IFHP presents: voices from the Hague Housing Conference
Does ‘More state’ necessarily mean ‘less market’? How the National Housing Programme My House My Life in Brazil was designed and implemented to reduce the chronic shortage of housing for low-income families acting as a stimulus to the Brazilian construction industry and, by extension, improve wages and increase employment?
While the central plea of the Hague Housing Conference 2014 was set around on the withdrawal of state from affordable housing provision, in much of Latin America a new political economy of development has emerged compromised with demands for 'more state’ and attuned to tackling the social debts and the region’s high rates of inequality. ‘More state’ has not meant ‘less market’ or a simple return to the economics of the past. Changes in the portfolio of state responsibilities and a vision of more equal distribution sit alongside strong continuities from the past, namely the retention of primary export axis and remaining fiscal restraint that are deemed essential for economic stability.
In Brazil, affordable housing provision has become a central element in the agenda of more equal distribution of national income and strong demands for economic growth. Since 2009, Brazil has been implementing an ambitious national social housing programme: “My House, My Life Programme” (Programa Minha Casa, Minha Vida - MCMV), with a goal to contract 3.75 million housing units by the end of 2014. For its magnitude, scale and amount of subsidies the MCMV is considered an important milestone in reasserting social housing as an issue of national importance for Government policy and action.
The Programme emerged in response to the specific conditions in Brazil and sets its foundation on significant public spending with a strong policy of upfront subsidies and increased housing credit, which has been possible because of Brazil’s economic stability, export bonanza and focused social agenda over the last decade. In addition, the Programme has counted on an enhanced institutional and policy framework that has better equipped local governments and improved policy tools.
MCMV does not necessarily break with the tendency of reducing the direct intervention of the state in housing provision. It creates special mechanisms to mobilize private sector housing production and designs innovative arrangements of subsidy and finance for a large range of income groups to acquire new homes. New legal and institutional arrangements evolved towards a smoother flow of resources, work procurement and a more reasonable division of responsibilities amongst municipal, federal and central governments and reflected positively in the implementation and accelerated project execution. Together these measures have demonstrated the potential of public-private partnerships to produce social-interest housing, but crucial challenges remain in engaging the private sector in more sustainable ways, in particular through more reasonable share of the risks and investments.
On balance the Programme is positive to the extent that it has established itself as a major instrument of the Government to structure social and economic policies. The integrated approach to housing provision and economic development runs evenly to the extent that the Programme has helped to stimulate the construction chain and create jobs. This has led to an increase in tax revenues and consumer power, which in turn feeds the domestic market and public revenue. Along with other initiatives in the agenda of social development policies, the MCMV makes good Government’s rhetoric of “paying-off long-standing social liabilities”. The experience of the Programme has contributed to reconcile a longstanding gap between housing demand and supply, and has laid the foundation for a continued reduction in the housing deficit in Brazil.
Overall, the key lesson learned is that such a Programme, with unprecedentedly high investments and extremely broad territorial coverage, will not succeed without highly coordinated efforts and commitment from all stakeholders: national and subnational policy capacities in particular, but also the broader network of actors in society including professionals of the building sector, academic institutions, social movements and citizens.
Issues that will define the future of the My House, My Life Programme include how state and private sector will share the burdens and responsibilities of affordable housing provision on a more equal basis, how the Programme will contribute towards a future of more inclusive cities in Brazil, in particular through tackling socio-spatial segregation and, in the economic domain, how it will address underlying concerns around dependence on primary exports to sustain public spending in welfare.
For information on the programme read the following report: Scaling-up Affordable Housing Supply in Brazil