Growth Acceleration Program (PAC)

In its committment to ensuring universal access to decent housing, and the improvement in the rate of growth in the economy through increasing income and employment of the pupulation, the Brazilian government launched the Growth Accelaration Programme in January 2007. The main objective of the programme was to accelerate the pace of economic growth, increase employment and income rates, decrease social and regional inequalities, overcome infrastructure bottlenecks and improvement in the living conditions through a series of interventions to encourage private investment, increase in public investment in infrastructure and the removal of obstacles to growths such as bureaucratic, administrative, regulatory, legal and legislative obstacles. Later in the year 2009, one of the critical goals of the PAC was to reduce the impact of the international economic crisis (Da Cruz Rios, 2011).

According to Schaller (2008), the PAC is the umbrella term for thousands of infrastructural projects around the country, such as the rebuilding of houses and the construction of roads, many of which aim to improve the situation of disadvantaged members of Brazilian society. As indicated above, besides investment in infrastructure projects, the programme also focuses on the investment in institutional measures. The government believed that economic growth would result in an increase in resources available to the nation for the housing need and at the same time reduce social inequalities and regional imbalances. To overcome the problem of inequality in the country, the government also focused on housing initiatives such as the slum (favelas) upgrading as a priority of the PAC programme as well as the programme-‗My House My Life‘ (Mina Casa Mina Vida).

(i) Informal settlements upgrading

The usually modest infrastructural projects involved in the upgrading of the slums were intended to be the catalysts for social change. The projects were aimed at reversing the social patterns of exclusion that hindered poor favelados (those who live in favelas) from getting jobs, receiving mail, applying for credit or using commercial delivery services. The impact of the upgrading of informal settlements through the PAC programme in favelas such as Rocinha and Complexo do Alemão, in the city of Rio de Janeiro became flagship projects in Brazil.

Favelados were employed as workers during the upgrading of favelas and therefore participated in the improvement of their own settlements. These projects therefore temporarily addressed unemployment along with the instability of favela construction. According to Smith (2008), the favelas show a physical configuration and space allowance that compare slightly better than Alexandra in Johannesburg (South Africa), generally superior to the accommodations in Dharavi, Mumbai (India), and vastly superior to Kibera, Nairobi (Kenya).

The Brazilian approach is that of upgrading the slum areas, attempting to keep the community in the same location by building infrastructure and seeking to regularise property titles (Abiko et al., 2012).

Deciding on whether the community stays on the same site or not, depends on where the slums are located. Relocation may be necessary where current sites are near waste landfills, under overpasses or in areas prone to mud slides or frequent floods in riverside areas, among oher things. According to Smith (2008), favelas in Brazil, are illegal for any of the following reasons:

 Located on public land, and hence illegally developed.

 Located on invaded private land. Private land, such as that intended for high-end development or adjacent to large infrastructure facilities (e.g. power plants).

 Located on improperly subdivided land. Some private land was illegally subdivided, by the owner or his/her agent, without government permission and without a properly approved cadastre of identified plots. Families bought in good faith, thinking they properly owned the land on which their home sits, only to discover they did not.

The following distinct perspectives determine how decisions are generally taken with regard to how to deal with the phenomenon of slums (Smith, 2008:5):

 Removal/Expulsion: ‗You are not good people and we want you out of our city.‘

 Demolition/Rebuilding: ‗Your homes and your informal community are not good and we will replace them with a nice new one‘.

 Provision of infrastructure: ‗Your home and informal community are good, it's our city that is deficient, and we will bring you the same benefits other citizens receive.‘

Initially, policies were aimed at eradicating favelas and relocating residents to housing projects on the outskirts of the cities. This was as a result of the government‘s belief then that favelas were a transitory phenomenon and not an urban phenomenon that led to the implementation of policies of removal and defavelisation. However, in the years that followed, in the 1970s, public policies regarded favelas as an urban phenomenon and part of the urban scenery (Leite, 2012). In São Paulo, for instance, during the period 1986–1996, a programme of demolation and rebuilding, known in

Brazil as Cingapura, was implemented to rationalise a favela by creating new construction, publicly funded housing, five or six-storey walkup flats, which are then sold to the residents in a condominium or co-operative format. According to Smith (2008), the Cingapura‘s basic operational sequence was as follows:

 Neighbourhood identification

 Enumeration of residents and households, and the determination of eligibility

 Provision of resident education in high-rise living

 Demolition of existing favelas and residents‘ relocation to nearby temporary housing

 New construction of five-six storey walkup flats

 Occupancy by returning households

 Post-occupancy social services.

This whole sequence took a very long time. From neighbourhood identification through to reoccupancy often lasted four or five years; meanwhile, communities, however informal, that were socially functional found themselves uprooted, leading to a loss of social cohesion. Those who moved back to the new site were often quite different from those who had moved away. According to Abiko et al. (2012), the current approach to slum upgrading in Brazil takes the following approach:

 Preliminary studies to determine the technical, physical, legal and cost feasibility of implementing the slum upgrading project

 Registration of slum residents to avoid swelling the numbers of beneficiaries, preferably using local residents during the registration

 Project design to ensure that the needs of beneficiaries are met in the most efficient manner

 Executing the actual construction activities with the maximum participation of beneficiaries.

One of the typical examples of the upgrading of informal settlements is the upgrading of Jardim São Francisco. The implementation of Jardim São Francisco‘s global upgrading project was expressed as

‗changing the tire while the car is running in a Formula 1 race‘ which, according to Leite (2012: 11) means actions that target the short and long term at the same time; a task that requires accurate management capacity; structuring a highly skilled team; and especially discipline. Besides the problems of the precariousness of the settlement and the fact that people settled in risk areas and some on contaminated landfills, and lacked infrastructure, sanitation, transport and jobs, the neighbourhood was socially destabilised over and over due to a number of interventions that were introduced over a number of years, as each intervention brought in new residents. To enhance the effective upgrading of the settlement, in Jardim São Fransisco, for instance, a social work duty team comprised of social

workers, engineers, architects, psychologists and other professionals was introduced to facilitate dialogue with the residents and enhance the daily intervention actions (Leite, 2012).

(ii) My House My Life Programme (MCMV)

The programme was launched by the federal government in 2009 to increase access to housing finances and infrastructure, providing more jobs and business opportunities during the construction of houses, and the elimination of the inequality gap, as part of the Growth Acceleration Programme (PAC). According to Moraes Valença and Fiahlo Bonates (2009), the prime overt objective is the promotion of economic growth. The plan was made by the government‘s economic ministries, not the Ministry of the Cities, in consultation with real estate interests, as the major government action to face the economic crisis. The investment was allocated such that 40 per cent of housing units to be built should benefit people earning up to three legal minimum wage, 40 per cent to benefit those earning from three to six legal minimum wage and 20 per cent to benefit those earning from six to 10 legal minimum wages.

The programme‘s phase 1 (2009–2010) target was the construction of 1 million homes for low- to middle-income families, in partnership with the federal government, states, municipalities, the citizens and real estate developers to clear about 14 per cent of the country‘s housing deficit. The programme‘s phase 2 (2011–2014) target was increased to 2 million more homes, and the programme‘s main objective was to provide an economic environment conducive to the development of formal housing with government subsidies for low- to middle-income families (Selvanayagam, 2012). In order to increase access to housing to low-income families, the My House My Life Programme assumed that each income bracket needed a different strategy (Rosa, 2010). The allowances were allocated as per the following criteria:

 Households with a total income of up to three times the minimum wage qualified for the full allowance without any insurance and notary costs to pay

 Households with a total income of between three and six times the minimum wage qualified for income supplements for loans, a discount on the cost of insurance, a 90 per cent reduction of the notary registration cost and access to the guaranteed fund (which covers in case of unemployment, death or other specified circumstances)

 Households with a total income of between six and ten times the minimum wage qualified for lower cost of insurance, an 80 per cent reduction in the notary registration cost and access to the guaranteed fund (which provides cover in case of unemployment, death or other specified circumstances).

The programme is administered and governed by the CAIXA Economica Federal. Households are able to purchase a house with a close to zero interest rate and refinance it over a period of 36 months.

A number of bottlenecks were experienced during the implementation of the programme; some of which are as follows:

 A lack of established precedence in the low-income sector resulted in only about 1 per cent of the houses completed in phase one allocated to low-income earners, with the large majority going to middle-income buyers who took advantage of the subsidies

 The rising cost of production reduced the viability of low-income housing and, as a result,

‗corner cutting‘ procedures led to poor quality of many project outcomes, as housing developers tried to maintain their profits

 Owing to the high cost of well-located land, housing projects were developed in areas that were not located within close proximity to employment and social amenities

 Complicated administrative processes had contributed to the disincentivisation of housing developers due to the high level of red tape they experienced to get projects approved

 Inability to attract and retain construction workers due to unfavourable working conditions, low salaries and better employment opportunities elsewhere in Brazil‘s growing economy

 Overpricing of completed units by developers led to failure by low-income earners to afford completed units despite the subsidies; consequently a number of these houses were unoccupied.

To enhance the programme‘s progress, a number of instruments were developed to remove a number of bottlenecks that were delaying the development of a housing policy targeting lower range income.

The following are some of the instruments:

 The establishment of the Housing Guarantee Fund

 The establishment of cheaper insurances

 Introduction of tax incentives for the production of housing for low-income earners

 Introduction of funding for infrastructure and modernisation of the production chain

 Reduction of turn-around time for the issuing of environmental licensing.

Despite criticism and fear that offering loans to poor families was risky, especially as this was perceived as the root cause of the US financial crisis, there was an increase in employment benefits due to the demand for construction workers; some construction companies‘ share indexes increased by 50 per cent since the introduction of the programme; and poor Brazilians were afforded a long-overdue opportunity to access affordable houses (Selvanayagam, 2012). It is also critical to mention that the My House My Life Programme seamlessly integrated the development model where the

country‘s economic development is achieved simultaneously with income distribution and social inclusion (Magalhaes, 2010). The programme made a significant impact on the implementation of the National Housing Plan objectives as it yielded amongst others, the following benefits:

 Increased government resources for the delivery of housing

 The prioritisation of support for low-income families

 Differential treatment of beneficiaries according to income levels

 Providing incentives for the expansion of the private market for low-income population

 Reduced interest rates for housing finance.

(iii) Mutirao and Self-Management Programme

In 1987, after the fall of a dictatorship regime in Brazil, probably in response to the pressure from the urban social movements, the new government launched a mutual aid housing programme called Mutirao. This programme offered community organisations grants to help them buy materials to build their houses through self-help. Although the initial target of 400 000 units was not achieved due to the termination of the programme in 1990, some regions continued with the programme (Cabannes, 1997). In the Fortaleza Metropolitan Region where, according to Cabannes, more than 2.5 million inhabitants lived in favelas, the programme received support from the state and municipal governments, and resulted in the construction of more than 10 000 houses. In Jardim São Francisco, the work processes and work plans of the Mutirao projects were developed by a tripartite organisation comprised of government which provided funding and defined the rules for the implementation of the programme; community associations comprised of future beneficiaries and managed enterprises; and technical assistance organisations which assisted in the construction works (Leite, 2012). This programme was meant for the construction of new houses and upgrading of favelas. According to Cabannes (1997), one of the Mutirao programmes, the Communidades programme implemented in Parque Havai in Fortaleza, had the following features that distinguished the programme from the conventional ones:

 The land was not given to an individual but to qualifying community organisations

 The existing community (grassroots) groups were respected and therefore there was no need to create new organisations for the implementation of the Mutirao projects

 The Mutirao was not limited to the building of one‘s house but also to the development of a land site with relevant social amenities

 Income generating projects are integrated within the Communicades projects unlike in conventional Mutirao projects

 The house was not perceived as an end in itself, but was perceived as a means to strengthening communities through the provision of jobs during the construction of the houses and necessary social amenities

 Institutions of higher learning and vocational training institutions participate in this type of Mutirao.

One of the critical lessons learnt from the Mutirao programme is the close and structured coordination of the planning, and the actual construction of the houses with job creation, income enhancement and large-scale training on both the professional and community levels. Another critical lesson is that community building must always mean the participation of beneficiaries in the planning, design and implementation of their communities. The importance of involving NGOs by government enhanced the capacity of government in its attempt to house the nation. The use of appropriate techniques and building processes that facilitated self-production of building materials and self-build programmes and mutual aid is critical for effective community building. It is also critical to note that housing units built under this programme in some parts of Jardim São Francisco, in addition to utilising residents‘

manpower, works were done by contractors. Notwithstanding this, according to Leite (2012), to dispel an incorrect view and a stigma, that projects implemented under mutirao programmes are associated with backlogs and archaic construction processes and traditional designs, a number of housing projects such as the Anastassakis–São Fransisco project were started and completed in self-managed Mutiraos.