Over the past decade, Brazil has made important progress in legitimizing illegal settlements in big cities. However, according this new study by the Inter-American Development Bank (IDB), Cities Alliance, the Ministry of Cities, and the Caixa Econômica Federal (CEF), the technical capabilities of Brazilian municipal governments need to be strengthened if improvements are to be integrated into housing and urban policies that can be implemented in the city as a whole.

The study shows that unsuitable dwellings of uncertain legal status continue to dominate the landscape in Brazilian cities. The analysis shows that a favela urbanization policy, when integrated into a municipal urban design plan, ensures economies of scale and the continuity of the actions taken, enabling municipalities to obtain the maximum return in terms of development and wellbeing from investments.

The report examines nine state and municipal programs that have obtained IDB financing in Aracajú, Belém, Curitiba, Manaus, Rio de Janeiro and Baixada Fluminense, São Paulo, and Vitória. It discusses factors that either facilitate or hinder the design, execution, and maintenance of projects, and identifies four critical pillars: institutionality, continuity, quality and cost, and universalization of social services to beneficiaries. 

Based on the lessons learned, the study identifies the principal challenges, as well as the opportunities to improve favela urbanization programs:

• the quality of the new dwellings is essential. The price of land and construction is almost always the main consideration in the design of the projects, with quality being a secondary focus even though it is vital to the success of urban policies. Using budgetary arguments to justify a reduction in the quality of the buildings risks undermining program objectives and increasing maintenance costs. Programs should avoid building dwellings that are too small, that do not allow for the control of temperature and acoustics, and that cannot be expanded
• the area that exhibits most weaknesses for the beneficiary families is social service. Although social work focused on housing units has been effective for the projects studied in this publication, the big challenge is to universalize social policies. A great number of projects have had problems, such as poor use of public spaces, inadequate trash disposal facilities for residents, and problems with relationships among neighbors
• Social work continuing after project execution. Social work and the universalization of social policies, in addition to support provided during the construction of the dwellings, help generate development, social inclusiveness, civic empowerment, and democracy. The study indicates a need for integrated urban programs to include ways to strengthen the sectors that are responsible for the social components before and after delivering the housing units to the residents
• holistic focus on the provision of dwellings. A consistent urban policy should combine the urbanization of precarious settlements with the production of new dwellings and support for progressive construction, especially for the lowest-income population. In turn, the increase in the supply of housing units is dependent on an ownership and urban planning policy that expands access to low-cost urbanized tracts of land and promotes the real estate market for the low- and middle-income...