Fernanda Magalhães, Editor SLUM UPGRADING AND HOUSING IN LATIN AMERICA Slum Upgrading and Housing in Latin America Fernanda Magalhães Editor Inter-American Development Bank Cataloging-in-Publication data provided by the Inter-American Development Bank Felipe Herrera Library Slum upgrading and housing in Latin America / Fernanda Magalhães, editor. p. cm. Includes bibliographic references. 978-1-59782-268-8 (Paperback) 978-1-59782-269-5 (PDF) 1. Slums-Latin America. 2. Urban poor-Housing-Latin America. 3. Housing policy-Latin America. 4. City planning-Latin America. 5. Urban policy-Latin America. I. Magalhães, Fernanda (City planner). II. Inter-American Development Bank. Fiscal and Municipal Management Division. III. Inter-American Development Bank. Housing and Urban Development Division. IV. World Bank. HV4050.5.A5 S58 2016 IDB-CP-45 Publication Code: IDB-CP-45 JEL Codes: O18 Keywords: slums, housing, land, policies, urban development Copyright © 2016. 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Proofreader: Sue Debowski Table of Contents Acknowledgments .................................... v Foreword .......................................... vii About the Authors .................................... ix List of Abbreviations .................................. xi Chapter 1: Critical Policy Choices in Slum Upgrading .... 1 Introduction ................................ 1 The Inability to Cope with Urbanization ........ 2 Facing the Slum Challenge: A Snapshot of Policy Choices in Brazil, Chile, and Colombia . 4 Critical Factors Beyond Housing ............... 7 Challenges of Scaling up Policies and Providing Universal Access to Quality Housing ......... 9 References .................................. 11 Chapter 2: From Government-Led to Market-Based Housing Programs ........................ 13 Introduction ................................. 13 Country Profile and Urban Context ............. 14 Slum Eradication Efforts Since the 1960s: Lessons from the Chilean Experience ........ 16 Lessons Learned from Forty Years of Implementing Market-Based Policies to Reduce the Housing Deficit .............. 23 Conclusions ................................. 26 References .................................. 28 Chapter 3: From Mass Pubic Housing to a Twin-Track Approach ............................... 31 Introduction ................................. 31 Country Profile and Urban Context ............. 32 Dealing with an Explosive Urbanization Process: What Housing Policy?. 37 Facing the Challenge of Slums. 39 iv SLUM UPGRADING AND HOUSING IN LATIN AMERICA A Twin-Track Approach: Combining Slum Upgrading with Market-Based, Low-Income Housing .................................. 48 Conclusions ................................. 54 References .................................. 57 Chapter 4: Learning from the Bottom Up .............. 61 Introduction ................................. 61 Country Profile and Urban Context ............. 62 Overview of Housing Policies .................. 65 Structural Reform and the Evolution of National Housing Policies: The Failure of Market-Based Housing .................................. 65 Enabling National Policies in Slum Upgrading: Learning from Experience .................. 72 Inspiring Municipal Experiences ............... 75 Critical Remaining Issues and Lessons Learned .. 93 Conclusions ................................. 96 References .................................. 98 Chapter 5: Shifting Gears ........................... 101 Summary ................................... 101 Lessons and Challenges ...................... 101 A Way Forward: Planning Ahead ............... 114 Annex 1: Glossary of Terms ........................ 115 Annex 2: Exchange Rates .......................... 119 Acknowledgments Several individuals and institutions have collaborated with valuable inputs to this publication, which has engaged local officials and professionals of several coun- tries. A critical factor in this joint-research effort has been the support of the manager teams of the organizations involved, namely the World Bank (Christine Kessides); Cities Alliance (William Cobbett); Inter-American Development Bank (IDB) (Ana Maria Rodriguez-Ortiz, Ellis Juan, Vicente Fretes Cibils, and Javier Leon); United Nations Human Settlements Program (UN-Habitat) (Mohamed El Sioufi); and the Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ), on behalf of Federal Ministry for Economic Cooperation and Development (Elke Siel). Ultimately, this research was only possible due to the hard work, pas- sion, and expertise of a large number of staff, international experts, and local researchers, including the following: IDB: Fernanda Magalhaes (Coordinator and Editor). World Bank: Andre Herzog (Project Coordination); Anushay Said (Project and Research Contributor); Eduardo Rojas (Final Case Study and Publication Reviewer); Janice Perlman (Case Study and Cross-Cutting Lessons Review); Patricia Cezario (Case Study Review); and Elaine Tinsley, Sadna J. Samaranayake, and Margarita Greene (Preliminary Research Methodology). Peer Reviewers: Ira Peppercorn (World Bank), Ellen Hamilton (World Bank), Zoe Elena Trohanis (World Bank), Judy Baker (World Bank), and Prof. Dr. Peter Herrle (GIZ). Cities Alliance: Rene Peter Hohmann (Coordinator), Andrea Merrick, and the CA Secretariat team. UN-Habitat: Claudio Acioly Jr. (Coordinator), Christophe Lalande, and Matthew French. GIZ: Prof. Günter Meinert (Coordinator), Tanja Feldmann, and Dr. Thomas Taraschewski. Country Researchers: Fernanda Lonardoni (Brazil), Patricia Acosta (Colombia), and Roberto Moris (Chile). v Foreword The extensive research for this publication reviews global experiences with national slum upgrading policies and enables the documentation of the genesis of flagship programs in countries of Africa, Asia, and Latin America, which were subject to peer reviews by selected experts and in workshops held in Nairobi and Washington, D.C., as well as during sessions of the World Urban Forum in Medellin and Naples. Experts were commissioned to prepare preliminary reports on selected cases of housing and slum upgrading policies and engage local offi- cials and professionals in Brazil, Chile, Colombia, and nine other countries across the world: Bangladesh, Ethiopia, India, Indonesia, Morocco, Thailand, Tunisia, South Africa, and Vietnam. The results of this collaborative research will be pub- lished in a forthcoming publication by the World Bank and Cities Alliance. This book focuses on the specific experiences in Brazil, Chile, and Colombia. The manuscripts of the studies in these countries served as the basis for depicting specific Latin American experiences, enabling the sharing among a broader public of lessons learned from how governments in the region have responded—or failed to respond—to the housing challenge. By offering insights of how the region has approached the problem, the chapters herein have been designed to stimulate learning, reflection, and dialogue among the region and other areas of the developing world that may be experiencing similar situations. vii About the Authors Fernanda Magalhães has worked as a planning practitioner for 20 years. In 2006, she joined the Inter-American Development Bank (IDB) as a senior urban specialist. Fernanda has over 25 years of academic experience and has authored many papers and books, including Regiões Metopolitanas no Brasil and Urbanização de Favelas no Brasil, published in English, Spanish, and Portuguese; “Changing Favelas in Neighbourhoods: the Favela-Bairro program in Rio de Janeiro,” edited by Vicente