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Housing conditions

The nature of the housing problem

Housing conditions in Latin America's largest cities are clearly far from good. Too many people lack services and infrastructure, too many live in homes built of flimsy materials, too many live in overcrowded accommodation, too few have full security of tenure. During the lost decade of the 1980s, conditions may well have deteriorated. At the same time, the situation should be put into context. Latin America's largest cities have relatively few homeless, certainly when compared to the situation in the major cities of the developed world (World Bank, 1992:14). And, despite the grave problems, most families live in adequate accommodation.

Table 4.2 Service delivery in major Latin American cities, around 1990

Sources:
a. Gavidia, 1994:21.
b. Lee, 1994:31.
c. Taschner and Bruna, 1994:100.
d. Webb and Fernández, 1991: 254.
e. Hataya et al., 1993:65.
f. Special tabulation of National Household survey provided by Hamilton Tolosa.

Of course, large numbers of people live in self-help housing and, because the number of self-help houses has increased dramatically over time, many would argue that the shelter problem is out of control. Indeed, concern that the Latin American city might be overwhelmed by shanty housing and its revolutionary inhabitants has long been one of the great fears of many observers (German), 1973; ECLAC, 1973). Table 4.1 seems to demonstrate that the fear was real; millions of people in Latin America's largest cities now live in self-help housing. In Lima, two families in five live in barriadas and pueblos jóvenes, some 1.8 million people in total. In Caracas, the total number of barrio dwellers is similar but accounts for three caraqueños out of five. In every city, the proportion of the population living in some kind of self-help accommodation has increased through time.¹

The figures remind us of the problems facing the poor in Latin American cities, but they actually tell us little about either political attitudes or housing conditions in self-help settlements. The increase in self-help housing has not led to a social revolution; indeed all the evidence points to the fact that home ownership in self-help settlements has had a politically conservative effect (Castells, 1983; Cornelius, 1975; Eckstein, 1977; Perlman, 1976; Portes, 1972; Ray, 1969). Self-help housing has also helped to improve the housing stock. What begins as a shanty soon becomes a consolidated house (Margin, 1967; Turner, 1967). Gradually, electricity and water are installed in the neighbourhood, the roads are paved, bus services begin operating, and schools are built (Gilbert and Ward, 1985). On the basis of changes in electricity, water, and drainage provision, past experience can be interpreted very positively. Service improvements have permitted vast areas of shanty towns to be transformed into proper suburbs.

Indeed, table 4.2 shows that housing conditions are generally far better than the figures in the previous table suggest. The vast majority of households in the largest cities now have access to potable water and electricity, and most are connected to the sewerage system. Few cities have more than 5 per cent of their population living in housing built of flimsy materials.

Three decades of improvement

Housing conditions in the largest cities improved consistently between 1950 and 1980, a period of rapid population growth. By 1980, the provision of infrastructure had never been better (Dixon, 1987). While the quality of services varied considerably from city to city, table 4.3 shows that water, sewerage, and electricity delivery generally improved.

Figures for individual cities strongly support that conclusion. In Bogotá, the proportion of homes without water fell from 14 per cent in 1951 to 4 per cent in 1985 and those without electricity from 20 per cent to 4 per cent (Molina et al., 1993: 39). In the municipality of São Paulo, the proportion of dwellings with piped water increased from 58 per cent in 1950 to 64 per cent in 1970; those with electricity increased from 85 per cent to 96 per cent (Batley, 1983: 118).

If service levels generally improved, so did the tenure situation. In so far as most Latin American families claim that they wish to live in their own home, the dramatic jump in home ownership in Latin American cities is a sign of housing improvement (Gilbert, 1993;

Table 4.3 Urban service delivery in selected Latin American countries, 1960-1990 (percentage without service)

Sources: United Nations, 1987: tables 42-4; World Bank, 1994: table A2.
a. 1964.
b. 1964.
c. 1980.

Table 4.4 The development of owner-occupation in selected cities since 1950 (percentage of households owning their home)

Sources: Gilbert, 1993; Riofrio, 1978: 58; INK, 1986a; Jaramillo, 1992: 25; Valladares, 1984: 146; Yujnovsky, 1984: 345; and some national census and household survey figures.

Gilbert and Varley, 1991). Since 1950, the trend in every large Latin American city has been for more and more people to own their homes (table 4.4). The causes of this trend are clear. First, there has been a massive increase in the size of the middle class. Second, the development of mortgage systems has allowed more people to buy formal-sector homes. Third, Latin American governments have strongly encouraged the trend towards home ownership. Fourth, transport and infrastructure improvements have permitted the spread of suburbia. Finally, the massive growth of self-help suburbs and government programmes to service and legalize these areas has increased home ownership among the poor.

Obviously, Latin America's major cities continue to face huge shelter problems. The improvements have not been universal; indeed, a major problem in drawing conclusions about social conditions in Latin American cities is that they vary so much between different areas of the city. If service provision has improved remarkably in the more consolidated areas of every city, the authorities have never managed to keep up with the constantly increasing demand for services. The key problem in every city is to cover the newer areas. Figure 4.1 shows the changing pattern of water provision in Mexico City between 1950 and 1980. While provision in the metropolitan area improved consistently through time, there were always areas on the edge of the city which lacked services. If some governments have kept up reasonably well with the population explosion (Bogotá, Mexico City, and Santiago), others have done rather badly (Lima and São Paulo).

In addition to the obvious spatial variations there are vast differences in the quality of services between different income groups. Table 4.5 shows how dramatically the quality of servicing differs between income groups in Lima. A similar picture can be drawn for every other major Latin American city.

Housing during economic recession

If the quality of housing improved in most cities between 1950 and 1980, the trend since 1980 is much less certain. Although we still lack data for many cities for the 1990 round of census figures, it is likely that deterioration set in during the "lost decade" (Iglesias, 1992).²

We know that the incidence of poverty increased greatly in Latin America during the 1980s, particularly in the cities. The proportion of families living in poverty in urban Latin America rose from 25 per cent to 32 per cent between 1970 and 1985, an increase of almost 50 million people (UN, 1989: 39). The combined impact of inflation, rising unemployment, and cuts in social expenditure reduced living standards in most cities by years - in places by decades.

Housing conditions were clearly hurt by this rise in poverty. First, formalsector construction slowed in most cities. Declines in private-sector construction were accompanied by cut-backs in state construction. During the 1980s, governments in Brazil and Venezuela cut back on their massive building programmes (Gilbert, 1989; Shidlo, 1990; Valença, 1992). Current doctrine in Argentina, Brazil, Mexico, and Peru is to maintain that position. In booming Chile and Colombia, the approach is offer subsidies to families to buy homes constructed by the private sector (Persaud, 1992).

Figure 4.1 Growth of piped water provision in Mexico City, 1950-1980

Table 4.5 Service delivery by income group in Lima, 1990 (percentage with service)

Source: Glewwe and Hall, 1992: 30.

Second, the self-help consolidation process was slowed by falling real incomes (Gilbert, 1989). Households had smaller disposable incomes with which to buy the materials needed to improve their homes. They were forced to spend more of their income on food (Cordera and Gonzalez, 1991; Gutiérrez, 1990). Cuts in social spending by the state forced more households to consume private education and health. Longer working hours sliced into the time available to consolidate the house. The prospects for improving the self-help home deteriorated in consequence.

Third, most self-help settlements received fewer services because many public utility companies were badly affected by the debt crisis. Indeed, it was often the seriousness of their external commitments that accentuated national debt problems (Connolly, 1985; Gilbert, 1990). Major loans were contracted during the 1970s to expand service capacity. With the rise in real interest rates in the late 1970s, and rapid devaluation of local currencies occurring against the dollar, servicing external debts became a major burden. One result was a cut in government investment programmes. Another was that tariffs to customers rose. Local customers were increasingly charged commercial prices, sometimes as a result of privatization, but usually because state agencies were attempting to improve their budgets and to raise their revenues in order to repay the foreign loans. In Bogotá, electricity tariffs soared in the 1980s (see chapter 11). In Santiago, electricity and water supplies to many families were cut when tariffs began to rise faster than household earnings (Rodriguez, 1989).

Fourth, local governments sought to increase their revenues by raising taxes. Land taxes rose in many cities (Ward, 1990). The only benefit for selfhelp settlers was that governments were more disposed to give out land titles. Large numbers of land titles were distributed to self-help settlers in Caracas, Lima, Mexico City, Rio de Janeiro, and Santiago (Azuela, 1989; Coulomb and Sanchez, 1991; Gilbert, 1993; Persaud, 1992).

Fifth, although the recession slowed the pace of self-help consolidation, it also forced more families to contemplate the self-help option. Faced by cuts in their real wages, many households have been forced to move out of rental accommodation. Some had little option but to attempt to move into a squatter settlement. Fortunately, their chances of occupying land free or very cheaply increased as a result of the wave of democratization that swept through the region during the 1980s. Many newly elected democratic governments were unwilling to repress land invasions; indeed, in Caracas, Lima, Rio de Janeiro, and São Paulo some actually encouraged informal processes of land alienation. With the debt crisis cutting their ability to supply urban populations with either housing or services, governments looked for less expensive ways of tackling the housing question. The poor had to be housed, but, if proper accommodation could not be provided, then the poor had to be allowed to do it themselves. Impoverished governments simply intervened less. That may not have been a satisfactory response, but at least it was less unpopular than repressing land invasions or insisting on unrealistically high levels of service provision. Democratic governments would not be reelected if they reacted otherwise. In cities, where the invasion of land was permitted, or where land could be acquired very cheaply through illegal processes such as the alienation of ejidos,³ the result was a proliferation of new flimsy accommodation.

Table 4.6 Tenure by income group in Bogotá and Lima

Sources: Jaramillo, 1990: 82; Webb and Fernández, 1991: 251.

Sixth, in cities where land invasions were seldom permitted (for example, in Bogotá, Buenos Aires, and Mexico City), the cost of self-help plots proved too expensive for many households. Here the quality of accommodation deteriorated in the sense that more families were obliged either to rent or to share accommodation. In cities where renting had long been a common refuge for poor families (table 4.6), many newly formed households rented rooms in the neighbourhood. In Santiago, where renting is expensive, sharing increased markedly after 1973 and, in 1984, possibly as many as one family in five occupied an improvised shack in someone's back garden or used a room in their house (Ogrodnik, 1984). Most of these allegados were young, many were poor, and a high proportion of families were headed by single women (Gilbert, 1993: 86; Necochea, 1987; Trivelli, 1987). Whether the local response was for more families to share accommodation or for renting to become more common, the overall result was for room densities to rise.

In sum, recession damaged the prospects of upward residential mobility for many families, even if the precise impact in different cities varied. In some cities there was a huge expansion in the amount of flimsy self-help housing; elsewhere, the incidence of renting and sharing increased with little expansion in the squatter population. Local variations in housing markets, state policies, economic health, and political dynamics will have determined the final outcome (Gilbert, 1993).

Unfortunately, we have too little data to document the exact impact of the recession on housing conditions in Latin America's largest cities. However, evidence from Lima, the city worst hit by the recession of the 1980s, broadly supports the idea of deteriorating housing conditions. Table 4.7 shows that among the poorest 10 per cent and 30 per cent of households in Lima, the incidence of invasions increased markedly. For the city as a whole, the proportion of the population living in invasion settlements rose from 2 per cent to 10 per cent. Access to piped water also deteriorated among the very poor. In other respects, the signs of deteriorating conditions are less obvious; access to electricity clearly improved and the incidence of renting remained more or less constant.

Size of city as an influence on housing conditions

There is little empirical support for the belief that housing conditions in the giant cities are worse than in Latin America's other cities. Indeed, given the huge variation between countries, it would be surprising if there were any close correlation between city size and housing conditions. Even within countries, local housing and employment conditions vary so much that there is little relation between size of city and housing conditions. Table 4.8 illustrates this point by showing how the proportion of households living in favelas in Brazil's largest 15 cities varies independently of city size. Indeed, while the proportion of favelados in São Paulo is lower than the average for all 15 cities, that for Rio de Janeiro is higher. When the higher figures for the northern and north-eastern cities are removed, São Paulo still has a lower average than the revised national figure. The incidence of self-help housing is not linked to the size of the city.

Table 4.7 Housing conditions during economic recession, Lima, 1985-1990

Source: Webb and Fernández, 1991: 253.

It is also important to recognize that the ranking of cities in terms of housing quality varies with the indicator used. Some cities do well on one indicator but badly on another. Table 4.9 shows that the quality of housing between cities in Latin America and the Caribbean varies according to the nature of the land market, local employment characteristics, governmental ability to provide services, climate, and relief. The principal problems facing one city may be of minor importance in another. In one city, homes may have poor infrastructure and services but offer families plenty of space. In another city, families may suffer from severe overcrowding but have plenty of services. It is difficult to tell from table 4.9 whether the housing problems of Bogotá are better or worse than those of Kingston, Jamaica. Conditions in the former are more crowded and there is a much longer journey to work. However, households in Kingston have less access to drinking water and are much less likely to own their home. This table suggests that there is no simple explanation of bad housing conditions and city size certainly explains very little.

If there are two reasonably consistent differences between larger and smaller cities, the first is that the former tend to be better serviced and to have more tenants. Table 4.10 shows that conditions in large cities are generally better than in the rest of the urban area of the same country. The major cities tend to receive more resources from central governments because of their political importance, to have developed better-organized servicing agencies because of the pressure exerted by the large number of powerful national and foreign companies located in the major cities, and to have a higher tax base with which to contract foreign loans.

Table 4.8 Favela households by size of city in Brazil, 1990

Source: IBGE, 1991: table 5.2.

The other major difference between larger and smaller cities is in the incidence of renting and sharing. Table 4.11 suggests that owning a home is more difficult in large metropolitan areas than in smaller cities. While the evidence is hardly conclusive, La Paz, São Paulo, Bogotá, Mexico City, and Caracas all have distinctly lower rates of ownership than their respective national averages. Of course, there is hardly a close relationship between size and ownership; too many other variables influence the level of ownership. This is demonstrated by evidence from Mexico which shows that several cities, including Guadalajara and Puebla, have lower levels of ownership than Mexico City.

Ownership tends to be lower in larger cities because travel times from the periphery to the urban centre are much longer. As such, many tenants living in central areas choose not to move out to the self-help periphery (Gilbert and Varley, 1991). The choice between central and peripheral accommodation in a smaller city is much less stark. Rates of ownership are also lower because access to land is generally more difficult. Governments tend to control state lands better in capital cities than elsewhere and land-price/earnings ratios tend to be higher in the largest cities.

Table 4.9 Housing indicators for selected Latin American cities, around 1990

Source: World Bank, 1992.

Table 4.10 Water and sewerage provision by urban area and major city, 1990

Sources: Pan-American Health Office; table 4.2.

Table 4.11 Housing tenure by major city and in total urban area, around 1980

Sources: Table 4.4 and Gavidia, 1994:23.

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