UrbanWarfare

UrbanWarfare

HousingundertheEmpireofFinance

RaquelRolnik

ForewordbyDavidHarveyTranslationbyFelipeHirschhorn

WorkpublishedwiththesupportoftheBrazilianMinistryofCulture/NationalLibraryFoundation

ObrapublicadacomoapoiodoMinistériodaCulturadoBrasil/FundaçãoBibliotecaNacional

FirstpublishedinEnglishbyVerso2019FirstpublishedasGuerradoslugares:acolonização

daterraedamoradianaeradasfinanças©Boitempo2015

Translation©FelipeHirschhorn2019Chapter6andafterwordtranslation©BiancaTavolari2019

Foreword©DavidHarvey2018

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Formymentors,GabrielBolaffi,LúcioKowarick,WarrenDeanandDavidHarvey

ForEugêniaandTeresa,thetwoendsoftheribbonofstrengthandlovethatunitesus

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Contents

Foreword

Introduction

PartI

TheGlobalFinancialisationofHousing

TheMortgageSystem

ExportingtheModel

Post-CrisisMeasures:MoreoftheSame?

TheDemand-SideSubsidiesModel

Microfinance:TheLastFrontier

PartII

TenureInsecurity

FromEnclosurestoForeclosures

Informal,Illegal,Ambiguous

PrivateProperty,ContractsandtheGlobalisedLanguageofFinance

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InsecureTenureintheEraofLargeProjects

PartIII

FinancialisationintheTropics

AttheFrontieroftheReal-Estate–FinancialComplex

Real-EstateAvenues

Real-EstateGames

June2013:JourneysandBeyond

Afterword:TheRentalHousingBoom–NewFrontiersofHousingFinancialisation

Acknowledgements

Notes

Index

Maps

Foreword

Raquel Rolnik has written a magisterial survey and analysis of what is fastbecoming one of the most compelling global crises of our time: the seeminginabilityofourincreasinglydominantfreemarketeconomicandpoliticalsystemtofurnishadequate,affordablehousingfor themassof theworld’spopulation.Whileproblemsofhousingprovisionhaveoftenbeenaddressedinthecontextofthepoliticsandpoliciesofparticularnationstates,neverbeforehassuchabroadglobalcomparativeworkofthesortherepresentedbeenattempted.

Rolnikhasbeenable todrawonawealthofexperienceasanurbanistandurbanplanner.AsdirectorofthePlanningDepartmentofthecityofSãoPaulo,shehadtodealwiththetumultuousproblemsofhousingprovisioninoneofthefastest-growingmetropolitanareasoftheworld.AsnationalsecretaryforUrbanProgrammesoftheBrazilianMinistryofCitiesinthefirstLulaAdministration,shefoughttoputteethintotheclausesoftheBrazilianconstitutiondesignedtoprotect theright to thecity.But itwasheryearsasUNspecial rapporteur thatprovidedherwiththebasicrawmaterialstocompilethisremarkablestudy.

Her method of enquiry when she was UN rapporteur is worthy of note.Instead of basing her work on the words of government officials alone, shetalked with those marginalised populations most affected by poor housingconditionsandfailingpoliciesontheground.Thisbroughtherintocontactwithsocial movement activists who furnished her with multiple grass rootsperspectives on their vast and ongoing daily struggles to sustain and createadequatehousingprovision all toooftenunder themost trying and sometimesevenrepressivecircumstances.

Whileeverycityhasitsownrichanddiverseparticularities,whatbecomesapparentfromRaquel’spenetratingandmovingaccountsisthatthedilemmasofadequatehousingprovisionalsohaveauniversaldimension,thanksinparttothe

exportofaparticularmodelofhousingprovisionundertheaegisofinternationalinstitutions (such as the World Bank and the IMF, along with the HabitatConferencessponsoredbytheUN).

Thecontemporaryobsessionwithmarketprovision,with landandpropertytitlingandtheextensionofprivatepropertyarrangements,withhomeownershipand access to credit and finance, along with the so-called ‘deepening’ offinancialarrangementstobuildasecondarymortgagemarket,isoverwhelming.While often well-meaning and on occasion sufficiently robust to be judgedsuccessful(particularlywithrespecttothesecuringofsocialcontrol),themaineffect of these obsessions has been to open the path, asRaquel shows, to theexploitationofhousingmarketsasvehiclesforspeculativegainforlandholders,developersandfinanciers.

Increasingly, thehabit of shapingpublic policies to counter recessions andwardoffdepressionsby‘buildinghousesandfillingthemwiththings’hasgivena macro-economic role to housing markets that is more about stabilizingcapitalismthanaddressingdeficitsinhousingformarginalizedpopulations.Theresulthasalltoooftenbeenevictionsanddisplacementsofthosepopulationsinthe name of urban upgrading and renewals that disrupt supportive socialnetworks,howeverfragileandtenuous.Theneighborhoodmayimprovebuttheneedypeoplewhooncelivedtherehavedisappeared.

On some occasions, market reforms have allowed marginalized andimpoverished populations to temporarily accumulate assets (through, forexample, sub-prime lending and other forms of micro-finance) only to havethose gains erased through subsequent financialmanipulations and crises.Themostspectacularexample is,ofcourse, theforeclosureonmore than7millionhouseholds in theUnitedStates after2007/8and the lossofmore than70percent of the asset values held by low-income black populations. The endlessaccumulation of capital by financial institutions has largely occurred at theexpense of the well-being of those populations that social policies weresupposedtoserve.

Thepoliticalandsocialresistancetothissystemiseverywhereinevidence,andRaquel’s documentation of thiswidespread struggle frombelow to secureadequate housing rights and appropriate shelter is inmany respects inspiring.Socialmovementsfightandstruggletoacquireortakebacktherighttoadecenthouseinadecentlivingenvironmentendowedwithadequatelifechances.Thecommodification of housing provision over the last forty years of neoliberalpolitics has not gone uncontested. While the well-to-do are furnished withabundantopportunitiestoindulgetheirfanciesandtheiroftenbizarretasteswith

multiple luxury mansions in a variety of privileged locations and climes, themassoftheworld’spopulationiseithertechnicallyhomelessoratbestcrammedtogetherininsalubriousdwellingsinfetidlocationsor,inthecaseoftheswellingnumbers of global refugees fleeing violence,war and environmental disasters,confinedtotentcitiesinremotelocationscutofffromanykindofeconomicorsocialopportunities to re-establishanormal life.To thesepopulations the ideathatadecenthouseinadecentlivingenvironmentwithaccesstoadequatelifechancesmightbeabasichumanrightmustseemlikeacruelutopiandream.

InclearingoutmylibraryrecentlyIcameacrossabookletpublishedbytheNewYorkMetropolitanCouncilonHousingin1978.ThetitlewasHousing inthe Public Domain: The Only Solution. In 1978, Raquel reminds us, the USHousingandUrbanDevelopmentDepartmenthadabudgetof$83billiontohelppursuethatsolution.Limitedequityco-opsandevencommunitylandtrustswerespringingupinmostmajorcitieswithmunicipalgovernmentalsupporttooffernon-market solutions.By1983,with theRonaldReaganneoliberal turn in fullswing,theHUDbudgetfornewconstructionhadbeenreducedto$18billion.IntheClintonyears, a periodof increasingly intensiveneoliberal reforms, itwasabolishedentirely,alongwithalmostanyprospectofmunicipalsupportfornon-market solutions. Forty years later, I find myself reflecting on the disastrousworldwide consequences of not taking up the obvious and the only solution.Forty years of demonizing that solution lies at the root of contemporaryinadequacies.Itistimetoturnthataround.Readingthisexcellentandinspiringbookisagoodplacetostart.

Introduction

‘How dare this Brazilian woman come over here to evaluate UK housingpolicy?’ These words summarise the reaction of members of the BritishConservativegovernmenttomytriptotheUnitedKingdomin2013,asUnitedNationsspecialrapporteuronadequatehousing.

My visit to the UK coincided with a moment of political debate in thecountry.Oneoftheproposedwelfarereforms–partofthegovernment’sfiscalausterity programme –was being contested by the people affected.Under thepretextofopeningupavailablestocktopeopleinneedofahome,themeasureknownasthe‘bedroomtax’introducedcutsinhousingbenefitstoindividualsofworking age who lived in public housing and had ‘spare bedrooms’.1 Thosedirectlyaffectedbythecutswere,bythattime,organisinglocalmovementsandbuildingregionalandnationalnetworksinprotest.Inaddition,oppositionpartyrepresentativesandsocialmovementsfightingagainsttherelentlessdismantlingoftheBritishwelfarestatewereendorsingtheprotests,alongsidesupportfromsomesectorswithinthepress.

Among those affectedwere individuals and families already living on theedge.Thesepeoplewereamongthemostvulnerablegroups inpublichousing:the poorest of the poor, often coping with mental illnesses or physicaldisabilities.Thenewmeasuresthreatenedtorobthemofthestability,safetyandguaranteeofadignifiedlifethatthepublicwelfaresystemhadpromisedthem.

It was clear from the outset that council tenants with ‘spare rooms’ weregoing to bemade tomove to smaller houses or flats. Furthermore, theywereunlikelytoberehousedinthesameneighbourhood,orevennearby.Insum,suchapolicywouldforciblyuprootpeoplefromthecommunitiesinwhichtheyhadbuilt their lives. At the time of my arrival, a few months after the policy’simplementation,mostoftheaffectedpeoplewerestrugglingtostayput,despite

the cuts to their housing benefits and consequent deterioration of their livingconditions.

Beforemyarrival,theUNrapporteur’svisittotheUKwasconsideredbythegovernment as a mere diplomatic ritual, necessary to confirm the state’scollaborationwiththeUN’shumanrightsprotocol.Inthefaceoftheunexpectedoutcry thateruptedwhile Iwas there, theConservativeParty’s reactionwas todiscredittherapporteur–contestingtheauthorityofthevisitandattemptingtocharacterise it as a politicisation of theUN’s role by local opposition parties.Thiswasdonebyunderminingarapporteurwhowasunwiseenoughtolistentoandbelievethevoicesofthosesufferingasaresultofthenewpolicies.

However, the Conservatives’ resentment was not merely against a UNrapporteurwhocriticisedthem.Itwasagainsta‘Brazilianwoman’,hailingfroman ‘underdeveloped’ country marred by the existence of favelas and otherdegrading housing forms. One who, moreover, dared to state that the recentreforms in the British social housing system were a step backwards and aviolation of the housing rights of the affected people. The campaign ofdisqualification that followed, spearheaded by the right-wing tabloids, onlyexposedtheprejudicesmoreclearly.

Firstly,ahousingexpertfromtheworld’speripheryshouldneverleavetheirplace of origin. They should focus on thoughts and actions directed towardsovercomingwhatisdefinedbytheWesternNorth(‘thecentreoftheworld’)asanincompletemodernisingproject.Subjecttothegeopoliticsoftheinternationaldivisionoflabourandknowledgeproduction,‘ThirdWorld’or‘underdevelopedworld’intellectualsandpolicymakersshouldberestrictedtotheirhomecontexts.Forthedominant logicofdevelopmentalism,thosecontextsarenotconsideredsingular socialandpolitical formations,butexamplesof failedand incompleteprojectsofthenationstatestheyareexpectedtoreproduce.2

Secondly, in the geopolitics of the international system of human rights,European countries are identified as exemplary, assuring civil and politicallibertiesalongwithreasonablyuniversalisedsocialsecuritysystems.Incontrast,it is in the ‘ThirdWorld’ countries that theworst violations are concentrated.Especially violations of economic, social and cultural rights, which aredenouncedinthediplomaticarenamainlybydevelopedcountries.

ContrarytowhattheBritishConservativePartybelieved,myvisittotheUKwas not motivated by the anti-bedroom tax campaign, but by a researchhypothesis that evolved over the course of my six-year mandate as the UNrapporteur on housing rights. This hypothesis became the foundation for theconstructionofalarge-scalenarrativeaboutacurrentglobalprocess:theradical

transformationofthedirectionsofhousingpoliciesworldwide,anditsfailureasanalternativetotheprovisionofadequatehousingforall.

In 2008, I had just started my mandate in the Human Rights Council(UNHRC)when theeffectsof the financial subprimemortgagecrisisbegan toresonatearoundtheworld.AccountsarrivedfirstfromtheUS,thenfromEuropeand other countries, of individuals and familieswhowere losing their homes.Thenewsspokeatthesametimeofthecollapseofaglobalisedfinancialsystem,and indicated that this failure was highly connected and interwoven with theproductionofbuiltspaces,especiallyhousing.

Tryingtounderstandtherootsofthecrisis,Istartedtoresearchtheoriginsofhousingfinancialisation.Ichosethisthemeasoneofthemaininvestigationandaction axes of my mandate, striving to observe it through country missions,working visits and questionnaires addressed to countries. I presentedmy firstreportonthisthemein2009.In2012,aftercompletingcountrymissionsintheUS,Kazakhstan,Croatia,IsraelandintheWorldBank,andfollowingavisittoSpain,Ipresentedmysecondreport,observingthethemefromdifferentanglesandlocations.

Theseexcursions reinforced thehypothesis thatwearegloballywitnessingthe impacts of the ideological and practical hegemony of a specificmodel ofhousingpolicy:onebasedonthepromotionofhomeownershipthroughmarketpurchaseviacreditloans–amodelthatspreadaroundtheworldattheelectronicspeedoffinancialflows.Attemptingtodevelopthishypothesismoredeeply,in2013IchosetheUnitedKingdomtobethelastcountrymissionofmymandate.It was appropriate, because the UK has been and continues to be one of theepicentres and laboratories of the theoretical formulation and practicaltransformationofhousingintoafinancialasset.

Besides the financialisation of housing, throughout my mandate as arapporteur Iwitnessedmassive forcedevictions, resultingasmuch from large-scaleprojectsasfrompost-disasterreconstruction.AvisittoHaiti,monthsafterthe2010earthquake,aswellasmissionstotheMaldivesandIndonesia,hitbythe 2004 tsunami, allowedme closely to observe situations of extreme socio-environmental vulnerability, in which previous tenure arrangements werefundamentaltodefine–ortoblock–rights.Fromthesevisitsandthreereportson the topic,3 I formulated the hypothesis that the hegemony of registeredindividual freeholdpropertyover everyother formof tenure relation isoneofthemostpowerfulmechanismsoftheprevalentterritorialexclusion.Withinthecontractual language of finance, territorial ties are reduced to theunidimensionality of their economic value and to the expectations of future

revenue streams – conditional on the guarantee of perpetuity of individualproperty. Therefore, the expansion of the boundaries of land and housingfinancialisationgoeshandinhandwiththeincreasedfragilityofotherformsoftiestotheland,generatingamachineryofdispossession.

Given the increasing connection between the organisation of sportsmega-events and urban restructuring projects, thismachinery becomes progressivelymorevisibleintheprocessofpreparingthehostcities.Intherun-uptotheFIFAWorld Cup in SouthAfrica (2010) and the BeijingOlympicGames (2008), Ireceived reports of forced eviction from individuals and organisations alike.Coincidentally,in2007Brazilwasannouncedasthehostofthe2014WorldCupandRiodeJaneiroasthehostofthe2016SummerOlympicGames.Fromthenon, I focusedonmega-eventsand the right tohousing ina reportpresented toUNHRCin2010,andstartedtochartthisprocessinBrazilinloco.Ivisitedhostcities and talked to people affected or at risk of eviction, as well as tointellectuals and activists who that same year were beginning to organise theBrazilianWorldCupPopularCommittees.

Althoughtherapporteur’smandatewasstructuredaccordingtothegrammarofhumanrights,itwasimpossibleformenottolivethisexperienceasaplanner,housingpolicymakerandurbanstudiescriticalresearcher.Ialsoconsideredthat,given my limitations in the juridical field, I should take advantage of myknowledge of city planning and housing to ‘translate’ the kind of informationlargely confined to human rights circles into the vocabularies of public policyandcurrentcriticalurbanthinking,thusstrivingtoamplifythemilieuinwhichthissubjectisdebated.

Therefore,whilethethematicandmissionreportsthatIpresentedtotheUNconstitutethemainbasisfortheempiricalmaterialandbibliographicreferencesof this book, it is important to highlight that these documentswere originallywritten in technical language, specific to human rights and with a predefinedformat. Here, the reports are free from diplomatic and formal constraints andserveasastimulusfortheargumentsIwillbepresenting.

Realestateingeneral,andhousinginparticular,constituteoneofthenewestandmostpowerfuloftheexpandingbordersoffinancialcapital.Thisexpansionisbasedonthecombinationoftwomainelements.Firstly,thebeliefthatmarketscan regulate the allocation of urban land and housing by generating themostrational distribution of resources. And secondly, the development ofexperimentaland‘creative’financialproductslinkingfinancetobuiltspaces.

This double movement led public policymakers to abandon the notion ofhousingasasocialgoodandofcitiesaspublicartefacts.Intheprocess,housing

and urban policies renounced their role as redistributors ofwealth.No longerwas housing conceived as a common good that a society agrees to share, byprovidingfor thosewith lessresources. Instead itbecameamechanismofrentextraction, financial gain and wealth accumulation. This process resulted inmassive territorial dispossessions; the creation of ‘placeless’ poor urbanpopulations; newprocessesof subjection structured around themechanismsofdebt;andasignificantintensificationofsegregationincities.

Thereductionofthevarietyofpossiblewaysofexistinginaterritorytoonesinglerecognisedmodel–homeownership,aformitselfcompletelycolonisedbydisciplinesof finance–hasbeenconductedbyandunder the leadershipofgovernments. In each one of the observed situations, the State produces itsmargins – subprime in the US, informal in ‘Third World’ cities – in ordereventuallyto‘unlock’itsterritorialassets,expandingthemarketborders.

This book offers a global panorama of the process of urban land and housingcolonisation by global finance in the past four decades. I identify its startingpointinthe1980s,anditsfirsthigh-magnitudeinternationalcollapseinthe2007financialcrisis–causedbytheburstoftheUSreal-estatebubble.Followingthistrack, the book shows the ties and connections between processes occurringsimultaneouslyincitiesoftheglobalNorth,South,EastandWest.

Thefirstandsecondpartscorrespondtothelarge-scalenarrativetowhichIreferred at the beginning of this text. It is a world map ‘puzzle’ of housingpolicies,thatpiecestogethertheirrelationwithurbanpolicies.Housingpoliciesareat thesame timepartofacountry’spoliticaleconomyanddislocatedfromit.4

In the first chapter, tracing the evolution of housing policies in variouscountries, I attempt to weave the lines of a net that defines the dominantparadigm: a model of privately owned homes bought via mortgage creditcertificates.Ialsoaimtopresentthespecificformsandsocio-politicalmeaningsthatthisnewparadigmassumesindifferentcontexts.

Thesecondpartofthebookdescribestheprocessesofdispossessionofthepoorestandmostvulnerablearoundtheworld.Usingexamplesofpost-disasterreconstructionprojectsandmega-eventpreparations,andreferringtourbanandland policies implemented in various countries, I attempt to relate the globalcrisisoftenureinsecuritytotheadvanceofthereal-estatefinancialcomplexanditsdirectimpactonhousingrights.

Inthethirdpart,thesameprocessesarereassessedinordertodescribeandinterprettheBraziliantrajectoryduringtheperiod1980–2007.Landandhousing

colonisation by finance is treated in terms of the recent evolution of thecountry’s housing and urban policy.The period studied also saw the return ofdemocracy to Brazil, spawning a movement for urban reform in which theuniversalisation of housing rights was a key element. Institutional actionincreasedas left-wingpartiesgainedmomentumatall levelsof legislativeandexecutivepower.Duringthesameperiod,theglobalmovementthatIdescribeinmyfirsttwochapterswasalsotakingplaceinBrazil.

To some extent, the third part of the book revisits my own trajectory ofactivism, professional action and reflection upon Brazilian cities during thatperiod,atimewhenIwasinclosecontactwiththecountry’shousingandurbanpolicy.IwaspartoftheMovementforUrbanReform,Iactedalongsidepartiesand governments and I dreamed of the utopia of the right to the city for all.Therefore, the thirdpart of thebook ismore than an essayon the theoretical-methodologicalapplicationofthehypothesisdevelopedinthetwopreviouspartstoBrazil’sspecificpoliticaleconomycontext.Writingitwas,forme,awayofmourningforthosedefeats,aswellasanattempttounderstandthecomplexityof the current Brazilian political and economic crisis. Once more, there is adisplacement in thebook: fromaprotagonist implicated in the constructionofpolicieswithinBrazilian realpolitik to the intellectual honesty of a researcherandactivist.

Lastly, the Afterword, written in 2018, offers a glimpse of the continuingprocess described in thiswork. Following themortgage crisis of 2007, a newoutbreakoffinancialisation–theseizureofresidentialrentalmarketsbyfinance–hasbeenrakingovertheashesofthepreviousone,imposinganewcircleofdispossession over the same, racialised and deprived bodies. In the Braziliancase, the eruption of protests in 2013 announced the beginning of a politicalcrisisthatledtotheimpeachmentofPresidentDilmaRoussefandthecaptureoftheBraziliangovernmentbyaliberalconservativecoalition.

In theAfterword I also point out the porosities and resistanceswithin theglobal processes that I have described, revisiting the scenes of protest andresistance that open each chapter of the book. This is the urban warfareannounced by the book’s title, which simultaneously questions the prevalentpoliciesandprefiguresotherpossibleurbanworlds.

Itwasaprivilegetoobservetheworldforsixyearsfromthevantagepointofa UN special rapporteur on adequate housing. I have no doubt that thisexperience was fundamental in spurring me to break away from themethodologicalparochialismandnationalisminwhichweintellectualsfromthe‘globalSouth’areoftenensnared–weurbanresearcherssituatedonthemargins

oftheworld’sintellectualproduction,foreverurgedtoreflectwithintheconfinesofthe‘national’–or,atbest,regional–universe.5

If further reason were needed, my photo in the Daily Mail (the reliablyxenophobictabloidthatoncesupportedtheBritishUnionofFascists),presentedas the image of a sorceress, a practitioner of African rituals from the putridBrazilianfavelas,fortifiedmyresolve.IknewthatafterconcludingmyworkasaUNrapporteur,thisbookwouldimmediatelybewritten.

PARTI

1TheGlobalFinancialisationofHousing

Scenesfromthebeginningofthetwenty-firstcentury,September2010.It was a cold and windy morning in Astana, the futuristic capital of

Kazakhstan.Aftercrossinga sortofplateauablazewith theshinycreationsoffashionable big-name architects,we finally arrived in a large tent tomeet thehungerstrikers.LyingonhammockssurroundedbysignswritteninKazakhandRussian,Asian-lookingelderlypeopleweremixedwithred-hairedwhitewomenand middle-aged couples, taking shifts in beds and chairs. Having paid theinstalments for apartments they had acquired off-plan, they were victims ofconstruction companies that had gone bankrupt and disappeared, leaving thebuildings’skeletonsunfinishedandfamilieswithneitherhomenormoney.

Astana’s hunger strikers were just the most daring among the 16,000borrowers affected by the bankruptcy of – mainly Turkish – constructioncompanies that had already halted 450 projects.1 In addition to the hungerstrikers,therewerealsothoseaffectedbyforeclosuresinAlmaty,thecountry’shistoriccapitalandeconomiccentre.During theyearsofcreditboom,KazakhbanksandtheirclientscontracteddebtsinbothUSdollarsandeuros,andwerenowstrugglingtopaytheirobligations.

In Astana and Almaty, the victims of the economic crisis, many nowhomeless,toldusthattheyhadbeenstronglyencouragedbythegovernmenttobuy apartments via mortgage credit certificates. (The president, NursultanNazarbayev,ledtheCommunistPartyduringtheUSSReraandhasbeenheadofthe government since Independence.) They also reported that the publicinstitutionsinwhichmanyofthemusedtoworkhadevensponsoredthesalesofapartmentstotheiremployees.ThegroupofstrikersinAlmaty,mostlymadeupofwomen,receivedmeinasmallapartmentdecoratedwithabannerthatread:

‘Government,helpyourpeople’.2

May2012WeclimbedthehighesthillofPuenteAlto,inSantiagodeChile’smetropolitanregion, in order to look across the Bajos de Mena area. It is one of theneighbourhoods inwhich thousandsof social housingprojectsbuilt byprivatecompanies are concentrated. They were commercialised via an association ofmortgage credit certificates and governmental subsidies to low-incomeborrowers. These estates have been built in Chile since the beginning of the1980s.Theviewisimpressive:aseaofhousesandfour-orfive-storeybuildingsasfarasyoucansee.

The housing rights activists who accompaniedme pointed to Volcán II, ahousing estate in the process of being demolished. They explained that thisneighbourhood has becomeone of themetropolitan region’smost problematicareas from a social point of view: drug addiction and trafficking, domesticviolenceandsocialvulnerability.3

Theyalsoshowedmea1983document,writtenatthemomentofthelaunchofChile’shousingprogram.Itwassignedby the thenministerofhousingandurbanism,amanfromtheChileanChamberofConstruction. In thedocument,he declared that the need for housing is ‘an element of social order that istranslatedandexpressedinsquaremetres’andthatthedemandforhousingis‘afactorofeconomicorderthatismaterialisedinmonetaryquantities’.4

Autumn2009The streets of Pacoima, a few kilometres away fromLosAngeles,California,looked likeaghost town. In thesuburban landscapeof frontyards reaching tothe streets, signs of abandonment were everywhere: mountains of forgottenrubble;dozensof‘ForSale’and‘ForRent’signsnexttomailboxes;doorsandwindows sealed with wood or bricks. The minister of a local church, whoaccompaniedmeinthevisit,toldsadstoriesoffamilieswho’dhadtoleavetheirhomesbecausetheycouldnotaffordtherepaymentsontheirloans.Heevokedthe difficulties of those who remained in the neighbourhood, struggling tosurviveinatownthat,havinglostitsfiscalbase,couldnotkeepbasicservicesrunning.

Attheendofastreet,inanoldSUVtransformedintoahome,Roger,Maryandtheiryoungchildrenwerecookingpastaonanimprovisedstove:‘We’velostourhouseandwesimplyhavenowheretogo.’

November2012Asmorning broke in a neighbourhood ofBilbao in theBasqueCountry, cashmachinesandbankheadquarterswerecoveredingraffiti:‘murderers’.Itwastheday after fifty-three-year-old Amaia Egaña’s suicide. She jumped from thewindowofher fourth-floorapartment,momentsbeforebeingevicted.Shehadfailedtopaytheinstalmentsforthebankloanthatshehadtakenouttobuytheapartment.Thiswastheseconddeathinsimilarcircumstances in less thanonemonth.5Bilbaowasnottheonly–northemostseriously–affectedcityintermsof foreclosures. According to data from the Spanish judicial system, between2007andthethirdtrimesterof2011,349,438homeforeclosureswereinitiatedinSpain.Accordingtothesamesource,oneachdayof2011,212newforeclosureprocesseswereopened.6

1March2012InBarcelona,oneofthecitiesmostrockedbythecrisis,IattendanassemblyofthePlataformadeAfectadospor laHipoteca (PlatformforPeopleAffectedbyMortgages).Since2009,thissocialmovementhasworkedtoorganisethepeopleconcernedinordertomakethecrisisvisible,establishingsupportnetworksandlobbyingforthepromotionofpublicpoliciestoaddressthissituation.Ilistentodozens of testimonies during themeetings: LatinAmericanmigrantswho losttheir jobs and could no longer pay the instalments; pensioners who, asguarantors of their children’s loans, now must hand over their own home tobanks;coupleswholosttheirhomeandstillhavehugedebts…Allthisbecause,inSpain,with thedrop inpropertypricesafter thebubbleburst, thevalue thatbanksobtainfromthesaleofahousedoesnotcovertheentiretyofthedebt.

Moreover, if no buyer is present at the auction of the confiscated house(whichhappensin90percentofcases),thelawstipulatesthatthevalueoftheproperty covers only 60 per cent of the total loan.7As a result, in addition tolosingtheirhomes,peopleremainmiredindebt.

Summer2011AtdawninTelAviv,oneofthecity’smostimportantarteries,DizengoffStreet,is filled by tents. The occupation of public spaceswas part of the strategy ofthousands of demonstrators – mostly young people – against the lack ofaccessible housing. The decade-long spiralling rise of real-estate prices hadreacheditspeak.ThelackofrentaloptionsandpublichousinginareasinwhicheconomicopportunitiesareconcentratedhadputhousingpolicyatthecentreofIsrael’spoliticalagendathatsummer.

August2013WhenIenteredthenineteenth-centuryhallofanoldfactory,nowconvertedintoa culture and events centre in Manchester, I remembered Friedrich Engels’swritingsandthought:‘Thesagastartedhere’.8

Wearrived justas the firstpartof themeetingwasabout to finish.On thewalls,signswritteninmarkerspeltoutstrategiesandschedulesforthefollowingmonths. It was one of the regional meetings for the campaign against thebedroom tax – one of the coalition government’s recently implemented fiscalausterity measures that most severely affected residents of British housingestates.Ourpresencewasannounced,andanyonewhofeltcomfortablesharingtheirexperiencewasinvitedthroughtoanotherroom.

Aroundthirtypeoplegatherednextdoor.Therewashesitationatfirst.Manyof them had known each other for months, having participated together inpreparatorymobilisations andmeetings; however, they had never talked abouttheir personal dramas. A middle-aged lady stood up and said that she was aprofessionalnurse,awidow,andthatsheusedtheextrabedroominherhousetooccasionally host her two granddaughters. Her daughter, addicted to cocaine,was unable to look after the children inmoments of relapse. Losing the two-bedroomhousewouldmeaninabilitytoprovidethissupporttoherdaughterandgranddaughters.

Another woman said she suffered from depression and, having lived forthirtyyearsonthesameestate,couldcountonanetworkoffriendlyneighbourstohelpherkeepstable.Therefore,shesaid,shechosenottomoveout,despitehavingtopayapenaltytolivealoneinatwo-bedroomapartment.Ashamed,sheadmitted that now she could hardly afford to buy food, so that, as well asresortingtofoodbanks,9shehadoftenlookedforleft-oversintheestate’sbins.

Otheraccountsfollowed,butthemosttouchingmoment–atleastforme–waswhenayoungman,inanelectricwheelchairandshowingclearsignsofalearningdisability,saidthathecouldnevermoveawayfromtheestatewherehelived, alone, in a two-bedroom apartment. For him, daily life required aherculean effort to remain autonomous and dignified despite his extremelyfragilephysicalandmentalsituation.Hislifewasentirelybasedonhisexistence–andpermanence–inthatcommunity.

October2010Afterwalkingforseventykilometres,aforty-year-oldIndiancarpentersuffersafatalheartattack.Thegoalofhiswalkwastoborrowmoneyfromfriendswholivedinadifferenttown,inordertopayhismicro-creditdebts.Areportfromthe

Indiangovernmentstatedthathisdeathwas‘duetopressureputbythemicro-financeinstitutionsforrepayment’.In2002,thecarpenterhadborrowedUS$350fromamicro-credit institution inorder tobuilda roominhishouse.Hiswife,working in a tobacco factory, had already borrowed US$1,100 from heremployers.In2008,hewaspersuadedbyanothermicro-creditagenttoborrowanadditionalUS$330 inorder to cover thepreviousdebts.Whenhedied, thepaymentofall three loanswasmore than twentyweeks late.Thiswasnot thefirst nor the last death related tomicro-credit debts occurring that year in thestateofAndhraPradesh.10

The scenes I have described – in places as diverse as Europe, the US, LatinAmerica, theMiddle East andAsia – are the expression and result of a longprocessofdeconstructionofhousingasasocialgoodanditstransformationintoacommodityandafinancialasset,whichbeganinthefirstdecadeofthetwenty-firstcentury.

Theextentandimpactofthisprocessgofarbeyondthefinancialsubprimemortgage crisis that, spreading from the US since 2007, contaminated theinternationalfinancialsystem.Itis,infact,thetakeoverofthehousingsectorbyfinance– thestructuralelementofcontemporarycapitalism.Weliveunder theempire of finance and fictitious capital hegemony, an era of increasingdominance of rent extraction over productive capital.11 The internationalliterature on political economy of housing has termed this process‘financialisation’,thatis,‘theincreasingdominanceoffinancialactors,markets,practices,measurementsandnarratives,atvariousscales,resultinginastructuraltransformationofeconomies, firms (including financial institutions), statesandhouseholds’.12

Thepromotionoftheideologyofhomeownership,13alreadydeeplyrootedinsome societies and more recently introduced in others, has been a centralelement of the new paradigm of housing. Together with the ‘socialisation ofcredit’, itsupportedadoublemovement:ononehand,theinclusionofmiddle-andlow-incomeconsumers intofinancialcircuits;ontheother, thetakeoverofthe housing sector by global finance. This process opened a new frontier forcapitalaccumulation,allowingthefreecirculationoffundsthroughoutalmostallurbanisedland.14

Between1980and2010, thevalueof theworld’s financialassets–stocks,debentures, private and government bonds, bank investments – increased by afactorof16.2,whiletheworld’sGDPincreasedbylessthanafactoroffiveinthesameperiod.15Thispoolof super-accumulation resultednotonly from the

profitsearnedbylargecorporations,butalsofromtheemergenceofeconomiessuch as China. This ‘wall of money’16 increasingly sought new fields ofapplication, transforming whole sectors (such as commodities, educationfinancing and health care) into assets to feed the hunger for new vectors ofprofitableinvestment.Theimbalancebetweenthesizeoftheavailablefinancialcapitalandthedomesticmarketsfromwhich theyoriginatedresulted–mainlyfrom the 1990s – in the search for internationalisation of investments. Thisenvironment was responsible for creating a structural scarcity of high-qualitycollateral. There was a wall of money as if airborne, seeking a ‘spatial fix’(DavidHarvey’sconcept),aplacetoland.17

Thecreation,reformandstrengtheningofhousingfinancialsystemsbecameone of these new fields for surplus investment, both formacroeconomics anddomesticfinanceandforthisnewfluxofinternationalcapital.Thecreationofasubprime mortgage market was one of the main vehicles used to connectdomestic systems of housing finance to global markets. However, other non-bankfinancial instruments,aswellasinterbankloans,allowedlocalbanksandother intermediaries to increase their leverage, enlarging credit availability.18The entrance of global surpluses of capital allowed credit to grow beyondinternalmarkets’sizesandcapacities,creatingandinflatingreal-estatebubbles.

The takeoverof thehousing sectorby financedoesnot represent themereopeningofanotherfieldofinvestmentforcapital.Itis,infact,apeculiarformofvaluestorage,asitdirectlyrelatesmacroeconomicstoindividualsandfamilies,andallows,throughfinancingmechanisms,theinterconnectionofmanycentralactorsoftheglobalfinancialsystem–suchaspensionfunds,investmentbanks,shadowbanking,creditinstitutionsandpublicinstitutions.19

In highly dynamic economies, including some EU countries and the US,homeownership, because of its capacity to feed growth via credit, was alsoresponsible for propelling the rise in household consumption in a context ofwagereductionandlimitedemploymentgrowth.20

On theotherhand, thepublicor semi-publicnatureofhousing institutionsandfinancialpoliciesdefinesthissectorasoneofhighpoliticalrelevance.21Nosetting-upofhousingfinancingsystems–regardlessofitsdegreeofconnectiontoglobalfinance–canhappenwithoutstateaction.Governmentinterventionisneedednotonlytoregulatefinance,butalsotobuildthepoliticalhegemonyofthe notion of home as a commodity and financial asset. Therefore, in everycontext that Ihaveobserved indifferentnationstates, thismovementalsohadsignificantpoliticaleffectsbycreatingandconsolidatingaconservativepopularbase,inwhichcitizensarereplacedbyconsumersandplayersincapitalmarkets.

It is in this sense thatwemay affirm,withFernandez andAalbers, that ‘Thishousing-financeelixiractslikeapoliticaldrug.’22

Finally,wemustflagupthehugeimpactthatchangesinhousingprovisionformatshaveovercities’structures.Throughlandmarketsandurbanregulation,thenewpoliticaleconomyofhousingalsoinvolvedanewpoliticaleconomyofurbanisation,restructuringcities.Itisnotonlyanewhousingpolicy,butalsoaredesignofcitiesbytheexpansionofanurban,real-estate/financialcomplex.23

Thousandsofmortgagedlives,thesubprimevictimsofadecade-longcreditsupplyboom;emptyneighbourhoods,desolatecities;demonstratorsoccupyingstreetsandpublicspacesformonths;ahungerstrikeofproprietorsdeprivedoftheirpromisedapartments.Someofthescenesdescribedatthebeginningofthischapter tookplace in the immediatewakeof the2007US subprimemortgagecrisis.After thebubbleburst, thecrisisquicklyspreadacross theworld,at thespeedoffinancialproductsandwiththeintensityoftheglobalisationofmarketstowhich themortgagemarketwasconnected. It isnot surprising that the firstsector affected by the crisis was housing. Supplied by pension funds, hedgefunds,privateequitiesandother‘fictionalproducts’,housingbecameafictionalproductitselfwhenitwastakenoverbyfinance.24

The intensity of this change can be described as a movement thattransformed a ‘sleeping beauty’ – the hitherto inert, immobile and illiquidhousingfromtheBrettonWoodsperiod–intoaneoliberal‘fantasticballet’, inwhichassetsleapfromhandtohandthroughfastandconstanttransactions.25

Thatmovementledtoachangeintheparadigmofhousingpolicyinalmosteverynationontheplanet.FormulatedinWallStreetandintheCityofLondon,rolledoutforthefirsttimebyNorthAmericanandBritishneoliberalpoliticiansattheendofthe1970sandbeginningofthe1980s,thechangeintheeconomicroleofhousingwasfurtherpoweredbythefalloftheBerlinWallandthefreemarket hegemony that followed. Adopted by governments or imposed as aconditionalitytoaccessloansbymultilateralfinancialinstitutions–suchastheWorldBankandtheInternationalMonetaryFund(IMF)–thenewparadigmisbasedmainlyon the implementationofpolicies thatcreatestrongerandbiggerhousing financialmarkets, drawing in the low- andmiddle-income consumerspreviouslyexcludedfromthem.

Attheendofthe1970sandthroughoutthe1980s,inresponsetoeconomicand fiscal crises, a series of policies began to dismantle the basic institutionalcomponents thatsustained thewelfarestatesystems.Among therootsof thesecrises, especially relevant were the drop of Fordist sectors’ profitability, theintensification of international competition, the exacerbation of

deindustrialisationandmassunemployment, and the suspensionof theBrettonWoodsmonetarysystem.ThesetofpoliciesadoptedbystatesafterthecrisisofFordistdevelopmentwasgenericallynamed‘neoliberalism’.26

Despite being a general tendency, neoliberal restructuring strategies areapplied to specific institutional configurations, particular socio-political powerconstellations, and pre-existing spatial configurations. In other words, sinceneoliberalismisaneminentlyunequalprocess,anyperspectivethatignoreseachcountry’spoliticalandeconomiccontexthaslittleexplanatorystrength.

Theimportanceofcontextsbecomesclearwhenweexaminethereformsofhousingsystemsindifferentcountriesinthatperiod.Ingeneralterms,thereisamove to dismantle social and public housing policies, destabilise security oftenure– includingrentalarrangements–andconvert thehomeintoafinancialasset. However, this process is path-dependent: the institutional scenariosinheritedbyeachcountryarefundamentalfor theconstructionof theemergentneoliberal strategies. Neoliberal policies must be understood as an amalgambetweenthesetwomoments:itisaprocessofpartialdestructionofwhatexistsandoftrendcreationofnewstructures.

In countries such as Britain or the Netherlands, with their strong welfarestate systems, thenewwatchwordwasprivatisation–orevendestruction–ofpublichousingstocks,anddrasticreductionofpublicfundingforsocialhousing.Instead, the creation of a mortgage-based financial system was stimulated inorder to encourage the purchase of homes in the private market. Moreover,subsidiesbegantoberedirectedtowardssupplyratherthandemand.

This budget reduction and the demolition of public housing units alsooccurred in theUS.However, therearesignificantdifferences.Firstly, the ideaofawelfarestatesystemwasneverfullyimplantedthere.Moreover,thesupportforhomeownershipbasedonmortgagecredit certificateshasbeen theguidingprinciple of US housing policy since the 1930s. Throughout the 1980s, thebuildingofpublichousingunitsbythestatewasgraduallyreplacedbyapolicyof mass stimulation of home purchase via subprime credit. Everywhere, thepresence of these credit certificates and the deregulation of the rental marketweredesignedtodismantleexistingoptionsofaccesstohousing,andstimulatehome-purchaseastheonlypathwaytoaroofoverone’shead.Spainisoneoftheparadigmaticexamplesofthisroute.

Twenty years ago, an influentialWorld Bank report –Housing: EnablingMarkets toWork – summarised this new line of thought on housing policy.27This document contains not only arguments about how important the housingsectorwouldbetotheeconomy,butalsodirectivestogovernmentsonhowbest

toformulatetheirpolicies.Sincethe1990s,housingfinancinggrewradicallyindeveloped economies. In the US, UK, Denmark, Australia and Japan, forexample,residentialmortgagemarketsrepresentbetween50and100percentofGDP.28

AccordingtoanotherWorldBankdocument,intendedtopromotemortgagemarkets in emergent economies, other countries have also seen an increase inhousing financialisation, although at a slower pace. Residential mortgagemarketsinSouthKorea,SouthAfrica,Malaysia,Chile,andtheBalticcountriesaccountedfor20to35percentoftheirGDPs.Morerecently,thisphenomenonarrived in other countries (China, Thailand,Mexico, the majority of EU newmembers, Morocco, Jordan, Brazil, Turkey, Peru, Kazakhstan and Ukraine),whereresidentialmortgagemarketsrepresentbetween6and17percentofGDP.AccordingtotheWorldBank,this‘progress’canalsobeobservedinsomelessdevelopedcountriessuchasIndonesia,Egypt,Pakistan,Senegal,Uganda,Mali,MongoliaandBangladesh,‘butnotonalarge-enoughscaletoaddresssomeofthechronichousingissuestheyface’.29

FromtheoldCentralAsianandEasternEuropeanSovietBlocallthewaytoLatinAmerica,and fromAfrica toAsia, the takeoverof thehousingsectorbyfinancehasbeenamassiveandhegemonictendency.Somuchso,thataWorldBankpublication crowed–onedecade after the launchof thehousingprivatemarketmanifestoreferredtopreviously–that‘thegenieisoutofthebottle.’30

Themercantilisationofhousing–aswellastheincreaseduseofhousingasanasset integrated into aglobalised financialmarket–deeplyundermined theright to adequate housing around the world. The belief that markets couldregulate the allocation of housing, combined with the development ofexperimentaland‘creative’financialproducts,ledtotheabandonmentofpublicpoliciesthatregardedhousingaspartofthesocialcommons.Inthenewpoliticaleconomy, centred around housing as a means of access to wealth, the homebecomesafixedcapitalassetwhosevalueresidesinitsexpectationofgeneratingmorevalueinthefuture,dependingontheoscillationsofthe(alwaysassumed)riseofreal-estateprices.31

Like other social spheres, housing was affected by the dismantlement ofbasicwelfareinstitutionsandbythemobilisationofaseriesofpoliciesaimingtoexpandmarketdiscipline,competitionandcommodification.32Thesenewideasconfrontedthewelfaresystemsandeconomic-politicalcoalitionsaroundhousingthathadpreviouslyexistedineachcountry.

Informersocialistcountries,intheUSandinmanyEuropeancountries,theprivatisation of public housing and drastic cuts in state investment in social

housing were combined with reductions in welfare programs and rentalsubsidies. Thesemeasures were accompanied by the deregulation of financialmarketsandbyanewurbanstrategy,allowingdomesticcapitalmobilisationandinternationalcapitalrecycling.Thenewtendencieshadasmallerimpactinlessdevelopedcountries,wherewelfarehousingsystemshadneverexisted,orweresmall andmarginal compared to the housing needs. The global imposition ofneoliberalismhasbeenhighlyunequal–bothsociallyandgeographically–anditsinstitutionalformsandsocio-politicalconsequencesvarysignificantlyaroundthe world. In each context, much depends on specific interactions betweeninherited regulatory landscapes and emerging market-oriented restructurationprojects.33

Byconsidering theWorldBank’sfirstdocumentasastartingpointand the2007 subprimemortgage crisis as the first large international trigger, this firstchapter of the book has mapped some of the key elements of the neoliberalperspective on housing and its impact on the right to housing in differentcontexts.34

Through observing different countries’ housing trajectories during mymandate as the UN special rapporteur on adequate housing, I detected threeforms that the process of financialisation of housing can assume,which differfromeachothernotonlyintheirorigin,butalsointhekindofimpacttheyhaveon economies, cities and people’s lives. They are: mortgage-based systems;systems based on the association of financial credit with direct governmentalsubsidies linked to the purchase of market-produced units; and micro-financeschemes.

Aswitheverygeneralisation, theseare for themostpartmodelsabstractedfrom the specificity of concrete situations, and not a rigorous classification.However,theyallowustounderstandthepatternsoffinancialisationgoverningthetakeoverofthehousingsector–inallitsdiversity–bythefinancialsector.35

In the US and the majority of European countries – which had previousexperience of public housing provision, and enjoyed significant economicdevelopment in theFordistperiod– thedevelopmentofa residentialmortgagefinancialmarketwasthemainmechanismforthepromotionofhomeownership.It increasingly replaced rental systems – however regulated, provisioned orsubsidisedbythestate–asthedominantform.Itisthesecountries’experiencethatIwillanalyseinthenextpages.

2TheMortgageSystem

Inthe latenineteenthandearly twentiethcenturies,whentheextremepovertyofthemajorityoftheurbanpopulationbegantoberevealedbysocialreformersinEuropeandNorthAmerica,governmentsbegantoprovidehousingassistancetopeopleandfamilies,aswellasdirectlysupplyinghomes.1

Publichousingprovisiongainedprominenceand intensityat thebeginningof the twentieth century and, in some countries, between the first and secondworldwars. However, it was afterWWII – particularly during the 1950s and1960s – that public housing provision became one of the structural pillars ofEurope’ssocialwelfarepolicy,a redistributivepactbetweencapitaland labourthatsustaineddecadesofgrowth.2

Nevertheless,ifweconsiderallEuropeancountries,fewcouldboast,atanygivenmomentoftheirhistory,astockofsocialhousingthatwassignificant inrelation to the total amount of existing homes.Wemay classify theEuropeancountriesintothreelargegroupsintermsofsocialhousingprovision.

Thefirstgroupiscomposedofcountrieswhosepublicorsemi-publicsocialhousing production has historically been non-existent, orwhere housing auto-constructionorauto-promotionprevailed.ThisgroupincludesGreece,Portugaland Spain, among others. The second group is formed, among others, byBelgium,Germany,IrelandandItaly.Inthesecountries,socialhousinghasneverbeen significant in terms of its participation in the general composition ofhouseholds.Andthethirdgroupiscomposedofcountrieswhosesocialhousingstock has been – and still is – significant. Countries such as Austria, CzechRepublic,Denmark,Finland,France,Holland,Poland,Sweden and theUnitedKingdomarepartofthisgroup.Togethertheyconcentratealmost80percentofEurope’s social housing stock today.3 Public or semi-public housing projects,

generallyintendedforrental,aredefineddifferentlywithinthestrategiesofeachcountry.Variationsdependon formsof financing; thenatureofpromoters and‘owners’;thedefinitionofdemand;andformsofadministration.

In some countries, especially in Germany, the inexistence of a significantpublicstockofsocialhousingdoesnotmean thathousing isabsent fromtheirwelfarepolicies.Boththeregulationofprivaterentalandthedirectaidprovidedto lower-income families for rent payment can be considered forms of stateintervention in housing, with the aim to universalise social rights. Still today,Germany and Switzerland are two of the European countries where rentedhomes – promoted by a highly regulated private sector – are the predominantformoftenure.4

Countrieswhichbuilt largestocksofpublichousingexperiencedapeak inconstruction between the late 1960s and the early 1970s. At that point, theconsensus and the political-economicmacro-conditions fromwhich the policyoriginatedbegantofade.The1970seconomic-financialcrisiscausedthelongestinternationalrecessionsincethe1930s.Fromthatmomenton,atransformationof the government’s role was mooted in both theoretical and practical terms:fromhousingproviders theybecame‘facilitators’,whosemissionwas tomakeway for and support the expansion of private markets. The above-mentioned1993WorldBankdocumentsummarisesthisthinking:‘Governmentsshouldbeencouraged to adopt policies that enable housingmarkets towork…and [to]avoid distorting [them]’.5 Their role was henceforth to create the conditions,institutionsandregulatorymodelsthatwouldpromotehousingfinancialsystemscapableofenablinghomepurchase.6

In some countries, this happened through the sale of the public socialhousing stock to their residents – boosting homeownership and reducing stateexpenditure.7 This privatisation process was further encouraged by thestigmatisation and residualisation of social housing, which started to beidentified with poverty and marginality.8 In Europe and North America, theprivatisationofpublichousingstocksoccurredinvariousforms:thesaleofunitstolong-termtenantsthroughRighttoBuyintheUK;9thetransferofpropertiesto not-for-profit organisations in the Netherlands;10 and in some cases, thetransferofpropertiestofor-profitcompanies,asintheUS.Invariouscountries,suchasSpain,the‘advantages’ofthecreationofahome-purchasemarketalsoincluded the reform of rental legislation, reducing protection and increasinginsecurity of tenure for tenants. In almost every country – mainly via taxexemptions and subsidised interest – housing commodification was promoted

throughtheadoptionofincentivestopurchase.Throughout the 1990s, the majority of former socialist and communist

countries also embarked on large-scale public housing privatisation projects,throughright-to-buyprogrammes.Insomeplaces,thispolicyresultedintheneareradication of public housing stocks. In various former communist countries,privatehomesnowrepresentthegreatbulkofthehousingstock–96percentinEstonia, 77 per cent in Slovenia and more than 80 per cent in China, forexample.11

Evenwheretheprivatisationofpublicstockswasnotdrastic,theideologicaltransferral of the responsibility for housing provision to private markets washegemonic. The paradigm of ‘homeownership’ became virtually the onlyhousing policy model. This process eclipsed other well-established forms oftenure, such as (public and private) rental and forms of cooperative andcollectiveproperties.12

Asa result, the ratesofhomeownershiphavegrowncontinuously:13 in themid-2000s, they reached more than 50 per cent in all member states of theOrganisation for Economic Cooperation and Development (OECD), exceptGermanyandSwitzerland.SpainandIrelandledtherankingwith83.2percentand81.4percent,respectively.14

The increase of private housing property and itsmobilisation as a formofwealthcoincidedwiththeageingofpopulationsandwiththehugepressurethatthis represented for public retirement systems. One of the responses to thispressure was the migration of retirement systems from public funds toindividualsandfamilies.Homeownershipperformeda fundamental role in thismigrationasitbecameanasset-basedwelfare.15

The use of homeownership aswealth stock, its valorisation over time andpossible monetisation worked, in practical terms, as potential substitutes forpublic pension and retirement systems. The basic difference in relation to theprevioussystemisthattherisks,too,migratefromcollectiveinstitutions–and,ultimately, from the state – to individuals and families.16 This change alsotransformedhousing– in thewordsofAmericaneconomistNourielRoubini–into a sort of ATM machine. The new system makes housing capable offunctioningassecurityforloans.Itisintendedtofundconsumptioninaperiod(from the 1980s on) of decline of the participation of wages in total globalwealth.Acrosstheworld,thispercentagedeclinedfrom63percentinthe1980sto54percentin2011.17

Inorderforprivatelyownedhomestoperformthisrole,thecontinuousrise

of real-estate priceswas a necessary condition.While this rise lasted, itmadeeconomicgrowthviabledespiteasignificantwagedrop–especiallyincountriessuchastheUS,UKandSpain.Itwasatypeof‘privatisedKeynesianism’.18

This process occurs simultaneously with the globalisation of finance,creating an international capital market with large freedom of movement, aspreviouslyexistingbarrierstothefreecirculationoffinancialcapitalhavebeenknocked down. Thus, capital surplus – converted into financial capital – wasabletopenetrateboththepromotionofresidentialrealestateandthefinancingofitsconsumption.Theseelementscontributedtocomprehensivelyinflatereal-estatemarketprices.Asanexample,between1997and2004,theaveragecostofhomepurchaseroseby149percentinSpain,139percentintheUK,187percent in Ireland, 112 per cent in Australia and 65 per cent in the US.19 Theincreaseinreal-estatepricesyieldedmorewealthforproprietors.Nevertheless,itis,infact,awealth-disguiseddebt,asasignificantpartofthisstockcorrespondsonlytothemortgagedebtsofproperty-owningfamilies.Insomecountries,suchastheUK,Spain,SouthKorea,theUSandCanada,thisparticipationissuperiortogovernmentdebt.

Through the finance of private home purchase, global capital marketexpansion was based on private indebtedness, establishing an intimate linkbetweenindividuals’biologicallivesandtheglobalprocessofincomeextractionand speculation. Therefore, the channelling of capital surplus flows intoresidential property also has a lived dimension: mortgaged lives, namely thegeneration of men and women in debt – a new subjectivity produced by thedisciplinarymechanismsthatsubjectlifeitselftodebtservicing.20Thisbecameevidentwhenthereal-estatebubbleburst,andallriskandonusfellonthosewhohad borrowed. It was they who, having exposed their lives to the riskyoscillations of fictitious commodities’ speculative game, suffered the realconsequences of the crisis: they were turned into indebted, often homelesspeopleovernight.

It is important to note that itwould not have been possible to expand themortgagemarket on this enormous scalehadother housing accessoptionsnotbeenblockedorrolledbacktoaresidual level.Thecrisisofaccess tohousingthat followed the bubble was aggravated by the erosion, abandonment orliberalisation of non-mercantile mechanisms for the allocation of housingresources. Even countries with a long tradition of social rental housingredesigned their systems in favour of homeownership, ‘free markets’ andcompetition.Asignificantreductioninconstructionofadequatepublichousingforthepoorestandmostvulnerableoccurredalongsidethereductionofnational

budgets and public funds for social housing. In the US, for example, theDepartment of Housing and Urban Development (HUD) budget was reducedfrom$83billion in 1978 to $18billion in 1983.Between1996 and2001, thebudget earmarked for public housing construction was nil.21 The steadyreduction of the housing supply resulted in long waiting lists, while lack ofmaintenance led to the deterioration of the existing public stock and,consequently,toalargenumberofpeoplelivinginsqualidconditions.22

EveninformerUSSRcountries–which,followingmassprivatisationofthehousing stock, did not experience housing scarcity in the short term – low-incomefamiliessoonfacedahugeproblemintermsofaccesstohousing.23Thedecrease of state investment in social housing, alongside the rising focus onhomeownership–shrinkingtheprivaterentalmarket24–madeaccesstohousingfinancevitalforlow-incomefamilies.Theywereleftwithnooptionbuttosignup to credit schemes –where andwhen such credit was available, and underconditionsestablishedbythereal-estateandfinancialmarkets.25

The role of stateswent beyond that of amere ‘facilitator’. States activelydeconstructed housing and urban policies and deregulated monetary andfinancialmarkets–adestructionof thepreviousorder.At thesame time, theyactivelypromotedthenewalternatives.Theabove-mentionedtrajectorycanbebetter understood by observing concrete national experiences. It is nocoincidencethatIwillstartwiththeUKandtheUS,thetwoepicentresofthistheoreticalandpracticalmodel.

Pioneers:TheUnitedKingdom

AccesstoadequatehousingforallhasmarkedthehistoryofUKpublicpolicy.Over many generations, Britain forged the notion that a dignified life shouldincludeaccesstofairanddecenthousing,irrespectiveofpersonalwealthoranyotherstatus.Thisnotionwastranslatedintoacombinationofland,housingandterritorial planning policies designed to provide adequate housing and to dealwiththeexistinghousingstock’sdeficiencies.Moreover,housingbenefitswereincludedintheBritishwelfaresystem.

The first housing policies were established in the UK at the end of thenineteenthcentury.Later, in1909, the firstnationalHousingandPlanningActintroducedpublicsubsidiesfortheconstructionofresidentialunitsandgrantedlocalauthoritiesthepowertodefinedevelopmentplans,whichincludedhousing

needs.DuringandafterWorldWarI,housingpoliciesremainedatthetopofthepublic agenda. The 1915 Glasgow strikes against high rents led to thegovernment’s first recognition of affordability in housing, which entailed thecreationoflawsrestrictingtheriseofrentalprices,whilethe1918TudorWaltersReport set the standard for social housing construction. During the interwarperiod,around4millionsocialhousingunitswerebuilt.26

After World War II, houses were built to remedy bomb damage and theprecarious housing conditions previously existent. At that time, there was aconsensus around public investment in adequate housing and the allocation ofpublic lands for this purpose.Anothermeasure in that directionwas the 1947Town and Country Planning Act, that demanded the formulation of localdevelopmentplansbyeveryUKcouncil.Theseplanswere toallocate landforresidential use and define each municipality’s requirements for infrastructure,transportationandaccesstoemployment.

The same Act also determined the nature of private entrepreneurs’participation in the provision of public land and infrastructure, throughinstruments such as betterment and planning gains.27 Over time, this law hasbeen amended many times. In 1990, specific planning obligations wereintroduced, commonly known asSection 106 agreements and planning gains.Since then, these agreements have contributed to the provision of accessiblehousing in theUK in twoways: firstly,with proportions of new developmentprojects being allocated for social housing; secondly, with road infrastructureand/orpublicequipmentbeingbuiltwithprivatecontribution.28

Housingalsobecameoneof thepillarsof thewelfarestateafterWWII. In1942,areportfromtheInter-DepartmentalCommitteeonSocialInsuranceandAlliedServicesproposeda seriesofmeasures todealwithextremepoverty. Itargued that itwas the state’sduty toprovide adequatehousing towidowsandsick, unemployed or retired people. This report was the blueprint for theNational Assistance Act 1948, establishing the base for the British socialsecurity network, which included aid for adequate housing. Local authoritieswereinstructedtohousethosewhocouldnothousethemselves.Morethanonemillionnewhomes,halfofwhichwerecouncilhouses,wereconstructedwithinfive years after WWII. This rhythm was sustained during the following twodecades,withpeaksofmorethan300,000unitsperyearintheearly1950sandlate1960s.29Evenintimesofeconomicconstraint,expandingthesocialhousingstockwasapriority.

Between the mid-1940s and late 1970s, council housing was the mainhousing provision for middle- and low-income working-class households. In

someregions,councilestatesworkedasasocialequaliser,guaranteeingincome-diverse neighbourhoods, even in ‘high value’ central urban areas. This waspossible thanks to the use of public land for the provision of social housing,especiallyinthepost-warperiod.Ontheotherhand,largecouncilestateswereconstructed in peripheral zones and not all public facilities were of a highquality.

By the end of the 1970s and beginning of the 1980s, with MargaretThatcher’s reforms, therewasaconsiderablechangeofparadigm.Policiesandinstitutions were created in order to deregulate housing finance systems,privatisecouncilhousingandreducepublicexpenditures–exceptthoserelatedtofiscalbenefitsandotherformsofsubsidyforhomeownership.30TheHousingActpassedin1980,aiming‘toprovidesecurityoftenure’,introduced‘RighttoBuy’asacentralelementofthisnewapproach.31Essentially, theRight toBuysystemgavetolong-standingtenantstheopportunitytobuytheircouncilhouseatalargediscount–between33percentand55percentoftheirmarketprice–basedonvariouscriteria,suchaslengthofoccupationandsumofrentsalreadypaid.Around2millionsocialhousingunitsweresoldbetween1980and2013–mostof themin the1980s.Of those,1.8millionwerecouncilhousingunits.32Withsalesexceedingnewconstruction,socialhousingparticipationfellto17.3percentofthetotalhousingstockbetween1987and1998.33

TheRighttoBuysystem,withitsattractivediscounts,wasamajorfactorinthe creation of a new political base for the Conservative Party, capturing asizeablepart of theLabourParty’s traditional base.Local authorities, for theirpart, lost a proportion of their housing stockswhile becoming hard-pressed tomaintain the remaining units, as subsidies and transfers from the centralgovernmentweredrasticallyreduced.Atthetime,localauthoritiesreceivedhalfofthetotalrevenuesfromthesales;however,rigidcapitalcontrolwasimposed,makingitpracticallyimpossibletoreplacetheunitsthathadbeensold.

Whatremainedofthepublichousingstockwastransferredeithertohousingassociationsortosociallandlords,whobecameprovidersofbelow-market-ratehousing. Since the mid-1970s, cooperatives, not-for-profit organisations,philanthropicassociationsandothersociallandlords–butnotlocalauthorities–have received government aid to cover the portion of capital costs of theirhousingactivitiesthatwerenotcoveredbyrentpayments.Until theendofthe1980s,suchaidwouldgenerallyreimburse80percent(andoftenreach100percent)ofthebuildingcostsofnewhousingunits.34Thisrate–aswewillsee–hasdeterioratedthroughoutthe1990sandmoresointhe2000s.

WhileUKpublichousingstockwasprivatised,housingcreditwaspromoted

viasystemssuchastheMortgageInterestReliefatSource(MIRAS),whichranfrom 1969 to 2000. MIRAS offered fiscal incentives corresponding to thepaymentofmortgageinterest,whichalleviatedtheimpactoftheinstalmentsfornewbuyers.35Credit forhomepurchasebecame themainhousingpolicy tool,progressively connecting housing to finance. Behind this policy lay theassumption that the residential private market would guarantee access toadequate housing for everyone, so long as a juridical and institutional supportsystemwas put in place. Homeownership was highly subsidised by the state,boththroughright-to-buydiscountsandMIRAS.

Homeownershipandhousing financialisationshaped the roleofhousing intheUK, transforming it froma social good into a financial asset.36An ‘asset-basedwelfare’hasputdownrootssincethe1990s,actingasanincentivetokeepprices high.At the base of this policy is the notion that thewelfare state haschanged:before,itwasasystemcentredonstateprovisionofwelfare;gradually,itbecameasysteminwhichindividualswouldtakemoreresponsibilityfortheirownsocialwell-beingandsecurity,asconsumersoffinancialassetsthatwouldprovide income in old age.37 In this context, homeowners rely on thevalorisationoftheirhomesandsupportthepoliciesthatpromoteit.

Consequently, the structural composition of housing tenure forms haschanged.In1971,owner-occupiersrepresented52percentofEngland’shousingstock; in 2007, this rate was close to 70 per cent.38 Social rental housingcorrespondedtoaround30percentofthehousingstockin1970;in2007,itwaslessthan18percent.Theprivaterentalsectorhasbeensteadilygrowingsince2000.39SimilarchangesoccurredinScotland:in1981,lessthan40percentofthehousingstockwas in thehandsofowner-occupants. In themid-2000s, thisratehadrisento62percent.40

Nevertheless, the long-term rise in price and the short-term volatility –alongside the drop in salaries and the rise in unemployment – reduced theeconomic viability for middle- and low-income households of purchasingresidential real estate. Some borrowers became exposed to increasing risks.From1997to2012,theaveragepriceofrealestateinEnglandroseby200percent,whiletheaveragefull-timesalaryroseonlyby54percent.41Itispossibleto say that today there is a housing crisis in the UK in terms of availability,economicviabilityandaccesstoadequatehousing–particularlyinregionssuchasGreaterLondonandeasternEngland.

Thegapbetweensupplyanddemandmustnotbeunderestimated.In2012,for an estimated demand of 250,000 housing units in England,42 only around

115,0000unitswerebuilt–89,000ofwhich,byprivateentrepreneurs.43Manyyearsofunderproduction44andlowavailabilityofurbanisedlandforhousingarecitedbythegovernmentasjustificationforthissituation.

However, these overall figures mask a worsening inequality. In reality,highly priced homes abound, while social housing is desperately scarce. Thewaitinglistsforrentingapublicunitaregrowing,asisthehomelesspopulation.Theprivaterentalsectorhasswelledtothepointofbecomingtheonlyoptionformanypeople,despiteitsconditionsofextremeinsecurityoftenure–suchassix-monthcontracts.Moreover,therehasbeenadeteriorationofhousingconditionsamidthepressuresofovercrowding.InApril2012,facedwithawaitinglistthathadgrownby81percentsince1997,45Englishauthoritiesrealisedthatitwouldbenecessarytoresorttounitspreviouslydestinedforprivaterental–particularlytoprovideemergencyaccommodation.However,1.4millionunits–35percentoftheprivaterentalsector–donotcomplywiththeDecentHomesStandard.46

Theproblemliesintheprioritiesthatwereestablishedfortheallocationofresources. In 1975, around 80 per cent of public investment in housing waschannelled through direct grants to local governments to build new councilhousingortomaintaintheirexistingstock.In2000,however,thebulkofpublicexpenditure on housing was directed towards housing benefits, or rentalsubsidies for those who could not afford it. More recently, a significantproportion of this amount has been going to private landlords.47 In addition,housingstocksareno longerseenaspublicresources thatshouldbepreservedfor severalgenerations.TheBarkerReviewofHousingSupply, commissionedbytheBritishgovernmentin2004,warnedofthenegativeimpactsofresidentialmarketvolatility,inwhichelevatedpricestendtofavouroldergenerationsoveryounger: ‘The wealth gap between home owners and others is widening.’48Today,oneineveryfivehouseholdsintheUKcannotaffordtheirhousingcostsandrequiregovernmentsupport.

There aremore than 1.8million families registered for social housing andmore than650,000 living inovercrowdedconditions,while the costofprivaterentroseby37percentinthelastfiveyears.49TheBarkerReviewhighlightedthe necessity of resuming the provision of social housing. Nonetheless, thedirectivethatwasinfactincorporatedintohousingpolicywasthatofpromotingtheconstructionof120,000housesorflatsperyear–regardlessofwhowouldlive in them.Thismeasureaimed to reduce theaverage increaseof realpricesthat had been observed within themarket over the previous thirty years. Theattemptwastoreduceitfrom2.4percentto1.1percentperyear,inlinewith

theaverageofotherEuropeancountries.50The2007financialmortgagecrisishaditspeculiaritiesintheUK.Although

residentialreal-estatepriceshaddroppedinsomeareas–asanimmediateresultofthecrisis–theyhadalreadyrecoveredby2010.ThemaineffectofthecrisisintheUKwasadecreaseinthenumberoftransactions,loansandconstructions.AccordingtoMaryRobertson,

thehousing crisis in theUKhas taken the formof a crisis of supply and affordability: as tightercreditconditionshavereducedthepoolofthoseabletoaccessmortgages,fewerpeoplehavebeenabletoaffordasuitablepropertytopurchase.51

Acombinationofmeasurestakenbythegovernment,theBankofEnglandandmortgage creditors restricted the number of foreclosures during the financialcrisis. These measures included: Support for Mortgage Interest, a regime ofcapitalisation formortgage bailouts thatwas aimed at helping homeowners tostay in their homes as tenants, instead of being evicted; low basic bank fees;increased transparency about loan modifications; greater tolerance of arrears;and the Funding for Lending Scheme, to support the renegotiation of debtorswith private institutions. However, some of these measures are temporary.Northern Ireland – and especially Belfast – witnessed the largest number ofmortgage defaults and bank foreclosures, partly because of a more difficulteconomic situation, with greater unemployment levels.52 The private rentalsectorhasbeencontinuouslygrowing:between1981and2012, thenumberofhouseholds in this sector doubled – from 1.9 to 3.8 million.53 Families ofdiffering compositions are renting in the private sector, including a growingnumberoffamilieswithchildrenandyoungpeople.Thegeneral rule is fragilesecurityoftenure,withcontractstypicallylastingfortwelvemonths–butalsoincluding cases of six-month contracts – and subsequent eviction of tenants iftheycannotaffordrenthikes.Today,26percentofthehomelesspopulationareofnofixedabodebecauseofevictionsduetodefaultingonprivaterents.

PrivaterentalsectorregulationvariesintheUK.InEngland,thegovernmentbelieves that regulation could lead to disinvestment by landlords, reducing thesupplyofhousesforrent.Thereisarangeofregulationsforlandlords–safetyrulesrelatedtogasinstallationsandfireprevention,forexample–buttheyaredifficulttoenforce,astenantsfearretaliatoryevictionsiftheycomplain.54

Formany,privaterentalistheonlyoption.However,inadditiontoinsecurityof tenure, discrimination against specific groups – particularly migrants –aggravates the rental market situation.55 These problems are more serious inareasofhighdemand,suchasLondon.56

InEngland,theplanningsystemhasalsoundergonereformsthat,accordingto the government, purported to remove obstacles that discourage or paralyseurban development, such as excessive environmental controls. These reformsincludedanewNationalPlanningPolicyFrameworkin2012,amendmentstoitsSection 106 in 2013, and measures introduced by the Localism Act 2011.57These measures were intended to eliminate the regional strategies demandedsince2004,seenasacentralised,bureaucraticandanti-democraticapproachtodevelopment.Their goalwas also to transfer power to the central governmentandlocalcommunities.Localplanningauthoritiesarenowencouragedtodrawup a local pro-growth plan. They are also expected to propose a supply ofresidential land plots for the next five years and speedily grant planningpermissions,intheabsenceofsignificantnegativeimpacts.

Itispossibletoviewthesemeasuresasaimingtoexpandtheavailabilityofland for residential real estate.Nevertheless, easier access to licences – if notfollowed by any type of sanction for the speculative retention of land – can,instead,leadtomorelandfinancialisation.Thispracticestimulatesentrepreneursto apply for licences and then use the licensed land as collateral, withoutbuildingonitintheshortterm.58

Otherinitiatives,too,soughttoboostthehousingmarket.Oneofthemwasthereleaseofpubliclands,basedontheestimatethataround40percentofthelocations suitable for urban development are public-sector-owned.59 The landmarkedforreleasewillbesoldforthehighestbidtoprivateentrepreneurs,whowillbuildresidentialunits.Oncethelandisreleased,localplanningauthoritieswill negotiate the type of residence that should be built. There is noconditionalityorprioritytowardssocialoreven‘affordable’housing.

A package of economic measures was launched through governmentalincentivestostimulatetheresidentialmarketandtheeconomy.Inordertohelppeopleaccessmortgagefinance,theUKgovernmentintroducedthreeschemes–theNewBuyGuarantee,liquidassetloansandtheHelptoBuyprogram–whichintroducedmortgageguarantees forallUKborrowers.60 In the absenceof anyfinance ceiling and conditionality, these measures are liable to feed the real-estate bubble, undermining the government’s goal of expanding access tohousing,especiallyforthoseonlowerincomes.

The Right to Buy programmes (for council housing, housing associationsandsociallandlords)arestillinforce,allowingthesaleofsocialhousingunitstotheir tenants. In England, since 2012, discounts for the purchase of councilhousingcanreachupto£75,000pounds.Since2013inLondon,theycanreachupto£100,000.

InJuly2013,theScottishgovernmentannounceditsintentiontocanceltheRighttoBuyprogrammefornewsocialhousingtenantsasof2017,aspartofitsnewHousingAct of 2014. InNovember 2013,when approving the newAct,Scottishministersarguedthat

whiletheRTB[RighttoBuy]hasprovidednewoptionsforhouseholdsoverthelastthirtyyears,thecostsof thispolicywill now fall on futuregenerations.The transferofhundredsof thousandsofproperties out of the social housing sector has decreased our social housing stock, and placedincreasing pressures on councils and housing associations. It has also had a profound anddetrimentaleffectonsomecommunities,withlessdesirableareasnowevenmoremarginalised.Atthesametime,manyofthosewhoexercisedtheirrighttobuyhavestruggledtomeetthecostsofhomeownership.61

Parallel to these measures, England cut social housing finance by two-thirds.Housingassociationsmustfightthecutstosubsidiesbysearchingforfinancialresources in capitalmarkets. In order to pay the interest, social landlordswillhavetoraiserentfornewtenants.Theyarenowauthorisedtoraiserentsupto80percentofmarketrates.Althoughthegovernmentconsidersthisanincentivefor landlords to invest in housing, the approach can potentially create newproblems, including the reduction of affordability. Moreover, some measuresimpactthesecurityoftenurefornewsocialtenants(orexistingoneswhomovehouse) inEngland: instead of perpetual rental – previously the rule for publicrentalstock–sociallandlordscannowoffercontractsforaslittleastwoyears.

The 2012 Welfare Reform Law, adopted by Westminster as part of theirfiscal austerity program, contains measures that directly infringe the right toadequatehousing.Thesereformsoccurinacontextalreadymarkedby:lackofsocial housing for low- and middle-income sectors; increasing numbers ofhomelesspeople;risingunemployment;andsalarysqueeze.Accordingtoa2013Oxfamforecast, totalUKpublicexpenditurewouldfaceacutof11.5percentbetween 2010 and 2014. Public sector salaries had been frozen, and between2010 and 2018, 1.1 million public jobs would be eliminated – two-thirds ofwhicharetodayheldbywomen.Theestimateisthatrealwagesfell3.2percent,reachingthelevelof2003,representingalostdecadefortheaverageworker.62Itisevenmoreconcerningthatin2012,around13millionpeoplelivedinpovertyin the UK; of those, more than half (6.7 million) were members of workingfamilies.63

Oneof thecuts tohousingbenefitsappliedbythis lawwasthe‘endof thespareroomsubsidy’,whichcame intoforce inApril2013. It isalsoknownasthe ‘under-occupancy penalty’ and, popularly, as the ‘bedroom tax’. Thismeasure reduces the housing benefits received by social housing tenants of

economicallyactiveage,basedonthenumberofbedroomsinthehomeandonfamilycomposition.Accordingtothenewregulation,asocialhousingtenanthasthe right tooccupyahouseor flat containingonebedroomforeachcoupleorsingleadult.Itisexpectedthatachildwillshareabedroomwithanotherchildofthesamesexuntiltheageofsixteen,andregardlessoftheirsexuntiltheageoften.Additionalconsiderationscomeintoplayforindividualswithspecialneeds,peoplewho require external carersduring thenight, or in casesofprovisionalchildcarers(aserviceprovidedbythestate).64

Forafamilywhohaveonebedroomabovethelimit,housingbenefitcanbereducedby14percent.Fortwoormoreextrabedrooms,thereductioncanreach25percent.InScotland,thegovernmentestimatedthatthisreformwouldcost,on average, £50 more per month for the 82,000 potentially affected families.Eighty per cent of these households include an adult with special needs and15,500 of them are families with children.65 For this reason, the ScottishParliamentdecidednottoapplythebedroomtaxandtobeartheonusbeforetheBritishTreasury.

Alongside theausterityargument, thegovernment justifies the reductionofhousing benefits as a ‘fairness’ measure. Firstly, it is aimed at reducing thecurrent imbalance between overcrowding and under-occupancy. Secondly, itwouldintroduceparitywithtenantsfromtheprivaterentalsector,whosehousingbenefits are proportional to the number of bedrooms in the unit. Since thebeginning of the implementation of the measure, the National HousingFederation (NHF) has expressed concern. The shortage of smaller houses andflatsinexistinghousingestatesreducestheoptionsfortenantsseekingtomovesoastoavoidbenefitcuts.66

SomereportshavealreadyshownariseinrentarrearssinceApril2013,aspeople struggle to remain in the homes where they have spent much of theirlives.67Although thenewpolicydoesnotoblige them tomoveout,mostwillobviouslyhavenoalternative,asmanyareworkerswithnosavings.Facedwithimpossiblechoicesbetweenpayingforeitherfood,heatingorrent,andwiththeimminenceofexpulsionfromanentiresocio-affectivenetwork,manypeoplearedriventodespair.

In addition to the bedroom tax, other austerity measures directly hit thepoorest. Among thesewere the elimination of benefits to support payment ofcouncil tax (municipal tax paid by individuals, not proprietors alone) and thereduction of the Local Housing Allowance (LHA) – monetary aid for thepaymentofrentsintheprivatesector.Thesecutscoincidedneatlywithariseinrentalcosts:betweenMay2005andMay2013,privaterentsroseby8.4percent

in England. The biggest increases were in London (11 per cent) and in EastEngland (8.3 per cent) and the smallest ones in the East Midlands (5.3 percent).68

Specificgroups areparticularly affectedby the cumulative impactof thesevarious policies and reforms. Among them, we can highlight lower-incomesectors, people with special needs and the young. A research paper fromLiverpool shows that pressures of living costs and cuts in social benefits leadlow-income households to increase the use of payday loans (short-term loanswithhigh interest rates) to cover essential expenses suchas rent andenergy.69Evenarelativelyslightchangetotheirincome,oradelayinbenefitspayments,quickly compounds poorer people’s fragility, given their narrow margins offinancialsurvival.

Poverty also contributes to rent arrears and occasionally,when these buildup,toevictions.AccordingtoNHF,morethan14,000householdsstartedtofallbehindwiththeirrentinMerseyside(oneofEngland’spoorestregions)amerefourweeksafterthebedroomtaxcameintoforce.Therearenotenoughsmallersocialhousingunits,orreasonablypricedalternativesintheprivatesector.Asaresultmanypeoplehangonin their‘under-occupied’homes,forcedtomanageonlessatatimeofrisinglivingcostsandpublicserviceprices.70

According to research carried out in 2012 by the National HousingFederation in eastern England, the number of homeless people in the regiongrewby44percentinonlytwoyears.NFHcitesthescarcityofhousingandtherise of residential real-estate prices and rents as contributing factors. Youngfamiliesarethemostaffectedgroup.In2010,theaveragepriceofhousingwasaround£195,000,almost7.5timesbiggerthantheregionalaverageincome.71

Forpeoplewithspecialneedsorchronicdiseases,adequatehousingmeanslivinginhomesadaptedtotheirspecificneeds,closetohealthfacilitiesthatarepartoftheirdailyroutine,aswellastofriendsandrelativesandthecommunityatlarge.Thisisessentialforthemtoliveanindependentanddignifiedlife.Toooften, the scarcity of adapted and economically accessible housing alongsideother changes in the social welfare system has left people with special needs‘between a rock and a hard place’: theymust choose between further limitingtheirlivingconditionsordelayingrentpaymentsandriskingeviction.

Youngpeoplefacemorebarriersthaneverintermsofaccesstohousing,duetotheir lowincome,highunemploymentorunderemploymentrateswithinthisage group and greater difficulty in obtaining amortgage. This is a generationwhose parents had far greater access to homeownership, mainly throughsubsidisedprivatisationofthepublichousingstockandtaxexemptions.

It is important to emphasise that the British process of constituting agenerationofhomeownerscorrespondedtoapolitical-ideologicaldismantlementof the welfare system, with a wide base of social support. Deliberatelymarginalised and residualised, social housing became – both in the political-socialimaginaryandinpracticalterms–theplaceoftheweak,thosedependingonsocialhandouts,incapableofmanagingfinancialassets.Socialhousingthusbecamestigmatised.Itisnotacoincidencethatrecentausteritymeasurestargetsocialtenantsandwelfarerecipientsaboveall.Nevertheless,thecurrenthousingcrisis in the UK is a victim of the success of the strategy that has beenimplemented over decades: real-estate prices cannot drop, because this wouldmean eroding the political-social base and their asset-based welfare. Publicsocialhousingcannotbepromoted,becausethiswouldsymboliseregressiontoastate of dependency. Therefore, British people – especially the youngest andpoorest–simplyhavenowheretolive.

The British experience epitomises the political, ideological and economicdismantlingofsocialhousingand its takeoverby thesphereoffinance. Italsoshowshowthisshiftledtothereductionoftherighttohousingforthepoorestand most vulnerable, and to the regression of housing conditions for currentgenerations. Comprehension of the North American trajectory, which I willpresentnext,isfundamentaltounderstandthe–theoreticalandpractical–originofoneofthemostpowerfulmodelsofhousingfinancialisation:themortgage.

Pioneers:TheUnitedStates

IntheUS,modernhousingpolicybeganduringtheGreatDepression,whentheNational Housing Act of 1934 created the Federal Housing Administration(FHA)toregisterandinsuremortgagesandtoprovidesecurityforcreditors incasesofdefault.TheUSgovernmentalsocreatedtheFederalNationalMortgageAssociation (better known as Fannie Mae) to buy mortgages from creditors,increasingtheirliquidityandthusallowingthemtoofferfurtherloanstobuyers.

Thesemeasurescameinresponsetothefirstlarge-scalefinancial-mortgagecrisis,whichoccurredafter1929intheUS.TheFederalReserveAct, in1913,permittedcommercialbankstoofferloansforreal-estatepurchase,generatingamortgage market. The bubble’s burst led to more than 250,000 residentialforeclosuresperyearintheworstyearsoftheGreatDepression.72

Anothermeasureadoptedafterthe1929crisiswastheHousingActof1937

(Wagner-SteagallAct),whichintroducedfederalinterventiononsocialhousing,authorisingthegovernmenttofund,constructandbecomethelandlordofrentalunits for the lower-income population. In a context of deep recession, thismeasurewasjustifiedasawaytoimproveconditionsinurban‘slums’–areasoftenementhousing–andtocreatejobsintheconstructionsector.73

The1934and1937HousingActsinauguratedadualhousingsystem:ontheonehand,theconstructionofpublicrentalhousingprojects,withdirectaidforlow-incomefamilies.Ontheother,subsidisedcredit–mainlyviataxexemptions– to promote homeownership amongmiddle-class families. This dual housingpolicy was also responsible for creating a new urban landscape: the housingprojectswerelargelylocatedininner-cityareas,whilethemajorityoftheprivatehousesbuiltviaFHAcreditwereconcentratedinexclusivelyresidentialsuburbswithlowpopulationdensities.

Under the new 1937 legislation, FHA built, in 260 localities, more than170,000 units – principally in apartment towers organised into superblocks.Eighty-ninepercentofthemwerebuiltinareasalreadydominatedbytenementsandotherformsoflow-incomehabitat,whichweredemolishedtomakewayforthenewbuildings.74

In the 1940s and 1950s, residents of housing projectswere essentially theworkingpoorwhocouldpayrent.However,thisdemographicchangedfromthe1960son,with thelargemigrationmovementfromtheSouthernstatesandthesuburbanisation of a new generation of white workers. Originally, racialminoritiesrepresentedbetween26and39percentofpublichousingtenants,butthis rateexceeded60percent in1978.75At thesame time,between1950and1970 tenants’ average income fell from 64 to 37 per cent of the nationalaverage.76

Between the 1960s and 1970s, under the pressure of the civil rightsmovement,asecondbatchofhousingprojectswasconstructed, this timemoreclearlyidentifiedasawelfarescheme–orasasolutionforthoseinneed.77Themajority of the new residents were black and/or poor:78 the projects becameethnically,geographicallyandsociallydefined.

The purchase of private homes by the (predominantlywhite)middle classwas vigorously supported by federal funding:more than half of the suburbanhouses built in the US during the 1950s and 1960s were funded by thegovernment.This increased theproportionofhomeowners from30percent in1930tomorethan60percentinthe1960s.

Thesocialandethnicgeographyofsuburbsandinnercitieswaslargelydue

todiscriminatorypracticesbythebanks.TheHomeownersLoanCorporation,acompany created to refinance mortgages and rescue debtors in the 1930s,developed a broad system of credit-acquirement evaluation, incorporating theculture and practice of real-estate agents. According to this system, areas towhich itwaspossibleanddesirable to loanmoneywereclassifiedasgreenoryellow;by contrast, areaswith a concentrationofvulnerablepopulationswere‘redlined’,ormarkedinred,consideredexcessivelyriskyforthebanks.79Mostloanswere thereforenotaccessible toblackpeople,andentireneighbourhoodsoccupied byAfricanAmericans and groups of impoverishedmigrants saw nonew residential real estate projects for decades.White people received 98 percentoffederal-approvedloansbetween1934and1968,whenredliningbecameforbiddenbytheFairHousingAct.

Thepublichousingstocknumbered1.4millionunitsattheendofthe1970s.The programme had been implemented by the federal government in order toprovide decent and safe rentals to low-income families, elderly people andindividuals with special needs. However, themodel of housing projects cameunderscrutinyastheywereincreasinglystigmatisedassitesofextremepoverty,crimeandsocialmarginalisation.Theperceptionofadeclineinqualityofpublichousingcamebothfromthebuildings’physicaldeterioration–duetotheirageandlackofmaintenance–andfromofficial inactionaroundthewiderissueofracialandeconomicsegregationinsomecities.80

TheHousingandCommunityActof1974decreedtheendoffederalfundingfor the constructionof public housingprojects. It also introduced theHousingChoiceVoucherProgram(commonlyknownasSection8),grantingsubsidiestoprivate-sectortenantsandtoreal-estatedeveloperswhoagreedtoreservesomeoftheirunitsforrent-controlledcontracts.Inthefirstcase,tenantscanchooseahousingunitownedbyaprivatelandlordwhoacceptsthevouchers.Tenantspaypartoftherent–basedontheirincomeandgenerallycorrespondingtonomorethan 30 per cent of their total household income – and the rest is covered byfederal resources. The Section 8 programme marked an important change inpublic housing policy, as it moved funds from public housing authorities –historicallyinchargeofbuildingandmanaginghousingprojects–totheprivatesector.Thejustificationforitscreationwas

to avoid concentrations of low-income people…However, it faced resistance from tenants andbuildings inmiddle-income neighbourhoods and in some cities ‘the concentration of [Section 8]buildingsandtenantshasbeenblamed,justlikepublichousing,forcommunitydecline’.81

Adecade later, theTaxReformActof1986created theLow-IncomeHousing

Tax Credit, a new mechanism designed to generate capital for housingconstruction. Subsidised fiscal credit certificates (Project-Based Assistance)were directed to builders of pre-approved projects, to increase local supply ofhousingat prices slightlybelowmarket rate.These certificateshavegeneratedapproximately2millionaffordablerentalunits.

Therefore,sincethe1970s,publicresourcesearmarkedfor theconstructionandmaintenanceofpublichousingstockshavebeenprogressivelyreduced.Thisprocess was aggravated by President Reagan’s fiscal restructuring measures.Concurrently,publicsubsidiesforhome-purchasegrew,aswellasprogrammessupportingprivaterental,suchasSection8andProject-BasedAssistance.

Figure2.1Publichousingandbeyond:trendsinfederalsubsidiesforrentalhousingintheUnitedStates

Source:LawrenceJ.Vale,PurgingthePoorest(Chicago,UniversityofChicagoPress,2013),p.28

In the 1980s, budget cuts resulted in the gradual erosion and lack ofmaintenance of the public housing system. By the beginning of the 1990s,hundreds of thousands of public housing unitswere dilapidated. In the 2000s,there was a liquid loss of 170,000 public housing units due to deterioration.Today, most of the stock stands in need of substantial repair and restoration.Notwithstanding,publichousingannualresourcesdropped25percentbetween1999and2006.

As federal resources began to be reduced, becoming progressivelyinsufficient, housing agencies found themselves obliged to slash their ownexpenses.Measuresincludedthetransferofunitstomoreaffluenttenants,abletopayhigherrents,andcutstoareassuchassecurityandmaintenance.82

In1989,CongresscreatedtheNationalCommissiononSeverelyDistressed

Public Housing in order to evaluate the situation. The commission concludedthat, although the majority of the 1.4 million public housing units were wellmaintainedandmanaged,asmallproportionof them–86,000,or6percent–were in ‘themost distressed and notorious urban developments in the nation,where crime, poverty, unemployment, and dependency were solidlyentrenched’.83In1992,basedonthecommission’srecommendations,theHOPEVIprogramme(HousingOpportunitiesforPeopleEverywhere)wascreated.

HOPEVIgoals included: therevitalisationofpublichousing; thedispersaloflow-incomefamilies;andthecreationofsustainablecommunitiesthroughthedemolition, restoration, reconfiguration or substitution of a large number ofpublichousingunitsbymixed-incomeprojects–thatis,housingunitsintendedfor different income groups.84 The programme provided resources for localagenciestodemolishdegradedorobsoletepublichousingprojectsandtoreplacethem with mixed-income projects, generally in collaboration with privatedevelopers. Between 1991 and 2006, HOPE VI invested US$6.1 billion offederal resources in 235 projects. A total 96,200 public housing units weredemolished and 107,800 were built or renovated – of which 56,800 wereaffordableunits.Moreover,78,000housingvouchershavebeenissued.85Lower-density and mixed-income projects have been built to replace the old projecttowers,generallyasacombinationofpublichousingunits,affordableunitsandunits at market rate. Under thismodel, the responsibility for the provision ofsubsidised housing was transferred from the federal government to localauthoritiesandtheprivatesector.

Inadditiontothefactthatmanyofthedemolishedunitshavebeenreplacedbymarket-ratedhomes,manyofthe‘affordable’onesaretooexpensiveformostpublic-housingtenants.ItisundeniablethatHOPEVIhasimprovedthequalityof the public housing stock. However, it has also reduced the number ofaccessible housing units for poor families and permanently displaced manyresidentsofthedemolishedprojects.Inprinciple,non-rebuiltunitswerereplacedbyhousingvouchers,butthisprocedurewasnotconsistentlyfollowedthrough.Moreover, this policy transferred to the users the responsibility of finding ahomeintheprivatemarket.Inpractice,thechoicesthatareactuallyavailabletovoucher-holders are often limited, as, in certain neighbourhoods, there are nounitsavailableornolandlordswillingtobepartoftheprogramme.

Unitshavebeendemolisheddespiteinsufficientmechanismsbeinginplacefortheirtenantstofindsimilarhousingoptions.Often,displacedresidentshavehad to move to other subsidised units in neighbourhoods as degraded as theoriginal ones; often, too, they suffered discrimination in their new

neighbourhoods.Thedemolitionoftheoldhousingprojectsandtheconstructionof thenewones tookmuch longer thanoriginallyplanned.Also, theefforts totrack down former residents in order to offer them the renovated units wereinsufficient.Infact,lessthan12percentoftheformerpublichousingresidentsultimatelyremainedintherenovatedcommunities.Ingeneral,fewerunitswerereconstructedthanweredemolished.

An example is the Cabrini Green community, in Chicago. Originally itconsistedof3,114publichousingapartments,ofwhich2,700weredemolished.Since thedemolition,only305publichousingunitshavebeenbuilt inmixed-incomeneighbourhoods.Asaresult,manyresidentshavebeendisplacedandareunabletoreturn.86

On the one hand, this federal housing policy resulted in an even highernumberofhomeowners– reachingapproximately69percent.On theother, itreducedthesupplyofpublichousing(whichnumbered1millionunitsin2010)through demolishing or closingmore than 300,000 unitswithout replacement.This losswasaccompaniedby thegovernment’sgradualexit fromthehousingsector.

In termsofhomeownershippromotion, important changesalsooccurred inthedomainofhousingfinance.Amovementtoincorporatelower-incomesectorswas accompanied by the amplification of ties to the financial market sensustricto. These changes resulted from two interconnected processes: firstly, theCommunity Reinvestment Act of 1977 and the consequent appearance ofsubprime loans; secondly, the growth of securitisation.The 1977Act requiredbankstoallocatepartoftheirmortgageportfoliosfortheneighbourhoodsfromwhich their depositors came. Banks had therefore to modify their usual riskdefinitions,transformingwhatwas,untilthen,‘redline’intoaspecificmortgageproduct: subprime – or very high-cost credit certificates, offered mainly tofamiliescomposedofminoritiesorothergroupswho,historically,hadnoaccesstocredit,astheywereconsideredhigh-risk.87

Large and small banks began to push subprime loans, especially after thederegulationofthebankingsystembytheDepositoryInstitutionsDeregulatoryandMonetaryControlActof1980.Anotherincentivewasthesuccessfullaunchofsubprimemortgageproducts,suchas‘teaserrates’(twoyears’repaymentsatvery low interest rates and twenty-eightyears athigh interest rates) andARM(Adjustable Rate Mortgages, or variable interest rates, allowing the re-establishmentofhighratesafterafewyears).From8.9percentofthemarketin2001,theseloansreached20percentofthetotalin2006.Almost90percentofsubprimeloanswereARM-type.88

Anothersignificantderegulationwasthepermissionforbanksandnon-bankinvestmentinstitutionstosecuritisemortgages–inadditiontoFannieMaeandFreddie Mac, which were government-created securitisers. This meant thatinstitutions could buy portfolios created by banks with subprime loans, packthem together with other financial products and sell them on as residentialmortgage-backedsecurities(RMBS)inthecapitalmarket.Financialinstrumentssuchascollateraliseddebtobligations,collateralisedloanobligationsandcreditdefault swaps – derivatives based on mortgage-guaranteed debts – could befreely exchanged between financial operators, themselves protected from thenewproducts’risks.

Securitisation allowed the operators to ‘clean’ credit institutions’ balancesthroughthesellingofthosederivativestobanksorinvestmentfunds.Moreover,as in an assembly line, they could produce, compile and synthesise financialproductscreatedfromamixofreal-estatecreditcertificates.Theworkersonthisassemblylinewere:real-estatecreditcertificatesbrokers–responsiblefordirectcontact with consumers; intermediaries – who bought those certificateswholesale in order to later redistribute them according to the specifications offinancial institutions and hedge funds; and, finally, rating agencies, whodetermined whether the composition of these asset-portfolios satisfied thequalitystandardsornot.89

Thefederalgovernmentdideverythingitcouldtoencouragethissecondarymarket,whichbecameoneofthebiggestsourcesofcreditleverage–alsoforthefinancing of home-purchase.90 Securitisation also included subprime loans. In2007, the subprime business accounted for US$1.5 trillion within the globalfinancial market. Wall Street banks and investment funds created specialdivisions to operate in the subprime mortgage market and earned highcommissionsforeverytransactionintheglobalmarket.

Thegrowthofavailableresourcesforresidentialreal-estatefinancingandthedevelopmentof‘innovative’mortgageproductsallowedbuyerstoacquiremoreexpensive properties, which also contributed to the elevation of real-estateprices. So long as prices kept growing, buyers with any kind of difficulty inpayinginstalmentscouldrefinancetheirhomesthroughnewloans.Butwhenthereal-estatebubbleburst,priceslevelledoutordropped,andARMplansbegantobill larger instalments. So the debacle began: debts piled up, leading toforeclosuresandlossofhomes.

AHUDreport from2009stated: ‘Theextentof thehousingandeconomiccrisis isnowpainfullyapparent…approximately3.7millionborrowersbegantheforeclosureprocessin2007and2008.’91RealtyTrac(theleadingproviderof

foreclosed homes) reported an increase of 32 per cent in the number offoreclosureprocessesbetweenApril2008andApril2009.92

The crisis affected not only indebted homeowners, but also tenants ofmortgagedhousesandbuildings: ‘At least20percentof foreclosedpropertiesarenotowner-occupied,andinmanypartsofthecountry(suchasNewEngland,New York City, and Minneapolis), half or more of households living inforeclosedbuildingsare renters.’93When creditors foreclose rented properties,tenantsareoftenevicted,despitehavingregularlypaidrent.

Rent-controllegislationisoneofthetoolsusedbysomecitiesintheUStoprovide accessible housing. This legislation was introduced by the federalgovernmentduringWorldWarII,whenPresidentFranklinD.RooseveltsignedtheEmergencyPriceControlActof1942.Subsequently,variousstatesandlocaljurisdictions institutedrent-controlmeasures,manyofwhichstillexist today.94This rental stock faces growing pressure from real-estate markets and, morerecently,threatsfrompredatorycapital.

Predatory capital arose and gained strength during the recent real-estatemarket bubble: an investor buys a building with stabilised rents through asecuritisedmortgage that is repeatedly soldover a short period for ever largersums.Asmortgageinstalmentsgrowwitheverysale,theexistingrentsbecomeinsufficienttocoverthecosts.Asaresult,landlordsadoptaggressivetacticstoevict current residents and find new tenants who will pay higher rents.Therefore, thebuilding isno longerwithin thestabilised-rentsystem.With thereal-estate market retraction, some investors simply departed, leaving thebuildingtothebankandanuncertainfutureforthetenants.InNewYorkalone,acivilsocietyorganisationidentifiedmorethan90,000rent-controlledunitsthataresubjectedtopredatorycapital.95

The housing crisis for low-income families and individuals was furtherexacerbated as a result of other typesof pressure on thehousing stock. In the1960s, the federal government established a partnership with privateconstructioncompaniestosupplyaccessiblehousingforatwenty-toforty-yearperiod.Dependingonthenatureofeachsubsidy,theownersofthesebuildingshad different options for making a profit: they could pay off their entiremortgage, to then start chargingmarket prices, and/or refuse to renewexpiredcontracts.96Eitherway,thestockofrent-controlledaccommodationwouldshedthatstatus.Manycontractsexpiredwithoutbeingrenewed.Thousandsofunitshavealreadybeenlostandareportestimatesthatanother300,000contractswillexpirewithinthenextfiveyears.97

Housing vouchers became the country’s largest scheme for low-incomehousingassistance,benefitingmorethan2millionfamiliesintheextremelow-incomebracket.Evenso, themajorityofmunicipalitieshavelongwaitinglistsfor new vouchers – generally five years. Under the current budget, federalprogramscanonlyserveonequarterofthelow-incomefamilieswhoareentitledtoassistanceaccordingtotheirprofileandincome.98Thebudgetarycutscausedanadditionallossof150,000vouchersbetween2005and2007.Accordingtoa2008studyfromtheUnitedStatesConferenceofMayors,duetoexcessdemand,manycitiesclosedtheirwaitinglistsforSection8/HousingChoiceVouchersandforpublichousing.99

Theeffectsofthepoliticalchoicestakenwithregardtohousingsincethelate1970sarepatentinthecountry’scurrenthousingcrisis.Thenumberofhomelessfamilies, the costs of renting, and the waiting lists for social housing andvouchersaresoaringinunison.In2007,around22percentofthe36.9milliontenant families in the US were spending more than half of their income onrent.100 The number of households facing serious housing-cost problems grewby33percentbetween2000and2007.Aroundtwo-thirdsofthemwerefamilieswith children, elderly people or people with special needs.101 In the USA,around12.7millionchildren–more thanone-sixthofallAmericanchildren–belongtofamilieswhospendmorethanhalfoftheirincomeonhousing.102

The drastic curtailment of social housing resources and programmes wassupposedly based on two neoliberal imperatives: to reduce public expenditureandtowithdrawthestatefromareasinwhichthemarketcanact.Nevertheless,the evolution of US housing policy allows us to present a very differentnarrative.Firstly, the argumentof reducingpublic expenditure is fallacious. IntheUS,althoughtheHUDbudgethasdropped,between1976and2004publicexpenditure on housing did not stop growing; only itwas, instead, directed tohigher-incomesectors through taxexemptions forhomepurchase,asshown inFigure2.2.

Figure2.2ComparisonbetweenFederalTaxExemptionsforHomePurchaseandtheHUDBudgetinbillionsofUSdollars(2004)

Source::WesternRegionalAdvocacyProject,2012HUDBudgetFactSheet,p.26.

Secondly, the subprime mortgage crisis was not the product of anunsuccessful attempt to amplify the private housing market to embrace thepoorest, reducing theirdependencyonpublic fundsandon thestate. Instead itresulted from a clear and aggressive policy of destruction of the existingalternatives of housing access for the poorest. Such a policy intended tofacilitate, precisely within the lower-income housing sector, a new form ofincome extraction: income moved from mortgage markets and indebtedhomeownerstofinancialinvestors.103

TheModelinWesternEurope

In2008,adecisionmadebytheEuropeanCommissionrestrictedtheprovisionof government-subsidised social housing. For all member countries, only thesociallyunderprivileged–thosewhoseincomeisnotsufficienttoaffordhousingmarket prices – would have access to this type of benefit. This decision wasintendedtoguaranteefreedomofcompetitionandtoreducestateinterventioninsectorswhere themarket also acts. It definedhousing as a ‘serviceof generaleconomic interest’ (SGEI) within the terms of Article 36 of the Charter ofFundamentalRights,adoptedattheformalcreationoftheEuropeanUnion(EU).

This interpretation clearly challenged the universalist policy of socialhousingprovisionpreviouslyacceptedinEurope,especially in theNetherlandsandDenmark. In these countries, the public or semi-public housing stockwasstill available at controlled prices – below market rates – to all citizens,

regardless of income. In the Netherlands, the implementation of this decisionmadesocialhousinginaccessibleto400,000familieswhowerenowclassedashigh-income.In2011inSweden,housingwassimplyexcludedfromthelistofsectors considered as SGEI. In France, the National Union of Real-EstateProprietorsdenouncedtheFrenchgovernmenttotheEuropeanCommissionforestablishing excessively high upper-income limits for access to public socialhousing,which,accordingtothem,representedunfaircompetition.104

The 2008 European Commission’s decision is merely one more juridical-politicalmovewithintheongoingprocessoftransforminghousingpolicyacrossEurope,evenincountrieswheresocialhousingrepresentedupto40percentofthe total units – such as theNetherlands, theNordic countries and theUnitedKingdom. This process means the focalisation and residualisation of housingpolicy,breakingwithitsuniversalistnaturetomakewayformercantilisationandfinancialisation.

Indeed,thetakeoverofthehousingsectorbyfinanceinEuropegoesbeyondthepressuretorestrictaccesstopublicandsemi-publichousingonlytotheverypoor.Evensociallandlordshavebeguntorelyonmarket-financingmechanismstocontinueproducingand/ormanagingtheirstocks.Moreover,evenincountrieswhere social housing still has a significant presence, the processes of home-purchase via mortgage, securitisation of the mortgage market and growth ofhouseholddebthavebeengallopingforward.

TheNetherlands(theEuropeancountrywiththecurrentlargestproportionofsocialhousing,at35percent)isaninstructiveexampleoftheabove.Fromthe1920s,Dutchmunicipalitiesandprivateorganisationsbuiltlargehousingestates,especiallybetween1945and1990.Rent-controlledhousingunits–producedbynon-profit private organisations, theWoningcorporaties – expanded the socialhousingsectorparticipationfrom23percentofallhouseholdsin1960to38percentin1985,involvingbothlow-andmiddle-incomesectors.105Thisexpansionwas possible thanks to the increase of public subsidies – multiplied six-foldbetween 1970 and 1987106 – and to rent-control legislation that limited pricesand readjustments, for the private rental sector as well. In cities such asAmsterdam, this policywas complemented by a systemof territorial planningandpublicownershipofland,designedtomitigatetheimpactoflandpricesontotalhousingcosts. Itwas thuspossible toprovidehigh-quality socialhousingalloverthecity,configuringoneoftheleastsegregatedEuropeancitiesinsocio-spatialterms.107

Since1974,theDutchgovernmenthasprovidedfinancialaidtotenants(bothinsocialhousingand in theprivatesector) in theformof rentassistance.This

measure allowed an initial readjustment of rental prices both inWoningcorporaties’ units and in the private rental sector. However, the largesubventions forWoningcorporaties were gradually terminated from 1995 on,significantly reducing the supply of new stocks. The existing facilities weremaintained, mainly through the sale of units, the elevation of rents and theemergence of newmechanisms used by social landlords to raise andmanagefundsviacapitalmarkets.108

Itisnotacoincidencethatfromthe1990son,homeownershipbegantogrowapace amid a flourishingmortgagemarket. Two factors influenced this trend:firstly, the government played an active role by offering fiscal incentives tobuyersandencouragingbuildingproprietors tosell theirapartments.Secondly,monetarypolicyreformskept interest rates lowandencouragedbanks to incurlargerrisks,increasingcreditlimits.109

Inthelate1990sandearly2000s,thecombinationofthesemeasuresresultedinanexorbitantriseinhousingcosts,bothrentandpurchase.TheDutchBankestimated that,by theendof the1990s,halfof thecountry’seconomicgrowthwasafunctionofrisinghomeequity,ratherthangenuinegrowth.110

The result was a restructuration of Dutch cities’ housing stocks, with anexpansionofthesupplyofmarket-pricedunitsandareductionofthesupplyofaffordable housing. In this context, lower-income individuals and families –especiallyyoungpeople–arehard-pressedtofindaroof:Amsterdamisonthebrinkofanewsegregationbetweenincomegroups.111

Swedenoffers another exampleofmomentous changes in a countrywheresocial housing was a universalist policy. On the whole, the Swedish welfaresystem resisted the neoliberal wave better than those of other Europeancountries. The exception was housing. The ‘Swedish model’ of housing wasonce considered one of the most radical among the European social-democracies: universalist and tenure-type-neutral, this state-funded modeloffered both subsidies for the production of social housing and direct aid totenants.Italsoestablishedstrictregulationsandincentivesforhome-buyersandinvestors.

Planned in the 1930s and 1940s, this model reached its peak in terms ofsocial housing availability, quality and accessibility in 1975, after theimplementationofaschemefortheconstructionof‘onemillionhouses’(1964–75).However, themodelunderwentaprofound liberalisationover the last twodecades, with the demolition or sale of housing complexes and theresidualisation of social housing. Faced with an economic crisis and losingadvantage within the global economy, Sweden held its welfare system

responsible.Housingwasoneofthefirstdepartmentstobereformed.112

PopularlyorientedpublicationssuchasAMarket forHousingforAll (Anderssonetal.1990)andPower Over the Home (Meyerson, Ståhl, and Wickman 1990), drawing on inspiration fromneoliberal policies in the United Kingdom and the United States, called for an end to existinghousing policies, laying out a road map for neoliberal reforms. One of the first things theConservativegovernmentdidaftercomingtopowerin1991–thefirstgovernmentinSwedenledby a Conservative prime minister (Carl Bildt) since 1930 – was to close the Department ofHousing.113

In 1993, a new model, the so-called Danell system for housing finance,drastically reduced subsidies and housing aid. The return of the SocialDemocrats to power in 1994 did not signal a rupture of this policy, and theneoliberal programme advanced.Reforms clearly prioritised homeowners overtenants: the latter suffered large rises in rent, which generated great incomeconcentrationonanationalscale.

The production of new housing units plummeted, increasing conditions ofovercrowding. Municipal public companies that had not been shut down andwhichstillownedhousingstocksbegantooperatewithaneyetoprofit,furtherconstraining lower-income people’s access to housing – especially in goodlocationswithdecentinfrastructure.Atthesametime,socialhousingestatesinareasthatwereappealingtothemarketwererenovated,whichattractedhigher-income residents.The resultwas,mainly inbigcities, anotable segmentation,polarisationandsegregationofthehousingmarket.114

Both in theNetherlandsand inSweden, socialhousingandprotected rentswere overlooked in favour of homeownership via mortgage finance. ThisprocessissimilartothepioneeringBritishmodel.Inallthreecountries,beyondtheeliminationofsocialhousingfromtheeconomicandsociallandscape,adeeptransformation in its socio-cultural and political meaning is manifest. Clearly,actorsinvolvedintheproductionandconsumptionofsocialhousinglostouttothe rise of not only homeowners but, above all, real estate developers andfinancial intermediaries.Notbycoincidence, inall threecountries thehousingreforms were accompanied by reforms in planning and land policy. Thesereforms limited public control over and intervention in the organisation of theterritory, and made regulations more flexible in order to attract privatedevelopers.As indicated earlier, reforms in the banking and financial systemsexpandedthefieldofactionforfinancialintermediaries,therebyincreasingtheirpoliticalinfluence.

In no European country was this clearer than in Spain. Combining thederegulationofbothcreditmarketandtenancylawswithreformoftheplanning

systemandentranceintotheEuropeanCommunity,Spainenjoyedtwodecadesof a ‘real-estate party’. It embarked on frantic construction of residentialdevelopments in extended peripheries, accompanied by exponential growth ofreal-estatemortgagecredittobuyers–includingthelow-incomepopulation.

UnlikethethreeEuropeancountriesthatwepreviouslydiscussed,Spainhasnever had a significant social housing policy, and public or not-for-profitsubsidisedhousingfacilitiesneversurpassed2percentoftotalhomes.115

Thecountry’shousinghistorywasmarkedbyself-buildsand,mainlyinbigcities, by a significant percentage of private rental housing. In 1960, owner-occupiers represented 51.9 per cent and tenants 41 per cent of the housingmarket.116 Ever sinceGeneral Franco’s dictatorship, central governments havebeen keen to foster homeownership, using incentives and tax breaks. At thelaunch of his housing plan in 1957, JoséLuis deArrese, Franco’sminister ofhousing,declared: ‘Wewanta countryofhomeowners,notofproletarians [depropietarios,nodeproletarios].’117

From an economic perspective, Franco’s dictatorship relied heavily on thepromotion of the real-estate industry, with two main goals: to dynamise theeconomyand,simultaneously,toenhancesocialcontrolthroughthedeactivationof potential revolutionary impetus, for ‘those who own a property havesomething to lose, concrete interests to defend and little time to conspire’.118Especially in the 1960s and 1970s, during the so-called desarrollo[development] period, credit and tax exemptions were given to real-estatedevelopers for the promotion of what they named ‘protected housing’. Thesemeasures significantly boosted real-estate activity and home-purchase by themiddleclass.Owner-occupiedunitswentfrom45percentofthetotalin1950to57percentin1970,reaching78percentin1991.119

Nevertheless, the movement observed in the 1990s and especially in the2000swasofadifferentnature.In1985,theBoyerDecreereformedtheUrbanTenancy Act: it liberalised the rental market, abolished the cap on upwardreadjustment and limited thedurationof contracts to fiveyears,making rentaltenuremoreinsecure.120

From1991on,anewlawallowedprivateagentstoentermortgagemarkets–whichhad,until then,been restricted tobanksandpublic funds.This lawalsoallowedtheriseofthemortgagedproportionwithinthetotalvalueofaunit.In1992,thesecondarymortgagemarketwasregulated.In1998,ontheotherhand,arevisionofnationalplanningregulationsdeclaredthat‘allnon-urbanizedlandcanbe incorporated into real-estatedevelopment’,whichopenedup thewhole

territoryfornewdevelopments.Whatismore,theregulationofland-usecontrolwasdecentralised,nowfallingtolocalauthorities.121

At thestartof the2000s, thismeasurecoincidedwith the increaseof localadministrations’ financial deficits. As their responsibilities and competencesgrew,theydependedmoreandmoreontaxesfromreal-estatetransactions.

Between1997and2007,6.6millionnewhousingunitswerebuilt–almosttwicethenumberofnewhouseholdsinthesameperiod.122Inacontextofgreatliquidity and falling interest rates, deregulation and mortgage marketsecuritisation–aswellasthecountry’sadoptionoftheeuro–contributedtotwoimportant movements. First, the multiplication of the housing supply by theprivatemarketandanunprecedentedurbanexpansion.Second,theriseofreal-estateprices,generatingabubble.

Taxexemptionsforhousingsavings-accountsandthereductionof taxesonsalesandpurchasesofresidentialbuildings–evenforsecondorthirdhomes–stimulated home-purchase and price appreciation. This occurred becauseconsumers could afford to purchase dearer properties, knowing theywould bereimbursedbytheannualtaxreturn.Atthesametime,banksandotherfinancialinstitutionscouldfinance100percentoftheunits’value,whichallowedthesaleofprogressivelymoreexpensivehouseseventopeoplewhodidnothaveenoughsavingstobuythem.123

Thisprocesswaswidelyencouragedviathemedia,includingmessagesfromthe government itself claiming that houses were a safe investment, one thatwould never lose value. It was also stimulated by the launch of ever more‘creative’ financialproducts,suchas ‘youngmortgage’, ‘freemortgage’, ‘openmortgage’, ‘de-mortgage’.124 The country was fomenting a policy of recklessprivateborrowing.Debtsjumpedfrom55to130percentoffamilies’disposableincome between 1997 and 2007. For every €3 of debt, €2 corresponded tomortgagedebts.Contrary to themediamessages, thepolicyofeasycreditwascrucialinelevatingprices,whichmeantthatfamilieshadtomultiplytheireffortsto keep up with their debts. In 1997, in order to buy an apartment, a familyneeded,onaverage,3.8grossannualsalaries;in2007,thisroseto7.6salaries.Measured another way, the percentage of income necessary to pay the houseinstalments rose from37.6 per cent of a family’smonthly income to 51.2 percentinthosetenyears.125

In 2007,when the bubble burst and financial and economic crisis ensued,soaring unemployment added to the difficulties ofmortgage-holders. In 2008,thenumberofSpaniardsdefaultingontheirmortgagecreditcertificatesgrewby310percentand2.7millionpeoplefinishedtheyearunabletopaytheirdebts.

In2009,defaultsreached850,000–anumberthatwasrepeatedin2010.126AccordingtoSpain’sjudicialsystem,between2007andthefirsttrimesterof

2011almost350,000foreclosureswereinitiated.Althoughsomesecondhomesandbuy-to-let investmentswere involved,85percentof thoseaffectedownedonly their mortgaged home. Moreover, as loan guarantors are included inforeclosureprocesses,theirpropertiestoowereaffectedandcouldbeseizedbythe bank. Research estimates from 2013 indicate that 2 million people wereaffected by foreclosures.127 At the same time, according to the 2011 census,there are approximately 3.5 million empty residential units in Spain – thegreateststockofunoccupiedhousesandapartmentsintheEuropeanUnion.128

Spain’scase isoneof themostextremeexamplesof the impactofhousingfinancialisationaspartofa‘creditsocialisation’movementviatheinclusionoflow-andmiddle-incomesectorsintocreditmarkets.Italsoshowstheeffectsofthefinancialreal-estatecomplexonpeople’slives.InSpain,theeuphoriaoftheexpansion of credit for home-purchase fed a real-estate orgy – the rapid andmassiveproliferationofresidentialconstructionwasoneofthecentralpillarsofthecountry’spoliticaleconomyforoveradecade.

Literally millions of residential units were produced by this system.Although they have the materiality of cement, brick and concrete – and areimplantedincities,transformingtheirlandscapeandwaysoffunctioning–theseobjectsare,atthesametime,abstractions,fractionsofunitsofvaluecirculatinginthefinancialsphere.Alongsideotherfractions,theyflowthroughthefinancialweb, whose speed itself was accelerated by digital communication networks.Therefore, housing – in the real, concreteworld – is connected to an abstractnetwork inwhichvalues circulate, via loans and their anticipated recuperationwith interest over time by the investors who bet on it. This web of debt thatunfoldsaroundtheworldoriginateswithonegroupofpeople,thedebt‘holders’,whoworkhardtopayloansback.Fortheinvestors,housingisonebetamongmany others, a mix of future forecast and asset that is called speculation –inherent to the financial logic ofwinners and losers. For the inhabitant of themortgagedhouseorapartment,ithasotherdimensionsandmeanings.Forthosewho are indebted beyond their currentworth andwealth, in particular, one ofthose meanings had been the expectation of future income growth via theappreciation of themortgaged property.However, this hope fades awaywhenonehasnowhereelsetoliveanditisnolongerpossibletobepartofthe‘game’.

At the endof theday, debt – this abstract currency that travels around theworld – is the responsibility of thosewho agreed to pay for it. In the case ofSpain,thelossisnotrestrictedtothepropertythat,undervaluedafterthebubble

burst,goesback to thebank; it involves too thepaymentof theentireoriginalpropertyvalue.During the2007debacle,after thehomeownershiporgy,Spainwas left with empty homes and, at the same time, homeless indebted people.People who are only too real, flesh and blood, abused by the speculativemechanismsandgamesofchanceofthefinancialworld.

3ExportingtheModel

ThispaperarticulatesthehousingpolicyoftheWorldBankasithasevolvedduringthe1980sandearly1990s andproposes anumberof importantnewpolicydirections forboth theBankand itsborrowers. It advocates the reformof government policies, institutions, and regulations to enablehousingmarketstoworkmoreefficiently,andamoveawayfromthelimited,project-basedsupportofpublicagenciesengagedintheproductionandfinancingofhousing.Governmentsareadvisedtoabandon their earlier role asproducersofhousingand to adopt anenabling roleofmanaging thehousing sector as a whole. This fundamental shift is necessary if housing problems are to beaddressed at a scale commensurate with their magnitude – to improve substantially the housingconditionsofthepoor–andifthehousingsectoristobemanagedasamajoreconomicsector.1

The paragraph quoted above, written in 1993 by Stephen Mayo and ShlomoAngel (experts at theWorld Bank’s Urban Development Division, Transport,Water, andUrbanDevelopmentDepartment) announces the new consensus intermsofhousingpolicy.According to this,governmentsshould renounce theirroleasprovidersofaffordablehousinginordertobecomefacilitators.

VariousWorldBankdocumentsclaimedthatthischangeinthedirectionofhousingpolicy–widelyfollowedbyothermultilateralbanks,suchastheInter-American Development Bank (IDB) – was a result of a reassessment of theBank’sactionwithinthesector.Theybegantoconsidertheprevioussystemasmarkedly limited in scope and lacking the capacity to recover costs.2 Thatsystem was the rule in the 1970s: loans to governments for projects thatpromotedaccesstolandforthepoorest–thusofferinglow‘investment’return.Withthismodel,urbanlandwasdirectlyprovidedbythestate,aimingtoenablethegradualconstructionofhomesby thebeneficiaries themselvesor to launchslum-upgrading projects. During this period, Sites and Services and slum-upgrading pilot-projects were financedmostly in Latin America (above all inPeru, El Salvador and Venezuela) and Asia (especially in Indonesia and thePhilippines),butalso–onasmallerscale–inSub-SaharanAfrica.Inthe1970s,

theseprojectswereimplementedinfifty-fivecountries,involvingaroundUS$2billion.3

The change that started in the 1980s led theWorld Bank to progressivelyredirect its policy towards loaning to financial institutions – resulting in thevirtually complete disappearance of loans for Sites and Services and theurbanisationofinformalsettlementsinthe1990s.Oneoftheargumentsfortheshiftwasthesepilotprojects’lowpotentialforreplication.However,theBank’sentrance into the restructuringof countries’housing finance systemsmeant, inreality,anopportunityfortheinstitutiontogetinvolvedwithlargerprocessesofeconomicreadjustmentinindebtedcountries–particularlythoseaffectedbythedebtcrisis.According to theWorldBank,a ‘well-functioning’housing financesystemwould contribute towider financial goals, such as capitalmobilisationand fiscal adjustment. Public expenditure would be applied through moretransparentandfocalisedsubsidiesandprivatecapitalcouldbemobilised.4

The initial goal was to create autonomous financial institutions in thecountries, capable of offering long-term mortgage loans to low- and middle-income families, enabling a reduction of the 1980s World Bank housingsubsidies. In the1990s, however, thepolicy evolved towards the creationof a‘housing sector that serves the needs of consumers, producers, financiers, andlocalandcentralgovernments;andthatenhanceseconomicdevelopment’.5

With the World Bank’s progressive abandonment of major urbaninfrastructure projects, loans integrated into larger structural adjustmentprogramsinindebtedcountriesgrewwithintheBank.Thesenewloanswerenotnecessarilyassociated to loansfor investmentandsubsidieswithin thehousingsector and operations of technical assistance. This change amplified both theamount of resources available and the participation of housing finance in theBank’stotalloans:inthe1980s,morethanUS$4billionwereinvolvedintheseoperations;inthe1990s,italmostreachedUS$7billion.Atthetime,thisvaluerepresentedmorethanhalfofthetotalloansfromtheBank’sinfrastructureandurbandevelopmentsector–inwhichhousingisallocated.6

This change also represented a significant transformation in the profile ofcountrieswhichreceive‘help’fromtheWorldBank:afterthefalloftheUSSR,former Communist Eastern European and Central Asian countries becameimportantWorldBankclients.Together, theyhavereceivedalmost20percentofallhousingloans–US$900millioninthe1990s.7

Alongside thedecisivepresenceofcommodificationand financialisation inWorldBankstructuraladjustmentprogrammes,theinstitutionplayedakeyroleinthedisseminationofthemodelofmarket-orientedhousingpolicy.Itdidsonot

only through direct loans to countries (Latin America continued being animportantclient,aswewillsee,aswellascountriesinthenorthofAfricaandinthe Middle East), but, more importantly, through its influence over thetheoreticalandpracticaldevelopmentofthemodel.InorganisationssuchastheWorld Bank, the European Central Bank and other multilateral banks andinstitutions,loansaresometimesnon-repayableandalmostalwaysaccompaniedbyapackageofeconomicmeasuresandtechnicalassistance.Thisassistanceisperformedbyconsultantswhobasetheiranalysisonreportsproducedinsidetheinstitutionitselfandfollowitsdirectives.Expertsandconsultantsalsotakepartin international forums and events that gather ministers, mayors and housingprogrammemanagers.Intheseways,thebanks’actiontransformseachloanintoa laboratory for technical-political experiments, which has been furtherconsolidatedintoasortof‘recipe’anddisseminatedbythebanksthemselves.

The recipe was formulated back in 1993, in the previously mentionedHousing:EnablingMarketstoWork.AccordingtothisWorldBankpolicypaper,governmentshaveseven instrumentsat theirdisposal to facilitate theactionofhousing markets: three to tackle obstacles to the growth of demand, three toaugment supply, and one to improve the sector’s performance as whole. Thethreeinstrumentstomakethedemandviableare:first,enforcementoftherighttoproperty, inorder toguarantee theestablishmentand legalenforcementofasystem of free trade in housing – achievable through the implementation of alandandpropertyregistrationsystemandtheregularisationofinsecureformsoftenure;second,developmentofahousingfinancesystemthroughthecreationofhealthy and competitive mortgage credit institutions and the development ofinnovative products, capable of extending home-purchase to the poorest; andthird, the rationalisation of subsidies, to ensure that they are focalised andaccessible, measurable, transparent and adequately scaled, avoiding thedistortionofresidentialmarkets.

The three instruments for supply expansion are: provision of infrastructurefor urbanisation; reform of urban and buildings regulation systems, aiming tobalancethecostsandbenefitsofnormsthatimpactlandandresidentialmarketsand removing laws that unnecessarily hinder the supply of housing; lastly,organisationofthecivilconstructionindustrytofostercompetitionandeliminatecommercialobstaclesandbarrierstoinput.

Theseventhinstrumentisinstitutionalstrengtheningofthehousingsector,inordertomonitorandmanageitsperformanceasawhole.8

Accordingtothesamedocument, theseseveninstrumentsareapplicabletoallWorldBank clients, but the priority for themobilisation of one or another

shouldvary fromcountry tocountry.Forcountries classifiedas ‘low-income’,thepriorityisthereformoftenurethroughthedevelopmentofmarket-orientedsystems of property rights, as well as investment in infrastructure and in theconstructionindustry.Incountriesholdinglargedebts, thepriorityisfiscalandfinancialreform,especiallythereductionofpublicexpenditureonhousingandtheimplementationofhousingfinancesystems.InformerCommunistcountries,thepriorities are: to reformproperty rights, housing finance systems, landandconstruction subsidies and regulations; to improve the real-estate developmentsector; and to further the production and distribution of buildingmaterials. Inothercountries,classifiedas‘middle-income’,theprioritiesshouldbethereformof land andbuilding-use regulation– enabling a transition tomore responsivesystemsofhousingsupply–andthedevelopmentofamortgagemarket.9

Alongside theWorld Bank’s direct loans to governmental institutions, theInternationalFinanceCorporation(IFC,theBank’sprivatearm),associatedtoitsCapitalMarket Department, also played a decisive role in the success of thisoverhaulofhousingpolicy.TheIFChelpedcreatemortgagecreditcompaniesinBolivia,Botswana,Colombia, Indonesia, Lebanon andSenegal, and instigatedtheHousingDevelopment FinanceCorporation in India. It alsoworked in theprivatesector, tocreatemortgagecredit institutionscapableofcompetingwiththepublicsector.Anditcontributedtothereformoffinancesystems,easingthedevelopmentofprimeandsubprimemortgagemarkets.10

TheaboveexpositionoftheWorldBank’sengagementinthespreadofthehousing financialisation model does not purport to be an evaluation of theBank’s strategies and outcomes. The intention here is to reveal anothermechanismofdisseminationof the theoretical andpracticalmodels that led tothe takeover of the housing sector by finance. In each country’s concreteexperience, the Bank’s involvement in the reforms may have been greater orlesser,bothinvolumeofresourcesandinpoliticalinfluence.Regardlessofthisvariable, agents from the international market interfered with the countries’politicaleconomy inmanyways– including theirparticipation in strategiesofcooperationviamultilateralbanksorcooperationagencies.

Indeed, theWorldBank’s owndocuments recognise an important effect ofthisnew–andallegedlysuccessful–housingpolicyfocus:thegradualstiflingof support for social housing for lower-income populations. In the 1970s, thistypeofsupportrepresented90percentoftheWorldBank’sloanstothehousingsector;sincethemid-1990s,thisratehasdroppedtolessthan10percent.TheBankalsoadmitsareduction in thenumberof lessdevelopedcountrieson theinstitution’sclient list: from40percent in the1970s to20percent in2006.11

Therefore,asintheexperiencesthatIhavepreviouslydescribed,financialisationpoliciesweremoreusefulfortheexpansionoffinancialmarketsthemselvesthanforincreasingaccesstohousingforthepoorestandmostvulnerable.12

In later chapters of this book, I will analyse more deeply the reforms ofproperty systems, as well as the impact of the above-mentioned policy offocalisedsubsidiesontheWorldBank’s‘revenues’.Certainly,theapplicationofthese‘revenues’dependsonthespecificnationalcontext.Aswehaveseen,theso-called ‘transition economies’ – countries that abandoned Communism andreformedtheireconomic,politicalandfinancialsystemsinthe1990s–wereanimportantlaboratoryforthenewhousingpolicyparadigmssoclearlylaidoutintheBank’sdocuments.Bywayofseveralexamples–withparticularattentiontoCroatia and Kazakhstan – I will examine how this process occurred, and theconsequencesithadforformerCommunistcountries.

LostinTranslation:TheHousingTrajectoryofFormerCommunistCountries

Untilveryrecently,housingpolicyinSouthEasternEuropewaspredominantlyconcernedwiththereconstruction of properties damaged during conflict, and with the privatization of the publiclyownedstock.Bynow,mostofthedamagedorlostpropertieshavebeenrebuiltanditwouldseemtimelytopursuethenextcriticalstagesofapost-privatizationhousingpolicyagenda…todevelopthelegalandregulatoryconditionstoenablenewprivatehomeowners…tomaintainandusethisasset efficiently; [and] to pave the way for an emerging housing finance market [which] is animportantsegmentofthefinancialsectorofanycountryandcontributestoitseconomicgrowth.

Withthesewords,thepresidentoftheCouncilofEuropeDevelopmentBankandtheWorldBankvicepresidentforEuropeandCentralAsiapresentedtheresultoftheMinisterialHousingConferenceforSouthEasternEurope,heldinParisin2003.13

InCommunistcountries,housingprovisionwasanobligationofthestateandwasuniversallyguaranteedtoallaspartofthenon-monetisedlivingconditions,salariesexcepted.14Despitetheirapparenthomogeneity,themodelsandsystemsforhousingprovisionvariedamongthecountries.Eveninsidearegionorblocofcountries,differencesprevailed–suchasamongtheformermembersoftheUSSR(inEasternEuropeandCentralAsia),Yugoslavia,SouthEasternEuropeortheAsiancountriesundertheinfluenceofChina.15

Thepredominantmodelwas the constructionof a publichousing stockbycentral governments, municipalities, cooperatives or state companies and its

subsidised letting to residents. However, some countries (such as Hungary,Bulgaria,PolandandformerYugoslavia)alsoranpublicbanksandagenciesthatissuedcheap loansforpeople tobuild theirownresidences. InYugoslavia, forexample, subsidies for home purchase became part of housing policy in the1960s,whileinHungary,self-buildswerecommoninthesuburbsofbigcities.In any case, in socialist countries, the predominance of state organisations forhomefinanceandconstructionmadehousingastateduty–eveninthecaseofhome purchase. Public banks offered long-term mortgage loans with fixedrepaymentsandlowinterestrates.Theseloanswereallocatedaccordingtolistsfrom syndicates, municipalities or the Communist Party. In further urbanisedcountries, such as Poland, the German Democratic Republic andCzechoslovakia, cooperatives mobilising previous collective savings becamegraduallymoreprevalent.16

Inthecaseofpublicrentalhousing–thepredominantmodalityinsocialistcountries–tenantsenjoyedextraordinarysecurity:theycouldnotonlyremaininthebuilding,butalsomoveapartments.17Rentandutilities (suchaselectricityandwater)wereextremelycheap,amountingtoanaverage2–3percentofthefamilybudget.

Despitemanydifferentsituationsfromcountrytocountry,attheendofthe1990sthenumberofhomelesspeoplewasminimalinmostofthem.Thisisnottosaythatpublichousingprojectswereofahighstandard,welllocatedorfairlyallocated among those in need. Large housing complexes were usually builtusing low-cost prefabricated technologyof very poor quality.Moreover,manyfamiliesandindividualshadnooptionbuttoshareovercrowdedandprecariousapartments and houses. Often these complexes were residential-only, with nosocial, sports or cultural facilities, and inadequately maintained. Privilegedallocationofthebetterapartmentstopartyorunionleaderswasalsoacommonpractice.

Atthebeginningofthe1990sinEurope,andattheendofthesamedecadeinAsia, themajority of formerCommunist countries embarked on projects ofprivatisationof their large-scalepublichousingstock,which resulted, inmanycases,initscompletesuppression.Thesecountriesadoptedright-to-buyschemes– the possibility for tenants to buy the units where they lived with largediscounts(andsometimesatnocost).OnlyPolandandtheCzechRepublicdidnot introduce national legislation on the theme, letting municipalities decidewhatshouldbedonewiththeirstocks.

AnexampleofthisisSlovakia.Between1948and1990–whenthecountrywasstillpartofCzechoslovakia–1.3millionrentalhousingunitswerebuilt(for

apopulationof5millionpeoplebytheendofthatperiod).Thisnumberdroppedafterthetransitionfromaplannedeconomytoamarketeconomy,in1989.From1991to2000,three-quartersofthepublichousingstockwaslost.However,themain characteristic of the transition was the change in the property regime:public rentals shrank drastically in comparison to residential private property.Nowadays,staterentalunitsrepresentonly2.7percentofthecountry’shousingstock. Slovakia implemented a slightly different version of the right-to-buysystem,asitkeptaproportionofitshousingstockascontrolled-rentunits.18

AnotherexampleisSlovenia,which,between1991and1993,privatiseditsentirehousingstock.Bytheendofthisperiod,88percentofallhousingunitswere privately owned.By the end of 2000, 11 per cent of the total stockwasstate-ownedandusedforsocialhousing.19InEstonia,beforethe1989reforms,25.8 per cent of all residential buildings belonged to the central government,34.7percenttolocalgovernments,5percenttohousingcooperativesand34.5per cent to private owners. After the Privatisation Law, the Population andHousingCensusof2000 indicated thefollowingpercentages: thepublicsector(mostly in the form of local governments) owned 6 per cent of all residentialbuildings, while the rest were privately owned. Later statistics show thatprivatisationkeptgrowing: in2005,only4percentofall residentialbuildingswerestate-owned.20

As part of the privatisation of some Russian and Bulgarian companies,productioncomplexesthatcomprisedworkers’accommodationweretransferredtonew (private)proprietors, housingand tenants included.Thus, former state-owned companies that were privatised became large landlords of residentialcomplexes.

Inaddition,manycountries–suchastheCzechRepublic,Estonia,SloveniaandAlbania– returnedbuildings to formerowners (or theirdescendants)whohad been expropriated by the Communist regimes. Some countries – such asRussiaandBulgaria–didnotimplementproperty-returnpolicies,whileothers–Hungary, for example – preferred to financially compensate formerproprietors.21

Despite the variety of internal socio-political configurations and optionschosen during the transition, former socialist countries radically transformedtheir housing tenure structure during the 1990s, with clear predominance ofhomeownershipovertenancy.

In Europe, all former Communist countries have homeownershippercentagesabove80percentoftheirresidentialstock–insomecases,above90percent, suchas inSlovakia,Lithuania,AlbaniaandRomania.This rate is

superiortotheEuropeanaverage,currentlyaround70percent.22InCentralAsiaand China, homeownership rates also exceed 80 per cent.23 Privatisation wasaccompanied–againindifferentproportionsandtimings–bytheintroductionof housing finance systems. As indicated previously, the World Bank andinternational cooperation agencies had participated intensely in this process,especiallyinEuropeancountries.24

Thetransformationofhousing,fromapublicandsocialgoodentirelyunderthe state’s responsibility into a product available on the market, has alreadyimpacted on access to housing in the above-mentioned countries, affectingmainly the poorest layers. On the one hand, most households enjoyed a firstmomentof tenuresecurityand,especially in theformerSovietcountries, therehasbeennolargeshort-termhousingdeficit.Ontheother,however,theissueofaffordability soon emerged as a problem.Familieswhobought the apartmentswheretheylivedhadneverbornetheircostsbefore–northeirmanagementandmaintenanceexpenses.Giventhelowqualityofmanyoftheseunitsandintheabsence of a policy to tackle the issue, their physical condition quicklydeteriorated.25Atthesametime,companiesthathadbecomelandlordsoflargehousingcomplexesbegantoraisetherent–whichhadrarelyreached5percentofthehouseholdincomebefore–abovemanyresidents’capacitytopay.

Moreover, the privatisation of the housing stock was accompanied by theprivatisation of public utilities (electricity, water and gas), entailing animmediateriseinhousingcostsasawhole.Inmostcases,renovationexpensesalsofollowedthegeneralriseofpreviouslysubsidisedprices.26

Anotherimportantconsequencewasthevirtualparalysisoftheconstructionsector, due to the interruption of public production and the nonexistence of areplacement private supply.27 The only housing solution for new families oryoung peoplewas therefore through the private rental sector,which, in urbanareas,couldtieupmorethanhalfoftheirincome.28

The rise of housing prices and overcrowding in large urban centres alsorelates to other processes: the growth of internal migration (which waspreviouslycontrolled),theinfluxofforeigninvestmentandtheopeningoflandand real-estatemarkets to the speculativemovements of financial capital.OnecountrywherethisphenomenonstandsoutisChina.

Chinastarteditsreformtowardshousingcommodificationin1998.Thenewpolicy ended the system of housing allocation, following the plan of SpecialEconomic Zones (SEZs) that intended to set up a new system based onsubsidised purchase in some parts of the country. The basis of the previous

systemforhousingregistration,orhukou–implementedbyMaoZedonginruralzones in the 1950s –was not eliminated.This system relates access to publicservices, including housing, to the place where an individual is registered.Nevertheless,assubstantialmigrationflowsfollowed the jobsfromruralareasintocities, therewasameteoricdevelopmentof residential real-estatemarketsandahouse-priceboom.29 In the absenceofhousing supply for these ‘illegal’migrants, the newparadigmhas been simply incapable of providing access tohousing for lower-income sectors, leading to increased segregation andsituationsofprecariousnessandinformalityinurbanareas.

The surplus rural population, estimated at 150 million people in 2013, isexpected to steadily fuel the migration movement. Such migrants, hukou-blockedwhere housing is concerned, represent approximately half of the poorurbanpopulation.30

Withinthisoverheatedresidentialmarket,thesolutionsfoundtoabsorbsuchcontingents are in the informal field.An example is ‘group rental’ (qunzu), inwhichmiddle-orevenhigh-incomeapartmentsaredividedintosmallcellsandsublettovariousindividualsorfamilies.31

ItisnotonlyinChinathatinformalhousingmarketshavegrowninordertoaccommodateanincreasingdemandthathadnootheralternative.Non-regulatedornon-authorised settlements area trademarkof affordablehousing invariousformer socialist countries. For example, inKazakhstan –which Iwill analyselater–morethanhalfofthepopulationliveinprecarioussettlements.Thisratereaches 30 per cent in Moldova and 19 per cent in Romania, Bosnia-Herzegovina,CroatiaandMacedonia.32

Many countries created, reformed or liberalised their housing financesystems during what came to be called the ‘second phase’ of the transitionprocess.Thisoccurredforthemostpartafterthe1996economic-financialcrisisinEasternEurope,whennewlyprivatisedbankingsystemsincountriessuchasBulgaria,BosniaandAlbaniacollapsed.Inthepost-crisisperiod,mostbanks–whichhadbeen sold to foreign investors– resumed their activities.33BankinginternationalisationandtheincreasedavailabilityofsurplusEuropeancapitalatthe start of the 2000s expanded mortgage loans. This happened especially inCroatia,HungaryandKazakhstan. InHungary,morepotentialclientshad theiractivities connected to the informal sector and the competition betweenmortgage credit institutions became fiercer. As a result, banks began to relaxtheircriteriaforguaranteesandproofofincomeandtoofferloanswithvariablerepaymentrates.34

Moreover, a significant proportion of the region’smortgage loan contractswereinaforeigncurrency.In2010,5percentofthepopulationoftheEuropeanUnion’semergentcountrieshadamortgage–and42percentofthesecontractswereinforeigncurrency.35

MortgagesinSwissfrancs–acurrencyconsideredstable–werecommoninEastern European countries, such as Hungary, Poland, Romania, the CzechRepublicandCroatia,beforethe2008crash.Withthecrisis,theappreciationofthe Swiss franc in relation to local currencies obligedmortgage borrowers tofacerisinginstalmentprices.Thesameprocessboostedmortgageprices,whichlargely exceeded the value of the houses and apartments concerned. In somecountries,theconstructionsectorwasoneofthefirsttosuffertheconsequencesof the crisis, and many construction companies went bankrupt, leavingunfinishedprojectsandindebtedandhomelessproprietors,aswewillseeinthecaseofKazakhstan.Theresultwasthatmortgageborrowerswereworsehitbythecrisisthannon-indebtedpeopleinEasternEurope.However,inacompletelyunregulated and buoyant rentalmarket, it was tenants rather than buyerswhoallocatedthemostsubstantialpartoftheirincometohousing.36

To sum up, former Communist countries which reformed their housingsystems in the direction of commodification are experiencing an affordabilitycrisisinthesector,aswellasrelatedproblemsofsupply,accessandqualityofhousing.

Thespecific trajectoryofKazakhstan,which Iwill surveynext, introducesnew elements to this narrative. By analysing specific scenarios, we canunderstand the evolution of housing policy beyond the binary contrapositionbetween state-produced housing and market-produced housing, in order tounderstandthepoliticaleconomyofhousingineachcontext.

Kazakhstan

In 1995, when the government of newly independent Kazakhstan decided tomove the country’s capital fromAlmaty toAstana, the latter barely existed. ItwasmerelyaclusterofoldSoviethousingcomplexes in themiddleofavast,frozen steppe in the north of the country– a region calledAkmola.However,aftertenyearsofeconomicgrowthatanannualrateof10percent–essentiallybasedontheexportationofoilandgas–Astana(‘capital’inKazakh)becameahotbed of experimental ‘brand’ architecture, attracting the likes of Norman

Foster and Manfredi Nicoletti to design state buildings, commercial towers,shoppingcentresandluxuryhotels.TheKhanShatyrcentre(‘queenoftents’inKazakh), in the shape of a mammoth tent, was inaugurated in 2010 on theoccasion of President Nursultan Nazarbayev’s seventieth birthday. Itaccommodatesupto10,000people,whocanshopinternationalbrandssuchasGAP and Timberland,watch 3-D films and relax on a ‘tropical beach’whosesandwasimportedfromtheMaldives.Another landmarkisaresidential towercomplex that hosts a shopping centre and a five-star hotel. Built by AldarProperties,thelargestAbuDhabireal-estatedeveloper,thecomplexcostUS$1.6billionandwasfinancedbythecity’sgovernmentandprivateUAEinvestors.

Kazakhstan’srapideconomicgrowthandthecentralgovernment’sdecisiveaction turned Astana into a magnet for international investment. Theconstruction of the new capital was one element of an aggressive strategy toopen the local banking system, attract foreign investment into the real-estatemarketandconstruction industry, and increasecredit availability–particularlyfor consumers of residential units. According to the government, this strategyaimed to transform the construction industry into the engine of nationaldevelopment, improving current living conditions and housing standards,generatingjobsandstimulatingtheconstructionindustrychain.

ThegovernmentofKazakhstandrasticallychanged itshousingpolicyafterindependence,concentratingalleffortsonpromotingtheconstructionandsaleofindividualpropertiesviathemarket.Tothatend,itprovidedwell-locatedurbanland to new development companies and courted private investors. Thepredominant model was the sale of off-plan apartments via shareholdingparticipation (dolevoeuchastie inKazakh).Aspiring homeowners contribute tothe financingwith their own savings – partially upfront and partially throughmonthly instalments. The contracts hold developers to deliver the finishedproductwithintwoyears.

This system was also strategic for President Nazarbayev’s government toconsolidate the territory under Kazakh control as an independent country,strengtheninghis–andhisclique’s–poweroverthedirectionofpoliticsandtheeconomy.DuringtheSovietera,thisterritory,thinlypopulatedbynomadtribes,was occupied for the exploitation of its mineral resources, leading to massimmigrationfromRussiaandotherUSSRrepublics.In1989,only6.5millionofits16.5millioninhabitantswereofKazakhorigin.37

In 1984, still under the Soviet regime, Nursultan Nazarbayev, a Kazakhmetallurgicengineer,hadalreadyservedasprimeministerand, stillbefore thecountry’s independence, as first secretary of the Communist Party of

Kazakhstan.Bydeclaringindependencein1990,hebecameitsfirstpresident.In1995, a referendum‘re-elected’him foranother five-year termand, ever sincethen, he has continued to be re-elected every five years, standing as the solecandidate and always gainingmore than 90 per cent of the votes. In 2007, aconstitutional amendment guaranteed that he will be allowed an unlimitednumberofmandates.

Beyondhis total controlover thepoliticalapparatus,PresidentNazarbayevpromotes a monarchic cult of personality. An example is Bayterek Tower(knownas‘thelollipop’bythelocalpopulation).Thismonumentisatthecentreof a monumental complex that includes the presidential palace, itself anemulationoftheWhiteHouse.InthelargeglassspherethattopstheBayterek,abronzemouldofthepresident’srighthandisdramaticallypositionedattheverycentreof thehighest room,granting thepopulation theexperienceof touchingthe president’s hand. Nazarbayev himself drafted the design and, defininghimselfasacontemporaryLouisXIV,comparedAstanatoVersailles.

This political economy of real-estate stravaganza helps to affirm both thepresident’spowerandtheKazakhnationality,workinginadoublesense:ononeside, it radically throws open the freezing steppes as experimental fields forglobal financial circuits; on the other, it consolidates an authoritarian andcentralised power founded on a contemporary cult of personality constitutedthroughtheconstructionofmonumentstoconsumption.38

‘These cities smell ofmoney’,was the frequent comment byvisitors fromother CentralAsian republicswhen describing the urban boom at Astana andAlmaty (the country’s previous capital and main economic centre). In 2007,KazakhstanboastedthehighestlevelofforeigninvestmentpercapitaamongallCentral Asian republics, and its banking system was considered the mostdevelopedofall‘transition’economies.39Asignificantpartoftheinvestmentinthe construction sector had come from international financial institutions asloanstocommercialbanks,whichinturnlenttofinalconsumersundertheformofmortgagecreditcertificates.Themajorityofthemrepresentedshort-andmid-termcreditsuppliedthroughthemortgagemarket.40

Nevertheless,withthefinancialcrisis–aswewillsee–thevolatilecapitalthathad landedonAstanaandotherKazakhcitiesquicklyvanished, leavingadesertofhalf-constructedbuildingsandthousandsofpeoplewithneithersavingsnorhomes.

Astana’slarge-scaleprogrammesofurbanrenovationandcityembellishmentattracted internal migrants, who moved into the new capital seeking the jobopportunities within the construction sector and a better standard of living.

According to the census of 2009, Astana’s population grew from 328,341 to613,006 inhabitants between 1999 and 2009. Almaty, with a population of1,365,632,remainsthelargestcityinKazakhstan.LikeAstana,Almatyattractedhigh numbers of migrant workers after the economic crisis that followed theUSSR’scollapse.Accordingtoofficialestimates,morethan300,000peopleperyearinternallymigratefromruraltourbanareas.

Thanks to its economic performance, Kazakhstan became a favoureddestination for migrant workers from other Central Asian countries and fromChina. According to official estimates once more, Kazakhstan hosts between500,000 and a million foreign workers, but other sources consider a numberbetween2and3millionmigrantsmoreplausible.Aconsiderableproportionofthesemigrantsareemployedwithintheconstructionsector.41

Mass migration of low-income workers, combined with the absence ofhousing policies for this population, led to the proliferation of informalsettlementsandshantiesaroundtheperipheriesofbothAstanaandAlmaty.Dueto their unofficial nature there are no reliable statistics about the number ofpeople living in thesesettlements,which tendtobe located inenvironmentallyprotectedzones,flood-proneareas,orplacesfacingahighriskofdestructionbyearthquake.

Most of these informal dwellings lack kitchens, sanitation, electricity andrunning water, and their residents are constantly at risk of forced eviction bypublicauthorities.Theabsenceofalegaladdresspreventsthemfromregisteringtheir place of residence, yet this is a legal requirement – in force since theCommunistera– for familiesand individuals if theyare toqualify forvariousstateservices,includingsocialhousing.

Eligiblecitizenscanonlyapplyforsocialhousinginthemunicipalitywheretheyareregistered.Townsandcitieskeepseparatelistsforthefollowingeligiblecategories:peoplewithspecialneedsandwarveterans;low-incomeandsociallyprotected families; certain categories of public functionaries; and people wholive in severely dilapidated accommodation. While social housing units areallocatedbasedon these lists,peoplewithspecialneedsandwarveterans takeprecedenceovertheothercategories.

Local authorities also use their budget to provide housing benefit tostrugglingfamilieswhosehousingexpendituresexceed10or15percentoftotalfamilyincome.Thisaidisusedforrent,housingmaintenanceorpublicservices.Andyet,noneoftheseprogrammesservethethousandsofmigrantswhoflockedtocitiesafterthecountry’seconomicliberalisation.

Kazakhstan was seriously affected by the international financial crisis

becauseoftheradicalderegulationofthecountry’sfinancialsystem.Duetotheexpansionofaccesstomortgagecredit–evenforfamilieswithlittlecapacitytopay – and the attraction of short- and mid-term international investment, thefinancial crisis provoked the collapse of the banking system as a whole.AccordingtotheWorldBank,theannualgrowthrateplummetedfromalmost10per cent between 2000 and 2007 to 3.3 per cent in 2008, and 1.2 per cent in2009.

Theconstructionsectorwasoneof the first tosuffer theadverseeffectsoftheglobaleconomicdecline.Manyconstructioncompanieswereforcedtoshutdown,leaving450unfinishedprojects.Accordingtothegovernment,morethan62,000borrowerswerenegativelyaffectedbythecrisis.Around16,000ofthemweredeceivedbyprivateconstructioncompanies–themajorityfromTurkey–who left the countrywithout completing their projects.Other individualswereunable topaytheir loan instalments,andbanksstartedforeclosureproceedingsagainst them. Following the extrajudicial sale of their property by banks andother financial institutions,many individuals and familiesbecamehomelessorwereforcedtomoveintolow-qualitydwellings.42

Thehungerstrikestagedbythose‘deceivedbyconstructioncompanies’wasthe scenario in 2010: an expression of the housing crisis after the financialeuphoria.

4Post-CrisisMeasures:MoreoftheSame?

Theburstof thebubble, thecreditcrisis thatswept theinternationalfinancialsystemandthestateofhousingemergencythatensuedinsomecountriesdidnotchange the paradigm. Instead, governmental responses assumed three basicforms:bailouts–massive injectionsofpublic resources intoprivatebanksandcredit institutions to save them from bankruptcy; the introduction of someregulatorymeasuresinordertoincreaseloantransparencyandcontrol;and…anewbatchofincentivesforprivate-sectorhousingproduction,withunitssoldviamortgagecredit togalvanisetheeconomy.Housing–oneofthemostdynamicnew frontiers of late neoliberalism during the decades of economic boom –switched to being one of themainKeynesian recuperation strategies after thebust.AccordingtoManuelAalbers,‘neoliberalismislikethat:itcanfurtheritsagendabothduringeconomicboomsandeconomicbusts.’1

The most immediate post-crisis responses were interventions from theFederalReserve(thecentralbankingsystemoftheUnitedStates),theEuropeanCentralBankandothernationalcentralbanks,whichboughtUS$2.5trillionofpublic debts and toxic assets from commercial banks, configuring the largestliquidity operation of credit markets in history. The US and France alsorecapitalised their central banks bymore thanUS$1 trillion, buying preferredstocksfromthebiggestbanks.Theinjectionofmoneyintothosebanksinvolvedwiththemortgagewebhadthedeclaredobjectiveofputtingthembacktowork,allowingnot only the refinancingofmortgages, but also theprovisionof newloans.InSpain,forexample,since2008,almost€170millionhavebeenspenttorescue financial institutions, with no conditions attached.2 Without the

impositionofanystrings,thenewresourcesinjectedbycentralbanksfollowedfinancial logic and, rather than being funnelled into the recuperation of localhousing markets, sought investments in more lucrative areas in emergentmarkets,notablyChina.3

Stimulus packages such as the American Recovery and Reinvestment Act(ARRA),enactedsoonafterPresidentObama’s inauguration in2009,strove toenergisecertainfieldsofactivity(infrastructure,healthscience,etc.)throughtaxincentives,whileincreasingtheresourcesforunemploymentbenefitsandothersocialexpenditures.4

In the same year, the American federal government also launched theMaking Home Affordable programme, one of whose aims was to preventforeclosures. Through partnerships with the private sector, this programmeoffered loan refinancing and better contract terms.5 From the start, thereweredoubtsaboutitscapacitytoreducethewaveofforeclosures.Thecritiqueswerebased on the small number of banks and investment funds signing up to aschemewhosesuccessreliedentirelyonthecreditors’will totakepart,andonthemodest number of proprietors actually benefiting from it.Moreover,mostloansreviewedviatheschemeweretemporary,validforanexperimentalperiodof nomore than fivemonths,with only a small proportion of thembecomingpermanent.6

InKazakhstan,thebankrescueoperationcostthegovernmentUS$4billion(approximately 4 per cent of the country’s GDP). As well as bailing out thelargest banks, the government announced a stimulus package that put US$3billionintothereal-estatemarket–US$1billionofwhichwasdirectedtowardsmortgage refinancing – and US$3 billion for the economic revitalisation ofindustrial, agricultural and infrastructural sectors.TheUS$3billion earmarkedforthereal-estatemarketwereusedforthepurchaseofunfinishedconstructionsand for the refinancingof thedebts of borrowerswhohadnoother propertiesand whose homes measured less than 120 square metres. The purchase ofunfinishedconstructionswasmanagedthroughthecreationofareal-estatefundlinked to thecountry’ssovereignwealth fund(theSamruk-Kazyna).Resourceswere poured into construction companies to ensure the completion of projectswhich had been slowed down or paralysed by the financial crisis. In total,US$1.1billionofpublicresourceswereallocatedtothisfund.

Insomecountries,post-crisismeasuresalsoincludedatighterregulationofloantypes.This ledfinancial institutionstoincreasetheiranti-riskprecautions,uppinginterestratesandreducingloanmaturity–and,consequently,restrictingtheloans.7Theserestrictions,combinedwithageneralscenarioofrecessionand

economiccrisis,furtherreducedthesupplyofcreditforhome-purchase,evenincontexts of real-estate price drop and huge vacancy rates, as in Spain. IncountriessuchastheUnitedKingdom,wherepricesdidnotfallandthesupplyofnewresidentialunitshasbeenlimitedfordecades,oneofthemainmeasuresadopted in the faceof the crisiswas aprogramme to stimulatehouse-buildingandsalesviasubsidisedmortgagecredit.

The 2007mortgage crisis had its peculiarities in theUK.Although housepricesdippedinsomeareas–asanimmediateresultofthefinancialcrisis–theyhad already recovered by 2010. In fact, the main characteristic of the creditcrunchwas adrop in financial transactions, loans and constructions.8TheUKgovernmentthenlaunchedastimuluspackagefortheresidentialmarketandthewider economy, through governmental guarantees formortgage equities – theliquidvalueofproperties,discountingthedebt.Inordertohelppeopletoaccessmortgage financing, the government introduced three schemes, with differenttypes of subsidies: the New Buy Guarantee Scheme (guarantees for home-purchase), theHelptoBuyEquityLoans(subsidisedloansforhome-purchase)and the Help to Buy Mortgage Guarantees (mortgage guarantees for home-purchase).9

Many other countries also redoubled incentives and subsidies for home-purchasemortgagecreditasaremedyforthemortgagecrisis.ThisisthecaseofMontenegro,which,in2010,launchedamortgageplanforlow-incomesectorscalled 1000+ Stanova [1000+ Homes]. Besides its ambition to reduce thecountry’shousingdeficit,thisprogrammewasadirectresponsetotheeffectsofthe2008crisis.Thepolicyisearmarkedforlow-incomeindividualsorfamilieswhocannotaffordhousingatmarketrates.Theprojecthasanestimatedvalueof€50million, half covered by a €25million loan from the European Bank forReconstruction andDevelopment; theother halfwas financedbyMontenegrincommercialbanks.Beneficiariesreceivegovernmentsubsidiesfor thepaymentofinterestoncommercialmortgages.Thepropositionwastobuild1,000unitstokickstartthecivilconstructionandbankingsectors–whichwerebothincrisis.10

InAndorra,asaresponsetothe2008crisis,Lawn.31/2008raisedthelimitofforeigninvestmentinthereal-estatemarket,andshortenedthestatutorynoticeperiod before the rescission of rental contracts.11 This law reapplies, after thecrisis, measures widely used in other countries to dismantle older housingalternatives–inthiscase,protectedrents–andstimulatetheentranceofglobalfinancialcircuitsintotheresidentialreal-estatemarket.

Overall, then, among the measures taken after a crisis caused by thefinancialisationofhousing,themostcommonresponsehasbeennoneotherthan

increased finance for housing. The crisis did not inspire the slightestreinforcement of programmes or policies of non-commodified social housing,nordiditencouragetheimplementationofnewmodelsofhousingprovisionandmanagement.12

IntheUS,despitehousingbeingattheheartoftheeconomiccrisis,theHUDcontinues tobe starvedof resources andpublichousingagencies are excludedfrom stimulus packages.More dismaying still, the fiscal adjustmentmeasurespassed by Congress in 2011 further reduced the resources available for thepayment of vouchers and for themaintenance, renovation and construction ofpublichousingunits.13

In the UK, austerity measures slashed funding for council and socialhousing. At the same time, welfare reforms meant hardship for low-incomehouseholds,asdescribedintheprevioussection.

Abettedbyinternationalorganisations,fiscalausteritymeasures–aspartofeconomicrecoveryplans–ledtocutsinthefewprogrammesofsocialhousingsupport that still existed in some countries. Sometimes they resulted in thewholesale extinction of these programmes, as in Greece and Portugal, forexample.

InGreece,until2012,themainorganisationinchargeofhousingprojectsforthe low-income population was the Workers’ Housing Organisation (OEK),createdin1954.Beneficiariesincludedprivate-sectorworkers(whetherGreekorlegalmigrants)whocontributedtoOEK;publicfunctionarieswhocontributedtoOEK; and pensioners who had previously belonged to one of the abovecategories.TheOEKwaspartoftheMinistryofLabourandSocialSecurity,butenjoyed financial autonomy. Its projects were financed through workers’ andemployees’contributions–1percentoftheworkers’salariesand0.75percentofthepublicemployees’salaries.Unitsweresoldatcostpriceandbeneficiariescouldpayfor themintwentyto twenty-fiveyearswithnointerest.Pensioners,singlepeopleor low-income familieshad theoptionofusinga rental subsidy.Benefits were conditional on family income and non-repayable. A SpecialSolidarity Fund existed to pay the debts of families under severe financialpressure. It had been expressly crafted for cases of illness or long-termunemployment and could support families for six to twelve months. Over itsfifty-eightyearsofoperation,700,000familiesgainedaccesstohousingthroughOEK.

The organisation was legally abolished in 2012, as part of the austeritypackageimposedonGreeceinthewakeofthefinancialcrisis.14

Many other countries saw the deterioration of a range of housing-related

indicators: increasedhomelessness;a rise in thenumberofovercrowdedunits;soaringhousing expenses; andhigher participationof private rentalwithin thehousingmarket. This transformed the subprime andmortgage crisis into newbusinessopportunities for financial investors.Theportionof thehousingstockthat is undervalued and empty – due to unsold projects, foreclosures or‘remnants’ofpublicstocksthatwerenotsoldduringtheprivatisationtornado–becomesanewdestinationforthespatialfixoffinancialcircuits.

At the beginning of this chapter I already observed that, because ofoveraccumulation, themarket’sterritorialandsectorialexpansionpermittedtheabsorption of surplus capital by transforming housing into a commodity andfinancialassetinmanypartsoftheworld.This,inturn,generatedaboomandanewcycleofoveraccumulationunderthecontroloffinancialagents.Whenthemarket became collateral-saturated, the investors’ quick entrance immediatelydevalued the stock, creating a new rental market and thus constituting a newfrontierforfinancialaccumulation.

This is one of the contradictions of capitalism: the fact that it requiresphysical space towork.At certainmoments inhistory, capitalismdestroys thespace–and,consequently,devaluesmostofthecapital investedtherein.Inthefollowingmoment, it generates a new spatial fix, through the opening of newterritoriesforanewcycleofaccumulation.15

Adetail,nonetheless,eclipsestheseeminglysplendidtrajectoryoffinancialcapital’s powers of reinvention: in the cycle that concerns us, it left behindindebtedpeoplewholosteverythingtheypossessed–includingtheironlyhome–andnowhavenowheretogo.

•

•••

5TheDemand-SideSubsidiesModel

An important component of the expansion of housing finance systems, alsopresentinthemortgagesystemsthatIhavepreviouslyanalysed,istheprovisionofpublicresourcesintheformofsubsidies–thatis,resourcesdirectedstraighttohouse-buyers.Thereasoningbehinddemand-sidesubsidyprogrammesisthatwith large financial contributions by the state, even lower-income familiesshouldbe able tomobilise their savings and finance their housing through themarket.Themaintypesofdemand-sidesubsidiesare:

Directsubsidiestobuyers–eitherundertheformofaone-offgrantaddedtothe requireddeposit, contract costsor insuranceprice,or subsidiesadded inmonthlyinstalments;Subsidiestiedtosavingsprogrammes;Subsidiesembeddedininterestratesorinthepaymentofinterest;Taxexemptionslinkedtothepaymentofmortgagesortoreal-estatetaxes.1

As well as representing the possibility of market expansion, subsidies alsoestablishaconnectionbetweenthestateandindividualsandfamilies,throughagesture offered and interpreted as ‘help’ for thosewho adhere to theproposedmodel. Most countries employ a combination of the types of subsidies listedabove. InEurope, theUS,Canada andAustralia, programmes of demand-sidesubsidies usually take the form of tax exemptions, interest-rate subsidies orsavings-account bonuses.2 In France, there is a mix of subsidies, includingsavings-accountbonuses forhomepurchaseor renovation,aswellas loansforfirst-timebuyers.3

Oneof themost commonhousing subsidies inGermany,France andother

Europeancountries is the systemofcontract savings.Saverswhohonour theircontracts are candidates for mortgage loans with below-market interest rates.This model spread to many other countries, especially post-CommunistEuropean states. Besides stimulating the marketplace, it encourages saving,guaranteeingthecommitmentofindividualsandfamiliestothefinancialsystemand rewarding thosewhoput something aside– a fundamental element of thebiopolitics of life financialisation. Paraphrasing a definition of ‘subsidy’attributedtotheUnitedStatesCongressin1969,theWorldBankcharacterisesitas:‘anincentiveprovidedbygovernmenttoenableandpersuadeacertainclassof producers or consumers to do something they would not otherwise do, bylowering the opportunity cost or otherwise increasing the potential benefit ofdoingso’.4

Taxexemptions,subsidisedinterestratesandsavingsbonusesusuallybenefitthemiddleclass,orgroupswiththeabilitytosaveand/orwithabalancetopayin their annual tax return.5 In most countries, it is a regressive expenditure,mobilisingalargeamountofpublicresourceswithoutbenefitingthosewhomostdepend on them to access adequate housing. In the Philippines, for example,interest-ratesubsidiesaccountfor90percentofallhousingsubsidies.Andyet77percentofthecountry’spopulationcannotaffordloansintheformalsector–not even at subsidised interest rates.6 In the US, as we have seen, publicspending on tax breaks for the middle and upper classes has historicallyoutstrippedanyinvestmentonhousingforthepoorest.InSpain,taxexemptionsforthepurchaseofpropertymadeuphalfoftotalpublicexpenditureintheearly1990s,andreachedarateof80percentin2003.7

TheseformsofsubsidyalreadyexistedintheKeynesianphaseofcapitalism,inbothdevelopedandlessdevelopedcountries.Asanalysedinthefirstchapterofthisbook, inmanycountriesapolicyofsubsidiesexistedalongsideasocialhousingsystem,aspartofthewelfareapparatus.However,inthe1960sand70s,inSpain,Greece,Portugal,BrazilandMexico,subsidiesweretheonlyhousingpolicy.

Nevertheless, grant subsidies are more common in developing countries,especially in Latin America. There, the low income of most individuals andfamiliesexcludesthemfromreal-estatemarkets,andduringtheFordistperiod,self-builthousingwaspredominant.8

In many countries, neoliberal processes of housing policy reform interactwith traditional formsofhousingprovision suchas self-constructionofhomesandneighbourhoods.Typically,industrialisationattractedthousandsofmigrants,mainlyfromthecountryside,withoutofferinganystructuresfortheirintegration

intothecitybymeansoflandandhousingpolicies.Inparttwoof thisbook, Iwill consider in detail the nature, role and fate of these settlements in the lastdecades.

First,however, Iwillanalyse thehousingpolicy inChile, rolledout in thelate1970sunderthelogicofneoliberalism,andconstitutingthemainlaboratoryfortheelaborationofamarket-orientedhousingpolicythatmightbeapplicableinotheremergentcountrieswhere informalsettlementswerepredominant.TheChilean model became a benchmark for other countries.9 This modelemphasises: the transferralof the responsibility forhousingprovision from thegovernment to the private sector; the award of a single grant to subsidise thepurchaseand,simultaneously,thecutofall indirectsubsidies;andmechanismsofqualificationofbeneficiariesthroughatransparentpointssystembasedonthefamily’sincomeandsavingcapacity.

These programmes aim to improve people’s economic chances to accesshousing, through cashgrants that cover a proportionof thepriceof a housingunit formally built and marketed by private companies. Grants can also becombinedwithmortgages.

The Chilean model has been promoted as ‘best practice’ due to itstransparency, the transferral of the supply of housing to the private market(considered more efficient than governments at dealing with very diversedemands for housing) and its focus on poor populations.10 It has beenwidelyreproduced in Latin America (Brazil, Colombia, Costa Rica, Ecuador, ElSalvador,Guatemala,Mexico,Panama,PeruandVenezuela).11OutsideofLatinAmerica, this model of grant subsidies has been extensively implemented inSouthAfricasince1994.12

TheChileanLaboratory

In 1973, a military coup d’état led by General Augusto Pinochet overthrewPresidentSalvadorAllendeandinauguratedwhatsomewriterscalla‘neoliberalrevolution’.13 Indeed, long before the IMF and multilateral banks started topromote so-called structural adjustment in developed countries, the Chileangovernment–under the technocraticwingof the ‘ChicagoBoys’14– radicallytook on the role of social-policy subsidiary, executing reforms in education,health,pensionsandhousing.

Atthetimeofthecoup,thepoliticalcontextofhousingwasoneofvigorous

mobilisationandpressure fromcampaigners.Since themid-1960s,comitéssincasa [homeless committees] had begun to occupy empty lots and to organisecampamentos [settlements] as a form of pressure on theChristian-Democraticgovernment of Eduardo Frei, demanding the fulfilment of his housingconstructionpromises.Campamentosalsobecamepartofthefoundationforthegrowth of left-wing parties, contributing to the victory of Allende’s UnidadPopular coalition in 1970.Thereweremore than 300 occupations in Santiagobetween 1968 and 1970, and they started multiplying. In 1972, more than500,000Chileans–400,000inSantiagoalone–livedincampamentos.15

In1978,Pinochet introduced reforms that reversedpolicies fromAllende’ssocialist run.Hedecreed the liberalisationof prices, the return of nationalisedcompanies to their formerowners, theprivatisationof all state companies, theeliminationofcustomsbarriers,andtheliberalisationofthefinancialmarketandits opening to international capital. In this context, the Ministry of Housingdesigned an instrument to underwrite themassive and sustained production ofhousing units by the privatemarket – a system that remains in place today.16Essentially, this policy consisted of: transferring housing finance andconstruction to the private sector; classifying the demand via a unified pointssystem(calledfichaCAS)onthebasisofincome,savingsandothercriteria;andawardinggrantsubsidies,tiedtofamilies’savings.

Thefinancingofthismodeloccurredthroughfamilies’savingsandthroughacomplex system of mortgage-linked deeds commercialised in the subprimemortgagemarket.17

Inpractical terms,accordingtoa1979flyerfromtheMinistryofHousing,homes are goods acquired through family savings efforts, ‘with Statecontributions via subsidy. Beneficiaries and State share the responsibilities inordertorespondtothehomeownershipdream.’Initsroleofsubsidiaryand‘inthe name of allChilean citizens, the state assistswith home-purchase and thesearchforasolutiontohomelessness–incash.Thatway,yougainthehumandignitythatyousogreatlydeservethroughthehonourofyourwork.Thisisnotpaternalism. It issocial justice.’18The requirements forapplying fora subsidyincluded being the head of a family, not being a homeowner, never havingobtainedahomeviastatepoliciesandmaintainingasavingsaccount–whetherin a bank or in a savings and loan association. Initially, the requirements alsoincludedowning landandbeingable to spend20percentofone’s incomeonmortgagerepayments.

Inmid-1984,whenaleaderoftheChileanChamberofConstructionbecameheadoftheHousingMinistry,thesystemwastweakedtoincreasethesubsidies

for lower-income familieswho could not access bank loans.The scope of thehousingmarketwastherebyexpandedandtheconstructionsector,thenincrisis,was reactivated. The same year, Pinochet approved a decree (Decree 168, 17October1984) that technicallydefinedsocialhousing,establishingaceilingof400UF (Unidad de Fomento, an abstract unit-of-account used by theChileancreditindustry)forthecostofconstructions,anddefiningthearchitectonicandurbanisticcharacteristicsoftheso-called‘viviendaseconómicas’.19

Intermsofsupply,socialhousingwouldnolongerbeproducedbythestate,butofferedbythemarket.Insteadofbuildingwhatthepublicsectordetermines,buildersshouldcompetetoproducewhatconsumers‘desire’.Accordingtothismodel, construction companies must deliver a product cheaper than thathistorically supplied by the state, giving poor people a ‘choice’ of housing,whichismadeaccessiblethroughstatecontributions.Toensurethatpricesfell,thegovernmentderegulatedthesector,reducingconstructionstandards(suchastheminimum size of housing units and plots of land) and reforming the landmarket.

In 1979, all restrictions to the development and expansion of themetropolitanarea–dating from the1960MetropolitanPlan–wereabolished,andSantiago’sbuildable surface leaped from36,000 to64,000hectares.20Thehousing and planning reform clearly had a political slant: between 1979 and1985, a complete eradicationofcampamentoswas accompaniedby apolitico-administrative decentralisation of the metropolitan area, which divided theformer seventeen districts into thirty-four, and transferred residents en massefrom central campamentos to recently created peripheral districts (many informer rural zones). More than 28,000 families were evicted.21 The mostdramatic instance was La Pintana, a comuna in Santiago Province whosepopulationgrewby90percentintwoyears(1982–84)asalmost30percentofthedisplacedpersonswereresettledthere.22

Thisaction–whosedeclaredgoalwastoterminateunregulatedsettlements–directlyimpingedonaterritoryofhighreal-estatevaluethathadbeenstructuredbylower-classorganisationsandinhabitedbytheirmilitants.Atthesametime,manyof theoldcampamentos located in outlying districtswere upgraded andregularised and endowed with sanitation and infrastructure. For people wholived in more central campamentos, there was no voluntary application forsubsidies. Instead therewas compulsorydisplacement – carriedoutwith armysupport–tonewperipheralhousingprojects,composedof25-square-metreunitsinplotsof100squaremetres.23

Combined with massive voluntary market supply, evictions from

campamentosrepresentedtheproductionofavastterritoryoccupiedmostlybylower-income housing units, offering scant facilities and services and lackingsocial heterogeneity and diversity of uses. In its competitive search for thelowestprices,theprivatemarkethadchosenthebest-valuelandasitslocus forproducinglow-incomehousing–inperipheralareasthathadnotpreviouslybeenurbanised. It signified a restructuring of the metropolitan area, intensifyingsocio-spatialsegregation.24

Morethan2millionnewresidentialunitswereproducedbetween1980and2000,ofwhichmorethan500,000were‘viviendaseconómicas’.Thisdrasticallyreduced the country’s housing deficit, and ostensibly ‘solved’ the ‘housingproblem’. Nevertheless, many studies carried out since the end of the 1990sshowtheopposite:thenew-builtstockdidnotmeanasolution,butthecreationof a fresh problem. If ‘families without roofs over their heads’ was the greathousing problem in the 1970s and 1980s, the great socio-housing problem inSantiagointhe2000sbecame‘familieswithroofsovertheirheads’.Almostallof the Chilean poor own low-quality houses or apartments, and precarioussettlementsnowrepresentlessthan4percentofthetotalhousingstock.

However, within Santiago’s socio-spatial dynamics, these new homes andtheirenvironmentsproduceanewplaceassociatedwithpovertyandmarginalityin the city. A survey performed in 2002 by SUR (a Chilean research centre)revealed that 64.5 per cent of residents in these areas want to ‘leave theirvivienda’.Thereasonsincludedproblemswithneighboursandperceptionsaboutlackofsafetyanddrug-relatedactivities.Amongthosewhowantedtoleave,90percentwere scaredandashamedof living there. Inorder tounderstand suchattitudes,researcherscrosscheckedthegeoreferencedinformationfrom‘viviendaeconómica’ complexeswith the locations of violence reported in the city.Theresultdemonstratedthatahigherlevelofinter-familyviolenceoccursinareasinwhich lower-income housing stocks are concentrated. Stigma, spatialconfinement and institutional framingwork together to define these places asauthenticghettos.25

Formany of those evicted from campamentos, the resettlementmeant theloss of their jobs, increased expenses (especially on transportation), difficultaccesstoeducationandhealthservicesand,aboveall,thedismantlementoftheirinformalsocialnetworksandthedisappearanceofcommunityorganisations.26

In2006,twolargesocialhousingcomplexes–onecomprising900unitsandthe other 1,500 –were demolished. Six years after the publication of the firstpapercriticisingChileansocialhousingpolicy,27 thegovernmentadmitted thatthisprogrammewasessentiallyaboutsettingupamachinefortheproductionof

cheap homes. Its main objectives were the invigoration of the constructionindustryandthepenetrationoffinanceintothesocialhousingsector,regardlessthatitgeneratedanewhousingandurbanproblem:theghettosofloscontecho–poorpeople‘withroofsovertheirheads’.28

The supposed advantages of this approach – freedom of choice andaffirmation of the consumers’ desires – represent, in fact, themost shamelesslackofchoice:thegovernmentusespublicresourcestocommercialiseproductsofappallingquality,whichwouldneverbeboughtifpeoplehadmoneyandrealfreedomofchoice.Within thehigher-incomehousingmarket, the supplymustbe sensitive to the requirements of the demand and, so, to the triadproduct/price/location, as it operates in a competitive context. Conversely,operatorssupplyingsocialhousinghavecaptivedemand–especiallywhenthisdemandishighlysubsidised.

In a context of housing deficit, receivers of subsidies will simply ‘buy’whatever is available and attainable at that moment. Social housing supplierscan,thus,belesssensitivetothepreferencesoftheirdemand,orsimplyignorethem,asthereisnocompetition.29

The ‘success’ of the Chilean experience was rapidly incorporated into theagenda of housing policy reforms in developing countries by bilateral ormultilateralagencies,particularlytheIDB.In1988,oneofthe‘inventors’oftheChileanmodel becamepart of the IDB’s staff. From thenon, almost all loansinvolvingthehousingsectorincludedtheChileanmodelofsubsidies.TheIDBalso sent Chilean social housing policymakers to several Latin Americancountries topresent theirpolicy’sfundamentsandmechanisms.From1995on,when IDB’s Executive Council decided to officially enshrine the formalproduction of housing units as a strategy to combat poverty, the model wasdefinitivelyincorporatedinalloftheBank’soperations.30

For readers who might have noticed similarities with the BrazilianprogrammeMinha Casa Minha Vida [My Home My Life], it is not a merecoincidence.Inthethirdpartofthisbook,Iwillanalyseindetailthetrajectoryofthatprogramme.ThelistofLatinAmericancountriesthathaveimplementedversions of the model does not stop growing: Mexico, Guatemala, Bolivia,Ecuador, Brazil, El Salvador, Colombia, Venezuela. As well as the IDB, theUnited States Agency for International Development (USAID) was highlyinstrumental in the promotion and diffusion of this policy, by sponsoringdebates, seminars andmeetingsbetween the countries’ConstructionChambersandhousingpolicymakers.

TheinfluenceofthismodelmovedbeyondthebordersofLatinAmerica.In

1992, for example, one of the main World Bank researchers presented theChilean policy to South Africa, which had recently abandoned apartheid. In1994,aWorldBankmissioninthecountryproposedaprogrammeofsubsidiessignificantlyinfluencedbyChile’sexperience.31

TheexampleofChileanprogrammesdesignedtoprovidemasshousingviathemarket is not, then, an isolated one. Chile’s pioneering experience has beenreplicatedacrossLatinAmerica,AfricaandAsia.

Incountrieswherethemodelhasbeeninoperationforsomeyears,thesocio-territorialeffectsareclear.InthecaseofMexico,itisalreadypossibletochartthe increase of urban sprawl, the reduction of population density and theproliferationof acresof standardised, extremely smallhouses.32Moreover, thecomplexesarebadlyintegrated,astheyaredisconnectedfromthecitiesanddonot offer basic infrastructure, public services or job opportunities.33 Thesedrawbacks led many people who had acquired mortgage credit certificates toreturn to thecity,opting torentout thepurchasedhome.34Anotherproblemisvacancy: almost 5 million new houses were simply abandoned.35 The pressreportsthatsomeoftheemptyunitshavebeenoccupiedbydrugtraffickersandthat banks have a hard time foreclosing these abandoned assets, whoseinstalmentshavenotbeenpaidbythepeoplewhoboughtthem.36

SubsidyschemesinSouthAfrica,Mexicoand–aswewillseeinpartthreeof this book – Brazil, have been criticised for replacing informal dwellingsscattered around cities by shoddy, stigmatised units that have concentratedlower-income families in one place. This process has reinforced – when notgenerated–socialandurbansegregation,disparity inaccess tourbanservices,worsening local living conditions, environmental degradation and ever moreurbansecurityproblems.

These programmes have also neglected habitability. The developments arenot only badly located, they are often too small or built with low-qualitymaterials,offeringscantpossibilitiesofimprovement.Asanexample,thebasicstate-subsidisedhousingunitinSantiagoin1990measuredamere33–34squaremetres.Despitean increaseof theaveragesizeduring the1990s, in1998eachfamily had at their disposal only 9.3 squaremetres per occupant. Initially, theaveragespaceinSouthAfricawasonly25squaremetresandthehouseshadnosubdivisions.37

Despite being intended for the poorest andmost vulnerable, grant subsidyprogrammes found difficulties in reaching the lowest-income families,mainly

becausethesestillcouldnotaffordthedownpaymentortheinstalmentsdefinedbythemarket.38Insomecases,subsidiesweresolowthatitwasimpossibletobuy a home without previous savings or substantial additional credit. Manyproprietors, evenwhen capable ofmeeting the credit or savings requirements,hadnothingleftoverformaintainingtheirhomesorpayingthebills,andwereultimatelyforcedtosellup.39

Attempting to complement the available resources, some governmentsencouraged private banks and NGOs to supply microcredit to low-incomefamilies,ontopofthealreadyawardedstatesubsidies.TheSwedishcooperationagency, SIDA,was particularly generouswith projects of this kind in CentralAmerica.Suchschemesactasinstitutionalintermediariesbetweenfamiliesandthe state, helping the former to bridge the gap in order to become eligible forsubsidies.Nevertheless, surveysconducted inSouthAfrica,Pakistanandothercountrieswherethesemechanismshavebeentriedshowthatthecombinationofmicrofinancewithsubsidieswasnotsuccessful.40

Despiteappreciablestatebudgetaryinvestmentandanexplicitfocusonlow-income families, grant subsidies have promoted, in part, only the economic-financialaspectoftherighttoadequatehousing.Theyprivilegedthesubstantialreductionofthehousingdeficitinsomedevelopingcountriesoverwideraspectsof this right, such as habitability, location, availability of services andinfrastructure.

6Microfinance:TheLastFrontier

Itisnecessarytotakethemoneyfromwhereitis:withthepoorest.Granted,theydonothavemuch,buttheyaresomany!

AlphonseAllais

In her book Poverty Capital, Ananya Roy recounts that when MuhammadYunusandtheBangladeshiGrameenBankweretheNobelPeacePrizelaureatesin2006,Grameen’smicrofinancemodelgainedinternationallegitimacy,afteralong trajectory of growth within poverty combat circles. Elizabeth Littlefield,CEOoftheConsultativeGrouptoAssistthePoor(CGAP,adonorforumbasedin the World Bank that advocates a market-based approach to development),consideredthat:‘Yunuswasoneoftheearlyvisionarieswhobelievedintheideaofpoorpeopleasviable,worthy,attractiveclientsforloans.’1

Themajorityoftheplanet’surbanpoorliveinunplannedandnotpreviouslyurbanised settlements, where residents gradually produce their own homes,mobilising their ownmaterial and financial resources. Until the 1980s, slum-dwellersandpoorurbanpopulationswerenotconsideredamarketforfinancialservices.2Thereasonswere:low-andmiddle-incomefamilies’inabilitytoaffordhousing-finance debt; the incompatibility of the formal requirements for theconcession of financial loans (collateral and payment capacity) with suchhouseholds’ profile (low or irregular income, often obtained through informalwork,and lackof securityofhousing tenure);and little interest fromfinancialinstitutionsinlendingtothepoorest,asthelattergenerallyborrowsmallsums,involving high transaction costs and high default risks. As a result, low- andmiddle-incomefamilieshavehistoricallyadopted‘informal’financialstrategies,based on individual savings, family loans or remittances, loan-specialisedcompaniesorpawnbrokersandmoneylenders.3

Nevertheless,inthe1980s,anewfinanceparadigmemerged.Apparently,thepoorest might be served by the extension of small, informal and income-generating credit: microfinance. Private investors became convinced ofmicrofinance’s profitability and started to regard even the most deprived as‘bankable’.4 Since then, there has been an intense expansion of the flow ofprivate investment capital (supported by donors, multilateral banks andinternational organisations) to the microfinance sector. Initially aimed atfinancing the entrepreneurship of the poorest – one of the ideological andeconomicbasesof theexpansionofneoliberalpolicies–microfinancerecentlyincludedlinesofcreditspecificallytosupportprogressiveself-buildprojects.Inthelastdecade,thisinitiativewasincorporatedasaprogrammebytheUNandtheWorldBank, through the creation of theCitiesAlliance andUN-Habitat’sSlumUpgradingFacility.5

In Grameen Bank’s pioneering experience, in Bangladesh, microfinanceadoptedthelanguageofhumanrightsor‘therighttocredit’.Microfinancewasframed as a non-profitable loan to combat poverty and empower women.Individualsdonatedresourcestoarevolvingfund.Aftersmallamountswerelentto women from villages and impoverished shanties, the money would bereturned through a process that also involved the apprenticeship of marketdisciplineand,initially,theconstitutionofsolidaritygroupsandcommunityco-responsibility.

Ofcourse,thepovertycombatconceptthatanimatesthismodeliscentredonthe promotion of entrepreneurship, not on the redistribution of income, themultiplicationofopportunitiesoranyprincipleofequality.Themodelofpovertymitigation is, thus, at the same time, centred on poor people and opposed towelfaresystems.Yunushasrepeatedlyaffirmedthatself-employment–andnotformalsalariedemployment–isGrameenBank’sgoal.6

Microfinancequicklyceasedtoberestrictedtonon-profitorganisationssuchastheGrameenBankandpenetratedcommercialbanksandthecapitalmarket.The increasing presence of large Western banking groups in developingcountries, like these consortia’s interest in microfinance (of housing amongothers),reflectstheideathatthe‘bottomofthepyramid’representsalargeanduntappedmarket.7

Newmodelsofmicrofinanceinstituterigidfinancialsustainabilityrulesandemphasise profit rather than human development, hoping that the ‘bottombillion’– theworld’spoorest–willactasa ‘frontiermarket’,openingupnewhorizons of capital accumulation.8 The age ofmicrofinance is part of a largertransformation of capitalism itself, termed ‘creative capitalism’ by Bill Gates.

Thisgentlercapitalismenvisages‘eradicatingpovertythroughprofits’.9In the last ten years, the number of housing-related microfinance

programmes has been growing. These offer loans of between US$300 and$8,000 to homeowners, with the possibility of top-ups, and amortisationdeadlinesofone to fifteenyears.Compared tomicrofinance forentrepreneurs,housingmicroloansgenerallyinvolvemuchhighervaluesandareconcededforlonger periods. But compared to mortgage loans, microloans involvesignificantly lower values, are conceded for shorter periods and target peoplewhoarenot servedby formal financial institutions,privateorpublic.10Due totheir limited scope, housing microloans are mainly used to fund homeimprovements(suchastheconstructionofsanitationfacilities)orextensions.11

Today, housing microfinance is offered by a large variety of institutions,including microfinance agencies such as Grameen and Accion, with theiraffiliatedbodies.Itisalsoofferedbycommercialbanksandinstitutions,suchasHDFC Bank in India, and Cemex in Mexico (through the Patrimony Todayscheme).Inaddition,microfinanceisofferedbyintergovernmentalorganisationsandNGOsspecialisedinhousingsupply,suchastheRuralHousingLoanFundinSouthAfrica,andHabitatforHumanity.12

TheWorldBank,USAIDandUN-Habitathavebeenenthusiasticpromotersof this kind of action. Directly financing, or publishing information on thetheme, they have played a fundamental role in pushing back the geographicalfrontiersofsuchinitiatives.AccordingtotheWorldBank,

If ever supplied at a larger scale, HMF [housing microfinance] could play an important role inhelping to provide an answer to the ‘qualitative’ housing deficits, and complement conventionalmortgagemarketsthatremainborderedbyan‘accessfrontier’–asdevelopedbyD.PorteousandFinMark… The potential reach of HMFmay be found among those who do not qualify undercurrentbankingcriteriabutwouldpayforahighercreditrateforaHMFloan.13

WhenlaunchingitsSlumUpgradingFacility(SUF),UN-Habitatunderstoodthattheproblemisoneoffinance.Hencetheneedtoensureslumresidents’accesstofinance in order to improve their living conditions. This should be achievedthankstothesavingeffortsanddisciplineofthepoorest,combinedwithprivatefinance resources inside the market sphere. There is no mention of socialredistribution – the state’s role is to provide the optimum conditions for themarkettooperate.14ThestartingpointofUN-Habitat’sperspectiveis,thus,theidentification of a ‘finance gap’: ‘the stark reality that combined public andprivateinvestmentandofficialdevelopmentassistancemeetsonly5percentto10 per cent of the financing required for improvements in housing and basic

services in Sub-Saharan Africa, South Asia and Southeast Asia’.15 SUFproposed to demonstrate that projects for slum upgrading – which can rangefrom ‘area improvement’ to house construction and improvements – can beachievedviafinancial-commercialinvestment.Thisprincipleisencapsulatedintheterm‘bankable’.16

Most housingmicrofinance initiatives are situated in developing countriesand emergent markets. Latin America holds the world’s largest housingmicrofinance portfolio, in institutions such asMiBanco, inPeru;BancoSol, inBolivia;BancoSolidario,inEcuador;BancoAdemi,intheDominicanRepublic;Calpiá (now ProCredit), in El Salvador; and Génesis Empresarial, inGuatemala.17ThistypeoffinanceisalsosignificantlygrowinginAsiaand,ataslowerpace,inAfrica.18ExamplesincludetheKuyasaFund(SouthAfrica),theJamilBoraTrust(Kenya),theKixi-Casa(Angola),thePride(Tanzania),theBRI(Indonesia), and the Card (Philippines).19 The scale of some housingmicrofinanceprogrammescanbe significant.GrameenBank, forexample,hasissuedmorethan650,000housingloans.20

Nevertheless,housingmicrofinanceoptionsaroundtheworldremainscarceinrelationtoglobalGDPandtomicrofinanceactivitiesingeneral.21Itisstillaserviceprimarilyforpeoplewhoarealreadyclientsofmicrofinanceinstitutions.Withinatypicalmicrofinancescheme,thesizeofthe‘housing’portfoliovariesbetween4and8percent.

Microfinance institutions employ more diverse and flexible guaranteestrategiesthantraditionalmortgageschemes.Theycanincludeco-signers,futureincomeassessment,deductions fromwages,other financialassets (suchas lifeinsurance)andthe‘socialguarantee’(theborrower’sreputation,orananalysisofthesocialcirclestowhichtheybelong).22Somemicrofinanceagenciesattempttominimisethenecessityofguaranteebyassessingtheclient’shistory.23Manyofthem–mainlyinAsiaandAfrica–requiretheexistenceofsavingsthatservebothtoevaluatetheborrower’spaymentcapacityandasasourceoffunds.24

Althoughmicrofinanceagencies’interestratesaretypicallylowerthanthoseof informalmoneylenders, theyaremuchhigher than thosechargedby formalfinancial institutions, with much shorter repayment schedules. In most cases,rates vary between 20 per cent and 50 per cent.25 For example:MiBanco, inPeru,chargesanannualinterestrateof37percent26andCompartamosBanco,in Mexico, charges almost 70 per cent interest on its housing microfinanceprogramme.27Thepoorer theclient, themore likely it is that themicrofinanceagencywilltrytooffsetthedefaultriskbyreducingboththeloandurationand

the amount lent.28 In some cases, the small loan is not sufficient andmust becomplementedbyadditionalborrowingfromexternalsources,whichalsochargeveryhighinterestandexposefamiliestohigherrisks.Variableinterestratesarecommonlyusedand tend to riseover time, sometimesdoubling theoriginal.29High interest rates deepen the clients’ indebtedness and aggravate the viciouscircle poverty/probability of default.30 In order to keep up with payments,familiesmayneedtoselltraditionalassets(suchasequipmentorland)ordivertmoneyfromotherincomesources(suchasremittancesorpensions).These‘last-resort’ strategies explain microfinance’s generally high amortisation rates.Nonetheless, they reduce equity within families, their power of economicrecoveryandtheireconomicaccesstohousing.Asisgenerallythecaseforhigh-riskmortgage loans, housingmicro-finance clients are punished for their ‘lowprofitability’andareforcedtopaymorebecauseofit.

For all these reasons, microfinance schemes represent another highlyexploitativeformofsubprimeloan.Moreover,thenatureandsmallscaleofmoststop these programmes from addressing issues such as security of tenure,location and availability of infrastructure and services. On the one hand, theprovisionoffinancialservicesfortheextensionand/orupgradeofconstructionsis a relatively straightforwardandmanageableactivity.On theother,however,theprocessoflandacquisitionandinfrastructuresupplyiscomplexinjuridical,financialandpolitical terms.Itdemands institutionalandfinancialcapabilities,aswellas legalclout–which isusuallyonlyavailable toorganisationswithinlocalandnationalgovernments.Thefocusonhouseenlargementorupgradecan,in some cases, promote better habitability and help slum residents to improvetheir homes, but does little in terms of wider aspects of the right to housing.While housingmicrofinance certainly expands economic access to housing, italsogeneratesnewdifficulties,asborrowerssubstantiallyincreasetheirhousingexpendituresand,evenafteranupgrade,remainunderservedintermsofhealth,sanitationandeducationservices.Whatismore,lackingsecurityoftenuretheyriskevictionfromtheirrenovatedhomes–withoutcompensationorrelocation.

There is, too,an increasingawarenessof the industry’s failure to reach thepoorest. Due to their financial orientation, many housing microfinanceprogrammes seem to focusmore on the higher-income poor urban population(whoseincomeis120–150percentabovethenationalpovertyline);familiesonpoverty’s borderline (whose income is 50 per cent above the national povertyline);31‘economicallyactivepoorpeople’(sometimesholdingformaljobs);and,finally,thosewhorelyondiversestrategiesfortheirlivelihoods.Theultra-poor(under the15per cent thresholdof incomedistribution),whoareoften spread

over rural areas and represent high costs for credit and infrastructure services,willnotbeconsideredbymicrofinance.32Insomemicrocreditprogrammes,thedemandofsecurityoftenuremayfurtherrestrictpotentialclientstothosewhoarepoorbutinrelatively‘better’economicconditions.

Within the vast universe of NGOs and financial institutions,many groupshave their roots in cooperative practices for the creation of self-managedcommunitytrusts.TheyareparticularlypresentinAfricaandAsia.Thesetrustswork with group loans and/or savings, aiming to help communities in theregularisation or acquisition of land, the implementation of infrastructure andservices,andtheupgradeoftheirhomes.Theyoffer,forexample,technicalandfinancialsupportfor theacquisitionof landandinfrastructure(roads,drainage,watersupply,etc.)inpartnershipwithotheractors,suchasthegovernmentandthe original landowners. These groups originated from collective processes ofmobilisation and organisation.33 Some organisations (such as the NationalCooperativeHousingUnion,inKenya)offermicrocreditbothtoindividualsandto community groups or cooperatives.34 ‘Umbrella-type’ internationalorganisations were created to facilitate the operation of community-basedorganisations that sprang from social housing movements, such as SlumDwellers International or the Society for the Promotion of Area ResourceCentres,inIndia.35

CommunitytrustssuchasBaanMankong,inThailand,andtheCommunityMortgageProgramme, in thePhilippines,showgreatcapacityforexpansionoftheir coverage and execution of complex housing and infrastructure projectsinvolvingnationalandlocalgovernments,landownersandvariouscommunities.TheBaanMankong programme, created in 2003 by theThai government andimplemented by a non-governmental agency (the Community OrganisationsDevelopmentInstitute),hadatargettoimprovethelivingconditionsof300,000families before 2008. Its strategy for offering housing to low-income familieswastochannelresourcestocommunity-basedorganisations,whichplannedandexecuted thework.36 This programme became a benchmark for slum upgradeschemes involving community support, despite being carried out on a rathersmallerscalethanoriginallyplanned.37

Such programmes have developed in parallel to the evolution of housingmicrofinance.However, theyembodya significantlydifferentapproach,whichemphasises collectiveproperty andmobilisation andworksonbehalf ofwideraspects of adequate housing, such as location, access to infrastructure andservices and security of tenure.38 As community trusts are less governed by

financial considerations, loan interest rates are generally lower than those ofhousing microfinance. Moreover, repayment deadlines are generally longer,reachinguptotwenty-fiveyears.39Suchtrustsrequireresourcestobeavailablewith no expectation of profit and the intense involvement of both local andnationalgovernmentsateverystagetoachievethenecessaryscale,sustainabilityand technicalassistance.At thesame time, theyareclosely tied to–andhaveoftenoriginatedfrom–organisationsandsocialmovementsfightingfortherighttohousing,whoseactionoftenexceedsthemicrofinanceoperationperse.

Itisstilltooearlytoevaluatetheimpactofthesecommunitytrustsonaccesstohousingforthepoorestpeoplewithintheirradius;moresystematicandlong-term surveys would be needed. However, financial sustainability has alreadyemerged as a problem. Due to their ample scale and their dependence onmultiple factors, community trusts largely depend on financial donations andtechnical support. Moreover, research indicates that they experience lowamortisationratesandhighdefaultrates.Ofequalconcernisthefactthattheseloansleadtopowerconflictsandimbalanceswithinparticipatingcommunities,duetodifferingpaymentcapacitiesamongfamiliesandindividuals.40

Finally, in the universe of microfinance, many institutions began theiractivities as self-management community trusts and ‘evolved’ towardsfinancialisation. Microfinance, in turn, walks towards securitisation. The firstinitiativeofsecuritisingamicrofinanceportfoliowaslaunchedin2006,tolendapproximately US$180 million to the Bangladesh Rehabilitation AssistanceCommittee (BRAC,oneof theworld’s largestNGOs for social assistance andanti-poverty action). Structured by RSA Capital, Citigroup, NetherlandsDevelopmentFinanceCompanyandthedevelopmentbankKFW,thisbusiness‘involvesasecuritisationof receivablesarisingfromthemicrocreditsextendedbyBRAC… and the creation of a special purpose trust which purchases thereceivables from BRAC and issues certificates to investors representingbeneficialinterestinsuchreceivables.’41

FazleAbed,founderandpresidentofBRAC,celebratedsecuritisationas‘alandmarkforthemicrofinanceindustry…Wehavebroughttheglobalfinancialmarketstothedoorstepsofnearly1.2mnhouseholdsinBangladesh.’42In2008,ASA International – aLondon-basedglobal holding that administers trusts formicrofinance institutions operating in China, Cambodia, Ghana, India,Indonesia,Nigeria, Pakistan, the Philippines and Sri Lanka – insuredUS$125million in stocksofCatalystMicrofinance Investors (aprivateequity fundco-managed by ASA International itself and Sequoia, a corporate investmentcompany). These securitisations aim to generate access to cheap capital for

microfinance institutions and, therefore, as stated by BRAC, to reduce‘dependencyonvolatiledonorfinancing.’43

It isworthwhile tomentiona report fromtheConsultativeGroup toAssistthePoor,aglobalpartnershipbetweenthemainEuropean,NorthAmericanandmultilateral cooperation agencies with company foundations, advocating thefinancial inclusion of the poorest. According to this report, ‘microfinanceinstitutions (MFIs)haveemerged relativelyunscathed from the financialcrisesofthepastfewdecades’,whichprovestheresilienceoftheseportfolios.Further,‘assetsofthetop10microfinanceinvestmentfundsgrewby32percentin2008’,meaningthat‘microfinanceisoneofthefewassetclasseswithapositivereturnin 2008.’ The links between ‘micro entrepreneurs and international capitalmarkets’arecelebrated,andmicrofinance is seenasamarket ‘wherearbitragepossibilitiesremaintobeexploited’.44

Therearetwothingsthatmustbeunderstoodabouthousingmicrofinance,intermsoffinancialisation:one, it isamodel thatestablishes linksbetweenslumresidentsandnationalcapitalmarkets–and,morerecently,internationalonesaswell. Two, it is amodel that presupposes a financial view on life, inwhich ahomeisregardedasanassettobeinvestedinexchangedorusedascollateraltoleverageadditionalfinancinginaidofconsumption,welfareorentrepreneurshipactivities.45

Microfinanceseemstobethenewsubprimefrontierforcapitalism,inwhichcapital destined for the promotion of development and financial capitalmergeand work together, identifying new development subjects andopening/consolidating new investment territories. Whether in the NorthAmericansubprimemortgagemarketortheSpanish‘creative’mortgagemarket,microfinance transforms neglected territories and stigmatised populations –discriminatedagainstongroundsofrace,class,genderorformoftenure–intoobjectsforfinancialcolonisationandexploitation,allinthenameofinclusion.

According to Ananya Roy, the subprime logic is the same as that ofmicrofinance,

foritallowsthepooraccesstocreditbutontermsthataresignificantlydifferentfromthoseenjoyedby ‘prime’consumers–be they thehigh interest ratesofCompartamosor the intimatedisciplineenactedbytheGrameenBank.Inotherwords,thesubprimemarksthelimitsofthedemocratizationofcapital.46

In other words, microfinance marks the expansion of capital towards its lasturbanfrontier:theslumsofcapitalism’speripheries.Itistheendoftheroadforalongstrategyofdeconstructionofhousingasarightanditstransformationinto

financialasset–inthenameofthefightagainstpoverty.

PARTII

7TenureInsecurity

Cambodia,2008Mao Sein, thirty-four-year-old widow and scavenger, is sitting with her threechildren under a straw sleeping mat in her shack, waiting for the seeminglyendlessmonsoonrains tostop.Twoyearsago, thepoliceraided thesettlementwhereshelivedinPhnomPenh,thecapitalofCambodia.Shewasthenrelocatedby the government to an empty field almost twenty kilometres away from thecapital.TheprecariousnessofAndong–whereshe livesnow–and its shacksremindsheroftherefugeecampthatshelteredhergrandfatherthirtyyearsago,whenhewasforcedtofleethecitybythebrutalCommunistKhmerRouge.Likethousandsofpeopleinthecountry,Andongresidentsarevictimsoftheruralandurbanlandgrabsthathavebeencausingevictionsandforcingpeopletoliveinthe streets. Economic growth is leading to amassive transfer of land towardsagriculture,mining,tourism,fisheriesandreal-estatedevelopment.Theevictionsandofficialseizurescanbeviolent,includinglate-nightraidsbythepoliceandmilitary. ‘They arrived at 2 a.m. with electric batons,’ said Ku Srey, anotherinhabitantofthesettlement.‘Theypushedusintotrucks,theythrewallourstuffinto trucks and theybrought us here.’ In a report published inFebruary2008,Amnesty International estimated that 150,000 people were at risk of forcedevictions in Cambodia because of land disputes, land seizures and newdevelopmentprojects. If thesepeoplehave indeedbeenforced tomove, itwillhavebeenthebiggestdisplacementofCambodianpeoplesincethedaysoftheKhmer Rouge. In 1975, the regime began the evacuation of Phnom Penh,herding thousands into the countryside and emptying the city. In 1979, theKhmerRougewereoverthrownbyaVietnameseinvasion,drivinghundredsofthousandsofCambodianstoseekrefugeinThailand.

Manyof the refugees returned to thecountry in the1990sandsetuphuge

squattercoloniesinPhnomPenh.MaoSeinremembersthepakdivat–revolution– that made her family lose everything, and laments that it is all happeningagain, this time because of akdivat – development. The Cambodian economygrewalmost9percentin2007andthesproutingoftowersandshoppingmallsisquicklytransformingPhnomPenh’slandscape.InAndong,ontheotherhand,people slowly build their own houses by hand and there is just one, partiallypavedroad.ButMaoSeinsuspectsthatthismightbeanothertemporaryhome.The suburbs of Phnom Penh are only a few kilometres away and, if the citykeepsexpanding,sheandherneighbourswillsoonbeforcedtomoveagain.1

Jakarta,June2013When I approach the old train station, the scene is devastating: debris on thefloor, scrapmetal,piecesofwood,cement, strewnclothes,plasticbasins.As Igetcloser,womenandchildrensurroundme.Theyliterallygrabme,cryingandshouting Indonesian words that I can’t understand. I quickly look around,searchingforoneofthetranslatorswhoisaccompanyingmeonthemission.Hejoinsmeand,withhishelp,Itrytocalmthewomendownsothattheycantellmetheirstories.WethenlearnthatthelandweareonbelongstotheIndonesiaStateRailroadCompany,whoselinesandstationshavenotbeenactiveforyears.

Thewomentellmethattheyusedtopayrenttothecompanyforthespaceinwhichtheysetuptheirmarketstalls.Thisareais intheverycentreofthecityand thousands pass through it everyday.They also tell us that some families,besides using the space for trade, have been living there for many years. Inaddition, according to a new government policy, empty plots of landmust besold to construction companies for the highest bid. Because of the newlegislation,IndonesiaStateRailroadCompanyhad,thatmorning,instructedthepolice to remove the area’s current inhabitants. Their desperate questionsechoed:whatnow?Whereshallwego?Whatwillhappentous?WhileItrytonotedownthe informationandexplainwhoIamandwhatIamdoingthere,Irealisethatthetranslatoriscryingtoo.Onthewaybacktothecar,heexplainswhy:hemisseshisvillage, in themost far-flung islandof thevastarchipelagothat makes up the country. With the land reform – which turned the clans’collectivepropertiesintotheindividualpropertyoffamilies–hisfamily’sentireheritage in thevillagewassoldagainsthiswill.After that,hehad to leavehishome and his island, migrating to Jakarta, where he started working as amissionary for the PentecostalChurch.He explains that accompanyingme onvisits to those who have been uprooted and resettled would continuouslyrekindle hismemory of that moment and reinforce the certainty that his own

departure, although not violently imposed by the police, was also a forcedeviction.

Haiti,June2011AyearandahalfaftertheearthquakethatdevastatedPort-au-Prince,Iarriveinacity with more than 1,000 camps of internally displaced persons (IDPs),harbouringalmost800,000peoplewaitingforhousingsolutions.Threatstoclearpartofthesecampswereadailyoccurrence,especiallyagainstthosewho,sinceJanuary 2010, had squatted in privately owned areas. According to CampCoordinationandCampManagementCluster–theorganisationsresponsiblefortheestablishmentandmanagementof thecamps– inJanuary2011,more than220,000peoplewere threatenedwith eviction in 179 camps inPort-au-Prince.Humanitarian and reconstruction agencies are in despair before the lack ofprospectsandanyviableresponsestothesituation.Theyareaccustomedtothelogicofrapidrebuildingonthesamelandwheretheaffectedpeoplelivedbeforethedisaster,aprocedureforwhichtheyhavealegalmandateandanorganisedapparatus.Thistime,theyarefacingacompletelydifferentsituation.

Most of the camps’ population are refugees from the huge informalsettlements of the city. Thismeans that, first, the land onwhich their housesshould be rebuilt is not their legal property, which immediately blocks thereconstruction.Moreover,theseplotsdonotevenhavealegalexistence,astheywerenot the resultofurbandevelopment,with thepreviousopeningofstreetsandlots,publicandprivate.Ontheotherhand,evenifthebuildingsweretobereconstructed, the situation remains paradoxical: in those same settlements,peoplewhohavenotbeenaffectedby theearthquake liveno lessprecariouslythanthoseintheIDPs’camps.Indeed,thereareadvantagestothecamps,sinceat least they providewater, bathrooms and, in some cases, schools and healthclinics.DespitethemillionspouredintoHaitibyhumanitarianaid,thesituationinJune2011is,literally,oneofparalysis.

Maldives,January2009As suggestedby thegovernment, I visit oneof the islands thatwas chosen tohostamajorreconstructionproject,destinedtosheltercommunitieswholivedinnumeroussmallislandsbeforethedevastatingtsunamiin2004.Thegovernmentproudlyshowsmethequalityoftheconstructions:thewaterdesalinationplants,theschools,thehealthclinics,therefuserecyclingcentres,thelargehouseswiththreebedrooms,American-suburban-style.

Idecidedtorequestavisit tooneoftheislandsthathadbeendevastated.I

hadtobeinsistent,asthiswasnotpartoftheinitialplanand‘there’snothingtosee,aseverythinghasbeendestroyed’,according tomy interlocutors from thegovernment and from the United Nations Development Programme (UNDP),whohadhelped to organise this visit. Finally, they agreed that our boat couldmake a brief stop on the ‘destroyed’ island. On landing, I realised, to mysurprise, that all the houses were standing, merely lacking doors, roofs andwindow frames – basically, everything that can be removed. The mosque(Maldivians are predominantly Muslim) was absolutely intact. During thefollowingdays,Ibegantounderstandthesituationbetter.Overadecadeago,thegovernmentof theMaldives–with300,000 inhabitantsspreadovermore than500 islands – had launched the strategy of ‘consolidating’ the population ontoonlyafewislands,withthegoalofeasingtheprovisionofpublicservices.Afterthat,thevacatedislandscouldbeleasedtotouristresorts–aprocedurealreadyinplaceandprovingagreatsuccess, thanks to theparadisiaccharacteristicsofthe archipelago-country. Local communities reacted against the proposal,refusing tomove and tomergewith other communities. The tsunamiwas theopportunity to implement the strategy: the islands hit by the catastropheweredeclared ‘uninhabitable’ and international aid enabled construction of some oftheconsolidationpoints.

BuenosAires,April2011We roamed the alleys of one of the oldest informal settlements in theArgentinian capital, Villa 31, situated at a strategic point and inhabited bythousands of people. It was one of the few villas to resist the mass evictionpolicyof thedictatorship,which,between1976and1983, removedmore than200,000peoplefromArgentinianinnercities.Asthoughinascenefroma1960sItalianneorealistfilm,aswewalked,moreandmorepeoplejoinedus,alltalkingloudly at once, tripping on dogs and chickens, jumping over open-air sewageditches.Thewholecortegewasfollowedbyindigenousboysholdingcameras–the Villa 31 radio and TV crew. At last we arrived at some kind of centralfootball pitch.By then therewere alreadymore than300of us.Amegaphoneappeared and was immediately fought over by a councilwoman and twocommunity leaders (one of whom I later learned worked in a congressman’soffice). One speaker succeeded another, voicing complaints about theprogrammesthatwereneverimplemented,ornevercompletely–inacorner,Isawahalf-builtplayground.Thehistoryofthatplacewascomingtogetherinmymindinfragments.Thecitycouncilhadapproveda lawdeterminingthatVilla31wouldbedefinitivelyurbanisedandthatamesadeconcertación,formedbycommunitymembers and public authorities, would undertake andmanage the

process step by step. Additionally, a project developed by Buenos AiresUniversityhadalreadybeenpresented.However,therewasnosignofanythinghappening.AsaBolivianladynexttomesaid,afterlisteningattentivelytothespeakers:‘Señorita,it’salaw,notreality!’

RiodeJaneiro,April2012TheEngineeringClubauditoriumwasfullwhenIarrived.Ihadbeeninvitedbythe People’s Committee for the World Cup and Olympic Games in Rio deJaneirotopresentthedossier‘Mega-EventsandtheViolationofHumanRightsin Rio de Janeiro’. Sitting next to me on the debating panel was AltairGuimarães,thenpresidentofViladoAutódromo’sResidentsAssociation,oneofthecommunitiesthatresisted(andstillresists!)theeviction.Allthosepresentatthetablespokeaboutrightsandreportedabuses,insomethingakintoa‘counter-voice’againsttheconsensuscelebratingthearrivalofanurban‘revolution’.Thisrevolutionwouldbethankstothecity’s‘conquest’oftheroleasnexthostoftheOlympicGames(2016)andtheWorldCup(2014).WhenitwasAltair’sturntospeak,hecalmlystartedtotellhisstory:‘Ispentmylifebeingvolleyedaroundlikeashuttlecock–fromheretothere,fromtheretohere.’In1967,whenhewasfourteen and lived in a community called Ilha dos Caiçaras, on the banks ofLagoaRodrigodeFreitas,heandthosewholivedintheotherfavelasborderingthe lake were evicted and relocated to the infamous Cidade de Deus housingproject –well known thanks to the filmCity ofGod, a recent blockbuster inmovietheatresaroundtheworld.Hewenton:

‘WhatgovernorCarlosLacerdasaidtojustifytheevictionwasthatmycommunitydirtiedthelakeandkilledthefish.Nowadaysweseethatthiswasahugeliebecausethefishkeepondying.Whattheyactuallywantedwas toconduct social cleansing, tobring inpedalos, toembellish thecity. Istayed inCidade deDeus frommy fourteenth untilmy thirty-fifth year. Itwas supposed to be amodelcity,butitbecameanarsenalofwar.Doyouknowwhatitmeanstome,amarriedman,tobeforcedtolieonthefloornexttomydaughtersbecauseoftracerbullets?Andthenoneday,wewereagaintakenbysurprisewitheviction,thistimebecauseofLinhaAmarela[YellowLine,theexpressroadwaybuilt in the 1990s, connecting the InternationalAirportwithZonaSul – the upper-classareaofthecity].Iwasthere,intheway,andhadtoleave.Again.’

With no other alternative, Altair went to Vila doAutódromo, an old fishing community thatbecameaneighbourhoodin1975,whentheworkersbuildingthemunicipalmotorracingcircuit–autódromo–settledthere.Inthe1990s,theareawas‘legalised’,obtainingfromtheStateofRio,theowneroftheland,a‘concessãododireitorealdeuso’,authorisingtheinhabitantstolivethereforninety-nine years.However, since 1996, themunicipal government have been trying to evict thecommunity, employingmanydifferent arguments: environmental reasons, high-risk area, buildingworksforthePan-AmericanGamesand,now,theOlympics…Thecommunity–wellorganised–foughtbothincourtandinthestreetsfortheirrighttostayput.‘WeareinJacarepaguá,rightintheeye of the construction companies’ hurricane. Theywant to evict us and build luxury residentialcondoshere.Butthistime,wewon’tleave!’2

Aglobal insecurity of tenure crisis blights the lives ofmillions on the planet.Theyare individualsand familieswhohavehad their livesmortgagedorhavelost the possibility of remaining in their home neighbourhoods because of thereal-estatepriceboomininternationalmarkets,3asdescribedinpartoneofthiswork.

Moreover,millionswereforciblyexpelledfromwheretheylived,displacedbylandgrabs, large infrastructureurbanrenewalprojects,naturaldisastersandarmedconflicts.

The international tenurecrisismanifests itself inmany formsandcontexts.Forcedevictionsareitsmostvisibleandshockingsigns.Intheabsenceofglobaland comprehensive statistics on forced evictions, the estimation of casesreportedbyhumanitarianorganisations–aswellasthereportsreceivedbytheUN special rapporteur on adequate housing – confirms that forced evictionshappenallovertheworldandaffectmillionseveryyear.

COHRE(CentreonHousingRightsandEvictions), forexample,estimatedthatmore than 18million peoplewere affected by this kind of displacementsbetween1998and2008.4Thenegativeimpactsoftheevictionsaretremendous:theydeepenpovertyanddestroycommunities,leavingmillionsinanextremelyvulnerableposition.

Many people are displaced because of large infrastructure projects oreconomicexploitation, suchas theexpansionofminingsitesandagribusiness.AccordingtoaformerWorldBankconsultant,suchprojectsaffected15millionpeople every year between 2001 and 2010.5Urban projects in preparation formega-eventshavealsobeensourcesoftenureinsecurityandforcedevictions.6

Conflicts and natural disasters – including those aggravated by currentclimatechangephenomena–alsocausedisplacementsandcanunderminetenuresecurity.More than 26million peoplewere internally displaced by the end of2011becauseof armedconflicts,violenceorhuman rightsviolations.Another15millionweredisplacedduetonaturaldisasters.7

Anearthquakeorofagreatflood–liketheprojectofahydroelectricpowerplant or of a large sports facility within an inhabited territory – has strongerimpacts on areas in which tenure status can be contested at any moment byauthorities or private agents. In cities, manywords are used to designate thissituation: favelas, unregulated settlements, informal settlements, slums.Aswewill see later on, the choice of these terms is not innocent: the intention is todefine a situation of otherness in relation to the predominant urban-juridicalorder, representing amultiplicity of very distinct situations.Nevertheless, it is

possibletoaffirm,atleastintheurbanworld,thatthesespacescanbedefinedbyhousingprecariousnessand tenure-relatedambiguities.This is thepredicamentofmorethanhalfoftheinhabitantsofcitiesintheGlobalSouth,8butitisalsopresentincitiesofthedevelopedworld,whereRoma,Bedouinsandotherethnicminoritiesalsoliveinapermanentstateoftransience.

Unfortunately, there are no global data about the number, nature or exactcircumstancesofthecommunitieswholiveintheseconditions.Theverynatureof tenure relations,ofpermanenceor transience, is tosomedegreeamatterofperception and experience, strongly rooted in the political, economic, juridicalandculturalcontextofeachregionandnation,makingitdifficulttoaccuratelydepictthisuniverse.9

UN-Habitatprovidesdataon‘slums’–thewordtheyadoptedtodefinetheseurban settlements, characterised by ‘the most intolerable of urban housingconditions,whichfrequentlyinclude:insecurityoftenure;lackofbasicservices,especially water and sanitation; inadequate and sometimes unsafe buildingstructures; overcrowding; and location on hazardous land’.10 In one study, theagency estimated that in 2001, 924 million people lived in slums.11 A laterestimate(2010)calculatedthenumberatapproximately828million.12However,considering that in2010 theagency’s surveysdidnot take tenure security intoaccount,thisfigureprovidesjustasmallinsightintothecurrentextentoftenureinsecurityinurbanareas.13

These so called slums – or favelas in Brazil – are by no means the onlyexampleofinsecuretenure.Infact,alargerangeofindividualsandgroupscanbeinaninsecureposition:refugeesandinternallydisplacedpersons,affectedbyconflicts, natural disasters and climate change, or at risk of these elements;people affected by or in land for development projects; occupants of valuablelands;tenantswithorwithoutlegaltitle,ininformalsettlementsorunderformalagreements, in urban and rural areas; internal and international migrants;minorities; nomad communities; groups affected by caste or otherdiscrimination; poor, landless andhomeless people; leaseholders;workers in aregime of servitude; other marginalised groups, such as disabled people orpeoplelivingwithHIV;indigenouspeople;groupswithconsuetudinaryrightstotheland;andevenownersofmortgagedhouses.Althoughnooneiscompletelyprotected against insecure tenure, the poorest and most vulnerable bear thelargestshareoftheburdenresultingfromthissituation.

Fundamentally, insecure tenure is a matter of political economy: laws,institutions and processes of decision-making related to the access and use ofhousingand landare conditionedby thepower structures that exist in society.

Consequently, both urban planning strategies and forms of land managementbearstronglyonthepossibilitiesofgranting–orblocking–accesstourbanlandtolower-incomeresidents.14Itisinsidethisjuridical-administrativewebthatthemechanismsofinclusion/exclusioninthecityareembedded.

Likewise, land administration and management reform programmespotentiallyimpactontenuresecurity/insecurity.Theymayresolveoraggravatelandconflicts,reinforceorunderminetenuresecurity.They,too,arecontingentonpolitical decisions:whowill determine the agenda for the landgovernancereform? Who will receive the benefits distributed by the reform?15 Thesequestionscannotbeignored,especiallyinacontextofincreasinginterestinlandandofacontentiousjuridicalpluralism.16

Inthesetimesoffinancialisedcapitalism–whenrentextractionsupersedesproductivecapitalsurplusvalue17 –urbanand rural landshavebecomehighlydisputed assets. The consequences have been dramatic, especially – but notexclusively – for emergent economies. The dynamics that follow landmarketliberalisation are increasingmarket pressures on territories controlled by low-incomecommunities,inaglobalcontextinwhichurbanlandisnotavailabletothe poorest groups.Thus, communities remain under the constant risk of theirterritorialassetsbeingdespoiled.

Although central and local authorities hold primary accountability forensuring that land and housing policies respect the right to adequate housing,humanitarian and development agencies also perform a significant role: theymayeitherbediligent, takingcaretoavoidinvoluntarycomplicitywithhumanrights violations or – allied with urban real-estate development companies,investorsandnationalandinternationalfinancialinstitutions–theymayhaveadeleterious effect on the rights of the poorest urban populations and othergroups,becomingaccomplicesincasesofforcedevictionsandlandgrabbing.

Policies of land planning, administration and management, including ofpublic lands, have an enormous impact on the construction of thesecurity/insecurity matrix. However – as in the case of housing policies –programmesoflandreformandadministrationaroundtheworldhaveinstitutedthe hegemony of individual private property over all other forms of tenure.Because they focus on bestowing individual private property titles on non-disputedusersorowners,themajorityoftheseprojectshavefailedtorecogniseandprotectallformsoftenureand,inparticular,toshieldthepoorest.18

Therefore, land reform programmes, including title-granting programmes,oftencontribute todispossess thepoorestof their territorial assets, capturingareserveoflandfortheexpansionofthefrontiersofcapital.InthenextchapterI

willtrytounveilthisprocess,revealingthestrategies,policiesandmechanismsthrough which spaces of ambiguity are constructed (and destroyed) in thecontemporaryurbanworld.

8FromEnclosurestoForeclosures

In the nineteenth century, the monstrous reality of England’s cities, so welldepicted by Charles Dickens, transformed one idea into common sense: thatcitiescontainaspare‘other’–thehordeofpoorpeoplewhoareunemployedorworking under informal regimes, subsisting in a situation of housingprecariousness.Thisvisionthenspreadadnauseam.Bythisaccount,citiesgrowfaster than they should, unable to absorb all who migrate to them, thusgenerating‘bloat’ratherthanorderlygrowth.Themigratorymovementfromthecountryorsmallertownstomajorcitiesshouldbeavoidedatallcosts,tostemthecreationofthesemonsters.

Ihaveparticipatedinhundredsofdebatesandsymposiumsinthelastthirty-fiveyearsandnonehavelackedanindividualwhoexpressedthisposition.Theidea has underpinned theoretical positions and structured public policiesthroughout history. Its influence is present everywhere, from the theory ofmarginality popular in 1950sLatinAmerica (the view that self-builtworking-class settlements symbolised the persistence of an archaic, traditional, rural-basedsociety,resistanttothemodernityrepresentedbycities),1tothemigratorycontrolpolicies implementedbycommunist countries in the twentieth century,manyofwhicharestillinforce–onebeingthehukousysteminChina.2

Allthesetheories,policiesandperceptionshaveaspectsincommon:first,akindof implicit revulsionat thepresenceofvastcontingentsofpoorpeople incities; second, the construction of a concept that links a certain spatiality –markedbyscarcematerialresources–withasocio-politicalstatus:theoutcastortheoutsider.Theveryoriginof theword‘slum’– largelyused in internationalliterature–revealstheperversityofthisamalgam.AccordingtoMikeDavis,

The first published definition reportedly occurs in the convict writer James Hardy Vaux’s 1812VocabularyoftheFlashLanguage,whereitissynonymouswith‘racket’or‘criminaltrade’.Bythecholerayearsofthe1830sand1840s,however,thepoorwerelivinginslumsratherthanpracticingthem. Cardinal Wiseman, in his writings on urban reform, is sometimes given credit fortransforming ‘slum’ (‘room in which low goings-on occurred’) from street slang into a termcomfortablyusedbygenteelwriters.Bymid-centuryslumswereidentifiedinFrance,America,andIndia,andweregenerallyrecognisedasaninternationalphenomenon.3

The couchingof theories andpolicies concerning informal settlements didnotdismantletheterritorialstigma:still today,incitiesofthedeveloped,emergingor impoverished world, a discriminatory hegemonic discourse persists,employingethnic,economic,juridicalandspatialelementsinordertodesignatethistenacious‘placeofurbanoutcasts’.4

The theory of marginality and its dualistic conception were stronglycontestedbyabranchofMarxist-basedliteratureproducedinLatinAmericainthe1970s.According toFranciscodeOliveiraandLúcioKowarick, it isnotaquestionofadualisticsystemthatopposesarchaismtomodernity.5Rather,itisaperipheralmodelofcapitalistaccumulation.Thismodelrequiresandreproducesa‘spare’labourforce:itdoesnotincorporatetheseextraworkersintotheactivelabour force, nor does it altogether guarantee their reproductive conditions,replicating forms of work and production linked to minimal conditions ofsurvival.Thepresenceofthispopulation–andits‘informal’activities–wouldrespond to a double necessity of the accumulation process in peripheralcapitalism: keeping labour-force reproduction costs down, and ensuring apermanent‘industrialreservearmy’.Theexistenceofalargepopulationofpoorpeopleandpeoplewithoutownershipofthemeansofproductionincitieswouldhence enable the maintenance of low wage levels. This is a sine qua noncondition for the productivity of companies that operate on the periphery ofcapital, as they cannot rely on economies of scale and agglomeration or ontechnology, as their rivals in the central countries do. Moreover, consumerproductsthatareessentialtosurvival–includinghousing–areofferedinanon-monetarywayoratareasonablylowprice.Thistookeepswagesbelowthevitalminimum. Therefore, self-built houses represent the super-exploitation of thelabourforcethroughoverworkandurbanspoliation.

IntheconcreteexperienceofcountriesintheGlobalSouththatwentthroughimport substitution industrialisation in the mid-twentieth century, intensivemigrationandtheformationofsprawlingself-constructedsettlementsweretheirownpeculiarformulaof‘capitalistrevolution’.Itconstituteda locusoflabour-force reproduction under extreme conditions of inequality and low wages.Understood in these terms, the current dynamics of urbanisation in theGlobal

SouthappearstoreplicatetheprecedentsetbyEuropeandNorthAmericainthenineteenthandbeginningofthetwentiethcenturies.Atthattime,themigrationof thousands of peasants was the motor of industrialisation in cities likeManchester, Berlin andChicago.Cities like São Paulo and Pusan in themid-twentieth century, and Ciudad Juárez, Bangalore and the Chinese megalopolitoday,allfollowroughlythatsametrajectory.However,inDavis’swords:

Most cities of the South, however, more closely resemble Victorian Dublin, which, as historianEmmetLarkinhasstressed,wasuniqueamongst‘alltheslumsproducedinthewesternworldinthenineteenthcentury…[because]itsslumswerenotaproductoftheindustrialrevolution.Dublin,infact, sufferedmore from the problems of de-industrialization than industrialization between 1800and1850’.6

The galloping urbanisation currently underway in Sub-SaharanAfrica and inparts of Asia has little to do with processes of industrialisation, employmentgrowth and economic development. Kinshasa, Khartoum, Dar es Salaam andDhakagrewirrepressiblyduringthedifficultyearsofthe1980sandbeginningofthe1990s,despitetheruinofimport-substitutionmanufacturing,thedropinrealwages,theincreaseinpricesandtheupsurgeofurbanunemployment.7

Since the debt crisis of the early 1980s, programmes of economicrestructuration were implemented globally through the efforts of the US andotherG7members.Banksandmultilateral institutionsurgedfiscaladjustmentsandausterityprogrammes.8 Inmanysoutherncountries, thesepoliciesstronglyinteractedwiththe‘traditional’patternofhousingprovisionforthepoorest–theself-built settlements – deepening and transforming the conditions of povertyandexclusion.

Particularly in countries that had undergone intensive urbanisation in the1960sand1970s–suchasBrazilandotherLatinAmericancountries–thecutsto public spending interrupted fragile attempts to introduce social welfaresystems.Moreover,theeconomiccrisisalsorestrictedtheearningpossibilitiesofthose working sectors already established in cities. In Latin America, socialhousingprovisionprogrammes, limited as theywere, suffered significant cuts.Forexample,between1990and2000, theregion’s‘housingdeficit’grewfrom38millionto52millionunits,eveninregionsalreadymarkedbytheso-calleddemographic transition (the decline of birth and fertility rates for all incomelevels). The resultwas theworsening of poverty and quality-of-life indicatorsamong the urban lower classes.9 Informal settlements had been the prevalenthousing solution for Latin American workers during the decades ofindustrialisation and urban expansion. However, it was in the 1990s and the

beginning of the 2000s that favelas exploded – even in cities like São Paulo,wheretheyhadnotbeenthepredominantformofhousing.

AccordingtoDavis,

Thisperverseurbanboomsurprisedmostexpertsandcontradictedorthodoxeconomicmodelsthatpredictedthatthenegativefeedbackofurbanrecessionwouldsloworevenreversemigrationfromthecountryside…Thesituation inAfricawasparticularlyparadoxical:Howcouldcities inCôted’Ivoire, Tanzania, Congo-Kinshasa, Gabon, Angola and elsewhere – where economies werecontractingby2to5percentperyear–stillsupportannualpopulationgrowthof4to8percent?10

Part of the secret, of course, was that policies of agricultural deregulation and financialdisciplineenforcedby the IMFandWorldBankcontinued togenerateanexodusof surplus rurallabourtourbanslumsevenascitiesceasedtobejobmachines.11

Theglobalforces‘pushing’peoplefromthecountryside–mechanizationofagricultureinJavaandIndia,foodimportsinMexico,Haiti,andKenya,civilwaranddroughtthroughoutAfrica,andeverywhere the consolidationof small holdings into largeones and the competitionof industrial-scale agribusiness – seem to sustain urbanization even when the ‘pull’ of the city is drasticallyweakened by debt and economic depression. As a result, rapid urban growth in the context ofstructuraladjustment,currencydevaluation,andstateretrenchmenthasbeenaninevitablerecipeforthemassproductionofslums.12

Although countryside transformation under the impact of the globalcommodities market – agricultural or mining – has heightened the scale ofmigration towards cities, this process has been known since the origins ofcapitalism,whenthe‘enclosureofthecommons’withdrewaccesstolandfromformerservants,drivingthemtoproletarianisationincities.13Intheseterms,canone say that we are again witnessing a cycle of territorial expansion anddispossession,whichoncemoreexpandsthefrontiersofcapitalinitsimperativetofindanewspatialfix?

Thesituationsdescribedbelowsuggestthatwearenotseeinganewcycleofcapitalistoccupationofspace,butanewrelationshipbetweencapitalandspace.Thisrelationshiptakesplaceunderthehegemonyoffinancialandrentiercapital:land,morethanameansofproduction,isapowerfulstoreofvalue.Expulsionand dispossession are no longer amachine for the production of proletarians.Theyareakindofcollateraleffectofanewgeography,basedonthecontrolofassets: ‘a capitalised property title and its value is set in anticipation of eithersomefuturestreamofrevenueorsomefuturestateofscarcity.’14

The land seizuremovement observed in rural zones on several continentsmay indeed indicate this dimension of future scarcity. This became clearbetween2007and2008,whencompanies,investmentfundsandsovereignfundsrushedtobuyuplargetractsoflandinAfrica,AsiaandLatinAmerica,withthedeclared purpose of expanding food production. However, according to José

Graziano, the director general of FAO (the UN Food and AgricultureOrganisation), after five years only 10 to 15 per cent of the acquired land inAfricaisbeingcultivated.15

As analysed in part one of this book, since the end of the 1970s, capitalinvested in land and in the real-estate market has gained new importance. Itoffered a guarantee capable of both leveraging more credit and feeding thehunger for compound growth (the necessity of exponential remuneration forfinancialcapital)withgrowingremunerations.16

AccordingtoFernandezandAalbers:

ThegrowingroleofhousingwealthisalsoillustratedinThomasPiketty’sbestsellerCapitalintheTwenty-FirstCentury,inwhathedescribesasthe‘metamorphosisofcapital’.HisdatashowthattheratioofthecapitalstocktoincomefollowedaU-shapedcurveintheperiodfromthe18thtothe21stcentury in different economies. A stable capital stock in the range of 600 per cent of incomethroughoutthe18thand19thcenturieswaslargelybasedonagriculturallandandincreasinglyfromcolonialinvestmentoutlets.AfterWWItheratioofcapitaltoincomedeclineddramatically,onlytoreturnfromthe1970sonwards.Thisreturntowardsalargestockofcapitaltoincomewaslargelypropelledbyrealestate(housing)…Inthislongue-duréeexposéofthetransformingcompositionofcapital, Piketty shows that the present-day value of real estate in relation to the overall stock ofcapitalandofnationalincomeistrulyofhistoricproportions.17

The movement of land seizure by financialised capital has taken numerousforms. One of them is purchase – starting with the ‘regularisation’ of theproperty and its register as private, as wewill analyse later. However, it alsohappens through ‘land concessions’, or state-remunerated grants of land forexplorationandcultivationbyprivatecompanies.

InIndonesia,forexample,forestsbelongingtotraditionalcommunitieswereconceded for mining and babassu oil (biofuel) plantations. This provokedconflicts and displaced entire groups to Jakarta and other major cities. Thecountry’s landlegislationisbasedoncolonialnormsandpractices,overwhichpost-colonial reformshavebeen superposed.Allof thecountry’s landmust fitintooneoftwopossiblecategories:ForestEstate(approximately70percentoftheterritory)andNon-ForestEstate(theremaining30percent).ForestEstatesareundertheresponsibilityoftheMinistryofForestryandareregulatedbythe1967ForestLaw.Non-ForestEstatesaremanagedandadministeredbyastateagency(BPN–NationalLandAgency),inaccordwiththe1960BasicAgrarianLaw.Thus,landisadministeredthroughadualsystem,managedbytwodistinctorganisations.Ontopofthisarethecolonialinheritanceandtheadat–thenon-integratedtraditionalcommunities’consuetudinaryrights.18TheBasicAgrarianLawrecognisesprivateproperty,butreservescontrolofallnon-registeredland

for the state. According to BPN, only 30 per cent of Non-Forest Estates areformallyregistered,19andsome60millionlandplotsarenotcertified.

Since 2006, the Indonesian government has had a land tenure certificationprogrammeforthelower-incomepopulationandthoselivinginruralandremoteareas,ThePeople’sServiceofReal-EstateCertification[LayananRakyatuntukTanahSertifikat–LARASITA].Theprogrammeoffersfreemobileregistrationservices.20However,extrafeeschargedtocovermorecomplexregistrationsandthe lack of necessary administrative information exclude a large part of thepopulation from the land registering system – especially those who live inremote villages. In the last few years, BPN registered an average ofapproximatelyonemillionplotsperyear.

TheBasicAgrarianLawrecognisesthepermanentvalidityofrightsresultingfromtheadat(consuetudinaryorcustomary)law.Nonetheless,thepossessoroftherightcannotregisteritorhaveitpermanentlyrecognisedbythestatebeforetheyobtainBPN’scertificate,confirmingthatthelandisnotownedbythestate.Adatlandscanonlyberegisteredandcertifiedafterhavingbeenslottedintooneof the seven land rights of private law recognised in Article 16 of the BasicAgrarian Law. Thus, although inmany cases the rights of land occupants arerooted inadat law – predating the creation of the Indonesian state in 1945 –BPN officialswork on the premise that all non-registered land belongs to thestateuntilthecontraryisproven.Moreover,Hakulayat(whichcanbetranslatedas ‘communal right to allocation’) cannot be registered. This preventscommunitiesfromdemandingacollectiveregister.

The Basic Forest Law andMining Law (both 1967) designated all forestlandsasstatepropertyandeliminatedadatrightsoflocalcommunities,recastasillegal ‘occupations’.According to theMinistry of Forestry, however, only 14percentoftheforestlandswerelegallydefined(gazetted).Unrecognisedrights–includingtoadatcommunallands–stillgenerateconflicts,asthereareabout33,000 villages (circa 48 million people) located in Forest Estates and theirenvirons.Theyhavebeen inhabited forgenerations–evencenturies–withouttheirexistenceortheirlandsbeingrecognisedbythestate.21

From2004to2009,theMinistryofForestryallocated1.2millionhectaresofforeststominingactivities;itplanstoallocateanother2.2millionbetween2010and2020.Landwasalsogranted in forest areas for theproductionofbabassuoil,asIndonesiacontrols14.3percentoftheworldmarketinvegetableoil.Itisestimatedthat66percentofallcurrentbabassuplantationsinthecountryareintheseareas.

Land conflicts are frequent: between 2004 and 2010, there were

approximately2,000ofthem,involving600,000familiesandatotal10millionhectares of forest lands.22 The country does not hold a complete inventory ofreliablygeoreferencedplotsofland–forestornon-forest.Andsincethereisnooneauthorityinchargeofresolvinglanddisputes,suchissuesarenegotiatedviaformalorinformalagreements.Juridicalproceduresinvolvinglandlitigationareslow,andoftentooexpensiveforthepoor.Furthermore,qualitylegaladviceisrarely available for lower-income families and there is no transparent oraccessibleinformationabouttheland.Large-scalelandlitigationsarecommonlyresolved through political channels, as the parties do not trust any civilrecourse.23

Ina2012report,OxfamdubbedthemovementdescribedaboveinIndonesiaasa‘globallandrush’.24ItisaclearreferencetotheNorthAmerican‘goldrush’of the turn of the nineteenth century – a savage appropriation of indigenouslands (theWildWest). The current encroachment is underway in contexts inwhichlargepartsoftheterrainsoccupiedbyruralcommunitiesarenotformallyrecognised as such. Where they are, they belong to a ‘parallel’ category oftenure,notintegratedintoasingleregisterormanagementsystem.

In2002,itwasestimatedthatonly1–3percentofterritoriesinWestAfricanStateswereoccupiedthrough the acquisitionof registeredproperty. ‘Modern’ land lawwas inherited from the colonialadministrationandusedtodefinecustomarylandsasstatepropertyinordertocedethemtocolonialcompaniesimmediatelyafter.Therefore,thelawwasalwaysperceivedas‘foreign’bythemajorityofAfricanruralpopulations,unfamiliarwiththeculturalperceptionsandsocialrelationsrelatedtoland ownership. Registered property titles, meanwhile, are inaccessible to most of the ruralcommunities.25

The situation described above constitutes a basic factor in the weakening ofcommunitylandrights,makingthemaneasytargetforlandusurpation.

Nevertheless,aspointedoutinthebeginningofthissection,itisnotanothermovement of border expansion, but a movement that occurs at a specificmoment of the capitalist advance, defined by two conditions: the growth ofrentiercapitalandacontextmarkedbythescarcityofnaturalresourcesandland.

Thefoodcrisisofthelate2000sandconcurrentdemographicgrowth–duetothemedicaladvancesthatextendedlongevityanddecreasedinfantmortality–highlightedMalthus’scatastrophicpredictionsabouttheimpossibilityoffeedingevery human being. At the same time, the process of the planet’s territorialoccupation–initiatedinthefifteenthcenturywiththe‘discovery’ofAmericainthemercantilistphaseofcapitalism–wasacceleratedinthe1990s,afterthefalloftheBerlinWallandtheopeningofthelastterritoriespreviously‘blocked’tothefreeflowofcapital.Thus,themovementwearenowwatchingrepresentsa

final border expansion, as capitalism will soon run out of wild wests to‘conquer’.

AccordingtoDavidRichard–buildingonMalthus–capitalwillendwhenlandandnaturalresourcesbecomesoscarcethatall revenueswillbeabsorbedeitherbythewagesneededtocoverthehighpriceoffood,orbytheincreasingrents charged by an unproductive, albeit powerful, rentier class. In his time,Malthus’s prediction of scarcity was contradicted by other economists, whopointed out the new perspectives brought by the advance ofmechanisation inagriculture, which increased work productivity. Many years later, Keynespredicted the euthanasia of the rentier class and the construction of a state-conductedregimeofgrowth–whichwaspartiallyimplementedinthepost-1945period.26

However,inthecurrentpost-Keynesianera(initiatedattheendofthe1970s)thegrowingpoweroffinancialcapital–exactlytheunproductiverentiercapitalevoked byRichard – is staggering. Its assetswere transmuted into stocks andshares, currency futures, credit default swaps, CDOs and other financialinstruments. These were initially created to spread risk but, in fact, serve totransform the volatility of short-term trading into an enormous field forspeculativeprofits.27Inthiscontext,landrevenuesregainedacentralposition.

Land speculation – aswell as large-scale land acquisition in rural zones –underminestenurerightsandlocalsubsistenceforms.28Combinedwithdroughtand other climate-related changes, these activities are huge propellers ofmigration from rural tourban areas.There, land andadequatehousing arenotusuallyavailabletonewarrivals–especiallythepoorest.Asaresult,peopleliveinsettlementsandhomesunderinsecuretenuredeals.Thesearethemechanismsthatcombinetoproducetheexpansionofvasturbanareasdefinedbyambiguityandinsecuretenure.29

Nevertheless, in addition to justifying urbanisation without economicgrowth,theprocesseswearewitnessingpointtonewdynamicsandanewroleforlandoccupiedbythepoorest,inbothurbanandruralareas.

The only recognised type of tenure – in country and city – is titled andregistered individual property.All land acquired in otherways assumes a newroleinthefinancialisedandrentierphaseofcapitalism:itfunctionsasareserve,readytobeoccupiedatanymomentbyanyarmoffinancialcapital,drivenbytheinsatiableappetitefornewcollateralsforitsassets.Thus,fromthelocusofan industrial reservearmy, informal settlementsaround theworldbecomenewlandreservesforrentextraction,underthehegemonyofthereal-estate–financialcomplex.30

Inthenextchapters,Iwillapproachthemechanisms,policiesandstrategiesthroughwhichtheseprocessesoccurincitiestoday,focusingonurbanunnamedterritories,thefavelasandinformalsettlementsoftheurbanworld.Tothisend,Iwillanalysetwofundamentalelements:territorialstigmaandtheconstructionofpermanenttransience.

9Informal,Illegal,Ambiguous

MynameisFlavia.IliveinRiodeJaneiro,themostbeautifulcityintheworld.IamseventeenasIfinishthisdiary,andIamatrespasser…Iwasninewhenthishappened,andIwasinthehouse,200metresawayfromthebattlefield.ButIcanstilltellthisstorybecausemyuncleandmygrandfatherrepeateditinconversationsontheporchofourhome…Themeninuniformscrossedthesteepandslippery trail in a line.Theyweremilitarypolice,withhelmets, truncheons, shields, tear gas andstun grenades and, of course, firearms. The resistancemovement had locked the solid iron gateswith chains and padlocks andmade a barricadewith tree logs at every entrance…As they gotclosertotheentrance,thepolicewereconfrontedbyahumanwall,armhookedwitharm,rowafterrow,blockingallthespacebetweentheriverandtheravine…Thesquadenteredinformationandmarchedup to thebarrier, beating their truncheonson their shields: then, as noonemoved, theystoppedfacetofacewiththefirstrow…Infrontofthem,around200people:men,women,adults,young, elderly,white andblack people.Not one gun, not onemenacingperson.Noonemoving.Someone began chanting the national anthem and soon everyonewas singing…The riot policewarned:‘Wearecomingin.’Amongthepeople,manystartedpraying.Allheldposition.Then,likeawedgeaimedataspecificpointofthehumanwall,thesquadsurged.Withthebarrierbroken,thebattle began. Truncheons span and hit, people ran everywhere…A sixty-year-old lady fell andpassedout,withbloodspurtingfromherhead…amilitarypolicemanreceivedaflyingkickinthechestandfellrollingover–hishelmetwentintotheriver.Inthedust,peoplefellandstoodbackup…[they]ranawaybutcamebackiftheywerenottoobadlyhurt…Then,almostinstantaneously,everythingended.Twocongressmenhadarrived,alawyerhadcalledaprosecutorandsocametheordertosuspendtheaction.Thepoliceregrouped,thedustsettled.Themoreseriouslyinjuredweretaken away – an ambulance was parked outside – the barricade was removed and the gate wasopened.Theresistancehadwon:despitethebrutalassault,thetargethadbeenprotected.

Mygreat-great-grandfather camehere in thebeginningof the last century,whenHortodidn’thave anything – there were just bushes and ponds. After him, my great-grandfather and mygrandfather–bothbornhere–alsoworkedinIBDF[BrazilianInstituteofForestryDevelopment],IBAMA[Brazilian InstituteofEnvironmentandNaturalRenewableResources]and theBotanicalGarden:theyallhadalicencetobuildtheirhousesinplotsclosetotheBotanicalGarden,wheremyfamilystill livetoday…Duringmygrandfather’stime,thiswasstillfarfromthecity,butpeoplestarted looking at this area. Governor Carlos Lacerda wanted to build a cemetery, he had evenchosenthename:SantaCatarinadeSiena–beautiful,isn’tit?Buttheland’sresidentsstoppedit.Inthedictatorshipyears,anactwasdecreeddonating this land toBNH[BrazilianNationalHousingBank] for the construction of a housing project of sixty-five apartment blocks. However, theresidentsof thesurroundingareasandBotanicalGardenemployeesrejected theproject, so itwas

abandoned.Fromthe1970son,thingsstartedmovingfaster.RedeGlobo[thecountry’smainmediagroup]hadinstalledtheirheadquartersnearby…Aluxuryresidentialcondowasbuiltonthehigherplots, behind the hill, for truly rich people – bankers, industrial owners, etc. The bigger the citygrew,themoredesirableHortobecame…Therehavebeenattemptstoevictformeremployeesandoriginal residents’ families to ‘best utilise the land’…All of this happened long before I startedwriting this diary, but the story must be properly explained in order to understand this kind ofcomplicatedsituation:actually,Ididnotbecomeatrespasser.IwasalreadyatrespasserbeforeIwasborn.1

Flavia’stestimony(reproducedherewithherconsent)revealsthecomplexwebthat defines the place of informal settlements in cities: that of ambiguity,contradictorysigns,lawsanddecreesthatcomeandgo.TheresidentsofHorto–some of whose ancestors were there before the construction of the botanicalgarden in 1808 – were ‘incorporated’ into the park as workers, obtaining a‘licencetolivethere’.Untilthispoint,itisnotpossibletoanticipateanyillegalactsortransgressions.Nonetheless,this‘licence’wasprobablygrantedasatypeof concession from the employer. Therefore, it did not represent a definitivetransferoftheplots’ownershiptotheirresidents.Theareahassincebeenfoughtoverandclaimed fordifferentuses, evenwithin thegovernmentalmachine.Acombinationofresistancefromresidentsandinterestsaroundthepreservationoftheparkmanagedtopreventtheeviction.Likeothersimilarcityterritories,theneighbourhood grew to encompass houses for descendants, family friends andtenants.

Althoughevictionattemptswereunsuccessful,the‘stateofnon-definition’ofthe area’s ownership remained. Somuch so, that, in 2005, the neighbourhoodwas the object of a repossession action accompanied by heavy-handedrepression.Theresidentsoncemoreresisted,thistimejoiningviolentbattle.

In her testimony, Flavia questions why her ‘people’ were being treated as‘thugs’, as ‘enemies’.Whoseenemy? Inherview, the ‘rich’, ‘powerful’,RedeGlobo-type incomerswho had bought property nearby could not tolerate theirpresence ina locality sohighlyvaluedby themarket. Inaddition, theecoandheritagediscourseindefenceofthepark–thatstoppeditstransformationintoacemetery or a housing project in the 1960s – is now used to frame Horto’sinhabitantsasvandalsandtrouble-makers.

Thistestimonymanifeststhebasicelementsofwhichthisandsimilarplacesare composed: permanent transience and territorial stigma.Despite beingbornthere, like her father, grandfather and great-grandfather, Flavia is a trespasserandhenceatransgressor.However,thelawanditsapparatusarenotcompletelyabsent from this place. On the contrary, it was formed by layers of legalitypermeatedbytensionsofeverytype.InthewordsofVeraTelles:

Anumberofpracticesandsituationsengrainedinsociety’spoliticallife(anddemocraticnormality),intheircontemporaryconfigurations,infactextendazoneofindeterminationbetweenlawandnon-law, territoriesofuncertain andcontinuouslymovingborderswhereevery singlepersonbecomesdispensable,ahomosacer.2

Situations like thesearehardlyconfined toBrazilorevenLatinAmerica.LisaBjörkmanreportsasimilarcaseinastudyofwatersupplyproblemsinMumbai,India. In1975,PrimeMinister IndiraGhandideclareda stateofemergency inthe country. Shivajinagar-Baiganwadi, a housing venture launched by themunicipalitytoressetletheresidents,becamea‘slum,illegalarea’.Atthattime,the Indian National Congress (Indira Gandhi’s party) governed the state ofMaharashtraandthecityofMumbai.Inabidtomodernisethecity–andatthesame time as a response to the precariousness of mass settlements – thegovernment undertook a mega-registration operation, enumerating 1,680neighbourhoodsconsideredtobeinviolationofthezoningordensitynormsofthe1967DevelopmentPlanandControlRegulations.Theseareas’residents(2.8million people – almost half of the city’s population at the time) werephotographed in front of their homes and received a photo pass. It was adocument associating a particular family with a particular house in thesettlement,ensuring‘somekindofsecurityoftenure’,aswellasaguaranteeofcompensation in the event of demolition or displacement. Simultaneously, thegovernment – empowered by the state of emergency – promoted large-scaledemolitionofhouses that stood in thepathof large infrastructureandupgradeprojects.Inthiscontext,amunicipalcolonyforresettledpeoplewascreatedontheedgeofarubbishdumpin1976:Shivajinagar-Baiganwadi.There,10×15-foot plots – grouped in rows of sixteen within ninety-four blocks – shelteredpeoplewhoweretopayasmallmonthlyfeeas‘indemnity’foroccupyinglandsbelongingtothemunicipality.

However,manyof the familieswhowere resettled into this ‘district’neverlived there.Firstofall, themajorityof these familieshadsocialnetworksandbusinesseswheretheylivedbefore,so theysimplyreturned.Moreover, reportsof the ‘district’s’ early years portrayed a squalid place, close to a dump and amosquito-infestedswamp.Manyfamiliessold,subletorabandoned theirplots.Whatcamenext–theneighbourhoodgrowingandbecomingoneofthedensestareas of the city – has ‘deleted’ the memory of the settlement as a planneddistrict.Today, this locality epitomises the city’s ‘illegal’ production of homesand services. In the words of an engineer from the Hydraulic EngineerDepartment of the Municipal Corporation of Greater Mumbai (MCGM):‘Shivajinagarisanillegalareawhichisnotpartofthecityplan.Theyoccupiedit illegally and keep illegally building;moreover, they stealwaterwith illegal

connections.’3Inthiscase,asinthatofHorto–whereresidentsfighttoremainwherethey

are – the same basic elements are present. Both exemplify territories withshiftingdefinitionsofthelegalandtheillegal,constructedfromanamalgamofdifferent types of pressure, political mediation and several layers of legality.Here,too,territorialstigmatransformsresidentsintocriminalsorviolatorsoftheurban order.However,Mumbai’s case also reveals some new elements.As inmany other cases, the ‘crime’ in Mumbai is non-compliance with planning,although it is precisely planning that defines the permitted – or prohibited –formsofoccupyingspace.Finally,inthiscase,themarketrelationshipsareclear.Theplots of land are sold, bought and rented. It is, thus, a powerful land andhousingmarket,insideandonthemarginsofthecity.

AccordingtoMikeDavis,

Thereareprobablymorethan200,000slumsonEarth,ranginginpopulationfromafewhundredtomore than amillionpeople.The fivegreatmetropolises ofSouthAsia (Karachi,Mumbai,Delhi,Kolkata,andDhaka)alonecontainabout15,000distinctslumcommunitieswhosetotalpopulationexceeds20million.4

Anevenlargerslumpopulationcoversthefast-urbanisingcoastofWestAfrica,while other immense and deprived conurbations are spreading through thehighlands of Anatolia and Ethiopia; their reach embraces the foothills of theAndes and the Himalayas; they explode away from the skyscraper cores ofMexicoCity,Johannesburg,ManilaandSãoPaulo;and,ofcourse, theybordertheAmazon,Niger,Congo,Nile,Tigris,Ganges,IrrawaddyandMekongrivers.

Nevertheless, Kolkata’s bustees, Mumbai’s chawls and zopadpattis,Karachi’skatchiabadis,Jakarta’sandSurabaya’skampung,Manila’siskwaters,Khartoum’sshammasas,Durban’sumjondolos,Rabat’s intra-murios, Abidjan’sbidonvilles, Cairo’s baladis, Ankara and Istanbul’s gecekondus, Quito’sconventillos, Brazil’s favelas, BuenosAires’s villasmiseria, Caracas’s barriosandMexicoCity’scoloniaspopularesarenotjustdifferentnamesforthesameconfiguration.Becausetheyaredeeplyrootedinlocalpoliticaleconomies,theirconfigurationsareunique,asaretheirtrajectoriesintime.5

Itispossibletoaffirm,though,thattheyalloccupyazoneofindeterminationbetween legal/illegal, planned/not planned, formal/informal, inside/outside themarket,presence/absenceofthestate.Suchindeterminationsarethemechanismsthroughwhichasituationofpermanenttransienceisconstructed–theexistenceofalargereserveterritory,readytobecaptured‘attherightmoment’.Thesearethemechanismsthatwillbeexaminedinthefollowingsections.

Legal/Illegal:Superpositions,Pluralismsand…Irresolutions

In the informal settlements of cities around the world, the category ‘illegal’shouldnot–mustnot–betreatedasanabsolute.Inmanycases,themajorityoftheirinhabitantsliveintenuresystemsthatcanbeconsideredparalleltolegality,semi-legal or almost legal.Tolerated or legitimised by consuetudinary laws orsimply by use or tradition, they may be either recognised or ignored by theauthorities.6 In the first place, the formation of these neighbourhoods has notnecessarily originated from a legal infringement. When aspiring residentsoccupyvacantlandwithoutitsowner’sconsent,theyare,inprinciple,violatingthe law andmight be liable to sanction.However, inmany cases the ‘owner’does not exist in formal terms, or perhaps the land is an object of disputebetweenvariousparties.Thus,evenwithina situation thatwould seemclearlyillegal, the presence of the occupiers cannot be immediately contested, whichmayleadtotheconsolidationoftheoccupation.Theterm‘slum’,definedasthesquattingof landbelonging toothers,was chosenbyMikeDavis todesignatethis‘other’spaceofmanynames.However,a‘slum’isnotnecessarilytheoriginof themajorityof informal settlements. In fact, different formsofpurchaseorleaseofplotsthatwerenotsubjecttoofficiallandsubdivisionanddevelopment–and,ingeneral,couldnotbeapprovedbythenormsinforce–aremuchmorecommon than landsquatting.Communal lands–belonging togroupsorclans,for example – are frequent instances. In the face of urban expansion, they aredonatedtoclanmembersorsoldinsmallerpiecesfortheconstructionofhouses.ThissituationisrecurrentinSub-SaharanAfrica:insteadofassigninga‘rightofuse’(theusualprocedureforprovidinglandtothemembersofatribe),theplotsare sold outright.Although rarely legal, these transactions are acceptedwithinthesocialmilieusoftheactorsinvolved.7Communalformsoftenurecanalsobetemporary and serve as a kind of transition between a collective status andindividual forms. In Benin’s cities and their environs, for example, whereoccupantshaveonlyacontract forpurchaseora temporaryoccupationpermit,landsare first registered to thestate,which then transmits themtoa residents’association(Associationd’IntérêtFoncier)before,occasionally,registeringthemasindividualtitles.8

This is also thecaseofMexicanejidos, or communal lands resulting fromtheagrarianreformbeginninginthe1920s.InthesuburbsofMexicoCityandothercitiesinMexico,theselandswereallottedandsoldtoresidentstoconstructtheirownhouses.9InbothBeninandMexico,thelandscouldnotbesubdividedbecause the right thatguaranteescommunal tenuredoesnot allowsellingand,

often, the terrains lie beyond the limit of what is considered developable byurbanperimeterplansandlaws.

In these situations, we can clearly speak of a juridical pluralism: theencounter, coexistence and, often, conflict between different juridical ordersoperating on the same territory.Boaventura deSousaSantos developed a vastresearchonthetheme.Accordingtotheauthor:

Istartfromtheverification–nowwidelyrecognisedinSociologyofLaw(andfoundedinmultipleempirical surveys) – that, contrary to what is intended by liberal Political Philosophy and itsjuridicalscience,notone,butmanyformsoflaworjuridicalmodescirculateinsociety.TheofficialStatelaw–thatlegislatedbythegovernmentortheParliamentandfoundinlegalcodes–isjustoneoftheseforms,althoughtendentiallythemostimportantone.Thesedifferentformsvaryintermsof:the field of social action or the social groups that they regulate; their durability – from the longdurationof the immemorial tradition to theephemeralityofa revolutionaryprocess; theway theyprevent individual or social conflicts and solve them when they occur; the mechanisms ofreproductionoflegalityanddistributionorobscurationofjuridicalknowledge.Istart,thus,fromtheideaofpluralityofjuridicalordersor,moresuccinctlyandcoherently,fromjuridicalpluralism.10

Theideaofsuperimposedjuridicalordersisnotonlyapplicabletotheencounterofcustomarylawandstatelaw,asinthesituationdescribedabove.Thepurchaseof small plots of undeveloped land on the edge of urban zones from smallproprietors and farmers is one of the most common ways of producing newurban settlements in various regions of the world. These sales are generallylawful,ascontractsaredrawnupbeforewitnessesandofficiallyregistered.Thebuyerhasadocumentproving thevalidityof thepurchase.However, inmanycases, subdividing the land is illegal because it violates a specific zoning orsubdivisionstatuteorbecausethelandownerdidnotrequest–ordidnotreceive–alicencetosubdivide.

This kind of legality/illegality is very common in Latin America(unregulatedorclandestinelandparcellingisrifeinBrazil)andinAsia(suchasunauthorisedcolonies in Indiancities).11 In these cases, it is not a question ofsuperposingdistinct juridical layers,butof superposingdistinct sphereswithinthesamejuridicalandgovernmentalfield.

Government legislation is far from being an undifferentiated, consistentcorpusofrules.Differentsectorswithinithavedifferentoriginsandarepartofdifferent institutions, themselves following different agendas. These sectorsrelate to different circumscriptions at different moments. Therefore, the stateorder itself is plural.12 Legalities and illegalities of different orders frequentlycollideinmattersofcivil,urbanandenvironmentallaw.Asaresult,greyareasemergethatarewidelyexploitedbyresidentsintheirstruggles–includinglegalones–toremainwheretheyare.

However, thenotionof juridicalpluralismgoesbeyondthepluralnatureofgovernmental juridicity and the coexistence of distinct urban orders. Thecoexistenceofconsuetudinaryandstatutoryrightsconstitutestheverynatureofthe order, authority andpower relationswithin autonomously produced lower-classneighbourhoods.

TheworkofPedroAbramohasalreadyshownthat,ininformalsettlements,a ‘local authority’ generally emerges to mediate in any conflicts within thecommunity,especiallyinrelationtothecontractualconditionsthatregulatetheoccupation of plots and houses by the residents. According to Abramo, suchauthoritiesare legitimisedby localhistoricalprocesses.This legitimacycanbereligious,ethnic,culturalorpolitical,orcanarisefromviolenceorforce:

Astheliteratureofeconomicanthropologyrevealsinmanystudies,themechanismsofcommunallivingthatensurethelocalsocialorderincludesometypeofcoercioninordertorestrictandcontrolconflictive (or deviant) behaviours. This coercion can assume the form of passive collective,representativeand/orimposedcoerciveforce.Inthecaseofinformallandmarkets,localauthoritiesserveasthemediatinginstitutionforcontractualconflictsandallowthesecontractstoberespectedand/or negotiated between the parties, ensuring their intertemporal and intergenerationalmaintenance. Many anthropological studies of the operational form of markets and formalorganisations describe coercive forms that are not restricted to their legal coercive dimension.Equally, in informal landmarkets,we can identify very distinct coercive forms andmechanisms,althoughwithasimilarfunction:toguaranteewhatcanbecalledthemarket‘contractualpact’.Thesocial and political history of every settlement constructs and deconstructs these coercivemechanisms.13

BoaventuradeSousaSantosnamesthesetofnormsandrulesthatregulatethemanagementof territories in informalsettlementsasan internal,unofficialandfragilelaw,

managed,amongothers,bytheresidents’associationandapplicabletothepreventionandresolutionof conflicts generated in the heart of the community because of the struggle for housing. Thisunofficiallaw–Pasárgadalaw,asIwillrefertoit–rulesinparallel–orinconflict–withofficialBrazilianlaw.ItisonthisjuridicalduplicitythatthePasárgadajuridicalorderfeeds.Betweenthesetwo laws, an extremely complex relation of juridical pluralism prevails, only revealed by a verythoroughanalysis.Ingeneraltermsitisnotanequalrelationship,sincePasárgadalawis,alwaysandinmultipleforms,dependentonofficialBrazilianlaw.Byapplyingacategoryissuedfrompoliticaleconomy,wemightcallitanunequalexchangeofjuridicity,whichreflectsandreplicates,insocio-juridical terms, the unequal relations between classeswhose interests are based onone or on theotherlaw.14

Alex Magalhães undertook a detailed analysis of the documents used in theregistrationofpurchasecontractsinRiodeJaneiro’sfavelas.Hisresearchshowsthattheyarevalidbothfromastate-juridicalorderperspectiveandfromthatoftheconceptoflawdevisedwithinthatspecificsocialcontext.Hethenanalyses

theiruseinprocessesoflandregularisation,aswellasinprocessesofdivisionofassetscarriedoutindivorceorhereditarysuccessionacts.CorroboratingSousaSantos’s view, Magalhães finds that it is not a peaceful coexistence between‘laws’, but a process denying juridical pacts involving the more powerlessclasses,whichreflectsandreplicatesclassinequalities.15

We could stop here in our analysis of the dynamics between legality andillegality in low-income settlements and neighbourhoods. However, thesuperpositionoflegalorders–hereconceptualisedasjuridicalpluralism–doesnotresolvetheconstructionofpermanenttransienceasanessentialconditionforthecontemporaryconstitutionofthesespacesaslandreserves.WorkingonSãoPaulo’slower-incomeneighbourhoods,JamesHolstonindicatesthefundamentalelement that completes the equation: ‘juridical-bureaucratic irresolution’.AccordingtoHolston,

TheurbanperipheriesofSãoPaulodeveloped,likemostofBrazil…asanarenaoflandconflictinwhich distinctions between legal and illegal occupation are temporary and their relationsdangerously unstable. In this context, the law regularly produces irresolvable procedural andsubstantive complexity; this jural-bureaucratic irresolution dependably initiates extrajudicialsolutions…Assuch,landlawpromotesconflict,notresolution.16

The field of mediation, discretionality and arbitration is generally situated inpolitics,whichismynexttopicofreflection.

TheState:SovereigntyandException

Fromtheabovestatements,wecaninferoneofthemostimportantexpressionsof the presence of the state in the formation and consolidation of informalneighbourhoods. Although the dominant narrative describes these localities as‘resulting from theabsenceof thestate’or ‘beyond the reachof thestate’, theinconsistency of these settlements’ processes of formation, consolidation andeviction have been – and still are – strongly constituted and permanentlymediatedbythestate.

This presence is the origin ofmany settlements on public landswhere, atsomepointintheneighbourhood’shistory,itsresidentsobtainedlicencetosettle– documented or otherwise – from the local authorities. This situation isparticularlyprevalentincountriesthatpromotedmasslandnationalisationinthe1960sand1970s,aswas thecase for twentyof the fortySub-SaharanAfricancountries.17Althoughnumerouscountrieshavelatelyrevertednationalisation,to

this day almost all land in Ethiopia, Rwanda andMozambique, for example,belongstothestate,whichgrantsrightsofuse.In1970sBotswana,asystemforthe concession of use of state land was implemented. It delivered occupationcertificates,whilemaintainingownershipforthestate.18

InCambodia,afterthefalloftheKhmerRougein1979,thosewhoreturnedtoPhnomPenhwereselectivelyauthorised tooccupyemptybuildingssituatedin areas near their jobs, receiving temporary permits from the authorities toestablishthemselvesthere,althoughownershipwasstillinthehandsofthestate.Whentherewerenomorepremisesavailable,emptyperipheralareasstartedtobeoccupied,nowadaystreatedas‘illegaloccupations’.19

To hold a right of occupation does not necessarily mean secure tenure.Forcedandviolentevictions–asinthecaseofCambodia(whichwaspreviouslyanalysed) and of residents holding rights of occupation in Nigerian cities –reveal thediscretionalityand instabilityof these temporarypermits,whichcanberevokedatanymomentwithoutadequatereparationorcompensation.20

Beyonditspresenceasownerandpromoterofinformalneighbourhoods–apositionwithclearpoliticalimplications–thestatehashadanomnipresentroleas the main mediator of consolidation in the settlements. Within democraticcontexts,inwhichpartiescontendforvotesintheseterritories,‘unblocking’theexistentlegal/administrativeimpedimentsinordertoofficialisetheexistenceofa settlement – and, thus, to allow the provision of services and amenities –becomesapowerfulpolitical-electoraltool.Thistactichasbeenfundamentaltosustain inequality and control of cities by their elite. At the same time, itreplicatespoliticalmandates,ensuringalargeelectoralbasefortheparties.

Thebulkofinvestmentinurbanisationtakesplacewhenneighbourhoodsarealready occupied and when this demand is difficult to address. Hence thestruggle for access to investment is fierce and of major political-electoralimportance. Because of the settlements’ condition of informality and/orillegality, their consolidation provokes deadlocks within the bureaucracy,creating opportunities for selective and intermediated solutions. Thecombination of informal neighbourhoods’ urban development with theirprecariousinsertionintocitiesmakespublicgoodsandservicesintooneofthemostimportantpopulardemands.Thisleadstolocalmobilisationwithorganisedcampaignsforhousing,transportation,health,sanitation,andsoon.

The relation between the political-electoral system and these pressures iscomplex. On the one hand, parties whose leaders are associated with thesemovementsbringtheiragendasintoformaldemocratic institutionsandintothestatesystem.Ontheother,thelogicofcompetitionbetweenpoliticalpartiesalso

penetratesthesemovements,transformingtheircultures.Political parties, whether on the left or the right of the spectrum, have to

competeforpoorpeople’svotes.Thereforetheymustrespondtothedemandforintegrationintocitiesthatcomesbothfromorganisedmovementsandfromthelargestandleastorganisedswatheofthepopulation.Thisishowinvestmentsinurbandevelopment–aswellasthetolerance,authorisationorevenpromotionofprecarioussettlements–becomeapowerfulelectoraltool.Theyofferenormouspotential for political return, in the form of popular votes and/or access tocampaign financing. Therefore lower-income territories receive sustainedinvestmentfrompoliticians,whoexpecttocollecttheirprizefromthosewhomtheyhaveselectivelyendowedwithpublicresources.21

Theabove lineof thought–which Ideveloped for theBraziliancontext–resonateswiththeanalysisofParthaChatterjeefortheIndiancontext.Chatterjeeaffirmsthattheurbanpooresthavenotbeentreatedascitizenswithfullrights,eventhoughtheirdemandsforurbaninfrastructureandamenitiesareformulatedin the language of citizenship rights. The lives and livelihoods of the urbanpoorest depend on ‘illegal’ land squatting and ‘informal’ productive andcommercial activities. Thus, for Chatterjee, the formal-legal structurepermanently hinders the extension of formal rights to the residents of suchneighbourhoods,whonegotiatetheprovisionofgoodsandrightswiththestatethrough ‘political’ rather than ‘civil’ society.According tohim,civil society isthe domain of people’s sovereignty that guarantees equality of rights –somethingdeniedtothemajorityoftheworld’sinhabitants.Politicalsociety,ontheotherhand,providesservicesthroughparalegalarrangements.22

Thepracticeofcut-offdates(aspecificdatethatseparatesresidentswhocanberecognisedandreceivebenefitsfromthosewhocannot)isaclearexampleofthedifferenceoutlinedabove.Thedifferencebetweenrightfulandnon-rightfulcitizens ignores the universality of the residents’ human condition, and thelegality/illegalityoftheoccupation.Itis,infact,anegotiationinpurelypolitical,discretionary terms, a territorial ‘pact’ that aims to respond to the pressurescoming from the urban masses while reaffirming transience and territorialstigma.

This territorial pact signed between dominant classes and emergent socialgroupsisbasedonthemaintenanceofanorderthatdoesnotadapttoincorporatedifferentformsofspatialoccupation.Rather,itselectivelytoleratesexceptionstotherule.Afterbeingrecognised,theexceptionsare‘rewarded’withtherighttoremain and with public investment in urban infrastructure and services.Therefore, the ‘clandestine’ majority enters urban politics owing a favour to

thosewhoconsiderthemadmissible.Thepoliticalrelationshipestablishedbytheterritorialpacthasbeencalledan

‘ideologyofgift’ in sociological literature. Inotherwords, the foundingactofcitizenshipisagiftfromthestatetothecitizen.Anydonation,evenifinitiallyavoluntary,freeandgenerousact,hasinfactadoubleedge.Thepersonwhogivesdoessoinrecognitionofanecessity.Thus,thedonationalsohasacompulsorycharacter, a sense of reparation. At the same time the act of giving impliesanother obligation, that of receiving. Every gift is only completed with itsacceptance: thosewho give also do it out of necessity and thosewho receivebehaveinthiswayoutofnecessity.Therefore,toreceiveabenefitisaright,butitisalsoaresponsibility.Becauseofthis,thestatemustnotonlygive,butalsocreateanobligationtoreceive.

Finally, the term that completes and gives meaning to the relationship isretribution,or reciprocation.Thepersonwhoreceivesapresentcreatesabondthatnaturallyleadstoanactofretribution.Consequently,thepowerofgivingistoarouseintherecipienttheconsciousnessofanobligationtoreciprocate,asanethicalandpoliticalresponsibility.Itisinterestingtonotethedifferencebetweentherequitalofadonationandthepaymentofadebt.Therequitalofadonationhas no deadline, nor a readily defined value: it is the acknowledgement of anobligation that transcends the utilitarian dimension. However, the establishedbond presupposes the ascendancy of the donor over the recipient, whosecondition is thatofadebtor.This impliesacommitment toa return that isnotpreviouslyfixed–likeabillwithnosetvalueorexpirationdate–andthatcanbedemandedatanymoment,underdifferentforms.23

Wedonotspeakhereofwhatpoliticalsciencehasdesignatedaspopulismorpatronage. That debate has little relevance to the objectives of this text, for itonly representsoneamongnumerouspolitical formsof exercising thesepacts.Whatisimportanthereistostresstwopoints:thefirstisthatthesepactsresultfromthemobilisationpowerandpoliticalpressureof thesettlements’residentsthemselves,whoplayfundamentallyactiveroleswithinthisprocess.Thesecondis the effect producedby these specific formsof state actionon the territoriesandonthenatureoftherelationshipsofsovereigntyestablishedtherein.

ItisinthissensethatVeraTellesemploystheterm‘margins’tonametheseterritories:

Theyarenotoutlawdomains,sitesofanomie,disorder,astateofnature.Theyarespacesproducedbythemodesthroughwhichtheforcesoforderoperateintheseplaces–practicesthatproducethefigure of homo sacer in situations embedded within the life and work circumstances of theirinhabitants.However,theyarealsoplaceswherethepresenceofthestatecircumscribesafieldof

practicesandcounter-behavioursinwhichthesubjectsmake(andelaborate)theexperienceoflaw,authority,orderandits inverse, interactingwithdifferentmodesofregulation–micro-regulations,one could say – anchored in the practical conditions of social life. The state is present in theseterritories produced as ‘margins’ and within the intricate relationships and circuits superposedtherein. It isalsoanactivepartof thesocialorderingproduced therein, in thesituated, relational,contextualmodesthroughwhichthecriteriaoforderanditsinversesarenegotiated.24

Instability,irresolutionandimpermanencearethekeystounderstandinghowtheexceptions are politically constructed in cities, indelibly tainting informalneighbourhoodsbecauseoftheambiguityoftheirpositionas‘margins’.

In the previous sections,we analysed how the laws – here employed in aplural sense – constitute these territories while marking them out as ‘illegal’.Within this set of norms, urban regulation plays a key role in articulating anddefiningtheproperlyspatialattributionsof thisorganisation.Letusexamineitmoreclosely.

DemarcatingtheBorderBetweenLegalandIllegal:UrbanPlanning

In a previouswork about the city of SãoPaulo, I reconstructed the history ofurbanregulationsandtheirsocio-politicaleffectsontheformationofatwofoldcity,shapedbytheterritorialexclusionofthepoorest.25

Theimpactofurbanlegislationonthedevelopmentofinformallandmarketshasbeenstudiedinworksofneoclassicaleconomics,whichpredominantlylinktheincreaseofinformalitytotheestablishmentofstricturbanregulations.Thesestudies started in the 1960s, with the works of William Alonso. It was wellacceptedthatthepricesofurbanlandandrealestatewerenotsolelydependenton therelationbetweensupplyanddemand,sinceurban legislationestablishesan (artificial) cap on supply. However, it was only in the 1970s that scholarsbegantoseearelationbetweentwootherphenomena:theexistenceofrulestoordain the form, uses and extent of built space in cities – derived fromurbanplanning–andtheriseofhouseprices.StephenMayoandShlomoAngelwerethefirst toassociateurbanregulationswiththeinelasticityofsupply.Althoughtheirfocuswasnotpreciselyonlandmarketsincitieswheregreatextensionsofland are occupied by unregulated neighbourhoods, their works were widelyemployed to ‘explain’why the poor lack access to formal urbanised land andhousingmarkets.26

Accordingtothispointofview,stricturbanplanningpatternsandstandardslead to the rise of land prices, making it difficult – or impossible – for thepoorest to accede to housing and urban land.The outcome is the growth of anon-standardisedmarket for land, tolerated by city authorities because, wherethesemarketsappear,thereisnolow-costhousingalternative.Finally,accordingto the same notion, a progressive public policy should strive to restrict urbanregulation. This would permit the formal real-estate market to offer legalhousingforthepoorest.27

Nevertheless, if we look more closely at the functioning of urban landmarketsandtheirlinkstourbanlegislation,whatappearstobeitsclearestfailure–theexistenceofparallelinformalmarkets–is,infact,itsbiggestsuccess.Thisinformalsectorisanessentialelementofthepoliticaleconomyofexclusionaryurbanisation.Intheory,urbanplanninganditsresultanturbanregulationshouldoperateasamouldfortheidealordesirablecity.However,urbanlegislationisentirely structured under the dominant economic logic. It is adapted to therhythmandstrategiesofthemarket–especiallythestrategiesadoptedbyluxuryreal-estate development and construction companies. Therefore, urbanlegislation simply defines and reserves the best urban areas for these affluentmarkets, avoiding ‘invasion’by thepoorest. Itsprincipal function–performedevenmore efficiently thanks to the presence of informal landmarkets – is toraise invisible barriers that prevent lower-class neighbourhoods fromencroachingonprimelocations,leavingtheseexclusivelyforhigh-incomereal-estatedevelopment.28

Contrarytotherulesthatregulatetheformationoflower-classsuburbsandinformal settlements – which are usually invisible on city zoningmaps – thestructuringofelitespacesisextremelydetailedwithinurbanlegislation.Thus,inaddition tosolidifying into lawthemorphologyof thecity’sreal-estatesupply,urbanlegislationreinforcesthediscriminatorygestaltofthecity.Intheexclusiveneighbourhoodsoccupiedbytheelite,themainurbanplanningcharacteristicisto perpetuate the type of commercial contract established during the originalreal-estate development. This is essential to ensure that the substantialinvestmentmadeinthoseareaswillgeneratelong-termprofits,andtominimisetheriskofdepreciation.Ontheotherhand,disobeyingurbanstandardsandrulesisthebestwaytoprofitfromtheinformalsettlements:asinformallandmarketsare usually located in devalued areas, the possibility of generating highpopulationdensities–typicaloflower-incomeneighbourhoods–produceslargereturns.Toenable this system, thestate,as theauthorisingbody,mustprovidetwo conditions: one, the intensity and density of construction on unregulated

landmustgreatlyexceedthosepermittedbyurbanplanning;two,theremustbeanexpectationofthearrivalofurbaninfrastructureimprovementsinthearea.

Additionally, central to this type of urban planning are the guarantees ofexclusivityandoflandprofitability.Themappingofthoroughlyregulatedreal-estateareasreservestheprimelocationsandbest-servedurbanlandfortheelite.Simultaneously, it ignores the evolution of ultra-dense territories in areas thathavenotbeenformallydeveloped,orarelesssuitableforurbanisation.

However, it isnotonlyaneconomiclogicthatdelimits the‘inside’andthe‘outside’ofthelawintermsofurbanplanning.Itisalsoapowerfulmachineryofethnoculturaldiscriminationthatdefinesas‘prohibited’housingformslinkedwith certain socio-cultural practices. In previous works,29 I sought todemonstrate how the collective housing forms practised by Afro-Brazilians –basedonreligiousandsocialroots–weregraduallystigmatisedandbannedbycitybuildingcodesandzoninglaws.

When one ethnic group dominates a multi-ethnic territory, the norms ofurbanplanning,aspartofthelandregime,maybecomepowerfulmechanismstocontroland,often,dispossesslong-establishedcommunities(generallyofethnicminorities).One example is Israel and its relationshipwithArab andBedouinvillages established on its territory before the creation of the Jewish state in1947.30 According to Oren Yiftachel and Alexandre Kedar, a set of norms,institutionsandlegalstructureswerethenestablishedbytheIsraelistateinorderto facilitate the expansion of a Jewish nation over a territory it controlled –constructingthedominationofanethnicclass,orwhat theauthorsdenominate‘ethnocracy’.31

TheinstitutionallegalsystemthatregulatesaccesstolandinIsrael,attachingit to development projects, is founded on three pillars: a centralised planningsystemthatdefineswhat,when,whereandhownewconstructionscanbebuilt;alandadministrationsystem(IsraelLandAuthority)thatcontrols93percentoftheterritory;andacomplexlegalsystem,inwhichqueriesarereceived,filteredandnegotiatedwithinhierarchisedcourts.Thissystemoflandmanagementandplanning granted access to housing for countless Israeli citizens – includingJewish migrants and refugees from anti-Semitic regimes. However, the samesystem enshrined ethnic-based practices that discriminate against communitiesor villages already established in Palestine. Some of these villages are‘recognised’andhavetheirexpansionpotential‘planned’.Othervillagesarenot.Tobeanon-recognisedcommunitymeanstobeinvisibleinadministrativetermsand,thus,nottoreceiveadequatepublicservices.Atthesametime,ifaterritoryisnotplanned, itcannotgroworerectnewbuildings.Asdemographicgrowth

demandstheexpansionofexistingstructures,newbuildingsandextensionsmustbe built without permission, which can cause demolition orders and evictionswithout compensation, as well as fines, the payment of demolition costs andeventual criminal sanctions. Small Arab towns, neighbourhoods in EastJerusalemandBedouinvillages in theNegevdesert and in theWestBankareexamplesofthispolicy.Thecontrastbetweentheplanners’capacitytoestablishnew Jewish settlements and their failure to expand non-Jewish villages andsettlementsisevident:since1948,theIsraelistatehasplannedandimplementedmore than 700 new Jewish settlements, while no new non-Jewish communitywas foundedor evenmooted– ifwe except theproposal to urbaniseBedouincommunitiesbyforce.32

The situation of Bedouin communities in the Negev desert displays othercomponents of the ethnocultural dimension of the expropriation of land andreorderingof legal spaceundertakenby Israeli planning.Bedouinpeoplehaveroamed the desert as nomad shepherds for hundreds of years. Since 1948, theIsraelistatehasadoptedthepolicyofnotrecognisingthesecommunities’claims,instead promoting the urbanisation of their lands as ‘planned towns’. Israeljustifiesthispolicyongroundsoftheprovisionofpublicservices.Afamilyorclan may only gain access to these towns on condition of renouncing anydemandofstaterecognitionfortheirlands.Today,theseplannedtownsarerifewithunemployment,dependency,crimeandsocialtension.33

Themodelof planningwithout consideration for traditional local lifestylesandformsoflandoccupationisoneofthecogsoftheethno-classicistmachineofdispossessionanddomination,whichcanalsobeobservedinthedifficultandcomplexsituationofRomaniorRomapeoplesinEurope.

Today,settlementsofRomaniandothertravellingcommunitiesinEuropeancities represent one example of these ‘others’ who are invisible or ‘illegal’according to urban planning norms – even when settled on lands they own.These communities have diverse origins; the Roma, who are ancestrallyconnectedtoIndia,arrivedinEuropeinthefourteenthandfifteenthcenturies.34

TheirpatternsofresidenceandtransitarenotinlinewithEuropeancultureandaregenerally thesourceof thediscriminationfacedbyRomani inEurope.Their territorialexclusioncausesaseriesofproblems,fromintermittentaccesstoeducationandworktoappropriatehealthcareorinclusionincommunitylife.Most of their settlements are marred by infrastructural precariousness. Forexample, inSlovakia in2005,10percentofRomanisettlementswerewithoutelectricity and 81 per cent had no sewage disposal.35 In Romania, theirpredicamentintermsofelectricityandsanitationissimilarandlessthan15per

centofhomescontain abathroom.36 InSerbia too, half of theRomani live insettlements with precarious infrastructure.37 In Montenegro, 48 per cent ofRomaniresidencesarelocatednearrubbishtips.38

As most of these settlements are deemed illegal, their residents are notallowedtoregister inthetownswheretheyaresituated.Theiraccesstopublicservicesisbythesametokenlimited.ManyRomaniandothertravellergroupsaretrappedbetweenaninadequateofferofsuitableaccommodationononeside,and the insecurityofunauthorisedcampsandconstructionson theother.Theyalso face a cycle of evictions, often successive, and violently carried out. Inorder to avoid evictions and to gain access to services, many families haveagreed to live in permanent structures, even if reluctantly. However, they arefrequentlyhousedinhighlydegradedbuildingsandexposedtomoredirectandviolenthostility,focusedontheirethnicityandwayoflife.39

InItaly,forexample,emergencylegislation,adoptedin2008,constitutedthelegalbasisforevictionsandforthedestructionofsettlementsofRomanipeopleandothergroupsoftravellers.Althoughthislegislationwasrescindedin2011,violentevictionsand resettlements in isolated,gatedghettoshavecontinued inmanycities.40

Urban planning regulations have been a powerful tool of discriminationagainstthesegroupswithinEuropeanurbanspace.InEngland,forexample,theGreenBeltplanningandprotectionnormsareofteninvokedbythenon-travellerpopulation–andbytheauthorities–asthereasontoexpeltravellersfromtheirsites,ashappenedinDaleFarm,nearBasildon.41

Settlements self-constructed decades ago byRomani communities in citieslikeIstanbulandSofiahavebeendemolishedtomakewayforurbanrenovationprojects. The communities were dispersed to different areas, sometimes verydistantfromwheretheyhadbeen.42

In the case ofArab andBedouin communities in Israel, aswell as that ofRomanipeopleandtravellers inEurope,urbanplanninganditsregulationsarewhat draw the border between legal and illegal. They do so throughcompounding an ethnically based discriminatory policy with a confrontationbetween different forms of occupation and the communities’ relationshipwiththeterritory.Evenifthediscriminationisnotalways,ornotexplicitly,present,theconfrontationisomnipresentininformalneighbourhoods.Inadditiontothegeneral neediness and the scarcity of available resources, we find, within theterritorial organisation of these neighbourhoods,morphologies, typologies andforms of use that reflect forms of organisation and economic strategies

pertaining to the majoritarian sectors of the city, which are systematicallyblockedornotrecognisedbyregulation.

Among the characteristic elements of informal neighbourhoods are:multifunctionality, or mixed use; ‘horizontal’ multi-family use, with varioushouseholdssharing thesameplotof land;andflexibility,or incrementalism, inthe forms of construction.These are sensible strategies tomaximise the spacenotonlyforhousingpurposes,butalsoforincomegeneration–byusinghomesforworkshop or retail activities, and letting out rooms or parts of houses. Tobegin with, within planning epistemology, the ‘residential’ category refersexclusivelyorpredominantlytoresidentialspaces,whichautomaticallyexcludesthe multifunctional nature of informal neighbourhoods’ typical spaces.Moreover, the typologies generally classified as ‘multi-family’ are apartmentbuildings,notsharedbackyardsorrooftop lajes.43This ishowtherestrictionsmentionedaboveareputintoactionbyurbanregulationtounderlinetheborderbetweeninsideandoutsidethelaw.

Iwillusethe(maybeextreme)exampleofthenumerouskampunginJakarta,Surabaya andYogyakarta–major Indonesian cities – inorder toproblematisethestatementabove.

Kampung (originally villages) are urban settlements with local roots,inhabitedmainlybylower-andlower-middle-classpeople.Theyaremixed-usezones,denselypopulated,servingasworkplaceandhomefor thegreatbulkofIndonesia’s urban population: it is estimated that 60 per cent of Jakarta’sinhabitantsliveinakampung.44Theyhaveexisted inJavanesecitiessince theprecolonialera.ThecitiesoftheislandofJavawereconstitutedinthesixteenthcenturyasportsandinternationalcommercialentrepots.Thus,thevariousethnicgroups involved with these activities became established, including Javanese,Malay,Buginese,Chinese,HinduandArabpeople.AccordingtoJavaneseurbancultural tradition, cities were composed of a group of neighbourhoods, thekampung–communitiesofresidencyandwork,someofwhichstillexisttoday.Sincethepre-colonialera,oneoftheessentialfunctionsofthekampungwastoaccommodate the city’s newcomers. Under the Dutch, they becameneighbourhoods organised by background or religious origin – such as theChinesePecinanandtheMuslimPekojan.

From the start, the city administration was only in charge of the areacontainingthepalaces,themarketsandtheport.Eachkampungwasautonomousandhad itsownrules. In500yearsofhistory,kampunghavenotsubstantiallychangedtheirmixed-usecharacteristics.Ingeneral,commercialandproductiveactivitiesoccupythegroundfloorwhileresidentialspacesareintheupperfloors

– which, today, can reach three or four stories in the densest settlements. Atstreetlevel,theproductionofeverytypeoffood,clothes,toys,furniture,aswellas electronic repair shops, spreads beyond private areas, creating semi-publicspaces thatarenotonlyspacesofcirculationandconnectionwith thecity,butalsosemi-privatespaces, invitingsocialandeconomic interaction.Anexampleisthepresenceofbarepavedareasthatmay–dependingonthetimeofthedayandthedayoftheweek–functionasaplacefordryinglaundry,aplayground,abadmintoncourtforchildrenandteenagersoraspaceforparties,whentheyarecoveredbydecoratedfabrictents.45

Thecurrentrelationshipbetweenurbanplanningandregulatoryframeworksand the kampung varies from city to city. It also changes according to thepolitical relationship that successive local and national administrations haveestablishedwitheachkampung.

In general, kampung are poorly served by infrastructure: there is unevenaccesstopipedwater,sanitation,drainageandfloodcontrolfacilities.Theyalsotendtohaveanambiguousjuridicalstatus.However, thehousingconditionsindifferentkampungvaryas,over time,somereceivedservicessuchasplumbedwater, street paving and drainage systems. Indonesia – and Surabaya inparticular–hasalonghistoryofinformalsettlementimprovementprogrammes,dating back to sanitation interventions in the colonial era. The KampungImprovement Programme (KIP), launched in 1969, is considered one of theworld’s largest and most successful projects for the urbanisation of informalsettlements.Lately,however,thispolicyhaslostbothspaceandresources.46

Theadministrativeandjuridical integrationofkampungvariesfromcity tocity. In places, at least some of the settlements are recognised by municipalplans.However,othersareconsensuallyclassifiedbythestateas‘illegal’.Thisis the case for kampung located near rivers, canals, railroads, green belts orparks.They are often in zones subject to flooding, in contraventionof currentnationalandlocalplanningrules,makingthementirely‘invisible’oncitymaps,‘illegal’ and vulnerable to eviction.47 The government abstains at every levelfrom implementing housing policies and programmes in such settlements, andrarely invests inamenitiesand infrastructure.Asa result, the livingconditionsareworsethaninotherkindsofkampung.Thesesettlementsclearlyharbourthepoorest among the urban poor, which includes undocumented internalmigrants.48

By classifying these settlements as ‘illegal’, riding roughshod over pre-existent social connections, the norms of planning, construction and landoccupationdefinethesesettlements’geography.Itisthatofinvisibilityinterms

ofurbanpolicy,orofaconstituted–butneverplainlyestablished–presenceasanexception.Here, theconcept of ‘state of exception’maybeuseful.GiorgioAgambendefines‘sovereignty’asthepowertodeterminethestateofexception.Forhim, theparadoxofsovereigntyconsists in thefact that thesovereignfindthemselves, at the same time, inside and outside of the juridical order.49 Thelegalandurbanplanningapparatushasthepowertodecreethesuspensionoftheurbanorder,determiningwhatis‘illegal’andwhatisnot,aswellaswhichformsof‘illegality’cansubsistandwhichmustdisappear.50

Throughpoliticalmechanisms, thealternativesofexpansion,consolidation,permanenceorexpulsionareconstantlydisputedand,occasionally,negotiated.However, the classification operated by planning and by land tenure systemsgoes beyond the territorial dimension. The expression ‘We are illegals’ – itssemanticcontext linking thestatusof illegality to theveryhumanconditionofthe inhabitants – indicates that, within the inhabitants’ attitudes towards thenational juridical system, it is as though the legality or otherwise of landoccupationoverridesallothersocialrelations,eventhosethathavenothingtodowithlandorhousing.51

The construction of the territorial stigma is a fundamental element of thepolitical machine that legitimises expulsion. However, alongside the state ofpermanent transience–amarkof the ‘reserve’characterof the land–and theterritorial stigma, the construction of the hegemony of registered individualprivatepropertyover all other formsof tenure is also clearly connected to theoriginoflarge-scaledispossession.ItiswhatIwillanalysenext.

10PrivateProperty,ContractsandtheGlobalisedLanguageofFinance

Butthey[thepoor]holdtheseresources[whatthepoorgloballypossess]indefectiveforms:housesbuilton landwhoseownershiprightsarenotadequatelyrecorded,unincorporatedbusinesseswithundefinedliability, industries locatedwherefinanciersandinvestorscannotseethem.Becausetherightstothesepossessionsarenotadequatelydocumented,theseassetscannotreadilybeturnedintocapital, cannotbe tradedoutsideofnarrow local circleswherepeopleknowand trust eachother,cannotbeusedascollateralforaloanandcannotbeusedasashareagainstaninvestment.

HernandodeSoto,TheMysteryofCapital

Inthelast250yearsofthehistoryof thesocialrelationshipbetweenhumanityandterritory,aspecificformofuseandrightoverland–theindividualprivateproperty – became hegemonic. This movement started with the enclosure ofcommunallandsinEuropeintheeighteenthcentury,throughaprocessdefinedbyPolanyias‘territorialdisplacement’–ortheseparationoflandandwork.Itadvancedtowardsitsjuridical-politicalconsecrationwiththeconstructionoftheliberalstate.Morerecently,ithasspreadovertheglobethroughtheexpansionofcapitalistformsofproductionandconsumption.1

According to Marx, ‘if land were … at everyone’s free disposal, then aprincipal element for the formation of capital would be lacking … The“production” of someone else’s unpaid labour would thus become impossibleandthiswouldputanendtocapitalistproductionaltogether’.2Whencapitalismencounters situations inwhich the private ownership of land does not exist, itmusttakeactivestepstowardsitscreationand,thus,guaranteetheproductionofwage labour. The barrier raised between work and land is therefore sociallynecessaryfortheperpetuationofcapitalism.

However, through creating a barrier against labour, capital also createsbarriers against itself, as the landowner captures part of the produced income

throughtheextractionofsurplusvalue.If,ontheonehand,landisliberatedandtransformed into an open field for capitalist operation, on the other hand, its‘enclosure’ and transformation into merchandise introduces land rent and itsexploitersasactiveagentswithintheprocessofcompetition.Marxdefinesthisprocess as: ‘rent, instead of binding man to Nature, merely bound theexploitationofthelandtocompetition’.3AccordingtoPolanyi,‘Toseparatelandfrommanandtoorganizesocietyinsuchawayastosatisfytherequirementsofa real-estate market was a vital part of the utopian concept of a marketeconomy.’4

Privateownershipoflandandlandappropriationthroughbuyingandsellinginthemarket–thewaylandrentisextractedandthefundamentalelementofthecapitalistaccumulationregime–alsohaveanessentialpoliticaldimension.Stillaccording to Polanyi, ‘Such freedom in dealing with property, and especiallyproperty in land, formed an essential part of the Benthamite conception ofindividual liberty.’5As such, this freedom is also part of the corpus of liberalideas that constituted themodern state in theeighteenthcentury.However, thefreedomdefendedby liberals isnegative freedom: freedomin thesenseofnotbeinghinderedbyaprohibitionorobligated toperformaspecificaction.Thismeaningof freedom,formulatedduring thefightagainstmonarchicdespotism,coincideswith Locke’s conception of property –which includes life, freedomand estate – and establishes a homology between ‘having rights’, ‘being anowner’and‘beingfree’.6

Whenfreedomisunderstoodinanegativeform,anexclusivistvisionoffreedomisheld:freedomismysphereofaction,inwhichothersdonotparticipate,andwhichisonlylimitedbyothers’sphereof action.This is themodern definition of freedom: freedomas autonomy and, especially, as theexclusion of others from a personal sphere, the individual left in peace. Property becomes theguarantee of power over a quantity of things that excludes everyone else…Nevertheless, theserightsarenotrestricted to thefreepersonaluseofone’sbodyandpossessions; theyextendto thehumancapacity–asabeingendowedwithreason–ofgivingawaytheserightsthroughcontract.Thus,theyarecapableofalienatingnotonlytheirassetsbutalsotheproductoftheirbody’slabour.This is the equality proclaimed by liberals: the equality of being a proprietor and of transferringproperties through contract – an equality that each should have before the law. According toNorbertoBobbio,‘privatelaworthelawofprivateindividualsistherightderivedfromthestateofnature,whosefundamentalinstitutionsarepropertyandcontract’.7

Given that, by this reasoning, freedom is dependent on private property, agovernmentresponsibleforitscitizens’freedommustguaranteeprivatepropertyasoneof its fundamentalobligations.At thesame time,anattackagainst landownershipcouldraiseconsiderabledoubtsconcerningotherformsofproperty–likethatofthemeansofproduction,fromwhichcapitalderivesitsownpower

1)

2)

3)

andlegitimacy.Therefore,thepreservation(andpromotion)ofprivatepropertyof land performs an ideological role, legitimising every other form of privateproperty.Thisexplainsitsmimesiswiththefullconditionofcitizenship.8

Therefore, according to liberal thinking, property, law and citizenship areinterwoven.Thisunderpinsbothpolicies for thepromotionof homeownership(as seen in part one of this work), and programmes for the reform of landsystems and for the registration of informal settlements – which were widelyimplemented on every continent since the 1980s, as central elements for theexpansionofthecapitalistmodelinitsneoliberalphase.

According to this model, the characteristic of tenure systems based onregisteredindividualpropertyistheircapacitytobeinvestmentvehiclescapableofmaximisingitsvalueandofcuttingtransactioncosts.KlausDeininger,alandpoliciesexperthighlyrespectedbytheWorldBank,listsasfollowstheessentialpointsforlandmanagementtofullypermitthefunctioningofmarkets:

Duration. As one of the main effects of property rights is to increase incentives forinvestment, thedurationforwhichsuchrightsareawardedneedsat least tomatch the timeframeduringwhichreturnsfrompossibleinvestmentsmayaccrue.

ModalitiesofDemarcationandTransfer.Propertyrightstolandshouldbedefinedinawaythatmakesthemeasytoidentifyandexchangeatacostthatislowcomparedwiththevalueoftheunderlyingland.

EnforcementInstitutions.Thekeyadvantageofformal,ascomparedwithinformal,propertyrights is that thoseholding formal rightscancallon thepowerof the state toenforce theirrights.9

Although the text isaimedateconomicgrowthandpovertyreduction, it isinterestingtonoticehowsecuretenure–understoodasanessentialelementforthe protection of human life and dignity – does not have any relevance. Thefocus is on economic growth, return on investments and transaction costs.Deininger’sintroductionspellsoutthisposition:

Property rights affect economic growth in a number of ways. First, secure property rights willincrease the incentives of households and individuals to invest, and oftenwill also provide themwithbettercreditaccess, something thatwillnotonlyhelp themmakesuch investments,butwillalsoprovideaninsurancesubstituteintheeventofshocks…Secureandwell-definedlandrightsarekeyforhouseholds’assetownership,productivedevelopment,andfactormarketfunctioning.

If property rights are poorly defined or cannot be enforced at low cost, individuals andentrepreneurs will be compelled to spend valuable resources on defending their land, therebydiverting effort from other purposes such as investment. Secure land tenure also facilitates thetransferoflandatlowcostthroughrentalsandsales,improvingtheallocationoflandwhileatthesametimesupportingthedevelopmentoffinancialmarkets.Withoutsecurerights,landownersarelesswillingtorentouttheirland,whichmayimpedetheirabilityandwillingnesstoengageinnon-

agricultural employment or rural-urbanmigration. Poorly designed landmarket interventions andthe regulationofsuchmarketsby largeandoftencorruptbureaucraciescontinue tohampersmallenterprise start-ups and nonfarm economic development in many parts of the world. Suchinterventionsnotonlylimitaccesstolandbythelandlessandpoorinruralandurbanareasofthedevelopingworld, butbydiscouraging rentingoutby landlordswhoare thusunable tomake themostproductiveuseof their land, theyalso reduceproductivity and investment.High transactioncostsinlandmarketseithermakeitmoredifficulttoprovidecreditorrequirecostlydevelopmentofcollateralsubstitutes,bothofwhichconstraindevelopmentoftheprivatesector.10

Therelationshipbetweentenuresecurityandpovertyreductionhasbeencentralsince the launchofUN-Habitat’sGlobalCampaignforSecureTenure in1999.‘Tenure security’was one of the elements proposed by the agency in the firstversion of the Millennium Development Goals in 2000, before disappearingfromtheadoptedindicators.

Theorigin of theMillenniumDevelopmentGoals dates back to theWorldSummitforSocialDevelopmentin1995,withextensiveparticipationofNGOsandactivistsfromallovertheWorld.In1996,donatingcountriesfromOECD’sDevelopment Assistance Committee (DAC) adopted a series of internationaldevelopment goals. Since that date, OECD countries, as well as internationalfinancial institutions, began to exert an influence over the MillenniumDevelopmentGoals,particularlyafterthepublicationofthedocumentsShapingthe21stCentury,byOECD,andABetterWorldforAll,bytheWorldBank.Thefinal list ofMillenniumDevelopmentGoals, adopted in 2001, did not includesecurityoftenure;thetopicwasinsertedintoabroadercontextlinkingthe‘fightagainstpoverty’with‘economicgrowth’.11

Ever since then, the idea of defending the security of tenure of informalsettlements–ahistoricaldemandof socialmovementsandhousingactivists–has been translated into land reforms, registration programmes and even bysettlement-eradicationpolicies–underthemotto‘CitiesWithoutSlums’,whichhassomehowbecomeasynthesisofthegoals,aswewillsee.

LongbeforetheadoptionoftheMillenniumDevelopmentGoals,theWorldBankandregionalbanksfromvariouscooperationagencies–particularlyfromAustralia, Germany, Norway, Sweden and the United States – were alreadysponsoringprogrammesoflandreform,registrationandtitlingaroundtheworld.When a Labour governmentwas elected inGreat Britain in 1997, the Britishcooperationagency(DepartmentforInternationalDevelopment)alsolaunchedastrategicdocumentoutliningactionforpovertyreductionandeconomicgrowth,andbeginningtofinancetheseinitiatives.12

ThedebatearoundtheeffectoflandtitlingonpovertyreductiongainedhugeprominencewiththepublicationofHernandodeSoto’s2000bookTheMystery

of Capital. The author proposes a direct correlation between private landpropertyandWesternwealth,andarguesthatthepersistenceofpovertyinpoorand middle-income countries springs from their ‘underdeveloped’ regimes ofproperty. According to de Soto, poor people own assets, but use them in a‘defective’way,makingthem‘deadcapital’.WhatdeSotomeansbythisisthat,withoutformalpropertytitles,theirassetscannotbeusedascollateralforloansto be invested into business and entrepreneurship. Titling their lands may‘awaken’ thisdeadcapital, thusgiving thepoorestaccess tocapital inorder toimprovetheirhomes,startbusinessesandeventuallyleavepovertybehind.13

Notbychance,deSotoandhisideasprovedimmenselypopularwithinUSandUKcircles.Notbychance,either,didBillClintondeclaretoTheObserver,in2009,thatheconsidereddeSotothe‘world’sgreatestlivingeconomist’;otheradmirers included George Bush, Vladimir Putin and Margaret Thatcher.14 Intimes of globalisation and financialisation, his theory positing a link betweenprivate property and the fight against poverty seemed like capitalism’s‘philosopher’s stone’. He seemed to have found the answer to the loomingquestion: how can the financialisation of land and housing be extended toterritories organised by tenure arrangements different from the ‘universal’languageofregisteredfreehold?

PedroAbramoexaminesthelogicandnatureofcontractsthatregulatethe–mercantile – relationshipswithin so-called informal settlements, and points tothelimitsoftheformalmarket’spenetrationintotheseterritories.Accordingtohim,

the informal land market exists outside the framework of rights, but must have a particularinstitutionalstructure.Itmustguaranteethetemporalreplicationofthemercantileinformalpracticesofbuying,sellingandrentinglandand/orrealestate…Thesepracticesguarantee,inintertemporalandintergenerationalterms,thecontractsofimplicitnatureestablishedwithinthemarket’sinformaltransactions.

Inthecaseoftheinformallandmarket–wherethereareirregularities(informality)intermsofboth titling and urban and construction norms – the contracts of purchase, sale and rent are notprotectedbylaw,astheirobjectswouldbeconsideredirregularintermsofregulatoryrights.Thismeans that conflicts cannot be solvedby instruments of legalmediation and law enforcement…When the lawdoesnotguaranteemarketcontractual relationships,other formsofguaranteemustdevelopinordertore-establisharelationshipoftrustbetweentheinvolvedparties…Otherwise,themercantilerelationshipofexchangewillnotbeaccomplisheddue to themutualmistrustaroundapotentialunilateralruptureoftheinformalcontract.Inotherwords,withoutformalinstitutions,theinformal landmarketmust establish itsown regulatorybodies, includingcoercivemechanisms inthecaseofunilateralcontractualrupturebyoneoftheparties…Inthecaseoftheinformalurbanlandmarket, an important base that guarantees the functioning of themarket and its contractualchain is the relationship of trust and loyalty that both parties establish between themselves;therefore,buyersandsellers–aswellaslandlordsandtenants–equallyplacetrustupontheother,based on the expectance of reciprocity, which comes from a relationship of loyalty between the

parties. The base of this informal market institution has no legal content, but depends on theenduringstabilityofaparticularformofsocialinterdiction:theformtrust-loyalty.Thisrelationshipof interpersonal reciprocity defines many social relations. However, in the case of mercantilerelationships, itwasexcludedby themarket’s characteristicofpromotinga contractual encounterbetweenanonymousparties.

Inthecaseoftheinformalandaffordablelandmarket,inwhichtherelationshipofreciprocity-trust-loyaltyisoneofthefoundationsforthepotentialexistenceofaninformalmercantileexchange,itisnecessarytopersonalisethecontractualrelationships.

Thispersonalisationmaynotbecompletely transparentandmayassumeanopaquecharacter.However, thepersonalisation– thatmeaning, someonesoldor rentedoutandsomeoneboughtorrented – introduces the possibility of the relationship of trust-loyaltywithin the constitution of acontractualrelationship.Thisrelationship,bydefinition,isimplicit(informal),andisnotinsuredbytherightsthatregulateeconomiccontracts.Therefore,intheinformallandmarket,itispreciselytheeliminationof impersonalityandthepersonalisationof thecontractualrelationshipthatguaranteesthemechanismoftrustandloyaltythatsupportsabuy-sellagreementoraninformalrent.15

Both land reform and land titling have been used as powerfulmechanisms toeliminatewaysofrelatingtolandandhousingthat,foronereasonoranother,arenotregulatedbytheimpersonalityandanonymityofcontractualencounters.ThepreviouslymentionedbibliographicrevisionfromDurand-Lasserve,Fernandes,RakodiandPayneidentifiedexamplesoflandtitlingprogrammesinthirty-fivecountries. They also found more than 200 documents related to theseprogrammes, all formulated within national governments or multilateralorganisations. Themajority of these programmes and projects are designed tocreateormoderniselandregisters,ortodevelopadministrativeinstitutionsthatcandealwithlandregularisationandtitling.16

The list of land titlingprogrammes andprojects is certainly longer.At theWorldBankalone,between1995and2014,thereweremorethanfortyprojectsrelated to land regularisation, titling and real-estate registration. They wereimplemented in urban Latin America (mainly Peru and Central Americancountries),formersocialistcountriesinCentralAsia,theBalkansandSoutheastAsiancountries suchasThailand, thePhilippines,SriLankaandPakistan.17 Itwasalsonotbychancethattheseprogrammesappeared‘boxed’ascomponentsof Structural Adjustment Loans (SAL), later renamed Development PolicyLoans (DPL),orwithinprojectsdirected to reform,createor enforce financialsystemsandreal-estatemarkets.

I will now examine one of the land reform programmes that I had theopportunityofgettingtoknowintheMaldives.Overall,theyshowhowthelandreformsofthe1990sand2000swereprimarilydesignedtountietheknotsthatstill bound certain portions of the territory to traditional or lower-incomecommunities and their tenure arrangements. The outcome was free and safecirculationoflandasanassetinthemarket–preferablytheinternationalmarket.

TheMaldives

TheMaldivesareanarchipelagocomposedofachainofcoralatollswith1,192islandscoveringanareaofmorethan90,000squarekilometres,stretching820kilometres in length.Formore than3,000years, the islandswere traditionallyinhabited by fishermen and sailors and their families. Today, only 203 of theislands (59 per cent of the total land area) are inhabited by approximately300,000 individuals. Ninety-six per cent of the islands are smaller than onesquarekilometre.18

The distinctive geography of the Maldives plays an important role inpolitical,economicandsocialissues.Aroundone-thirdofthepopulationoftheMaldivesisconcentratedinMalé.Theremainderisdispersedamongtheislands,of which only three, aside fromMalé, have a population greater than 5,000.Seventy-fourislandshaveapopulationoflessthan500.Althoughtherearestillmanyuninhabitedislands,somespecificitiesofthearchipelago’sgeographyanditseconomicmodelcontributetoashortageofinhabitableland.Thesituationofthe Maldivian national territory makes the country particularly vulnerable toglobalphenomenasuchasclimatechangeand itsconsequences– includinganincreasingnumberofnaturaldisastersandrisingsealevels.About80percentoftheislandsstandlessthanonemetreabovesealevel.19

Moreover, tourism–currentlyresponsibleformore than30percentof theMaldives’ GDP and employment – has been encouraged through a model ofleasingentireislandsto‘all-inclusive’resorts.

In 2008, the Maldives Human Rights Commission estimated that 12,000familieshadnohomeoftheirown.Around85percentofMalé’sfamiliesshareda small apartment with other families or lived in temporary or improvisedspaces.In60percentofthecity’sdwellingsarefound2.5ormorepersonsperbedroom,which can be defined as overcrowding.20 In 2006, according to thePopulationandHousingCensus, theaveragenumberofpeopleperbedroominMaléwas3.1.

Atthesametime,aboominrentpriceshadbeenshapingthecapital’sreal-estate market. FromMarch to June 2008, house prices rose by up to 10 percent.21 The exorbitant rents have left families – especially the poorest, whomigratedfromruralislands–withnochoicebuttoliveinovercrowdedhousingunits. Some families in Malé and Villingili spend up to 80 per cent of theirincome on rent. This leads to extreme situations, such as more than fifteenpeople sharing one room. Similarly, migrant workers who cannot afford

adequatehousingareforcedtoliveincrampedspaceswithmanyotherpeople.In2009,thetotalnumberofmigrantworkerswas70,000.

The country has improved its social indicators since 1997, eradicatingabsolutepoverty (less thanUS$1percapita per day) in 2005.But, ifwe takehaving less thanUS$3adayas thepoverty line,19percentof thepopulationlive below it.Add to this a high unemployment rate – 16.5 per cent in 2009,reaching23.7percentamongwomen.22

According to the traditional system of land allocation in theMaldives, alllandispublic,andaplotoflandisthebirthrightofallMaldiviancitizens.Thissystemisno longerviable,due toseveral factors.First,demographicgrowth–resulting fromthe fall in infantmortalityand the increaseof lifeexpectancy–leads to continuousdivisionof the land,with families inheritingprogressivelysmallerplotsandhouses.Atthesametime,migrationandtheconcentrationofinhabitants in Malé introduced renting as the predominant form of housing,puttingevenmorepressureonthecity’shousingsupply.Becauseoftheseissues,land and housing became central to the country’s political agenda and thegovernmentproposedanewLandLawin2002,whichwasapprovedin2003.

This law introduces procedures for the governmental allocation andregistration of land to individuals and companies. It also regulates theopportunities for current occupants to purchase land. Moreover, it introducesmortgagesandthepossibilityofusinglandascollateralforloans.AftertheLandLaw’spromulgation in2003, a consultant from theWorldBank recommendedvariouschangestoit,suchastheeliminationofbarriersfortheestablishmentofa financial system for housing. These changes were intended to remove theremainingobstaclestobanks’repossessionofhousesacquiredthroughmortgagedeals, in the event of default. They also aimed to regulatemore precisely theindividualisationofapartmentsandcommercialspacesinmulti-familybuildingsand business premises through the concepts of condominium and the idealfractionsize.23

Thepress releasepresenting the amended lawdescribed thesemeasures asessentialinordertotacklethehousingdeficit:

PresidentMohamedNasheedannouncedthereformsthatwillbeproposedbythegovernmentonthelegislation that regulates land and its transaction inMaldives…The president said therewere anumberofreformstoexistinglandlegislationandnewlegislationnecessarytofacilitateuseoflandas a transferable commercial property and to ease the shortageof land in theMaldives… Inhisspeech today, thepresidentunderscored that the severe shortageand resultinghighercostof landprevailedinthecountrynotbecauseofthelimitedamountofland,butbecauseofimpedimentstoitstransaction.

HesaidthegovernmentwantstochangethewaylandtransactionsaredoneintheMaldivesto

facilitatetheuseoflandforcommercialends,asacommerciallytransferableasset.Thepresidentsaidattainingnationaldevelopmentandeconomicgrowthwouldnotbepossible

withoutfreeinglandfromunnecessarylegalandproceduralencumbrancesandallowingcommercialtransactionsofland.24

Inthepresident’sannouncement, the‘thesis’explaininglandshortageandhighrentalpricesisclearlylaidout:landisexpensiveandinaccessiblebecauseoftheexisting limits to its free circulation as amerchandise and financial asset.Thesame‘thesis’isnolessclearinanIMFreportpublishedin2005,inresponsetotheMaldives’application foremergency financialaidafter the tsunami.Underthe heading ‘Recent EconomicDevelopment’, reforms to the financial system(including its opening to international capital flows), and land reformsintroducing systems of individual property and mortgages, are praised aspositive elements in the ‘homework’ theMaldiveswere expected todoon theroadtoeconomicliberalisation.25

Nonetheless, a 2014 report from the US State Department, analysing theeconomic potential of investment in the Maldives, offers an alternativeperspective.Itappreciatesthatthementionedreformsimplyimportantadvancestowards the consolidation of a system of registered individual property.However,itconsidersthat

there is little private ownership of land, and foreign investors cannot own land. The NasheedAdministrationdraftednew legislationon land reform that could result inmore trade andprivateownershipofproperty,butthebillispendinginParliament.26

Thedirection of the proposed reforms – towards the provision of land for thefinancialisation of real-estate markets – will certainly increase the supply ofparticular kinds of products, attracting more foreign investment. But lower-incomeMaldivians, unemployed people andmigrant workers – the categoriestodayenduringtheworsthousingconditions–areunlikelytobebenefitedbythereforms. The access to land and housing for all, regardless of social class orincome,isapositiveaspectofthetraditionalMaldivianlandallocationsystem–atleastforMaldiviansthemselves.However,thisisbeingjettisonedwithouttheproposalofanysubstitutemeasuretoprotecttheuniversalrighttohousinginthecountry.

ThecaseoftheMaldives,likethatofIndonesia,showshowprogrammesoflandreformwhich,inprinciple,aimtoincrementtenuresecuritytothecurrentoccupants,promoteeconomicdevelopmentandfightpovertymay,infact,betraythese promises. Under the aegis of a single market and the model of assetliberalisation, theconditionsofaccess to landandhousing for thepoorest and

mostvulnerablepeoplemaybeweakenedinsteadofstrengthened.Followingupthislineofthought,Iwillnowpresentthedebateaboutlarge-

scaletitlingpoliciesandtheireffects,alreadywellassessedworldwide.

TheMysteryofTitling(andPrivatisation):WhoBenefitsfromRegisteredTitles?

Thedebateaboutlarge-scaletitlingpoliciesandtheireffectsonpoorpeoplehasalready produced hundreds of studies and papers around the world, includingposition re-evaluations from agencies promoting this strategy, such asUSAIDandtheWorldBank.Wewillnotreproducethiswholedebate.

However,itisworthsummingupatleastsomeofthe‘findings’fromstudiesthat question and relativise the basic presuppositions of the utopic notion of‘capitalism for all’.This idea isbasedon the transformationof all bondswithlandandhousingintoone,thatofregisteredprivateproperty.Magicalthinkingaboutpropertyconsistsinthenotionthat,oncepoorpeoplehavetheirlandtitled,the market will take care of the rest. That is, the market will provideinfrastructureandservices toall,offerformalcreditandautomaticallyregulatethereal-estatemarket–whichwillbeinflatedbytheentryofthesenewassetsand clients. By this means, all families will obtain their own home and,moreover,willmakemoneyfromitspotentialmortgage.27Thisutopiaextendstorural land titling: thanks to land titles, ownerswill have access to agriculturalcreditand,throughinvestinginmechanisation,seedsandotherinputs,theywillbeabletoincreasetheirprofits.Overthelastdecade,tensofstudiesandpapershavequestionedtheseassumptions.Herearetheirmainarguments:28

1.LackofevidenceabouttheeconomicresultsoftitlingprogrammesGiventheintellectualandfinancialinvestmentsmadetodateinprogrammesforthe regularisation of informal settlements based on land titling, there is asurprisingdearthofindependentevidencetosupportorchallengetheapplicationof land titling as the most appropriate policy option to promote social andeconomicdevelopmentandreduceurbanpoverty.Thislackofevidenceisnotedin the synthesis report prepared by the Land Tenure Center (LTC) for landreformsundertakenbyUSAID,a leadingadvocateof land titlingprogrammes,whenitstatesthat

these findings are minimal with regard to the extent that projects achieved their objectives andtargets, and non-existent with regard to their long-term impact on landmarket development andsocio-economic development. The paucity of findings is due both to the lack of projectdocumentation, particularly end-of-project reports and final evaluations, and to the quality ofinformationprovidedinthereportsthatwereavailable.Thelackofpost-projectimpactevaluationstudiesmadeitimpossibletodeterminelong-termimpacts.29

At the same time,within the ruralworld, andespecially inAfrica, it hasbeendemonstrated that land registration had insignificant or no impact on ruralinvestmentoronitsinhabitants’income.30Evaluationsoftheformalisationandregistration of rural lands in former socialist countries also question if thesequence ‘land reform, titling, registration, emergence of land markets,consolidation, agricultural growth and efficiency increase’ did apply in everycountry,showingverydistinctresultswithinthedifferentcontextsinwhichtheregistrationpolicywasuniformlyapplied.31

2.Dopoorresidentsofinformalsettlementsstarttoaccesscreditinbanks?StudiesundertakeninPeru–oneofthefirstlarge-scaletitlingexperimentsàlade Soto, as well as in Colombia, Turkey, Mexico and South Africa –demonstratedthatthepresenceoftitleshadlittleimpactonpoorpeople’saccesstoformalcredit.Theargumentsinvolvenotonlythemaintenanceofbarriersthatimpedethisaccess;theyalsoquestionpoorpeople’sinterestinobtainingofficialcredit, given its implications. It requires the debtor’s submission to regularpayments and other conditions largely foreign to the economic strategies oflower-income groups.32 In Mexico, for example, settlement residents avoidformal credit, preferring arrangements with relatives and friends. Borrowingmoneyfromabankorgovernmentagencymeanslosingflexibility,whichisoneof the key incentives for people to choose to live in this kind of settlement.Residentscomparethepaymentofformalloanswithmonthlyrentpayments.33

3.Doesformalpropertyregistrationincreasetenuresecurity?Theliteratureoninformalsettlementshasalreadypointedoutthatsecuretenureisnotnecessarilyrelatedtotheexistenceofaformalregisteredtitle.Rather,itisrelated to the perception, political, cultural and social, of the possibility ofpermanence.34 In a study of informal settlements in Mexico, Ann Varleydiscussestheargumentthatlegalisationisnecessaryinordertoenablepeopletoimprove their housing conditions.35Without secure tenure provided by titling,residentswouldbefoolishtoinvestinimprovementstohousesfromwhichtheycouldbe later evicted.AsoneMexicoCityejido resident said in an interview

withVarley: ‘“With the regularisation,wemanaged to construct [improve] thehouse – there is no security without title.” However, he was the only personamongthemembersof150interviewedfamilieswhomadethisexplicitlink.’36

Inpracticalterms,themajorityofresidentsjustifytheirevaluationoftenuresecurityintermsofofficialtolerancetowardstheirsettlementsandtheexistenceor otherwise of infrastructural improvements. Consequently, people improvetheirhousesasandwhentheycanpayforthework,regardlessofwhethertheypossessaformallandtitle.37

4.Dotitlingprogrammesimprovethequalityoflifewithinthesettlements?Recentstudieshavecastdoubtontheurbanandsocio-economicsustainabilityofsettlements already legalised inMexico,Peru,ElSalvador andother countriesthatpromotedtitlingandregistrationprogrammes.38Becausethesewerelimitedtoestateregistrationandwerenotfollowedbyinvestmentininfrastructureandservices or by administrative and environmental regularisation, they failed toachievethesocio-spatialintegrationoftheseplacesintothecities.

TheinterestarousedbydeSotoandthesubsequentdebateproducedsignsofarethinkattheheartoftheinternationalcommunity.Forexample,BuckleyandKalarickal affirm that the previous consensus on this issue has changed,becoming more nuanced, as the majority of analysts and policy managersstoppedsimplyassumingthatformalisationnecessarilyincreasestenuresecurityand leads to collateralised lending.39 In the same document, Buckley andKalarickal also affirm that ‘it would be dangerous to promote formal titlingprogrammes as the sole solution necessary to solve the problemsof the urbanpoor as some have suggested.’40 In 2003,KlausDeininger proposed a sort ofauto-criticalrevisionofthepolicy,admittingthat:

It is nowwidely realized that the almost exclusive focus on formal title in the 1975 paper wasinappropriate,andthatmuchgreaterattentiontothelegalityandlegitimacyofexistinginstitutionalarrangements will be required. Indeed, issues of governance, conflict resolution, and corruption,whichwerehardlyrecognisedinthe1975paper,areamongthekeyreasonswhylandiscomingtotheforefrontof thediscussion inmanycountries.While therearemoreopportunities forwin-winsolutionsthanmayoftenberecognised,dealingwithefficiencywillnotautomaticallyalsoresolveallequityissues.41

Buckley andKalarickal also suggest that titlingdoesnot necessarilyboost theassetsofthepoor,affirmingthat‘whiletherearegoodreasonstoagreewiththeidea that improving property rights should be an essential part of the reform,there is also a range of practical problems that potentially reduce these

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seeminglylargegains’.42Amongtheseproblems,theylistthefollowing:

Titlingisoftenacostlyprocess.Itisnotjustamatterofformalisinginformalarrangementsthatalreadyexist.Veryoften,contradictoryclaimsofownershipsucceedtheannouncementsoftitlingprogrammes.Much of the land on which informal houses are built is obtained throughillegalsquattingonprivateproperty,andcompensationisnotpaidtoexistingowners.The broader web of societal contracts and constraints, as well as a widevariety of political economy issues, may well reduce the value given topropertytitlesinisolation.Atitleis lessvaluableif itcannotbeusedascollateral.Sucharesultoccurswheneverthereisnoeffectiveformalfinancialsystem,asisthecaseinmanydevelopingcountries.The anthropological perspective on tenure – that is, a continuum of tenurecategories with different levels of security of tenure – applies. Across thisspectrum,somemayvaluetitlesmuchmorestronglythanothers.43

Therewerenumerouscritiquesofthesinglemodelofindividualprivatepropertyforregistrationandtitlingprogrammes.TheGlobalLandToolNetwork(GLTN)– a partnership between UN-Habitat and other multilateral and bilateralinstitutions engaged in the development of instruments for land reformprogrammes, with the objective of fighting poverty and increasing tenuresecurity – proposed the concept of a ‘continuum of tenure categories’. ThesuggestionwasapprovedbytheUN-HabitatCouncilin2011.Althoughtheword‘continuum’ was intended to express the range and diversity of tenure, it isillustratedbyalineardiagram:anarrowpointingfromleft(informallandrights)to right (formal land rights).44Thecontinuumconceptwas rapidlyadoptedbycircleswithintheWorldBankandothercooperationagencies.45

However, the linear diagram has many implications. First, it placesindividual private property at the final point of the continuum (as the mostformal andmost secure formof tenure).This seems to suggest that registeredindividualprivatepropertyistheidealformat,theultimategoal,despitethefactthatmanyothercategories–inothertenuresystems–alsoofferhighlevelsofsecurity, legalityand legitimacy. Individualprivateproperty isnot, aswehaveseen,anunequivocallyguaranteedtenure,nordoesitnecessarilypavethewaytoeconomicdevelopment.

Moreover,byapproachingtheissuein termsofformalandinformalrights,

thecontinuumdiagramreflects thebinary thought thatpermeates thenarrativeaboutformsoftenureandbondsbetweenpeopleandthelandtheyoccupy:thedualities of statutory and consuetudinary tenure arrangements,46 legal andillegal,formalandinformal.

Aspreviouslynoted,tenurecategoriesareoftenpartiallyformal,recognisedorlegal,generatinglegallyobscurezonesandcombinationsoflegality,formalityandextra-legality.Thelevelofsecurityofferedbyeachofthetenurecategoriesdoes not always correspond to formalist or legalist readings of the existentarrangements; on the contrary, it can vary according to the political andsocioeconomiccontext.

ThepolicyrevisionundertakenbytheWorldBankandorganisationssuchasUSAID is important, and directly related to pressures from both socialmovements and human rights organisations. However, it did not prompt clearchangesin‘core’activities.Titlingprojectskeeponbeingfinancedbythebankand other multilateral agencies, on grounds that it is the choice of nationalgovernments. Of course, changes in sectorial policies take time to reachoperational and regional departments within an organisation as large as theWorldBank.Butitisimportanttopointoutthatthecritiqueoftitlingpolicies–expressed in 200347 – did not necessarily mean a retreat from the bank’seconomic-financial priorities. In 2006, an online discussion about propertyrights, organised by the World Bank’s Private Sector Development (PSD)Department, posed the question: Can informal property titling programmesguarantee increase of companies’ investments? From the answers, theDepartment concluded thatwhilemanydevelopingcountrieshad implementedtitlingprogrammes to ensureproperty rights, suchprogrammeswereoftennotsufficient to stimulate private sector growth.Thiswas because these countriesstill offered little security for investors. Evidently, sectors of theWorldBank,suchasFIAS(ForeignInvestmentAdvisoryService),aremoreconcernedwiththe environment offered by countries to a foreign investment capable ofstimulating the economy and using scarce land resources for ‘more efficient’uses,thanwithsolvingproblemsrelatedtotheinsecuretenureofthepoorest.48

Even within the documents addressing the critical revision of titling andregistration drives, issued by theBank’s ‘experts’, the evaluation is that theseprogrammes’ failurewasnotdue to theirunsuitability in transforming the landintocollateral,butbecausetherewereinsufficiencies:

Nevertheless, in most developing countries, where the capital markets are undeveloped and aspectrumofownershipstructuresexists,titlingalonewillnot‘unlock’capital.Whilesuchpropertyrightsmayoftenbeanecessaryconditiontodevelopafullyfunctionalhousingmarket,theyarenot

asufficientconditiontounlockthetrillionsthatarenowlockedupindeadassets.49

In the first part of this book, I set out to present several reforms of financialsystems designed to develop housing markets, considering the existence ofproperty rights as a necessary condition. Clearly, the policies of banks,multilateral and bilateral organisations can neither explain nor justify thewidespreadmovearoundtheworldtowardstitlingandregistrationofproperties.Inmanycountries,togranttitlesto‘informally’settledpeoplehasnotonlybeenaresponsetopressuresfromthesecommunitiesbutalsoawayofpreservingthemodelofterritorialexclusion.Wecanonlyfullygrasptherangeofstakeholdersinvolvedinthematteroftitling–includingthepotentialwinnersandlosers–byexaminingeachsituationindividually.

However, this more global view – seen through the strategies of banks,multilateral and bilateral organisations – shows how a policy aiming to ‘fightpoverty’ and combat ‘insecurity of tenure of the poorest’ also became amechanism for increasing the exposure of the poorest to processes ofdispossession.Thishappenedbecausethepolicyaffirmedthehegemonyandthepredominance of private property over all other forms of tenure and gave itpreference in urban transformation processes. However, it is only possible tounderstandhowthisoccursincitiesbyexaminingtherolethatland–andlandmarkets–playinthewiderprocessesofurbantransformationthathaveunfoldedinpreviousdecades,undertheaegisofthesamemacroeconomicpostulates.Thisiswhatwewillexaminenext.

11InsecureTenureintheEra

ofLargeProjects

Chengdu,China,2013FuLiangparkshisbatteredcarinfrontofGoldenLakeshore,asetofluxuriousvillaswhosesalesroom,decoratedwithchandeliersandvelvetfurniture,evokesthe fantasy of aristocraticTuscany. ‘Here iswhere I used to live’, he says. In2010, after being threatened by militia and having received from the localgovernment nine yuan per square metre of his small plot – where he kept acommercial fish-breeding tank – Fu Liang had to leave. The municipalityquicklyresold theplot toa real-estatedevelopmentcompanyfor640yuanpersquaremetre.After concluding theirTuscan fantasyproject, the companywillsellthevillasfor6,900yuanpersquaremetre.MrFuLiangisnowunemployed.He is one among tens of thousands of peasant farmerswhoonce lived on theedgesofChengdu,SouthwestChina.1

Fu Liang’s story can be repeated ad infinitum. It essentially reveals the‘saint’ behind the Chinese urban miracle. The arrival of infrastructure andhousing developments transform scrubby fields owned by small farmers intoprosperouscitieswithgigantictowers.Thosewhovisit thecountryandmarvelat Chinese competence are probably unaware of the predominant form offinancingmunicipalinfrastructureexpansionandlocalreal-estatedevelopment.Publiclandissoldorleasedtoprivatereal-estatedevelopmentcompaniesandtopublic–privatepartnerships(PPPs)withinvestorsininfrastructureprojects.Thelandis‘acquired’formuchlessthanmarketvalue,throughtheexpropriationofmillionsoffarmersandurbanresidents.Thecollectivefarmsandstatelandshadalready been privatised in 1998,when land reforms granted property rights totheir occupants for thirty years.According to a study carried out in seventeenChinese provinces by the Landesa Rural Development Institute in 2011, the

indemnitiesforrurallandexpropriationspaidbythegovernmenttotheirownerswereworth, on average, around 2 per cent of theirmarket value. Public landexpropriationhasbeen themainsourceofmunicipal income,notonly throughitsleasingtoprivateinvestors,butalsothroughitsuseasacollateralforloans.The sale and leasing of expropriated lands represented 26 per cent of totalmunicipalbudgetsin2010,accordingtotheMinistryofFinance.Insomecities,theyaccountedfor60to70percentofmunicipalincome.2

ThismodelcanbefurtherillustratedbythecaseoftheconstructionofaringroadaroundChangsha,thecapitalofHunanprovince.Tobuildthishigh-speedmotorway, themunicipality used theRingRoadCorporation, a public–privatejoint venture listed on the Shanghai Stock Exchange, but whose equity iscontrolledbytheHunanlocalgovernment.ThecityofChangshatransferredtothe Ring Road Corporation the right to use and build on a strip of landmeasuring 200 metres to either side of the 33-kilometre motorway, totalling3,300hectares.Tokick-start theproject,halfof theworkwas financedby theleasingofthislandafterithadbeenduly‘cleared’ofitspreviousoccupants.Theother half was leveraged by the Ring Road Corporation through loans fromChina’s Development Bank and commercial banks, using as security theanticipated value of the remaining land once it had beenmade accessible andvaluablebythenewinfrastructure.InChina,citiescannotacquireloansdirectly.Instead, theyissuea‘comfort letter’ toprivatebanks,attestingthat thepublic–privatecorporationwillbeabletopaytheirdebtthankstothefuturereal-estatedevelopmentspledgedbythecity’splanningauthority.3

Thesamemodelispresentinvariousurbaninfrastructuremegaprojects,suchastechnologicalparksandprototypesofindependentandself-governedcitiesinIndia.ItfrequentlycropsupinBangalore,theregioninwhichIndia’sITindustryisconcentrated.Oneexampleis theBangalore–MysoreInfrastructureCorridor:theconstructionofasix-laneexpresswayconnectingBangaloreandMysore,thesecond most populated city of Karnataka. The project is operated by NICE(Nandi Infrastructure Corridor Enterprises), a trust of Indian and NorthAmerican companies and investment funds. Spread over the 130km of theexpressway, five new private towns will be built, each boasting a corporatecentre, business park, shopping centre and museum of ‘ecology and culturalpatrimony’ – to preserve thememory of a rural life that the projectwill havedestroyed.Afterexpropriating the farmersat rural landprices, thegovernmentleasesthelandtothetrustforUS$5peracre.Aftertwentyyears,theexpresswaywillbeownedby thegovernment,but the townswill remainprivate. In2007,DLF – one of India’s major real-estate development companies, which had

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recentlyconcluded thecountry’s then largest IPO–went intopartnershipwithDubai World, the investment and joint ventures arm of the UAE sovereignwealth fund.Together theywon the bid to build and exploit one of the townswithanofferofUS$15billion.ItwascertainlynotthehighwaythatattractedtheUSandUAEinvestors,but thevalue‘unlocked’bythetransformationofruralKarnataka into urban real-estate.MichaelGoldman analyses the current urbantransformationbehindIndia’svaunted‘rising’asaglobaleconomicpower,anddesignatesBangalore’surbanpolicy‘speculativeurbanism’.4

Theschemepresentedabovedemonstratesthenewroleofurbanlandwithincities’ financialisedproduction. It isnotonlyaquestionofmarketcompetitionforlocation,orofpermanentpressuresinfavourofasupposedlymoreprofitableuse of land. Rather, it is a new form of land agency,which combines privateinvestment in infrastructure and real estate. This combination is promoted bycorporations that bundle engineering with financial products and themanagementofbuildingprojects.Global investment in infrastructurehasbeenthe strategy of large sovereign wealth funds, such as the China InvestmentCorporation, AbuDhabi InvestmentAuthority andDubaiWorld, emulated bybigpensionfunds.5

Morerecently,private investment funds increased theirparticipation in thissector: in the third trimesterof2009alone,more thanUS$7billionof foreigninvestment migrated to India’s newest speculative capital instrument – urbaninfrastructure funds. These funds are managed by Citigroup,Morgan Stanley,Goldman Sachs, Blackstone Group and D. E. Shaw: the very owners of thederivativesandhedgefundsthatsanktheglobaleconomyin2007–08.6

ThecasesofbothChinaandBangaloreserve toproclaim thenew logicofcityproduction,particularlyintermsofpublicinfrastructure.Thisiscomposedoffiveelements:

Giventhatlocalgovernmentscannotrunintodebt,theyappealto‘innovative’mechanismstofinancetheexpansionoftheirinfrastructure;Landismobilisedtoleveragefinancing,asitensuresafutureincomeflow;Theinvestor’sprofitsthedifferencebetweenwhattheypaidforthelandandthevaluethatitcangenerateinthefuture;Thenecessityandthescaleoftheprofitdefinethefutureuseofthelandand,thus,thecontentoftheproject;Thefateofthosewhopreviouslyoccupiedthelandisirrelevantinthismodel.Itisthegovernment’sresponsibilitytodeliver‘cleared’land.

We shall now examine each of these elements and their progressivetransformationintocogsofthedispossessionmachine.

NewFormsofMunicipalFinancing

Productive restructuring and fiscal adjustment eroded local economies and taxbases. Literature about the impact of neoliberalism on urban policies hasidentified the emergence of ‘municipal entrepreneurship’ as a response to thisphenomenon.Citygovernmentsabandonedtheadministrativeviewpredominantin the 1960s in favour of a more ‘entrepreneurial’ action in the 1970s and1980s.7Thecontextinwhichtheydidsowashighlycomplex.Ononeside,theyfaced: monetary chaos in the geo-economic environment; speculativemovementsoffinancialcapital;multinationalcorporations’globalstrategiesforlocalisation; and intensification of the competition between localities. At thesame time, the retraction of welfare-state regimes and intergovernmentaltransfers imposed limits on the financing of urbanpolicies.On the other side,neoliberal programmes of deregulation, privatisation and reduction of publicspending also impingedon local governments’ agendas.Therefore, their urbanpolicies became real-life laboratories. The experiments were many, including:citymarketing;specialzonesforeconomicpromotion;globalmegaprojects;andorganisationoflocalcorporationsforurbandevelopment.8

So-called ‘public–private partnerships’ are among the most popular recentstrategiesforthemanagementandpromotionofurbandevelopment.Theydateback to the 1980s inNorthAmerican cities, and quickly spread to theUnitedKingdomandEurope.They thenstarted to featureon theagenda for technicalcapacity-building and knowledge dissemination pursued by the cooperationorganisations’thinktanks.

PPPs have been progressively mobilised in infrastructure modernisationprojects directly linked to the competitiveness of urban systems. Thejustificationisnotonlytheshortageofresourcestofundprojects,butalsolocaladministrations’supposedlackofthetechnicalknow-how,agility,flexibilityandmanagementcapacityrequiredtoimplementverycomplexundertakings.9

In 1999, the World Bank created a specific advisory body – the Public–Private InfrastructureAdvisoryFacility (PPIAF)– financedbyvariousdonors,including USAID, European cooperation agencies, Japan, Australia and theAsianDevelopmentBank.PPIAF’srolewasto‘providetechnicalassistanceto

governments in developing countries in support of the enabling environmentconducive to private investment, including the necessary policies, laws,regulations,institutions,andgovernmentcapacity.Italsosupportsgovernmentstodevelopspecificinfrastructureprojectswithprivate-sectorparticipation.’10

The mobilisation of public land in order to finance infrastructure throughPPPsisoneofthepiecesof‘capacity-building’providedbyPPIAF.Itis,infact,oneofthemainsuggestedstrategiesforthepromotionofurbandevelopmentindeveloping countries. Katherine Sierra – World Bank vice president forsustainable development, the department covering the bank’s urban sector –definedtheadvantagesofthisstrategyasfollows:

Manycitiesindevelopingcountrieshaveunderusedpubliclandsthatwouldbemorevaluableifsoldandconvertedintoinfrastructureassets…Aspartoftheoverallfinancingmix,usinglandassetsforinfrastructure finance has several advantages. Most instruments of this type generate revenuesupfront, making it easier to finance lumpy investment projects. Mobilizing finance from landtransactionsalsogeneratespricesignalsthatincreasetheefficiencyofurbanlandmarketsandhelprationalizetheurbandevelopmentpattern.11

Despiteallthetalkofthefiscalcrisisandtheprivatesector’ssuperiorcapacityto attract capital, shoulder risks and introduce competitiveness and efficiency,therealityisthaturbanPPPs–whicharegenerallyundertakenformegaprojectsofurbandevelopment–are,almostwithoutexception,conductedandfundedbythe state. The risks are assumed by the taxpayer, who is also generallyresponsibleforcoveringdeficitswhentheyoccur.

According toKatherineSierra’s above-mentionedpresentation, abeneficialside-effect of land mobilisation toward megaprojects is to ‘signal’ a moreefficientand‘rational’allocationofurbanlandinthecity.Thiswouldeliminateless lucrative formsofoccupation,or formsunder thecontrolof socialgroupsincapableofusinglandasafinancialasset.

Publicland,then,acquiredthroughthestate’spowerandadministeredbyit,has a fundamental role. According to Deininger, once more in a documentproducedbytheWorldBank:

Thestate, especially indevelopingcountries,often lacks thecapacityneeded tomanage landandbring it to its best use. Nevertheless, surprisingly large tracts of land continue to be under stateownership and management. In peri-urban areas, this can imply that unoccupied land of highpotential lies idle while investment is held up by bureaucratic red-tape and non-transparentprocessesofdecision-makingthatcanattractcorruption.Experiencedemonstratesthattransferringeffective control of such land to the private sector could benefit local governments, increaseinvestment,andimproveequity.Wherepubliclandhasbeenoccupiedbypoorpeopleingoodfaithforalongtimeandsignificantimprovementshavebeenmade,suchrightsshouldberecognisedandformalizedatanominalcosttoavoidnegativeequityoutcomes.Incaseswherevaluableurbanland

ownedandmanagedbythestateliesunoccupied,auctioningitofftothehighestbidderwillbetheoption of choice, especially if the proceeds canbe used to compensate original landowners or toprovidelandandservicestothepoorattheurbanfringesatmuchlowercost.12

Asalreadymentionedat thebeginningof this section, thebasisof speculativeurbanism’ssuccessisthedifferencebetweenthepricepaidfortheoccupantsto‘liberate’ their landand the land’sexpected futureyield.So, theacquisitionofpubliclandsforaslittleaspossibleiscrucialtothis‘success’.Inwhatwayandthroughwhichmechanisms thishappens indifferentcountrieswillbe thenextfocusofanalysis.

DispossessionasaStrategyforMultiplyingValue

Thevariouswaysof acquiringpublic land– aswell as the juridical apparatusthat sustains expropriation (or its absence) – are deeply dependent on thepolitical relationship established between the expropriating state and theexpropriated individuals or communities. In general, compulsory purchase or‘eminentdomain’–thestate’ssovereignrighttotakeprivatepropertyforpublicuse–areestablishedwithinthelawsandstatutesthatregulatetheacquisitionofpublicland.

InthecasesofChinaandIndia–examinedatthestartofthischapter–wesaw situations inwhich therewas a clear asymmetry of power between thosebeingexpropriatedandthosepromotingtheproject.Theweaknessoftheformerinnegotiatingfortheirlandsresultsfromacombinationofelements:theurgentneed for money – thus, vulnerability and propensity to accept lowercompensation; ignorance concerning their rights; lack of access to specialisedlegal services; and clearly – in the Chinese case – authoritarianism, even theviolenceofparamilitarythreats.

In the following examples, the main mechanisms emerge through whichcertaincategoriesoflandownersare‘weakened’andmadeintotheeasiest,mostlucrative targets for dispossession. The forms through which indemnities aredefined–aswellasthereasonsthatcanjustifythedeprivationofproperty–arethe central elements of thismechanism.13 Next, I will present a few concretecasesofexpropriationprocessesandnormstodemonstratemypoint.

Indonesia

As seen in the previous chapter, parts of Indonesia’s informal settlements areparticularlyexposedtoforcedeviction.Theyarelocatedinthetanahterlantar,orpublicwaste lands– forexampleunderbridges,on riverbanksoralongsiderailways.Thetermappearedin1998,duringtheeconomicrecession.The1997Asian crisis had a heavy impact on Indonesia.At its height, the state allowedhomeless people to settle in these places as a temporary solution toaccommodate hundreds of unemployed from the industries that had gonebankrupt. Tanah terlantar would also include public lands assigned todevelopmentprojects–forexample,inKemayoran,Jakarta’soldairport(whichclosedin1985),whereresidential towers,offices,golfcoursesandhotelsfromlarge international chains weremushrooming. Between 1998 and 1999, whilewaiting for investors to recover from the impact of the financial crisis, thegovernmentpermittedseveralfamiliestosettleincertainpartsofthearea.Afewyearslater(2004–05),theoccupantswereevictedwithoutcompensation.14

Some of these settlements are reasonably well-established, like otherkampung–especiallytheoldestcommunities,onthebanksofurbanriversandreservoirs.ThoseliningtheCiliwungRiverinJakarta(withmorethan200,000inhabitants),theStrenkaliRiverinSurabayaandtheCodeRiverinYogyakartaare examples of settlements that have flourished for decades. But in 1993,national environment protection legislation defined the minimum distancebetweenconstructionandtheriversas15metres,andthesesettlementsstartedtofindthemselvesinapositionof‘illegality’eversince.Whenthe1997financialcrisis postponed the implementation of this rule, these and other settlementswere able to remain. However, in 2007, the large floods that hit the countryagaintransformedthesecommunitiesintotargetsforexpulsion,reinforcingtheirstatus as ‘trespassers’. The distinction between these and other informalsettlements is important. In the case of eviction, those kampung residentsholding ‘land certificates’ are entitled to monetary compensation, alternativelandorenrolmentoninsituregularisationschemes.Forriverbankresidents,theonly option is the rusunawa policy: low-cost rental apartments in high-risebuildingsconstructedbythegovernmentontheperipheryofcities.Therearenotenough such apartments to meet the demand of hundreds of thousands offamilies.15

Therefore, thisdistinctionhasadirect impacton theevictioncost. Inotherwords,itaffectsthepricetobepaidto‘clear’theinformallyoccupiedlandand,eventually,transferittootheruses.IntheIndonesiancase,althoughtheneedforevictionisconsensual,therearedifferentideaswithinthegovernmentaboutthefuture use of the ‘cleared’ lands: on one side, some argue that they should

becomegreenspaces;ontheother, theMinistryofPublicHousingis intentonusing part of these areas to promote their policy of large-scale houseconstruction throughmarket andmortgage credit. It is no coincidence that, inIndonesia’s contemporary urban and housing policy, there is a convergencebetween the launch of titling programmes, the establishment of a policy ofhousing financialisation (through a secondary mortgage market and a line ofmortgage credit called Liquidity Facility for Housing Finance) and thecriminalisationoftheoccupationofcertainareasofcities.

The banks of the Code, in Yogyakarta, were defined by the country’splanninglawsasanareaofpreservationofhydricresources,andthusprohibitedfromresidentialpurposes.Thecaseoffamilies living there is representativeofthe issue’scomplexity: in2011,more than53percentof themhadlived thereformorethantwenty-fiveyears–sincebeforethedefinitionoftheareaastanahterlantar,andbeforetheenvironmentallegislation,bothdatingfromtheendofthe1990s.However,only38percentheldacertificateoflandownership;9percent held a right to use the property; 12 per cent had the status ofmagersari(authorisedtostaybyYogyakarta’ssultan,whotodayisalsothegovernor);and41percentpaidrenttooccupyhousesorbedrooms.16

Inthemid-1980s,thearchitect, theologianandwriterRomoMangunwijavaled a participatory project of community rehabilitation, opening public spacesand introducing sanitation and waste collection. Residents were involvedthroughgotongroyong(self-governance)alongsidetheparticipationofvolunteeractivistsandstudents.TheprojectwontheAgaKhanAwardforArchitecturein1992.17

TheideaofconsolidatingasettlementliketheCodeRiver–whichwasseenasaviablepossibilityinthe1990s–is,today,submergedunderthenarrativeof‘protection’oftheenvironmentand,thus,ofhumanhealth.Thistransformsanyattempttoresistintoanactofirresponsibility.Today,theadvancesandretreatsof eviction actions are permeated by the environmental protection theme, therisksassociatedwithclimatechangeandnaturaldisasters.

Under these circumstances, perhaps no low-cost dispossession system ismore eloquent than that of the Turkish programmes for the clearance ofgecekondus.

Turkey

Gecekondu iswhat informalsettlementsarecalled in Istanbul, Izmirandothermajor Turkish cities. Gecekondular appeared in the mid-twentieth century,duringthecountry’smodernisation,ashomesforthelargepopulationmigratingfrom the fields to the cities to take up the new industrial employmentopportunities. Although produced by their own residents, gecekonduneighbourhoods’ relationship with the government was marked by tolerance,ambiguity, amnesty, consolidation propositions and, on many occasions, bytitlingprogrammesforresidents.However,thepicturehaschangedsince2003.The AKP government and President Recep Erdoğan restructured production,carriedouturbanadjustmentsandimplementedneoliberalpolicies.18

In Istanbul – as in Izmir andothermajor cities – largeurban restructuringprojectshavebeenunderway.Theseprojectsmotivated interventions inurbanareas occupied by gecekondular, through wholesale eviction plans or in situreconstruction of apartment blocks supplied by the formalmarket. Toki – theagency for the promotion of housing founded in 1984 that initiated theseventures–wasradicallyrestructuredinthe2000s.Itbecamethecountry’smostpowerful real-estate development agent, responsible not only for theadministrationofallpublicland,butalsoformanagingtheurbanplanningandzoning of these lands. Toki was also in charge of promoting real-estatedevelopment in theseareas,eitherdirectlyor throughpartnershipswithprivatedevelopmentcompanies.19 Since 2003, the agency has produced 541,000 newapartmentsin1,350locations–morethanhalfasreplacementsforgecekondular–andplanstoproduce500,000morebefore2024.20

Toki’sinterventioninthesettlementswas‘eased’bylegalmeasuresdecreedby the government: declarations of emergency and demarcation of land weremadeafterthe1999earthquake,withtheuseofdecreesestablishedsince1978.The government identified high-risk areas and, from 2007 on, ordered thedemolitionofbuildingsortheirreplacementwithearthquake-resistantstructures.In2004,Turkey’sPenalCodelabelledtheconstructionofinformalsettlementsacrime, punishable by five years in prison. These measures contributed to thetransformationofgecekonduneighbourhoods’roleintheurbannarrative:fromaplaceforpoorworkers,intoaplaceforspongersengagedineverykindofillegalactivity,includingterrorism.21

Formally, the expropriation procedure has numerous stages, from a firstproposalforthebuilding’sevaluationbymunicipalfunctionaries,toaneventuallegal process if no agreement can be reached between the authorities and theresident.Compensationcanbetakenincashorusedtopart-financeanapartmentwithToki’shousingprogramme. In somecases, especiallyon theperipheryof

cities,thenewhomesbuiltbytheformalmarketundermortgagesystemsmaybelocatedinthesameareaasthedemolishedsettlements.Inothercases,involvingprimelocations,theonlyoffertogecekonduevicteesisanapartmentmilesaway.In fact, the expropriations have been conducted through case-by-casenegotiations, under pressure from the closure or demolition of local publicamenities,threatsfromfunctionariesinchargeofthenegotiationandotherformsofduress.Thesemethodsaimtoforceresidentstofindasolutionfasterandinamoreadvantageousway–forToki.22

The new policy towardsgecekondu neighbourhoods underlines the role ofthedispossessionofinformalsettlementsasaformoflow-costlandacquisitionfor real-estate development projects through PPPs. It also flags up anotherdimension of land and housing financialisation, combining the ideas in thischapterwiththosesetoutinpartoneofthisbook.IntheTurkishandIndonesiancases,itisnotaquestionof‘displacing’thepoor,butofsimultaneouslyturningthe territory they occupied into saleable assets and pushing them towards thenewmortgagemarket.Notonlydotheir landsbecomecommodities, therefore,buttheirlives–withallthattheyinvolve–areturnedintomortgagedlives.23

TheTurkishcasecastslightonhowrisksassociatedwithnaturaldisasters–in this case, earthquakes – can be made to serve seemingly straightforwardarguments that selectively definewhat should be demolished andwhat shouldremain;whoshouldbedisplacedandwhoshouldnot.AnewlawgoverningtheTransformationofAreasunderDisasterRiskwasproposedby thegovernmentand approved by Parliament in 2012. It grants full powers to the centralgovernment torealiseexpropriations‘underanemergencyregime’ inbuildingsorneighbourhoodsconsideredatrisk,allowingdemolitionswithoutnegotiationwith theowners.Thismethodhadalreadybeenusedby the2006Law for theProtectionandPreservationoftheHistoricPatrimony,supplyingthelegalbasisfor the demolition of almost all the buildings in Sulukule. This historicneighbourhoodofIstanbul,largelyinhabitedbyRomanipeoplebefore,wassoongentrified.Vulnerabilitytoearthquakeswasalsomobilisedhereasanargumentformassdemolitionsandevictions,evenif,accordingtoexperts,theriskwasnogreaterthaninanyotherpartofthecity.24

Thethemeof‘risk’associatedtolow-costlandacquisitionanditstransfertomorelucrativeprojectsalsocharacterisestheexperienceofthereconstructionofcitiesinthewakeofnaturaldisasters,suchasfloodsandearthquakes.

Post-DisasterReconstructionandDispossessionMechanisms

‘Living in risk’washowLúcioKowarickdefined the socioeconomic,politicalandcivilvulnerabilityofahugenumberofpoorpeopleincitiesintheNorthernandSouthernhemispheres.25Fromthisconcept,Iborrowtheideathatthemanydimensions of precariousness multiply, making the most vulnerable, such asthose living inpovertyorwith insecure tenure,more likely to live indisaster-proneareas;theyarealsoatgreaterriskofdisplacementandlossoflivelihoodintheeventofadisaster;anditistheywhowillrecoverwithmostdifficulty.

Aspreviouslyanalysed,thespacephysicallyandsociallyoccupiedbythesepopulations causes (or, at the same time, results from) discrimination. Thiscompromises theabilityof individualsandcommunities toprotect themselves,and to recover, from disasters. The discrimination against communities indisaster-response contextsmay not be immediately apparent. Indeed, the term‘naturaldisaster’concealsthesocialprocessthatconstructedtheareaatriskandthatdefinedhow,whyandunderwhatconditionsithadbeenoccupied.

Evidence of the above statement abounds.WhenHurricaneKatrina struckNewOrleans in2005,AfricanAmericansandpoorpeople (the twocategoriesoverlappingtoalargeextent)borethebruntofthedevastationbecause,forthemostpart,theylivedinthelower-lying,moreflood-pronesectionsofthecity.Inaddition,becauselargenumbersofthemetropolitanarea’spopulationwerepoor,theylackedthemeanstoescapetheflood.26Theparticularimpactsandcostsofthehurricanewere therefore intimately linked topre-existing social, economicandland-usepatterns,directlyrelatedtohousingandurbanplanningpolicies.

Post-Katrinaresponsesbythefederalandstategovernmentsweregenerallyfound wanting when it came to supporting lower-income renters —predominantlyAfricanAmerican—andaddressing therangeofobstacles thatpreventedthemfromaccessingaffordablehousing.Despiteafederalprogrammeof housing vouchers, in practice, familieswith rent vouchers had difficulty infindingplacestorent.Thereasonsincluded:publicandrentalhousingshortages(duetostormdamage,butalsotosubsequentdecisionstomassivelycullpublichousing); rent increases; discrimination by landlords; the slow pace of rentalhousingconstruction;andthedecisionbyGulfCoaststatestodirectthebulkoffederal funds towards repairinghomeownerunits rather than rental ones.Withverylimitedrentingoptions,manyfamiliesweredefactodeniedreturntotheircityandformerhomes,resultinginaspikeinhomelessness.27

The destruction of much of New Orleans’s housing stock by Hurricane

Katrinawasreallyseenasanopportunitytofundamentallyalterthehousingandurbancharacteristicsofthecity.Itisnoticeablethatthecity’sfourlargestpublichousing projects (the so-called Big Four), that used to shelter predominantlyAfro-American residents, were demolished to make way for requalificationprojects,designedformixed-incomecommunitiesamongotheruses.Evenifinsome cases therewas probably no alternative, due to the gravity of structuraldamage to the buildings, the demolitions were framed as necessary for therecoveryofthecityandforhealthandsafetyreasons.28Aproblematicaspectofthenewhousingprojectswasthattheycontainedfarfewerpublichousingunitsin comparison to the amount available before Hurricane Katrina.29 Thedemolitionwasafurtherimpedimenttothereturnoflower-incomeresidentstoNewOrleans.30

InHonduras,inthewakeofHurricaneMitchin1998,thedisproportionatelyaffectedgroupsincludedpoorwomen,peasantsandindigenouspeople,manyofwhomhadbeenlivingunderinsecuretenureconditionsandinvulnerableareasexposedtostrongwinds,floodingandlandslides.31

IntheaftermathofthePakistanfloodsof2010,itwasacknowledgedthatthepoorandvulnerableborethebruntofthecatastrophe,havingnoassetsorsafetynets.Thosedisplacedbythefloodswholostalltheirpossessionsandmeansofsubsistenceconsistedmostlyoflandlesstenantsandlabourers,livinginnon-orsemi-permanent housing.32 Similar limitations appear in the post-disasterevaluations.While conditionspertaining to tenure and landownershipmaybediscussedandrecognisedasimportantinprinciple,inpractice,theyareseldomaddressed by policies, strategies and sectorial priorities. For instance, in thedisasterneedsassessmentcarriedoutby international financial institutionsandthegovernmentofPakistanfollowingthefloods,thehousingproposalsmadenomentionoflandownershiportenureissues,butfocusedonlyonthetechniquesandcostsofreconstruction.Theassessmentdidnotconsiderthatforthosewhohad been most significantly affected, the problem was not the roof, but theground.

The earthquake inHaiti exacerbated andmade visible a hitherto relativelyinvisible problem, namely, the dire conditions of the informal settlements inwhichthemajorityofthePort-au-Princepopulationlived.Thesettlements,likemany others elsewhere, had arisen spontaneously and never been formallyrecognised by the authorities. They had little or no basic infrastructure orservices. After the earthquake, many residents moved into camps – whetherbecause theirhomesorneighbourhoodshadbeendamagedordestroyed,or inorder tobeable to receivefoodormedicalassistance, to takepart incash-for-

work programmes, to save on rent (in the case of renters) or in the hope ofreceivingahouse.

Sixteenmonthsaftertheearthquake,therewerestill634,000peopleinover1,000 camps.Observers noted that the camp populationswere decliningmoreslowly than in 2010, suggesting that people had nowhere else to go or haddecidedthat,howeverprecarioustheirsituationinthecamps, itwasstillbetterthanwheretheycamefrom.33Theearthquakethushighlightedlong-entrenchedpatterns of discrimination and neglect. Disasters elsewhere have had similareffects.

The response to disasters appears to differ greatly according towhether itaddressesthesituationofindividual,formallyregisteredproperty-ownersorthatofpeoplewithanyothertypeoftenurearrangement.

It has been noted that inmost housing reconstruction programmes, tenuredocumentation and legal proof of rights are prerequisites for establishingbeneficiaryeligibility,with theconsequenceofexcluding thepoorestandmostvulnerable, including those residing in informal settlementswith temporary orinformal rights of tenure. In a number of countries, displaced renters andsquatters often find themselves excluded from permanent housing schemesdesigned to replace the assetsofhomeowners.The same thing is replicated inpost-disasterneedsassessments.

Theaboveexamplesshowhowdiscrimination,asmuchasvulnerability,isakeyfactorbearingupondisaster impactandresponse.Discriminationbasedontenurestatushighlightsabroaderproblem,namelythereluctanceorinabilityofgovernments, international and national organisations alike to adequatelyrecogniseandprotectallformsoftenureequally.

It is often said that disasters, by creating a ‘clean slate’, offer preciousopportunities forwholesale reform and ambitious redevelopment.Disasters dopresentopportunities,butalsoseriousrisks.

The2004IndianOceantsunamiwasseenbymanyasamajoroccasionforredevelopment, sometimes under the guise of public safety and disaster riskmitigation. In the aftermath, coastal zones where housing reconstruction wasbanned (buffer zones) were introduced by various countries affected by thetsunami; they ranged from 100 to 500 metres wide and, in some places, ifimplementedfully,wouldhaverequiredtherelocationofover100,000houses.34Thezoneswerepurportedlydeclared toprotect residents fromfuturedisasters.But they had major repercussions on the livelihoods of residents, especiallythosewhoreliedontheseaforaliving.

At the same time, ambitious plans for ‘redevelopment’ and luxury tourism

emerged, including for those coastal areas closed off to residents for ‘safety’reasons. Sri Lanka’s tourism board announced at the time that the tsunamioffered an opportunity to make of its country a ‘world class tourismdestination’.35Itwasreportedthatwhiledisplacedpersonswereforbiddenfromreturningtotheirhomes,thesameprohibitiondidnotapplytohotelcomplexes.In some places, land developers simply used the opportunity to grab land,especially from themost vulnerable communities. Luxury hotels sprang up inmany coastal areas. Communities and civil-society organisations complainedthat the creation of buffer zones was used to arbitrarily evict poor coastaldwellers and indigenous communities, to the benefit of businesses and newtourismfacilities.36

InChile,followingtheearthquakeandsubsequenttsunamiofFebruary2010,theprivatesectorreportedlyplayedacentralroleinthereconstructionofurbancentresandcoastalareas.Followingoneof themainprinciplesof thenationalreconstruction plan, families could choose whether to rebuild their collapsedhomeonthesamesiteortoacquireapreviouslyexistingornewlybuilthouse.However,ashousingreconstructionwasoverwhelminglysupportedbysubsidiesattachedtoindividualproperty,privateconstructorspreferredtorebuildhousinginnewareason theoutskirtsof towns, rather than in the inner-cityareas fromwhichmanypeoplehadbeendisplaced,wherelandandhousepricesweremuchhigher.

The above examples demonstrate that ‘living in risk’ – the condition ofoccupation by vulnerable populations of areas struck by disasters – can bequicklyconverted intoanactivationofnew landreserves,under thepretextof‘rebuilding better’. This can be another one of the many mechanisms ofdispossession.

Megaprojects,Mega-EventsandDispossession

Aspointedout in thebeginningof thissection, it is theneedforrevenuefromthefinancialcapital invested inurbantransformationprojects thatdefines theircontent.Therefore,itisnotaquestionofimplementingurbantransformationsastoolsforthestrategiesandplansofthecities’futuredevelopment,basedonandansweringtotheircitizens’needs.Itis,infact,inthewordsofFrançoisAscher,an ‘adhocurbanism’,37whichprivileges thenegotiationover the rule and thecontractoverthelaw.

An abundance of literature on large projects and the transformation ofmodern urban planning in the neoliberal era has identified how essential suchprojects have been for the competitive repositioning of cities facing theeconomictransformationsofpost-Fordistcapitalism.38

Nevertheless,morethanreaffirmingthisroleorbringingtolightnewcasesfor study, for thepurposesof thepresentbook it ismore interesting to pose aquestion.Corporatetowers,museums,culturalsites,luxuryhotelsandshoppingcentres become the object of these macro-projects, produced with a kind ofmore-of-the-same-posing-as-a-unique-work ‘stamp’.Butwhythesepostmodernlandscapesspecifically?That is,whatare thekeyelementsof theseoperationsthatposition themasnew formsofproductionofbuilt spaceandgovernance?Whatdifferentiatesthemfromtheordinaryreal-estatedevelopment,valorisationandspeculationthathavealwaysdefinedurbancapitalistproduction?

Until now I have focused on dispossession procedures – or, in Harvey’swords,proceduresof‘accumulationthroughspoliationofthepoorest’sassets’.39Ihavealsodemonstrated theway inwhich landcapturingbecameanessentialmechanism for the expansion of finance capitalism. However, in themegaprojects,Iwillidentifythe‘umbilicalcordthattiestogetheraccumulationby dispossession with the construction of the hegemony of finance capital,backedasever,bystatepowers’.40Indeed,ifmegaprojectsbecameoneofthe

most visible and ubiquitous urban revitalization strategies pursued by city elites in search ofeconomicgrowthandcompetitiveness,wealsoinsistthatitisexactlythissortofnewurbanpolicythatactivelyproduces,enacts,embodies,andshapesthenewpoliticalandeconomicregimesthatareoperativeatlocal,regional,national,andglobalscales.Theseprojectsarethematerialexpressionofadevelopmentallogicthatviewsmegaprojectsandplace-marketingasmeansforgeneratingfuturegrowthand forwagingacompetitive struggle toattract investmentcapital.Urbanprojectsof thiskindare,therefore,notthemereresult,response,orconsequenceofpoliticalandeconomicchangechoreographedelsewhere.Onthecontrary,wearguethatsuchUDPsaretheverycatalystsofurbanandpoliticalchange,fuellingprocessesthatarefeltnotonlylocally,butregionally,nationally,andinternationallyaswell.41

Local studies of urban megaprojects in Italy and India have alreadydemonstrated how their implementation was a ‘lived’ process of economic-politicalrealignmentforlocalstakeholders.Itwascentralfortherestructuringofcorporate capital, and for the development of a new strategy of accumulationcentredonthemobilisationoflandasafictionalasset.42

In advance of realisation, the megaprojects typically adopt exceptionalmeasures such as: freezing or flexibilising the traditional urban planninginstruments; reshaping legal resolutions and the responsibilities of institutional

organisations; creating agencies with special or exceptional powers ofintervention and decision-making; altering national and regional laws. Oncetested,manyofthesenewformsofmanagementbecomestandardpracticesthatgraduallycontaminateotherterritorialinterventionsandpolicies.

Theapparentjustificationfortheadoptionofthesenewformsisbasedonthegreater flexibility, efficiency and sense of opportunity that supposedlycharacterisetheprivatesectorinaction.Thestate,ontheotherhand,isseenasadministrativelyparalysedandpoliticallycolonised.

However,afterobservingthenewtypesofarrangementbetweenpublicandprivatestakeholders,itbecomesclearthat

Democratic imperatives, such as those around sustainability and employment rights, have beeninstitutionallyreplacedandconvertedintocontractualrequirementsonfirms.Thisformofstate-ledprivatizationofthedevelopmentprocessrepresentsanew,andforsome,potentiallymoreeffectivemodeofgovernancethanthoseofferedbytraditionalsystemsofregulationandmanagement.43

MikeRacobacksuphisargumentbyanalysingtheimplementationofLondon’splan to host the 2012 Olympic Games. His conclusions resonate with CarlosVainer’sformula, inspiredbyRiodeJaneiro’spreparationsfor the2014WorldCupandthe2016OlympicGames:the‘directdemocracyofcapital’.44

Weseemtobefacingaradicalisationofthetransformationofthecityintoanenterprise.This impliesachange in theeconomiccircuits,with rentextractionplaying a more active and dominant role than production; but also atransformation of the political model of government. Here, hegemony isconstructed through the contractual capture of public funds, via a systemshielded from social oversight by a set of regulatory procedures andmanagementstructureswithmassiveparticipationfrominvestors.45

OnanEarthruledintosquaresbytheuniversalregistrationofproperty,itisthelanguageofcontractsthat,alliedwiththemorphologyofreal-estateproductssuch as the ‘corporate floor’, the shopping centre and the postmodern culturalcentre, allows the safe entry of international speculative capital.46 It does notmatterifweareinDubai,Astana,Johannesburg,MumbaiorRiodeJaneiro:wespeakthesamelanguage,weidentifythesamelandscape,westeponthesamefloor, abstract, abstracted – and subtracted – from the territory lived andexperienced by those who were there before. No tuk-tuk drivers navigatingaroundcows,nomobilestreetvendorsofferingexoticfood,nodistinctwaysoflife:itisnotbychancethatdispossessionisalsoamachineforthematerialandsymbolicannihilationoflifestyles.

It isnotbychanceeither that thepreparationof cities tohostmega sports

events has been one of the most obvious fronts for this process. Above allbecauseoftheverynatureoftheseevents,capableofmobilisingmasssupport,with the social cohesion and patriotism inherent in international sportscompetitions. Without this element, such support for megaprojects would bedifficulttoobtain.

It is during the period between the designation of the host city and thestaging of the event that many of these transformations are accomplished.Displacements and forced evictions are common features of preparations formega-events. The heightened demand for space to construct sports venues,accommodation and roads is channelled throughurban redevelopment projectsthatoftenrequirethedemolitionofexistingdwellingsandtheopeningofspacefornewconstruction.The importanceof forginganew international image forthe city, as an integral part of its preparation for theGames, often entails theremoval of signs of poverty and underdevelopment through re-urbanisationprojects that prioritise the construction of a space composed of real-estateproductsthatareeasilyidentifiableandreadableforthecorporateworld.

Thecity’shistoricagendaandneeds–inscribedinitsplans,rulesandnormsandinthedailystruggleofitsinhabitantsforspaceandresources–givewaytoaprojectstructuredviaabusinessmodel,superimposedontheterritorythroughthesuspensionofexistingnormsandconflicts.Thisensuresthe‘success’oftheventure,inotherwords,assuresthefuturerevenuestreamstobeextractedbytheinvestorsatthetermofthecontractualdeadlines.

Whentheareasdesignatedfortheprojectsareinhabited,theirresidentsmayface mass displacement, forced eviction and the demolition of their homes.Theseprojectsalsotendtoaffecttheresidentsofneighbourhoodsnearthehotelsand stadiums, which may likewise receive ‘beautification’ and securityenhancements:theyarethescenerythatdecoratestheprojects’stages.Theyalsoconstitute aprotectivebelt, a transitionbetween theproject and the chaos andconfusion of the rest of the city. Informal settlements and affordable housingprojects are among the spaces considered aesthetically negative. Thus, if notremoved, they may be disguised. During the Athens Olympic Games, forexample, a housing project that resisted demolition was covered by a giantbillboardthathiditfromtheroadleadingtotheOlympicStadium.47

In most cases, alternatives to evictions are not sufficiently explored,displacementisnotprecededbyconsultationwiththeaffectedcommunities,andadequate compensation or alternative housing is not provided. In addition,evictionsalmostneverallowthereturnofformerdwellerstonewlybuilthomes.Indeed,owners,tenantsandsquattersareoftenpressuredbypublicauthoritiesor

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privatedeveloperstoleavethearea,theirrightsareseldomrecognised,andtheyreceivenoguaranteesof return to the redevelopment site.Onmanyoccasions,evictions are carried out in a climate of harassment and violence against theinhabitants. Time constraints are usually cited as the reason for disruptive orbrutalevictionsanddisregardfortherightsofaffectedcommunities.48

Thesituationininformalsettlementsisofparticularconcernintherun-uptomega-events. As a symbol of poverty and underdevelopment, suchneighbourhoods are normally seen as ruining the image that a city seeks toproject by staging the Games. Regarded as unsightly and lacking security oftenure,informalsettlementsarethefirsttoberazedwhenamega-eventistobeheld.Theirprecariousness in termsofurbanplanning,highpopulationdensityandpovertyareinvokedtojustifytheeviction,andtheirinsecuretenureenablesthistobecarriedoutatminimumcost.

The areas they once covered now become urban mobility infrastructure,sportsvenues, residentialandhotelcomplexes,or simplya landscapecleansedof their presence. Local governments usually fail to adequately indemnify, letalone rehouse, the erstwhile residents of informal settlements. Entirecommunities are forced to relocate, generally dispersed to the outskirts of thecity or to rural areas, where they find no means of subsistence and fewemploymentopportunities,whilebeingseveredfromcommunalties.49

Examplesofevictionduetourbaninterventionsundertakenbyhostcitiesinpreparationforamegasportsevent:

Seoul–15per centof thepopulation forcibly evicted and48,000buildingsdemolishedinpreparationforthe1988OlympicGames;50Barcelona–200familiesevictedtomakewayfortheconstructionofnewcityringroadspriortothe1992OlympicGames;51Beijing – nine projects related to venue construction, covering over onemillionsquaremetres,involvingrelocationofresidents;thirteenallegationsofmass evictions, sometimes conducted by unidentifiedmen, in themiddle ofthenightandwithoutpriorwarning,andwithresidentsandhousingactivistsoftensubjecttorepression,harassmentandarbitrarydetention;52NewDelhi–35,000familiesevictedfrompubliclandsinpreparationforthe2010CommonwealthGames;53CapeTown– forN2Gatewayhousingproject involving theconstructionofrentalhousingfor the2010WorldCup,over20,000residentsremovedfromthe Joe Slovo informal settlement to impoverished areas at the edge of the

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city,withhousescoveredbymetallicsheetsdubbed‘microwaves’.54

Massdisplacementintherun-uptoasportseventmayalsoresultfromindirectprocesses, such as gentrification and escalating housing costs. The suddeninterest of real-estate investors in areas ‘promoted’ by the events inneighbourhoodspreviouslyconsideredof lowmarketvalueraisespropertyandrentalprices.Thishas an impactonaffordability for local residents, andoftenresultsintheirdefactoexpulsionfromthearea.Tenantswholackthemeanstorent the new premises are forced to resettle elsewhere, and often receive nocompensation, alternative housing or financial aid. In sum, gentrification andescalating prices have the effect of forcing out low-income communities infavourofmiddle-andupper-classresidents.Thecommunitythussuffersamajorchangeinitsdemographiccomposition.

Examplesofdisplacementduetogentrificationandescalatinghousingcosts:

Seoul–apartmentpricesincreasedby20.4percentinthefirsteightmonthsof1988,andlandpricessoaredby27percentin1988,thesteepestrisesince1978;55Barcelona – the increase in house prices during the five-year periodsurrounding the Games was 131 per cent, while in the rest of the countryprices increased by 83 per cent; in 1993, a year after the Olympics, housepricesonlyroseby2percent;56Atlanta–around15,000low-incomeresidentswereforcedoutofthecityastheannualrentincreaserosefrom0.4percentin1991to7.9percentin1996,inpreparationforthe1996OlympicGames;Sydney– the increase inhousepricesduring thefive-yearperiodbefore theGameswas50percent,whileintherestofthecountrypricesincreasedby39percent;57Beijing–around1.5millionpeopleweredisplacedfromtheirhomestoallowforurbanrenewalintherun-uptothe2008OlympicGames;58London–propertypricesinthevicinityoftheOlympicParkincreasedby1.4to4.6percentassoonasthecitywonthebid,whileintherestofthecitytheyweredownby0.2percent.59

The impact of redevelopment and beautification on housing accessibility andaffordability is even greater when it affects neighbourhoods containing low-incomedwellingsandsocialhousing.Giventhatmanyhousingestatesarestate-owned – which spares the government from ordering expropriations –

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redevelopment projects tend to demolish them to open space for newdevelopments.Theavailabilityoflow-costhousingissharplyreduced,renderinglow-incomegroupsevenmoreexposedtoviolationsoftheirrights.

Examplesofdecreasedavailabilityofsocialhousing:

Atlanta–1,200socialhousingunitsdesignatedforthepoorweredestroyedinpreparationfortheOlympicGames;60Sydney–reportssuggestthataround6,000peopleweremadehomelessintherun-uptotheOlympics;61Vancouver – more than 1,400 low-income housing units were lost inconnection to real-estate speculationgeneratedby the2010WinterOlympicGames;62SouthAfrica–theministerforhousingnotedthatplanstobuildhundredsofthousands of new low-cost homes could be affected by shifting budgetdemandsintherun-uptothe2010WorldCup;63London– theClaysLane cooperative, a historic social housing complexonthe Olympic Park site where around 400 people lived, was demolished.According to the London Development Agency, the site did not meet thegovernment’sDecentHomesStandard;64Tokyo–withintheprojectofrenovationandexpansionofthesportingvenuesbuiltforthe1964OlympicGames,Tokyo2020requiresthedemolitionofthehousingconstructedbackthentoresettlethosewhohadbeenevictedtomakewayforthestadium.65

Thesituationofhomelesspeoplealsodeterioratesinthecontextofmega-events.Shortlybeforetheeventsarestaged,somelocalauthoritiestakestepstoremovehomelesspeople fromareas exposed tovisitors.Thehomelessmaybeofferedincentivestoleave,butaremoreoftensubjecttoforcedremovalandrelocationduring the events.Specific legislation is introduced, criminalising acts suchassleepinginthestreetandbegging.Similarly,streetvendorsandsexworkersaretargetedbylawsthatforbidthemtocarryouttheiractivitiesinthecitywhiletheevent is takingplace.Thereareknowncasesofcampsor largefacilitiesbeingused to accommodate homeless people and other ‘unsightly’ groups for theduration.

Examplesofthepenalisationofthehomelessandofcertainactivitiesduetothecelebrationofmega-events:

Seoul – the ‘beautification’ measures prior to the 1988 Olympic Games

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included the detention of homeless people in facilities outside the city. Inadvanceofthe2002WorldCup,localauthoritiescreatedalistofplacesfromwhichthehomelesswerebanned;66Barcelona – homeless people were moved out of the city during the 1992OlympicGames;67Atlanta – to wander the streets while of no fixed abode was declared anoffence,forwhich9,000homelesspeoplewereindicted;68Vancouver – the city hired private security services in order to removehomelesspeopleandanyonelivinginthestreetsofcommercialzones.69

Despite the large number of evictees and the violation of rights in the urbanrestructuring procedures described above, the social cleansing during thesemega-events, and during the implementation of large urban projects and post-disasterreconstructionprocesses,represents,interritorialandnumericalterms,adropintheoceanofprecariousurbansettlementsaroundtheworld.Itisratheraquestionof implantingenclaves insidecities,mappedoutandgovernedby theinternationallanguageoffinance.

However,theimportanceofmega-eventsgoesbeyondtheirdirectimpactonthe territory occupied by informal settlements. The narratives and practicesestablishedcontributetodeconstructthecultureofrightsthatwasconstitutedinthose places, alongside the huge efforts to improve material and economicconditionsovertimebyreinforcingthestigmatizationofthoseterritories.

Allthisamountstoanewformofgoverningurbanspaceandpolitics,basedon the contractual capture of public funds and implemented through a systemshieldedfromsocialcontrolandpoliticalintermediations.While‘experimenting’with this new form, the creation of privatised enclaves further weakens thecapacityofthepooresttoactivelyparticipateinthedefinitionofthecity’sfuture,andcomplicatestheirstruggletoholdtheirground.Inthecitieswheretheyareimplanted,theenclavesconfront

the daily forms of subordinate contestation regarding the urban space, the daily fights of: streetvendorstousethesidewalksandstreets;peopleoccupyingemptybuildingsandspacesinordertolive;subordinatedpeoplewhoinsistindemandingandusingalloftheavailablespacetobuild,live,inhabit,produce,commercialize.Itisthis‘freewill’thattheglobalagendaongovernabilitystrivestocaptureandutilize.70

In thissense,expulsionsandevictionsconnected to largeprojectsareonly theviolent and, therefore, most visible face of the current criminalisation anddeepening stigmatisation of lower-income territories. Such procedures are

intrinsic to the ‘capitalisation’of those territories,understoodas thecaptureoftheireconomic,politicalandsociallogicbythelogicofmarketsandfinance.

AsIhavearguedthroughout thispartof thebook, land titlingprogrammesare themostexplicit formof incorporating these territories into thehegemonicformsofassetcirculation,bypermittingtheirdirectinclusionintolandmarkets.Nevertheless, subtler andmore insidious forms, such as formal credit – in theshapeofmicrocreditortheexpansionofindebtedness–havealsopenetratedtheeveryday activities of these spaces, introducing so-called market skills andultimately decapitalising some of the peoplewho had benefited from the vastsocial,economicandpoliticalwebthatconstitutesinformalsettlements.

The slogan ‘CitiesWithoutSlums’, formulated in internationalcooperationcirclesandincludedintheMillenniumGoals,encapsulatesthestatementabove.The slogan reflects the emergence, within the liberal sphere, of the idea of‘endingpoverty’ throughthepromotionof inclusive,market-basedgrowth– inother words, by the expansion of the market towards the poorest. TheMillennium Development Goals express this new position – also known as‘bottombillioncapitalism’.71

‘CitiesWithoutSlums’cancarryadoublemeaning,understoodbothasaninjunction to eradicate informal settlements around the world by means ofevictions and resettlements, and as a proposal to ‘include them’ in the urbanmarket through their regularisation and the formalisation of their economicactivities.Thehistoryof this slogan laysbare the trapsof apublicpolicy thatstrivestocombineanapproachofsocialprotectionforthepoor(thefightagainstpoverty) with the idea of urban land as a financial asset, under the aegis of‘inclusivegrowth’.72

In 1999, theWorldBank andUN-Habitat founded a neworganisation, theCities Alliance, with a mission to convince – and finance – governments toregularise andurbanise their informal settlements, aswell as to integrate theminto more general strategies of territorial planning (City DevelopmentStrategies).ThisinitiativerepresentedaresponsetooneofthecentralpointsoftheHabitatAgenda,drawnupbytheHabitatIIconferenceinIstanbulin1996.Underpressurefrompopularmovementsandorganisations,theHabitatAgendacalled for securityof tenureand the introductionof infrastructureand servicesforinformalsettlements.However,CitiesAlliancewaslaunchedwiththeslogan‘CitiesWithoutSlums’,thatappearedforthefirsttimeinthetitleofitsinauguralpublication:Cities Alliance for CitiesWithout Slums: Action Plan forMovingSlumUpgrading to Scale. In 2000, the UNGeneral Assembly adopted CitiesAlliance’s objective of improving the lives of 100million peoplewho live in

informal settlements before 2020,making it the 11thmillenniumdevelopmentgoal.TheUN’sadoptionofagoaloninformalsettlements,andthemobilisationof the slogan ‘CitiesWithoutSlums’ as the expressionof thisgoal, turned thewatchword ‘cities without slums’ into a guide for the conception of policies,projectsandevenlegislationinmanycountries.73

Theuseoftheword‘slum’isnotnaïve.Itdeliberatelysetsouttostigmatisethevast territoriesautonomouslyproducedbypoorpeopleincitiesand,hence,to justify their erasure. The warlike language usually employed is not naïveeither: itaims tosubdue territoriesstructuredunder the logicofsurvivalneedsand resourcefulness in order to enable financial capital – the currency thatcirculatesfreelydisembodiedinanyterritory–tolandpeacefullyonthem.

This new form of colonisation operates via a dual system: through theoccupation of the territory (by means of evictions and demolitions) and thereplacement of previous ways of life; and through the daily process ofconstructing individuals who have entered the circuits of consumption andcredit,boostingmarketsandglobalfinancesinbothculturalandmaterialterms.

PARTIII

12FinancialisationintheTropics

May2011,RiodeJaneiroAsIclimbthestepsatMorrodaProvidência,inRiodeJaneiro’sportarea,Iambeing followed by the eyes of the local residents,who are displayed on hugeportraitspastedtotheirhouses’walls.Thework,bytheacclaimedartistJR,wasinstalledasaprotestagainsttheimminentdemolitionofthesehouses.Everyonewho livesnear thesteps, themainaccess to thecommunityformore than100years,willhavetoleave,givingwaytoacablecarleadingtothetopofthehill.There,morehomeswillbe razedand theareawillbecomea touristpanoramapoint. Fromup there, one has a privileged viewofPortoMaravilha, the tradenameofRiodeJaneiro’snewestreal-estate–financialcomplex.

AsIclimbed,theprojectwasalreadyunderwayunderconstruction?throughapublic–privatepartnership(PPP),settomanagethearea’sservicesforthenextfifteen years. Three-quarters of the area included in the projectwas originallypublicland,mostlyoldportfacilitiesandwarehouses.Itwasnotyetpossibletosee the glass buildings, such as Porto Atlântico Business Square and PortoMaravilha Corporate offices. Nor could one espy the Trump Towers, whichwouldbelaunchedthefollowingyear,ortheMuseumofTomorrow,designedbytheSpanishcelebrityarchitect,SantiagoCalatrava,inauguratedduringthe2016RioOlympicGamesintheplaceoftheoldpier.

Onthetopofthehill,theatmospherewasoneoftenseapprehension.Nooneknewwhen,howorwhere theymightgoasa resultof thenew‘urbanisation’project. This was to be implemented by the same joint venture of contractorcompaniesthathadwonthebidforPortoMaravilha,theprojectforrenovatingtheportareaatthebaseofMorrodaProvidência.Thisjointventurewastheonlybidder for the project,which had been designed by the consortium itself, andofferedasa‘gift’totherecentlyelectedmayorin2013.Themayordecidedtogo

ahead,obtainingquickapprovalfromthecitycouncil.Formostpeople–especiallythoseabouttobeevicted–acablecarwasnot

thepriorityforthecommunity,whichhadalreadyreceivedanupgradelessthanten years before, under the auspices of the Favela–Bairro (Slum toNeighbourhood) programme.However, as in every other favela that had beenurbanised by the same programme, themunicipality and the state governmentdid not take over themanagement of the area.As a result, thewastewas notcollected,andtherewasnomaintenanceofthedrainagesystem.

Instead,inApril2010,aPacifyingPoliceUnit(UPP)wassetupinMorrodaProvidência.LaunchedbythestateofRiodeJaneiro’sgovernmentattheendof2008,theUnitwaspartofastrategytooccupyandregainterritoriesthenunderthecontrolofnarco-traffickers.Theoccupiersconsistedofmilitarypolicefromthe National Public Security Force (officers from other Brazilian states) andfromRiodeJaneiro’spolice.WithaUPPlocated inside thefavelaalongsideacablecarproject,ProvidênciawasonthefrontlineoftheRioOlímpicoproject–a package of works and urban interventions that were part of the city’spreparationstohostthe2014WorldCupandthe2016OlympicGames.

As negotiations for the compulsory purchase of homes affected by theproject were carried out with each resident individually, rumours shook thecommunity. No one knew precisely what was going to happen. The affectedfamilies‘negotiated’theirevictionwiththecityadministrationbasedonpartialinformation and obscure proposals. The combination of the police occupationand a project defined and imposed from the outside, avoiding anymeaningfuldialoguewiththecommunity,wereareminderofsimilarhistoriccasesthathaveafflictedMorrodaProvidênciaoveritsmorethan100-yearhistory.

ThiscommunitywasBrazil’sfirstofficialfavela,bornwhentheMinistryofWarpermittedhomelessveteransfromtheCanudosWar(whichendedin1897)to settle there. Since then, police raids, threats of eviction, public investment,urbanisation and regularisation programmes have succeeded one another. ThePortoMaravilharedevelopmentprojectisessentiallythelatestchapterinastorymarked by ambiguities, compromises, resistances, negotiations, porosities andconflicts.

Onmywaybackdownthesteps,afterwalkingaroundthecommunity,myeye falls on a pathetic image: one of the people portrayed on the façades is awheelchair user. The cable car is precisely the accessibility project that willexpelhimfromthehill.

December2013,SãoPaulo’ssouthzone

OnthebanksofRioPinheiros,thelandscapeofofficetowers,shoppingcentresand luxury hotels announces twenty-first-century São Paulo’s new ‘businessdistrict’.Here,MrGerônciotakesmetoseehisapartment,oneof the252thatwere built in a former favela: Jardim Edith. This community used to shelteralmost 3,000 families in an area of 68,000 square metres situated betweenMarginal Pinheiros and Engenheiro Luís Carlos Berrini Avenues. The favelaborderedtheWorldTradeCentre,areal-estatecomplexdevelopedbytheWTCAssociation, the same developer behind the Twin Towers in New York City,destroyedin2001.Thisventureincludesanofficetower,afive-starMeliáHotel,aconventioncentre,anexhibitionarea,ahelipadandaninteriordesignshoppingcentrewith200stores.1In1996,theWorldTradeCentrewasthenewestofthedevelopments launched in thearea:mostof themresulted from jointventures,international investment funds, real-estate investment trusts or other forms offinancialinstrumentsthatpenetratedSãoPaulo’sreal-estatemarketinthe1990s.

Jardim Edith is inside the perimeter of the Operação Urbana ConsorciadaÁguaEspraiada,aPPPinitiatedin1991andmodifiedin2002.Itwasorganisedmainly tocanalise theÁguaEspraiadastreamand toopennewavenues in thearea, expanding the boundaries of São Paulo’s corporate and high-incomedistrict.ThefundstoinvestinthoseworksweremadeavailablebytheOperaçãoUrbanathroughthesellingof‘certificatesforprospectiveconstruction’(Cepac).JardimEdithwasincludedinthisprojectasoneoftheZonesofSpecialSocialInterest (ZEIS),earmarked for socialhousing (HIS) for thedisplaced residentsfromlocalinformalsettlements.TheinclusionofZEISJardimEdithinthelawthatreviewedthePPPoccurredaftergreatpressurefromthefavela’sresidents,who occupied the city council and did not leave until the ZEIS areas wereincludedintheprojectinDecember2002.2

Jardim Edithwas one of sixty-eight favelas occupying the banks ofÁguaEspraiadastreameversincepartsoftheneighbourhoodhadbeenexpropriatedinthe 1970s for the construction of the city’s ring road. Up to the 1980s, thecommunity experienced vigorous population growth.3 Some of these favelaswereremovedinthebeginningofthe1990sbyapoolofreal-estatecompanieswhichcreatedafundtofinanciallysupportthemunicipalgovernment’sevictionprogramme.Thealternativesofferedto theresidentswere:abusticketbacktotheir home town; a one-off sum of 1,500 reais per family (this amount wasnegotiable and could reach 11,000 reais, according to one former resident); anew apartment in Jaguaré or Jardim Educandário, on the border with theneighbouringtownTaboãodaSerra(andtemporaryaccommodationuntilitwasbuilt),oranapartment inCidadeTiradentes,anenormousspreadofaffordable

housingcomplexesintheextremeeastofthecity.Approximately 20 per cent of the evicted families were sent to housing

projects situated ten, fifteen ormore than thirty kilometres away from JardimEdith.Otherfamiliesacceptedthecashofferandthe‘freeremovalstruck’,andmoved toothernearby favelas, or tononedificandi (building forbidden) areasnearthebiggestwaterreservoirlocatedinthesouthernpartofthecity.4Thefirstwaveofevictionsoftheremainingfamiliestookplaceatthebeginningof2001,promotedbytheHighwayStateDepartment(DER).

The inclusion, at the endof2002,of the remaining favelas asZEIS in theLaw of Água Espraiada Urban Project was considered a great victory by theresidents.However,MrGerônciotoldmethatthepressureforthemtoleavedidnotstopafterthat.Everytimeafamilyleft,theirshackwasimmediatelybroughtdownbybulldozers thatpassedclose to the remaininghomesor ‘accidentally’hitaneighbouringwall.Therubblewasleft,degradingtheareaandpressuringthefamiliesto‘quicklyclosethedeal’andleave.

Finally, in 2008, a public civil action stopped the continuous evictions,opening space for a judicial agreement with the city government, whoguaranteedthebuildingofasocialhousingcomplexinthesameplace.5In2010,withadditionalinterventionfromtheProsecutor’sOffice–whichwasalsopartof theUrbanProjectManagementGroup–thecitywasorderedtostartontheconstructionof252apartmentsdestinedtoaccommodatetheremainingresidentsofJardimEdith.

The scenes from Rio de Janeiro and São Paulo above portray the encounterbetween the advance of the real-estate–financial complex and already existinglow-income territories. The sprawling, self-built irregular settlements andfavelas,wherethemajorityofworkersandotherurbanpoor live,wereformedthrough a permanent process of conflicts and negotiations with the state,definingaconditionofpermanenttransience,aspecificformofprecariousandexclusionarybelongingtothecity.However,thesescenescannotbythemselvesmake explicit the transformations that are currently impacting on Braziliancities. The country’s experience in this regard is just one part of the widereconomic, political and territorial changes befalling cities around the planet,undertheparadigmofneoliberalismandtriumphantfinancialisation.

Sincetheendofthetwentiethcenturyandoverthefirstdecadesofthenewmillennium, Brazil has undergone a process of democratisation, buffeted bywavesofeconomicrecessionandrecovery.Ithasseeninthisperiodtherisetopower–firstlylocallyand,later,onthenationallevel–ofacoalitionledbythe

Partido dosTrabalhadores (PT,Workers’ Party). This party is a political forcethat emerged from trade-union struggles, social movements and thereorganisationof left-winggroups throughout the1980s and1990s.Central tothe PT’s agenda was the construction of a welfare state, universal access toadequatehousingand the full enjoymentofurbanopportunitiesandamenities.On theotherhand, itwaspreciselyduring the sameperiod thatBrazil felt theimpactofboththehegemonyofglobalisedcapitalandthepreponderanceoftheneoliberalagenda,especially in thedomainsofhousingandurbanpolicy.Thismomentwas,thus,markedbyambiguitiesandcontradictions.

After almost two decades of stagnation or recession (1980–98), Brazilembarkedonatrajectoryofeconomicgrowth.Between1999and2009,theGDPgrewatanannual rateof3.27percentandemployment increasedby2.29percentperyear.6Atthesametime,theminimumwagehadanominalreadjustmentof 155 per cent and an increase in real terms of 73 per cent between January2003 andMarch 2010.7After 2005 therewas also a shift in economic policy,encouragingtheexpansionofinternalconsumptionbyropinglargerportionsoftheBrazilian population into the formalmarket.Boosting consumption by theinclusion of lower-income sectors became the chief strategy for economicgrowth.8

Intherealmofsocialpolicy,publicmeasurestowardthepopulationlivinginextreme poverty attempted to lift them from their precarious levels ofsubsistence.Thiswasdonethroughconditionalcashtransferprogrammes(BolsaFamília)andasetofsocialinterventionsintendedtostimulateentrepreneurshipand economic development opportunities.9 The achievement in terms ofworkrevenues, employment expansion, social security and social policy advancesmeantthenumberofpoorpeopleinBrazildroppedfrom57millionin2001to30 million in 2008 – or from 30 per cent to 15 per cent of the country’spopulation.10

The average income per capita at the top of Brazilian income bands (therichest10percent)grew,onaverage,by1.6percentperyearbetween2003and2008.Forthebaseofthepyramid(thepoorest10percent),thegrowthwasof9.1per cent in the sameperiod.Thiswasdue, initially, to realgains from theintroduction of real increases in the minimum wage, which permitted aninjection of 1 trillion reais into workers’ income between 2003 and 2010.Anotherfactorwasthecashtransferprogrammes,directedtovulnerablesectors(elderly,unemployedandpoorpeople,peoplewithspecialneeds,etc.) throughsocialsecurityandsocialassistancepolicies.11Itisalsoworthnotingthatpublicbanks and funds resumed providing credit and leveraged public and private

investmentthroughprogrammessuchasPAC(GrowthAccelerationProgramme)andMinhaCasaMinhaVida.

Theformerincludedlargeinvestmentsinlogisticsandenergyinfrastructure,sanitation and urbanisation of the favelas. The latter significantly increasedpublic subsidies for the construction of residential units and the promotion ofhomeownershipthroughaccesstocredit.Finally,therewerealsoincentivesforspecific economic sectors, such as automotive production and navalconstruction.12AsaproportionoftotalGDP,creditgrewfrom24.2percentin2002 to45percent in2009.Thevolumeof resources invested in individuals’finance more than quadrupled between 2003 and 2009, with an importantadvance in housing finance,whichgrew from25.7 billion reais in 2004 to 80billionreaisin2009.13

The PT government therefore successfully put in practice an agenda ofeconomic growth committed to combating poverty. It added to the market apopulation that was, until then, excluded from it, increasing the capacity ofconsumptionthroughwageappreciationandexpansionofcreditforfamilies.

In terms of urban policy, the 1980s and 1990s were marked by legaladvancesinthefieldoftherighttohousingandtothecity.Thiswasachievedasaresultofintensemobilisationandopendiscussionwithincivilsociety,partiesandgovernmentcoalitionsofthecitizen’sroleinurbangovernance.The‘UrbanReform agenda’ was able to insert a chapter on urban policy in the newConstitution of 1988, based on three pillars: the social function of cities andproperties;therecognitionoftenurerightsandrightstothecityforthemillionsliving in the cities’ favelas and self-built developments; and the directincorporation of citizens into decision-making processes related to urbanpolicies.14

The wider availability of subsidised housing credit provoked one of thelargest-evercyclesofexpansionofthereal-estatesectorinBraziliancities.15Atthe same time, the decades-long great migratory flux from country to citiesdecreased.

On the other hand, many years of investments and consolidation of low-incometerritories(favelas,irregularsettlementslocatedattheurbanperipheries,and housing complexes),made it impossible to define the urban developmentmodelsolelybythedualityof‘centreversusperiphery’.Ononehand,theself-built spaces formed during the years of great urban growth (1960–80) werenowadays equipped with water, electricity, public facilities and commercialspaces. On the other hand, a new, complex geography of poverty and socialvulnerabilitydefinedthe‘placeofthepoor’incities.The‘poor’themselveswere

nowamuchmoreheterogeneousgroupthanbefore.16Nevertheless, ‘periphery’ and ‘favela’ remained strong urban and cultural

categories. Despite the accumulated investments in these settlements, wherebasicinfrastructureandsocialfacilitieswereavailabletheywerestillmarkedbyprecariousness, notably in the bad quality of public services. There remained,too,apersistentterritorialstigma.

Theperiodofeconomicgrowthchallengedcitiestoimprovetheirconditionsofurbanisationinordertosustainthisgrowth.Thechallengesweremany.Itwasnotmerelyamatterofexpandingurban infrastructure toabsorbfuturegrowth,althougheconomicgrowthhadindeedenabledtheincreaseofpublicexpenditureonhousingandsanitation,whiletheconstitutionalCityStatute(2001)promiseddecentralisationandtheextensionoftherighttothecity.Andyet,despitetheseachievements and pledges, an urban crisis emerged. Why, despite so manyhopes,didthishappen?

MinhaCasaMinhaVidaandHousingFinancialisationinBrazil

A residential market has been in place since the end of the 1920s in Rio deJaneiroandtheendofthe1940sinSãoPaulo.However,itwasafterWWIIthataspecialisedandprofessionalisedreal-estatedevelopmentsectorstartedtoactasa true private residential market.17 In particular, from the 1950s, real-estatedevelopers could be either companies associated with banks, constructionbusinessesheldbyfamilies,orinsuranceandfinancecompanies.18Nevertheless,in 1964, under the reforms launched by themilitary government immediatelyaftertheircoupd’état,apublicbankspecialisedinhousingfinancewascreated:the National Housing Bank (BNH). Financial instruments were also created,such as real-estate credit societies and real-estate credit bonds, making up aHousingFinanceSystem(SFH).

In the same year legislation regulating real-estate residential developmentwasenacted,totweakasectorthathadbeenrunningforoveradecade.Thislawallowed the establishment of co-ops and the possibility of selling apartments,‘idealfractions’ofthebuildings,whichincludedtheapartmentitselfandashareofthecommonareas.19

The launch of BNH resulted from a coalition of entrepreneurial interests,particularly those linked with the construction industry, which was politicallyclosetotheconservativeUDN(NationalDemocraticUnion)partyanditsleader,

Carlos Lacerda. This political proximity occurred through the Institute ofResearch and Social Studies (IPES), created in 1961 by private businessmenfromUSgovernmentdonations.Itsmainobjectivewastoformulateapoliticalcounteroffensivetotheascensionoftheleft-wingPresidentJoãoGoulart.

Beforethemilitarycoupandaspartofhispoliticalcampaign,accordingtoMarcus de Mello, ‘Lacerda had already announced a public commitment tocreateaNationalBankforSocialHousing,aimingtobuildmillionsofaffordablehousing units across the country, in order to transform every worker into ahomeowner and to provide a place in the sun for the middle class’.20 Thisposition was reiterated by Sandra Cavalcanti, the BNH’s first president:‘Homeownership turns a worker into a conservative person who defends therighttoproperty.’Thereforesheusedahomeownership-basedhousingpolicyasaweaponagainstcommunistandprogressiveideas inBrazilat thepeakof theColdWar.However,‘itwasthishousingpolicy’seconomicrole,dynamisingtheeconomy by generating jobs and strengthening the construction sector, thattransformed it into one of the central elements of the strategy of themilitarygovernment.’21

Therefore,sincethecreationoftheBNHuntiltoday,afieldofconvergence–and, as we will see, of conflict – arose from the designation of a financialorganisationasthelocusofformulationandimplementationofhousingpolicies,and from the original ambition tomake everyBrazilian a homeowner. Firstly,thispolicydependsonand,atthesametime,influencesthecountry’smonetaryandfiscalstrategies.Secondly,thepolicyisideologicallyandpoliticallyfixatedontheideaofcombating‘housingdeficit’,thatis,thenotionthathousingpolicyis basically the establishment of a certain number new ‘private homes’ to bebuilt,whichdonotnecessarilyrespondtothecountry’shousingneeds.Thirdly,the policy is an instrument to stimulate an industrial sector – the constructionchain – that itself stimulates the financial sector.These three dimensions havehadagreateror lesserprominencethroughoutSFH’shistory,dependingonthelevel of influence of the various political interests surrounding the system. Itsbasicstructureisstillinforce,despitetheabolitionoftheBNHin1986:housingpolicyishousingfinancetosupportthebuildingofnewhomes.

Under Sandra Cavalcanti’s mandate, mass evictions were carried out infavelas,andhousingcomplexessuchasVilaKennedyandCidadedeDeuswereconstructedbyCohab-GB(theGuanabaraPublicHousingCompany),launchedin 1962 by the state government with USAID financial support. The housingpolicywaspartoftheAllianceforProgress,theUSprogrammeofcooperationwithLatinAmericalaunchedbyPresidentKennedyin1961aimingtopromote

development and block the spread of communism. Under Cavalcanti’sadministrationandfollowingtheexampleofCohab-GB,nineteenotherCohabswerecreatedinthecountrybetweenMay1964andOctober1965.22

In1966BNHwasconverted intoa ‘second-line’bank,ashadhappened tothe North American FannieMae.With the increasing participation of privatebankingsystemrepresentativesonthemanagementboard,itbecameoneofthekey financial instruments of the country’s economy. In the same period, thegovernment created the FGTS (Employee Indemnity Guarantee Fund), whichwasfundedbycompulsorymonthlycontributionsfromtheemployeronbehalfof employees. FGTS functioned through the deposit of 8 per cent of theemployee’ssalaryintoaprivateaccountunderpublicmanagement.From1967on,FGTSbecamethemainfundingsourceforBNH.ThemagnitudeofFGTSresources lifted BNH into the position of being the country’s second-largestbanking institution before the endof the 1970s.To this day, FGTS is amajorsupplierofhousingpolicyresources.23

Fromthenon,mosthousingdecisionsweredeterminedbytheremunerationneeds of the FGTS’s fund, defining to whom, where, and how public fundswouldbeavailable.Thispartiallyexplainswhy,despitetheBNH’sclaimtobeanenablerofsocialhousing,only30percentofthe4.5millionhousingcreditsconcededthroughBNHbetween1970and1986weredirectedtolower-incomesectors.24 It also explains the diversification of the bank’s investments, as itstarted in the 1970s to finance large infrastructure projects and middle-classresidentialmarkets.25

However, it is for the political economy of housing that the existence ofFGTSanditsresourcesismostsignificant.Incontrasttothevoluntaryresourcesof traditional savings accounts, FGTS creates compulsory savings for allregisteredworkers,tocomplementtheirretirementpensionsandprovideincomeinperiodsofunemployment. In thatway, theworkers’ interestsandclaimsforlarger resources are entangled with measures that ensure the financialprofitabilityofhousingoperations.Thereismore:aswewillseefurtheron,after1989 the unions created during the democratic transition sat on FGTS’sAdministrative Council alongside representatives of employers and of thegovernment.Thispictureisfundamentaltounderstandthepoliticalintertwiningoffinancialcapitalandthenewunionleadership,includingLuladaSilva,inthe1990sand2000s.

The role of BNH as promoter of ‘affordable housing’ was strengthenedthrough themid-1970s.This push resonatedwithWorldBank policy andwasenshrined in the economic policy established by Brazil’s Second National

Development Plan (II PND). II PND moved its focus from construction,automotiveandconsumerdurableindustriestothoseofcapitalgoodsandheavyconstruction.26Inthatperiod,Cohabsgainedstrengthbybuildingmasshousingcomplexes on the fringes of major cities. For example, the José Bonifáciohousing complex (Itaquera II and III)was built between 1978 and 1982.ThiswasthelargestcomplexproducedbyCohabSãoPaulo:19,600unitsinaplotofmorethan1millionconstructedsquaremetres,withanestimatedpopulationof76,800inhabitantsin1983.27

BNHcollapsedin1986.28Thiswasnotonlybecauseofeconomicreasons,suchastherisingdefaultratesduetorecession.Amoresignificantfactorinthefall of BNH was the rupture of the coalition between corporate and politicalintereststhathadbeencoordinatedforitscreation.Thisruptureoccurredwithinawidercontext:thecrisisofthedictatorialregimeanditseconomicandpoliticalbase.TheendoftheBNHsystem,aswellastheperiodofeconomicrecessionandstagnation in the1980s,signalleda retractionof real-estateactivityandofhousingfinance.

This scenarioonly started to change in themid-1990s,when reformswereimplementedbothinthemodelofhousingcreditregulationandinthestructureand capital composition of companies involved in the residential real-estatemarket. In 1994, the government launched the Plano Real, aiming to controlinflation. It introduced a new currency and promoted reforms to the financialsystemthatincludedtheopeningofBrazil’smarkettoforeignbanks.

Theopeningofthebankingsystemwaspartofaraftofmeasuresproposedby international organisations such as the IMF and the World Bank, whichexercisedhugepressureonemergentcountriesindifferentways.Thetheorywasthat the entranceof foreignbankswouldmeangreater efficiency,modernisingBrazil’sbankingsystem.Atthesametime,itwouldfacilitatealargerinfluxofinternational capital. Indeed, after a cycle of mergers, acquisitions andprivatisations,theparticipationofforeignbanksinBrazilgrew–thoughnottothepointof imposingthedenationalisationof thecountry’sbankingsystem,aswasthecaseinArgentina,ChileandMexico.29

The real-estate sector was an important target of the liberalising reformsundertaken in this period.TheBrazilianAssociationofMortgage andSavings(ABECIP), founded in1968,expanded the influenceof financialcapital in thedecision-makingofBNH.30ItalsoactivelyparticipatedintheformulationofandnegotiationsoverthecreationofaReal-EstateFinancialSystemonthemodeloftheNorthAmericanmortgagemarkets,whichhadbeenreformedinthe1970s.31From the 1990s on, this system introduced innovations to expand the

participationoffinancialcapitalinthereal-estatemarket,creatingnewfinancialproducts and constituting an environment suitable for the link between bondsandreal-estatemarkets.Amongtheinnovations,wemaylisttheCertificadodeRecebíveis Imobiliários – CRI [Mortgage-backed Securities]; the Fundos deInvestimento Imobiliário – FII [Real Estate Investment Funds, or REITs]; theestablishment of new rules for mortgage securitisation companies; and theFiduciaryRegime,theessentialtoolfortheestablishmentofchattelmortgages.32

This attempt to introduce a securitised mortgage market was not animmediatesuccessinBrazil.Itonlygainedmomentumafewyearslater,afterafirst round of regulatory adjustments in the initial model, changes in themacroeconomic conditions and, above all,more public incentives through taxexemptions.33 Nevertheless, Mortgage-Backed Securities (CRI) and theformation of Real-Estate Investment Funds FII) started to be used bycommercialreal-estatedevelopmentcompaniesinvolvedwiththepromotionofcorporatebuildingsandshoppingcentres,aswewillseelater.34

Fortheresidentialreal-estatemarket,animportantfactorintherevitalisationof housing creditwas the recuperationof theFGTS, due to the resumptionofeconomic growth and the increased number of registered workers. Otherregulatorymeasureswerealsoresponsibleforthisrevitalisationonanewbasisatthebeginningofthe2000s,constitutingtheprogrammesthatprecededMinhaCasaMinhaVida.

Firstly, between 1995 and 1998, the individual credit bonds – carta decréditoindividual,aprogrammeofdirectfinancingtotheborrower,absorbed76percentofFGTSresourceswithin theSFH(HousingFinanceSystem). In thatway, the paradigm changed ‘from a model centred on the financing of theproductionofnewunitsandbasedonanetworkofpublicproviders,toamodelcentredonfinancingthefinalborrower’.35

Subsequently, still under President Fernando Henrique Cardoso’sadministration, two programmes of social housing were launched, althoughsmallerinscale.Inoneofthem(ProgramadeArrendamentoIndividual,PAR),privateentrepreneurswereresponsibleforthewholeproject–fromthepurchaseoflandtotheconstructionoftheunits,includingthedesignoftheproject;localgovernmentswereresponsiblesolelyforthe‘selectionofthedemand’,whilethefederal government dealt with the direct and subsidised financing to theborrower through the Caixa Econômica Federal that had replaced the BNH.Through the Programa Social de Habitação (PSH), the second programmelaunched by President Cardoso’s government, the state auctioned regionalsubsidies,andminorbanksacquiredthemtobuildhousesinpartnershipwiththe

municipalities.Bytheendofhissecondmandate,CardosowasclosetosealinganagreementwiththeWorldBanktorestructureBrazil’shousingfinancesystemalongthelinesofMexico’s.

However, in 2004, progress was halted when Lula’s government adoptedthree newmeasures to expand housing credit and revitalise the housing salescircuit. With these changes, compulsory investment in housing derived fromsavingsaccountswentfromlessthan2billionreaisin2002toapproximately18billion reais five years later. Finally, in 2005, a resolution from FGTS’sAdministrative Council allowed the expansion of subsidies supplied by thefederal government and the doubling of the housing sector’s budget for thatyear.36Thiswasnotyet aprocessof financialisation, as it didnot involve theformation of a securitised mortgage market, nor an intense participation byfinancialtrustsandinstitutions.Butthesewereabouttohappen.

Since the1990s, therehadbeensweepingchanges in thereal-estatesector,with mergers, acquisitions and the entrance of equity funds and assetmanagement companies into the real-estate business. This intensified after the1997–98AsiancrisisandtherecoveryofLatinAmerica’seconomicgrowth.

GP Investments, for example, founded in 1993 by Jorge Lemann and hispartnersinBancoGarantia(aninvestmentbanksoldtoCréditSuissein1998),mobilised investorsacross theworld tomanage thecapital and/orcontrol fiftyLatinAmerican(mainlyBrazilian)companiesinreal-estate,retail,logisticsandtelecommunications sectors. In 2005, GP brought into Gafisa (a real-estatedeveloper incorporated by GP in 1997) one of the US’s largest real-estateinvestmentfunds,EquityInternationalManagement,whichacquired32percentofGafisa´scapital.37Thenextyear,ledbyGPandEquity,GafisamadeitsIPO(InitialPublicOffering),raising927millionreaiswiththesaleof47percentofitsstock.38 In2007,Gafisa raised1,171billion reais ina follow-onoffering.39Thatsameyear,GPexitedfromGafisa, realisingaprofitofapproximately6.5timestheinvestedcapital.40

This process was repeated in the early 2000s by several developers andinternational funds. Developers sold part of the company to one or moreinvestment funds, bought up competitors and launched IPOs. This is how theresidentialdevelopmentsectorwastakenoverbythefinancialsector.

The most explicit case of this type of arrangement was PDG (Poder deGarantir),createdbyaparticipating trustcontrolledbyBancoPactual’sformerpartners in2003,when thebankwassold toaSwissbank.PDGprogressivelyacquired real-estate developers and brokerages (Agra,Abyara,Klabin Segall),also bringing investment funds that had already entered into these companies,

suchasEnriqueBañuelos,MorganStanleyRealEstate,CréditSuisseandPoloCapital Management.41 Some of those investment funds had previouslyparticipatedinsimilarcompanies,likeEquityInternationalinHomexinMexico,andbroughttheirexpertise,strategiesandhousingpolicyproposalstotheirnewmarkets.

A significant proportion of the new capital was then injected intodevelopment companies and invested in land banks. In 2014, twenty-twocompanies were listed on São Paulo Stock and Futures Exchange (BM&F-Bovespa).Among them,nineconcentrated100billion reais (US$37billion) inland, which represents almost 620,000 square kilometres of urban land invarious Brazilian cities. As we will see further on, this would have notablerepercussionsontheriseoflandpricesinthelargercities.42Giantdevelopmentcompaniesthathadtraditionallyservedthehigh-incomeresidentialsegmentnowintroducednewlinesaimedatthe‘lowermiddleclass’.

In 2002, after three consecutive defeats, Lula finally won the presidentialelections.Adopting amoderate political position, the formerunion leaderwasabletobringtogetherthesupportofthehistoricpoliticalsectorsthatbackedthePT in preceding contests alongside a new electorate. He obtained votes fromsectorsthatweredissatisfiedwiththeoutcomesoftheSocialDemocracyPartyadministration,andseducedbythesoftreformismproposedbythePT.

IfLula’svictorywasfullofsymbolicmeaning–asenseofhistorictriumphforworkers,migrants,thepoorandmarginalisedsectorsofBraziliansocietyingeneral – it also corresponded to a widespread desire for change. It did not,however,signalthevictoryofanauthentic left-wingpoliticalproject.Rather itwas a coalition of conflicting interests and purposes. Lula represented awideandpluralisticcoalition,embracingoldrivalsfromconservativepoliticalparties,bigbusinessandotherstakeholdersthathadstoodagainsthiminpriorelections.ThebroadeningofLula’selectoratewasaresponsetohisplatformofcautious,gradual reforms, committed to the respect of market institutions and themaintenanceofmacroeconomicprudence.43Hisleadership,inturn,dependedonpacts with conservative political parties that had joined the coalition out ofexpedience,resultinginafragilepoliticalbalance.Inthispoliticalscenario,theactualmarginsforchangeremainedverylimited.44

OneofthefirstinitiativestakenbyLula’sgovernmentwastheinstitutionofanewMinistryforCities,agovernmentalboardchargedwithformulatingurbanpolicy at the national level and providing financial and technical support forlocal governments. It brought together housing, sanitation and urbantransportation – which had, since 1985, been spread across fourteen different

ministriesandsecretariats.InitiallyrunbyPTmembersandsocialactivists,thisministry signalled the recognition of the urban reform agenda as a politicalpriority.Initiativesincludedparticipatoryprocessesforpolicyformulation,suchas councils and conferences, as well as self-management experiments for theproductionofhousing,whichgainedinpoliticalscaleandpoweramonghousingmovementsinSãoPaulobytheendofthePT’sfirstterm(1989–92).45

The government’s housing policy had already been drafted during thecampaign.NamedProjetoMoradia(ProjectHousing),itwasoneofthepillarsofdevelopment policy in a country that sought to balance social issues witheconomic growth and the generation of jobs.46 For one year, InstitutoCidadania’s team promoted numerous technicalmeetings, as well as seminarswith socialmovements, corporate, technical and academic institutions,NGOs,unionsandstatesectors,inordertocompileideasanddebatealternatives.

TheprojectproposedthecreationofaNationalHousingSystemthatwastobe supervisedby theNationalCities’Council andby similarbodies createdatstate andmunicipal level. They were responsible for managing funds, with afocusonsubsidisinghousingforlower-incomepopulations,financedbyBrazil’sGeneralBudget(OGU)andFGTS.

In October 2003, the Ministry of Cities organised the first NationalConference ofCities,with 2,500 delegates elected through a broad process ofsocialmobilisationinmorethan3,000municipalities.TheelectionofaNationalHousing Council resulted from this process, with 56 per cent of itsrepresentatives originating from civil society (social movements, constructionindustryunion,professional andacademic associations andNGOs) and44percentcomingfromthegovernment(atfederal,stateandmunicipallevels).Socialmovements occupied almost half of the seats allocated to civil society.47However, the housing policy’s principal element continued to be SFH and itsmain funder to be FGTS, which remained subordinate to the Ministry ofFinance.

In 2005, chivvied by social movements, President Lula inaugurated theSecondNationalConferenceofCitiesbyproclaiminghisendorsementofthebillthat had emerged from the people’s initiative for the creation of the NationalSocial Housing System (SNHIS), including a specific fund (FNHIS) and acouncil. The bill was approved. According to this law, all public resourcesearmarkedforhousingwerepartofSNHIS– includingnon-interest finances–andwere tobe subject to thehousingplans tobe formulated and approved inevery municipality and state and at the national lever. Again, lower-incomefamiliesweretobeprioritised.Resourcesweretobeassignedtotheproduction

of houses and urban plots, urbanisation of informal settlements, landregularisation,housingameliorationandtherenovationandconversionofemptybuildingsintohomes.

However, the implementation of SNHIS and theMinistry of Cities’ urbanreformagendaencountered resistance frompartof thegovernment’seconomicteam. In addition, an internal political change in 2005 brought the fall of theminister and the resignationof a significantpartof theministerial team.Aftertheoutbreakofabigcorruptionscandal,dubbedtheMensalão,thegovernmentwasforcedtocedemorespacetoitsconservativealliesinordertokeeppoliticalsupportinCongress.Asaresult,thecontroloftheMinistryofCitieswenttotheright-wingProgressistasParty(PP).Inspiteoftherestructuringoftheministry,theSecretariatofHousingremainedunderPTcontrol,aswellasthepresidencyof Caixa Econômica Federal and its government vice-presidency, tasked withrunning the SFH and implementing the government’s urban developmentprogrammes.

ItwasinthiscontextthatDilmaRousseff,theministerofminingandenergy,assumed thepositionofchiefofstaff, thegovernment’s topmanager ineffect,andpolitically inchargeofhousingandurban infrastructure.At thesametimethe Ministry of Finance changed staff and Guido Mantega, a developmentaleconomistfromthePT’shistoriccoreandlinkedtotheunionmovements,wasnamedminister. The government decided itwas a propitious time to focus onexpandingworking-class consumption, inhopesof establishing a ‘newmiddleclass’.TheMinhaCasaMinhaVidaprogramme(MyHouseMyLife)wouldbethemostimportantachievementofDilmaRousseff’sfirstmandate.48

Since the beginning of the 2000s, both housing credit and the number ofhousing units produced by the market had been growing. In 2007, almost550,000unitswerefinancedbyFGTSandSBPE,andinmid-2008thevolumeofloansreached40billionreais.49Real-estatedevelopershadaccumulatedlargereservesoflandand,inthatyear,werepoisedtolaunchapproximately200,000housingunits.

When the subprimemortgagecrisisbroke in theUS in2007–08, investorsrushedtoselltheirstocks.Bytheendof2008,landwassellingatafractionofits value. It was a situation of international crisis with the risk of wholesalebankruptcyinthesector,somethingthatmightcontaminatethewholeproductivechain and, ultimately, the Brazilian government’s economic strategy. At thatmoment, the affected construction and development companies, led byGafisaand supportedby theCBIC (theBrazilianChamberofConstruction Industry),started to intensify their lobbying of the Ministry of Finance in order to

implementa‘housingpackage’inspiredbytheMexicansystem–whichhad,inturn,followedtheChileanmodel.

Throughdirectsubsidies tobuyers, thegovernment facilitated thepurchaseof the200,000units that the capitalisedconstructioncompanieswere ready tolaunchinthemarket.Haditnotbeenforthestate’sintervention,thisoperationwouldhavebeenseverelyjeopardisedbythecrisis.Thesubsidiesweregiveninthe form of resources for final buyers and through easier access to mortgagecredit, with the introduction of a loan guarantee fund. The ‘package’ wasdevelopedby thegovernment indirectdialoguewith theconstruction industryand investorsconcerned. Itwasoriginallydevised to save thecompanies fromthe debacle and, at the same time, to work as a countercyclical measurefurtheringjobsandgrowthinanunfavourableinternationalscenario.

Nevertheless,whenthe‘housingpackage’waspresentedtoPresidentLulaattheendof2008,he ‘politicised’ itsmeasures: insteadof200,000,heproposedtheconstructionof1millionhouses,andincreasedtheproportionearmarkedforthelowest-incomesectors,thatwouldbesubsidised100percent.Governorsandmayorsweretoberesponsibleforidentifyingthebeneficiaries.

Around the end of 2008 and the beginning of 2009, social housingmovementsandtheNationalForumforUrbanReformorganisedseveralactsofprotest.Theywereworriedat the rumoursofahousingpolicycreatedwithouttheir participation. The sit-ins and demonstrations in many states resulted inaudiences with President Lula and his chief of staff, Dilma Rousseff, at thebeginningof2009,whenthemovementspresentedproposals tobe includedinthe housing ‘package’. The Minha Casa Minha Vida (MCMV) programmefinally included the promise that a proportion of the ‘1 million houses’ forconstruction would be self-managed by cooperatives formed by housingmovementactivists.

Initially,MCMVwasdesignedtoserveonlymetropolitanregionsandcitieswith more than 100,000 inhabitants. However, during negotiations to get therelevant bill through Congress, the government agreed to extend MCMV toeverymunicipalityinthecountry.TheprogrammewaslaunchedinaceremonypresidedbyLulainMarch2009.Onthatoccasion,alongsidethepresident,fourmorepeople spoke: a representativeof stategovernors, a representativeof themayors, the president of CBIC and the president of Gafisa. In the audience,representatives of the social housingmovements expressed such frustration atnot beingon thepodium that, during the ceremony, they obtained the right tospeakdirectlyfromPresidentLula.

Although crucial to ensure the programme’s political support from social

housing movements, cooperative and self-managed housing represented lessthan 1 per cent of the total units.More importantlyMCMV offered differentconditionsfordifferentincomeranges,withdifferentlevelsofsubsidy.Thefirstrange(upto1,600reaisinmonthlyhouseholdincome)offersahighlysubsidisedproduct, built by private firms and ‘distributed’ by local governments. Thebeneficiarieswere defined by local governments, based on their own level ofdemand. The takers were supposed to pay a monthly fee for twenty years,corresponding to 5 per cent of household income, with the aspiration ofbecoming homeowners at the end.50 Caixa received the payments and wasresponsible for paying the construction company. The difference between thecost of the unit and the total amount paid by beneficiaries was covered by apublicfundfedbythefederalbudget.

The second range (families with amonthly income of between 1,600 and3,100 reais) also received subsidies, but to a lesser extent.When signing thecontract, homebuyers in this category could access direct subsidies of up to23,000reais–around20percentoftheupperlimitofaunit’sprice.Theyalsobenefittedfromcreditlineswithinterestsetbelowmarketrates,andaguaranteeextendedbyapublicfund(FGHab).ThethirdrangeonlygotcheapercreditandtheguaranteefromFGHab.

In the case of the second and third income brackets, private companiesconductedthewholeprocessofbuyingland,constructionandmarketingattheirownrisk.Caixafinancedtheproductionandsubsidisedthosewhowantedtobuytheunits,buttherisksandresponsibilitieswereassumedbyprivateenterprise.Inallcases,therewasapriceceilingfortheunitthathadtobemetinorderforthehousing project to be eligible for the subsidies and credit conditions: 76,000reaisforthefirstrange,andupto190,000forthesecond.51

Immediately after the launch of the programme, real-estate developersrecuperatedthevalueoftheirsharesonthebourse.Clearly,thereal-estatesectorand, especially, financialised developers and their investors greatly benefitedfromtheprogramme,asitnotonlysavedthemfrombankruptcy,butalsohikedthevalueoftheirshares.Afterpocketingtheprofits,theselargecompanies–theonesthatlaunchedthehighestnumberofunitsduringthefirstphaseofMCMV–slowlylefttheprogrammeinphasetwo,returningtomoretraditionalmarketniches.Inanycase,propelledbytheprogramme,housingcreditwentfrom1.55percentofBrazil’sGDPin2006to3.48percentin2010and6.73percentin2013.52

MCMV’s countercyclical effect on the civil construction industry wasindisputable. According to data from the São Paulo Construction Companies

SyndicateReview, this sector grew by 47.1 per cent between 2003 and 2013,while the country’s GDP grew by 45.9 per cent in the same period.What ismore,2.23millionformaljobswerecreated.From2010on,some1millionunitsfinancedbyFGTSandSBPEhavebeenlaunchedperyear,fourtimesmorethanin2003.Theproductionofpaintgrewby75percentandthatofrebarby72percentinthesameperiod.53

However, it isnotpossible tounderstand theprogramme’s successwithoutclosely observing its political dimensions. The centralisation of all financialresources gave a crucial role to the federal government in terms of housingpolicy,54 and hence control of an important electoral capital. It was nocoincidencethatMCMVwaslaunchedinMarch2009,eighteenmonthsbeforethepresidentialelections.Besidesmitigatingtheadversepoliticaleffectsthataneconomiccrisiscouldcastonthepresidentialsuccession,itservedtostrengthenthecandidatureofDilmaRousseff–toutedasthe‘motherofMinhaCasaMinhaVida’,theanointedsuccessortoLula,who,accordingtothelaw,couldnotapplyforre-election.

Oneoftheprogramme’scentraldeviceswastoovercomelocalgovernmentopposition. Party alignment was important in the implementation of federalgovernment policies at a local level, generating political capital for theirpromoters.However,anoveltybroughtbyMCMVwasthechancetobypassthe‘party’ by delegating the management of housing ventures to private firms.MCMV transformed Caixa into an important actor at local level, beingresponsiblefor‘spreading’theprogrammeandmakingitworkasacruciallinkbetween the parties involved – federal government, private firms, localgovernmentsandbeneficiaries.55Inthatway,itreinforcedthefinancingagent’sroleasthepolicy’smainimplementer.

Therewereelectoraldividends from inaugurationsofnewMCMVhousingcomplexes – always big political events, which conferred prestige on all thepoliticians involved.56 They were attended not only by local executive andlegislative leaders, but, often, by members of the federal executive andlegislativepowers.Thus,eachhousingunitdeliveredcountedtwice:thepoliticalcapitalthatitgeneratedservedboththemunicipalandthefederalgovernment–aswellasthedeputiesfromthegovernment’scoalition.

Finally, although small in numbers, organised social movements obtainedappreciable gains from MCMV: they could offer help and advice to theirsupporters,whoweremainlyfamiliesseekingahome.57Whilenotparticipatingde facto in housing policy decision-making processes, the movements werenonethelessincludedindebatesovertheshareofthebenefits.Makingthemost

of their representation within councils, these groups became part of themechanismsforcontrollingthedistributionofthegovernment’spoliticalassets,alongsidepartyleadersandtheirsupportbase.58

TheripplesofMCMV’seconomicandpoliticalsuccesscanbeseeninDilmaRousseff’selectionin2010andre-electionin2014,afterthelaunchofMCMV-2(2011)andMCMV-3(2014).AccordingtotheMinistryofPlanning,inAugust2014, the programme had already financed 3.5 million units and deliveredapproximately 1.7 million houses or apartments.59 Thus, from a packagedesigned to save financialised real-estate developers, MCMV grew to be thenational housing policy, based solely on the model of promotion ofhomeownershipthroughthemarketandmortgagecredit.Theunintendedeffect,however,was theendof thediversifiedhousingpolicy, tailored to localneeds,thatsocialmovementsandurbanreformactivistshadhopedforatthebeginningof Lula’s presidency and contained in the National Social Housing System(SNHIS).

Theprogrammearticulatedspecificpatternsofcoordinationbetweenpublicandprivateagents inBraziliancapitalism. If,ononehand, itwas fashioned toincentivise private companies to engage in the production of housing for lessaffluent citizens, it remained on the other hand highly dependent on publicresources,requiredtosubsidisetheacquisitionofpropertiesbylow-andmiddle-incomehomebuyers.This ambivalent financial arrangementmeant transferringtheriskstopublicinstitutionswhiletheeventualprofits–generallyamplifiedbyindirect subsidies–went to theprivate sector, reiteratinghistorical patternsofappropriationofpublicfundsbyprivateactors.60

A fewyears later, after the delivery ofmore than onemillion newprivatedwellings,collateraleffectsemerged.Decisionsconcerningtheprojects’locationand design had been handed to private agents, and such decisions wereinevitably driven by considerations of gain. Since the units’ dimensions andceilingpricewerepre-established,theentrepreneur’sprofitwasbasedoncuttingproduction costs. Savings were obtained through standardisation, large-scalereproductionofunits,speedyapprovalandconstruction,andlimitedexpenditureon land.61 The result was a proliferation of indistinguishable mega housingcomplexesinthecities’peripherallocations.62

Thestandardisationofhousingwascloselyrelatedtothestandardisationofthe production process, which involved the uniformisation of measurements,materials, components and even forms of execution and management of thebuilding site. This explains, for example, how a company was able to build40,000units inoneyear,followingonlythreehousingtypologies inmorethan

seventyBraziliancities’.63Thehomogeneityofsizeandinternalarrangementisnot appropriate to families’ different sizes and, above all, does not allow theflexibilitytoadapttothefamilies’changes.Itisnotpossibletoaddpuxadinhos(self-builtextrarooms)tothehousessoastoincorporateeconomicactivitiesortoaccommodaterelatives.64

According to these construction companies, large-scale constructionwas anecessarycondition forprofitability: theyargued that,with return ratesof lessthan15percent,projectsforthefirst incomerangewereonlycost-effectiveatover600housingunits.Suchmassbuildsoftenhaddisastrousurbanimpacts.65

Theissueof their location is, in turn,directlyrelated to theeffects that thegrowth of income and the vertiginous rise of credit availability had on landprices,mainlyinbigcities.Almostimmediately,real-estatepricesbegantosoaraboveinflationindexes,constructioncostsandincomerise.

Given the prevalent urbanisation pattern ofBrazilian cities, inwhich jobs,services,andeconomicandculturalopportunitiesareconcentratedinpocketsofmiddle- to high-income areas, these places experienced a price boom.Amongtheprogramme’shousingcomplexes,thoseearmarkedforthethirdincomerangelieclosesttothecities’centralandbetterequippedareas,whilethoseforthefirstincome range are relegated to the perimeters. These large-scale ventureswereproduced on great tracts at the fringes of cities, bleak places lacking properinfrastructure,commercialspaces,publicfacilities,evenpublictransportation.

Housingpolicyhashistoricallyperformedakeyroleintheconsolidationoftheurbanmodelof thesemetropolitanregions,notablyin theirreproductionofsocio-spatial patterns of segregation. The construction of large housingcomplexes inoutlyingareaswhere land is cheaper substantially contributed tourbansprawl,andtheentrenchmentoftheterritorialcleavagebetweenrichandpoor.Asaresult,despitethemanybillionsofreaisinpublicsubsidies,MCMVdidnothingtolessenurbansegregation.Rather,thiswasreinforcedbyproducingnewmono-functional urban areas or adding to the population density in pre-existingghettoisedzones.Thisendedupgeneratingaseriesofsocialproblemsthatplacedsignificantburdensonthegovernmentinthefollowingdecades.

Inparticular,gatedcommunities–compulsoryfortheprogramme’sverticalcomplexes – reproduced fortified enclaves that further fragmented anddislocated the urban social fabric. In addition, such communities requiredresidentstopayamonthlymaintenancefee.ResidentsinthestateofSãoPaulo,for example, complained that such fees ate upmore than 17 per cent of theirincome.Whenaddedtothecondominiumfee,thissometimesrosetoalmost40percentofincome.Intime,residentsstartedtodefaultonsuchfeesandconflicts

emerged aroundmanagement issues, often leading to the swift collapse of theproject.

Housing expenses weighed even more heavily once the cost of water,electricity and gaswas factored in. This impactedmainly on peoplewho hadbeenforciblyevictedandresettled.Theirprevioushousingarrangementswouldoften have included clandestine connections forwater and electricity supplies,andcertainlydidnotrequirepaymentofcondominiumfees.66

This issue is related to another effect of the programme.MCMV enabledmass evictions, for example in Campinas, where dwellers of various favelasborderingriversandstreamsweremovedintolargecomplexesontheoutskirts.In this case, the displacements clearly contributed to ‘adjust’ land values,removinglower-incomefamiliesfrommorecentraldistrictsandresettlingtheminhomogeneousenvironmentsofverylowaveragehouseholdincome.

Eventually,somecomplexesbecamedominatedbygroupsconnectedtodrugtrafficking and/or paramilitarygroups.This came about through the control ofcollective spaces and also of condominium management, where leaders ofresidents’ committeeswere imposed by one or another gang. Residentsmightevenbedrivenfromtheirhomesinorderforotherfamilies–infavourwiththegangsters–totakepossession.Thevictims’silencewasensuredbythreatsandretaliation.Evenso,38.4percentof thefamiliesdescribed theircondominiumas violent or dangerous, and 45.8 per cent considered them more violent ordangerous than their previous homes. Of the 494 families who had alreadythought about relocating, approximately 49.6 per cent cited violence as thereason.

Such data demonstrate the failure of the idea, frequently put forward tojustifyfavelaclearances, thatresettlingpeopleingated,formalised,regularisedandorderedhousingcomplexeswillputanendtoviolence.

13AttheFrontierofthe

Real-Estate–FinancialComplex

ThecrisisthathitBraziliancitiesattheendofthe1970scontributedgreatlytothe urban reform movement. Its advocates began to include not only theresidentsofcities’informalsettlements,peripheriesandfavelas,butalsomiddle-class sectors of liberal professionals such as architects, engineers and lawyerswho, mainly through their recently created unions, supported and joined thiscoalition.1Besidesdemandingtherecognitionofinformalsettlementsandtheirintegration intocities, themovementproposedmeasures tocombat ‘real-estatespeculation’, introducing the concept of social function of the city andproperties,andincludingformsof‘directdemocracy’.

Especiallyinthosecitiesmostaffectedbythecrisis,thiscoalitionsucceededthroughout the 1980s in electing local governments committed to a model ofredistribution and the expansion of citizenship. Despite the extremely limitedbudgets available to local administrations at the time, this model set out tointroduce infrastructure and public services in favelas and peripheries, andsupport cooperatives, business incubators, income-generation programmes andother social projects, drawing attention to the lack of national policies of thiskindandcounteractingnationalfiscalausteritypolicies2

The new redistributive, local model also impelled a conceptual andmethodologicalrevisionofurbanplanningandregulations–especiallyaftertheConstitutionmadeMunicipalMasterPlans compulsory formunicipalitieswithover20,000 inhabitants.According to thisprogressiveagenda, the formulationofMaster Planswas intended to change themodel of urban development thathad been followed over four decades of intense urbanisation based upon

territorialexclusionofthepoor.Itaspiredtothe‘ruptureoftheexclusivecontroloveraccess towealth, incomeandopportunitiesgeneratedwithin (andby) theuseandoccupationofurbanland,ensuringtherighttothecityforall,associalwealth rather thancommodification’.3 It also setout to influence themodelofurbanpoliciesconcerningcitizenship.4

Asaresult,the1980–90ssawgreaterinvestmentininfrastructure,especiallyinthemoredeprivedareas.However,‘irregular’or‘illegal’settlementsremainedbarred by urban and environmental planning regulations from total integrationinto thecity. It ispreciselyagainst thisbackground,and fromaperspectiveoftheuniversalisationofrights,thatthefirstattemptstorecognisefavelasinurbanplanning and regulation came about. Recife and Belo Horizonte’s pioneeringexperiments in the 1980s were innovative not solely for their investment infavelas,somethingsporadicallycarriedoutinmanyBraziliancities,butbecausethey identified and demarcated these areas asZones of Special Social Interest(ZEIS), recognising their existence and proclaiming a public commitment totheirregularisation.

InRecife’scase,Prezeis(PlanfortheRegularisationoftheZonesofSpecialSocial Interest) proposed rules for the implementation of urbanisationprogrammes and their consolidation through thedevelopmentof special plans,participatory processes and the recognition of the existence of specificoccupational patterns.5 Prezeis was particularly innovative in creating amanagement system that involved deliberation in local Urbanisation andLegalisation Commissions (Comuls). These were formed by residents andmunicipal representatives, and were responsible for approving and managingeach ZEIS’s urbanisation plan. Moreover, a Prezeis Permanent Forum waslaunchedtodiscussanddeliberateonprioritiesandgeneralstrategiesrelatedtothedemarcatedareas.

Belo Horizonte too was a pioneer, creating, in 1983, the Profavela(MunicipalProgrammefortheRegularisationofFavelas)thatdevelopedanewzoningcategoryinitsMasterPlan.

Inthewakeofthesetwoexperiences,therewasanationwidemultiplicationof programmes which directed the regularisation and urbanisation of favelas,along with new laws specifying instruments for the regularisation andrecognition of tenure rights. Among Brazilian municipalities, the adoption ofZEISacceleratedbetween2001and2009,withasignificantincreaseafter2005,when they were incorporated into Municipal Master Plans. ‘The number ofmunicipalitieswhoseMasterPlansincludedZEISjumpedfrom672in2001to1,799in2009,whichrepresentsanincrementof168percent.’6

However, theday-to-day strugglesof informal settlements andoccupationsin resisting violent evictions and expulsions were much more complex andcontradictory. In the 1990s, the consolidation of favelas in central areas wasalready an object of dispute and controversy.7 It was not a coincidence that,although approvedby theNationalCongress, thevery instrument that enabledthe concession of irregularly occupied public areas to their residents – theSpecialConcession forHousingPurposes –wasvetoedbyPresidentCardoso.Later negotiations resulted in the promulgation of a Provisional Measure,prohibiting the application of these instruments in green spaces andenvironmental protection areas.The official federal systemof housing financeand urban development – even under the PT coalition’s administration – hasneverrecognisedanythingotherthanfullyregisteredpropertyasaguaranteeofsecurityoftenure,despiteitsbeingprotectedbythestatutebooks.

ZEIS were also included in some Master Plans to designate areas whereaffordable housing should be built, combined with innovative land policyinstrumentsdesignedtocurbspeculation–suchasprogressivetaxesinemptyorunder-utilised areas or compulsory occupation orders. These attempts facedresistanceincitycouncilsandcourts,whichallegedlackoffederalregulation.

In 2001, the Statute of the City, a federal law, tried to provide the legalframework to solve this impasse and established a five-year deadline for allcities to approve theirMaster Plans. Therefore, when the team led by OlívioDutra–anadvocateof‘municipalsocialism’8–tookovertheMinistryofCities,theMinistrydecidedtopromotetheelaborationofparticipatorymasterplansaswell as the incorporationof thenew landpolicy instruments in them.The lawrequiredmaster plans to consider the ‘social function’ of each city, through aparticipatoryprocessofdiscussionandagreement thatshould takeplace in thepublicarenaineachcity.

BasedonaproposalderivedfromtheTechnicalCommitteeofPlanningandUrban LandManagement and in alliance with civil society organisations andgovernmentbodies,theministrydecidedtosupportacampaignpartneringwithanetwork of technical and academic bodies, research institutions, state andmunicipal governments, social movements and, in some states, the PublicProsecutor’s Office.9 This agenda challenged the public machine, statebureaucratsandpoliticalleaders

toproduce institutionscapableofgeneratingexchangesandagreementsbetween thevarious localstakeholders about the future of their society; to promote networks of stakeholders working onpublic problems; to establish instruments of citizens’mobilisation; to create norms to ensure theimplementationoftheseagreements;tohaveastrategiccapacityofpoliticalarticulation;and,above

all,togainstakeholders’trustandreducetheuncertaintiesofthepoliticalsystem.10

From an urban planning point of view, the ideawas to promote ‘urban pacts’capableofpromotingsustainableoccupationofeachcity’s territories,ensuringanadequateplaceforallitsinhabitants.Fromapoliticalpointofview,therewasa commitment to multiplying the number of actors having politicalrepresentation, to allow the incorporation of new subjects into the debate anddecision-makingaroundurbanpolicies.

After theMinistry ofCities’ call,more than4,000Brazilianmunicipalitiesencouraged local discussion of urban development policies, either throughmunicipal conferences, the development of participatory master plans or theparticipation in newly formed councils,with a variety of results.Naturally, incitieswhereorganisedsocialmovementsexistedalready,theyusedthepoliticalspaceopenedbythedebateasanadditionalforumtopresenttheiragendas.

Inmanycities,publicdebatesonurbanpolicywerebeingheldforthefirsttime. In others, itwasmerely a formal procedure – the conveningof apublichearing and its record in secretarial minutes – to avoid the accusation (andpossibleretribution)against localcouncilsandmayorsofnon-compliancewiththe law. A significant proportion of local administrations went through themotions,hopingthatfulfillingthelegalrequirementswouldmakethemeligibleto receive federal support for urban development. Research performed by theMetropolis Observatory showed that, despite the quantitative success ofapprovedmunicipalmaster plans and the presence of theStatute of theCity’s‘newinstruments’,

Many plans merely transcribe excerpts of the Statute; others incorporate instruments withoutassessing their pertinence to the territory and the municipality’s management capacity; othersincorporatefragmentsofconceptsandideasfromtheStatutewithnoconnectiontotheurbanplanitself … This research exposed a generalised inadequacy of the instruments’ regulation withinmasterplansintermsoftheirauto-applicabilityoreffectiveness,mainlyinthecaseofinstrumentsrelatedtotheinductionofinclusiveurbandevelopment.11

At the same time, the policy of growth with job generation and wageimprovement mobilised public resources to foster urban development throughlargeinfrastructureprojects,oftenwithoutanyconsiderationofthedevelopmentofhousingor theeffectsonurbanmarkets.This resulted ina totaldisjunctionbetween the master plan’s directives and the large investments under way orabout to be realised. According to a report on the plans developed in Rio deJaneiro:

large investments are imposed onto themaster plan as external conditions, i.e., large investment

definitionsaredecidedwithnorelationtomunicipalmasterplansandplansdonotdialogueasmuchastheycouldwithexistingorprojectedinvestments.Investmentsinpowerplants,steelindustries,airports,largeroadworksorPAC(GrowthAccelerationProgramme)initiativesarenotmentionedwithinmasterplans,anddonotexplicitlyrelatetoanyothergrowthstrategyordirective.12

ItispossibletosaythesameaboutMinhaCasaMinhaVida’sprogramme,whichfailedtoincludeanyelementoflandpolicy.Localmasterplansthusbecamelawthatcouldbeenforcedornot,anddefinitelydidnotdirectthelocationchoicesofMCMVprojects.

Meanwhile, with the defeat of theMovement for Urban Reform’s agendaunder the PT government at the national level, fiscal austerity measuresexpressed an archetypal neoliberal response to the crisis at local level. Urbanpolicy now aimed at inciting competition between cities, demonstrating howstrategic planning might become a fundamental instrument for neoliberalpolitical administrations. Such was the case with Mayor Cesar Maia’sadministration,whichemptiedofmeaningtheMasterPlanapprovedforRiodeJaneiro.13AccordingtoCarlosVainer,

It is impossiblenot toacknowledgethecentralityof theideaofcompetitionbetweencitieswithinthetheoreticalandpoliticalprojectofurbanstrategicplanning.Itistherecognitionofcompetitionbetweencitiesthatauthorisesthetranspositionofthestrategicmodelfromtheentrepreneurialworldtotheurbanuniverse,asitisthissamerecognitionthatauthorisesthesaleofcities,theuseofurbanmarketing, the authoritarian and despotic unification of citizens and, finally, the enforcement ofcivicpatriotism.14

Rather than opposing ‘socialist’ urban policies with ‘neoliberal’ policies, onesawthesimultaneousandcontradictorypresenceofbothideologiesinside‘left-wing’administrations.TakeSãoPaulo.Here,thecity’sMasterPlan,producedatthebeginningof the2000sduring the administrationofMayorMartaSuplicy,incorporated various instruments from the Statute of the City for landregularisation,recognitionof tenureandpromotionofaccess tourbanised landforlower-incomeresidents.Andyet,thesameplanmarkedoutasignificantpartof the municipal territory as areas open to public–private partnerships andbacked projects exempt from the general regulations of the city, designed toattractprivatecapitalandinvestment.Thiswasadeliberatemovetoexpandthefrontiersofthereal-estate–financialcomplex.

Thefirstinstanceofbendingexistingzoningregulationstoallowchangesinland use rules, in exchange for financial compensation from real-estatedevelopers,wasontheoccasionofaco-projectagreementbetweenthecitiesofSãoPauloandTorontoat theendof the1980s.SãoPaulohadrecentlychosenJânioQuadros, supportedby a right-wing coalition, as its first directly elected

mayor(1985–88)afterthemilitarydictatorship.15Therelaxationofregulationswasproposedasa‘LawforDe-Favelisation’(Lawno.10,209,1986).Thejointventure granted special authorisation for the alteration of urban patterns (areafloor ratios, permitteduses, set-backs, occupation rates, etc.) inplotsoccupiedby favelas.Authorisation to use flexible zoning ruleswould be granted to theowner of the plot in exchange for the obligation to build and donate socialhousingfor thefavela residents inadifferent location.Thenumberofhousingunitstobebuiltwascalculatedaccordingtoapercentageofthepotentialprofitthatthelandownerswouldobtainwiththenewzoningpatterns.

Twoyears later, interested landlords could, insteadof directly building theaffordablehousingunits,hireamunicipalgovernmentbody,FUNAPS(FundforResidentsofSubstandardHousing),todoso:‘thepaymentofthecompensationtoFUNAPS…allowedthecreationofapotentiallyhugesum,transferredfromprivatemoneytoaSocialFund.’16

Forthisreason,whenthefollowingelectionswerewonbyLuizaErundina,thefirstPTmayorofSãoPaulo(1989–92),theinstrumentcontinuedtobeused,financing almost 4,000 of the 10,000 housing units produced during thatadministration. FUNAPS resources were responsible for funding projects ofcooperativeandself-managedhousingconstruction,urbanisationoffavelasandrenovation of buildings in downtown areas. Nevertheless, during Erundina’smandate,thisinstrumentbecamedetachedfromde-favelisationandwasopenedtoanyentrepreneur.Newmethodsofcalculatingandnegotiatingcompensationwereintroduced,raisingnotonlythenumberofprojects,butalsothepricepaidbyentrepreneurspersquaremetre.17

During the following administration, under a right-wing coalition led byPauloMaluf(1993–96),jointventurescontinued,althoughunderpressurefromthe city council, which demanded a say in the process of negotiation andapproval.18TheresourcespaidbyprivateentrepreneursinexchangeforflexiblezoningstartedtofinancetheCingapuraproject–apartmentbuildingstoreplacepartofthefavelasneighbouringSãoPaulo’smainavenues.Finally,in1998,thejudiciary suspended the application of the de-favelisation law. Itwas declaredunconstitutional in 2000 and, in the following year, became the object of aParliamentary Commission of Inquiry involving the city council, afteraccusationsofthelossofalmostUS$80millionthathadnotbeentransferredtothehousing fundduring the administrationsofPauloMaluf andhis successor,CelsoPitta.19

Thisaccountreveals the threads thatunderhandedlywovethe localversionofaglobalparadigm.Itsstartingpointwasundoubtedlythefiscalcrisis.Indeed,

since 1983, São Paulo’s own investment capacity became negative. The diagnostic presented byMárioCovas’sadministrationin1984indicatedthat,forthefirsttimeinthecity’srecenthistory,theexpendituresrelatedtotherepaymentofdebtsexceededthelevelofinvestment.20

Why? Brazil’s economic stagnation, combined with the galloping rise ofinternational interest rates, hugely swelled the public debt. One recipe toconfront inexorable budget deficits came from Canada, in the form of ‘co-projects’ between cities. Such ‘co-projects’ were among the newmechanismsthat redrew the world of international relations, with cities andmunicipalitiesassumingmoreinitiativeandindependencetowardstheirinternationalcontacts,bent on defending their interests in the global environment. It iswhat is nowcalled‘para-diplomacy’,oneofurbanentrepreneurship’snewweapons.

While Toronto ‘sistered’ São Paulo, the Canada Mortgage and HousingCorporation – the Canadian authority for housing and homeownership – wasseeking new forms of public–private partnerships to beat the Canadian fiscalcrisis. It financed theTorontomunicipality’s research into linkageprogrammeswith San Francisco, in the US, and with British Columbia. These policiesrequiredcorporateinvestorstoproducehousingunits intheirareaofaction, intheformoffinancialresourcesorlanddonations.21

In the same period (late 1970s to early ’80s), North American citiesintroduced what they called ‘inclusionary zoning’: incentives in the form of‘density bonuses’ or the possibility of increasing the construction potential inexchange for the production, by the entrepreneur, of a certain number ofaffordableunitsinthebuilding.22

The‘translation’ofthisinstrumentbyJânioQuadro’sadministrationlabelledthe production of houses a ‘compensation’, not an ‘obligation’, as it was inNorthAmericanandCanadianlinkageprogrammes.UnderSãoPaulo’sversionof the linkage programme, both sides of the equation were interconnected: itbecamepossibletoremovefavelasfromcitiesand,atthesametime,tobowtothe real-estate sector’s pressure to undertake construction that was currentlyimmobilised by the rigidity of zoning regulations.By connecting the potentialprofits with the provision of affordable dwellings, this mechanism promotedhomeownership as the solution. Within the city’s political economy, theprogrammewas presented as a fairmechanism, that helped the poorest whilesolving the social blight of housing precariousness. Thatway, it dissolved theresistancetoincreasedliberalisation.Additionally,itgainedthesupportof‘left-wing’parties.

Theliberalisationofzoningwasalsoapartofneoliberalideology.Itmeantthe creation of a less regulated working environment, with more freedom of

actionforthemarket.However,itdidnotmeanthesuspensionorsubstitutionofzoning,buttheopeningforpotentialexceptions,asdescribedbyWilderode:

jointventures reveal theobsolescenceofzoning.However,despiteallowing thederogationof thezoninglaw,jointventuresdonotopposeit.Conversely,themaintenanceofzoningisafundamentalelementforthefunctioningoftheinterconnectedmechanism…itisthecreationofanexceptiontothe previous rule, and this exception generatesmuchmore profit than is shown in the technicalreports to calculate potential gains,which are produced by certified evaluators (coming from theprivatesectoritself).23

Inthisway,practicesandideologiesofdifferentoriginsandobjectivesbecameinterwoven,whilecuttingapaththatprogressivelyexpandedtheareasofthecitytobeopenedupbythereal-estate–financialindustry.

Nonetheless, the joint ventures came to an endwhen their applicationwasjudiciallycontestedbyzoningregulationdefenders.Theyweresuspended,andonly publicly reappeared when the city council started an inquiry into theirdealings.Thatwaswhenanothertraitoftheseprojects’‘business’cametolight:Maluf andPitta’s administrations, besides enabling earnings for the real-estatesector,didnottransferanyresourcesresultingfromjointventuresto‘affordablehousing’.

WhileSãoPauloexperimentedwithjointventures,italsoexperimentedwithothertypesofpublic–privatepartnerships.Proposedforthefirsttimeinthe1985MasterPlanproject,duringMárioCovas’sadministration,itplannedtoexpandthe supplyof infrastructure, urban facilities andhousing in thirty-five areasofthecity–aboveallinthesuburbs.24However,theproposalwasshelved.

It resurfaced later, in Jânio Quadros’s Master Plan, but only began to beimplemented under Luiza Erundina. During his administration, Quadros hadinitiated a large package of roadworks (tunnels, viaducts, canals and newavenues) distributed betweennine large contractor companies.The initial totalvaluewasof330millionreais.Bytheendofhisterm,ithadalreadyrisento416million reais. In that way, when Erundina became mayor, she inherited anoutstandingdebtof135millionreaisandatotalbudgetof900millionreaisforthecompletionoftheworks.Asnoexternalfinancingwasobtained,theworkswere halted for reassessment by the new administration. It was decided torenegotiate the costs and to finish the works at Anhangabaú, due to theirdowntownlocation.25

The funding strategy for the new tunnel crossing the city centre was tolaunchapublic-privatepartnership–OperaçãoUrbanaCentro–tosellbuildingrightsinexchangeformoneytofinishthepublicworks.Thejustificationforthiswasthenecessityof‘revitalising’theareabyattractingnewreal-stateinvestors.

Similarly, theFariaLimaUrbanProject (OperaçãoUrbanaFariaLima),whichwasincludedintheMasterPlanof1991andregulatedonlyin1995,wasdirectlytied to a road project. The proposal for its inclusion in the city’sMaster Plancame from JúlioNeves’s architecture office.Hewas involved in planning thecity’s new corporate district, in the south-west. Initially christened ‘BoulevardSul’,theprojectofextendingAvenueFariaLimawaspresentedtothecityhallas‘importantroadworksatnocosttothemunicipality’.26AccordingtoErmíniaMaricatoandJoãoWhitaker,

the market’s interest in the Marginal Pinheiros’ region, along Faria Lima and Água Espraiadaavenues … is related to the movement of private enterprise towards the creation of a new‘globalised’–and,evidently,segregated–centreinSãoPaulo.ApowerfulgroupwasformedtoputpressureonCityHall.Itincludedrenownedarchitectswiththeirowninterestsintheproject(havingdevelopedprojects and urban plans for the area)… that is, the urban project becomes an end initself,anelementofleverageofamegareal-estateproject.27

Faria Lima Urban Project was considered a great success, attracting theparticipationofdevelopersandraisingmore than2billionreais.28Thisprojectalso saw later on, under its first revision in the city council in 2004, theintroductionoftheCertificatesofAdditionalConstructionPotential,(CEPACs)–areal-estate–financialbond.CEPACswereauctionedin‘packs’andnegotiatedonfinancialmarketsthroughtheStockExchange.Thepricewasdeterminedbyauctionand, likeanyother financialbond,oscillatedaccording to themarket’sinterests, which, in turn, depended on the appreciation of the urban spaces towhich theprojectwas linked.29Thus the introductionofCEPACswasanotherstep towards the financialisation of urban development. As Paulo Sandroninotes:

The first auction ofCEPACswasmade inOperaçãoUrbana/UrbanOperationÁguaEspraiada inJuly2004;100,000CEPACswereofferedat theminimumpriceofR$300(US$150).Allof themweresold,producingrevenueofR$30million(US$15million)…

InDecember2004thefirstCEPACauctionwasheldinFariaLimaUrbanOperation,and90,000CEPACswereofferedataninitialprice,determinedbylaw,ofR$1,100(US$550)each.Only9,091weresold,resultinginrevenueofaroundR$10million(US$5million)…

Thefailureofthisauctionandtheapparentlackofinterestofdevelopersinaverydynamicareaofthecity(fromthereal-estatebusinesspointofview)wasduetomanycauses…Whenitbecameclearat thebeginningof2004that theCEPACslawwasgoingtobeapprovedinurbanoperationFariaLima,manydevelopersobtained licenses tobuild inaccordancewith the formermethodofeconomiccompensation…

AdditionalreasonsforthehugefailureofthefirstauctionintheFariaLimaUOwerearecessioninthereal-estatebusinesscycleandthefactthattheauctiontookplaceduringthelastweekofthemandateofthemayorwhohadlosttheelectiontotheopposition…Thiscausedsomeuncertaintyaboutthefutureofurbanprojectsingeneral…ThefirsttwopublicauctionsintheFariaLimaUOfailed…

The thirdpublic auction in2007wasvery successful. In this auction, 156,730CEPACswereoffered at an initial price of R$1,225, and all of themwere sold for R$1,240.01, an increase ofalmost13percent.30

The introduction of CEPACs in São Paulo was a step forward in weavingconnectionsbetweenfinance,realestateandurbanregulations,underbothleft-wingandright-winglocalcoalitions.

14Real-EstateAvenues

‘TheAvenueIsOwnedbytheFunds.’Withthisslogan,theBrazilianReviewofPensionFundscelebratedthefirst

business district outside of the city centre andAvenida Paulista.1 The projecttookoffbetween1968and1971withtheconstructionofanexpresswayonthebanksofthePinheirosriver:theMarginalPinheiros.2Theavailabilityoflandforsale,thepresenceofhigh-incomeresidentialneighbourhoodsandthelaunchofthecity’s firstshoppingcentre, Iguatemi, in the late1960s(alsonearMarginalPinheiros),propelledthenextphaseofexpansion.

However, theentranceofpensionfunds intoSãoPaulo’sreal-estatemarketand the shift in corporate real-estate strategy – renting floors or buildingsthrough long-term contracts instead of building or buying them – drove theboom of corporate towers, hotels and convention and shopping centres in theregion from the late 1980s onwards.3 Between 1984 and 1999, more than800,000squaremetresofcorporatebuildingswerecompleted,withthesizeableparticipationofPrevi,Funcef,Sistelandotherpensionfunds.4

PensionfundshadfirstbeenintroducedinBrazilin1977asastrategictoolfor the generation of internal savings and the formation of a capital marketduring themilitary regime. Inspiredby similarNorthAmerican schemes, theywereinitiallycreatedwithinbanksandstatecompaniesandsponsoredbypubliccompanies. In 2010, therewas a total of 369 funds,which, together,managed504billionreais–theequivalentof17.5percentofBrazil’sGDP.Themajoritywererunbyprivatecompanies,64.7percentofthemarket,givingtheseactorsconsiderable economic and political power. Brazil’s largest fundswere: Previ,fedbyBancodoBrasilemployees;Petros,fromPetrobras;Funcef,fromCaixaEconômica Federal; andValia, fromVale (amining andmetals company that

wasprivatisedinthe1990s).5

Sincetheircreationduringthemilitarydictatorship,pensionfundshavehadstrategicimportanceforthegovernmentandhavebeenrepeatedlymobilisedforthe implementation of its policies. During President Fernando HenriqueCardoso’s mandate (1995–2002), they were called upon by the government,alongside theNationalBankforEconomicandSocialDevelopment (BNDES),toparticipateinstatecompanyauctionsandbecometheirminorityshareholders.In that way, they formed, alongside banks and private equity funds, SpecialPurpose Entities (SPEs) with the sole purpose of acquiring such shares.6AccordingtoSérgioLazzarini,

duringtheprivatisationprocess,PresidentCardoso’sgovernmentreceivedstrongcriticismfromleft-wingoppositionparties fordeliveringBrazil’snational companies to foreigncapital.At the sametime,itwasnecessarytoreassurepublicopinionthattheauctionswouldbesuccessful…Inordertoattenuate this criticism and politically enable this process, state pension funds andBNDESwerevigorouslyactivated.7

Nonetheless, from the 1990s on, amovement led by the Bank Clerks’ UniongrewwithintheUnifiedWorkers’Central(CUT)andotherunionfederationstodemand a say in the regulation of pension funds, aiming to expand theiractivities while exerting greater political control over them.8 In 2001, a bill,stronglysupportedbydeputieswithunion links,extendedworkerparticipationin the running of the funds. In October 2002, these new directors of ClosedPrivate Pension Entities published the ‘Carta de Brasília’ (Brasilia Letter),supportingunionleaderLuladaSilva’scandidatureforthepresidency:

We,theundersigned,wereelectedbytheworkerstodirecttheirpensionfunds,arecommittedtotheindependentandseriousmanagementoftheirresourcesinthefaceofanygovernmentandmanifestoursupportforLula’scandidature,certainthatthisisthebestwayforthefundstodeveloptheirfullpotential,fulfiltheircommitmentsandcontributetothecountry’sdevelopment.9

Indeed,onceelected,Lulaenthusiasticallymobilisedthefunds’participationinPPPsandlargeindustrialandinfrastructureprojectsinthecountry.Forexample,pensionfundswerethemaininvestorsinhigh-endoffices,shoppingcentresandholidayresortsbetweenthemid-1990sandmid-2000s.Thustheyworkedas‘asubstitute for real-estate credit in thedestinationof capital flows into the real-estate sector; some funds invested up to 20 per cent of their resources in realestate–asignificantcapitalflowthathadimportantconsequencesforthereal-estatesector’sstructureatthetime’.10However,thischangedin2002,whentheCentralBankreducedthemaximumpercentageofpensionfundparticipationinreal-estate assets to 16 per cent. From then on, this figure progressively

decreasedapproximatelytwopercentagepointseverytwoyears,untilreaching8percentin2009.11

Pension funds were important agents in the construction of São Paulo’sbusinessdistrict,openinganewreal-estatefrontierinthecity’ssouth-westzone.In order to ensure high rates of return, pension and real-estate funds favouredcommercial buildings classified by real-estate consultants as ‘triple A’, alongwithshoppingcentres.Whereverpossible, thebuildingwassituatedonanaxisofreal-estatevalueappreciation:locationwaseverything.12

Nevertheless, any area’s long-term value essentially relies on publicinvestments in infrastructure, especially roads and transportation. Publicinvestmentwasdecisiveforsettingpricesandprofitabilitymarginsofreal-estateinvestments.13According to JoãoWhitaker, ‘the completionof the city’smostdesirable and important real-estate front,MarginalPinheiros’s “newglobalisedcentrality”…dependsalmostexclusivelyonvarious investments in theregionand,thus,onthepressureofthelobbytodirectpublicinvestmentaccordingtoitsowninterests.’14

At this point, another fundamental actor in the coalition emerged: thecontractor.

TheStateandtheContractors

The state has enjoyed a strong and long-lasting relationship with the nation’scontractors.Itisa‘functionalunion’thathasresultednotonlyintheinextricableentanglement of public and private interests, but also in the great power ofcontractorstoinfluencepublicpolicies.15

Theintimateassociationbetweenthestateandprivatecapitalis,inthewordsof Raymundo Faoro, an ‘internal game of exchange of advantages,fundamentallysustainedbyapatrimonialnetwork’.16 Itappliesnotonly to therelationsbetweenstateandcontractors,butalsotoapeculiarityofcapitalisminBrazil – the primacy of ‘patronage’. Faoro attributes this characteristic to thespecificitiesofBrazil’shistoricformation,especiallyinthecolonialera.

During that period, in the absence of an impartial, rule-based system, theprivate sector’s economic opportunities depended on its capacity to establishdirect links with a discretionary Crown. According to Faoro, this logicdominatedboththeImperialera(1822–98)andtheFirstRepublic(1898–1930),when the state became the main conductor of the economy. Sérgio Lazzarini

develops the thesis that the individualswith power are thosewho are insertedand coordinated within a web of corporate links between public and privateactors – links that are expressed through interactions across the spheres ofpropertyandcompanydirectorships.17

Although it is certainly possible to detect this tendency in past state–contractor relations,wemust reflect upon the specificity of this sector and itsroleinthecountryinordertounderstandtherecenttransformationsofthebuiltenvironment, as well as the making of the Brazilian real-estate–financialcomplex.Contractor companies are currently themain drivers of this process,coordinating and leading the new form of infrastructure financing andgovernance:thePPPs–public–privatepartnerships.

At the end of the 1970s, due to the economic and fiscal crisis, the federalgovernment progressively reduced its investment, cooling the market forambitious projects.Contractor companies switched to seeking dealswith stategovernments and metropolitan administrations. They participated in theimplementationofsanitationprogrammesandother infrastructuresectors– forexample,theconstructionofSãoPaulo’smetrosystem.18

Bythatpoint,inthemid-1980s,directelectionsformayorsofstatecapitalswere already in place. As the contests for the government of states and forlegislative positions grew fierce, campaign funding became a vital means ofconnecting political influence with big money. State and municipal electionsbecame occasions for bargaining between candidates and their campaignsponsors. Deals were clinched directly with futuremembers of the executive,suchasmayorsandgovernors.

São Paulo’s municipal budget – the country’s third largest – becameincreasingly attractive when the Constitution transferred resources previouslyreserved for theFederation tomunicipalities.19According to Szmrecsanyi andLefèvre,thepackageofworksproposedbyJânioQuadrosin1985wereliterallya ‘package’, a hotchpotch of proposals presented by contractor companies,selectedaccordingtopersonalcriteriabythethenmayor.Thefinalcutincludedthefollowingprojectsandcompanies:tunnelsunderIbirapueraPark(CBPOandConstran); boulevards JK I and II (Serveng-Civilsan, CBPO and Constran);tunnelsunderthePinheirosriver(CamargoCorrêa);aminiringroad(AndradeGutierrez);acanalisationof theÁguaEspraiadacreekandanavenuealongitslength (Mendes Jr.); the Jacu-Pêssego road complex (CR Almeida); theredevelopmentofValedoAnhangabaú’s(AndradeGutierrez).20

Most of the works in the ‘package’ launched by Mayor Quadros weredirectly related to the expansion and consolidation of São Paulo’s southern

business district. These urban projects were managed by the public companyEmurb, which administered both the works themselves and the financialresourcesraisedbytheprojects.Emurbwas,therefore,thepointofcoordinationbetweenlargecontractorcompaniesandthelocalgovernmentinSãoPaulo.21

After the return of democracy, in São Paulo and other municipalities andstates,connectionsbetweencontractorcompaniesandthegovernmentbegantobemade throughpoliticalpartiesand,moreprecisely, through fund-raising forelectoralcampaigns.Thepower-brokersaregenerallymembersoftheparty,whooccasionally also occupy positions within the government that allow them tocontinuetoactaslinksbetweenthegovernmentandcontractorcompanies.

In recent decades, unsurprisingly, large contractor companies havebecomethe main financers of political campaigns, especially those for executivepositions,asthis is thelevelwithmostpowertoinstigateanddistributepublicworks contracts.22 The companies usually donate to several parties, bettinglarger sums on those who have a better chance of winning. For contractorcompanies,donationsworkasakindof‘insurance’,toguaranteethattheywillbehiredbythenewgovernment,orgetpaidiftheyhaveongoingcontracts.Forthepoliticiansinvolved,contractingandpayingthosecompaniesisa‘return’forthe support received.23 Heavy construction has thus been politicised, as ‘thecondition for obtaining contracts – aswell as their profits – are of a politicalnature, linked to the company’s ability to deploy its influencewithin the stateapparatus.’24

Ultimately, this deployment allows large andmega-contractors not only toredirectpublicbudgets,butalsotodrawuptheinfrastructureprojectstheywishto execute, ‘selling’ them to their potential clients (governments and statecompanies).25ThiswasclearlythecaseforMayorQuadros’s‘packageofworks’(tunnels, avenues, bridges and canals) thatmade up his ‘urban renewal plan’.Thecircleisthusclosed:the‘real-estateavenues’financethecostoftheworksproposed by the contractor, simultaneously opening new fronts for rentextractionandfeedingthemachineofpoliticalcampaignfinancing.

Moreover,throughoutthe1990s,manycontractorsparticipatedinreal-estateventures as a strategy for business diversification, joining developers andinvestors in building clusters of corporate towers and retail spaces. They tookadvantage, for example, of previously established relations with the BNDES(Bank for Economic and Social Development) to raise publicmoney to buildshoppingmalls,definedbyBNDES’slinesofcreditas‘urbanequipment’.Theyalso tookadvantageof theirhistoric linkswith thepublicworkssector tourgeinvestment in road projects that, in turn, offered their businesses new

opportunities.Buttherewerestillbiggerprizesonthehorizon.

15Real-EstateGames

2October2009Inthestreets,youcouldhearthecheering.CrowdswatchedthebigscreensetupbythetownhallonCopacabanaBeach.LivefromCopenhagen,itbroadcasttheannouncementofRiode Janeiroas thehost cityof the2016OlympicGames,beatingChicagoandMadrid.ChiefofStaffDilmaRousseffwenttoRiotoaddher voice to the celebration, accompanied by the minister of cities, MárcioFortes.Atthebeach,manyweredressedingreenandyellow,respondingtothecall tobrightenup a shoreline alreadydecoratedwith a250-metrebanner thatsaid‘RioLovesYou’.1

On the screen, Lula shed copious tears, while hugging Rio de Janeiro’sgovernor, Sérgio Cabral. At the back, Henrique Meirelles, the president ofBrazil’sCentralBank,andCarlosNuzman,presidentof theBrazilianOlympicCommittee,lookedonsmilingly.TheheadlineofthenewspaperOGlobo read:‘Yes,WeCan:RioBeatsChicagoandWillHostthe2016OlympicGames’.EikeBatista– thenoneofBrazil’s richestmen, theownerofmining, transportationand oil companies that had recently completed their IPOs – had donated 10millionreais toRio’sOlympiccampaignandwasoneof thosewhocelebratedthemost.

March2014InRio, theWorldCup andOlympicGamesPeople’sCommittee and InstitutoMaisDemocracia(MoreDemocracy)publishtheleaflet‘WhoaretheownersofRio?’ It lists the large works, with their respective values, financers andexecutors.TheBNDESandtheCaixa(NationalSavingsBank)togetherleadthefinancingwith 10.5 billion reais. They are followed by themunicipality (10.4billionreais)andthenthestateofRiodeJaneiro(8.7billionreais).Amongthe

works planned are urbanisation projects for the favelas of Manguinhos andAlemão, the construction of theOlympicVillage, the renovation ofMaracanãStadium and new transit lines such as the Light Rail, Transolímpica andTranscarioca roads and Metro Line 4, as well as the renovation of GaleãoInternationalAirport.TheleafletalsoliststhePortoMaravilhaproject.

Barring the schemes for Manguinhos and Alemão – won respectively byAndradeGutierrez/CamargoCorrêaandOdebrecht–alltheotherprojectsonthelist were PPPs, implemented by joint ventures between Odebrecht, AndradeGutierrez,CamargoCorrêaandOAS.TherenovationofMaracanã,forexample,wascarriedoutbyAndradeGutierrezandOdebrecht.Thelatter,alongsideIMX,owned by EikeBatista,won the bid tomanage the stadium.Over four years,Batista donated 80 million reais per year to equip the Pacifying Police Units(UPPs)installedinfavelassurroundingtheareathatwouldhostOlympicevents.The UPP in the Alemão community was set up in May 2012; the one inManguinhos,inJanuary2013.

OncetheRioBarraJointVenture(CCRB),ledbyOdebrecht,concludedtheconstruction ofMetroLine 4, itwas operated by Invepar, a joint venture thatmanagedtransportationservicesinpartnershipwithOASandthemainBrazilianpension funds, Previ and Funcef. The Olympic Village in Barra da Tijuca,baptised‘PureIsland’byitsconstructors,hasthirty-onetowerblockswith3,604high-quality apartments that served 18,000 athletes during the Games. Theywere already being sold at theminimum price of 800,000 reais. This venturecameundertheresponsibilityofanotherjointventurecomposedbyOdebrecht,Andrade Gutierrez and Carvalho Hosken. The latter had been one of theprincipaldevelopersoftheBarradaTijucaneighbourhoodsincethe1970s.2

December2014IreceivedapromotionalleafletannouncingthelaunchoftheHolidayInn,PortoMaravilha, from Odebrecht Real Estate Developments. Besides describingHoliday Inn as the ‘largest hotel chain in the world’ as a hook for potentialinvestors,theleafletpuffedPortoMaravilhaitselfasthecity’sfuturecorporatedistrict, with ‘5 million developed square metres’, and Rio de Janeiro as theBraziliancity that receives the largest amountsof foreign investment.QuotingtheFederationofIndustriesofRiodeJaneiro(Firjan),theleafletannouncedthatUS$266 billion was to be invested in the city between 2014 and 2016. Itpresented Odebrecht Real Estate Developments as the pioneer in real-estatedevelopments in Porto Maravilha, and disclosed that the Holiday Inn was tooccupytheplotofPraiaFormosa,theoldrailwaystationgarage,whichbecame

federalpropertyaftertheclosingoftheFederalRailNetwork.On receiving this leaflet, I remember the affordablehomesproject that the

MinistryofCitiesdevelopedwithCaixaforthispieceoflandin2005.TheplotsofPraiaFormosa,UsinadoAsfaltoandPátiodaMarítimahadbeensoldtothePorto Area Real Estate Investment Trust (Fiirp), in 2013, guaranteeing thetransfer of 1 billion reais to Porto Maravilha Urban Project. These resourceswerenecessary to finance the jointventureover thesecondstageof theworksandservices.

The threescenesabove introduce themainactors involvedwith themakingofBrazil’s newurban policy, foundedonPPPs and strongly attached to the real-estate–financial complex. They unveil, in Carlos Vainer’s words, ‘the slow,complexandcontinuousprocessoftheconstitutionofahegemonicblock,whichhas,sincethe1970sandmoresointhe1980s,setouttoofferanewprojecttothecityincrisis’.3Inthesescenarios,theprotagonistsarenamedandidentified:the three levels of government (the president and the chief of staff, then thepresident,thegovernorandthemayor);RedeGlobo(theleadingmedianetwork,based in Rio); and ‘Rio’s business friends’ in the figure of Eike Batista, theFederationofIndustriesofRiodeJaneiro[Firjan],publicbanks,largecontractorcompanies, old and new real-estate developers, pension funds from publicworkers,andforeigninvestors.However,mostnoteworthyarethenewformsofinterplaybetweentheseactors,astheybindtogetherinjointventuresandPPPsfinanced100percentbypublicfunds.

Mega sports events provided a favourable political environment for thistransformation, ‘shielding’ the projects from the public administration’s dailydemocratic-bureaucratic scrutiny. Through their network of consultants, theywerealsoabletointroducetechnical-politicalandmanagementdevicesalreadyemployed inother countries.4Nevertheless, thenewurban regimewas a localconstruct, designed through practices with deep roots in Brazil’s history andculture, and commanded by the state. As previously seen, this construct tookadvantageof theexperienceofSãoPaulo’surbanprojects,butwasalsorelianton reforms of the regulatory framework for public procurement ofworks andservices, implemented by left-wing administrations: the regulation of PPPs,changes to the concessions law, the optionof publicmanifestations of interest(MPIs)and,finally,theadoptionofthedifferentiatedhiringregime(RDC).

TheInstitutionalisationofthe‘Complex’

InJune2002,inthethickofthepresidentialcampaign,thestockmarketseemedreadytoplummetinresponsetotheprospectofLula’svictory.Thisfinancialjoltincreasedthe‘countryrisk’anddepreciatedBraziliancurrency.ItwasthenthatLulapublicisedhisLettertotheBraziliansataPTCongress,committinghimselfto thecontrolof inflation,fiscalbalance, themaintenanceof thebenchmarkofprimarysurplusandthefulfilmentofthecountry’scontracts.Thelettercritiquedthe previous government’s economic policy, blaming it for the crisis, whileaffirming a ‘responsible’ agenda of growth with income redistribution. Thisseemedtosoothethemarket.

ThefirstyearsofLula’sgovernmentweremarkedbytheorthodoxmonetarypolicylaidoutintheletter:highinterestrates,stratosphericprimarysurplusandhighlevelsofbudgetcontrol.AttheotherendofthespectrumweretheMinistryofPlanning,commandedbyGuidoMantega,andthechiefsofstaff–firstJoséDirceu,thenDilmaRousseff.Constrainedbythereigningeconomicpolicy,theMinistryofPlanningsoughtalternativestoignitetheexpansionofinvestmentininfrastructure.Itputforwardabillregulatingpublic–privatepartnershipswhichwaspassedinDecember2004.5

Inspiredby theBritishmodel, theBrazilianPPP lawwas an instrument tofacilitate major investments in infrastructure – mainly in transportation andenergy–whilebypassingthelimitsimposedbythethenexistingregulationsfortenders and public procurement. The relocation of the minister of planning,Guido Mantega, into BNDES, in 2004, further ensured the availability ofresources from the national bank to finance private companies willing toundertakelargeprojects.

AlthoughthelawhadbeenapprovedbyCongress,andpublicresourceshadbeenallocatedtofinancethecompanies,thePPPsolutionwasstillhamperedbya‘chroniclackofprojects’,accordingtotheviewsexpressedintheministerialcorridors of Brasília. In 2005 and 2006, during negotiations between thegovernmentandthecontractorcompaniesinvolvedwiththeconstructionoftheSantoAntônioHydroelectric Plant, on theMadeira river, Odebrecht proposedtheinclusionofanewinstrument–thePublicManifestationofInterest(MPI)–into thedecree that regulatedPPPs.6Based on theEuropeanUnionmodel, anMPIallowstheprivatepartiesinterestedintheworksthataretobedoneviaPPPto design the project and present the partnership’s technical, legal and andfinancialmodel.IftheirbidisnotchosenbythefuturePPPthewinnerspaytheMPI proponent the cost of drawing it up. Finally, once the country startedpreparations for the World Cup and the Olympic Games, the governmentinstituted a new hiring regime – the Differentiated Hiring Regime (RDC) –

which applied to Games-related works, airport and road infrastructure, healthand education installations and new prisons.Beyond shortening deadlines andsuspending certain requirements, the law introduced so-called ‘integratedhiring’.Throughthismechanism,contractorscouldbehiredwithoutsubmittingadetailedproject,whichwouldbedevelopedbythecontractorcompanyafteritwonthebid.

Equally important, the Statute of the City also envisaged ‘urban planningconcessions’,withoutdefiningexactlywhatthesewere.Thefirstconcessionwasmade in 2009, as part of an attempt to renovate SãoPaulo’s historical centre:‘Project Nova Luz’. The idea was to give the private sector the power toexpropriate 400,000 squaremetres in one of the city’s oldest neighbourhoods(SantaIfigênia)forfurtherprivatedevelopment.However, theprojectattractedfuriousprotestsfromtheaffectedresidentsandbusinesses,andwasblockedbythecourtsin2011.DuetothepoliticalmobilisationagainstNovaLuz,thewholetopicofexpropriationbytheprivatesectorgaverisetoalegaldebate.Theissuehas now been resolved, thanks to an article inserted in a 2013 Federal Lawregarding construction of silos: it explicitly declares that private contractorsinvolvedinpublicworkshavetherighttoexpropriatebuildings.7

Thus,within less thanadecade, the regulatory framework for the relationsbetween the stateandcontractorsofpublicworkswas transformed,chieflybytheprogressivetransfer tocontractorsof thepowertoplan,defineandexecuteprojects,aswellastomanagespacesandservicesintheaftermath.Thisresultedin an increasing number of public spaces governed by private contractualrelations, beyond state control. Contractors could now suggest and design theprojects, execute the construction, and then manage the space for the lowestprice.Meanwhilethestatepickedupthebill.

WiththeWorldCupandtheOlympicGamesonthehorizon,thislogicwasfinallyappliedtolargeurbanprojects, throughurbanplanningconcessionsandPPPs.Whole portions of citieswere handed to companies to be occupied andsubsequentlymanagedbythereal-estate–financialcomplexforaslongasittookfor the extractionof that area’s rent.The constitutionof these territories, builtand controlled under the logic of rent extraction and the promotion ofconsumption, managed under a regime parallel to the city’s generaladministration,expandedfromresidentialandcommercial‘enclaves’–thegatedcommunitiesandmalls–intowiderareasofthecity.Inthatway,privateplayersstartedtoexercisesomeofthepowersofgovernment,amplifyingtheindefinitezonebetweenthepublicandtheprivateandreconfiguringthepoliticalorder.8

ForWhomIstheCity?

RiodeJaneiro’sOlympicprojectwascentredaroundtheOlympicPark,atBarrada Tijuca, alongwith two ‘clusters’ around theDeodoro Sports Complex andMaracanãStadium. Inaddition to thesesites, in2010 theprojectencompassedthe port area,whichwas to host theMediaVillage and theReferees’Village.BarradaTijucahadbeenthemainfrontierofexpansioninRiodeJaneiro’sreal-estatemarketsincethe1970s.9Barra’sgrowthwaspossibledue to roadworksimplemented by FranciscoNegrão de Lima’s administration (1965–70). Theseworks improved the connection between the city centre, the south zone andBarra.10 Furthermore, in the 1980s, the different municipal administrationsinvestedheavilyininfrastructure,suchaswaterandelectricitysupply.

According to Nelma Gusmão, the public notice announcing the Gamesincludedinvitationstobidfortheadministrationofservices,implementationandmanagementof theOlympicPark.11Thewinning joint venturewas to assumethe construction and maintenance costs of some facilities for fifteen years.Besides monetary compensation, the joint venture would receive real-estatecompensation: property of an area measuring 1.8 million square metres,equivalentto75percentofthelandtheParkison.

Accordingtotheagreementsignedafterthebidswereadjudicated,RioMais(the winning consortium, made up of Odebrecht and Andrade Gutierrez inassociation with Carvalho Hosken) was in charge of building a 400-bedroomhotel, themainmediacentreand threepavilionsconstitutinga futureOlympicTrainingCentreforhigh-performanceathletes.ThemunicipalitywasresponsibleforbuildingvariousfacilitiesintheOlympicParkthatwerenotpartofthePPP:the Aquatic Park, the Tennis Centre and the International Broadcast Centre(IBC),amongothers.

In addition to the public land, the real-estate compensation for theconstructionofBarradaTijuca’sOlympicParkalsocomprisesthehomesoftheViladoAutódromocommunity–afishingcommunitythathadsprungupwiththearrivaloflabourersbuildingaracetracknearby.Thesepeoplehadlivedthereformorethanthirtyyearsand,inthe1990s,hadreceivedfromthestateofRio(theowneroftheland)legaltitlestooccupythatlandinperpetuity(aconcessionofrealrightsofuseforhousingpurposes).Nevertheless,astheGamesloomed,theybecameatriskofeviction.

During preparations for the Games, with their additional transportationprojects, it soon became clear that expropriations and evictions would be

unavoidable.Thethreataffectedbothfavelasandformalneighbourhoodslocatedoutsidetheplotsactuallyearmarkedfortheworks,andthepossibilityemergedofsellingadditionalbuildingrightsinthoseexpropriatedareas.

One illustrationwas thePlan for theUrbanRestructurationof theCorridorT5/Transcariocaproject, that saw the expropriationof 1,627plots of land in atotalareaof1,476,383.39squaremetres.12Accordingtothisproject,theprioritywas the expropriationofplots that couldbe reused for construction.However,the same project also stipulated the expropriation of a fifteen-metre bandadjacenttothecorridorsinanareaoccupiedbyfavelas,inorderto‘reconstitutetheinformalurbantissue’.Therefore,theTranscariocaCorridorwasintendedtoclear either totally or partially the following favelas: Arroio Pavuna,ComunidadeSãoFranciscodeAssis,VilaSapê,ChácaradoTanque,ChacrinhadoMatoAlto,VilaCampinho,ComendadorLisboa,VilaSantoAntônio,Uga-Uga,AvenidaTeixeiradeCastroandParqueUnião.

According to Lucas Faulhaber, a recurring problem was the affectedpopulation’s total lack of information about the projects and their fate.13Moreover, as the new transit routes were constantly being modified, thecommunitiessuspectedthatsuchnoticeswereonlyapretextformoreevictions,as was the case with Vila União in Curicica. This community was due to beurbanisedundertheMorarCariocaprogramme,butwiththeproposalforaBRT(rapid bus transit) system, the municipality had told 700 families that theirhomesweretoberazedtomakewayfortheTransolímpicaHighway.14

RosaneRebecadeOliveiraSantosconductedasurveyoffavelasundergoing,or at risk of, eviction, to reveal an ‘eviction geography’ directly linked toOlympic clusters and their transportation projects.15 In October 2009,immediately after Rio’s investiture as the 2016 Olympic Games host, themunicipality declared that it would be necessary to resettle more than 3,500familiesthroughthe‘PlanfortheRioOlympics2016UrbanandEnvironmentalLegacy’.Additionalevictionscameafterthe2010rains,whichcausedlandslidesin various areas. Geo-Rio’s survey was contested in a counter-mapcommissionedbythePublicDefender.16

Soon after, theMorar Carioca programme was launched with the goal ofurbanising100percentoftheremainingfavelasby2020.AccordingtoRiodeJaneiro’smunicipality, the prioritywas communities in areas locatedwithin afour-kilometre radius of the Olympic facilities.17 Despite appearances to thecontrary,themunicipalgovernmentdubbedtheseactions‘democraticevictions’–atermcoinedbymunicipaldeputyAdilsonPires(PT).Whenannouncingtheplanforthereductionofthecity’sinformalarea,followingthe‘Olympiclegacy

plan’, the PT congressman Jorge Bittar, then Rio’s secretary of housing,declared:

Wewillnotevictasithasbeendoneinthepast.Thisprocesswill takeplacewithouttrauma.Wewill offer alternatives to families living in high-risk and insalubrious areas. In addition toMinhaCasaMinhaVida,theycanopttobuyusedhomesor[toreceive]compensation–inthislastcase,inordertogobacktotheirhometowns.18

Thiswas not the residents’ version of events. Themethods of clearancewerewell rehearsed. Evictions were negotiated on a case-by-case basis. Theabandonment of the debris of demolished homes, pressures and threats, andinsufficient indemnity payments for the families to access alternative housingwere the norm. In addition to the forms of violence described above, manydwellers learned about their imminent eviction when they discovered theirhomes’ outer wall spray-painted with the letters SMH (the acronym forMunicipal Secretary of Housing) and a number, without prior explanation orpermission.19 Moreover, cash compensation was based solely on the‘ameliorations’ in the house value, not including the plot’s value, even whenresidentshadalreadylivedinthearealongenoughtoclaimownership,orwherecommunitieshadalreadybeengrantedlegaltitlesbythegovernment.

In a February 2014 interview, the municipal secretary for housing, PierreBatista, admitted that 20,299 families (around 67,000 people) had beencompulsorilydisplacedsince2009–thatis,morethantenhomesperdayduringthe full term for that administration. This number does not include buildingslocated in formal areas that were also expropriated to make way forinfrastructureworks.

Sinceformostresidentsthecashcompensationwasinsufficienttoacquireanewhouse, theMinhaCasaMinhaVida apartments optionwas, in reality, theonlyone.AccordingtoCardoso,Araújo,NunesJr.andJaenisch,mostMCMVcomplexes were located in Rio de Janeiro’s western zone, the region mostlacking in transportation, amenities, jobs and services. For example, the IpêAmarelohousingestateatRealengo lies twenty-fivekilometresawayfrom theresidents’ former homes, dismantling their professional and interpersonalnetworks.Thegeographyofevictionsandresettlementsisclear:removingfromthereal-estatefinancialcomplexfrontwhileatthesametimecreatingacaptiveconsumption market – forced resettlement – for private MCMV housingcomplexesinremotelocations.

TheOldandtheNewinBrazil’sUrbanPolicy

Thefictionsofliteratureandcinemaoffermanyplotsinwhichacharacterfallsdeeply asleep and wakes up decades later, revealing the strangeness of thecontemporaryworld.Ifsomeonewokeupin2014inBrazilafterasleepoffiftyyears,theywouldbeprettysurprisedbythechanges.TheimpoverishedmigrantssomasterfullyportrayedbyJoãoCabraldeMeloNetoinhisplay,MorteeVidaSeverina, practically no longer exist. Nor do Rio de Janeiro’smalandros, thecharmingroguesofthecity’sfolklore.

Within that half-century Brazil’s cities, once teeming with migrants in asocietyruledbytheagrarianworld,havebecomelarge,complexanddiversifiedmetropolises.However,whenexploringthesecities,itisimpossibletoignoretheseaofaffordablehousingcomplexesthatBrazilianshavenicknamed‘theBNHs’(theacronymof theNationalHousingBank).Theyarewhere thecitycentres’‘invaders’were resettled,on recentlyopenedurban frontiersor inprecariouslyconsolidated ‘non-cities’. There, we see the favelas and squatters’ camps,bravelyresisting,periodicallyhitbywavesofviolenceorcharity.There,too,wefind the tunnels, viaducts and highways, always constructed by the samecontractor companies, marking the latest fronts of real-estate development.There,wemayalsodiscern the links that connect these real-estate frontiers tonewandoldpartiesandpoliticalforcesinthecities’governments.

Such could be the description, in 2014, of the landscapes of MCMV’spopular housing, São Paulo’s southern business district or the Rio Olímpicoproject.However,itisalsopossibletoidentifythestoutrootsofastatecapturedbyprivateinterestsandshapedbyacultureofracism,oppressionandexclusion,stressedbyasimultaneousprocessofstruggleagainstpovertyandinclusionbyconsumption,andbytheseizureofurbanlandandhousingbyglobalfinance.

Today, contractors and real-estate developers still dominate the logic ofurbanexpansion,butnowthroughamuchmorecomplexinterweavingbetweenthemandtheworkers’pensionfundsdirectedbyformerunionleaderswhomayalsooccupycitylegislativeandexecutiveposts.ThisistheBrazilianversionofthereal-estate–financialcomplex.

In order to remain in power, political groups governing cities continue todependbothoncampaignfinancefromthosecompanies,andonthevotesfromfavelas and the urban peripheries. Endeavouring to reduce the diversion ofpublicresourcesinvolvedinthesebalancingacts,tightercontrolsareappliedtopublic administrations, making them increasingly bureaucratic and sluggish,witheverlessexecutivecapacity.

Thisprocess, alongwith theprogressivedismantlingof the state, abets thecontinuedadvanceofaspaceremovedfromthedemocraticimperativesofsocialcontrol,directlydefinedandmanagedbythereal-estate–financialcomplexitself.

Butifourfictionalcharactershouldwakeupin2017–justthreeyearsafterthescenedescribedabove–shewillfindaverydifferentpoliticalandeconomicpicture. Just over a week after the closing of the Rio 2016 Olympic Games,Dilma Rousseff – re-elected in 2014 for a new four-year PT mandate – wasimpeached. The economy has suffered a massive recession, and contractorcompanies’CEOsandhigh-rankinggovernmentofficialshavebeenarrestedorarestandingtrialoverso-calledLavaJato(CarWash)corruptionscandals.SinceMichel Temer (Rousseff’s former vice president) took the presidency, majorfiscal austerity reformsandneoliberal economicpolicieshavebeen rolledout,includingdrasticcuts to thesubsidiesofMinhaCasaMinhaVidaandmassiveprivatisations.ThePortoMaravilhaPPP is near bankrupt: in 2016 theCity ofRiowasforcedtoinjectmoneytokeeppublicservicesrunninginthearea,andmostoftheCEPACsremainunsold.Whathappened?

16June2013:JourneysandBeyond

17June2013Morethan100,000peopleareoccupyingSãoPaulo’sstreets.ThedemonstratorsareconcentratedonFariaLimaAvenue, thentheydivideintotwogroups.Oneheads towards Paulista Avenue. The other makes for the southern businessdistrict, occupyingMarginalPinheiros,BerriniAvenue and thePonteEstaiadathat spans the Pinheiros river. Thousands of people are also occupyingdowntownRiodeJaneiro,inanevenlargerstreetdemonstration.

Somedayslater,similargatheringsweresparkedindifferentBraziliancities,initiatingwhatwasafterwardscalledthe‘JuneJourneys’.Thefirstprotestswereagainst the increase inbus fares.TheywereorganisedviaFacebookandothersocial media by the Movimento Passe Livre (MPL, Free Pass Movement), adecentralised group composed mostly of high-school and university students,whichemergedin2005indifferentcitiesinresponsetobusfaresandqualityandavailabilityofpublic transportation.1But rejection of the proposed increase inpublic transportation fares was not the only demand now being heard on thestreets.‘Itisnotonlyfor20cents’wasthesloganwrittenonimprovisedpostersand banners, and shouted by the protesters. In these moments the voices ofyoungpeoplewhorefused traditional formsof representation,suchaspoliticalpartiesandtradeunions,rangoutloudandclearastheydefendedsuchvaluesasautonomy,self-managementandtheurbancommons.

In mainstream international media, commentators were surprised at theoutbreak of the massive street demonstrations. They compared the BrazilianJunewithothermovementssuchasOccupyWallStreetintheUnitedStates,andwith15-MandIndignados,inSpain.ThesurprisecamefromthefactthatBrazilwas not experiencing an economic crisis in 2013.On the contrary, in the firstyearsofthemillennium,Brazilwaspartofanexclusivegroupofcountriesthat

had seen steadygrowth and that had emergedonto the international economicscene as new and thriving economies, the so-called BRICs. If the country’seconomywas growing, if jobs, opportunities and incomewere expanding in amoreredistributiveway,whatwerethereasonsfortheprotestsandwhowerethesocialactorsbehindthem?

Readingthedemandswrittenonbannersandposters, listeningtowhatwasshouted on the streets and reading the posts on Facebook andTwitter, severalelementsofdiscontent canbe identified.Firstly, thequalityandavailabilityofpublic services, summed up in the slogan ‘We want a FIFA-standardeducational/health system’– alluding to the exorbitant spending inpreparationfor the mega-events hosted by Brazil, the World Cup and the Olympics.Secondly, the human and social rights violations that were embedded in thepolicies created for these events. This was also an outcry against the rise ofmoralistic and conservative values within the Brazilian political scene,epitomised by the appointment of an evangelical pastor who believes in thepossibilityofa‘gaycure’astheheadofCongress’sHumanRightsCommittee.The mood was further ignited by a more general and diffuse rejection ofpoliticiansandpoliticalparties,muchliketheArgentinian‘Quesevayantodos’(Awaywiththelotofthem)in2001.2

Sincetheprotestswerenotorganisedbyunions,partiesortraditionalsocialmovements, the insurgency was mostly composed of young and middle-classpeople,aswellasaverysignificantpartof the ‘newmiddleclass’.3Thisnewmiddle class comprised thoseworking-class and poorer cohorts that had beenroped into the consumer market and educational system thanks to theinclusionary economic and educational policies implemented by theWorkers’Party(PT).Thiswas,ineffect,thefirstgenerationofworking-classyouthwholefthighschoolandentereduniversity,fundedbysizeablestudentloans.Somecommentatorspointoutthedisappointmentofthisgroupwiththelackofwell-paidandstable jobs,despite theirhighereducation.Thefact that theyfinishedtheir degrees only to become part of a precarious labour force has been putforwardasoneofthesourcesofthediscontent.4

AlthoughwecannotreducetheJuneprotestssolelytoayouthfulexpressionofdissatisfactionwiththeurbancondition,thiswasaveryimportantcomponentof the June turmoil.When theSalvador city council buildingwasoccupied inJuly 2013, the letter to the city government presenting the protesters’ claimsstated:‘Wearestrugglingforalifewithoutturnstiles,inwhichcitizenshavetheuniversalrighttothecityandtopublicservices.’.5

BesidestheMPL,oneofthepreviouslyexistingsocialmovementsthatmade

theirpresencefeltinJune2013wastheComitêsPopularesdaCopa(WorldCupPopular Committees). In Rio, São Paulo, Fortaleza and other Brazilian citieswhereWorldCup/Olympics-related urban renewalworks had been underwaysince2011,faveladwellersthreatenedoraffectedbyevictionswereorganising,togetherwithNGOsanduniversitystudents, todefend their right tohousing–whether the right to adequate resettlement or the right to stay put. Theyweredenouncing the way those projects were defined and designed, beyond anyprevious adopted planning schemes and without any public discussion.6 Theactivityof theCommitteedemonstratorson the streets,blocking roadsand thefrontofstadiums,didnotendin2013.TheywereviolentlyrepressedduringtheWorldCupin2014,aswell.

Despite the Minha Casa Minha Vida housing programme, and in a lessvisiblemanner, the ‘housingquestion’wasalsopresent in June’scauldron.On19 June, for instance, MTST – Movimento dos Trabalhadores Sem Teto(Homeless Workers Movement), a housing movement that emerged in early2000s – held street demonstrations denouncing the high cost of living anddemanding housing policies.7 According to Guilherme Boulos,MTST leader:‘Whatwages have givenwith one hand, rental and housing prices have takenawaywiththeother.’8Thisriseinhousingpriceshelpsexplaintheboomofneworganised squats,bothofurban landandof emptybuildings inSãoPauloandothercities,whichgainedmomentumafter2013.9

Figure16.1Rateofappreciationinresidentialprices

Source:Aragāo,HousingPolicyandtheRestructuringoftheRealEstateSectorinBrazil,(updated)

In any case, the different claims of the June Journeys exposed the toxiccombinationof thepoliticalandeconomicchoicesmade in thepreviousyears.

Brazilians had more money in their pockets but were living in totallydysfunctional cities, unable toprovidehabitablepublic spaces, efficient publicservicesoradequatehousing.Therewasdissatisfactionwiththepoliticalsystemand its inability to represent society’s desires and voices, as increasingly itmovedawayfromsocialclaimsandshutitselfupinthebusinessofpolitics.

Accordingto theeditorialofa liberalFrenchnewsmagazine, theevents inJunewere

violent riots that threwmore than 1million people into the streets of a hundredBrazilian cities,explodinglikeathunderclapinanapparentlytranquilsky.Nonetheless,morethanprotestingagainstthe rise in transportation fares, they testify to theBrazilianmiracle’s collapse.After a decade ofexceptionalgrowth(5percentperyear),whichincreasedtheincomepercapitafromUS$7,500toUS$11,800andbroughtforthamiddleclassof90millionpeople,economicactivitygrewonly0.9percentin2012,duetoDilmaRousseff’sstatistandprotectionistpoliticalorientation.10

Basedon themain tenetsof theneoliberalhandbook, thearticlepointed to thehigh cost of labour, the heavy tax burden, state interventionism and, finally,corruptionasthemaincausesofunrest.Thisvisionintendedtocircumscribetheindignation, confining it to an ideological niche in opposition to DilmaRousseff’s ‘statism’. The systemwas blasted as imperfect, needing correctionthrough the successful adoption of a globalised neoliberal economy controlledbythefinancialsystem.

Indeed,oneof themovements that cameoutof the June Journeyswas theright-wingMovimentoBrasilLivre[MBL,FreeBrazilMovement].MBLbeganwithagroupofformerstudentswithscholarshipsfromStudentsforLibertyandtheAtlasNetwork, a think tank funded byKoch Industries, theUS fossilfuelenergy and petrochemicals giant, to promote free-market policies.11 TogetherwithVem pra rua [Come to the street] and other politically and economicallyliberal right-wing groups (including a group rooting for the return ofmilitarydictatorship),MBLorganisedprotests thatwerepro-impeachment forRousseffandanti-PT.

Thismovement grewquicklywith the advancement of theOperaçãoLavaJato, or Car Wash Operation, a judicial investigation into allegations ofcorruption involving contractors and politicians, starting with the state-controlled oil company Petrobras. The operation included more than 1,000warrants for dawn raids, temporary and preventive detention and coercivemeasures. Led by the federal judge Sérgio Moro and the federal police, thecorruptionscandalgrewinpartbecauseitchallengedtheimpunityofpoliticiansand business leaders until then, and because it was keenly supported by themedia. Many high-level politicians were caught up in the investigations –

present and former presidents, governors, senators and deputies from severalparties,includingPT,PMDB(PartyoftheBrazilianDemocraticMovement)andPSDB (Brazilian Social Democracy Party). What with the right’s increasingpresenceonthestreetsandwidesupportfromcorporatemedia,theinvestigationinto the promiscuous relationship between large corporations and politicianssoonevolvedintoananti-corruption,anti-PT,pro-neoliberalreformmovement.

But the anger with politicians and the political systemwas not limited toright-wing, neoliberal and opposition parties; it was also present on the left.Sincethecountry’sdemocratisationinthe1980’s, therehadbeenafragmentedpolitical scene without a consistent majority in Congress. Elected presidentswere forced to distribute posts in the executive and to hand out money topolitical allies for support in elections. This is what political scientists called‘presidencialismodecoalisão’ (coalitionpresidentialism)or ‘pemedebismo’, inallusion to the role played by the PMDB, a centre-right party that sincedemocratisationhastakenpartineverynationalgovernment.

In this way, presidents found themselves the head of a conglomerate ofpartiesandmandates,interestedaboveallincontrollingthedistributionofpublicresourcesandstayinginpower.12LulaandthePTdidnotbreakwiththispatterninthe2000s.Theeconomicgrowthandtheincreaseinpublicfundsonlyfedtheappetiteofthosecoalitions.Duringhistwotermsinoffice,besidesmaintainingthe alliancewith conservative and corrupt forces,Lula also opened spaces fordirectdialoguewithunionsandsocialmovements;however, thesespaceswerenotbasesfordecision-making,butrather‘listening’spaces,astrategytoincludeselectedorganisedmovementsinthedistributionofpublicbenefits.13

Dilma Rousseff, heir to Lula’s political capital but lacking his politicalability,isolatedherself,implementingasortof‘technocraticdevelopmentalism’thatsoughtrapidresults.14Re-electedin2014,shepromisedthePT’ssocialbasetoradicaliseredistributionpoliciesandtocurbfinancialprofits,puttingpressureon private banks to lower interest rates. But as the signs of economic crisisbecamemorevisible,herfirstmeasuresin2015wereguidedbyfiscalausterity.

Theanti-PTcoalitionthatlostthepresidentialelectionin2014thenfiledforimpeachment, on grounds of the dubious legality of certain fiscal accountingmethods. These were called ‘pedaladas’ (pedalling), that allowed theadministration to fund a programme for farmers using money that was notreimbursed until several months later. But this was only a pretext: since theBrazilianConstitutiondoesnotcontemplatetheno-confidencevoteasadevicetoeject apresident fromoffice, thepoliticalopposition thatwasgaining forceresorted to impeachment to do the job. The PMDB, via Eduardo Cunha, the

Congresspresident,wasthefirsttobreakthecoalitionledbyPT,acceptingthepetitionofimpeachment.

UnderRousseff, on the left side of the political spectrum, spaces of directparticipationbecameevenmoreprecarious.Inthenameofeconomicgrowthanddevelopment, indigenous and traditional communities’ rightswere increasinglybypassed, while movements like MPL, groups opposing Belo Monte (ahydroelectric dam in the Amazon), and Comitês Populares da Copa weredemandingmorecontrolonthedecision-makingprocessregardinginfrastructureandother investmentswithhigh impacton their territories.Asa result, thePTwas increasingly losing the sympathy of its traditional popular base.15Nonetheless, many of these groups still regarded the impeachment as a coupd’étatconductedbytheneoliberalcoalitionthathadbeendefeatedin2014.

Rousseff’s ousting in 2016 triggered the rapid implementation of massivecuts in social programmes, like Minha Casa Minha Vida. In addition,constitutional reforms were approved by Congress as part of a wholesaledismantlingofthewelfarestate.ButBraziliancivilsocietydidnotremainsilent.Although it was not possible to block the impeachment and the reformscompletely,pollsindicatedthatMichelTemer,Rousseff’sPMDBvice-presidentwhosteppedintohershoes,hadthesupportofonly3percentofthepopulation.And, in April 2018, sixmonths before the presidential election, Judge SergioMoro succeeded in imprisoningLula.According to thepolls,Lula and thePTledtheelectoralcampaignwith40percentofthevote.

Despite theconservative tsunami, Junewasalsoa timeofhope for the future.Herewealso saw the ‘ocupas’–high-school studentsoccupying their schoolsagainst educational reform;16 the strengthening of an anti-racism movementfightingthegenocideofblackyouthinBrazil,andfeministmovements,amongamyriad of new social organisations. In São Paulo and other Brazilian cities,hundreds of cultural and housing squats (including combinations of both) areexperimentingwithalternativesolutionstotheurbanandalsothepoliticalcrises,self-managing their destinies while clamouring for resources and politicalattention.

It seems that a new coalition of social movements is starting to cometogether,inwhichtherighttothecityisdefinitelyattheheartoftheagenda.

AfterwordTheRentalHousingBoom:NewFrontiersofHousing

Financialisation

9June2017:CarrerLeiva,Hostafrancs,Barcelona,SpainInJune2017, Iwasonmywayto theheadquartersof thePlatformforPeopleAffectedbyMortgages(PlataformadeAfectadosporlaHipoteca–PAH)totakepartinadebateonahousingbilltobeproposedbypopularinitiative(filedtotheSpanishCongressat thebeginningof2018),whenIsawabuildingcoveredinbannersthatsaid:

Nosquierenechar[Theywanttothrowusout]L’habitatgeesunDret![Housingisaright!]Nosombitxossompersones[Wearenotanimalswearepeople]@Somleiva37emlluita[@Somleiva37instruggle]

At PAH’s headquarters, I heardmany stories about the foreclosures that havebeen multiplying since the financial crisis of 2008. I also heard stories ofvictorieswon through the platform’s actions, and through the emergence of anewhousingmovement in the city. I heard stories about the new faces of thehousingcrisisinBarcelona:peoplebeingevictedfromapartmentstheyhadbeenrentingforyears,avertiginous increase in rentprices, theproliferationofnewneighbourhoodorganisationsindistrictsthatarebeingheavilyimpactedbythoseprocesses, and the formation of a new federation of local organisations oftenants:theSindicatdeLlogaters(tenants’union).

3January2017,FultonCounty,Georgia,UnitedStates

OnachillyDecemberafternooninAtlanta,ajudgetoldReitonAllenthathehadsevendaystoleavehishouseorthemarshalswouldkickhisbelongingstothecurb.Inthepackedcourtroom,thetruckdriver,hisbeardfleckedwithgray,stoodup,casthiseyesdownwardandclutchedhisblackbaseballcap.

The 44-year-old father of two had rented a single-family house from a company calledHavenBrookHomes,which is controlled by one of theworld’s biggestmoneymanagers, PacificInvestmentManagementCo.HereinFultonCounty,Georgia,suchlargeinstitutionalinvestorsareuptotwiceaslikelytofileevictionnoticesassmallerowners,accordingtoanewAtlantaFederalReservestudy.

‘I’veneverbeendisplacedlikethis,’saidAllen,whosaidhefellbehindbecauseofunexpectedchildcareexpensesashisrentroseabove$900amonth.‘Ineedtogohomeandregroup.’1

The scenes described above are far from being an exception. Such scenes arevisible not only in Barcelona or Atlanta, but also in Berlin, New York, LosAngeles,Dublin,Lisbonandmanyothercities.2Weare facinganewwaveofhousing financialisation, now overwhelming rental housing. A new type ofinstitutional, corporate landlord,usually linked to transnational financial assetsmanagement companies, has begun to control a great number of rental housesandapartmentsinmanycities.Thislandlord’sentryintothehousingmarketwascombined,insomeglobalcitiesandtouristdestinationslikeLondon,NewYorkand Barcelona, with other dimensions of the residential real-estate–financialcomplex toproduce this newand toxic trend, unleashing, once again,massiveprocessesofdispossession.

Broadlyspeaking,largefinancialinvestorsenteredtherentalhousingmarketafter the bursting of the real-estate bubble of 2008, seizing the opportunity tobuythoseso-calledtoxicassetsonthecheap.Knownasvultureinvestors,globalfinancialconglomeratesboughtdevaluedassetsinordertotransformthemintoanew market frontier, infiltrating territories that had been neglected by – orprotectedfrom–them.Bymobilisinganenormousamountofcapitalviaprivateequity funds, hedge funds, Real Estate Investment Trusts (REITs) and otherfinancial instruments, capital obtained through shareholders or directly fromloans,theywereabletobuyupdeeplyundervalued‘housingstocks’availableincities.

In thehistoryofcities,cyclesofdestructionanddevaluationofbuilt spaceare by no means new. Such cycles generate new expansion fronts for socialactorswith the relevant capacity to raise capital. Despite that, there are someapparent novelties here. One is the huge scale of this process, its dimensionsproportionate to themassive concentration and availability of global financialcapital today; another is the velocity, directly derived from the technologicalrevolution, of value representation, in online and real-time transactions, inincreasingly abstract circuits that no longer have any connection to the social

workembeddedintobuiltspace,letalonetoitsinhabitants.3Thesefundsfirstenteredthemarketbypurchasingreal-estatedirectlyfrom

the banks, a ‘stock’ of toxic assets composed of foreclosed or defaultingmortgages. Another way in for the funds was the acquisition of companiescreatedafterthecrisisinorderto‘clean’thebanks’portfolios.Manyfundsalsoboughtdirectlyfromindebtedanddesperatehomeowners.Butthesefundshavealsocapturedpartof thecontrolledandregulatedpublichousingstock,buyingjob lots of social housing units from indebted cities asphyxiated by fiscalausteritymeasures.

Once the phase ofwholesale buying of ‘toxic’ or ‘rotten’ stockswas over,theseglobalcorporatelandlords4hadbecomedeeplyrootedin localresidentialmarkets, controlling hundreds – sometimes thousands – of units in singledistrictsorcounties.Fromthatpointon,theystartedtobehavelikemonopolies,pressingforageneralincreaseinrents,indexingthosemarketstowardsahigherprice.

Onceagain, thefinancialcrisis itselfendedupcreatingthedemandforthisnewproduct– rentalhousing.The increaseddemandhasbeen fuelledbothbytheexpulsionofdwellers from theirmortgagedhousesandby theendofeasyaccesstoloans,creatingasituationinwhichmanypeoplecouldnolongeraffordhomeownership.Withoutaccess to socialhousingprovision–destroyed in theprevious cycle – and unable to become homeowners, people’s only availableoptioninresidentialmarketsistorent.

Since2008,intheUnitedStates,privateequityfundshaveboughtforeclosedhomesrepossessedfromindebtedfamilies.Butitwasonlyin2011thatsomeofthebiggestprivateequityfundsthatinvestinrealestate–suchasBlackstoneorColonyCapital–decisivelyenteredthebusiness.Theysetupaffiliatesthathaveaccumulatedthousandsofhousingunits,especiallyinthecitiesmostdevastatedbythemortgagecollapse.5Forinstance,todayBlackstoneowns82,000unitsinseventeenUSmarkets.6AccordingtoareportpublishedbyacivilorganisationindefenceoftherighttohousinginAtlanta,thehousingstockownedbyprivateequityfundsintheUnitedStatesamountedto200,000unitsin2013.7

At first, thepurchaseof toxic assets thatwereby-productsof the financialcrisiswasashort-termmove.Theideawastobuyreal-estateunitsatextremelylowpricesandsellthemon:quickprofitsweremadeasaresultofthedifferencebetween capital costs and the yields obtained through letting or resale. Later,there was a process of consolidation of those companies, accompanied bymergersandacquisitions.Theyhavealsoenteredthestockmarket,investingin

real-estate investment funds.8 These asset management funds operate in theUnited States and elsewhere. Blackstone, for example, has picked upCatalunyaCaixa’sbankruptestatestockinSpain,paying€3,6billionforastockvaluedatthetimeat€6,5billion.9

The entry of vulture funds into collapsing housing markets was eagerlypromotedbynationalandlocalgovernments,whichhaveregulatedandfosteredtheoperationof thesefundsasapartof theirpost-financial-crisismeasures. Inaddition,aspartofbailoutpolicies,assetmanagementcompanieswerecreatedtosegregatethetoxicassets–thosewithlittleornopossibilityofrepayment–fromthebanks’portfolios.Thiswasthecase,forinstance,ofIreland’sNationalAssetManagementAgency(NAMA),theUKAssetResolution(UKAR)andtheSpanish Sociedad de Gestión de Activos Procedentes de la ReestructuraciónBancaria(Sareb).10

Sarebhad initiallygathered aportfolioof 200,000 real-estateunits, 56percent of which were housing units.11 The entry of private equity funds –especiallyNorthAmerican–wasmadethroughmanagementcontractswiththeasset manager, as service providers in charge of negotiating foreclosures,evicting tenants and residents,with the aimof later putting those units up forsale, organised in ‘packages’. US companies TPG,Apollo and Cerberus havetaken part in these contracts. Through managing those services, they havegathered information on the housing stock, andwere better positioned towinauctions promoted by the asset management companies. Cerberus acquired aportfolio of 118,323 securitised foreclosures that belonged to UKAR, in theUnitedKingdom, beating offers fromGoldmanSachs,Blackstone, JPMorganandCarVal.12

Besides,ashappenedinIrelandandinSpain,managersof toxicassetsandinvestmentfundshavestronglylobbiedgovernmentstopasslegislationallowingandencouragingthecreationofreal-estateinvestmentfundsthatcouldbuythereal-estate stock depreciated by the crisis, adopting and adapting the existing(REITs)models.

In the Spanish case, the regulatory framework of SociedadesCotizadas deInversiónenelMercadoInmobiliario(SOCIMIs)wascodifiedintolawin2009,but reformulated in 2012 in order to make such firms more attractive toinvestors.Oneof theseSOCIMIsiscalledAnticipa.ThecompanywascreatedwithCatalunyaCaixa’s‘rotten’real-estatestock,acquiredbyBlackstonein2014.Other real-estate fundswere also constituted throughSOCIMIs.Their strategywastoemptytheapartmentstheyownedasfaraspossibleinordertorentthemout and, eventually, to sell them individually or in packages, usually to other

fundsorREITs.13But, in Spain and in other European countries, the formation of large,

institutional landlords also took place through the acquisition of public socialhousing,soldbymunicipalitiesandgovernmentsdirectlytofundsandREITs.InSpain, the first SOCIMI owned byBlackstone is called Fidere. Fidere bought1,860publichousingunitsin2013fromthecityofMadrid’sEmpresaMunicipalde la Vivienda (EMV). Though this transaction created great controversy andwastakentocourt,theunitsremainwiththeAmericanfundtothisday.14

InGermany,theprivatisation,butespeciallythefinancialisation,ofthesocialhousingstockhashappenedinmanycities,aboveallinBerlin.In1990,30percentofBerlin’shousingstockconsistedofpublichousing; thisproportionwasreducedbyhalfby2008.15Unlike in theUnitedKingdom,for instance,wherecouncil houseswere sold to their long-time tenants, inBerlin, 212,000 homeswere privatised by being sold to large investment funds. This was a decisiontaken by the city government in view of their fiscal deficit at the end of the1990s.Governmentsofdifferentpolitical affiliationsmaintained thepolicy fordecades. Of the nineteen public housing companies in Berlin, two were soldoutrighttoprivateequityfunds(GSWandGehag);othershavesoldpartoftheirhousingunitsstock.

LikeBerlin,whichhashistoricallybeenacityoftenants,NewYorkhasalsoseen large investment funds enter its residential rentalmarket. AlthoughNewYork’spublicsocialhousingunitsamountonlyto6percentoftheentirestock,since the 1970s a very significant part of its private residential rental marketstock has been regulated. Every year, a Rent Guidelines Board, composed ofreal-estaterepresentativesandcityofficials,set themaximumallowedincreasein rental prices. The stabilised rentalmarket represents, today,more than onemillionunits,or45percentofthecity’stotal.

However,duringthe1990s,newlegislationbegantoderegulatethestabilisedrentalmarket, permitting, for instance, a specific real-estate unit to be exemptfrom the rental raise cap when the rental price reached US$2,000 (today,US$2,500) and the unit was vacant (vacancy decontrol). It also permitted theinvestmentmadebythelandlordin improvements to thebuildingorunit tobetransferred onto the rent.16 According to a report published in 2009 by theAssociation of Neighbourhood and Housing Development (ANHD), between2005and2009,around100,000stabilised-rentunits–thatis,10percentofNewYork’shousingstock–wereboughtbyprivateequityfunds.17

Like the other processes, analysed in part one of this book, thefinancialisation of rental housing has been a result of public policies. States

promote a ‘regulated deregulation’18 that enables and supports the pervasiveexpansion of this new urban business, strengthening a financial asset-basedhousingandurbanpolicy.19

Eventhoughtheactualpercentageofunitscontrolledbythesefinancialisedlandlordsisonlyaminorproportionoflocalrentalhousingmarkets,theimpactsof thisprocessontenants’ livingandhousingconditionshavebeensignificant.First, this housing stock is not geographically distributed in a random orscattered manner. Whole districts collapsed with the financial and mortgagecrisis,especiallyinthesuburbsandcityoutskirts.Therehavealsobeenradicalchanges indowntownareaswhere itwasoncepossible to findaffordable lets.Amid intense and conflictive processes of gentrification and resistance,corporatelandlordsownedbyaffiliatesofglobalisedinvestmentcompanieshavenowcapturedthoseunits.

In the case of Barcelona, Melissa García-Lamarca’s study shows thesuccessive dispossession cycles in the city and maps their victims.20 Bygeoreferencing the addresses of individuals and families at risk of foreclosurewhohadsoughthelpfromtheadvisoryplatformPAH,andcross-referencingthisdata with the location and the rental prices of real-estate units owned byBlackstone’sSOCIMIs, theresearchclearlyrevealsthesocio-spatialdimensionof this new frontier of housing financialisation. The working-classneighbourhoodsinthenorth,northeastandsouthofthecityweretheonesthatsuffered the biggest devaluations during the crisis and the largest number offoreclosuresafterwards.Inthosesameneighbourhoods,95percentoftherentalunits offered by Blackstone’s affiliates charge rents above the neighbourhoodaverage.21

A similar scenario prevails in Atlanta, where, as shown by some alreadymentionedresearch,22 there isaconcentrationofrealestateownedbyfunds incertain suburban areas; here, too, rental prices are above the city average.According to the same report, among the tenants of Invitation Home(Blackstone’shomerentalcompany),45percentspentmorethan30percentoftheirincomeonrent,limitingotherexpendituresand,often,fallingintodebtdueto arrears and defaults. In Fulton County, on the outskirts of Atlanta’smetropolitanarea,morethan20percentofrentersreceivedevictionnoticesin2015.AccordingtoareportpublishedbytheFederalReserveBankofAtlanta,2312.2 per cent were ultimately evicted. Similar figures can be found in LosAngeles and in Riverside, California, where THR California, another one ofBlackstone’saffiliates,operates.24

TheongoingprocessinFultonCountyrevealswhoarethemostaffectedbythemachineryofdispossession: thecounty’sracialcomposition is largelynon-white,with44.3percentAfricanAmericans.25 InNewYork, too,mostof theevictedtenantsareAfricanAmericanandHispanic.Withanincreasingnumberof apartments being taken out of stabilised rent protection, evictions havemultiplied.AccordingtothedataonevictionlawsuitscollectedbytheNewYorkCityPublicAdvocate’sOffice,thereweremorethan450,000lawsuitsbetweenJanuary2013andJune2015,80percentof theminitiatedby less than10percentoflandlords,highlightingahugereal-estatepropertyconcentration.26Suchlawsuits are especially common in Hispanic neighbourhoods (Bronx,Washington Heights and Bushwick) or African American (Crown Heights, inBrooklyn).27 In Berlin, the number of evictions has risen in privatised publichousing projects owned by funds, mostly in those inhabited by low-incomeimmigrantfamilies.28

Fromtheinvestors’viewpoint,itisnecessarytomaximisetheprofitabilityoftheinvestedcapital,unlockingthewealthembeddedinresidentialbuiltspaces.In the words of aWorld Bank study aiming to persuade governments of theadvantages of this new frontier: ‘Rental markets also play a key role inenhancingthemarketvalueofhousingassetsandingeneratingrevenuesfromanunlockedhousingwealth.’29‘Unlocking’meansliberatingtheseassetsfromanyconstraintsthatcouldblocktheirimmediatedisposal.Onewayistheevictionofdwellerswhocannolongeraffordthepricesdeterminedbyfunds.

Thecapacitytosetpricesisdirectlylinkedtothenumberofunitscontrolledbythesefundsandtheirconcentrationincertainareas.Butitalsoderivesfromthepracticesadoptedbyfinancialisedlandlordsinorderto‘unlock’thoseassets.Coercionandintimidationarethewordsmostoftenheardinthestoriestoldbyevictees and tenantswho experiencedpressure to leave their homes. InSpain,Germany and the US, you hear of the same tactics being used by banks andfunds toget ridof tenants: from imposedagreements to free thehousingunitsfromindebtedtenants,toassaultsonpeoplelivinginoldpublicrentalunitswithstabilised rent in New York and Berlin, especially in gentrifyingneighbourhoods.30 Cutting off essential services or lowering the quality ofbuildings maintenance are other common tricks: winters without heating,buildingsunderendlessrepairwiththetenantsinside,threatstocallimmigrationservices,monthlyrentchequessystematicallyreturned,offersofcashtoquitthebuildingornotrenewthecontract.

Inadditiontothosestrategies,somecountriesandmunicipalitiesareworkingtofacilitateevictionsbymakingtherulesmoreflexible.TheSpanishrentallaw,

LeydeArrendamientosUrbanos (LAU),and the revisionof stabilised rents inpublichousingunits inBerlin andNewYork are someexamples.Thegeneralhike in rent prices, combinedwith the stagnation of tenants’ incomes and theabsenceofefficientmechanismstoprotecthousingaffordability,generatesrisesinevictionsandinthehomelesspopulation.ThenumberofhomelesspeopleinlargeAmericancitieslikeNewYork,LosAngelesandSeattlehasskyrocketedinrecentyears,amountingtomorethan550,000nationwide.31

Lastly,despitethefactthatthisnewwavehasbeendetectedinEuropeanandAmericancities,therearesignsthatitalsoimpactscitiesoftheso-calledglobalSouth.InSantiagodeChile,forinstance,anasset-managementcompanycalledAssetChileismobilizinginvestors’resourcestobuyentireresidentialbuildingsin downtown areas, launching them on the rental housing market.32 In SãoPaulo,thereal-estatecompanyVitaconhasjustjoinedupwithCapitalLand,anequity fundfromCingapura, to invest in5,000residentialunits to rent.33And,oncemore, just aswehave alreadypointedout in this book, technical reportswrittenbythinktankslinkedtomultilateralagenciesandpresentedinworkshopsforgovernmentsandbusinesssectorsarestartingtocirculateintensivelyinthecountries of the capitalist periphery – arguing that now is the right time forpublicpoliciestoenablerentalhousing.

IntheUK,thepresenceofinstitutionallandlordsinrentalresidentialmarketshas not been significant up to now; however, the government is seriouslyengagedinpromotingtheirentry.In2012thegovernmentcommissionedastudy,the Montague Report, to examine the obstacles and propose measures forattractinglarge-scaleinstitutionalinvestmentinnewhomesforprivaterent.Thiswasamodelofinvestmentwhichismuchmoreprevalentinothercountries,andin some niche markets in the UK, like student housing.34 In 2013, a PrivateRentedSectortaskforcewasestablishedwithintheDepartmentofCommunitiesandLocalGovernmenttoenforcesomeoftheproposedmeasures.35

The rentalhousingmarket, though,hasnotbeen restructured solelyby thepresenceofcorporatelandlords.IfthehousingcrisishasbeenespeciallyacuteinNewYork,LondonandBarcelona,thisisalsodowntothetourismindustryandtoaglobalmarketofsecondhomes that removeshousingunits fromthe long-termrentalmarket.

Buying high-end houses and apartments in global, cultural or tourist citieshasbecomeasafe-depositboxforthetransnationalwealthyelite.Itfunctionsasastablestoreofvalueforpartoftheircapital,withgreatscopeforappreciation.Manyofthesetransactionsaremadeviaoff-shoretaxhavens,belowtheradarsofnationalandlocalgovernments.36London,NewYorkandMiamiarecitiesin

whichthisphenomenonisconspicuous.Inthelastfewyears,Barcelonahasalsobecome a valued target for foreign investors. One of the factors that hascontributed to launching Barcelona as a target was Spain’s promotion of the‘Golden Visa’ as one of its post-crisis recovery measures. Golden Visas arenothing less than the gift of citizenship in exchange for investments in realestate.

Furthermore, in the cases of Barcelona and New York, the popularity ofsharing-economyplatformsthatconnectpeopleseekingtolettheirapartments–orapartmentfractions–withpeoplehopingtopaylessthanhotelratesontheirnext trip is another element that affects rental housingmarkets.Airbnb is themostnotoriousexampleofsuchplatforms.

AlthoughAirbnbpresentsitselfasa‘communitymarket’,thecompanyis,infact,averyprofitablestart-up.Airbnb’smarketpriceexceedsonebilliondollarsandthecompanyhasnotfloateditscapitalonthestockmarketyet.Themathsbehind its profitability are very simple: the website charges a 10 per centcommission for each reservation and another 3 per cent commission forprocessingthepayment.The‘host’paysthese,butthe‘guest’alsopaysa6to12per cent fee for the service. We are talking about a two-sided market thatmanagestomakeaprofitfrombothsides.Theplatform’sappealisconfirmedbyits list of investors. They include venture capital companies such as MightyCapital,SequoiaCapital,BracketCapital;globalfinancialservicesfirmssuchasMorganStanleyandJPMorganChase&Co.;bankslikeCitigroup,andprivateequitycompaniessuchasChinaBroadbandCapital.37

Thesuccessoftheplatformhasrepercussionsnotonlyinthehotelindustry,butalsoonthelong-termrentalhousingmarket.38Duetotheirprofitabilityandto flexible negotiations, Airbnb and copycat platforms have started to listpremisesthatwereformerlyavailableonthelong-termrentalmarket,convertingthemintoshort-termletsfortouristsandlodgers.

Oncemore, the effects of financialisation of rental housing go beyond therestructuring of rental markets, resulting in dispossession and displacementprocessesthathurtethnicminorities,thepoorandthevulnerable,andalsoyoungpeople.Oncemore,thefinanciallogicoftheoperation–thebetsandstrategiestomake sure that revenues from invested capital will increase – trumps city-dwellers’housingneeds.

Thecreationandexpansionof thisnewfrontierofhousing financialisationdoesnotproceedwithoutresistance,especiallyincitieswheretheupheavalhasbeen particularly intense and where there is a history of organised socialmovements.Thevictimsofdispossession,togetherwithactivistsfortherightto

housing and to the city, are challenged to develop new forms of resistance inorder to confront the opacity and abstraction that are intrinsic to theworld offinance.39

In New York, resistance originated from a network of communityorganisations, NGOs and legal advisory groups that had existed since thestrugglesforadequatehousinginthe1960s.Stabilizedrentwasoneoftheirfirstconquests.Thisnetworkwasrevivedinordertoconfrontthecity’surbancrisisatendofthe1970s.Rootedinthepoorestcommunities,mainlyhometoAfricanAmericans and Hispanics, they were able to reactivate their capacities formobilisationandstruggle,reinventingstrategiesassoonastheybegantodetecttheominoussignsoftheentranceofprivateequityfundsintothestabilized-renthousingstockinthoseneighbourhoods.

Local coalitions such as the Association for Neighborhood and HousingDevelopment, along with neighbourhood organisations such as the NorthwestBronx Community and Clergy Coalition, committed to developing a criticalnarrative about what was going on. They mapped and developed socialindicators; they engaged in advocacy, provided legal advice to tenants anddesignedeye-catchingactionswiththemedia.

Byallthesetactics,theymanagedtochangepublicopinioninthecityaboutwhat could be considered ‘predatory equity’. In a positive reaction, themunicipality began to intervene in the most egregious cases and has, morerecently,startedtoofferfreelegalcounselling–andotherservicesandmeasures–tothosethreatenedwitheviction.40Ontheotherhand,whenMayordeBlasio’sadministration announced measures touted as extending the offer of rentalhousing to the poorest – including changes to the zoning laws of wholeneighbourhoods, toallowhighbuildingpotentialsand taxexemptionsfor real-estatedevelopers–evenmoreheatedprotestsensued.41

In the case of Barcelona, despite the emergence of a new social housingmovement in 2005, Plataforma por la vivienda digna [Platform for decenthousing],itwasonlyaftertheoutbreakofthefinancialandmortgagecrisisthatthe tenants’ defence bureau PAH was formed, organising those affected byforeclosuressidebysidewithactivists,housingrightscampaignersandlawyers.Thanks to its wide-ranging advisory services for victims, informationcampaigns,proposaloflegalbillsanddirectaction–whethertostopevictionsortofindshelterforthoseinurgentneed–PAHhasamplifieditssocialbaseandpolitical influencetothepoint thatoneofits leadersandfounders,AdaColau,waselectedBarcelona’smayorin2015.

Besides PAH, several organisations in the districts affected by speculation

have come together in a ‘tenants’ union’. Their agenda includes measures tointroduce rent control and collective forms of negotiation of those prices, infavour of social housing and for the protection of tenants threatened witheviction.42Initiativestode-commodifyhousingarealsospringingup.Examplesare socialcooperatives, community land trustsandsquattingofemptyhousingunits.Direct actions like squatting are proposedboth as concrete solutions forsituationsofurgenthousingneed,andasatacticforthestruggle.

Under pressure from – and committed to – those social movements,Barcelona’s new city government has attempted to promote social housing,adoptingmeasuresliketheintroductionofrentcontrolcapsforunitsrenovatedusingmunicipalloans.Thecityhasembarkedonbuildinganewstockofpublichousing. It has confronted predatory tourism by controlling the number ofhousing units rented for short-term periods through online platforms. Themunicipality is also keeping an eye on accommodation listed on Airbnb andsimilar platforms that are not registered with the municipality or that violatezoning laws, finingAirbnb andHomeAway directly.43 Given its financial andjurisdictionallimitationsinthismatter,thelocalgovernmenthasactedinconcertwith other cities to influence national housing policies, to reform the rentalhousinglegislationandtoabolishthebenefitsandtaxincentivesgivenforreal-estatefunds,REITsandthroughGoldenVisas.44

Despite the fact that the new housing and urban movements emerging inNew York and Barcelona were not able ultimately to reverse thosefinancialisationprocesses,theirpracticesbuildalinkbetweenthematerialityofthevictims’concrete lives–and theprivations theyaresubjected to–and theabstraction of transnational financial flows, advancing towards a more multi-dimensionalcomprehensionofthephenomenon.

At the same time, these struggles have begun to delineate the politicalconfrontation between territories understood as spaces for life and itsreproduction and territories understood as playgrounds for finance capital,uprootedanddisconnectedfromhumanneedsanddesires. It is thisaspect thatprovides the connecting point between the movements around housing andhabitationincontemporarycitiesaroundtheworld.

The scenes that open and close this book, inAstana,Barcelona, TelAviv,Manchester, São Paulo and Rio de Janeiro, depict contemporary rebellions inwhichspaceismorethantheinertsettingwherebattlestakeplace,beingitselftheobjectofthosebattles.Wearelivinginaneraofrebellions,andoccupationsoftenspringupsimultaneouslyatdifferentpointsontheplanet.Theparadoxofneoliberal economic globalisation is precisely that it simultaneously weakens

androusesthesocialforcesofresistance.45Theoccupationofpublicspaceforlongperiodshasbeenoneofthetactics

employed.Even in temporaryoccupations– for the timeof ademonstration–theoccupiedspacecarriesanimportantsymbolism.ItiswhatCharlesTillycalls‘symbolic geography’: the spaces become loaded with meanings,communicating themessage that themovementwants to spread.46 Temporaryoccupations also represent a type of abrupt hiatus in the cities’ busy motion,bringing to the surface themes previously submerged under the avalanche ofday-to-daylife.

Longeroccupations–asinTahrirSquare(Cairo),TaksimSquare(Istanbul),Zuccotti Park (New York) and in empty buildings in São Paulo and otherBraziliancities–alsoofferedthechancetoexperimentand‘prefigure’.Inotherwords, to try out forms of organisation, decision-making, self-governance andmanagement of collective life, as well as to institute alternatives today,rehearsingpossiblefutures.47

Traditionalformsofpoliticalrepresentation,suchasparliaments,partiesandunions, arebeing contested and there is a proliferationof groups campaigningfor autonomy,or new formsof auto-representation and self-management.VeraPallamin has commented on the effect of interventions by art collectiveswithreference toEdifícioPrestesMaia–abuilding in thecentreofSãoPaulo thatwasoccupiedin2002bymembersoftheSãoPauloCentreHomelessMovement(MovimentodosSemTetodoCentro–MSTC).Sheaffirmed:

Stampedontheurbanlandscape,[theimage]becomesaseallendingsubstanceandamplificationtotheactionsformoralrecognitionandpublicsubsidies takingplaceinside.In these terms,wemaysee how forms of spatialisation and its sensitive interweavings alter the city’s politico-aestheticfabric.48

Finally, occupations also carry a confrontational dimension. A militaryoccupationisthecontrolofaspaceandthedominationofaninsurgentorenemyterritory.An occupation carried out by a socialmovement, on the other hand,means the ‘liberation’ofa space soas toallowordinarypeople toappropriateandinterveneinit,challengingtheauthorities’attempttoexcludethem–fromaspace,aprojectoradecision.Therefore,italsoimpliesconfrontation,butintheoppositesensetothatofapoliceormilitaryoccupation.49

Againstthisradicalappropriationofspace,repressivetechnologiesimposeamilitarised management of the spaces. This model invades cities and theirurbanistic and housing policies, capturing territories, expelling and colonisingspaces and lifestyles. The effects of this colonisation are politico-territorial,

creating a new form of metropolitan government. This form has beendenominated by some authors as post-political or post-democratic, in whichdissentanddemocraticnegotiationaresuppressedinthenameofefficiencyandmanagementtechnologies.50ItiswhatJacquesRancièrehascalleda‘democraticscandal’: for,despitepromisingequalityanddemocracy, itproducesa formofoligarchy,wherepoliticalandeconomicpowerfuseperfectly.51

Thosenewformsofgovernancedrivetheexpansionofthemarket’sbordersthrough a continuous process of accumulation through spoliation: thecapitalisation of space and life.This involved the capture and encirclement ofpublic spaces; the extension of land and housing commodification; or, simply,expulsions.

In Slavoj Žižek’s words, this is the ‘further expansion of the reign of themarket, combined with progressive enclosure of public space, diminishing ofpublic services (health, education, culture) and rising authoritarianism’.52Agambengoesevenfurtherwhenhedescribesthenewformsofgovernmentinthemetropolis:

wearenotfacingaprocessofgrowthanddevelopmentoftheoldcity,buttheinstitutionofanewparadigm…Undoubtedlyoneofitsmaintraits is that thereisashiftfromthemodelof thepolisfoundedonacentre…anagora,toanewmetropolitanspatialisationthatiscertainlyinvestedinaprocessof‘de-politicisation’,whichresultsinastrangezonewhereitisimpossibletodecidewhatisprivateandwhatispublic.53

The colonisation of urban land and housing by finance is a powerful globalprocessthat,evenafteracrisissuchasthatin2008,survivesandrecreatesitselfas a hegemonic movement, putting down roots and penetrating into differentenvironments. Housing and urban policies cannot be considered neutral inrelation to this process. On the contrary, they actively opt for the creation ofmaterial,symbolicandnormativeconditionsthattransformlivedterritoriesintoabstract assets. However, at themargins, in the porosities and fissures of thisprocess,‘fermentsanewhybridconglomerateofpractices,ofteninthemidstofdeepeningpoliticalexclusionandsocialdisempowerment’.54

Theoutburstsandmassprotestsareseismic tremors inwhich thepowerofthis ferment can be glimpsed.However, it is not only on these occasions thaturbanwarfaretakesplace;itisfoughtoneveryfront.Itexistsineveryresistanceagainst expulsion and eviction; in every anti-privatisation and anti-homogenisation struggle; in every appropriation of public spaces as spaces ofmultiplicityandfreedom.Itexists,thus,inthedailystrugglefortherighttothecity:

Itisexactlythesepracticesthaturgentlyrequireattention,nurturing,recognition,andvalorization.They demand their own space; they require the creation of their own material and culturallandscapes, their own emblematic geographies. These are the spaces where the post-politicalcondition is questioned, the political re-treated, and practices of radical democratizationexperimentedwith.55

Urbanplanningandhousingpolicieshavebeenfundamentaltotheexpansionoffinancialisedcapitalism.Itwilltakemorethanimaginationtoprotectthesenewgeographies.Nonetheless,weneed to imaginehow tobreakwith the idea thatthe‘highestandbestuse’equals themostprofitableone.This logicmust shifttowardstheuniversalisationoftherighttohousingandtothecity,andtowardsthe‘communisation’ofurbanspacesasthecoreofplanningpolicies.

We also need a political movement to push against the currentdepoliticisationofurbangovernance– thewaypublic–privatepartnerships aredefinedandregulatedentirelyintheprivaterealm.56Thismovementmustinsistonthepromotionofcitizenship,andtherecognitionofdissent.Amidthecurrentplethora of socialmovements and struggles, it remains impossible to agree onthedesignofanewutopiaofpoliticalandsocialorganisation–post-capitalistandpost-socialist.Itisalsonotyetpossibletodefineanewmodelofcity.

Fornow,itsufficestoknowthat,intheJuneJourneysinBrazil,inuprisingsagainst the evictions caused bymega-events (inCapeTown,Tokyo orRio deJaneiro), in the Platform for People Affected by Mortgages in Spain, indemonstrations against gentrification in the Global North and South, urbanstrugglesareintheascendant.TheLefebvrianconceptofthe‘righttothecity’isdefinitelyaliveandkickinginthestreets.

Acknowledgements

This book is a register ofwhat I saw– and of the reflections I developed –during and immediately after my mandate as the UN Special Rapporteur onAdequateHousing.ThankstoasabbaticalgrantedbytheFacultyofArchitectureandUrbanismoftheUniversityofSãoPaulo(FAU-USP),Iwasabletocommit,forafewmonths,toitswritingasanacademiccareerthesis.

AProductivityGrantfromtheBrazilianNationalCouncilforScientificandTechnologicalDevelopment (CNPq)gaveme the resources thatallowedme tocomplete several stages of the research, systematise the information collectedduring the years ofmymandate as a rapporteur and, additionally, support theproductionofboththethesisandtheBrazilianeditionofthebook.

The rapporteurs’ position is part of the UN Human Rights Council’s(UNHRC) ‘special procedures’. They are in charge of monitoring theimplementation of pacts and negotiated resolutions. All rapporteurs arespecialistswhoactindependently:theyarenotsubjecttotheUNHRCnortoanygovernmentormultilateralorganisation.Theirmissionistolistentothevoicesofthosewhofeelthattheirrights–inmycase,tohousing–arebeingviolatedand,asmuchaspossible,tostrivetounderstandthecircumstancesinwhichthishappensinordertodialoguewiththecountry’sgovernment,theUNHRCorthepress,expressingtheirviewoneachcase.

As a rapporteur, I received denouncements on a daily basis. They wereaccounts sent in by communities, NGOs, law clinics and other human-rightsdefenders,andtheyalmostinvariablyinvolvedcontexts(orthreats)ofeviction.Withtheslenderresourcesatmydisposal,itwasnotevenpossibletodealwithall the cases that did manage to reach me. Each year, the rapporteur hasresources to realise two ‘missions’ – official visits to countries – as well assupporttodevelopannualthematicreportsonemergentissueswithintheirfield,

with the help of one assistant from the Office of the High Commissioner(OHCHR). During the official country visits – immersions that lasted aroundtwo weeks1 – I walked around the communities and spoke directly to thoseinvolved with housing issues: affected families and individuals, civil societyorganisations, academics, public authorities and representatives of allgovernmental levels. Despite the scarce initial resources, for each one of theobserved countries and contexts, I was able to count on a vast network ofcollaboratorswilling to sendmaterial, information, articles and documents, toarrangeinformalconversations,publicconsultationsandhearingsduringofficialvisits,andtopromoteworkingvisitsinvariouscities,aswellasonlinemeetingsanddebates.Itwouldbeimpossibletonamehereallthepeoplewhoengagedinonewayoranotherwithmyactivitiesasarapporteur.

Twointernationalnetworksofhousingmovements,communitiesandNGOsforthedefenceofhumanrightshavebeenfundamentaltomobilise–withineachanalysed context or theme – further information and contacts: the HabitatInternationalCoalition(HIC)andtheInternationalAllianceofInhabitants(IAI).Totheirmembersandalsotothehundredsoforganisationsandindividualswhovoluntarily collaboratedwithmywork as a rapporteur, I register heremy firstacknowledgementandthanks;toallthosewhoparticipatedinthehugeeffortofmakingvisible – and comprehensible tome– the signsof theglobal crisis ofinsecurityoftenurethatishittingthepoorestandmostvulnerablegroupsduringthesefirstdecadesofthethirdmillennium.

Ialsowant to registermygratitude toall theOHCHRstaffwhosupportedme during the six years ofmymandate, organising and running all activities,thus helpingme to face the tough task of producing reports, communiqués togovernments and press releases, under the pressure of urgent situations, thecomplexities inherent in each case or theme and the diplomatic constraints towhich thismechanism is subject. Special thanks go toMaraBustelo and JaneConnors,BahramGhazi,BeatriceQuadranti,DeniseHauser,BrendaVukovic,Laure-Anne Courdesse, Boris-Ephrem Tchoumavi, Marcelo Daher, StefanoSensi, Isabel Ricupero, Lidia Rabinovich and Juana Sotomayor, with whom Ihavesharedthesechallenges.

ThankstothesupportofthepermanentmissionsofGermanyandFinlandinGeneva (mymandate’ssponsorswithinUNHRC), from2010on Icouldcountonextraresourcesthatallowedmetohireconsultantstoperformbibliographicalresearch on specific subjects and organisemeetingswith specialists in certainareas,with aview to theproductionof reports. I registerheremygratitude tothese sponsors, but also and particularly to Jean du Plessis, Natalie Bugalski,

DavidPred,MayraGomez,BretThiele,GeoffreyPaine,AlainDurand-Lasserve,AlanGilbertandYvesCabannes,whocollaboratedasconsultantsintheresearchandwritingofsomereportscitedinthisbook.

Techniciansfromhumanitarianagenciesinvolvedwithpost-conflictorpost-disaster emergency succour and reconstruction processes, particularly BarbaraMcCallin, from the Internal Displacement Monitoring Centre (IDMC), LauraCunial, from the Norwegian Refugee Council, and Graham Saunders andVictoria Stodart, from the International Federation of the Red Cross and RedCrescent, were important interlocutors and collaborators in the effort ofinvestigatingthistheme.

From2009on,IwasfortunatetohaveFAU-USP’sbackingforthesettingupofaresearchhubtosupportmymandate.ThankstoProfessorEulerSandeville’sgenerosityandtothepermanentsupportfromtheFAU-USPDesignDepartment,thehubwassetupwithintheLaboratoryforPublicSpaceandtheRighttotheCity (LabCidade). It received research fellowships funded by USP and fromprojectsfinancedinitiallybytheGermanMinistryofInternationalRelations,bySida(SwedishInternationalDevelopmentCooperationAgency)and,from2012on, by Ford Foundation Brazil. I thank those people who participated in themany projects from LabCidade’s Research team: Joyce Reis, Bruno Lupion,Paula Lígia Martins, Mariana Pires, Rodrigo Faria, Marília Ramos and VitorNisida.

I must register here my huge gratitude to Letícia Osório, responsible forconvincingmetoapplyforthepositionofUNspecialrapporteur.Sheactedasthe ‘coordinator of my campaign’, which was promoted by NGOs andinternational networks for the right to housing. My nomination was alsoendorsed before UNHRC by the Brazilian government. As Ford FoundationBrazil’shumanrightsofficial,Letíciawasalsoagreatsupporterofmyworkandavaluedinterlocutorthroughoutthemandate.

It would have been impossible to develop a critical reflexion about theprocessesthatIobservedwithoutdialoguingwithauthorsandresearchersfromall over theworld,whom I also had the privilege tomeet along this journey.They are cited in the book and I could not hope to mention them all here.Nevertheless, I owe particular thanks to Manuel Aalbers, with whom I haveenjoyed intellectual collaboration andwhogenerously includedme inhisownnetworkof research about housing financialisation–now focusedon the real-estate–financialcomplex,aconceptwidelyemployedinthisbook.Ialsothankmy colleagues from the International Sociological Association’s ResearchCommittee on Sociology of Urban and Regional Development (RC21) and

ResearchCommitteeonHousingandtheBuiltEnvironment(RC43),withwhomIsharedfruitfulsessionsofintellectualexchangeinseminarsandencounters.Ialso thank my partners on the editorial board of the International Journal ofUrban and Regional Research: as well as being understanding about myabsences from the journal’s activities, they sent me articles, helped withbibliographyand‘obliged’me tokeepupwithcurrentcriticaloutputonurbanissues.MyspecialthankstoAnanyaRoy,whosentmearticlesandbooksrelatedto these topics throughoutmywriting. I also thankMarcello Balbo, who hadinsistedforyearsthatIshouldstopandwrite,andwhorepeatedlydiscussedthecontentandstructureofthisbookwithme.ForwritingtheAfterword,updatingthe book, I used the information on Barcelona kindly supplied by JosepMontaner andVanesa Valiño, from the city council, plus a huge file of newsclippingsand reports from theeditorofEditorialDescontrol,publishersof theSpanish edition of the book. I also had articles and information fromMelissaGarcía-LamarcaandfromAnaSugranyesonChile.Thankyou!

Theses submitted for promotion to full professorship do not havesupervisors.Nevertheless,withoutevenaskingifhecouldorwouldtakeontherole, Iadoptedone:DavidHarvey.Duringaconversation inQuito,after Ihadpouredoutapileofempiricalfacts,heresponded:‘Verywell.Youhaveshownmewhereandhowprocessesofdispossessionarehappening.Congratulations!However,fromanintellectualpointofview,theinterestingquestionis“why”.’He thenpatientlydiscussedwithmepointbypoint, suggestedbooks,gavemeideasandtextsand,whenmyworkseemed‘stuck’,heansweredmydesperateSkypecalls.IregisterheremyprofoundgratitudetoDavidHarvey.

In order to develop the third part of the book, set in Brazil, I drew onmaterial generated by my working visits as a rapporteur to Rio de Janeiro,Salvador,Recife,Fortaleza,PortoAlegreandBeloHorizonte.IalsohadsupportfromPublicDefenders, thePublicMinistry,NGOs,university researchgroupsand theWorldCupPopularCommittees (inRio, theWorldCup andOlympicGamesPopularCommittee),whichhadbeensetupin2010.Additionally,Idrewonconsultationsandseminarsheld inSãoPaulo. Ialsoused researchmaterialproducedbyLabCidadefrom2009on.WithresourcesfromFAPESP(SãoPauloResearch Foundation), CNPq, USP and the Lincoln Institute of Land Policy,through projects developed by the Laboratory’s team or in collaboration withotheruniversities,wewereabletoobservetherecentevolutionofhousingandurban policies in Brazilian cities, especially in the state of São Paulo.2 Asignificant portion of part three came directly from articles produced incollaboration with LabCidade’s researchers, as well as from final reports of

surveysweconducted,whicharecitedinthenotes.Iregisterheremygratitudeto the commitment and professionalism of the team of researchers who haveworked in LabCidade since 2009, including those who are still there: toProfessor Paula Santoro, co-director of LabCidade, and to Professor ReginaLins, who helped to organise our ‘Evictions Observatory’; to Joyce Reis,DanielleKlintowitz, JúlioCaldeira, JúliaBorrelli,AnaPaulaLopes, FernandaAccioly, Luanda Vanucchi, Rodrigo Faria, Álvaro Pereira, Vitor Nisida, LuisGuilhermeRossi,AluizioMarino, PedroLima, PedroRezende, IsabelMartin,LucianaBedeschi,TalitaGonzales,FelipeVilelaandFernandoTulio.Forsomeofthem,Iwas(oram)asupervisorfortheirfirstdegree,Master’sorPhDthesesin science. I add to this acknowledgement my gratitude to Higor Carvalho,Evaniza Rodrigues, Daniel Caldeira and Rosane Santos, former or currentmenteeswho helpedwith research and Sunday emergency calls.With them –supervisedmenteesandLabCidaderesearchers–aswellaswithmycolleagues,undergraduate and graduate students from FAU-USP, I learned more than Itaught.

DialoguewithBrazilianactivistsandintellectualsinconversations,debates,public lectures and seminars has been fundamental for the collective effort tounderstandthedifficultpresentmomentandtoimaginepossiblefutures.Ithankparticularly my colleagues from Le Monde Diplomatique–Brazil’s editorialboard:SilvioCacciaBava,AnnaLuizaSallesSoutoandVeraTelles;Ialsothankmyfriend-sisterSôniaLorenz,who,instrollsaroundthestreetsandsquaresofthe neighbourhood where we live, shared with me the point of view ofindigenousandquilombolacommunitiesaffectedbylargeprojectsinBrazil.

Two continuous dialogues were crucial for thinking about some of thequestions I analyse in this book: firstly, with my professor colleagues in theGroupofUrbanPlanningDisciplines,especially thosewithwhomIshared(orstill share) LabCidade’s research – Paula Santoro, Karina Leitão and LucianaRoyer;andsecondly,withthemembersofCityandHousingResearchNetwork.A significant proportion of the book’s part three has its source and empiricalresearchbaseinmyownexperiences,duringmyyearsaspartoftheMovementfor Urban Reform within municipal governments and the Brazilian federalgovernment.I thankmypartners inthefederalgovernment,particularlyBennySchvarsberg,Otilie Pinheiro,CelsoCarvalho, EvanizaRodrigues,Weber SuttiandGraziadeGrazia,who,sharingwithmethesettingupanddirectionoftheMinistry of Cities’ National Secretariat of Urban Programmes, helped me todevelopareadingoftheBraziliancityinthenewmillennium.

When writing this book, I interviewed former colleagues from various

ministriesandfederalgovernmentinstitutionsinordertoverifyinformation.Inrespect to the confidentiality that was sometimes required, I decided not toidentifythem,entirelyassumingtheresponsibilityfortheveracityofwhatIhavewitnessedandnowreport.

Ialsothanktheprofessorshipexaminationcommittee,whoproblematisedapreliminaryversionofthisbook.CarlosVainer,VeraTelles,CibeleRizek,MariaCristina Leme and Flávio Villaça made me see (and admit) what it was thatreally propelled me to write this book: the ruptures and displacements thatmarkedmyintellectualandpoliticaltrajectoryinrecentyears.

Bianca Tavolari and Mariana Pires, respectively research assistant andreviser,were important partners in the process ofwriting this book.Bianca, aLabCidade researcher andcollaborator,worked intensivelyon theorganisationofallthematerialfrommymandateasarapporteur,onthedevelopmentofthestructure, on the setting up of the chapters and on the organisation of thebibliographic references – and then, in the research support for updating partthree and writing the Afterword. She has been a firm, patient and carefulinterlocutor.Marianaperformed therevisionof thisbook’s firstversionsand–evenmoreimportantly–byproducingarticlesformyblogandfornewspaperswithmeforfiveyears,shetaughtmetobeajournalistwhileItaughthertobean urbanist. In the updating of part three I could also count on the fruitfulconversationandsupportofAluizioMarino.

Finally, I found inBoitempo’spublishing team the careful reading and theenthusiastic reception needed for the transformation of a thesis into a book. Iparticularly thank Ivana Jinkings, Kim Doria and Isabella Marcatti for theircommitment,forthedozensofemailsperday,forthepartnership!

Translationstootherlanguagesarealwayscomplex,asitisnotjustamatteroflanguagebutalsoofcultureandcontext.IamgratefultoFelipeHirshchorn,who,thankstoagrantfromtheBibliotecaNacional,preparedanEnglishversionof the book, written originally in Portuguese. But Leo Hollis, from Verso,literally reworked the whole book with me, thinking as a British reader, buttrying always to respect and understandmy arguments and points of view. Inorder to make it more readable to a non–Brazilian audience, part three wasreducedandsynthesised.Thankyou,Leo,andalsoMarkMartinandLornaScottFox,copy-editorsperformingprofessional,delicateanddedicatedwork!

My last – and biggest – acknowledgement goes to Luiz Fernando deAlmeida, my dear partner, who provides me with the necessary peace andgrounding in order to navigate on my several journeys of writing, rewriting,translatingandupdatingthisbook.

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Notes

Introduction

Kenneth Gibb, ‘TheMultiple Policy Failures of the UK Bedroom Tax’, International Journal ofHousingPolicy,vol.15,no.2(June2015).JennyRobinson,‘PostcolonialisingGeography:TacticsandPitfalls’,SingaporeJournalofTropicalGeography,vol.24,no.3 (2003);AchilleMbembeandSarahNuttall, ‘Writing theWorld fromanAfricanMetropolis’,PublicCulture,NewYork,vol.16,no.3(2004).Thefirstofthethreereports,‘ClimateChangeandHousingRights’,waspresentedtotheUNGeneralAssembly in 2009. The other two, presented in 2011, examined processes of post-disasterreconstructionanditsimpacts,inconcretesituations,onhousingrights.AnanyaRoy,‘The21stCenturyMetropolis:NewGeographiesofTheory’,RegionalStudies,vol.43,no.6(2009).Robinson, ‘Postcolonialising Geography’; Carlos Vainer, ‘Disseminating “Best Practice”? TheColoniality of Urban Knowledge and City Models’, in Susan Parnell and Sophie Oldfield, TheRoutledgeHandbookonCitiesoftheGlobalSouth(NewYork/Abingdon,Routledge,2014);AndreasWimmerandNinaGlickSchiller,‘MethodologicalNationalism,theSocialSciences,andtheStudyofMigration:AnEssay inHistoricalEpistemology’, InternationalMigrationReview,NewYork, vol.37,no.3(2003).

1.TheGlobalFinancialisationofHousing

RaquelRolnik,Report:MissiontoKazakhstan,A/HRC/16/42/Add.3,2011,written incollaborationwithStefanoSensi.AllmissionandthematicreportsthatIpresentedtotheUNandthatarecitedinthe book are available on theUNHighCommissioner forHumanRights’website: ohchr.org.Theidentification provided after the report’s title in the Notes is the easiest way of finding the textthroughthewebsitesearchtool.Olzhas Auyezov, ‘Troubled Kazakh Homeowners Protest over Foreclosures’, Reuters, 18 March2009.Availableat:in.reuters.com,accessed4Dec.2014.AlfredoRodríguez,AnaSugranyes andManuelTironi, ‘Anexo1:Resultadosdeuna encuesta’, in

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AlfredoRodríguezandAnaSugranyes(eds),Loscontecho:Undesafíoparalapolíticadeviviendasocial(Santiago,SUR,2005),pp.225–6.AnaSugranyes,‘LapolíticahabitacionalenChile,1980–2000:unéxitoliberalparadartechoalospobres’, inRodríguezandSugranyes(eds),Loscon techo,pp.23–33;FernandoJiménezCavieres,ChileanHousingPolicy:ACaseofSocialandSpatialExclusion?(doctoratethesisinArchitecture,FakultätVII,ArchitekturUmweltGesellschaft,TechnischeUniversitätBerlin,2006).MartinRoberts,‘SpanishBankstoRestrictEvictionsafterSuicides’,Guardian,12November2012.Availableat:theguardian.com,accessed6Oct.2014.Ada Colau and Adrià Alemany, Vidas hipotecadas: De la burbuja inmobiliaria al derecho a lavivienda(Barcelona,CuadriláterodeLibros,2012).RaúlGuillén,‘EmMadri,vidashipotecadas’,LeMondeDiplomatiqueBrasil,SãoPaulo,dossiern.8,year1(Nov.–Dec.2011).See Friedrich Engels, The Condition of the Working Class in England (1845) and The HousingQuestion(1872).Foodbanksstockfarmers’surplusproduceandfooddonatedbyindividuals.IntheUK,foodbanksusuallydonatedirectlytothepersoninneed,referredbysocialservices.Soutik Biswas, ‘India’s Micro-Finance Suicide Epidemic’, BBC, 16 Dec. 2010. Available at:bbc.co.uk,accessed6Oct.2014.David Harvey, Seventeen Contradictions and the End of Capitalism (Oxford, Oxford UniversityPress,2014),p.241.Manuel Aalbers, ‘Corporate Financialization’, in Noel Castree et al. (eds), The InternationalEncyclopediaofGeography:People,theEarth,Environment,andTechnology(Oxford,Wiley,2015).Availableat:academia.edu,accessed8Oct.2015.Seep.3.RichardRonald,TheIdeologyofHomeOwnership:HomeownerSocietiesand theRoleofHousing(NewYork,PalgraveMacmillan,2008).DavidHarvey,TheUrbanExperience(Oxford,Blackwell,1989);UgoRossi,‘OnLifeasaFictitiousCommodity:Citiesand theBiopoliticsofLateNeoliberalism’, InternationalJournalofUrbanandRegionalResearch,vol.37,no.3(May2013).LedaMariaPaulani,‘OBrasilnacrisedaacumulaçãofinanceirizada’,IVEncuentroInternacionaldeEconomíaPolíticayDerechosHumanos,2010,p.5.Availableat:madres.org,accessed6Oct.2014.ManuelAalbers andRodrigo Fernandez,Housing and the Variations of FinancializedCapitalism,internationalseminar,TheRealEstate/FinancialComplex(Refcom),Leuven,2014,mimeo,p.1.International Monetary Fund, Long-Term Investors and Their Asset Allocation: Where Are TheyNow?(Washington,DC,IMF,2011),citedinAalbersandFernandez,HousingandtheVariationsofFinancializedCapitalism,p.13.AalbersandFernandez,HousingandtheVariationsofFinancializedCapitalism,p.14.Ibid.Herman M. Schwartz and Leonard Seabrooke, ‘Conclusion: Residential Capitalism and theInternationalPoliticalEconomy’, inSchwartzandSeabrooke(eds),ThePoliticsofHousingBoomsandBusts(London,PalgraveMacmillan,2009),p.210.Ibid.p.209.AalbersandFernandez,HousingandtheVariationsofFinancializedCapitalism,p.4.The concept of real-estate/financial complex was presented to me by Manuel Aalbers. He leadsresearchfocusedontherelationshipbetweenrealestate,financeandthestate,drawingaparallelwiththeUSmilitary–industrialcomplex.See:ees.kuleuven.be/geography,accessed10Aug.2015.MarianaFix,FinanceirizaçãoetransformaçõesrecentesnocircuitoimobiliárionoBrasil(PhDthesis

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32.33.34.35.

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3.4.

5.6.

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in Economic Development, Campinas, IE-Unicamp, 2011); Rossi, ‘On Life as a FictitiousCommodity’.SchwartzandSeabrooke,‘Conclusion’,p.210;PhilippeZivkovic,‘Financiarisationdel’immobilier:La réponse innovante dugroupeBNPParibas’, 2006, cited inHigorRafael deSouzaCarvalho,Acidade como um canteiro de negócios (Undergraduate Final Work in Architecture and UrbanPlanningFAU-USP,SãoPaulo,2011),p.155.NeilBrennerandNikTheodore,‘CitiesandtheGeographiesof“ActuallyExistingNeoliberalism”’,inBrennerandTheodore(eds),SpacesofNeoliberalism:UrbanRestructuringinNorthAmericaandWesternEurope(Oxford,Blackwell,2002).WorldBank,Housing:EnablingMarketstoWork(Washington,DC,WorldBank,1993).Herman M. Schwartz and Leonard Seabrooke, ‘Varieties of Residential Capitalism in theInternationalPoliticalEconomy:OldWelfareStatesandtheNewPoliticsofHousing’, inSchwartzandSeabrooke(eds),ThePoliticsofHousingBoomsandBusts,p.16.LoïcChiquier andMichaelLea (eds),HousingFinancePolicy inEmergingMarkets (Washington,DC,WorldBank,2009),pp.xxxi–ii.RobertM.Buckley and JerryKalarickal (eds),Thirty Years ofWorldBank Shelter Lending:WhatHaveWeLearned?(Washington,DC,WorldBank,2006),p.41.David Harvey,Limits to Capital (London and New York, Verso, 2007);A Companion to Marx’sCapital,2vols(LondonandNewYork,Verso,2013).BrennerandTheodore,‘CitiesandtheGeographiesof“ActuallyExistingNeoliberalism”’.Ibid.WorldBank,Housing:EnablingMarketstoWork.Raquel Rolnik, Thematic Report about the Impact of Financialization on the Right to AdequateHousing,A/67/286,2012,incollaborationwithLidiaRabinovich.

2.TheMortgageSystem

InGreatBritainandNorthernIreland,forexample,around5.5millionsocialhousingunitswerebuiltbetweentheendofWorldWarIIand1981.SeeMichaelHarloe,ThePeople’sHome?SocialRentedHousing in Europe and America (Hoboken, NJ, Wiley-Blackwell, 1995); and David Fée, ‘LelogementsocialenAngleterre:trenteansdedéclin’,InformationsSociales,no.159(2010).Claire Lévy-Vroelant and Christian Tutin (eds),Le logement social en Europe au début du XXIesiècle(Rennes,PressesUniversitairesdeRennes,2010),p.15.Ibid.,p.18.Raquel Rolnik, Thematic Report about Rental and Collective Housing, A/68/289, 2013, incollaborationwithLidiaRabinovich.WorldBank,Housing:EnablingMarketstoWork,p.6.JoeDohertyetal.,TheChangingRoleoftheState:WelfareDeliveryintheNeoliberalEra(Brussels,Feantsa,2005).UN-Habitat, Affordable Land and Housing in Europe and North America (Nairobi, UN-Habitat,2011),p.9.RaquelRolnik, ‘LateNeoliberalism:TheFinancializationofHomeownershipandHousingRights’,InternationalJournalofUrbanandRegionalResearch,vol.37,no.3(2013).

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MarshallW.DennisandThomasPinkowish,ResidentialMortgageLending:PrinciplesandPractices(Mason, NH, Thomson/South-Western, 2004), cited in Manuel Aalbers, Place, Exclusion, andMortgageMarkets(Oxford,Wiley-Blackwell,2011),p.83.Larry Bennett, Janet L. Smith and Patricia A. Wright (eds), Where Are Poor People to Live?TransformingPublicHousingCommunities(Armonk,NY,M.E.Sharpe,2006).Lawrence J.Vale,Purging the Poorest: PublicHousing and theDesign Politics of Twice-ClearedCommunities(Chicago,UniversityofChicagoPress,2013),p.11.Nowadays,69percentofpublichousingresidentsbelongtoracialminorities:46percentareAfro-descendantsand20percentareLatinAmericans.Cf.USHousingScholarsandResearchAdvocacyOrganizations,ResidentialSegregationandHousingDiscriminationintheUnitedStates:Violationsof the International Convention on the Elimination of All Forms of Racial Discrimination(Washington,DC,PovertyandRaceResearchActionCouncil/NationalFairHousingAlliance,2008).Availableat:prrac.org,accessed16Nov.2014.JohnAtlasandPeterDreier,‘PublicHousing:WhatWentWrong?’,ShelterForce,NationalHousingInstitute,no.74(Sept.–Oct.1994).Vale,PurgingthePoorest,p.16.NationalFairHousingAssociation,TheFutureofFairHousing:ReportoftheNationalCommissionon Fair Housing and Equal Opportunity, Dec. 2008, p. 9. Available at: nationalfairhousing.org,accessed16Nov.2014.Aalbers,Place,Exclusion,andMortgageMarkets.JanetL.Smith, ‘PublicHousingTransformation:EvolvingNationalPolicy’, inBennett,SmithandWright(eds),WhereArePoorPeopletoLive?,p.30.Ibid.,p.31.BarbaraSardandWillFischer,PreservingSafe,HighQualityPublicHousingShouldBeaPriorityofFederalHousingPolicy,Washington,DC,CenteronBudgetandPolicyPriorities,8Oct.2008,p.12.Availableat:cbpp.org,accessed6Jan.2015.Department of Housing and Urban Development (HUD),HOPE VI: Best Practices and LessonsLearned1992–2002(Washington,DC,HUD,2002).Susan J. Popkin et al., A Decade of HOPE VI: Research Findings and Policy Challenges,Washington,DC,TheUrbanInstitute,18May2004.Availableat:urban.org,accessed18Aug.2015.Ibid.,p.20.InterviewwiththeexecutivedirectoroftheCoalitiontoProtectPublicHousing.Ididnothaveaccessto official data on the total number of demolished or constructed units within Chicago’s Plan forTransformation.For more data on how much banks were forced to offer ‘risky’ loans, see Peter Marcuse, ‘TheDeceptive Consensus on Redlining: Definitions Do Matter’, Journal of the American PlanningAssociation,vol.45,no.4(Oct.1979).JointCenterforHousingStudies,‘ExecutiveSummary’,inTheStateoftheNation’sHousing2007,Cambridge,MA,HarvardUniversity,11June2007.Availableat:jchs.harvard.edu,accessed12Jan.2015.MarthaPoon,‘Auxoriginesétaitlabulle:Lamécaniquedesfluidesdessubprimes’,Mouvements,no.58(2009).KevinFoxGotham,‘TheSecondaryCircuitofCapitalReconsidered:GlobalizationandtheU.S.RealEstateSector’,AmericanJournalofSociology,vol.112,no.1(July2006).HUD, FY 2010 Budget: Road Map for Transformation (Washington, DC, HUD, 2010), p. 5.Availableat:hud.gov,accessed12Jan.2015.

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SeeNationalCoalition for theHomelesset. al.,Foreclosure toHomelessness2009:TheForgottenVictimsoftheSubprimeCrisis (Washington,DC,NationalCoalitionfor theHomeless,2009),p.2.Availableat:nationalhomeless.org,accessed6Jan.2015.AsreportedbyLosAngelesCounty,therehas been a significant growth in home foreclosures in the last few years: from 12,469 in 2007 to35,058in2008.DaniloPelletiereandKeithWardrip,‘RentersandtheHousingCreditCrisis’,PovertyandRace,vol.17,no.4(July–Aug.2008),pp.3–7.New York State Division of Housing & Community Renewal,History of Rent Regulation: RentRegulation after 50 Years – An Overview of New York State’s Rent Regulated Housing, 1993.Availableat:tenant.net,accessed4Dec.2014.Pratt Center for Community Development and New York Immigrant Housing Collaborative,ConfrontingtheHousingSqueeze:ChallengesFacingImmigrantTenants,andWhatNewYorkCanDo, New York, Pratt Center for Community Development, 16 Oct. 2008, p. 16. Available at:prattcenter.net,accessed6Jan.2015.Policy Link, Expiring Use: Retention of Subsidized Housing (Oakland, CA, Policy Link, 2014).Availableat:policylink.info,accessed4Dec.2014.DouglasRiceandBarbaraSard,TheEffectsoftheFederalBudgetSqueezeonLow-IncomeHousingAssistance(Washington,DC,CenteronBudgetandPolicyPriorities,Feb.2007),p.5.Ibid.,p.10.The United States Conference ofMayors,Hunger andHomelessness Survey: A Status Report onHungerandHomelessness inAmerica’sCities (Washington,DC,TheUnitedStatesConferenceofMayors,2008),p.23.Availableat:usmayors.org,accessed18Aug.2015.HUD,FY2010Budget,p.9.RiceandSard,EffectsoftheFederalBudgetSqueeze,p.2.JointCenterforHousingStudies,‘ExecutiveSummary’,inTheStateoftheNation’sHousing2008,Cambridge,MA,HarvardUniversity,23June2008,p.28.Availableat:jchs.harvard.edu,accessed12Jan.2015.ManuelAalbers, ‘The Financialization ofHome and theMortgageMarketCrisis’,Competition&Change,vol.12,no.2(June2008).European Economic and Social Committee, ‘Opinion of the European Economic and SocialCommittee on “Issues with Defining Social Housing as a Service of General Economic Interest”(Own-InitiativeOpinion)’,OfficialJournaloftheEuropeanUnion,Brussels,15Feb.2013.Availableat:eur-lex.europa.eu,accessed4Dec.2014.PeterBoelhouwerandHugoPriemus,‘DutchHousingPolicyRealigned’,TheNetherlandsJournalofHousingandEnvironmentalResearch,vol.5,n.1,1990,p.115.Ibid.,p.110.Susan Fainstein, ‘Cities and Diversity: ShouldWeWant It? CanWe Plan for It?’,Urban AffairsReview, vol. 41, (Sep. 2005), cited in Justin Kadi and Richard Ronald, ‘Market-Based HousingReforms and the “Right to theCity”: TheVariegated Experiences ofNewYork,Amsterdam, andTokyo’,InternationalJournalofHousingPolicy,vol.14,no.3(2014).MarjaElsingaandFrankWassenberg,‘L’exceptionnéerlandaise’,inLévy-VroelantandTutin(eds),LelogementsocialenEurope,p.52.Aalbers,‘TheFinancializationofHome’.De Nederlandsche Bank (DNB), Het bancaire hypotheekbedrijf onder de loep. Rapport over deontwikkelingen op de hypotheekmarkt in de periode 1994–1999 (Amsterdam, De NederlandscheBank,2000),citedinAalbers,‘TheFinancializationofHome’.

111.112.

113.114.115.

116.

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118.119.120.121.

122.123.124.125.126.127.

128.

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KadiandRonald,‘Market-BasedHousingReformsandthe“RighttotheCity’”.Karin Hedin et al., ‘Neoliberalization of Housing in Sweden: Gentrification, Filtering, and SocialPolarization’,AnnalsoftheAssociationofAmericanGeographers,vol.102,no.2(2012).Ibid.,p.444.Ibid.JuliePollard,‘PoliticalFraminginNationalHousingSystems:LessonsfromReal-EstateDevelopersinFranceandSpain’,inSchwartzandSeabrooke(eds),ThePoliticsofHousingBoomsandBusts.JaimePalomera,‘HowDidFinanceCapitalInfiltratetheWorldoftheUrbanPoor?HomeownershipandSocialFragmentationinaSpanishNeighborhood’,InternationalJournalofUrbanandRegionalResearch,vol.38,no.1(Jan.2014).Melissa García Lamarca, ‘Resisting Evictions Spanish Style’, New Internationalist (April 2013).Availableat:newint.org,accessed12Jan.2015.ColauandAlemany,Vidashipotecadas,p.35.Pollard,‘PoliticalFraminginNationalHousingSystems’.ColauandAlemany,Vidashipotecadas,p.56.JosepRocaCladera andMalcomC.Burns, ‘TheLiberalization of theLandMarket inSpain:The1998ReformofUrbanPlanningLegislation’,EuropeanPlanningStudies,vol.8,no.5(July2000).Ibid.,p.46.ColauandAlemany,Vidashipotecadas,pp.51–6.Ibid.,p.66.Ibid.Guillén,‘EmMadri,vidashipotecadas’,p.46.Observatori Drets Econòmics Socials i Culturals and Plataforma de Afectados por la Hipoteca,Emergencia habitacional en el Estado español: la crisis de las ejecuciones hipotecarias y losdesalojos desde una perspectiva de derechos humanos, 2013, pp. 106–8. Available at:afectadosporlahipoteca.com,accessed15Oct.2014.Instituto Nacional de Estadística, Censos de Población y Viviendas 2011. Available at: ine.es,accessed4Dec.2014.

3.ExportingtheModel

WorldBank,Housing:EnablingMarketstoWork,p.3.BuckleyandKalarickal(eds),ThirtyYearsofWorldBankShelterLending.Ibid.,pp.60–3.Ibid.WorldBank,Housing:EnablingMarketstoWork,pp.35–6.BuckleyandKalarickal(eds),ThirtyYearsofWorldBankShelterLending,pp.18–19.Ibid.WorldBank,Housing:EnablingMarketstoWork,p.6.Ibid.,p.5.Ibid.,pp.37–8.BuckleyandKalarickal(eds),ThirtyYearsofWorldBankShelterLending.

12.13.

14.

15.

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17.

18.19.20.21.

22.23.24.

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27.

28.

29.

30.

31.

32.33.34.35.

36.

WorldBank,Housing:EnablingMarketstoWork,pp.37–8.CouncilofEuropeDevelopmentBank(CEB),HousinginSouthEasternEurope:SolvingaPuzzleofChallenges(Paris,CEB,2004).David Donnison and Clare Ungerson,HousingPolicy (Harmond-sworth, Penguin, 1982), p. 107,cited in Mark Stephens, ‘A Critical Analysis of Housing Finance Reform in a “Super” Home-OwnershipState:TheCaseofArmenia’,UrbanStudies,vol.42,no.10(Sep.2005).JózsefHegedüs, Stephen E.Mayo and Iván Tosics, ‘Transition of theHousing Sector in the EastCentralEuropeanCountries’,ReviewofUrban&RegionalDevelopmentStudies,vol.8,no.2(July1996).Mark Stephens, ‘A Critical Analysis of Housing Finance Reform in a “Super” Home-OwnershipState’,pp.1795–7.Mark Stephens, ‘Locating Chinese Urban Housing Policy in an International Context’, UrbanStudies,vol.47,no.14(Dec.2010).Slovakia’sanswerstoa2012questionnaire.Ibid.Estonia’sanswerstoa2012questionnaire.JózsefHegedüs,MartinLuxandPetrSunega, ‘Decline andDepression:The Impactof theGlobalEconomicCrisisonHousingMarketsinTwoPost-SocialistStates’,JournalofHousingandtheBuiltEnvironment,vol.26,no.3(Sep.2011).SeeEurostat,epp.eurostat.ec.europa.eu,accessed4Dec.2014.Stephens,‘LocatingChineseUrbanHousingPolicyinanInternationalContext’.UN Economic Commission for Europe (UNECE), Housing Finance Systems for Countries inTransition:Principles andExamples (NewYork/Geneva,UNECE, 2005). Available at: unece.org,accessed12Jan.2015.UN-Habitat,AffordableLandandHousinginEuropeandNorthAmerica,p.62.Council of Europe, Housing Policy and Vulnerable Social Groups: Report and Guidelines(Strasbourg,CouncilofEuropePublishing,2008),p.53.Slovakia’s answers to a 2012 questionnaire; Scott Leckie, Regional Housing Issues Profile:Implementing Housing Rights in South East Europe, Regional Consultation on Making CitiesInclusive,Belgrade,2002.SashaTsenkova,HousingPolicyReforms inPost-SocialistEurope:Lost inTransition (Heidelberg,Physica,2009).Jian-Ping Ye, Jia-Ning Song and Chen-Guang Tian, ‘An Analysis of Housing Policy DuringEconomicTransitioninChina’,InternationalJournalofHousingPolicy,vol.10,no.3(Sep.2010),pp.273–5.YaPinWang,UrbanPoverty,HousingandSocialChangeinChina(London,Routledge,2004),citedinStephens,‘ACriticalAnalysisofHousingFinance’.YuqinHuang,WhereIsHome?Hukou,Non-LocalYoungPeopleandNewInequalitiesinRelationtoHousing inContemporary Shanghai, China,XVIII ISAWorldCongress of Sociology,Yokohama,2014,mimeo.UN-Habitat,AffordableLandandHousinginEuropeandNorthAmerica.Tsenkova,HousingPolicyReformsinPost-SocialistEurope,pp.160–1.Hegedüs,LuxandSunega,‘DeclineandDepression’,p.319.EuropeanBank forReconstructionandDevelopment (EBRD),CrisisandTransition:ThePeople’sPerspective(London,EBRD,2011),p.56.Availableat:ebrd.com,accessed20Aug.2015.Ibid.,pp.55–6.Seealso:Eurostat,HousingStatistics, availableat: ec.europa.eu, accessed 20Aug.

37.

38.39.

40.41.

42.

1.

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3.

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5.6.

7.

8.9.10.11.12.13.14.15.

2015.WallaceKaufmanandIlyaLipkovich,HousinginKazakhstan:RecentStatisticsandTrends(Almaty,InternationalCity/CountyManagementAssociation, 1995).Available at: pdf.usaid.gov, accessed 6Jan.2015.Inparttwoofthisbook,Iwilldelvemoredeeplyintothenatureofurbanmegaprojects.AlimaBissenova, ‘ConstructionBoom andBankingCrisis inKazakhstan’,CentralAsia-CaucasusInstituteAnalyst,March2009.Availableat:old.cacianalyst.org,accessed17Oct.2014.Ibid.Raquel Rolnik,Report: Mission to Kazakhstan, A/HRC/16/42/Add.3, 2011, in collaboration withStefanoSensi.SeethereportontheactivitiesoftheCommissionerforHumanRightsintheRepublicofKazakhstan.Availableat:ombudsman.kz,accessed4Dec.2014.

4.Post-CrisisMeasures

Manuel Aalbers, ‘Debate on Neoliberalism in and after the Neoliberal Crisis’, Debates andDevelopment.InternationalJournalofUrbanandRegionalResearch,vol.37,no.3(May2013),p.1054.Observatori Drets Econòmics Socials i Culturals and Plataforma de Afectados por la Hipoteca,EmergenciahabitacionalenelEstadoespañol,p.13.ThiswastheassessmentofJosephStiglitz,citedbytheeconomistMichaelHudsoninaninterviewforDemocracyNow!.See‘New$600BFedStimulusFuelsFearsofUSCurrencyWar’,DemocracyNow!,5Nov.2010.Availableat:democracynow.org,accessed10Nov.2014.TheWhiteHouse,FactSheet:PresidentObama’sPlantoHelpResponsibleHomeownersandHealtheHousingMarket,1Feb.2012.Availableat:whitehouse.gov,accessed10Nov.2014.Ibid.Peter S. Goodman, ‘U.S.Will PushMortgage Firms to ReduceMore Loan Payments’,New YorkTimes,28Nov.2009.Availableat:nytimes.com,accessed10Nov.2014.IMF, Global Financial Stability Report: Durable Financial Stability: Getting There from Here(Washington,DC,IMF,April2011),pp.115–16.Robertson,‘WhatGoesUpMustn’tComeDown’,p.1.SeeUnitedKingdom,‘AffordableHomeOwnershipSchemes’.Montenegro’sanswerstoa2012questionnaire.Andorra’sanswerstoa2012questionnaire.IMF,GlobalFinancialStabilityReport,pp.115–16.TheWhiteHouse,FactSheet.Greece’sanswerstoa2012questionnaire.DavidHarvey,‘Globalizationandthe“SpatialFix”’,GeographischeRevue–ZeitschriftfürLiteraturundDiskussion,vol3,no.2(2001).

1.

2.

3.4.5.6.

7.

8.9.

10.11.

12.

13.

14.

15.

16.

5.TheDemand-SideSubsidiesModel

There is an important distinction between subsidies that operate through the financial system andthose that do not. For example, the construction and management of rental housing units or theconcessionofaidtohelptenantspaytherentarenotpartoffinancialisedcircuits.Inthischapter,wewillonlyexaminedemand-sidesubsidies,whichaimtopromotehome-purchasethroughthefinancialmarket. See UN-Habitat,Guide to Preparing a Housing Finance Strategy (Nairobi, UN-Habitat,2009),p.45.Harold M. Katsura and Clare T. Romanik, Ensuring Access to Essential Services: Demand-SideHouseSubsidies,SocialProtectionDiscussionPaperSeriesno.0232(Washington,DC,WorldBank,2002), p. 6.Available at: documents.worldbank.org, accessed 6 Jan. 2015. Canada’s answers to a2012questionnaire;Australia’sanswerstoa2012questionnaire.France’sanswerstoa2012questionnaire.ChiquierandLea(eds),HousingFinancePolicyinEmergingMarkets,p.436.Ibid.UN-Habitat,TheRoleofGovernment in theHousingMarket:TheExperiences fromAsia (Nairobi,UN-Habitat,2008),pp.39–40.JesúsLeal,‘LapolíticadeviviendaenEspaña’,DocumentaciónSocial,vol.138(2005),pp.63–80,citedinPalomera,‘HowDidFinanceCapitalInfiltratetheWorldoftheUrbanPoor?’CouncilofEurope,HousingPolicyandVulnerableSocialGroups,p.31.Alan Gilbert, ‘Power, Ideology and theWashington Consensus: The Development and Spread ofChileanHousingPolicy’,HousingStudies,vol.17,no.2(July2002).UN-Habitat,QuickGuide2,p.57.According to El Salvador’s, Guatemala’s, Mexico’s and Venezuela’s answers to a questionnaire.Approximately20percentoftheInter-AmericanDevelopmentBank’s(IBD)loanstohousingwereallocatedthroughgrantsubsidyprogrammes.SeeEduardoRojas,SharpeningtheBank’sCapacitytoSupport the Housing Sector in Latin America and the Caribbean: Background Paper for theImplementationoftheSocialDevelopmentStrategy(Washington,DC,IBD,2006).FinancialandFiscalCommissionofSouthAfrica,Buildingan InclusionaryHousingMarket:Shiftthe Paradigm for Housing Delivery in South Africa (Midrand, FFC, 2012). Available at:housingfinanceafrica.org,accessed5Jan.2015.Ben Richards, ‘Poverty and Housing in Chile: The Development of a Neo-liberalWelfare State’,Habitat International, vol. 19, no. 4 (1995); TomásMoulian,Chile actual: Anatomía de un mito(Santiago,LOMEditores/UniversidadArcis,1997),citedinCavieres,ChileanHousingPolicy.AccordingtoCavieres,‘ManyoftheministersunderPinochetthattookkeypositionsinthisperiodwerepostgraduatestudentsof theChicagoschoolwhereoneof themost influentialprofessorswastheNobelPrize laureateeconomistMiltonFriedman,widelyknownasa fiercepromoterofaneo-liberalfree-marketeconomy.’Cavieres,ChileanHousingPolicy,p.76,fn.18.ManuelCastells,TheCityandtheGrassroots:ACross-CulturalTheoryofUrbanSocialMovements(Berkeley,UniversityofCaliforniaPress,1983),p.200,cited inPaulPosner, ‘TargetedAssistanceandSocialCapital:HousingPolicyinChile’sNeoliberalDemocracy’,InternationalJournalofUrbanandRegionalResearch,vol.36,no.1(Jan.2012).JoséMiguelSimian,EigentumsorientierteWohnungspolitikinDeutschlandundChile.Kooperations-undGenossenschaftswissenschaftlicheBeiträge series (Münster, Institut für GenossenschaftswesenderUniversitätMünster,2000),pp.153–6,cited inRodríguezandSugranyes(eds),Loscon techo,pp.23–33.

17.

18.19.20.

21.

22.

23.24.

25.

26.27.

28.29.

30.31.

32.

33.34.

A. R. Ferraz,Economic Adjustment and Housing Policy: General Trends and the Chilean Case,PrimerCongresoVirtualdeArquitectura,1999,mimeo;ClaudioAdriánPardo,HousingFinanceinChile: The Experience in Primary and Secondary Mortgage Financing (Washington, DC, BID,2000); Eduardo Rojas,The Long Road to Housing Reform. Lessons from the Chilean Experience(Washington,DC,BID,1999),citedinCavieres,ChileanHousingPolicy.Sugranyes,‘LapolíticahabitacionalenChile’,p.29.Ibid.,pp.23–33.ArnoldHarberger,‘Notassobrelosproblemasdeviviendayplanificacióndelaciudad’,Auca,no.37(1979);CarlosA. deMattos, ‘Santiago deChile, globalización y expansiónmetropolitana: lo queexistía sigue existiendo’, in Alfredo Rodríguez and Paula Rodríguez (eds), Santiago, una ciudadneoliberal (Quito, OLACCHI, 2009); Martim Smolka and Francisco Sabatini, ‘The LandMarketDeregulationDebateinChile’,LandLines,vol.12,no.1(Jan.2000).Availableat: lincolninst.edu,accessed12Nov.2014,citedinCavieres,ChileanHousingPolicy.Alfredo Rodríguez and Ana María Icaza, ‘Chile: The Eviction of Low-Income Residents fromCentralSantiagodeChile’, inAntonioAzueladelaCueva,EmilioDuhauandEnriqueOrtiz(eds),EvictionsandtheRighttoHousing:ExperiencefromCanada,Chile,theDominicanRepublic,SouthAfrica,andSouthKorea (Ottawa: InternationalDevelopmentResearchCentre,1998).Availableat:idrc.ca,accessed6Jan.2015.CitedinCavieres,ChileanHousingPolicy.FernandoKusnetzoff, ‘TheStateandHousing inChile:RegimeTypesandPolicyChoices’, inGilShidlo(ed.),HousingPolicyinDevelopingCountries(London,Routledge,1990),citedinCavieres,ChileanHousingPolicy.RodríguezandSugranyes(eds),Loscontecho.PabloTrivelli,‘SobrelaevolucióndelapolíticaurbanaylapolíticadesueloenelGranSantiagoenel período 1979–2008’, and Carlos A. de Mattos, ‘Santiago de Chile, globalización y expansiónmetropolitana:loqueexistíasigueexistiendo’,bothinRodríguezandRodríguez(eds),Santiago,unaciudadneoliberal.AlfredoRodríguezandAnaSugranyes,‘Eltrajenuevodelemperador:laspolíticasdefinanciamientodevivienda social enSantiagodeChile’, inRodríguezandRodríguez (eds),Santiago,unaciudadneoliberal.Sugranyes,‘LapolíticahabitacionalenChile’,pp.23–33.Elena Ducci, ‘Chile: The Dark Side of a Successful Housing Policy’, in Joseph S. Tulchin andAllisonM.Garland(eds),SocialDevelopmentinLatinAmerica:ThePoliticsofReform(Washington,DC/Boulder,WoodrowWilsonCenter/LynneRiennerPublishers,2000),pp.149–74.RodríguezandSugranyes,‘Eltrajenuevodelemperador’,p.303.Pablo Trivelli et al.,Urban Structure, LandMarkets and Social Housing in Santiago, Chile, Jan.2010,mimeo.Availableat:cafedelasciudades.com.ar,accessed16Nov.2014.Gilbert,‘Power,IdeologyandtheWashingtonConsensus’.WorldBank,WorldBankHousingMission to SouthAfrica,August 1994 (Washington,DC,WorldBank,1994),mimeo,citedinGilbert,‘Power,IdeologyandtheWashingtonConsensus’.JavierCorral,LaviviendasocialenMéxico:pasado,presenteyfuturo(MexicoCity,JSA,2012),p.34, cited in Higor Carvalho, Social Housing Policies in the Era of Financial Accumulation: AComparative Analysis between Agents and Impacts in Brazil andMexico, report presented at theLatinAmericanStudiesAssociation(LASA)meeting,PuertoRico,2015.Ibid.EdithJiménezHuerta,RentingandSharing:HousingOptions for thePoor, reportpresented in theXIII International SociologyAssociationWorld Congress, 2014 (RC21-43 joint session: ‘Unequalcitiesandpoliticaleconomyofhousing’).

35.36.

37.38.39.40.

1.

2.3.

4.

5.

6.

7.

8.9.

10.

11.

12.

13.14.

Corral,LaviviendasocialenMéxico:pasado,presenteyfuturo.Victoria Burnett, ‘They Built It. People Came. Now They Go’, New York Times, 8 Sep. 2014.Availableat:nytimes.com,accessed6Jan.2015.Gilbert,‘Power,IdeologyandtheWashingtonConsensus’,p.29.UN-Habitat,FinancingUrbanShelter.Gilbert,‘Power,IdeologyandtheWashingtonConsensus’,pp.31–2.ChiquierandLea(eds),HousingFinancePolicyinEmergingMarkets,pp.405–6.Microcreditisthethemeofmynextchapter.

6.Microfinance

AnanyaRoy,PovertyCapital:MicrofinanceandtheMakingofDevelopment(NewYork,Routledge,2010),p.89.UN-Habitat,FinancingUrbanShelter.UN-Habitat,HousingforAll:TheChallengesofAffordability,AccessibilityandSustainability–TheExperiences and Instruments from the Developing and Developed Worlds (Nairobi, UN-Habitat,2008),p.11;UN-Habitat,FinancingUrbanShelter,pp.99–100.Don Johnston Jr. and JonathanMorduch, ‘TheUnbanked: Evidence from Indonesia’,WorldBankEconomicReview,vol.22,no.3(2008),p.517.BruceFergusonandPeerSmets,‘FinanceforIncrementalHousing:CurrentStatusandProspectsforExpansion’,HabitatInternational,vol.34,no.3(2010),pp.288–9;ChiquierandLea(eds),HousingFinancePolicyinEmergingMarkets,p.395.DavidBornstein,ThePrice of aDream: The Story of theGrameenBank (NewYork, Simon andSchuster,1996),p.331,citedinRoy,PovertyCapital.C. K. Prahalad and Stuart L. Hart, ‘The Fortune at the Bottom of the Pyramid’, Strategy andBusiness, no. 26 (2002), p. 1.Available at: cs.berkeley.edu, accessed 6 Jan. 2014;RaquelRolnik,ThematicReportontheFinancialCrisis,A/HRC/10/7,2009,incollaborationwithBahramGhazi.Roy,PovertyCapital,p.5.C. K. Prahalad, The Fortune at the Bottom of the Pyramid: Eradicating Poverty through Profits(UpperSaddleRiver,NJ,WhartonSchoolofPublishing,2004).Center forUrbanDevelopment Studies,HousingMicrofinance Initiatives: Synthesis and RegionalSummary–Asia,LatinAmericaandSub-SaharanAfricawithSelectedCaseStudies(Bethesda,MD,MicroenterpriseBestPractices/DevelopmentAlternativesInc.,2000).Chiquier and Lea (eds),Housing Finance Policy in Emerging Markets, p. 399; Bruce Ferguson,‘Housing Microfinance: A Key to Improving Habitat and the Sustainability of MicrofinanceInstitutions’,SmallEnterpriseDevelopment,vol.14,no.1(2003),p.21.UN-Habitat,FinancingUrbanShelter,pp.106–12;DorisKöhnandJ.D.vonPischke(eds),HousingFinanceinEmergingMarkets:ConnectingLow-IncomeGroupstoMarkets(Berlin,Springer,2011),pp.33–5.ChiquierandLea(eds),HousingFinancePolicyinEmergingMarkets,pp.395–7.GruffyddJones, ‘“CitiesWithoutSlums”?GlobalArchitecturesofPowerand theAfricanCity’, inKarelA.Bakker (ed.),AfricanPerspectives2009–TheAfrican InnerCity: [Re]sourced(Pretoria,UniversityofPretoria,2010),pp.769–70.Availableat:lirias.kuleuven.be,accessed6Jan.2015.

15.

16.17.18.

19.

20.21.22.

23.

24.25.26.27.28.29.

30.31.32.

33.34.

35.36.

37.

38.39.40.41.

UN-Habitat,‘AnApproachtoFinancialActionPlanningforSlumUpgradingandNewLow-IncomeResidentialNeighbourhoods’,The SUFHandbook –DesignPhase vol. 1 (Vancouver, Jun. 2006).Availableat:mirror.unhabitat.org,accessed6Jan.2015.Ibid.,p.771.UN-Habitat,‘HousingforAll’,p.22;FinancingUrbanShelter,p.106.MichaelKihato,ScopingtheDemandforHousingMicrofinanceinAfrica:Status,OpportunitiesandChallenges (Johannesburg, Centre for Affordable Housing Finance in Africa, 2009), mimeo.Availableat:finmark.ed.za,accessed5Jan.2015.Annika Nilsson, ‘Overview of Financial Systems for Slum Upgrading and Housing’, HousingFinance International, vol. 23, no. 2 (Dec. 2008), pp. 20–1; Sally Merrill and Nino Mesarina,‘ExpandingMicrofinanceforHousing’,HousingFinanceInternational,vol.21,no.2(Dec.2006),p.21.See:grameeninfo.org,accessed4Dec.2014.ChiquierandLea(eds),HousingFinancePolicyinEmergingMarkets,p.398.UN-Habitat,HousingforAll,p.20;SallyMerrill,MicrofinanceforHousing:Assistingthe‘BottomBillion’ and the ‘Missing Middle’ (Washington, DC, Urban Institute Center on InternationalDevelopmentandGovernance,Jun.2009),mimeo,p.4.UN-Habitat,EnablingShelterStrategies:ReviewofExperiencefromTwoDecadesofImplementation(Nairobi,UN-Habitat,2006),p.91.UN-Habitat,FinancingUrbanShelter,p.114.UN-Habitat,HousingforAll,p.19.ChiquierandLea(eds),HousingFinancePolicyinEmergingMarkets,p.410.See:compartamos.com,accessed4Dec.2014.UN-Habitat,HousingforAll,pp.24–5.P. K. Manoj, ‘Prospects and Problems of Housing Microfinance in India: Evidence from“Bhavanashree” Project in Kerala State’, European Journal of Economics, Finance andAdministrativeSciences,no.19(April2010),p.178.UN-Habitat,HousingforAll,p.23.ChiquierandLea(eds),HousingFinancePolicyinEmergingMarkets,pp.36–7.Center for Urban Development Studies, Housing Microfinance Initiatives (Bethesda, MD,MicroenterpriseBestPractices/DevelopmentAlternativesInc.,2000),p.24.Nilsson,‘Overview’,p.19.ErlendSigvaldsen,KeyIssuesinHousingMicrofinance(Oslo,NordicConsultingGroup,2010),pp.16–17.UN-Habitat,FinancingUrbanShelter,p.99.FergusonandSmets,‘FinanceforIncrementalHousing’,pp.293–4;UN-Habitat,HousingforAll,pp.88–9; Somsook Boonyabancha, ‘Baan Mankong: Going to Scale with “Slum” and SquatterUpgradinginThailand’,EnvironmentandUrbanization,vol.17,no.1(April2005).ByJanuary2011,1,546communitiesand90,000 residentswere involved inorhadbenefited fromBaan Mankong projects. See UN-Habitat, Affordable Land and Housing in Asia (Nairobi, UN-Habitat,2011).UN-Habitat,FinancingUrbanShelter,p.120.ThisisthecasewiththeCommunityMortgageProgramme,inthePhilippines.RolnikandRabinovich,‘Late-Neoliberalism’;Rolnik,ThematicReportontheFinancialCrisis.Roy,PovertyCapital.

42.43.44.

45.46.

1.

2.

3.

4.

5.

6.

7.

8.

9.

10.

11.

12.

13.

See:brac.net,accessed17Dec.2006.Roy,PovertyCapital,p.203.Consultative Group to Assist the Poor (CGAP), The Global Financial Crisis and Its Impacts onMicrofinance,2009,p.5.Availableat:cgap.org,accessed12Oct.2016.Jones,‘“CitiesWithoutSlums”?’,p.785.Roy,PovertyCapital,p.218.

7.TenureInsecurity

SethMydans, ‘InCambodia,LandSeizuresPushThousandsof thePoor intoHomelessness’,NewYorkTimes,27July2008.Availableat:nytimes.com,accessed17Nov.2014.Ciro Barros, ‘Altair enfrenta a terceira remoção da vida pelas Olimpíadas’, Pública: Agência deReportagemeJornalismoInvestigativo,21June2013.Availableat:apublica.org,accessed26Dec.2014.SeetheEconomist’s interactiveguideofglobalhouseprices,availableat:economist.com, accessed26Dec.2014.MentionedbyUN-HabitatandinthedocumentLosingYourHome:AssessingtheImpactofEviction,fromUNHumanRightsHighCommissioner’sOffice(2011,p.1).Forfurtherdataandtestimoniesofcases, see, for example, theHabitat International Coalition’sLand andHousing RightsWeb 2012AnnualReport(HIC,2012).MichaelCernea,‘IRR:AnOperationalRisksReductionModelforPopulationResettlement’,HydroNepal:JournalofWater,EnergyandEnvironment,vol.1,no.1(2007),p.36.RaquelRolnik,ThematicReport on the Impact ofMega-Events on theRealization of theRight toAdequateHousing,A/HRC/13/20,2009,incollaborationwithBrendaVukovic.InternalDisplacementMonitoringCentre,Global Overview 2011: People Internally Displaced byConflict andViolence (Geneva, IDMC, 2012), p. 8.Available at: unhcr.org, accessed 6 Jan. 2015.Internal Displacement Monitoring Centre, Global Estimates 2011: People Displaced by NaturalHazard-Induced Disasters (Geneva, IDMC, 2012), p. 4. Available at: internal-displacement.org,accessed6Jan.2015.Seealso:RaquelRolnik,ThematicReportonSecurityofTenure,A/HRC/22/46,2013,incollaborationwithLaure-AnneCourdesse.UN-Habitat,Handbook on Best Practices, Security of Tenure and Access to Land (Nairobi, UN-Habitat,2003).Someinitiativestomeasuretenureinsecurityareunderway.See,forexample,RemyStiechipingetal.,MonitoringTenureSecuritywithintheContinuumofLandRights:MethodsandPractices,WorldBank annual Conference on Land and Poverty, Washington DC, 2012, available atlandandpoverty.com/agenda/pdfs/paper/sietchiping_full_paper.pdf,accessed6January2015.UN-Habitat,The Challenge of Slums: Global Report on Human Settlements 2003 (Nairobi, UN-Habitat,2003).UN-Habitat,SlumsoftheWorld:TheFaceofUrbanPovertyintheNewMillennium?(Nairobi,UN-Habitat,2003),p.24.UN-Habitat,StateoftheWorld’sCities2010-2011:BridgingtheUrbanDivide(Nairobi,UN-Habitat,2011),p.33.Ibid.Seealso:UN-Habitat,SlumsoftheWorld.

14.

15.

16.

17.

18.

1.

2.

3.4.

5.

6.7.

8.

9.

10.11.

World Bank, Investigation Report – Cambodia: Land Management and Administration Project(Washington, DC, World Bank, 2010). Available at: wds.worldbank.org, accessed 18 Nov. 2014.RaquelRolnik,ThematicReport on theMission to theWorldBank,A/HRC/22/46/Add.3,2013, incollaborationwithBeatriceQuadranti,NatalieBugalskiandDavidPred.DavidPalmer,SzilardFricskaandBabetteWehrmann,Towards ImprovedLandGovernance:LandTenure Working Paper 11 (Rome/Nairobi, FAO/UN-Habitat, 2009), p. 2. Available at: fao.org,accessed6Jan.2015.DanielAdlerandSokbunthoeunSo,‘TowardEquityinDevelopmentwhentheLawIsNottheLaw:ReflectionsonLegalPluralism inPractice’, inBrianTamanaha,CarolineSageandMichaelWool-cock(eds),LegalPluralismandDevelopment:ScholarsandPractitionersinDialogue (Cambridge,CambridgeUniversityPress, 2012);KlausDeininger andDerekByerlee,RisingGlobal Interest inFarmland:CanItYieldSustainableandEquitableBenefits? (Washington,DC,WorldBank,2011).Availableat:elibrary.worldbank.org,accessed18Nov.2014.David Harvey, Seventeen Contradictions and the End of Capitalism (Oxford, Oxford UniversityPress,2014),p.241.COHRE et al, Untitled: Tenure Insecurity and Inequality in the Cambodian Land Sector(Genebra/PhnomPenh,COHRE/BridgesAcrossBorders/JesuitRefugeeService,2009).Availableatbabcambodia.org/untitled/untitled.pdf,accessed18nov.2014.

8.FromEnclosurestoForeclosures

CentroparaelDesarrolloEconómicoySocialdeAméricaLatina(Desal),MarginalidadenAméricaLatina: un ensayo de diagnóstico (Barcelona, Herder, 1969), in Samuel Jaramillo Gonzalez,‘Urbanizacióninformal:diagnósticosypolíticas–unarevisiónaldebatelatinoamericanoparapensarlíneas de acción actuales’, inClaraEugenia Salazar (ed.), Irregular: suelo ymercado enAméricaLatina(MexicoCity,ColegiodeMéxico,2012).GeorgeMartine andGordonMcGranahan (eds),Urban Growth in Emerging Economies: LessonsfromtheBRICs(Abingdon/NewYork,Routledge,2014).MikeDavis,PlanetofSlums(London/NewYork,Verso,2006),p.21.LoïcWacquant,‘UrbanOutcasts:StigmaandDivisionintheBlackAmericanGhettoandtheFrenchUrbanPeriphery’,InternationalJournalofUrbanandRegionalResearch,vol.17,no.3(Sept.1993).FranciscodeOliveira,‘Aeconomiabrasileira:críticaàrazãodualista’,EstudosCebrap,no.2,1972;Lúcio Kowarick, Capitalismo e marginalidade na América Latina (Rio de Janeiro, Paz e Terra,1975).Davis,PlanetofSlums,p.16.Josef Gugler, ‘Introduction: Rural–Urban Migration’, in Cities in the Developing World: Issues,Theory,andPolicy(Oxford,OxfordUniversityPress,1997);Davis,PlanetofSlums,p.14.Neil Brenner and Nik Theodore (eds), Spaces of Neoliberalism: Urban Restructuring in NorthAmericaandWesternEurope(Oxford,Blackwell,2002).Minurvi,InstrumentosfinancierosparamejorarelaccesoalaviviendadelossectoresdemenoresingresosenAmericaLatinayelCaribe,XVGeneralAssemblyofMinistersandHighAuthoritiesonHousingandUrbanisminLatinAmericanandtheCaribbean,Montevideo,2005,mimeo.Davis,PlanetofSlums,p.14.Ibid.,p.15.

12.13.

14.15.

16.17.

18.

19.

20.

21.22.

23.

24.

25.

26.27.28.29.30.

1.

2.

Ibid.,pp.16–17.Karl Marx, Capital: A Critique of Political Economy, Volume I, The Process of Production ofCapital.Harvey,SeventeenContradictions,p.240.Mark Tran, ‘Land Deals in Africa Have Led to a WildWest: Bring on the Sheriff, Says FAO’,Guardian,29Oct.2012.Availableat:theguardian.com,accessed18Nov.2014.Harvey,SeventeenContradictions,p.222.ManuelAalbers andRodrigo Fernandez,Housing and the Variations of FinancializedCapitalism,TheRealEstate/FinancialComplex(Refcom)InternationalSeminar,Leuven,2014,mimeo,pp.7–8.KeithCliffordBell,ShivakumarSrinivasandJuanMartinez,ReformingIndonesia’sComplexLegalEnvironmentforLandGovernance:ComplementaryTop-DownandBottom-UpApproaches,AnnualWorldBankConferenceonLandandPoverty,Washington,DC,2013,mimeo,p.6.WorldBank(2013).InformationprovidedbyBPNtothespecialrapporteuronadequatehousingon3June2013inJakarta.Information provided byBPN on 3 June 2013, and by the Indonesian government on 11October2013.Bell,SrinivasandMartinez,ReformingIndonesia’sComplexLegalEnvironment,pp.8–12.Maharani Hapsari, ‘The Political Economy of Forest Governance in Post-Suharto Indonesia’, inHirotsuneKimura et al. (eds),Limits of Good Governance in Developing Countries (Yogyakarta,GadjahMadaUniversityPress,2011),pp.103–37.TimothyLindsey, ‘SquarePegs&RoundHoles: FittingModernTitle intoTraditionalSocieties inIndonesia’,Pacific Rim Law and Policy Journal, vol. 7 (1998), pp. 699–719; Daniel Fitzpatrick,‘DisputesandPluralisminModernIndonesianLandLaw’,YaleJournalofInternationalLaw,vol.22(1997),pp.171–212.Oxfam, ‘ “Our Land, Our Lives”: Time out on the Global Land Rush’,Oxfam Briefing Paper,Oxford,Oct.2012.Availableat:oxfam.org,accessed18Nov.2014.VincentBasserieandHubertM.G.Ouedraogo,‘LaSécurisationfoncière:undesdéfismajeurspourlenouveausiècle’,Graindesel,nos.41–2(Dec.2007–May2008),p.13.Harvey,SeventeenContradictions,p.244.Harvey,SeventeenContradictions,p.240.DeiningerandByerlee,RisingGlobalInterestinFarmland.Rolnik,ThematicReportonSecurityofTenure.IwouldliketothankDavidHarvey,whodebatedthischapter’sempiricalcontentwithme,suggestingtheconceptualframeworkadoptedabove.

9.Informal,Illegal,Ambiguous

F.L.J.,Diáriodeumainvasora(RiodeJaneiro,LivreExpressão,2012),pp.5–15.Flaviagavemeherbook as a present,with a dedicationwritten in tiny letters, on3May2013. Itwas at a publicevent,whereshetriedtodefend–asshehaddonecountlesstimesbefore–Horto’sresidents’righttoremainthere.Vera da Silva Telles,As cidades na fronteira do legal e do ilegal (BeloHorizonte, Argumentum,2010),p.29.

3.

4.5.6.

7.

8.9.

10.

11.12.

13.

14.

15.

16.

17.

18.

19.

20.

21.

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CarlosVainer, ‘Cidade de exceção: reflexões a partir do Rio de Janeiro’,Anais do XIV EncontroNacionaldaAnpur,RiodeJaneiro,2011.Availableat:br.boell.org,accessed6Jan.2015.Ibid.PedroFioriArantes,Arquiteturanaeradigital-financeira:desenho,canteiroerendadaforma(SãoPaulo,Editora34,2012).StavrosStavrides, ‘UrbanIdentities:BeyondtheRegionaland theGlobal:TheCaseofAthens’, inJamalAl-Qawasmi,AbdesselemMahmoudandAliDjerbi(eds),RegionalArchitectureandIdentityintheAgeofGlobalization(Tunis,CSAARPress,2008).Rolnik,ThematicReportontheImpactofMega-Events.Ibid.SolomonJ.Greene,‘StagedCities:Mega-Events,SlumClearance,andGlobalCapital’,YaleHumanRightsandDevelopmentLawJournal,vol.6,no.1(2003).COHRE, Fair Play for Housing Rights. Mega-events, Olympic Games and Evictions (Geneva,COHRE,2007),p.197.HumanRightsWatch,‘Demolished:ForcedEvictionsandtheTenant’sRightsMovementinChina’,HumanRightsWatch,vol.16,no.4(March2004).Availableat:hrw.org,accessed6Jan.2015.COHRE,FairPlayforHousingRights,p.28.Caroline Newton, ‘The Reverse Side of the Medal: About the 2010 Fifa World Cup and theBeautificationoftheN2inCapeTown’,UrbanForum,vol.20,no.1(Feb.2009),p.9.Greene,‘StagedCities’,p.172.COHRE, Barcelona 1992 – International Events and Housing Rights: A Focus on the OlympicGames(Geneva,COHRE,2007).EastThamesGroup,HomeGames:A Study of theHousing andRegeneration Legacies of RecentOlympicandParalympicGamesand the Implications forResidentsofEastLondon (London,EastThamesGroup,2012),p.14.Availableat:east-thames.co.uk,accessed15Jan.2014.COHRE,OneWorld, Whose Dream? Housing Rights Violations and the Beijing Olympic Games(Geneva,COHRE,2008).Rolnik,ReportontheImpactofMega-Events.EastThamesGroup,HomeGames,p.13.Ibid.,p.16.Pivot Legal Society,Cracks in the Foundation: Solving the Housing Crisis in Canada’s PoorestNeighbourhood (Vancouver,PivotLegalSociety,Sept.2006),pp.1–3.Availableat:pivotlegal.org,accessed15Jan.2015.MiloonKothari,RelatóriodeMissãoàÁfricadoSul,A/HRC/7/16/Add.3,2007.Rolnik,ReportontheImpactofMega-Events.TheinformationaboutTokyowasobtainedduringmyvisittothecountryandtothishousingprojectinparticular.COHRE,FairPlayforHousingRights,p.198.EastThamesGroup,HomeGames,p.15.COHRE,FairPlayforHousingRights,p.198.Rolnik,ReportontheImpactofMega-Events.Jones,‘“CitiesWithoutSlums”?’Roy,PovertyCapital,p.140.AnanyaRoy, ‘Slum-freeCities of theAsianCentury: PostcolonialGovernment and theProject ofInclusiveGrowth’,SingaporeJournalofTropicalGeography,vol.35,no.1(March2014).

73.

1.

2.

3.4.5.

6.

7.8.

9.

10.11.

12.

13.14.

15.

16.

17.

18.19.

Huchzermeyer,‘“Slum”Upgradingor“Slum”Eradication?’

12.FinancialisationintheTropics

Mariana Fix,Parceiros da exclusão: duas histórias da construção de uma ‘nova cidade’ em SãoPaulo:FariaLimaeÁguaEspraiada(SãoPaulo,Boitempo,2001),pp.19,37.Mariana Fix, São Paulo cidade global: fundamentos financeiros de uma miragem (São Paulo,Boitempo,2007),p.104.Ibid.Ibid,pp.98–101;Fix,Parceirosdaexclusão.Paulo Somlanyi Romeiro, Zonas Especiais de Interesse Social: materialização de um novoparadigma no tratamento de assentamentos informais ocupados por população de baixa renda(Master’sDegreeDissertationinLaw,PUC-SPLawSchool,SãoPaulo,2010),p.77.RaquelRolnikandJeroenKlink,‘Crescimentoeconômicoedesenvolvimentourbano:porquenossascidadescontinuamtãoprecárias?’,NovosEstudosCebrap,no.89(Mar.2011),p.89.ErmíniaMaricato,OimpassedapolíticaurbananoBrasil(Petrópolis,Vozes,2011),p.34.TagoreVillarimdeSiqueira,‘Competitividadesistêmica:desafiosparaodesenvolvimentoeconômicobrasileiro’,RevistadoBNDES,vol.16,no.31(June2009),p.141.MariaHermíniaTavaresdeAlmeida,‘ApolíticasocialnogovernoLula’,NovosEstudosCebrap,no.70(Nov.2004).Maricato,OimpassedapolíticaurbananoBrasil,p.35.MarcioPochmann,‘PolíticassociaisepadrãodemudançasnoBrasilduranteogovernoLula’,SERSocial,vol.13,no.28(Jan.–June2011),pp.26–7.AndréA.Sant’Anna,GilbertoR.BorçaJr.andPedroQ.deAraújo,‘MercadodecréditonoBrasil:evoluçãorecenteeopapeldoBNDES(2004–2008)’,RevistadoBNDES,vol.16,no.31(June2009),pp.43–8.Pochmann,‘Políticassociaisepadrãodemudanças’.RaquelRolnik,‘DemocracyontheEdge:LimitsandPossibilitiesintheImplementationofanUrbanReformAgenda inBrazil’,InternationalJournalofUrbanandRegionalResearch,vol.35 (2011),pp.239–55.RosanaDenaldi,KarinaLeitão and SilvanaZioni, ‘Nota técnica: infraestrutura e desenvolvimentourbano’, in Tânia B. Araújo (ed.), Trajetórias do Brasil frente aos compromissos assumidos pelogovernoLula2003–2009,dimensãomelhoriadaqualidadedevida(Brasilia,CGEE,2010),mimeo.Haroldo daGamaTorres andEduardoMarques, ‘Reflexões sobre a hiperperiferia: novas e velhasfacesdapobrezanoentornomunicipal’,RevistaBrasileiradeEstudosRegionaiseUrbanos, no. 4(2001);SuzanaPasternakTaschnerandLuciaBógus,‘Acidadedosanéis’,inLuizCesardeQueirozRibeiro (ed.),O futuro dasmetrópoles: desigualdades e governabilidade (Rio de Janeiro, Revan,2000).RossellaRossetto,Produçãoimobiliáriaetipologiasresidenciaismodernas:SãoPaulo,1945–1964(PhDthesisinArchitectureandUrbanism,FAU-USP,SãoPaulo,2002).Ibid.Luciana de Oliveira Royer, Financeirização da política habitacional: limites e perspectivas (SãoPaulo,Annablume,2014),p.51.

20.

21.

22.

23.24.25.

26.27.

28.

29.

30.31.

32.

33.

34.35.36.37.

38.39.

40.41.

MarcusA.B.C.deMello,‘Classe,burocraciaeintermediaçãodeinteressesnaformaçãodapolíticadehabitação’,EspaçoeDebates,no.24,yearVIII(1988),p.76.Nabil Bonduki, ‘Política habitacional e inclusão social no Brasil: revisão histórica e novasperspectivasnogovernoLula’,ArquitecturaUrbana,no.1(2008).Availableat:usjt.br,accessed12Dec.2014.DeOliveiraRoyer,Financeirizaçãodapolíticahabitacional,p.53;MarceloBurgos, ‘DosparquesproletáriosaoFavela-Bairro:aspolíticaspúblicasnasfavelasdoRiodeJaneiro’,inZaluarandAlvito(eds),Umséculodefavela.DeOliveiraRoyer,Financeirizaçãodapolíticahabitacional,p.55.Ibid.,p.67.ErmíniaMaricato,‘Autoconstrução,aarquiteturapossível’,inAproduçãocapitalistadacasa(edacidade)noBrasilindustrial(2nded.,SãoPaulo,Alfa-Ômega,1982),p.80.DeMello,‘Classe,burocraciaeintermediaçãodeinteresses’.MarianaFix,FinanceirizaçãoetransformaçõesrecentesnocircuitoimobiliárionoBrasil(PhDthesisinEconomicDevelopment,IE-Unicamp,Campinas,2011),p.102.MartaArretche,‘IntervençãodoEstadoesetorprivado:omodelobrasileirodepolíticahabitacional’,Espaço&Debates,vol.10,no.31,1990;SérgiodeAzevedo,‘Vinteedoisanosdehabitaçãopopular(1964–1986):criação,trajetóriaeextinçãodoBNH’,RevistadeAdministraçãoPública,vol.4,no.22 (Oct.–Dec.1988);GabrielBolaffi,Aspectos socioeconômicos doPlanoNacional deHabitação(PhDthesisinArchitectureandUrbanism,FAU-USP,SãoPaulo,1972);ErmíniaMaricato,Políticahabitacionalnoregimemilitar:domilagrebrasileiroàcriseeconômica(Petropolis,Vozes,1987);deMello, ‘Classe, burocracia e intermediação de interesses’. For a review of the literature, see DeOliveiraRoyer,Financeirizaçãodapolíticahabitacional,p.52etseq.Patricia Olga Camargo, A evolução recente do setor bancário no Brasil (São Paulo, CulturaAcadêmica,2009).DeMello,‘Classe,burocraciaeintermediaçãodeinteresses’,p.81.PeterMarcuse,SubprimeHousingCrisis, 2008,mimeo. Available at: hic-gs.org, accessed 4 Sept.2015.De Oliveira Royer, Financeirização da política habitacional; Thêmis Amorim Aragão, HousingPolicy and the Restructuring of the Real Estate Sector in Brazil, international seminar, The RealEstate/FinancialComplex(Refcom),Leuven,2014,mimeo.ÁlvaroLuisdosSantosPereira,LucianadeOliveiraRoyer andAlineViottoGomes, ‘Mercadodecapitaisemercadoimobiliário:acrescenteimportânciadostítulosdebaseimobiliária’,AnaisdoXVEncontroNacionaldaAnpur,Recife,2013.Availableat:unuhospedagem.com.br, accessed 4Sept.2015.Fix,Financeirizaçãoetransformaçõesrecentesnocircuitoimobiliário.Ibid.,p.123.Ibid.,p.134.HigorRafaeldeSouzaCarvalhoandDanielÁvilaCaldeira,HousingUnderFinanceInfluence:TheCaseofSãoPaulo,Brazil,InternationalSociologicalAssociationForum,Amsterdam,2013,mimeo.Datafromthecompany’sfinancialreport.See:gafisa.com.br,accessed13Dec.2014.According to the announcement of completion of primary and secondary public distributions ofcommonstockissuedbySãoPauloStockandFuturesExchange.See:bmfbovespa.com.br,accessed13Dec.2014.SouzaCarvalhoandÁvilaCaldeira,HousingUnderFinanceInfluence.Fix,Financeirizaçãoetransformaçõesrecentesnocircuitoimobiliário,pp.158–61.

42.43.

44.45.46.

47.

48.49.50.51.

52.

53.54.

55.

56.

57.

58.59.

60.61.62.63.64.

65.

66.

Aragão,HousingPolicyandtheRestructuringoftheRealEstateSector.AndréSinger,Ossentidosdolulismo:Reformagradualepactoconservador(SãoPaulo,CompanhiadasLetras,2012).RolnikanddosSantosPereira,TheFinancializationofHousingandSpatialSegregation.Bonduki,Habitaçãoeautogestão.Under Lula’s supervision and the general coordination of Clara Ant (architect, former PTcongresswomanandLula’sadvisor),ProjetoMoradia’scoordinationboardwasformedby:AndrédeSouza, theUnifiedWorkers’ Central (CUT) representative at the FGTSCurator Council; ErmíniaMaricato;EvanizaRodrigues(leaderof theHousingMovements’Union); IaraBernardi (thenaPTcongresswoman);LúcioKowarick;NabilBonduki,andPedroPauloMartoniBranco.Inthecouncil’sfirstline-up,socialmovementsheldnineteenseats,whilecorporateinstitutionsheldseven.RolnikanddosSantosPereira,TheFinancializationofHousingandSpatialSegregation.Fix,Financeirizaçãoetransformaçõesrecentesnocircuitoimobiliário,p.135.Thefeewaslaterfixedat50reaispermonthforthisrange.There aredifferentprice ceilings fordifferent categoriesof cities and regions,SãoPaulo,Rio andothermetropolitanregionsbeingthehighest,andsmallcitiesinthehinterlandthelowest.Sinduscon/FGV, Conjuntura da Construção, ano XII, no. 3 (Oct. 2014), p. 6. Available at:sindusconsp.com.br,accessed6Jan.2015.Ibid.,pp.4,6–7.MartaArretche,Capacidadesadministrativasdosmunicípiosbrasileirosparaapolíticahabitacional(Brasilia/SãoPaulo,MinistériodasCidades/Cebrap,2012),p.164.Raquel Rolnik, Rodrigo Iacovini and Danielle Klintowitz, ‘Habitação em municípios paulistas:construirpolíticasou“rodar”programas?’,RevistaBrasileiradeEstudosUrbanoseRegionais,vol.16,no.2(Nov.2014).ReginaCoeliMoreira Camargos,Estado e empreiteiros no Brasil: uma análise setorial (Master’sthesisinPoliticalScience,IFCH-Unicamp,Campinas,1993).Evaniza Lopes Rodrigues, A estratégia fundiária dos movimentos populares na produçãoautogestionária da moradia, Master’s dissertation in architecutre and urban studies at São Paulo2013.Rolnik,IacoviniandKlintowitz,‘Habitaçãoemmunicípiospaulistas’.SeeMinistryofPlanning,GovernofederalrespondeeditorialdojornalOEstadodeS.Paulo,8Aug.2014.Availableat:planejamento.gov.br,accessed7Dec.2014.RolnikanddosSantosPereira,TheFinancializationofHousingandSpatialSegregation.ZaninShimbo,Habitaçãosocialdemercado.SeeLabCidade’sresearchreportat:labcidade.fau.usp.br.accessed15Dec.2014.ZaninShimbo,Habitaçãosocialdemercado,p.211.AmongthepeopleinterviewedbyLabCidade’ssurvey,68.8percentmissaspaceorambiencethattheyhad in theirprevioushome.Thisabsence ismorestrongly feltby resettleddwellers (74.5percent),whobecamepartoftheprogrammenotbyvoluntarysubscriptionorlottery,butbecausetheyhadbeen forcebly evictedby thegovernment and resettled in aMCMVhousingcomplex.Amongthosewhoclaimedtomissaspaceorsurrounding,70.5percentmissedhavingayard.RaquelRolniketal.,‘OprogramaMinhaCasaMinhaVidanasregiõesmetropolitanasdeSãoPauloeCampinas:aspectossocio-espaciaisesegregação’,CadernosMetrópole,vol.17,no.33(May2015).Thisgroupcorrespondsto329(35.4percent)ofthe930interviewedfamilies.Withinthisgroup,83per cent did not pay rent before, 96 per cent did not pay condominium fees, 37 per cent had no

1.

2.

3.

4.

5.

6.

7.

8.

9.

10.

11.12.

electricityexpenseand33percenthadnowaterexpense.

13.AttheFrontieroftheReal-Estate–FinancialComplex

MargaretE.Keck,TheWorkers’PartyandDemocratizationinBrazil(NewHaven,YaleUniversityPress,1992),pp.190–3.The lackofresourcesmeantgreaterparticipationofbeneficiaries themselves. Inmany instancesofcollective neighbourhood urbanisation, themunicipality provided themachinery andmaterials andthe residents constituted the workforce. See Raquel Rolnik, ‘Urbanização a conta-gotas’, Versus:RevistadeCiênciasSociaisAplicadasdoCCJE/UFRJ,vol.2(2009).OrlandoAlvesdosSantosJr.,‘Cidade,cidadaniaeplanejamentourbano:desafiosnaperspectivadareforma urbana’, in Sarah Feldman and Ana Fernandes (eds),O urbano e o regional no Brasilcontemporâneo:mutações,tensões,desafios(Salvador,Edufba,2007),p.297.MariaCeliaPaoli, ‘Movimentos sociais noBrasil: embuscadeumestatutopolítico’, inMichaelaHellmann(ed.),MovimentossociaisedemocracianoBrasil:‘semagentenãotemjeito’(SãoPaulo,MarcoZero,1995),p.376.Milton Botler and Geraldo Marinho, ‘O Recife e a regularização dos assentamentos populares’,RevistaPólis,no.29(1997);JoãoSetteWhitakerFerreiraandDanielaMotisuke,‘Aefetividadedaimplementação de Zonas Especiais de Interesse Social no quadro habitacional brasileiro: umaavaliaçãoinicial’,inLauraMachadodeMelloBuenoandRenatoCymbalista(eds),PlanosDiretoresMunicipais: novos conceitos de planejamento territorial (São Paulo, Annablume/InstitutoPólis/Puccamp,2007);LíviaMirandaandDemóstenesMoraes,‘OPlanodeRegularizaçãodasZonasEspeciais de Interesse Social (Prezeis) do Recife: democratização da gestão e planejamentoparticipativo’, in Adauto Lúcio Cardoso (ed.),Habitação social nas metrópoles brasileiras: umaavaliaçãodaspolíticashabitacionaisemBelém,BeloHorizonte,PortoAlegre,Recife,RiodeJaneiroe São Paulo no final do século XX (Porto Alegre, Antac, 2007); Demóstenes Moraes, Por umapolíticadehabitaçãodeinteressesocialparaoRecife:apontamentossobreoPrezeis(Recife,URB,2005).Availableat:habitare.org.br,accessed5Sept.2015.OrlandoAlvesdosSantosJr.andDanielTodtmannMontandon(eds),Osplanosdiretoresmunicipaispós-EstatutodaCidade:balançocríticoeperspectivas(RiodeJaneiro,LetraCapital,2011),p.31.JacquelineSeverodaSilva, ‘Regularizaçãofundiária,exercitandoumnovoparadigma:umconflitotambémideológico–apresentaçãodecasos’,PlanejamentoePolíticasPúblicas,no.34 (Jan.–June2010).Availableat:ipea.gov.br,accessed6Jan.2015.Benjamin Goldfrank and Andrew Schrank, ‘Municipal Neoliberalism and Municipal Socialism:UrbanPoliticalEconomyinLatinAmerica’,InternationalJournalofUrbanandRegionalResearch,vol.33,no.2,June2009.TheMinistryprovidedsupportthroughtheproductionofeducationalmaterial–the‘MasterPlanKit’–withvideo-guidebooksandtechnicalreferencematerial,andalsosupportedpromotersofcapacitybuildingworkshopsacrossthecountry.CarlosRobertoSanchezMilani, ‘Lesparadoxesdu“principeparticipatif”dans lagestionpubliquelocale’,inDanielvanEeuwen(ed.),LenouveauBrésildeLula:dynamiquedesparadoxes(LaTourd’Aigues,L’Aube,2006),p.232.AlvesdosSantosJr.andTodtmannMontandon(eds),Osplanosdiretoresmunicipais,pp.31–4.PedroManuel Rivaben de Sales, ‘Operações Urbanas Consorciadas’, in Alves dos Santos Jr. and

13.

14.15.

16.

17.

18.

19.

20.21.22.

23.24.25.

26.

27.

28.

29.30.

TodtmannMontandon(eds),Osplanosdiretoresmunicipais,p.7.Pedro Novais Lima Jr., Uma estratégia chamada ‘planejamento estratégico’: deslocamentosespaciais e atribuições de sentido na teoria do planejamento urbano (PhD thesis in Urban andRegionalPlanning,Ippur-UFRJ,RiodeJaneiro,2003);CarlosVainer,‘Pátria,empresaemercadoria:notassobreaestratégiadiscursivadoPlanejamentoEstratégicoUrbano’,inOtiliaArantes,ErminiaMaricato,CarlosVainer (eds)AcidadedoPensamentoúnico:desmanchandoconsensos (PetrópolisVozes,2000).Vainer,‘Pátria,empresaemercadoria’,p.99.In the first direct election to choose São Paulo’s mayor, Jânio Quadros, leading the PTB/PFLcoalition,defeatedFernandoHenriqueCardoso,standingforthePMDB(theoppositionpartyduringthedictatorship),andEduardoSuplicy,ofthePT(apartyformallycreatedin1981).Adauto Lúcio Cardoso et al., ‘Flexibilização da legislação urbanística no Rio de Janeiro: umaavaliação das operações interligadas’, Anais do VIII Encontro Nacional da Anpur, Porto Alegre,1999.DanielJulienvanWilderode,‘Operaçõesinterligadas:engessandoapernadepau’,inRaquelRolnikandRenatoCymbalista(eds),Instrumentosurbanísticoscontraaexclusãosocial (SãoPaulo,Pólis,1997).PauloMalufinitiatedhispoliticalcareeraspartofArena,themilitarydictatorshipparty,andwasSãoPaulocitymayorandSãoPaulostategovernorduring thatperiod.Hewasconvictedofcorruptionmanytimes,generating,withinthepoliticalvocabulary,theverb‘tomaluf’,asynonymof‘todivertpublicresources’.Luiz Guilherme Rivera de Castro, Operações Urbanas em São Paulo: interesse público ouconstruçãoespeculativadolugar (PhDthesis inArchitectureandUrbanism,FAU-USP,SãoPaulo,2006).VanWilderode,‘Operaçõesinterligadas’,p.53.See:cmhcschl.gc.ca,accessed29Oct.2015.Nico Calavita and Kenneth Grimes, ‘Inclusionary Housing in California: The Experience of TwoDecades’,JournaloftheAmericanPlanningAssociation,vol.64,no.2(1998).VanWilderode,‘Operaçõesinterligadas’,p.54.RiveradeCastro,OperaçõesUrbanasemSãoPaulo.MariaIreneQ.F.SzmrecsanyiandJoséEduardodeAssisLefèvre,‘Grandesempreiteiras,EstadoereestruturaçãourbanísticadacidadedeSãoPaulo,1970–1996’,AnaisdoIVSemináriodeHistóriadaCidade e do Urbanismo, vol. 4, Rio de Janeiro (1996). Available at: unuhospedagem.com.br,accessed6Jan.2015.MarianaFix, ‘A“fórmulamágica”daparceriapúblico-privada: operaçõesurbanas emSãoPaulo’,CadernosdeUrbanismo,year1,no.3(2000).Ermínia Maricato and João Sette Whitaker Ferreira, ‘Operação consorciada: diversificaçãourbanística participativa ou aprofundamento da desigualdade?’, in Letícia Marques Osório (ed.),EstatutodaCidadeereformaurbana:novasperspectivasparaascidadesbrasileiras(PortoAlegre,SergioFabrisEditor,2002),p.10.See the summary ofmovements ofUrbanProject FariaLima, developed bySP-Urbanismoon 25Nov.2014.Availableat:prefeitura.sp.gov.br,accessed17Dec.2014.Fix,Financeirizaçãoetransformaçõesrecentesnocircuitoimobiliário,pp.181–2.Paulo Sandroni, ‘CEPACs: Certificates of Additional Construction Potential: A New FinancialInstrumentofValueCaptureinSãoPaulo’,inGregoryIngramandYu-HungHong(eds),MunicipalRevenues and Land Policies, Lincoln Institute of Land Policy, Cambridge, 2010. Available at:sandroni.com.br,accessed6Jan.2015.

1.2.

3.

4.5.

6.7.

8.

9.10.11.

12.13.14.

15.

16.

17.

14.Real-EstateAvenues

Fix,SãoPaulocidadeglobal;EduardoAlbertoCusceNobre,Reestruturaçãoeconômicaeterritório.WhenLight&Power’selectricitysectorwasnationalisedbythefederalgovernmentin1978,therestof the company was reorganised as Brascan Holdings, operating in the areas of mining, energy,agribusiness and real estate (new developments, shopping centres, hotels). Brascan – later namedBrookfield – opened an investment bank in 1989 and became a powerful developer in Barra daTijuca,RiodeJaneiro,andinSãoPaulo’ssouthernindustrialdistrict,havingparticipatedinoneofthefirstresidentialreal-estateinvestmentfundstobesetup:Panamby.Eduardo Alberto Cusce Nobre, Reestruturação econômica e território; Mariana Fix, São Paulocidadeglobal.EduardoAlbertoCusceNobre,Reestruturaçãoeconômicaeterritório,p.523.MariaChavesJardim,ObservatóriodeinvestimentosnaAmazônia:fundosdepensão(Brasília,Inesc,2010).Ibid.Sérgio Lazzarini, Capitalismo de laços: os donos do Brasil e suas conexões (Rio de Janeiro,Campus/Elsevier,2011),p.11.An examplewas the conference of leaders representing pension fund holderswhich took place inBrasilia in 2001, with the collaboration of theNational Union of Closed Private Pension Entities(Sindapp).InadocumentsenttoPresidentCardoso,theparticipantsdemandedtheexpansionofthecomplementarypensionsectorbygivingpermission toothersectors toestablish theirownpensionfunds.Theyalsodemandedincreasedparticipationofworkers’representativesinthemanagementofthese funds.Thedocument requested ‘thepluralityofpublic functionaries’complementarypensionentities’(CartadeBrasília,17Oct.2002).Amongthesignatoriesofthedocument,itisimportanttohighlightthenamesofLuizGushiken,RicardoBerzoiniandJoséPimentel,who,duringLula’sfirstterm, were in commanding positions and actively involved with the proposal for social securityreform sent to the government in 2003. See Maria Chaves Jardim, ‘ “Nova” elite no Brasil?Sindicalistaseex-sindicalistasnomercado financeiro’,SociedadeeEstado, v. 24,n. 2,May–Aug.2009.MariaChavesJardim,ObservatóriodeinvestimentosnaAmazônia.MarianaFix,FinanceirizaçãoetransformaçõesrecentesnocircuitoimobiliárionoBrasil,p.179.AdrianoBotelho,Ourbanoem fragmentos:aproduçãodoespaçoedamoradiapelaspráticasdosetorimobiliário(SãoPaulo,Annablume/Fapesp,2007),p.175.MarianaFix,FinanceirizaçãoetransformaçõesrecentesnocircuitoimobiliárionoBrasil.FlávioVillaça,EspaçointraurbanonoBrasil(SãoPaulo,StudioNobel/Fapesp,1998).JoãoSetteWhitakerFerreira,Omitodacidade-global:opapeldaideologianaproduçãodoespaçourbano(SãoPaulo/Petrópolis/Salvador,EditoraUnesp/Vozes/Anpur,2007),pp.188–9.ReginaCoeliMoreiraCamargos,EstadoeempreiteirosnoBrasil,citedinRodrigoFariaGonçalvesIacovini,Rodoanel Mário Covas: atores, arenas e processos (Masters thesis in Architecture andUrbanism,FAU-USP,SãoPaulo,2013).RaymundoFaoro,Osdonosdopoder:formaçãodopatronatopolíticobrasileiro(3rded.,SãoPaulo,Globo,2001),p.447.SérgioLazzarini,Capitalismodelaços,p.13.

18.

19.20.21.

22.23.24.25.

1.

2.

3.4.

5.6.7.8.

9.

10.

11.12.

13.14.

15.16.17.18.

Szmrecsanyi et al., ‘Grandes empreiteiras, Estado e reestruturação urbanística da cidade de SãoPaulo,1970–1996’,p.1023.Ibid.,p.1025.Ibid.Nowadays,Emurbisdividedintotwostatecompanies:SPUrbanismostillmanagesurbanprojects,while SP Obras manages larger projects. They still are, thus, the aforementioned point ofcoordination.PedroHenriquePedreiraCampos,Aditaduradosempreiteiros.RodrigoFariaGonçalvesIacovini,RodoanelMárioCovas,p.189.ReginaCoeliMoreiraCamargos,EstadoeempreiteirosnoBrasil,p.54.Ibid.

15.Real-EstateGames

IsabelaVieira, ‘CemmilpessoasdevemacompanharemCopacabanaanúnciodasededasOlimpí-adas’,AgênciaBrasil,1Oct.2009.Availableatmemoria.ebc.com.br,accessedon:6Jan.2015.SamanthaLima,‘Empresárioterádeconstruirevender3.600apartamentosdaviladosatletas’,FolhadeS.Paulo,7Dec.2014.Availableatwww1.folha.uol.com.br,accessedon7Jan.2015.CarlosVainer,‘Cidadedeexceção’.Nelma Gusmão de Oliveira, ‘Força-de-lei: rupturas e realinhamentos institucionais na busca do“sonho olímpico” carioca’, Anais do XIV Encontro Nacional da Anpur, Rio de Janeiro, 2011,availableatunuhospedagem.com.br,accessedon12Jan.2015.Lawn.11.079/2004.Decreen.5.977/2006.Lawn.12.873/2013.Erik Swyngedouw, ‘The Post-Political City’, in Bavo (ed.), Urban Politics Now: Re-imaginingDemocracyintheNeoliberalCity(Rotterdam,NAIPublishers,2007).LuizCesardeQueirozRibeiro,Doscortiçosaoscondomíniosfechados:asformasdeproduçãodamoradianacidadedoRiodeJaneiro(RiodeJaneiro,CivilizaçãoBrasileira/Ippur-UFRJ/Fase,1997),p.308.AdautoLúcioCardoso, ‘Oespaçodocapital: aBarradaTijucae agrandepromoção imobiliária’,AnaisdoIIIEncontroNacionaldaAnpur,ÁguasdeSãoPedro,1989.NelmaGusmãodeOliveira,‘Força-de-lei’.Municipal Law n. 32.576, from 28 Jan 2010. The contract, public notice and attachments areavailableat:portomaravilha.com.br,accessedon19Dec.2014.Ibid.CCR–acompanywhichadministersseveraltolledmotorways–ispartoftheCamargoCorrêagroupandalsoparticipatesintheimplementationofPortoMaravilha’sLightrailsystem.RosaneRebecadeOliveiraSantos,Oplanejamentodacidadeéoplanejamentodosjogos?Ibid.,p.98.Ibid.JorgeBittar, cited in IsabelaBastos andSelmaSchmidt, ‘PlanoEstratégico: Paes quer reduzir em

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16.June2013

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Prashant Gopal, ‘Wall Street, America’s New Landlord, Kicks Tenants to the Curb’, BloombergNews,1March2017.Availableat:bloomberg.com,accessed22Jan.2018.DesireeFieldsandSabinaUffer,‘TheFinancialisationofRentalHousing:AComparativeAnalysisofNew York City and Berlin’, Urban Studies (2014); M. Byrne, ‘“Asset Price Urbanism” andFinancialization after the Crisis: Ireland’s National Asset Management Agency’, InternationalJournalofUrbanandRegionalResearch,vol.40,no.1(2016),pp.31–45;GertjanWijburg,ManuelAalbersandSusanneHeeg,‘TheFinancializationofRentalHousing2.0:ReleasingHousingintothePrivatizedMainstreamofCapitalAccumulation’,mimeo,2017;S.Soederberg,‘TheRentalHousingQuestion: Exploitation, Eviction and Erasures’,Geoforum, vol. 1, no. 10 (2017);Melissa García-Lamarca,‘FromMortgageSecuritisationtoREITs:DispossessionandFinancialisedHousing2.0inSpain?’Workingpaper,underrevision.Harvey,SeventeenContradictions,p.241.Joe Beswick, Georgia Alexandri, Michael Byrne, Sònia Vives-Miró, Desiree Fields, StuartHodgkinsonandMichaelJanoschka,‘SpeculatingonLondon’shousingfuture’,City,vol.20,no.2(2016),pp.321–41.Ibid.,p.324.RobCall,DenechiaPowell andSarahHeck,Blackstone:Atlanta’snewest landlord–Thenewfaceofrentalmarket,HomesforAll,2014.Availableat:homesforall.org,accessed22Jan.2018.Seeinvitationhomes.com,accessed30Jan.2018.Call et al., Blackstone: Atlanta’s newest landlord, p. 6; Jade Rahmanai, Bose George and RyanO’Steen,Single-Family REO: AnEmerging Asset Class (3rd edition,Keefe,Bruyette andWoods,2013).MatthewGoldstein, ‘MajorRental-HomeCompaniesSet toMergeasU.S.HousePricesRecover’,NewYorkTimes,10Aug.2017.Availableat:nytimes.com,accessed22Jan.2018.Beswicketal.,‘SpeculatingonLondon’shousingfuture’,p.325.Michael Byrne, ‘Bad banks: The urban implications of asset management companies’, UrbanResearchandPractice(2015).García-Lamarca,‘FrommortgagesecuritisationtoREITs’;MichaelByrne,‘“Assetpriceurbanism”and financialization after the crisis: Ireland’s National Asset Management Agency’, InternationalJournalofUrbanandRegionalResearch(2016).Beswicketal.,‘SpeculatingonLondon’shousingfuture’,p.332.Alba Brualla, ‘Anticipa, filial de Blackstone, quiere ser la mayor gestora de pisos en alquiler’,eleconomista.es,30March2017.Availableat:eleconomista.es,accessed22Jan.2018.Alfonso Simón Ruiz, ‘Blackstone construye un gigante de viviendas para el alquiler en España’,CincoDías,15May2017.Availableat:cincodias.elpais.com,accessed22Jan.2018.Manuel Aalbers, The Financialization of Housing: A Political Economy Approach (Abingdon,Routledge,2016),p.121.Benjamin F. Teresa, ‘Managing fictitious capital: The legal geography of investment and politicalstruggleinrentalhousinginNewYorkCity’,EnvironmentandPlanningA,vol.48,no.3(2016),p.472.DesireeFields, ‘Contesting the financializationofurban space:Communityorganizationsand

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Acknowledgements

The shortestmissions I carriedout lasted tendays (Maldives,Argentina andAlgeria); the longest,eighteendays(UnitedStates).Iparticularlyhighlight:RedeCidadeeMoradia,who,withCNPqandMinistryofCities’resources,developedsurveysabout theprogramMinhaCasaMinhaVida; surveysdeveloped incollaborationwiththeObservatóriodasMetrópoles,coordinatedbymyselfandOrlandoJr.,fromIPPUR;andthesetofresearchpapersonurbanandhousingregulation,supportedbyresourcesfromFAPESPandtheLincolnInstituteofLandPolicy,developedinLabCidade.

Index

1000+Stanova,Montenegro78–9

Aalbers,Manuel18,76,120Abed,Fazle100Abramo,Pedro134,156–7accountability114affordability68,191–2AfricanAmericans42,182–3Agamben,Giorgio149,279–80agriculturalderegulation119Airbnb274–5,277Albania67,69Allen,Reiton265Almaty11–2,70–1,73–4Alonso,William141AmericanRecoveryandReinvestmentAct,The,200977AmnestyInternational105Amsterdam52,53Andorra79AndradeGutierrez246Angel,Shlomo59,141Angola95anti-riskprecautions78Argentina109Arrese,JoséLuisde55ASAInternational100Ascher,François186

Asiancrisis,1997–98214asset-basedwelfare31AssetChile273assetsmanagementcompanies266–9AssociationofNeighbourhoodandHousingDevelopment270Astana11–2,70–1,72–4Athens190Atlanta192,193,194,268,271–2austeritymeasures118Australia19,26Austria24authoritarianism279

BaanMankong98BancoGarantia214Bangalore117Bangalore–MysoreInfrastructureCorridor172–3Bangladesh93BangladeshRehabilitationAssistanceCommittee99–100bankingsystem:bailouts76–8;deregulation46–7Barcelona13–4,274;homelessness194;OlympicGames,1992191,192,194;PeopleAffectedbyMortgages(PlataformadeAfectadosporlaHipoteca–PAH)264–5,271,276–7;publichousing277;rentalhousing271;resistancetofinancialisation276–7

BarkerReviewofHousingSupply33BasicAgrarianLaw(Indonesia)121–2Batista,Eike245,246,247Batista,Pierre253–4beautification190bedroomtax,UnitedKingdom1–2,14–5,37,39Beijing4,191,192Belfast34Belgium23Benin132Berlin117,270BerlinWall,fallof18,123Bilbao13Bittar,Jorge253Björkman,Lisa129Blackstone268,269–70,271BNDES(BankforEconomicandSocialDevelopment)243–4,246,249

Bolivia63,89,95Bosnia-Herzegovina69Botswana63,136bottombillion,the94Boulos,Guilherme259Brazil90,118,133;bankingsystem212;BeloHorizonte227;BNDES(BankforEconomicandSocialDevelopment)243–4,246,249;capitalismin241;CertificatesofAdditionalConstructionPotential(CEPAC)236–7;CityStatute,2001208;Cohabs211;colonialera241;creditgrowth207;democratisation205,262;demonstrations,17June2013257–64;displacement224;economiccrisis,2013258;economicgrowth206,208;economicstagnation233;expansionofreal-estate–financialcomplex231–7;FariaLimaUrbanProject(OperaçãoUrbanaFariaLima)235–7;Favela–Bairroprogramme202–3;favelas110,112,113,118,135,202–3,203–5,227–8,246,252–4;FGTS(EmployeeIndemnityGuaranteeFund)210–1,213,214,221;FIFAWorldCup4,110,188,259;financialisation201–25;forcedevictions202,204–5;FUNAPS(FundforResidentsofSubstandardHousing)232;GDP206,221,238;housingdeficit209–10;HousingFinanceSystem(SFH)208–12,213;housingfinancialisation208–25;housingpolicy208–25;incomepercapita206;infrastructureinvestment227;landprices215,223–4;landuserules232–3;LavaJato(CarWash)corruptionscandals256,261;LawforDe-Favelisation232;LawofÁguaEspraiadaUrbanProject204–5;liberalisation212–3;Mensalãocorruptionscandal217–8;migrants254–5;MinhaCasaMinhaVida(MyHomeMyLife)programme89,218–25,231,254,256,259,263;MinistryforCities216,217,218,228–9,247;MinistryofPlanning248–9;mortgagesystem212–3;MovementforUrbanReform6,231;MunicipalMasterPlans226–32;NationalConferencesofCities217;NationalForumforUrbanReform219;NationalHousingBank(BNH)208–12;NationalHousingCouncil217;NationalSocialHousingSystem(SNHIS)217–8,222;newmiddleclass258–9;newurbanregime248;OlympicGames,20164,109–11,245–6,250–4;PacifyingPoliceUnit(UPP)202;PartidodosTrabalhadores(PT,Workers’Party)205–6,207,216,261–3;patronage241;pensionfunds238–41,246;PMDB(PartyoftheBrazilianDemocraticMovement)261–2;povertyreduction206;Prezeis(PlanfortheRegularisationoftheZonesofSpecialSocialInterest)227;Profavela227;ProgramadeArrendamentoIndividual(PAR)213;ProgramaSocialdeHabitação(PSH)213–4;ProjectNovaLuz249;ProjetoMoradia(ProjectHousing)216–7;public–privatepartnerships235–7,247–8,249–50,256;Real-EstateFinancialSystem212–3;regularisationoffavelas227–8;residentialmarket208;righttohousing4;SecondNationalDevelopmentPlan211;socialhousing213–4;socialpolicy206–7;SpecialConcessionforHousingPurposes228;standardisationofhousing223;state–contractorrelations241–4,249;StatuteoftheCity,2001228,231,249;subprimemortgagecrisisimpact218;subsidies84,214,218–9;tenureinsecurity109–11;territorialstigma208;urbancrisis208,226;urbanpacts229;urbanplanning230–1;urbanpolicy207–8,245–56;urbanpolicypublicdebates229–30;UrbanReformagenda207;urbanreformmovement226–31;ZonesofSpecialSocialInterest(ZEIS)204,227;zoningliberalisation232–5

BrazilianAssociationofMortgageandSavings(ABECIP)212–3BrettonWoodsmonetarysystem,suspensionof18BRICs258Buckley,RobertM.165–6BuenosAires109Bulgaria65,67,69buyers,subsidiesdirectto82

CamargoCorrêa246

Cambodia105–6,137campamentos,Chile85,87Canada233–4CanadaHousingandMortgageCorporation233capacity-building174–5CapeTown,FIFAWorldCup,2010191capital:accumulation16;formationof150–1;marketexpansion26–7;metamorphosisof120;surplus26,26–7

capitalism16;inBrazil241;contradictionsof81;creative94;endof124;expansionof123–4;financialised114;mercantilistphase123–4;powersofreinvention81

capitalismforall162capitalistrevolution117Cardoso,FernandoHenrique213–4,228,239‘CartadeBrasília’(BrasiliaLetter),ClosedPrivatePensionEntities239–40CatalystMicrofinanceInvestors100Cavalcanti,Sandra209,210Cemex94centralbanks,recapitalised76–7CertificatesofAdditionalConstructionPotential(CEPAC),Brazil236–7CharterofFundamentalRights(EU)51Chatterjee,Partha138Chengdu,China170–1Chicago45–6,117Chile:campamentos85,87;earthquake,2010186;economicliberalisation85–6;homelesscommittees85;housingdeficit88,89;housingpolicy84–91;MetropolitanPlan,196087;MinistryofHousing85–6;neoliberalrevolution85–6;socialhousing12,86,88–9;viviendaseconómicas88

China16,25,65;homeownership67;housingpolicy68–9;hukousystem115;informalhousingmarkets69;mega-projects170–1;RingRoadCorporation171;rurallandexpropriations170–1;SpecialEconomicZones(SEZs)68;tenureinsecurity170–1

choice,freedomof89cities:growthof115–9;Javanesetradition147;strugglefortherightto280CitiesAlliance93,196‘CitiesWithoutSlums’195–6citizenship152CityofGod(film)110cityproduction,logicof173CityStatute,2001,Brazil208CiudadJuárez117civilsociety138climatechange112,159Clinton,Bill155ClosedPrivatePensionEntities,‘CartadeBrasília’(BrasiliaLetter)239–40

COHRE(CenteronHousingRightsandEvictions)111Colau,Ada276collectivehousing143Colombia63,90,164colonisation,newformof196–7ColonyCapital268ComitêsPopularesdaCopa(WorldCupPopularCommittees)259,263commodification61,80communallands132communisation281Communisthousingpolicy64–6CommunityOrganizationsDevelopmentInstitute98CommunityReinvestmentAct,1977(USA)46communitytrusts98–9compulsorypurchase176ConservativesParty(UK)1–2,3ConsultativeGrouptoAssistthePoor92,100consumption26contractors241–4,249,255corporatecapital,restructuring188corporatereal-estatestrategy238CouncilofEuropeDevelopmentBank64countrysidetransformation119Covas,Mário235creativecapitalism94creativefinancialproducts5credit:accessto164;growthof17;rightto93;socialisationof16,57credit-acquirementevaluation42Croatia69,70Cunha,Eduardo263Czechoslovakia65,66CzechRepublic24,66,67,70

Danellsystem53Davis,Mike116,117,118–9,130debtcrisis,1980s118debts:responsibilityfor58;wealth-disguised26DecentHomesStandard32deindustrialisation18Deininger,Klaus152–4,175–6demand-sidesubsidiesmodel:Chileanmodel84–91;spreadof83;types82–3

Denmark19,24,51DepartmentofHousingandUrbanDevelopment(US)27depression15deregulation:agricultural119;banking46–7;financialmarkets20;mortgagesystem46–7,56;rentalhousingmarket19,271;Spain56;UnitedKingdom30;UnitedStatesofAmerica19,46–7

destructionanddevaluation,cyclesof267developmentalism2DevelopmentPolicyLoans(DPL)158Dickens,Charles115Dirceu,José249discrimination34,113,142,145,146,182;disasterimpact182–3,184–5displacement87,266;Brazil224;infrastructureprojects111;internal107–8,112;megaprojectsandmega-events190,191–2

dispossessions5,114,176–97;Indonesia177–8;megaprojectsandmega-events186–97;andrisk182,182–6;Turkey179–82;UnitedStatesofAmerica272

DLF172domesticfinance17DominicanRepublic95DutchBank52Dutra,Olívio228–9

economic-financialcrisis,1970s24economic-financialcrisis,EasternEurope,199669economicgrowth153;Brazil206,208;Kazakhstan71,74Ecuador90,95Egaña,Amaia,suicide13ElSalvador60,90,95,165Emurb242enclosure150,151Engels,Friedrich14environmentaldegradation91Erdoĝan,Recep180Erundina,Luiza232,235Estonia25,66–7,67Ethiopia136ethnicclass143ethnocracy143–4EuropeanBankforReconstructionandDevelopment79EuropeanCentralBank61,76EuropeanCommission50–1EuropeanUnion:CharterofFundamentalRights51;housingpolicy50–1

evictions4,87;forced105–6,109,110,111,126–8,137,177–8,179–82,189–90,191,202,204–5;rentalhousing272–3;RiodeJaneirogeographyof252–3;UnitedStatesofAmerica272

exceptions141exclusion113,145

FairHousingAct(USA)42Faoro,Raymundo241–4FariaLimaUrbanProject(OperaçãoUrbanaFariaLima),Brazil235–7Faulhaber,Lucas252favelas110,112,113,118,135,202–3,203–5,227–8,246,252–4FederalHousingAdministration40,41FederalNationalMortgageAssociation40FederalReserve76FederalReserveAct,1913(USA)40FederalReserveBankofAtlanta272FederationofIndustriesofRiodeJaneiro247Fernandez,Rodrigo17,120FGTS(EmployeeIndemnityGuaranteeFund),Brazil210–1,213,214,221Fidere269–70FIFAWorldCup:Brazil4,110,188,259;SouthAfrica4,191,193financialassets,valueoftheworld’s16financialcapital,andhousing5financialcredit,andgovernmentalsubsidies21financialisation3–4,4,5,11–22,51,57,155;Brazil201–25;forms21;hegemonyof280;ofhousingsector16–22;andmicrofinance100–1;rentalhousing265–82;resistanceto275–81;resultsof11–5;WorldBankand59–64

financialisedcapitalism114financialmarket,globalised20Finland24Flavia126–8foodbanks15foodcrisis123foreclosures13,48,57formerCommunistcountries62;affordability68;homeownership67;housingcosts68;housingpolicy64–75;mortgagesystem69–70;privatisation68

France24,51,76,83freedom,negative151–2freeholdproperty,hegemonyof4freetrade62Frei,Eduardo85FuLiang170

FUNAPS(FundforResidentsofSubstandardHousing),Brazil232Funcef239,246FundingforLendingScheme34

García-Lamarca,Melissa271Gates,Bill94GDP:Brazil206,221,238;residentialmortgagemarkets19–20;world16gecekondus,Turkey179–82gentrification191–2GermanDemocraticRepublic65Germany23,24,25,83,270Ghandi,Indira129Glasgow28GlobalCampaignforSecureTenure,UN-Habitat154globalfinancialcrisis17,74–5;post-crisisresponses76–81globalisation17,26,278GlobalLandToolNetwork(GLTN)166GoldenVisas,Spain274,277Goldman,Michael172Goulart,João209governmentalsubsidies,andfinancialcredit21governmentintervention17–8governmentrole24GPInvestments214GrameenBank92–3,96GreatDepression,the40GreaterLondon32Greece23,79–80,84Guatemala89,95Guimarães,Altair110–1

habitability91HabitatAgenda196HabitatforHumanity94HabitatIIconference,Istanbul196Haiti:earthquake,20104,107,184–5;reconstruction107–8Harvey,David187HDFCBank94hegemony188–9Holland24

Holston,James135–6homelessness34,36–7,39,49,65,193–4,273homeownership3–4,152;China67;formerCommunistcountries67;growthof25–6;hegemonyof5–6,25;andhouseholdconsumption17;Netherlands52;promotionof16,21;Spain55;subsidies31;UnitedStatesofAmerica41–2;aswealthstock26

HomeownersLoanCorporation42Honduras183HOPEVIprogramme(HousingOpportunitiesforPeopleEverywhere)44–5hotels185–6householdconsumption,andhomeownership17houseprices26,191–2housing:commodification16;economicrole17–8;andfinancialcapital5;politicaleconomyliterature16;rightto4;staterole29

HousingAct,1937(Wagner-SteagallAct),(USA)40–1HousingAct,1980(UK)30housingallocation,andmarketforces5,20HousingandCommunityAct(USA)42–3HousingandPlanningAct,1909(UK)28housingassociations30–1,36HousingChoiceVoucherProgram42–3housingcosts52,68housingcrisis:Kazakhstan75;UnitedKingdom32–4,39–40;UnitedStatesofAmerica47–9housingdeficit:Brazil209–10;Chile88,89;LatinAmerica118;Maldives160–1HousingDevelopmentFinanceCorporation,India63housingemergency,post-crisis76Housing:EnablingMarketstoWork(WorldBank)19–20,21,61–3housingexpenditures74housingfinance:seemortgagesystemhousingpolicy3–4,280;accountability114;Brazil208–25;Chile84–91;Communist64–6;EuropeanUnion50–1;formerCommunistcountries64–75;Kazakhstan71–5;neoliberalreform84;Netherlands51–3;residualisation51;Spain54–8;Sweden53–4;UnitedKingdom28–40;UnitedStatesofAmerica40–50;WorldBankand59–64

housingprovision,formats17housingsector,takeoverbyfinance16–22housingtenure,UnitedKingdom31housingvouchers49housingwealth,roleof120humanitarianaid108humanrights3,93;violations112Hungary65,67,69,70HurricaneKatrina182–3

HurricaneMitch183IDB89ideologyofgift139–40illegaloccupations122importsubstitution117inclusion113inclusionaryzoning233–4inclusivegrowth196India94,129–30,133,138;Bangalore–MysoreInfrastructureCorridor172–3;communitytrusts98;debts15;HousingDevelopmentFinanceCorporation63;megaprojects187–8;rurallandexpropriations172;urbaninfrastructurefunds173

IndianNationalCongress129Indonesia60,63,95,106–7,123;BasicAgrarianLaw121–2;dispossessions177–8;financialcrisis,1997178;housingfinancialisationpolicy178;kampung147–8,178;landconcessions121;landlitigations122;MinistryofPublicHousing178;tsunami,20044

IndonesiaStateRailroadCompany106–7industrialisation84,117inequality32informalfinancialstrategies93informalhousingmarkets69informallandmarkets141,142,156–7informalsettlements84,118,125,152;characteristicelements146–7;dispossessions177–82;dominantnarrative136;exceptions139;forcedevictions126–8,177–8,179–82;impactofurbanplanning141–9;juridicalpluralism132–4;landmarket156–7;legality/illegality129,131–6,137–9,149,167;localauthority134;megaprojectsandmega-eventsimpacts190–1;origins136;qualityoflife165;regularisation227–8;regulation134–5;rightofoccupation136–7;securityoftenure129;andthestate136–41;stateofnon-definition128;tenureinsecurity107–8,109,112;territorialorganisation146–8;territorialstigma116;webofplace127–8

infrastructure,globalinvestment172infrastructureprojects,displacement111InstituteofResearchandSocialStudies(IPES)209InstitutoMaisDemocracia(MoreDemocracy)245–6Inter-AmericanDevelopmentBank59–64interbankloans17Inter-DepartmentalCommitteeonSocialInsuranceandAlliedServices,(UK)29interestrates:microfinance96–7;subsidies82internallydisplacedpersons107–8,112InternationalFinanceCorporation63InternationalMonetaryFund18,212investmentfunds120,172InvitationHome271–2INX246

Ireland23,25,26;NationalAssetManagementAgency(NAMA)268Israel143–4,146IsraelLandAuthority143Istanbul180,196Italy23,145,187

Jakarta106–7,147–8,177Japan,residentialmortgagemarkets19juridical-bureaucraticirresolution136juridicalpluralism132–3,135

Kalarickal,Jerry165–6kampung,Indonesia147–8,178KampungImprovementProgramme147Kazakhstan69,70–5;bankingsystem73;constructionindustry71,74–5;economicgrowth71,74;economicliberalisation74;foreigninvestment73;globalfinancialcrisisimpacts74–5;housingcrisis75;housingpolicy71–5;independence72;informalhousingmarkets69;migrants73;population72;post-crisisresponses77–8;socialhousing74;sovereignwealthfund78;undertheSovietregime72

Kedar,Alexandre143Kenya95,98KhmerRouge105–6,137knowledgeproduction2Kowarick,Lúcio116,182

labour,internationaldivisionof2Lacerda,Carlos110,209land,andwork150–1landappropriation151landconcessions120–1,128landgrabs105–6,111landlaw123landmanagement113,153landmarkets17;informal156–7landmobilisation,megaprojects175landprices141,215landreform63,106–7,113,114,152,157,166;Maldives158–62;WorldBanksponsorship155landregistration:seelandtitlinglandregularisation135landrights123landseizuremovement119–20landspeculation124

LandTenureCenter163landtitling155,157–8,162–9,195;andaccesstocredit164;benefitsof162–3;cost166;critique165–8;economicresults163;funding167;programmes114;andqualityoflife165;andtenuresecurity164

landuserules232landusurpation123LandesaRuralDevelopmentInstitute171landlords30–1;institutional269–70,274Lazzarini,Sérgio239,241Lebanon63Lefèvre,JoséEduardodeAssis242Lemann,Jorge214liberalisation114,212–3;Brazil212–3,232–5;economic74,85–6,161;zoning232–5Littlefield,Elizabeth92livingconditions91,98livingcosts38,39locallifestyles144Locke,John151–2London34,36,274;OlympicGames,2012188,192,193low-incomeborrowers12LuladaSilva,Luiz211,214,215–8,219,220,239–40,245,248,261–3,263

Macedonia69macroeconomics17Madrid270Magalhães,Alex135Maia,Cesar231MakingHomeAffordableprogramme77Maldives108–9;economicliberalisation161;housingdeficit160–1;investmentpotential161;landallocationsystem159–60,161–2;LandLaw,2002160–1;landreform158–62;population158;socialindicators159;tsunami,20044

MaldivesHumanRightsCommission159Malé158–9,160Malthus,ThomasRobert123,124Maluf,Paulo232–3,235Manchester14–5,117Mangunwijava,Romo179Mantega,Guido218,249MaoSein105–6MaoZedong68marginality,theoryof115–7Maricato,Ermínia236

marketrelationships129,162;andhousingallocation5,20Marx,Karl150–1Mayo,Stephen59,141mechanization119megaprojectsandmega-events109–11;benefitsof175;China170–1;displacement190,191–2;dispossessions186–97;forcedevictions189–90,191;andhomelesspeople193–4;andhouseprices191–2;impactsonsocialhousing192–3;importance194;India172–3,187–8;andinformalsettlements190–1;justification188;landmobilisation175;literature186;municipalfinancing173–6;andpatriotism189;andtenureinsecurity170–97;andurbanrestructuringprojects4,109–11;seealsoOlympicGames

Meirelles,Henrique245Mello,Marcusde209mercantilisation51MetropolisObservatory230Mexico84,89,90,94,96,132,164,165Miami274microfinance15,21,92–101;access95;amortisationrates97;communitytrusts98–9;critique97–8,101;defaultrisk96;emergenceof92–4;andfinancialisation100–1;guaranteestrategies96;housingmicroloans94,97;initiatives95–6;interestrates96–7;povertymitigationmodel93;securitisation99–100

migrantsandmigration84,115,117,124,254–5MillenniumDevelopmentGoals154–5,195MinhaCasaMinhaVida(MyHomeMyLife)programme,Brazil89,218–25,231,254,256,259,263MinisterialHousingConferenceforSouthEasternEurope,Paris,200364MinistryforCities,Brazil216,217,218,228–9,247MinistryofPlanning,Brazil248–9modernity116Moldova69monetisation26moneylenders93MontagueReport(UnitedKingdom)274Montenegro145;1000+Stanova78–9mortgage-basedsystems21mortgagecreditcertificates12,19mortgagecrisis,200733–4MortgageInterestReliefatSource(MIRAS)31mortgagemarkets21;residential19–20mortgagesystem23–58;access27–8;background23–8;bailouts34;Brazil212–3;credit-acquirementevaluation42;crisis,200733–4;deregulation46–7,56;expansion26–7;exporting59–75;formerCommunistcountries69–70;innovativeproducts47;post-crisisresponses76–81;securitisation46–7,56,212–3;Spain55–7;subprimeloans46–7;UnitedKingdom28–40;UnitedStatesofAmerica40–50;WesternEurope50–8

MovementforUrbanReform,Brazil6,231

MovimentoBrasilLivre(MBL,FreeBrazilMovement)261MovimentoPasseLivre(MPL,FreePassMovement)257,263Mozambique136MTST–MovimentodosTrabalhadoresSemTeto(HomelessWorkersMovement)259Mumbai129–30municipalentrepreneurship173–6municipalfinancing173–6

NationalAssetManagementAgency(NAMA),Ireland268NationalAssistanceAct1948(UK)29NationalBankforEconomicandSocialDevelopment(BNDES)239NationalCommissiononSeverelyDistressedPublicHousing43NationalConferencesofCities,Brazil217NationalCooperativeHousingUnion,Kenya98NationalForumforUrbanReform,Brazil219NationalHousingAct,1934(USA)40NationalHousingBank(BNH),Brazil208–12NationalHousingFederation38,38–9NationalSocialHousingSystem(SNHIS),,Brazil217–8NationalUnionofReal-EstateProprietors(France)51naturaldisasters107–8,108–9,112,182–6Nazarbayev,Nursultan11–2,71,72Negevdesert144neoliberalism18,20–1;expansionof93;housingpolicyreform84;post-crisisresponses76neoliberalrestructuring18Netherlands,the25,51;homeownership52;housingpolicy51–3;privatisation18–9;socialhousing54Neves,Júlio236NewDelhi,CommonwealthGames,2010191NewOrleans182–3NewYork48,274;evictions272;rentalhousing270;resistancetofinancialisation275–6NICE172Nigeria137non-definition,stateof128NorthernIreland34Nuzman,Carlos245

OAS246Observer,The155Odebrecht246,247,249Oliveira,Franciscode116OliveiraSantos,RosaneRebecade252–3

OlympicGames:Athens190;Atlanta192;Barcelona,1992191,192,194;Beijing,20084,192;London,2012188,192,193;RiodeJaneiro,20164,109–11,188,245–6,250–4;Seoul,1988191,192,194

OperaçãoUrbanaCentro,Brazil235OrganizationforEconomicCooperationandDevelopment25;DevelopmentAssistanceCommittee154outsider,the115–6overaccumulation80–1overcrowding33Oxfam37,123

Pacoima,California12–3Pakistan91;floods,2010183–4Pallamin,Vera278–9Paris,MinisterialHousingConferenceforSouthEasternEurope,200364PartidodosTrabalhadores(PT,Workers’Party),Brazil205–6,207,216,261–3patronage241paydayloans38PDG215pensionfunds238–41,246PeopleAffectedbyMortgages(PlataformadeAfectadosporlaHipoteca–PAH),Spain264–5,271,276–7peoplewithspecialneeds39permanenttransience128Peru60,95,96,164,165Petros239Philippines,the60,95PhnomPenh105,106Piketty,Thomas120Pinochet,Augusto85,86Pires,Adilson253Pitta,Celso233,235placelesspoor,the,creationof5PlataformadeAfectadosporlaHipotecaassembly13–4PMDB(PartyoftheBrazilianDemocraticMovement)261–3Poland24,66,70Polanyi,Karl150,151politicaleconomy6,7,57,63,70,135,141–2,142,166,211,234;Kazakhstan72;literature16;new18,21;andtenureinsecurity113;urbanisation17

politicalparties137–8politicalrelevance17–8politicalrepresentation278politicalsociety138

populationconsolidation108–9Port-au-Prince107–8PortoMaravilhaUrbanProject247Portugal23,79,84post-disasterreconstruction4;anddispossession182–6poverty23,24–5,29,37,38–9,89;mitigation93,153;persistenceof155–6;reduction154–6,206precariousness105,115predatoryequity276Previ239,246privateequityfunds268,269,270privateproperty150,151–2,155,155–6privaterental24privatisation18–9,20,80;formerCommunistcountries68;publichousing24–5;UnitedKingdom30–1;UnitedStatesofAmerica25

privatisedKeynesianism26ProgramadeArrendamentoIndividual(PAR),Brazil213ProgramaSocialdeHabitação(PSH),Brazil213–4ProjetoMoradia(ProjectHousing),Brazil216–7property124–5;private150,151–2,155–6;regularisationof120;rightto62,153–4provision,responsibilityfor84publichousing:Barcelona277;construction27;Germany270;privatisation24–5;provision23–4;UnitedStatesofAmerica41,42–6,270;seealsosocialhousing

publicland:acquisitionmechanisms175–6,176–82;dispossessions176–82Public–PrivateInfrastructureAdvisoryFacility(PPIAF),WorldBank174–5public–privatepartnerships170,174,201–2,235–7,240,241,247–8,249–50,256,281publicspaces,occupationof14,278Pusan117

Quadros,Jânio232,235,242,243qualityoflife,informalsettlements165

Raco,Mike188Rancière,Jacques279real-estatebubble,bursts27real-estatedevelopers255real-estate–financialcomplex:advanceof201–5;Brazilianexpansion231–7;dismantlementofthestate255

RealEstateInvestmentTrusts(REITs)267real-estateprices26,32RealtyTrac47–8reconstruction:Haiti107–8;Maldives108–9

RedeGlobo247redlining42refugeecamps107–8rent:arrears38,38–9;extraction16,114;land151;Maldives159;UnitedKingdom38rentalhousingmarketsector:demand267–8;deregulation19,271;evictions272–3;financialisation265–82;growthof31,34;insecurityoftenure34;private24;profitability272;regulation34;resistancetofinancialisation275–81;roleof272;stockdistribution271–2;UnitedKingdom31,32,34,274

rent-controllegislation48rentstrikes28residentialmortgage-backedsecurities(RMBS)47retirementsystems25–6Richard,David124rightofuse132rights,unrecognised122RingRoadCorporation,China171RioBarraJointVenture(CCRB)246RiodeJaneiro4,109–11,126–8,135,201–3,257;evictiongeography252–3;HolidayInn247;MasterPlan230,231;MinhaCasaMinhaVida(MyHomeMyLife)programme254;MorarCariocaprogramme252,253;OlympicGames,2016188,245–6,250–4;PacifyingPoliceUnits(UPPs)246;PlanfortheRioOlympics2016UrbanandEnvironmentalLegacy’252–3;PlanfortheUrbanRestructurationoftheCorridorT5/Transcariocaproject252;renovationofMaracanã246;RioBarraJointVenture(CCRB)246;urbanisationprojects246

risk,dispossession182,182–6Robertson,Mary33Rolnik,Raquel:countrymissions3–4;mandate3,5;missionreports5;trajectoryofactivism6;UKvisit1–2,3,4

Romania69,70,145Romani,the144–6Roosevelt,FranklinD.48Roubini,Nouriel26Rousseff,Dilma218,219,221,222,245,249,255–6,261,262–3Roy,Ananya101;PovertyCapital92RuralHousingLoanFund94rurallandexpropriations:China170–1;India172Russia67Rwanda136

Sandroni,Paulo236–7SantiagodeChile12,273;housingpolicy87,88,91SantoAntônioHydroelectricPlant249SãoPaulo117,118,135–6,203–5,216,224,231,232–7,238,240,242–3,249,255,257,273,278SãoPauloConstructionCompaniesSyndicateReview221

Sareb269savingsprogrammes,subsidies82Scotland36securitisation46–7,56,212–3;microfinance99–100segregation5,90self-buildprojects84,93,115,117Senegal63Seoul194;OlympicGames,1988191,192,194Serbia145SIDA91Sierra,Katherine175Slovakia66Slovenia25,66–7,67slum-dwellers92slums:definition132;originofterm116;populationestimates112–3,130–1;upgradeschemes98socialcommons20socialhousing:Brazil213–4;Chile12,86,88–9;Kazakhstan74;megaprojectsandmega-eventsimpacts192–3;Netherlands51–3,54;privatisation18–9,20,24–5;stigmatisation24–5;Sweden53–4;tenure31;UnitedKingdom24,29–30,54;UnitedStatesofAmerica40–1,49;WesternEurope50–1;seealsopublichousing

socialjustice86socialrights24socialwelfarepolicy23socio-environmentalvulnerability4socio-politicalstatus116Soto,Hernandode155–6,165SousaSantos,Boaventurade132–3,135SouthAfrica90,91,94,95,164;FIFAWorldCup4,191,193SouthKorea26sovereignty138,149sovereignwealthfunds120,172Spain19,25,26,268;adoptionoftheEuro56;BoyerDecree55;debts56–7;desarrollo[development]period55;economic-financialcrisis,200757;foreclosures13,57;Franco’sdictatorship55;GoldenVisas274,277;homeowneraship25;housingpolicy54–8;mortgagesystem55–7;owner-occupiers55;PeopleAffectedbyMortgages(PlataformadeAfectadosporlaHipoteca–PAH)264–5,271,276–7;PlataformadeAfectadosporlaHipotecaassembly13–4;post-crisisresponses77;propertyprices14;publichousing23;rentallaw273;resistancetofinancialisation276–7;SociedadesCotizadasdeInversiónenelMercadoInmobiliario(SOCIMIs)269–70;subsidies84

SpecialPurposeEntities(SPEs)239speculativeurbanism176squatting132,166

SriLanka185–6statebudgetaryinvestment91state–contractorrelations241–4,249stateofexception149state,the:dismantlementof255;andinformalsettlements136–41;roleof28,29StatuteoftheCity,2001(Brazil)228,231,249StructuralAdjustmentLoans(SAL)158;WorldBank158subprimemortgagecrisis3,16,17,21,50,218subprimemortgages17,46–7subsidies:Brazil214,218–9;Chileanmodel84–91;demand-side82–91;directtobuyers82;financialcredit21;interestrates82,83;reasoningbehind82;savingsprogrammes82,83;taxexemptions82,83;types82–3;WorldBank60

suicides13Suplicy,Marta231SupportforMortgageInterest33–4surpluscapital80surplusinvestment16–7surplusvalue,extractionof151Sweden24,51,53–4SwissFranc70Switzerland24,25Sydney192,193,194Szmrecsanyi,MariaIreneQ.F.242

Tanzania95taxexemptions,subsidies82,83TaxReformAct,1986(USA)43TelAviv14Telles,Vera128–9,140Temer,Michel263tenure:communalforms132;continuumofcategories166–7;property124–5tenurereform62tenurerelations112tenurerights124–5tenuresecurityandinsecurity18,36,105–14,129,154–5;BuenosAires109;Cambodia105–6;China170–1;crisis111–4;dispossessions176–97;Haiti107–8;informalsettlements107–8,109,112;Jakarta106–7;andlandtitling164;livinginrisk182–6;Maldives108–9;andmegaprojects170–97;andpoliticaleconomy113;RiodeJaneiro109–11;riskgroups113;andurbanrestructuringprojects109–11

territorialexclusion4territorialstigma126–49,196;Brazil208;constructionof149;andthestate136–41;andurbanplanning136–41

Thailand98Thatcher,Margaret30Tilly,Charles278title-grantingprogrammes114Toki180,181Tokyo193Toronto232,233–4tourism108–9,159,185–6TownandCountryPlanningAct,1947(UK)29toxicassets,saleof267–9transitioneconomies64travellergroups145tsunami,IndianOcean,2004185TudorWaltersReport28Turkey164;expropriationprocedure180–1;gecekondus179–82;TransformationofAreasunderDisasterRisk181

UDN(NationalDemocraticUnion),Brazil209unemployment18,37,118UNFoodandAgricultureOrganisation120UN-Habitat93,94,112–3,166,196;GlobalCampaignforSecureTenure154;SlumUpgradingFacility94UnitedKingdom19;austeritymeasures79;bedroomtax1–2,14–5,37,39;councilhouses29–30;counciltax38;DepartmentforInternationalDevelopment155;deregulation30;fiscalausterityprogramme1,36–8;HelptoBuyEquityLoans78;HelptoBuyMortgageGuarantees78;HelptoBuyprogram35,78;houseprices26;HousingAct,198030;HousingandPlanningAct,190928;housingbenefits37–8;housingcrisis32–4,39–40;housingpolicy28–40;housingtenure31;LocalHousingAllowance38;MontagueReport274;mortgagecrisis,200733–4;MortgageInterestReliefatSource(MIRAS)31;NationalAssistanceAct194829;NewBuyGuaranteeScheme35,78;planningsystem34–5;post-crisisresponses78;PrivateRentedSectortask274;privatisation18,30–1;publicexpenditure32–3,37;real-estateprices32;rentalhousing274;rentalsector31,32,34;rentarrears38;rents38;RighttoBuysystem25,30–1,35–6;socialhousing24,29–30,54;TownandCountryPlanningAct,194729;travellergroups146;underproduction32;UNrapporteurvisits1–2,3,4;WelfareReformLaw,201236–7;welfarereforms79;welfarestate31

UnitedNations93UnitedNationsDevelopmentProgramme(UNDP)108UnitedNationsHumanRightsCouncil(UNHRC)3UnitedStatesAgencyforInternationalDevelopment90,94,163,210UnitedStatesConferenceofMayors49UnitedStatesofAmerica19,26;TheAmericanRecoveryandReinvestmentAct,200977;civilrightsmovement41;CommunityReinvestmentAct,197746;DepartmentofHousingandUrbanDevelopment27;deregulation19,46–7;displacement266;dispossessions272;evictions272;FairHousingAct42;FederalReserveAct,191340;foreclosures48;FultonCounty,Georgia265,272;homelessness273;homeownership41–2,46;HousingAct,1937(Wagner-SteagallAct)40–1;HousingandCommunityAct

42–3;housingcrisis47–9;housingpolicy19,40–50;housingprojects41;HurricaneKatrina182–3;Low-IncomeHousingTaxCredit43;MakingHomeAffordableprogramme77;mortgagesystem40–50;NationalHousingAct,193440,41;post-crisisresponses76–7,79;privateequityfunds268,269;privatisation25;publichousing19,27,41,42–6,270;rentalhousing268,270,271–2;rent-controllegislation48;socialhousing40–1,49;subprimemortgagecrisis3,16,17,21(actually22),50,218;taxexemptions83;TaxReformAct,198643

urbandevelopment,promotionstrategies175urbaninfrastructurefunds173urbanlandmarkets141–2urbanlegislation141,141–2urbanpacts229urbanplanning113,141–9,230–1,280urbanpolicy280;Brazil245–56urbanpoor92–3urbanregulation17urbanisation115–9,124;economiclogic142–3;exclusionary142;investment137;politicaleconomy17USSR61,65USStateDepartment161

vacancyproblem90Vainer,Carlos231,247Valia239valuestorage17Vancouver193,194Varley,Ann164Vemprarua(Cometothestreet)261Venezuela60,90Vitacon273vulnerability,socio-environmental4vultureinvestors266–9

wages117,118welfareinstitutions,dismantlementof20WelfareReformLaw,2012(UK)36–7WesternEurope,mortgagesystem50–8WesternNorth,the2Whitaker,João236,240Wilderode,DanielJulienvan234–5Woningcorporaties52work,andland150–1WorldBank18,24,90,94,94–5,166–7,196,212,214,272;CapitalMarketDepartment63;Development

PolicyLoans(DPL)158;Housing:EnablingMarketstoWork19–20,21,61–3;housingfinanceloans61;housingfinancialisationrole59–64;housingsubsidies60;instruments61–3;andlandreform155,160;landtitlingprogrammes157–8;PrivateSectorDevelopment(PSD)Department167;Public–PrivateInfrastructureAdvisoryFacility(PPIAF)174–5;StructuralAdjustmentLoans(SAL)158;structuraladjustmentprograms60–1

WorldCupandOlympicGamesPeople’sCommittee245–6WorldSummitforSocialDevelopment,1995154WorldWarI28WorldWarII28,48

Yiftachel,Oren143youngpeople39Yugoslavia65Yunus,Muhammad92,93Žižek,Slavoj279

zoningliberalisation232–5