World Policy Journal begins each issue with the Big Question, where we ask a panel of experts to provide insight into the cover theme. The question for the summer 2016 Renegade Cities issue is: How can governments collaborate with the private sector to provide affordable housing? Below, Priscila Pacheco argues that São Paulo’s collaborative housing program should serve as a model to the rest of Brazil. Click for additional perspectives from Jordan and Singapore.
By Priscila Pacheco
Researchers estimate a global $4.1 to 4.3 trillion annual investment gap between current urban infrastructure and what cities need given projected urban growth. Though many cities have good ideas, they often lack of the technical capacity to develop projects and business models that are attractive to the capital market.
In Brazil, 84 percent of the total population—170 million people—live in urban areas. Increasing demand for services and infrastructure has accompanied the steadily growing urban population. Brazilian cities also face a number of challenges resulting from the unplanned and uncontrolled urbanization process, including a housing deficit of 5.4 million homes. Of those in need of housing, 73.6 percent are from low-income families. In order to meet this demand, in 2009 the Brazilian federal government launched the social housing program “Minha Casa, Minha Vida” (My House, My Life). The program has already placed 10.5 million low-income people in 2.6 million housing units throughout the country.
Ensuring affordable housing to low-income families, however, remains a major challenge in Brazil. Gentrification and urban sprawl take low-income residents away from expensive city centers. However, there are opportunities to reverse this trend: Underutilized spaces and buildings in central areas of cities can be redesigned to give rise to affordable housing projects.
In São Paulo, the state and city governments have established a social housing construction program through a public-private partnership. The main long-term goal of the program, called “São Paulo Home,” is to offer 20,000 social housing units on the large number of underutilized properties in the city center to low-income people. According to the conditions laid down by city hall, São Paulo is investing $22.7 million, the state government is investing $132 million, and the private partner Canopus Holding S.A.—which is responsible for the construction, infrastructure, social facilities, and services—is investing an additional $255.6 million over a 20-year contract.
By identifying opportunities for intervention, the partnership has the potential to simultaneously re-energize the city center and create affordable housing. The mayor of São Paulo, Fernando Haddad, says he is implementing these changes to make the city center more accessible: “We can say that a city works well if it can accommodate all of its citizens, regardless of income. To manage and long-term planning cities is, first of all, a land access discussion.”
Cities and the private sector can and must work together to implement robust urban projects and provide affordable housing to those who need it. Successful experiments have proven the economic and social benefits of these partnerships. Brazilian cities are just beginning the process of developing housing programs, with São Paulo leading the way. Nevertheless, by finding a common language and establishing dialogue between municipal governments and the private sector, these programs may have a promising future ahead.
Priscila Pacheco is a Brazilian journalist living in Porto Alegre. She works in a non-profit organization focused on promoting urban sustainability. Pacheco is an online writer and is currently a postgraduate student in digital journalism.
[Photo courtesy of Otávio Nogueira]