Brazil: Building gated communities is illegal, squatting is not, scholar says

As gated communities thrive in Brazil, scholar argues the country has failed to effectively implement urban policies

One of Brazil’s most prominent urban scholars spoke with 'Brasil de Fato' about urban law and the boom of gated communities in the country / Arquitetura da Gentrificação

The collapse of a squatted high-rise in downtown São Paulo almost a month ago, where around 630 people had been living since 2003, sparked off debate about the occupation of empty buildings in Brazilian cities. Ermínia Maricato, a full professor at the Architecture and Urbanism School of the University of São Paulo, says there is no doubt: while housing movements are legitimately enforcing the social role of private property, as established by law, the country's booming industry of gated communities, which creates irregular, usually upper-class condominiums, is illegal.

But, as Brazil has traditionally failed to appropriately enforce its urban legislation, gated communities have thrived all over the country over the last 20 years, the scholar says.

Maricato has coordinated the creation of Brazil's Ministry of Cities during the first term of Luiz Inácio Lula da Silva and was the secretary of Housing and Urban Development in the city of São Paulo during the Luiza Erundina administration (1989-1992).

Read the interview she granted to Brasil de Fato.

Brasil de Fato: We’ve been witnessing great advances in urban public policies since the 1980s. However, when we look at land concentration in Brazilian cities, that's another story. What went wrong in this process?

Ermínia Maricato: We could say income distribution has improved during the Lula and Dilma [Rousseff] administrations [2013-2016]. The country’s Gini coefficient and HDI [Human Development Index] clearly show that. The minimum wage has risen above inflation, there’s Bolsa Família [conditional cash transfer program] and PRONAF, a program to strengthen family farming.

But, in cities, income distribution is faced with the cost of living – which usually is not taken into consideration and is not often part of the conversation for the Left, the workers’ movement, and economists. If property prices and transport costs and fares increase, all income increments could go to pay for the cost of living in the city. And that is what really happened, especially after the real estate market boom between 2009 and 2015.

The cost of living in the city has increased substantially because housing is a special commodity, different from all others, basically for two reasons.

First, because it requires financial capital to finance its production and consumption. People who do not inherit property and need a home have to obtain financing and usually spend decades to pay for it.

Second, because of the relationship between housing and the urban land. House prices are based on location. There are attributes that influence the price of real estate or urban land: water supply, sewage treatment, public lighting, public transportation access, schools, private services, having a home near a supply network, health and education services. All this makes up urban housing prices.

There is a big fight over real estate in the best locations, which generate differential, usually speculative income.

I estimate that, between 2009 and 2015, the State and banks have invested more than R$800 billion [US$220 billion] in the real estate market in Brazilian cities – that's in seven years. We’ve built over 400 million houses for low-income families with very high subsidies. So how come the [housing] deficit increased? Why have housing costs, rent, commuting time, and mobility costs increased?

There has been spectacular speculation in urban land. With real estate in general, but especially urban land. What we see, especially in mid-sized cities, is that urban boundaries have expanded. The Minha Casa Minha Vida projects [one of Brazil’s major federal affordable housing programs] were built far from the consolidated urban fabric. So city councils expanded these urban boundaries, including real farms actually, and as these farm areas were incorporated into urban boundaries, their value changed.

To have this huge number of people moving to housing projects on urban outskirts, water supply, sewage treatment, garbage collection services, public lighting, and public transport services expanded. All that costs money. Expanding the city has a price, and that price is paid by society as a whole. That adds value to "empty" land that is between the city and these new [urban] areas.

These people have good housing conditions, but from a city viewpoint, we have a new urban apartheid, a new segregation.

You argue that this urban process was taking place in June 2013 [when major protests were staged in Brazil] and that the Left did not understand it. What is your opinion looking back at those demonstrations five years later?

[Karl] Marx did not think about cities, so the Left cannot think about cities. That’s very sad. Economists don’t have a great tradition of thinking about this issue either.

What we’ve witnessed from 2009 to 2015 is an exponential real estate appreciation. In the city of São Paulo, rates were up 240% in this period. Real estate prices and rents have outpaced wages.

We’ve seen investments in the housing market at nearly R$800 billion [US$220 billion]. If we add the Mobility PAC [Brazil’s Growth Acceleration Program], that’s R$90 billion more [almost US$25 billion] to put up buildings that were not designed to meet people’s needs.

The needs of urban masses are found in a survey we call "Origin-Destination Survey". It shows commuting routes in our cities and how long they take, how much they cost, where people are coming from and where they are going in their commutes. For Mobility PAC projects, a small part [of funds] was assigned based on social needs. Most of it was guided by a lobby I call the "Growth Machine" – real estate capitals, big construction companies, real estate development capital, financial capital, and landowners, who really decided where those investments would be made.

It’s a deaf struggle over public money. There was no technical or broader debate to decide what projects would be top priority and where they would be located – because that would impact landowners' wealth increments.

The federal government meant well when it decided to go for a countertrend strategy [investing in construction works] when facing the GDP [Gross Domestic Product] fall after the 2008 crisis.

Now we are no longer in a period of large investments, [and we're facing] housing deficit growth, real estate appreciation, rent hikes, transport fare hikes, but especially – and that’s something no one talks about – an increase in land, real estate, and urban land concentration. This was crucial in a period that made urban life worse after 2009. In 2013, we were in the middle of that process, and we will have a lot of problems in the future, there is no doubt about that.

Criticism against developmentalism is a topic that comes up in some analyses about the Workers’ Party-led administrations [of Rousseff and Lula] and should be addressed by the Left in this year’s elections. How should a developmentalist project deal with cities’ boundaries?

See, developmentalism is better than neoliberalism, let’s be honest. Neoliberalism is about looking at cities and trying to find business opportunities, and not caring for public and social policies. It’s the privatization of the public good, the commons, and especially the public budget. This privatization is worse than a misguided developmentalism.

In Brazil, our industrial development has led to urbanization. But urbanization has been far from incorporating the masses into a process toward the right to the city. Actually, a lot of our cities are built by people themselves, oblivious to urban legislation, in their free time. But even urbanism courses don’t talk about this. They spend hours talking about land-use legislation, while the houses of the working class expand with no State interference.

We need to talk about developmentalism again, which is what happened in Latin America while core capitalist countries were experiencing the welfare state. And, yes, Brazil was one of the countries that has grown the most in the world between 1940 and 1980.

But we have to understand there is something at the core of urban politics, which is the social role of private property. Cities are built collectively. If property can be used without restraints, then there is no chance this collective construction will be socially, economically, and environmentally sustainable.

Our cities have been building more and more walls around properties, more so during this real estate market boom. These private gated communities are illegal according to Brazil’s Federal Law 6,766 of 1979. You even see affordable and low-income housing projects with walls. All this makes cities more insecure.

So, at the heart of urban policy, we have the control over land use and occupation to protect what is environmentally fragile and stop outright speculation, which is what we’ve witnessed during this real estate market boom.

The biggest issue is not about having money to invest. The biggest issue is enforcing the social role of private property according to the Constitution, federal laws, City Statutes, and all land-use laws I have read and know about. So it’s time for the court system — and also part of the Prosecutor’s Office [in Brazil, it’s the government agency in charge of law enforcement and prosecution of crimes] — to understand, read, and respect Brazil’s urban legislation.

The social role of private property is as important as the right to property in the Constitution. Unlike what people may think, when empty buildings are squatted, they are having their social role enforced. It’s time for us to enforce the law in Brazil. It’s time to stop the hypocrisy of criminalizing social movements. There are around 70 squatted properties in downtown São Paulo that are actually serving society.

We’ve seen the media talking a lot about squatting being unlawful, and now the government is actually inspecting those [squatted] buildings. But few people remember, for example, that gated communities are unlawful. Why is that?

Let’s recall that property fraud is a fact in Brazil. In Pará and Amazonas [states], you will find piles and piles of different property titles for the same piece of land.

The history of private property in Brazil is closely linked with the process of emancipation of slaves. Farmers owned the work force and the Crown owned the land until 1850. Between 1824 and 1888, there’s a shift that some authors call the emancipation of labor and the privatization of land.

Actually, this work force was not really emancipated, we know that. And the privatization of land is based on a long process to verify whether certain areas were really occupied by certain farmers. The definition of these boundaries and who owns land in Brazil is still ongoing.

This is the case in Pará, where Ariovaldo Umbelino, a geographer who has looked into this issue thoroughly, has demonstrated that, the number of land titles in the state is enough to cover an extension five times larger than the state’s actual area. But even here in the city of São Paulo you see a lot of properties overlapping.

As Brazil is traditionally lenient when enforcing urban legislation, we can understand why gated communities have boomed all over the country in the last 20 years or so.

What I’m calling gated communities are cases where the commodity is a lot, a parcel of land. It may have infrastructure, but there is nothing built on it.

The lot in gated communities has been the most lucrative product in Brazil's real estate market in the last few years. So it took precedence over the law. That’s how we live with our legislation.

We have a very modern urban legislation in Brazil. The City Statute, the Urban Mobility Law, the Metropolis Statute, the Solid Waste Law. These are celebrated all over the world. But there’s a huge contradiction between the law and reality in Brazil.

Edition: Juca Guimarães | Translated by Aline Scátola