The Future of Global Peripheral Cities

Global Cities in the Context of Peripheral/Emergent Capitalism

“Underdeveloped,” “developing,” “Southern,” “dependent,” “peripheral,” “semiperipheral,” and “emerging” are only some of the adjectives used to classify Brazil from an academic or ideological perspective. The BRICS (Brazil, Russia, India, China, South Africa) acronym expresses the prestige that Brazil and other countries acquired at one point in the beginning of this century, a period marked by profound change in world geopolitics. ¹ From a country that was an object of jokes to foreigners and Brazilians alike, Brazil became an international player and role model—according to the mainstream media—in terms of productive innovation, management of social policy, and even urban policy. ²

The new phase of international capital and markets was given the glamorous name of “globalization,” and some cities were termed “global” (Sassen, 1992). Globalization is simply one more stage of the old process of internationalizing capital. In 1945, Caio Prado Junior, the first Brazilian historian who was a Marxist, stated that in the contemporary world one could no longer speak of economic histories of individual countries but only of the economic history of mankind. Prado (1972) did not ignore the specificities of his country when he wrote his economic history of Brazil, in which he highlighted the Portuguese colonial heritage, prolonged slavery, persistent inequality, the ambiguous role of the white free worker in a society based on slavery, and the dominance of plantation-based exports, all legacies that haunted the country’s development. In each of these specific features, however, he also saw the marked prevalence of international interests.

The important aspect here is that globalization in Brazil was suffocated for a period under the influence of the theories of development/underdevelopment produced by the Economic Commission for Latin America and the Caribbean (ECLAC) to explain the economic backwardness of Latin American societies in the mid-twentieth century. ³ In spite of being criticized for its dualistic view, ECLAC was, during the period, a forum for innovative and independent theoretical production about the condition of Latin America in the context of the global division of power. Given Latin America’s underdevelopment, ECLAC attempted to draw up development strategies that generated proposals for (late) industrialization based on an import-substitution policy that was known as developmentalism. Far from disappearing, this relationship has been maintained and has even been deepened, especially in cities, because of globalization. There is some difficulty in using the labels “developed” and “underdeveloped,” since Brazil is neither one nor the other, but I also reject the stage-based definition of the term “developing.” I shall restate the need to maintain a dialectical relationship between developed (or neo-developed) sectors and backward (or neo-backward) sectors to explain the reality of countries like Brazil in a world context that has been revolutionized by advances in communications technology and changing geopolitics.

Preceding the ECLAC studies or sometimes following the path they opened, Brazilian scholars, Weberian and Marxist, have studied the structural condition of Brazil in peripheral capitalism, and this helps us better understand cities (see Arantes and Arantes, 1997). Some of the concepts used to explain the paradox of a process that is modernized by feeding on outdated mechanisms are “uneven and combined development” (Oliveira, 1972), “rupture and continuity” (F. Fernandes, 1975), “conservative modernization” (Tavares and Fiori, 1993), and “caught capitalism” (Furtado, 2008). In such a society, liberal in rhetoric but slave-based in the sphere of production, culture constitutes “ideas out of the place,” according to Roberto Schwarz (1990).

Cities are remarkable evidence of this theoretical construct of peripheral capitalism, and within them the best example is perhaps the construction of housing (and entire parts of the cities) by residents themselves—low-income workers who, little by little in their time off over the course of many years, ignoring any and all city rules and regulations, build their dwellings on illegally occupied land. Francisco de Oliveira (1972) provided the key to explaining this practice: it is a result of the low wages these populations receive, which make it necessary for them to spend their weekends and days off building their homes. This practice of urban development contributed to the accumulation of capital throughout the period of industrialization in Brazil, particularly from 1940 to 1980, when the economy grew at rates of approximately 7 percent per year and urbanization increased by 5.5 percent per year, according to the Instituto Brasileiro de Geografia e Estatística (Brazilian Institute of Geography and Statistics—IBGE). Thus, industrialization and low wages resulted in urbanization and low wages (Maricato, 1976; 1979; 1996). Some modernization and some development (capital-intensive industrialization and the manufacture of durable goods) depended, in a certain premodern or even precapitalist way (for example, building one’s own dwelling), on the production of part of the city. This was and still is essential to the national and international process of capital accumulation. It was superbly applicable to the production of cities where the automobile industry—Volkswagen, Chrysler, and Mercedes-Benz—was located in the 1950s and is still applicable today to cities that we call “global.” More than 80 percent of the residents of the favelas surveyed live in the main Brazilian cities, where we find one-third of the housing deficit in the country, according to the IBGE’s 2000 census (Table 1). Updated data show that between 1980 and 2010 the population living in favelas grew more than the total population and more than the urban population in the past 30 years (Márques and Saraiva, 2011).

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Table 1

Slum Dwellers in the 11 Largest Brazilian Cities, 2000

City	Population	Housing Deficit	% Total	Households in Slums	% Total
São Paulo	17,878,703	596,232	9.0	416,143	25.2
Rio de Janeiro	10,710,515	390,805	5.9	349,183	21.2
Recife	3,337,565	191,613	2.9	57,723	3.5
Belo Horizonte	4,357,942	155,645	2.3	107,212	6.5
Salvador	3,021,572	144,767	2.2	65,443	4.0
Fortaleza	2,984,689	163,933	2.5	84,609	5.1
RIDE Brasília	2,952,276	146,667	2.2	8,246	0.5
Belém	1,795,536	117,004	1.8	130,951	7.9
Porto Alegre	3,718,778	116,010	1.7	53,447	3.2
Manaus	1,405,835	93,952	1.4	39,505	2.4
Curitiba	2,768,394	75,668	1.1	42,854	2.6
Total	54,931,805	2,192,296	32.9	1,355,316	82.1

Source: MCidades/IPPUR, Observatório das Metrópole, database Fundação João Pinheiro, IBGE 2000, prepared by Leticia Sigolo.

Note: The IBGE has no accurate data on the slum population not only because it disregards communities with fewer than 50 households but also because it is unaware of many land occupations.

Land occupies a central position in Brazilian society. Social, economic, and political power has always been associated with property ownership, whether in the form of slaves (until 1850) or in the form of land. This phenomenon, called “patrimonialism,” is also present in the privatization of government assets, which have been treated as part of the culture of personal property. Patrimonialism is linked with Brazil’s historical social inequalities, which are noteworthy and persistent, permeating every aspect of the country’s life. These features, in turn, are connected to the constant export of excess wealth to core capitalist countries or to corporations in those countries, as currently happens with the auto industry. Celso Furtado (2008) has mentioned on several occasions the close connection between the export of excess wealth and the consumption of luxury goods by the minute national elite. This scenario can only result in a stagnant market, although this market has gone through changes with the increase in consumption during the governments of President Lula. A recent UN Habitat (2012) report shows that Brazil, albeit the sixth-largest economy in the world, has one of the worst income distributions in the continent. There are only three other countries in Latin America with worse inequality rates than Brazil: Guatemala, Honduras, and Colombia. The inequality at the national level is also present in the cities.

Obviously, for this kind of capitalism to work as part of the international division of labor, urban workers need to be integrated into the productive process but excluded from a large portion of the benefits that a consumer market makes available, and especially from the cities. They are subject to a powerful ideological engine that is not simply a matter of repressing them but relies on the exchange of political favors as a way of mediating social relationships. This is the way Brazilian cities work and the sui generis form of citizenship in Brazil: rights for a few, modernization for a few, cities for a few (Silva and Castro, 1997). ⁴

The historical features of large cities under peripheral capitalism may be summarized as follows (see Maricato, 1996; 2000; 2011a):

The enduring illegal nature of the occupation of land shapes the city’s periphery, which is frequently a repository of people in areas not served or poorly served by urban infrastructure and lacking public or private social infrastructure. In some state capitals in the North and Northeast (Belém, São Luiz, Fortaleza, Terezina, Recife, Maceió, and Natal), the proportion of illegally built dwellings is higher than that of legally built housing. In the South, Southeast, and East, the proportion of illegally built dwellings in the core cities is almost 15 percent in São Paulo and Curitiba, 25 percent in Belo Horizonte, Rio de Janeiro, and Porto Alegre, and more than 30 percent in Salvador (see Maricato, 2001).

Connected to the above is the lack of control of the state over the use and occupation of urban land in certain parts of the city, especially those where the poor population resides. Locked out of the formal city (or market), the poor population occupies areas that are left or that are of no interest to the real estate market. Many of these areas are environmentally fragile (with mangroves, dunes, and forests protected by law, reservoirs, permanent protection areas, national parks, state parks, and steep slopes). In addition to the environmental impacts, dwellings built in these areas are under constant risk of collapse, which during every rainy season accounts for accidents and casualties.

Another variable in this picture is the limited housing market. There is a formal or legal capitalist market for a small portion of the population, a luxury market that is highly speculative. The construction sector is characterized by low productivity and intense exploitation of the labor force. ⁵

The rules and regulations governing urban development are detailed and city plans prestigious, but they are limited by the operational weaknesses of the state. Laws and plans that are not enforced or enforced in only part of the city reveal the importance of rhetoric and discourse and the lack of importance of urban reality with regard to certain social classes (Maricato, 2000). The powerful legal and bureaucratic apparatuses of the Brazilian state contrast with its fragile operational capacity, enabling us to compare it to an “elephant with the feet of a heron” (see Maricato, 2011a). Power resides in the offices, including those with the highest salaries and the best resources and equipment. Enforcing urban legislation plays a strategic role in social relations in that it confers the status of “illegal” on the outcast. Land use regulation forces people out. There is no place for the poor in the legal city (Albuquerque, 2007; Moura, 2009; Pilotto, 2010; Sánchez, 1997).

Widespread favoritism (clientelism) results in the privatization of the state apparatus and even mediates relations between the executive, legislative, and judicial branches in the city. This apparent flexibility is combined with a remarkable bureaucratization resulting from exaggerated procedures and excessively detailed rules and regulations. Therefore, it is easy to draw up plans but difficult to implement them.

Metropolises and Neoliberal Globalization

The changes that followed the international capitalist restructuring impacted Brazil heavily from the 1980s on, reorienting demographic, social, economic, and territorial (and therefore also rural, urban, and environmental) dynamics. The large transnational conglomerates—the main drivers of globalization—involved in the production and export of commodities such as grain, meat, pulp, ore, and ethanol succeeded in refocusing the urban settlement pattern along the country’s coast, which had survived from the seventeenth century. The growth of cities in the Brazilian interior followed the establishment of a powerful agribusiness sector that was oriented toward capitalism and based on state-of-the-art technology. This changed the landscape of many regions and transformed the relationships among them.

Contradicting the previous trend, the 1980 census indicated that large cities were growing less than medium-sized cities (cities with populations between 100,000 and 500,000), and among the large cities those with the highest growth rates were the ones in the North and the Center-West. After 25 years of this model, Brazil was divided in two by the year 2000 (Bacelar, 2008). The country’s traditionally richer and more developed regions, the Southeast and the South, were joined by the Center-West, which had been taken over by agribusiness. Despite marked and persistent inequality, all other Brazilian regions grew faster than the Southeast (which is still the economic epicenter of Brazil), and this had the effect of lowering regional inequality rates. São Paulo’s proportion of the nation’s industrial production dropped from 80.7 percent in 1970 to 61.8 percent in 2005, still the largest in Brazil. The sprawl of large cities across the country reflects new strategies for locating manufacturing and commercial sectors, innovative industrial activities, and an increase in communications, finance, and educational services. Regional networks serve export-oriented production, and new gated communities dispute with low-income populations for land in peripheral urban areas.

There is no doubt that globalization, dominated by neoliberal ideology, has had a powerful adverse impact on large cities for more than two decades. This has happened with the endorsement of the Brazilian elite. The sharp drop in economic growth rates and increase in unemployment was accompanied by limited government investment in social services. Dominated by the Washington Consensus and with the cooperation of local elites, these forces have operated against an unequal society in sharp opposition to the interests and needs of the majority of the Brazilian population (Cano, 1995; Tavares and Fiori, 1997). Three critical urban policies—transportation, housing, and sanitation—have been completely ignored or dealt with erratically, receiving inadequate investment for over 20 years. The precarious teams of poorly equipped government employees and institutions were in tatters when public investment was renewed with the Lula administration in 2003 (Maricato, 2011b).

Perhaps the indicator that best illustrates what we might call a true urban tragedy is the homicide rate, which increased by 259 percent in Brazil between 1980 and 2010. In 1980, the average murder rate in the country was 13.9 per 100,000 inhabitants. In 2010, this rate skyrocketed to 49.9 (Waiselfisz, 2012). This is part of a larger picture in which the state has abandoned its responsibilities to the people. Violence is deeply rooted in the country’s slavery-based society, which lasted until 1888, and is one of the main legacies of Brazilian cities.

Not all social indicators have been negative as a result of the urbanization and industrialization of the twentieth century, especially after the 1930s. Rates of child mortality, life expectancy, literacy, access to drinking water and garbage collection improved between the 1940s and 2008 because of the transformation of living conditions promoted by urbanization (Maricato, 2001). However, more detailed study reveals the same contradictions across Brazilian society. For example, almost 13 percent of households in the São Paulo metropolitan region, the richest in the country, are not connected to the sewerage system, and 56 percent of the sewage collected is discharged into the rivers that run through the metropolis (Câmara Municipal de São Paulo, 2014).

On resuming investment in sewerage and housing, the federal government created the Ministry of Cities. A lot was expected from the administration of the first industrial worker to win a presidential election in Brazil, especially in urban policy, because since its founding the agenda of the Partido dos Trabalhadores (Workers’ Party—PT) had been based on the social movements that fought for urban reform.

The Urban Reform Movement during the Lost Decades

After a long period of growth and unequal income distribution (1940 to 1980), the Brazilian economy faced a decline sharply affected by the tax crisis. Swimming against the world current, which pointed to the weakening of leftist parties, ⁶ Brazil found itself in a contradictory situation. While the economy showed a sharp decline, there was a struggle against the military dictatorship, and social movements and workers were preparing platforms to change policies. In the 1980s new political parties such as the PT were created, and parties such as the Communist Party of Brazil and the Brazilian Communist Party were made legal. The unions created the Central Única dos Trabalhadores (Unified Workers’ Central – CUT), and the early urban social movements—a novelty on the Brazilian political scene—created the Central de Movimentos Populares (Popular Movement Central—CMP).

A vigorous movement for urban reform revived the proposals drafted in the 1960s in the context of revolutionary struggles in Latin America. The intention was to build a bridge between the present and the agenda the military had interrupted in 1964. In the 1960s, 44.67 percent of the Brazilian population lived in cities. By 1980 this figure had risen to 67.59 percent (IBGE, 2012). Suddenly there were almost 50 million people more living in cities, and urban problems became more severe. The urban reform movement was made up of professional organizations (architects and urban planners, engineers, lawyers, and social workers), unions, neighborhood associations, nongovernmental organzations, researchers, professors, and intellectuals, among others. Under its influence, congressional committees were created and sympathetic mayors, city council members, and state representatives were elected. In the active political scene of the time one could find social movements organized by urban residents, unions, and political parties (organized around the Movement for Urban Reform); academic research that analyzed urban realities, identifying the strategies used to perpetuate the low-income workforce and dismantling the symbolic and ideological constructs that dominated cities; and innovative local governments that were experimenting with new agendas that had socially, economically, and politically inclusive programs.

During the military dictatorship (1964–1985), mayors of capital cities were appointed by the state governors, who were appointed by the president, who, in turn, was appointed by the military. Therefore, any experiment with local democratic management was carried out in municipalities, where there were still direct elections for mayor. Among urban experts, the working-class city of Diadema, in the metropolitan region of São Paulo, was important for socially inclusive proposals that were drafted in the midst of social struggles (see Hereda and Alonso, 1996). After 1985, when direct elections were once again held in capital cities, the innovative Porto Alegre experiment, with participatory budgeting came to light (Genro and Dutra, 1989). In São Paulo, two women were elected to govern the most important city in Brazil: Luiza Erundina (1989–1992) and Marta Suplicy (2001–2004). Original proposals were made in areas such as housing, social welfare, public transportation, and culture. ⁷ Many other cities also introduced reforms—Recife, Belo Horizonte, Fortaleza, Belém, and Aracaju, among others.

The local governments that put together innovative management practices as part of what was called popular democracy tried to “invert priorities” when discussing budgeting and social participation across all levels. The PT administrations were so successful that a “PT way of governing” was identified (Magalhães, Barreto, and Trevas, 1999). The proposals they made were creative and effective, providing answers to problems raised by the local population. Thus, architectural, urban, and legal projects related to the “urban liabilities” (the illegal and self-help-built city) gained importance after having long been overlooked by mainstream urban planning. The aims of the main government programs fell into three categories: improving existing urban conditions, designing new urban spaces, and changing urban regulations.

Most parts of cities that were extremely poor and invisible on postcards and sometimes unseen on the planning maps used by the authorities needed urgent intervention to improve housing, infrastructure, sewerage, drainage, and the environment. It was urgent to eliminate the life-threatening risks resulting from flooding, landslides, epidemics, poor health conditions, and impaired mobility. Detailed planning was needed to ensure improved conditions without displacing most of the population. The most important program of this kind was the program for urbanizing the favelas and improving run-down areas. Almost every case required the determination of which households would have to be removed (and obviously the solution for these families had to be provided in advance) because of the development of water, sewerage, and drainage systems and improved roads. The improvement of environmental conditions also required the displacement of some residents (see Cardoso, 2009; Denaldi and Rosa, 2010; Ministério das Cidades, 2010). These programs also included changes that the social movements had fought for such as giving the favelas legal status. ⁸

The tenements in the central areas were a social liability that required attention. Studies have shown that the income generated by the rent paid on small and substandard dwellings was higher than that obtained from conventional housing (Kohara, 1999). Besides demanding improved health and safety conditions, the city administration provided legal aid for the poor. This program inspired a new municipal law requiring tenement landlords to improve their property. The legal aid in question aimed to protect tenants from eviction. One of the most important initiatives for providing children and adolescents in poor neighborhoods with a better quality of life was the creation of unified educational centers ⁹ —high-quality buildings equipped to offer vocational training and leisure activities such as movies, physical education, arts, theater, and music. The centers were an unprecedented idea favoring poor neighborhoods, bringing them a small part of an entirely different universe.

From a social justice perspective, producing new housing and urban spaces would minimize the growth and density of the existing favelas and prevent the emergence of new ones. Renovating or building, individually or collectively, with free professional advice from engineers and architects and special attention to the participation of the community in the choice of the land, the design of the project, and the building of the homes was a successful approach also followed by the social movements and the technical assistance offices. The fees for technical assistance to the social enterprises were included in the construction budget. Nongovernmental organizations (NGOs) have been created by young architects, engineers, and lawyers who did not want to work for the luxury market or the traditional housing market in São Paulo and other capitals. An entire generation of architects graduated with this mind-set, striving to ensure the “right to architecture” and the “right to the city.”

The construction work performed by community labor was a topic of debate among architects and later among the organized population, which, initially, preferred to do the work in groups in order to master the production process, control quality, and improve its own organization (see Bonduki, 1992). Several city administrations invested in plants to produce prefabricated slabs of reinforced concrete for use in new urbanized areas or to improve areas that were poorly urbanized. The concrete slabs were also used in building public facilities. Engineers for the city used new techniques to channelize streams, repairing the engineering work, carried out over decades, that had resulted in the filling of streams and environmental problems. To improve public transportation, corridors for bus rapid transit were created.

New legal solutions were created to hold the market accountable for some of the social housing projects and for improvements in the wealthier areas of the city. The solutions were Urban Operation, aimed at reclaiming areas for the construction of social housing; special zones of social interest, empty areas for the construction of privately owned social housing projects (type 1) and occupied areas where self-help-built dwellings would be legalized and provided with services (type 2); progressive taxes and new real estate registries aimed at equitable taxation; and new rules promoting the “right to architecture” and in particular applying sanctions and fines for vacant buildings, especially those served by urban infrastructure. In the favela projects, a number of studies were aimed at establishing urban standards for this kind of unruly and spontaneous habitat, very different from traditional modernist standards such as carving out wide streets in the formal city. Some of these proposals were part of master plans or city ordinances, and their goal was to provide new guidelines for the growth of cities that ensured the subordination of the right to private property to social interests and the state’s control over land use. The lack of experience and the idealism of advocates made activists rethink the limitations and changes that ought to have been made to the proposals. Constant conflict resulted from the confrontation between the social movements and city councils, the nearly always conservative courts, and the mainstream media, which operated like a political party representing the elites (Fonseca, 2010).

During the 1980s and 1990s, socially engaged researchers and university professors in several areas created what we might call the New School of Urbanism. In the past, these actors criticized the state and public policies, but after engaging with the city administration and as left parties, notably the expanded PT, they started seizing parts of the state apparatus—the executive, the legislatures, and to a lesser extent even the courts. New programs, practices, laws, projects, and procedures including social participation enabled the development of expertise about how to achieve greater urban justice and equality. The macroeconomic hurdles were to be addressed in the future.

There were three political fronts: academic research, social movements, and democratic city halls. These developed and resulted in significant legal and institutional achievements that were advanced in the presidential elections of 2002: new laws based on the 1988 Constitution providing mechanisms for promoting urban justice, the most notable of them the Statute of the City; ¹⁰ new entities such as the Ministry of Cities and the national secretariats for housing, urban mobility, sewerage, and programs for dealing democratically with urban issues; and the consolidation of opportunities for the direct participation of labor, professional, academic, and population leaders, such as the National Urban Conference and the National Urban Council. ¹¹

Expanding Government Investment: Neodevelopmentalism?

To ensure his election in 2002, Lula reached an understanding with the financial market that placed limits on his administration. It began with an affirmation of neoliberalism, which was present in every nook and cranny of the state apparatus. The few lapses included government spending to alleviate extreme poverty, which was in fact the recommendation of the World Bank. By 2003 it was decided that significant resources would be spent on basic sanitation, but this was a response to another of the bank’s recommendations, “cost recovery,” and was adopted despite protests by the activists in the Ministry of Cities. Strict International Monetary Fund rules were not the only ones preventing social concerns from playing an important role in budgeting. There was also the traditional clientelism, which fragmented the limited resources across the country in exchange for support in Congress. How could planning take place in this context? It did not, however, stop the progressive and left ministries from succumbing to planning fever. In fact, they wanted to reestablish the role of the state as planner, regulator, and developer.

There is no doubt that the administration’s social policy made a difference in the lives of millions of Brazilians. The main social programs that continued into the Rousseff administration were the Bolsa Família (Family Grant), the payroll deduction credit program, Universidade para Todos (University for All—tuition scholarships funded by tax discounts in private universities), the family agriculture program, and Luz para Todos (Light for All). The minimum wage increased by almost 65.95 percent, more than the inflation rate, between 2003 and 2012 (DIEESE, 2012). Social security, which supports many low-income families, did not undergo the reforms advocated by the liberals. In addition to these programs, economic growth and higher employment rates brought some hope for better days. Marcio Pochmann (2012) explains the more prosperous population as a shift at the lower levels of the social pyramid rather than the emergence of a new middle class. These sectors of the population increased their share of income from 27 percent to 46.3 percent between 1995 and 2009. The population considered to be in poverty dropped from 37.2 percent to 7.2 percent in the same period. Part of the population that moved out of poverty found jobs in construction.

The Ministry of Cities

The Ministry of Cities was created in 2003 following the recommendations of the Housing Project drafted under Lula’s direction in 2001. The central thesis of the project was to expand the private housing market to include the middle class so that the state could focus on providing subsidies to the lower-income population. ¹² The ministry developed a proposal, with a budget and timetable, identifying the financial resources needed to reduce the housing deficit and another proposal addressing land reform. Transportation and sewerage policies were also developed. Since almost one-third of the Brazilian housing deficit is in large cities, they were prioritized by the project. To increase the private housing market for the middle class, bills were submitted to Congress that related to private development and financing. The main funds were the same ones used to promote significant housing construction during the military dictatorships (especially between 1970 and 1980): the savings and loan systems and the workers’ compensation fund, managed by the state in cooperation with labor (which, based on mandatory savings, also operated as an unemployment fund for registered workers).

The rate of investment picked up slowly, even when the resources were not necessarily public because of the neoliberal restrictions that banned social spending, but in 2007 the federal government launched the Programa de Aceleração do Crescimento (Growth Acceleration Program—PAC) and in 2009 the Programa Minha Casa, Minha Vida (My House, My Life Program—PMCMV). The former was intended to stimulate the construction of infrastructure (roads, railways, ports, airports, and energy generation and distribution networks) and social infrastructure (water, sewerage, drainage, garbage disposal, and streets) and the latter to promote housing development. At last the Brazilian state was acknowledging the problems of cities and attempting to rehabilitate and legalize areas that had been illegally occupied. Many in the large universe of poor neighborhoods had seen urban redevelopment projects that improved sanitation, accessibility, and other conditions. My House, My Life was different: the business approach to housing policy was once again adopted, and consequently new houses were built with little attention to the urban environment as a whole and even less to the city already at risk because of poor services. Facing the economic crisis of 2008, My House, My Life presented for the first time a housing policy with subsidies from the federal government. Drafted by the Office of the President’s Chief of Staff (headed by Dilma Rousseff) together with the biggest businesses in the sector, the program included rules for securing loans. This was to avoid the disaster that marked the end of the system implemented by the military governments through central institutions such as the National Housing Bank, the National Sanitation Plan, and the National Urban Transport Agency. One of its main goals was to reverse the impact of the 2008 crisis in Brazil, and in this matter it was successful. Between 2003 and 2012 the unemployment rate for construction sector in the six largest metropolises (Recife, Salvador, Belo Horizonte, Rio de Janeiro, São Paulo, and Porto Alegre) declined from 12.8 percent to 5.8 percent and the rate for all activities from 9.8 percent to 2.7 percent (CBIC, 2012). Seventeen Brazilian real estate development and construction companies became publicly listed in 2007. They bought a large amount of land in anticipation of the allocation of funds to housing programs. The My House, My Life program responded to the housing need, and intense building began (Fix, 2011; Royer, 2009). Financing of housing by the savings and loan system and the workers’ compensation fund steadily increased from R$3.9 and R$3 billion to R$34.2 and R$79.9 billion, respectively, between 2004 and 2011 (ABECIP, 2011).

The National Housing Plan was drafted by the National Housing Department of the Ministry of Cities in 2006. It adopted an innovative form of urban typology to identify budget priorities. However, in 2005 the ministry had been turned over to a markedly conservative party in an effort to ensure a majority in Congress. Plans, strategies, and criteria for utilizing the investments provided for by the Ministry of Cities had not been fully taken into account in the drafting of the My House, My Life program. Despite the growth of the market, which had begun to serve the middle class (the population earning 5–10 minimum wages), and the efforts of the federal government to provide housing for the low-income population, inequality and segregation could not be avoided because of the aggressiveness with which real estate capital retook the land market by, literally, evicting, using violence and even arson, the population of favelas and illegally occupied areas that had potentially greater market value. ¹³

We were living a paradox. After 29 years, the Brazilian state had finally made aggressive investments in housing, sanitation, and urban transportation. At the same time, intense land and real estate speculation had caused a hike in prices, considered the highest in the world. Between January 2009 and September 2012 housing prices rose 184.9 percent in Rio de Janeiro and 151.3 percent in São Paulo, as in several other cities in Brazil, mainly because landownership remained concentrated although the laws and plans indicated the application of the social function of property. In most cases, city councils and city halls bent the legislation or supported illegal initiatives in favor of privately owned businesses (see A. Fernandes, 2012; Rugani, 2012). The symbiosis among governments, legislatures, real estate developers, and finance and construction capital promoted a real estate boom that took our cities by surprise. ¹⁴ The growth machine took command.

The land conundrum continues to undermine attempts to overcome urban underdevelopment. In defense of the federal government it may be said that, according to the constitution, control of urban land belongs to the local or state authorities. However, since the beginning of the boom, no government has taken up a proposal for urban reform. The centrality of land to social justice has become invisible. It appears instead that urban policy is the result of the sum total of public works disconnected from the planning process. Plans have guided discourse but not investment, with the interests of the real estate market and construction companies being primary. Priority has been given to roads and other highly visible projects. Today we are seeing plans without public works and public works without plans.

The reasons the struggle for urban reform was short-lived and dissipated and the government’s urban policy was contrary to the reform require further study and analysis. Undoubtedly many of those who fought for the reform were engulfed by the institutions they worked for. Now most of them occupy offices in government or around government (Maricato, 2011a). Pragmatism took over the main left parties and leaders, and the processes for increasing social awareness of the need to control spending and respect legal rights have been forgotten.

Mega-events: The World Cup and the Olympics

Brazil was chosen to host the 2014 World Cup and the 2016 Olympics in Rio de Janeiro. Once considered an “emerging” country, it now qualifies to receive—or suffer—the flow of capital that goes with mega-events such as these. The current fever in the real estate market was expected to increase a few more degrees and, following the trajectory of countries that host these events, the “growth machine” was at work trying to legitimize, through “spectacle urbanism,” spending that was hardly justified when the country still suffered from extremely poor health care, education, sanitation, and transportation.

Many examples could be given of the brutality with which major public works drove people in surrounding communities away to promote real estate development and build a piece of the global urban landscape. ¹⁵ Many of the projects eventually lay idle after absorbing a significant amount of government money (see Arantes, 2000; 2011; 2012; Rolnik, 2012; Vainer, 2000). ¹⁶ The dynamics of mega-events are defined by celebrity architects, lawmakers who put together a set of exceptional rules to satisfy the requirements of the international sporting or cultural agencies, several levels of government investing in public works that are visible and create financial returns that will support future elections, and local and international corporations. This is a new front for the accumulation of capital in various countries.

The Empire of the Automobile: Public Transportation in Ruins

Mobility in Brazilian cities has become one of the most serious social and urban problems. Between 1980 and 2009 almost no investment was made in public transportation. This is irrational considering the limitations it imposes on social mobility, but it is quite rational and effective for some sectors of capital. The average commute time in São Paulo was two hours and 42 minutes. For one-third of the population the average time was over three hours and for 20 percent of the population more than four. In other words, people spend much of their daily lives in traffic, whether in a luxury car or, more commonly if they live in the peripheral areas of a large city, in an overcrowded bus or train. ¹⁷ Stress, anxiety disorders, and depression affect 29.6 percent of the population in São Paulo, according to research carried out by the Center for Psychiatric Epidemiology of the University of São Paulo (Andrade et al., 2012). Of the cities of the 24 countries surveyed, São Paulo is the most affected, and a significant share of the problems identified is caused by traffic.

In São Paulo there are 5.2 million cars on the road. Traffic jams can reach up to 295 kilometers long (an all-time record set on June 1, 2012). The average vehicle speed between 5 p.m. and 8 p.m. on June 1, 2012, was 7.6 kilometers per hour, almost as fast as the average pace for walking. In the morning, the average vehicle speed is 20.6 kilometers per hour, about the speed of a bicycle (O Estado de São Paulo, September 23, 2012). Every medium-sized and large city in Brazil is now facing increasing traffic jams. The federal and some state governments encourage the purchase of vehicles through tax incentives. In 2003 the total number of cars in Brazilian cities was almost 24 million, and by 2012 the figure had reached almost 43 million. In the same period the number of motorcycles in these cities went from just over 5.5 million to almost 17 million. In several large cities, the number of cars doubled in that 10-year period.

Across the world, even in cities that have good transit systems, traffic jams persist because cars are believed to provide comfort for the drivers. Cars have become a fetish of consumption. By acknowledging the economic, environmental, and health impacts of this kind of transportation in Brazilian cities, we can begin to understand the depth of the problem. Compared with public transportation, automobiles account for 83 percent of crashes and 76 percent of the pollution in cities (ANTP, 2010). According to the Health Ministry, in the past five years there were 110 traffic deaths per day and approximately 1,000 people were injured. Twice the number killed were left impaired or disabled. In São Paulo, in 2011, 1,365 people died in traffic crashes, of whom 45.2 percent (617) were pedestrians hit by vehicles. Individuals riding motorcycles, so-called motoboys, who rarely respect traffic laws because speed is their competitive advantage, represented 512 of the casualties. The 2010 report on urban mobility drafted by the National Association for Public Transportation shows that at least a third of the population in cities with more than 1 million inhabitants travels by foot. Since transportation is poor and expensive, residents, especially the young, live their lives, as noted by Milton Santos (1990), “exiled in the periphery,” where good facilities for public health, education, culture, and recreation are rare. And we should keep in mind that poverty and lack of mobility are the perfect combination for violence.

Automobiles account for a small proportion of trips within cities, even though government provides huge incentives to car buyers. In addition, road construction has become a priority in city budgets, to the detriment of, for instance, sanitation and sewerage. Road construction is more visible and prestigious and thus may influence the outcome of future elections. In the words of the Universidade de São Paulo professor Paulo Saldiva (2012),

According to the World Health Organization, high levels of pollution in the city of São Paulo are responsible for reducing life expectancy by 1.5 years. The three main reasons for this are lung cancer in the upper airways, heart attacks and arrhythmias, chronic bronchitis, and asthma. It is estimated that for every 10 micrograms of pollution removed from the air, there is an eight-month increase in life expectancy. Approximately 12 percent of hospital admissions due to breathing conditions are caused by air pollution. One out of 10 heart attacks results from the association between traffic and pollution. The current levels of air pollution cause 4,000 premature deaths per year in the city. Therefore, this is a public health issue.

Auto-oriented mobility has many other impacts on the quality of life in the city. Although there are many critical analyeis of this and proposals have been drafted to improve conditions, giving priority to the automobile has never been mentioned in any official document, discourse, or plan. On the contrary, every year the government celebrates World Car-free Day (September 22), repeatedly emphasizing the importance of bicycles and walking for health.

Heading for Urban Tragedy: Unsustainable Growth

Returning to Brazil from exile in the early 1980s, Celso Furtado found a suffering country under a tax crisis. Inequality had worsened despite the high economic growth of previous decades. He argued that subordination to the banks and the IMF would lead to recession, unemployment, and indebtedness (Furtado, 1983) and urged immediate action. He proved right about this, and the subsequent lost decade (or decades) caused much suffering for a significant proportion of the population. He advocated structural reforms and the provision of assets, land reform, and education. What he said then remains true today. Without urban reform (specifically land and real estate reform) there will be no development. We will only keep on growing in the midst of marked social inequality and profound environmental deterioration. Income redistribution is important, but it does not ensure equitable “city distribution”—the right to the city. What is at stake is the appropriation of real estate income as it affects the lives of the poor, who, living close to new projects, are being driven out of the city.

Income redistribution and tax cuts for some products like automobiles may spur consumption and employment in the short term, but they will not create better and more equal cities. Giving a car to everyone will not provide the individual freedom we all dream of but jeopardize our mobility (Ludd, 2004). Even if they own cars, the poor will continue to live in the shadow of the law and have no right to the city. Young people in favelas will have computers, MP3s, and all the other gadgets you can think of but will never have dignified, healthy, safe homes.

Brazil has laws that are celebrated around the world and master plans for all cities with populations of more than 20,000. We have innovative legal tools, expertise, and experience, but our cities are getting worse. The “growth machine” that is inflating our cities does not follow a rational, social or environmental logic. Instead, it follows the logic of the prevailing interests: real estate capital, construction companies, and automakers, in symbiosis with the funding of political campaigns. For many years we have drafted public policy proposals for cities without acknowledging the constraints imposed by peripheral capitalism on Latin America and the rest of the world. The goal has been “simply” to minimize inequalities through the politically popular measures demanded by social movements. Acknowledging that after many institutional achievements our cities are getting worse and that we have been run over by the real estate boom is difficult but necessary (Lessa and Dain, 1998 [1980]).

During the Fifth World Urban Forum in Rio de Janeiro in March 2010, Peter Marcuse reminded us that not everything we do is governed by the market. There is plenty of volunteer work, and there are individual, spontaneous actions such as caring for children and the elderly, meeting with friends, participating in sports, and sharing love. Undoubtedly, Marcuse was trying to put an end to the lack of hope in the air during a meeting that aimed at making an assessment of the impact of neoliberal policy on cities and societies at the end of the twentieth century and the beginning of the twenty-first. Our conclusions about the increase of commodity fetishism and the withering of left ideologies (even social democratic) seem inevitable, but there is a need for hope. Our appreciation of the younger generation requires that we tell them about our experiences pursuing a utopian and more equitable city in the given historical and geographical context and that we seek a way out of the dark space to which our cities have been confined.

In order to build more democratic, solidary, and sustainable cities in Brazil, we have to take into consideration the importance and central role of the demands of the Movement for Urban Reform, among them enforcing the law with regard to the social function of land ownership, government control over urban land use and the real estate market, and priority for collective and nonmotorized means of transportation. These reforms are possible even under capitalist relations. We already have the necessary legal framework in place. Everything will depend on the actions taken by the forces in the nation.