Brazil needs a new approach
Brazil needs a shift in attitude if it is to successfully tackle its growing housing crisis, says Ruban Selvanayagam
If the delegates raise their heads above the pomp and circumstance of June’s forthcoming Rio+20 conference and take a look around the city, the state of its social housing will be a prime indictment of what is really happening in relation to global sustainability.
Rio de Janeiro’s complex landscape of living conditions is itself a microcosmic example of the many contradictions facing developing world property markets: unsustainable middle-upper class speculation in sharp contrast with the distinct lack of progress in dealing with fast-growing expanses of urban slum communities.
Looking at Brazil as a whole, there is a need to build 4,932 new low-income housing units every day until 2022 - the bicentenary of Brazil’s independence - based on an aggregated existing deficit level of 6.7 million homes. However, the situation is evidentially much worse than is often reported when considering the highly inefficient data collection methodologies which invariably include homes with abysmally degraded living conditions as part of the national stock count.
In its defence, Brazil - relative to the other so-called ‘emerging’ nations - has at least initiated steps to confront this debilitating problem in the form of the lynchpin ‘Minha casa, minha vida’ (‘My house, my life’) policy: an initiative based on subsidising new homes in line with real salary levels. Yet, while the government incessantly touts how the social housing sector is finally on the right track, more than three years after the programme’s launch, it’s barely taken the first bite into the housing need of the target demographic, with just 3,500 homes completed to date.
The most attributable problem is related to rising construction costs: both land and material costs have seen rises in addition to the massive pressures on the labour market where workers - refusing to accept low salaries and poor working conditions - are justifiably demanding more (demonstrated by the highest level of strike action that the sector has witnessed in decades). This has also meant that most Minha casa, minha vida housing developments are unable to use green building materials and methodologies.
Yet with business leaders unwilling to compromise margins, most have either abandoned ship or forcibly pushed sales values disproportionately higher than real income levels - a strategy that has been seemingly encouraged by the government, which raised the maximum sales price ceiling of 170,000 reais (about £55,000) in 2011.
One of Brazil’s biggest home builders, Gafisa, reported a loss of 1.1 billion reais last year, after its low-income housing unit, Tenda, got into financial difficulties. But there also remains political apathy to admit that there is a problem. The government has continued to plough funds into various forms of subsidised municipality-specific housing initiatives (still part of the Minha casa, minha vida programme) which; despite appearing to possess noble objectives, have largely resulted in poorly constructed, peripheral and unmanaged housing condominiums which are failing to tackle, and are debatably worsening, the root causes of the crisis.
My company, Fez Tá Pronto, uses a patented plaster block to build luxury, environmentally friendly homes for the ‘base of the pyramid’ - the poorest part of the population, living on as little as £200 a month.
Elsewhere, a transformation of attitudes and cohesive support the sector’s deserved growth is crucial for Brazil’s housing future - not the continued stance of throwing money blindly at the situation.
Ruban Selvanayagam is base of the pyramid housing developer at Fez Tá Pronto