Alessandra d’Avila VieiraNational Housing Secretary

Ministry of Cities

May, 2013

LESSONS FROM BRAZIL LESSONS FROM BRAZIL scaling up slum upgrading and prevention

through national policies and program

63,84%

54,92%

36,16%

45,08%

84,25%81,25%

75,59%

67,59%

55,94%

15,65%18,75%

24,41%

32,41%

44,06%

1950 1960 1970 1980 1990 2000 2010

Urban

Rural

8,5 million km² 190,7 million inhabitants - 57 million households 26 States and the Federal District 5.565 municipalities: 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

BRAZILIAN CONTEXTBRAZILIAN CONTEXT

Rapid urban growth:

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 CONTEXTBRAZILIAN CONTEXT

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.

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.

ORGANIZATIONAL STRUCTUREORGANIZATIONAL STRUCTUREMINISTRY OF CITIESMINISTRY OF CITIES

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 NATIONAL HOUSING POLICY

STRATEGIESSTRATEGIES

SLUM UPGRADING SLUM UPGRADING ++

HOUSING DELIVERY IN SCALEHOUSING DELIVERY IN SCALE

HOUSING BACKLOG Improvised or rustic homes Involuntary family cohabitation Excessive expenditure with rent

MY HOUSE, MY LIFE PROGRAM

SLUMS AND HOUSING INADEQUACY Lack of services and infrastructure Land tenure irregularity Overcrowded homes Lack of bathroom Inadequate roofing

PAC- SLUM UPGRADING

NATIONAL HOUSING POLICY NATIONAL HOUSING POLICY

PROGRAMSPROGRAMS

GROWTH ACCELERATION PROGRAM GROWTH ACCELERATION PROGRAM (PAC)(PAC)

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)

Urban territories with varying dimensions and typologies, inhabited by low-income families and characterized by the presence of shortages and inadequacies

Emerged as an alternative housing made by low-income people, who occupied territories environmentally fragile without interest to the formal market

SLUM DEFINITIONSLUM DEFINITION

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

SLUM DEFINITIONSLUM DEFINITIONTYPESTYPES

SLUMSSLUMSSLUMSSLUMSIRREGULAR SETTLEMENTS IRREGULAR SETTLEMENTS

OF LOW INCOME DWELLERSOF LOW INCOME DWELLERSIRREGULAR SETTLEMENTS IRREGULAR SETTLEMENTS

OF LOW INCOME DWELLERSOF LOW INCOME DWELLERS

buildings sub-divided into rented

accommodation or assigned; crowded

and with common use sanitation facilities

by lack of maintenance or because their execution by the government was incomplete, requiring rehabilitation and adjustment actions.

TENEMENT HOUSESTENEMENT HOUSESTENEMENT HOUSESTENEMENT HOUSES DEGRADED HOUSING DEGRADED HOUSING PROJECTSPROJECTS

DEGRADED HOUSING DEGRADED HOUSING PROJECTSPROJECTS

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

HISTORY OF INTERVENTIONSHISTORY OF INTERVENTIONS

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

INTERVENTIONS CONCEPTSINTERVENTIONS 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

INTEGRATED: Incorporation of settlements into the formal city, with approach of urban issues, housing, land, social and environmental

INTERVENTIONS CONCEPTSINTERVENTIONS CONCEPTS

INTERVENTIONS COMPONENTSINTERVENTIONS COMPONENTS

Implementation of:

basic infrastructure

containment and soil stabilization - eliminate risks

construction of public facilities

adjustment of the road system and land subdivision

Implementation of:

basic infrastructure

containment and soil stabilization - eliminate risks

construction of public facilities

adjustment of the road system and land subdivision

Aiming to decrese the density and the reordering of the settlement may occur :

relocation (in the same area) or

resettlement (in other areas) households

The other houses may receive housing improvements such as bathrooms and new roofs

Aiming to decrese the density and the reordering of the settlement may occur :

relocation (in the same area) or

resettlement (in other areas) households

The other houses may receive housing improvements such as bathrooms and new roofs

The land adjustment is an essential and mandatory component.

It must occur during the execution of works

both for the families that will be consolidated and the ones that will be resettled

The land adjustment is an essential and mandatory component.

It must occur during the execution of works

both for the families that will be consolidated and the ones that will be resettled

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

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

Actions that promote:

autonomy

social leadership and

development of the beneficiary population in order to promote sustainable development

Actions that promote:

autonomy

social leadership and

development of the beneficiary population in order to promote sustainable development

URBAN INTEGRATION

URBAN INTEGRATION

HOUSINGHOUSING LAND ADJUSTMENT

LAND ADJUSTMENT

ENVIRON-MENTAL

ENVIRON-MENTAL

SOCIALWORK

SOCIALWORK

45,000 families benefited

US$ 541 million investment

45 communities served

5.340 new houses

45,000 families benefited

US$ 541 million investment

45 communities served

5.340 new houses

Environmental recovery

Sanitation, drinking water, paving, storm water drainage and house improvements

PAC – SLUM UPGRADINGPAC – SLUM UPGRADINGDAMS BILLINGS AND GUARAPIRANGA – SÃO PAULO/SPDAMS BILLINGS AND GUARAPIRANGA – SÃO PAULO/SP

0

15

30

45

60

Centro-Oeste Sul Norte Nordeste Sudeste

% RECURSOS ALOCADOS % DOMICÍLIOS PRECÁRIOS

RESULTS 2007 – 2010: 558 operations contracted 1,2 million benefited families Investments, in financing and

subsidies: US$ 8.4 billion

PAC – SLUM UPGRADINGPAC – SLUM UPGRADING

PAC 2 2011 – 2014: Additional US$ 14.1 billion Modalities of support: Building works and services Studies and plans

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

PAC – MAIN CHALLENGESPAC – MAIN CHALLENGES

Alemão - RJ

Vila Dique – RS

Gravataí – RS

MY HOUSE, MY LIFE MY HOUSE, MY LIFE

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 inclusionIncome distribution and social inclusion

GOALGOAL: DELIVERY OF 3 MILLION HOMES

1st PHASE INVESTMENTS (2009-2010)1st PHASE INVESTMENTS (2009-2010): R$ 53.3 billion (US$ 26.6 billion)

2nd PHASE INVESTMENTS (2011-2014)2nd PHASE INVESTMENTS (2011-2014): R$ 125.7 billion (US$ 62.85 billion)

R$ 72.6 billion in subsidies (US$ 36.3 billion)

R$ 53.1 billion in financing (US$ 26.55 billion)

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 (PlanHab): 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 LIFEMY HOUSE, MY LIFEGUIDELINESGUIDELINES

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

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

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.

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.

MY HOUSE, MY LIFEMY HOUSE, MY LIFE

RESOURCES / FUNDSRESOURCES / FUNDS RESOURCES / FUNDSRESOURCES / FUNDS INSTRUMENTSINSTRUMENTSINSTRUMENTSINSTRUMENTS

MY HOUSE, MY LIFEMY HOUSE, MY LIFEIMPROVEMENTS FOR IMPROVEMENTS FOR 22ndnd PHASE 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 MY HOUSE, MY LIFE

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%

Units Contracted: 2.279.706

Investments US$ 71.7 billions

Units Delivered 1.050.393

Units Contracted: 2.279.706

Investments US$ 71.7 billions

Units Delivered 1.050.393

RES. BANGU – RIO DE JANEIRO/RJ RES. RONALDO TENUTA - CAMPO GRANDE/MT RES. CONCEIÇÃO VILLE - FEIRA DE SANTANA/BA

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

MY HOUSE, MY LIFEMY HOUSE, MY LIFEMAIN CHALLENGESMAIN CHALLENGES