, 000 inhabitants, where 17% of the population lives 38 municipalities with over 500, 000 inhabitants concentrate 30% of the population Development promotion and management capacities are very uneven between them 190, 7 million inhabitants - 57 million households 26 States and the Federal District 5. 565 municipalities: Rapid urban growth:

BRAZILIAN CONTEXT Housing deficit of 5, 5 million households (2008): 83, 5% in urban BRAZILIAN CONTEXT Housing deficit of 5, 5 million households (2008): 83, 5% in urban areas and 89, 6% concentrated in families earning up to 3 minimum wages Over 3 million households in slums: 85% in metropolitan areas Around 11 million households with lack of urban services and infrastructure: electric lighting, canalized water supply, sewage collection system or septic tank, and rubbish collection Estimated annual growth of 1, 5 million new households – future demographic demand for housing 69% concentrated in the lower income strata (up to 3 mw) 1 minimum wage (mw) R$678 (2013) = US$339 R$2, 0 = US$1

BRAZILIAN CONTEXT Federalism and inequalities 3, 914 municipalities with less than 20, 000 inhabitants, BRAZILIAN CONTEXT Federalism and inequalities 3, 914 municipalities with less than 20, 000 inhabitants, where 17% of the population lives 38 municipalities with over 500, 000 inhabitants concentrate 30% of the population Decentralized federal State: by the 1988 Constitution municipalities gained more political, management and legislative powers as well as the competence to collect taxes, but. . . Development promotion and management capacities are very uneven between them Almost 90% of municipalities with less than 10, 000 inhabitants depend almost fully on state and national government transfers

ORGANIZATIONAL STRUCTURE MINISTRY OF CITIES q Created in 2003, the main goals are: Regain ORGANIZATIONAL STRUCTURE MINISTRY OF CITIES q Created in 2003, the main goals are: Regain and assert the state's ability to formulate and manage urban development policies; Develop and implement the National Urban Development Policy and sectoral policies for housing, sanitation and mobility; Build a federative pact to elaborate and implement the National Urban Development Policy. q Council of Cities, created en 2004 as an important instrument of democratic management of the National Urban Development Policy Collegiate organ of deliberative and consultative nature to formulate, study and propose guidelines for urban development and monitor its implementation; Composition: 86 members, with voice and vote, of various social segments that are elected at national conferences.

NATIONAL HOUSING POLICY STRATEGIES Maintain investment level in upgrading and tenure regularization Guarantee investment NATIONAL HOUSING POLICY STRATEGIES Maintain investment level in upgrading and tenure regularization Guarantee investment and urban land in order to deliver new housing units to the lower income classes Support municipalities to develop housing planning and instruments and to manage local territory Modernize and cheapen civil construction, meeting demands on technological infrastructure, sustainability, and professional qualification Provide new housing alternatives, linked to other social and income generation policies, for population in high social vulnerability

NATIONAL HOUSING POLICY PROGRAMS SLUM UPGRADING + HOUSING DELIVERY IN SCALE SLUMS AND HOUSING NATIONAL HOUSING POLICY PROGRAMS SLUM UPGRADING + HOUSING DELIVERY IN SCALE SLUMS AND HOUSING INADEQUACY Lack of services and infrastructure Land tenure irregularity Overcrowded homes Lack of bathroom Inadequate roofing PAC- SLUM UPGRADING HOUSING BACKLOG Improvised or rustic homes Involuntary family cohabitation Excessive expenditure with rent MY HOUSE, MY LIFE PROGRAM

GROWTH ACCELERATION PROGRAM Investments in three infrastructure axis: Logistical Infrastructure (highways, railways, ports, waterways GROWTH ACCELERATION PROGRAM Investments in three infrastructure axis: Logistical Infrastructure (highways, railways, ports, waterways and airports) Energetic Infrastructure (generation and transmission of electrical energy, petrol, natural gas and renewable energies) Social and Urban Infrastructure (light for all, sanitation, housing, metros, water sources)

SLUM DEFINITION q Urban territories with varying dimensions and typologies, inhabited by low-income families SLUM DEFINITION q Urban territories with varying dimensions and typologies, inhabited by low-income families and characterized by the presence of shortages and inadequacies q Emerged as an alternative housing made by low-income people, who occupied territories environmentally fragile without interest to the formal market

SLUM DEFINITION TYPES SLUMS IRREGULAR SETTLEMENTS OF LOW INCOME DWELLERS Agglomerates of self -built SLUM DEFINITION TYPES SLUMS IRREGULAR SETTLEMENTS OF LOW INCOME DWELLERS Agglomerates of self -built houses, arranged in a disorganized way, dense and lacking in essential public services, occupying land of property of others With self-constructed houses and lack or precarious basic urban infrastructure by lack of maintenance or because their execution by the government was incomplete, requiring rehabilitation and adjustment actions. buildings sub-divided into rented accommodation or assigned; crowded and with common use sanitation facilities TENEMENT HOUSES DEGRADED HOUSING PROJECTS

HISTORY OF INTERVENTIONS Until the 70’s - Eradication of slums Total removal of families HISTORY OF INTERVENTIONS Until the 70’s - Eradication of slums Total removal of families for housing on the periphery of cities without public facilities and transportation systems 80’s and 90’s - Partial and gradual upgrading Implementation of basic sanitation services - water and sewerage Local initiatives - states and, especially, municipalities 2000’s – Complete and integrated upgrading Implementation of actions to face all the needs diagnosed in the area The Federal Government incorporates slum upgrading as an axis of housing policy

INTERVENTIONS CONCEPTS q The scale of the problem no longer involves the removal of INTERVENTIONS CONCEPTS q The scale of the problem no longer involves the removal of all families for housing projects

INTERVENTIONS CONCEPTS COMPLETE: Configuring a polygonal where will run all works and services necessary INTERVENTIONS CONCEPTS COMPLETE: Configuring a polygonal where will run all works and services necessary for the elevation of the urban and housing conditions of the settlement q INTEGRATED: Incorporation of settlements into the formal city, with approach of urban issues, housing, land, social and environmental q

INTERVENTIONS COMPONENTS URBAN INTEGRATION Implementation of: basic infrastructure containment and soil stabilization eliminate risks INTERVENTIONS COMPONENTS URBAN INTEGRATION Implementation of: basic infrastructure containment and soil stabilization eliminate risks construction of public facilities adjustment of the road system and land subdivision HOUSING LAND ADJUSTMENT Aiming to decrese the density and the reordering of the settlement may occur : The land adjustment is an essential and mandatory component. relocation (in the same area) or resettlement (in other areas) households The other houses may receive housing improvements such as bathrooms and new roofs It must occur during the execution of works both for the families that will be consolidated and the ones that will be resettled ENVIRONMENTAL Aiming to prevent further occupations in areas where families are removed from, they shall be restored to a proper destination considering: the natural topographic profile and urban and social characteristics of the location SOCIAL WORK Actions that promote: autonomy social leadership and development of the beneficiary population in order to promote sustainable development

PAC – SLUM UPGRADING DAMS BILLINGS AND GUARAPIRANGA – SÃO PAULO/SP Sanitation, drinking water, PAC – SLUM UPGRADING DAMS BILLINGS AND GUARAPIRANGA – SÃO PAULO/SP Sanitation, drinking water, paving, storm water drainage and house improvements 45, 000 families benefited US$541 million investment 45 communities served 5. 340 new houses Phase 2: more US$1. 6 billion and 46, 400 families Environmental recovery

PAC – SLUM UPGRADING LEFT MARGIN OF THE ANIL RIVER– SÃO LUÍS/MA Urban mobility, PAC – SLUM UPGRADING LEFT MARGIN OF THE ANIL RIVER– SÃO LUÍS/MA Urban mobility, environmental recovery, housing delivery and infrastructure, housing improvements and public facilities 13, 000 families benefited US$243 million investment 12 communities served 2. 720 new houses 6. 000 housing improvements before

PAC – SLUM UPGRADING COMPLEXO DO ALEMÃO – RIO DE JANEIRO/ RJ Urban mobility PAC – SLUM UPGRADING COMPLEXO DO ALEMÃO – RIO DE JANEIRO/ RJ Urban mobility (cable car), housing, mitigation of risk areas, infrastructure and facilities 30, 000 families benefited US$478 million investment 950 new houses + 1. 155 acquisition 7 cable car stations and 12 public facilities

PAC – SLUM UPGRADING RESULTS 2007 – 2014: 931 operations contracted 1, 8 million PAC – SLUM UPGRADING RESULTS 2007 – 2014: 931 operations contracted 1, 8 million benefited families Investments, in financing and subsidies: US$ 13. 4 billion

PAC – MAIN CHALLENGES VILA DA BARCA – BELÉM/PA VILA DIQUE – PORTO ALEGRE/RS PAC – MAIN CHALLENGES VILA DA BARCA – BELÉM/PA VILA DIQUE – PORTO ALEGRE/RS ALEMÃO – RIO DE JANEIRO/RJ Maintaining current levels of investment Sustainability after the conclusion of interventions Integrate other public policies in the territory, such as public safety, education, health and social care Structuring a technical assistance system to stakeholders and to the families Improvement of regulatory frameworks

MY HOUSE, MY LIFE SLUM PREVENTION A set of instruments for meeting the different MY HOUSE, MY LIFE SLUM PREVENTION A set of instruments for meeting the different income classes housing needs, aimed at: Increasing opportunities for accessible housing Generating employment trough investments in the construction industry Income distribution and social inclusion GOAL: DELIVERY OF 3 MILLION HOMES GOAL 1 st PHASE INVESTMENTS (2009 -2010): R$ 53. 3 billion (US$ 26. 6 billion) (2009 -2010) 2 nd PHASE INVESTMENTS (2011 -2014): R$ 125. 7 billion (US$ 62. 85 billion) (2011 -2014) R$ 72. 6 billion in subsidies (US$ 36. 3 billion) R$ 53. 1 billion in financing (US$ 26. 55 billion)

MY HOUSE, MY LIFE GUIDELINES Broad set of instruments in order to reach all MY HOUSE, MY LIFE GUIDELINES Broad set of instruments in order to reach all income levels: Tax incentives for companies and developers Tax reduction for materials Subsidy policy for families Strategies National Housing Plan (Plan. Hab): Distribution of resources/housing units according to the states housing deficit Regionalization of the costs of the dwelling Counterpart of states and municipalities Organized in modalities based on a combination of: family's income level; organizer agent: construction company, entities, governments or individual urban or rural areas; size/population of the city; with or without subsidies associated to credit.

MY HOUSE, MY LIFE FUNDING INSTRUMENTS RESOURCES / FUNDS Federal Budget (OGU): Main resources MY HOUSE, MY LIFE FUNDING INSTRUMENTS RESOURCES / FUNDS Federal Budget (OGU): Main resources of subsidies for the program, transferred at no cost Employee's Severance Guarantee Fund (FGTS): individual savings accounts opened under employee's names, in which employers deposit monthly, for means of retirement, unemployment and for financing housing. Can be reached by any person regardless of an individual account. Residential Leasing Fund (FAR): Private accounting fund that receives resources of OGU Social Development Fund (FDS): Private fund constituted by parts of compulsory acquisition, today sustained by contributions of the Federal Budget and used to operate the program. Special Taxation Regime: reduction of the tax rate for real estate property destined for social housing Financing with FGTS: Complementary Subsidy – financial contribution that varies according to the family's income, modality of the program and location/region; Balance Subsidy – pays the administration fee of the loan/finance and reduces the interest rate paid by the family; Guarantee Fund: formed with resources of the Federal Budget to reduce credit risk, reduce insurance and refinance parts of the installments in case of unemployment or loss of income source. Reduction of Registry Costs: cheaper and faster both for the families and for the developer companies

MY HOUSE, MY LIFE IMPROVEMENTS FOR 2 nd PHASE Adjustments in income level groups MY HOUSE, MY LIFE IMPROVEMENTS FOR 2 nd PHASE Adjustments in income level groups Increase of lower income homes delivery goal - from 40% to 60% Improvement of financing concession rules Empowerment of women head of families in contract signing Improvement of technical norms and of beneficiary selection process Closer partnership with local governments (for social assistance, better housing location, delivery of social and community facilities)

MY HOUSE, MY LIFE RESULTS Units Contracted: 2. 279. 706 Investments US$ 71. 7 MY HOUSE, MY LIFE RESULTS Units Contracted: 2. 279. 706 Investments US$ 71. 7 billions Units Delivered 1. 050. 393 Income groups Goals Units (contracts signed) % Goal Group 1 2, 0 million 978. 092 49 % Group 2 1, 0 million 1. 018. 031 101, 8% Group 3 0, 4 million 283. 583 70, 8% RES. BANGU – RIO DE JANEIRO/RJ RES. RONALDO TENUTA - CAMPO GRANDE/MT RES. CONCEIÇÃO VILLE - FEIRA DE SANTANA/BA

MY HOUSE, MY LIFE MAIN CHALLENGES Improve design and building quality, in order to MY HOUSE, MY LIFE MAIN CHALLENGES Improve design and building quality, in order to minimize condominium maintenance costs Improve urban location: guarantee complementary urban uses and public and community facilities Increase participation of local governments: in project assessments and approval, in maintenance and operation of public facilities and services and in effectiveness of social development and livehood promotion actions Attract new partners to the low income real estate financing market Optimize participation of government tiers, social movements and community based organizations in the housing programs Institutional strengthening of the Ministry of Cities in order to undertake follow up and monitoring actions