JS-26.2
The Financialization of Housing Developers and Cooptation of Social Housing Policies. Territorial Impacts of a Market Policy
Since the late '90s the real estate sector began a restructuring process focused on two dynamics: the financialization of real estate developments and the spreading of activities of few construction companies over the country through a monopolization process.
Between 2003 and 2004, other processes reinforced these previous trends: (a) Real estate companies have made IPO on the Stock Exchange, capitalizing on and diversifying their operations; (b) Changes in regulatory funding policies expanded exponentially the credit conditions; and (c) Economic growth has been fostered by government policies, with a progressive fall in general interest rates and increases in wages and incomes for lower and middle classes.
The 2008 crisis strongly affected real estate sector that by then had invested large amounts of capital in land banks. As a solution to the crisis in the sector and as a countercyclical instrument to foster economic growth, the government launched a new housing program called “Minha Casa Minha Vida”. The scope of the program has intrinsic impact on urban structure, inducing increase of urban inequalities.
Since 2005, a continuous and sharp increase in property prices, supported by the credit expansion and also by local policies aiming the preparation of cities for the mega-events (World Cup and Olympic Games), influenced the configuration of urban space of Brazilian cities, emphasizing the social segregation. As an empirical case, this paper will analyses the location of MCMV projects in Rio de Janeiro combining the spatial pattern with the changes of housing prices. The paper will explore the economic, social, political and territorial sustainability of this model.