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Marisa Carmona (ed)

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Bernal Ponce, Carmona, Colombo, Deak, Fadda, Meurs, Saitua, Stalenhoef

Delft University of Technology

Faculty of Architecture

Section Urban renewal & Housing Improvement


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Bernal Ponce, Carmona, Colombo, Deak, Fadda, Meurs, Saltua, Stalenhoef



Uiigave en dlstributie

I:..) Publlkatleburo

Faculteit der Bouwkunde Technische Universiteit Delft

Berlageweg 1

2628 CR Delft Teletoon (015) 784737

CIP-Gegevens Koninklijke Bibliotheek, Den Haag Trends

Trends of urban restructurering in Latin America I Marisa Carmona (ed.).

- Delft: Publikatieburo Faculteit der Bouwkunde, Pub!. of Delft University of Technology, Faculty of Architecture, Section Urban Renewal & Housing Improvement.

- Met literatuuropg., reg.

ISBN 90-5269-051-0

SISO 303.83 UDC 911.375.227(8) NUGI 655 Trefw.: verstedelijking; Latijns-Amerika

Copyrig hi © 1990 ru-oem

Niels uit deze uitgave mag worden verveelvoudigd enlof openbaar gemaakt worden door middel van druk, 10- tokopie, microfilm of op welke wijze dan ook zonder voorafgaande schriftelijke toestemming van de uitgever.


This book has been written as part of the research of the VF-Programme 'De Toekornst van de Randstad (the future of De Randstad) at the Faculty of Architecture from the Delft University of Technology, Section of Urban Renewal and Housing Improvement. It Is also directed to the seminar 'Trends of Urban Restructuring in Latin America and lessons from the dutch experience' (TUR90), that will be held at the Faculty on 31 October and 1 November 1990.

The general aim of this Seminar is to identify the different trends of the urbaniztion process in Latin America, and to look at the peculiarities and similarities of the one occuring In Europe, particular in 'De Randstad' in the Netherlands.

The Idea is to analyze teh political answer of the State in relation to the control and management of the urban process, as well as to the role of social movements in this process. Also changes in the theoretical approach and in the development of the urban research will have to be discussed.


september 1990



1.1. Imreduction, M,Carm~m 1

1.2. Current Trends of Urban Restructuring

(M.Carmom) 5

1.3. 'fiends of ecenomic and teehnologlcal 17

organization (M.Carmom)

1.3. Some consideration on the economic

perspectives in Latin America 19

(Rdfud Saitua)

1.4. Rent Theory and the price of Urban Land

(Csaba Deak) 25

1.5. Trends on Democratization and Urban

Planning (Jorge Rub: de Somecurclo ) 37

1.6. Trends concerning urbanization and

social movements (M.Carmona) 40

1.6. C~mmunity Participation:

A Prospective view of Alternative Strategies for Urban Development

(Ghdidta Fadd a) 41

I. 7. 'Irends of Urban Design

(Francisco Colombo) 47


11.1.1. Intreduetlen.Urban Restructuring

in Latin America (M.Carmona) 57

1.2. The effed of De-regulation in Urban Development. Illustration on Chilean

Housing poUcies.(M.Carmona) 59

1.3. National Urban Development Policies

in Chile, (M.Carmona) 89

n.2.1. Colonial. planning in the Caribbean 99

(Juan Bernal Ponce)

n.2.2. 'fiends in Urban Revitalization in

SanJose (Juan Bernal Ponce-M.Carmona) 111

n.l. Caracas centre, Macre-transfcrmations

vs Sensitive sectorial planning (M.Carmona) 135 11.4. Salvador da Bahia.Morphalogtcal

development and potential (Paul Meurs) 139

11.5. Residential Networks in Cartagena.

(Gerard Stalenhoef da Aguayvives) 157


Trends of Urban Restructuring In Latin America


Marlsa Carmona Csaba Deak

Rafael Saltua Glulletta Fadda Francisco Colombo Interview to:

Jorge Rulz de somoeuretc




Trends and Problems of Urban Restructuring.

Marisa Carmona 1990.

1. The trends.

Trends of urban restructuring in Latin America are framed by economical and political paradigms concerning the economic revitalization of the region as well as the issue of state decentral lzatlon,

On the one hand, the pressures ot the IMF concerning the form of payment and service of the external debt, structures the dilemma of the primacy of surplus expatriation over the consolidation of an -intensive-accumulation-regime directed towards the internal market. The pressure exercised by the IMF encourages Latin American countries to return to regimes of extensive accumulation based on primary exportation modes. Which leads towards the strengthening of the conditions for the reproduction of regulations forms, other than those developed in the industrialized countries, due to the fact that these are forms imposed by a highly concentrated economic group. Once again this seems to hinder the development of a mass consumption society, the expansion of the middle class and the achievement of a more democratical urban structure.

On the other hand there is a general tendency towards state decentralization and this idea goes beyond ideological and political barriers and it seems to be aimed by almost all groups of society

During many years planners and researchers on the territorial question have been arguing in favour of decentralization and regional and local autonomies as a way to reduce spatial inequalities. Nowadays this seems to be a central matter.

Since the early seventies, it has been pleaded for industrial de-concentration, and an enormous transformation potential has been been assigned to decentralization , both in the economic and social spheres.

The present paradigm in Latin America, in its new democratic phase, is related to whether it is possible to separate the wave in favouring decentralization from the newly neo-llberal streams,- which aim could be directed to dilute in part its political costs, which could arise from the


implementation of such policies,- towards the regional and local authorities.

One of the most important expressions of the decentralization bias is the tendency for reducIng public expenditures through the liberalization of public services. However, the increasing democratization of the social structures seems to highlight the different characters of the decentralization debate. In fact, the issue seems to be of interest only to political sphere only, and is not yet accompanied by any important transformation in the organization or the functioning of the economy and of society. This distortion, it has been argued, could produce considerable soclo-economlc costs, which would fall inevitably upon the most vulnerable group of society.

This is placing the accent into trying to re-study the conditions for the production of the metropolitan space and makes evident that this analysis should be developed in conjunction to the studyof the power structure of the different societies in Latin America.

2. The urban problems.

Concerning the urban problems, the deep economic crisis has accentuated the urban contradiction in all Latin American countries. A urban fragmentation with increasing differentiation of residential networks has reshaped the already non articulated urban structure of the seventies. The process of income concentration has accentuated the differences in quality of life of the city fragments, and urban agglomerations show a fast process of changes in land use, location of activities, residential densities, as well as social and spatial mobility. Moreover, given the very low public investments in low-income residential areas, the de-urbanization process, the low-rise development and the overcrowding tendency has been strengthened.

The maintenance of an exclusion tendency against the majority of the urban population , makes evident the failures efland , transport and city service policies as well as urban regulations.

In many countries changes we can see in the urban-regional systems. The opening of the economies to the external market, -through i.e. exploitation of national resources-, are in many cases creating new regional systems, contributing to change the regional balance of population concentration.



Secondary cities have been also stimulated, both through effective decentralization policies, as well as by obsolescence of some large urban industrial estates, which has discouraged attraction to central metropolis. In many metropolitan areas, demographic growth rates start to reshape. Together with diminish of migration flux (Le south cone, Argentina, Chile, Uruguay), the predominance of natural growth -also in decreasecontributes to change the character of people urban demands and change the political arena for negotiations as well. The long urban-life experience, the massive "commodltlzatlon'', the development of mass media, constitute important elements which contribute to a cultural modernization and also reshape urban demands of the very marginals.

The effects of non controlled (de)-urbanization process guided only by the simple need of an individual site for living, have not created any real collective-urban space, the city has been built by the users-in-need only. This generates new demands for integral restructuring of the urban system.

3. Central areas restructuring and urban regulations

The downgraded central-peripheral residential areas, which still maintain traditional morphologies ofthe initial phase of urban growth, are now largely affected by the combined process of expansion and concentration of economic activities, and the pressure for re-use of new central locations. It looks like that up to now, nor any public or market regulation has been really effective to guide and/or induce social investments in these areas, this due the particularities of the land policy and to the large availability of cheap land elsewhere. The enormous and rapid changes experimented in some central areas, have been induced by private investors and indicate the failure of previous developing strategies and of state interventions in achieving an integral and more coherent urban structure.

Caracas and Guayaquil business centers have been reshaped by the petroleum boom of the late sixties. A rapid growth of the building sector was produced by the rnonetarlzatlon of petrodollars, together with the formation and consolidation of real estate sectors that induced oligopolic characteristic to the structure of urban property.

Sao Paulo, Mexico City and Bogota business central areas are also examples of effective con-


solldatlon of oligopolic real estate sectors. Santiago Northern central areas achieve a notorious renewal and revitalization impulse since the 80's which reflect the concentration of economic groups including agro-export-real estate-and banking sectors, the total liberalization of the economy, the opening to the external market and the cheap foreign loans of the late 70's

4. The democratization phase

From the political point of view, the ongoing democratization processes are also a remarkable political issue of the 90's and will be an important element in the restructuring of the regulation modes needed in the process of substitution of production techniques in both "formal" and "informal" economies, wages rise and consumption rates expansion. Above all democratization features will conform the political scenario needed in the restructuring of the participation of the new social urban movements at local level.

These inedited social movements have developed in the region as a consequence of the authoritarian modes of regulation of the free market economy of the 80's. These are consumption based and territorial located movements rather than attached to a(n) (obsolete) production process of national industrialization. These movements are pressuring in the opposlte direction to the concentration of power, and primary goods export-surplus expatriation trends. They seems to favour locally based decision making and pressure for more effective regulations in favour of a social sector formed by the present informal economy. They plead for a beter co-existence of informal economy, with the traditional private and public sectors.

The stability and preservation of the experiences of restoration of democracy in the region is deeply threatened by the continuity and growth of the crisis. Therefore the importance of the studies on the feasibility of urban restructuring is evident since this is one of the most important expression of the crisis which hinder the expansion of capital valorization in Latin America, and also because it is a constitutive element in the same process.


I ntrod uctlon

s.urban research.

Since the sixties, several studies have been developed in Latin America in order to clarify the relationship between the social processes and the spatial re-structuring of the territory and in many the development of the urban system, it have been highlighted as related to the forms and rhythm of capital accumulation and the role of state intervention in the process.

The 90's is seen as the decade of studies on people role in urban restructuring process, being prioritarian the studies on the feasibility of local administration for improve living conditions, the negotiation arena, democratization and spatial regulations, particularly administration and management of the restructuring process.

During many decades the Latin American city has been analyzed as an important component of valorization of capital, and besides that, as fixed capital necessary for achieving a series of stages of the economic process. This structuralist approach has highlighted the heterogeinity of the spatial structures considering the different realities of the countries of the region, but in many case has submitted further social understanding of the ongoing processes to the need of structural changes.

The trend nowadays, due to the economic stagnation of the region and the overwhelming urban marginality, is to look for new forms of making urban planning, which need to separate from mechanisist tendencies of the past. it need to establish some general guidelines for future theoretical and empirical studies on this subject and it is important to build up instruments for the understanding of the specific social conditions were spatial restructuratlon is taking place, considering the diversificity of context, with different economic development and different forms of national unities.

These two volume Reader is intended to provide a presentation of how the transformation of the urban territory has taken place in some countries. We aim to highlight how the process of urban configuration developes, regarding the historical determinants in the organization of the space, the changes in the productive process, the form of land property, the role of the state in the economic process, and the development of social movements.


These Readers, will try to focus on the trends of restructuring metropolitan areas in Latin America. Specifically we will try to orient the discussion towards the downgraded central areas considering several researchs on upgrading peripheral human settlements, rational planning and urban poverty issues produced in previous decades.

The purpose is in itself very complex, and there are at least three issues which need to be further explained:

I. The limits and mechanism of intervention in the urban structure.

II,The specificity and heterogeneity of the present metropollzatlon process in the Latin American countries.

III. Instruments for the characterization of the process of spatial organization and for forecasting the urban transformations.

In order to orientate the compilation study of d ifferentcases studies, in the first chapter we try to provide an analytical framework

together with a characterization of some common landmarks and trends regarding the transformation of the territory.

The election of the case studies presented in the second chapter has been conjunctural and does not answer to any structural scheme. There are some some issues, necessary to highlight in urban restructuring studies, which are:

1. The interaction of the different branches of capitals and its expression in the organization of the territory and configuration of urban-regional systems.Their interest on land policy, housing production , urban administration and descentralization.

2. The political space of new social groups and its expression in local government's decision making processes.

3.The spatial expression of the fluctuation between repressive and integrationist policies, the soclo-spatlal contradictions aroused from the unequal and combined development and conditions for spatial restructuratlons.




6. Presentation of case studies.


The case studies presented in this first volume are the following:

1. The case of. San Jose will present the paradigma of renovation of central areas linked to the rapid urbanization processs, and the .inefficient regulations upon land uses, densities and urban consolidation.

2. The case of Chile will present the historical fluctuation of housing policies and its effects inthe spatial organization of the cities. It will present as well an overview on spatial regulations and effects of de-regulations in urban development.

3. The case of Cartagena, tries to give an overview of urban residential networks and shall accentuate the study of the inner city downgraded areas, with little historic value.

4. The case of EI Salvador da Bahia, presents the morphologic conditions of the old historic area and the potentials of restoration.


Trends of Urban Restructuring in Latin America



Marisa Carmona, Delft. 1990

a. The object of knowledge. The urban-regional systems.

Since the sixties several studies which grasp the relationship between the social processes and the spatial organization of the territory have been developed in Latin America. Most of the studies have pointed out that cities change as the socioeconomic conditions of society change, and that unequal and combined development produces a serie of socio-spatial contradictions.

In general, Latin American urbanization process has been understood as directly linked to the rapid transformations of the agrarian structures, to the insufficiencies of industrial development and to the particular sources, character and rhythms of capital accumulation of each country. The pauperization of traditional peasants, the migrations flows and the urbanization are nowadays understood as interrelated processes. Urbanization is related to the forms of economic growth and the forms of distribution of investments which produce inter and intra sectorial inequalities, enormous regional disparities, in-migration flows and high concentration of wealth in the hands of powerful economic groups which have traditionally controlled the State apparatuses.

Given the diversity of functions that cities nowadays embrace it is important to understand its particular role in the process of social development and in the regional transformations that are taking place.

Many studies have revealed the logic of capitalist development which needs unequal transformation for its growth, .. "The redistribution resulting from the larger transformation of the economy and society will, necessarily , disandvantage certain places while they advantage others. The nation's settlements will have to undergo these adjustments, and their "health" will often have to be appreciated at new levels of population and employment"(President of the European Com isslon 1980,} It has also been revealed that the transformation of the general conditions has changed the object of knowledge from the human

settlement and the city, to major macro-organizations.

In fact advanced capitalist societies have been transformed into extensive market places, which have caused important changes to the city conception as territorial entity, in itself as an object of research. We can consider three processes linked together in the transformation of capitalist relations. First in this market places all products of human labour have became commodities and almost all "needs" depend on the demands of the market to be satisfied. Second, this "comrnodltlzatlon" of social life (Mouffe's, Laclau 1985) has been accompanied by a joint phenomenon of "bureaucratization" resulting from the increasing intervention of the state at all levels of social reproduction. A third and linked process can be also distinguished, namely that of "cultural massification" resulting from the allembracing influence of the mass media. The path from an industrial to a post-industrial city has generalized commodity production and has produced cultural massification, requiring therefores a mayor macro-organization unit of analysis.

The homogenization of the space as result of the development of market forces, results as well on a large fragmentation and differentiation of residential networks .... "capitalist commodity production within a unified market entails the reduction of the former town/country dichotomy and the reduction of the constellation of local spaces to a single space in which commodities, labour and capital flow freely and at a scale great enough to support an autonomous process of accumulation" (Deak.1985).

New urban concepts arise to understand the meaning of urbanization and de-urbanization and the effects of the loss of identity in the conceptualization of the geographical space.

The ongoing rnetropollzatlon process in Latin America is the spatial expression of socioeconomic adjustments impossed by IMF. The result is that cities present unequal growth and a process of growth and modernization which goes parallel to processes of stagnation, downgrading and unequal consolidation of pauperized settlements. This can be explained inasmuch as the generalization of the capltal/Wage-Iabour relation has been more limited than in advanced capitalist societies (Slater 1985), the means for the reproduction of labour-


Trends of Urban Restructuring in Latin America


power far less developed, and the state's penetration in civil society has been Jess and welfare functions of the state have been much less effectivelyestablished. However the overwhelming social effects of the new forms of capital accumulation processes in the periphery. the diversification of trade and social development, the accentuation of the economic crisis, the rapid urbanization process, the tertlarlzatlon process and the concentration of the population in a few spatial locations of the national territory, are all interrelated regional factors that produce spatial effects beyond the city frontiers making the urbanregional dimension the object of research as well.

According to Mouffe most of the existing collective identities of Western societies have been demolished by the effects of these three combined processes, and as a consequence new forms of subordination have been created. It is then as resistances against these new forms of subordination that the new social movements ought to be interpreted and politically located.

b.Spatla] Transformation and research complexity.

Latin American cities present its own dynamic in the adaptation to the new conditions of global capitalism. This adaptation is expressed mainly through the rapid growth, the changing olfunctions, the creation of new activities. the appearance of new social groups, the changing social mobility, the segmentation of the population. In summary exist different transformation potentials of the different city fragments. The understanding of city-and city fragment- role in the real estate accumulation process, and the conditions for the generations of urban social movements are of particular importance. On this respect it seems that, the development of new social movements does not depend on the specific political situation created, amongst other by military dictatorships, nor on a defeat of left parties, (Evers 1985) but is rooted in the contemporary social development of capitalist societies.

The constant transformation of the city also impacts analytical and empirical residential and housing research. On this respect three main subjects need to be highlighted (Bertrand. 1988} :

1. The conceptual and structural complexity: both, of the characterization of reality and of the pollcles Itself, as well as the interaction with the other sectors, and the resulting effects or impacts in

functional, structural, environmental and cultural terms.

2. The synchronic and diachronic fragmentation of the process itself, as well of the policies, of the programmes and these in the mayor context on which they belong.

3.The question of the values system, explicit and implicit in the formulation of housing poncles, ie. the neighborhood concept and its relation with the mayor urban space, the image of the city, the ideas concerning lifestyle and its possible evolution in the short term.

c.Capital accumulation and development strategies.

''The features of all political regimes can be understood in the context of a dependent economy in terms of the requirements of the process of capital accumulation. By capital accumulation is meant not only the quantitative growth of the stock of physical capital (i.e. productive capacity) and its technological development but also, and most importantly, the concrete social relations leading to, and resulting from, the growth in capital stock and technological change. This raises questions such as : What are the sources of increase in the amount of surplus available for accumulation? These may be increases in the absolute rate of exploitation of labour through reductions in standards of living, or increase in prod uctivity by the introd uction of more advanced technology or foreign inflows of capital, or others; What is the mechanism whereby the direction of accumulation -by sectors of activity- and the choice of technologies are decided? What is for instance, the role of the State as compared to private local and international capital? What is the impact of a given kind of capital accumulation on the possibilities of expanded reproduction of the system through time?". (Fortin,78)

According to the "regulationist" school (Aglietta M.1977,Mistral J.1978) accumulation regime and regulation mode are two central categories for the interpretation of the eighties crisis. (Ominani, 1981; CEPREMAP, 1980; ). For "accumulation regime" it is understood "a systematic mode of assignment of the surplus capable of guaranteing certain adequation between the transformation of the production conditions and the transformation of the consumption conditions for a long period".


Trends of Urban Restructuring in latin America


"Regulation mode", ... ·"is the set of forms and institutional procedures that acting as coercltlve or incitative forces guide the agents to behave according to parameters which guaramtee a certain stability of the accumulation regime in force".

Referred to the study of the historic development of advanced capitalist economies, the theoretical approach in terms of regulation gives ground for a periodization of the process, from which it is possible to analyzes its main transformations. From these transformation two sucesslve sets of concepts will result, that of extensive aceumulatlon and of concurrennal regulation vis-a-vis the concept of intensive accumulation and monopolist regulation.

The extensively dominant regime of accumulation is where, once they have been developed, the production techniques are spread in a progressive way to industry as a whole, and whose labour process is not systematically subjected to fundamental modifications.

Opposite to this former, the intensive accumulation is a regime where there is a positive interaction between the permanent renovations of production norms and the transformation of consumption conditions. In other wordsterrns, it is an accumulation regime whose stability is guaranteed by the existence of a vlrtuos circle where the introduction of Iordlsm (Palloix 1976), makes possible a constant renovation of the social norms of production and the development of mass consumption allows the realization of a never ending increased volume of commodities.

In the same way the concurrenclal regulation refers to the set of institutional forms which in a way regulate the organization of wage relations, the forms of concurrency, the reproduction of the general equivalent and the articulation of national economy to world economy. This articulation makes possible the automatic adjustment of prices, employment levels, salaries and nominal profits, according to conjuncture changes.

Monopolist regulation is the case of an increasing stiffness of those variables due to a process whose most relevant elements are:

* an integral transformation of wages relation according to which nominal salaries will be determined based on collective agreements, which on time will increase the stability of employement (immobility agreements, payment of high indem-

nization in case of dismissal etc) and the indirect salaries represent an ascendent fraction of the total salary income.

'I< the increasing importance of the monopolic structures, that based upon the general tendency towards concentration and centralization is also stimulated by the extension of the domain of financial capital and by the development at state level of the forms of national and sectorial planning.

1< the alteration otthe price formation mechanism sanctlonated by the transition towards a system of administrated prices based upon the application by the enterprises of a marginal tax for whose previous determination the amount of desired cash flow is of vital importance. In this way, prices will stop being a fundamental component of concurrency which will take place only in the field of product differentiation and quantitative adjustments.

'* the configuration of a new modality of reproduction of the general equivalent that, liberated of the monetary pattern, can set into course a sustainable monetary expansion, extended also by the new developments related to public expenditure and the distribution of the credit.

In this conditions the stiffness to the decrease in prices as well as in profits and nominal salaries shown in a monopolist regulation is comprised. The latter are intimately linked, In real terms, to increase of productivity.

d.Analytical considerations about the State

Concerning the State and consequent with the above mentioned category, Alejandro Rofman (E.Pradilla, 75.A.Rofman, )has characterized the Latin American state adopting two essential functions regarding the development of a given society ... " On the one hand, it must assure the satisfaction of basic needs to the population in what respects services which are seen as progressively socializing for a more fair supply and in increasing number. On the second hand, the State, from Its dominant position as generator of employment and supporter of productive private activities, looks at the promotion of economic processes ... "

"Both functions tend to the consolidation of the ongoing social system that recognize in the


Trends of Urban Restructuring in Latin America


capitalist production relations the central axe from which the process of accumulation of capital and its form of regulations will develope. In order to achieve this, the State separates Itself from social domain,- where it develops its force and exercises its control capacity upon the dominant ssctors-, and tries to regulate the system. In this way it tends towards the supply of living conditions and capacity for economic growth in order to avoid serious distortions in the existing accumulation pattern and, even, to prevent that emergent social or economic crisis can jeopardize the stability of the ongoing system".

Many Latin American countries present a state structure that allows both institutional and territorial distributions of its functions, which establish a close jurisdiction of its actions, both political-administrative and geographical. In the institutional order it appears, in descendent order in relation to power and decision capacity, the federal (or national given the case) state, the provincial and the municipalities. Each of these instances has its own spatial dimension and different power potential.

The state exercises some given development strategies in order to reach its objectives defined by its state policies. These strategies or development patterns identify the accumulation process of a given society in the following terms: (Roffman)

a.Characteristic of the ongoing political system, which shows the rate of popular participation in the state decisions, including those related to the interregional distribution of available resources.

b. Identification of the power structure going out from the basic situation that implies the validity of the capitalist production system, with strong interferences of oligopolic and/or monopollc processes in the market.

c. Relative dimension of the productive processes in the configuration of the national economic process. In each stage, sectorial activities which occupy key positions in the capital accumulation process will emerge as an answer to incentives and dispositions originated by the State.

d. Individualization of the social agents who are benefited/or damaged by the model of distribution of surplus generated in the productive system.

This assignment of yearly produced wealth flow is related to the modes of power distribution and the accumulated wealth and is the result of the be-

havlour of the economic sectors that impulse the development -style.

e. MetropoliZSltion and conflict upon urban land.

Metropolization and rapid urban growth deepen the pressure for urban land and further it adds additional conflicts over land use. The expansion of central business districts, large differentiation of residential networks, the rising of housing prices and rents, the demands of infrastructure in and transportation to the new spontaneous settlements and the lack of general services in old neighborhoods, are all factors that increase class conflicts and causes new social and political organizations to emerge. A variety of explanations arise concerning increasing housing cost and lack of affordability for low income sectors. This are generally linked to land speculations features, to the possible effects of land and financial monopolies, and other important elements in the housing problem.

The conflict over land can be seen in the changes on cost of location (Deak,85) and in the changes of land rent (Edel,75) - however, given the case, it is worth to analyse its various variables.

e.1.Land costs variations arising from general urban growth (as opposed to amortization and profits on urban constructions which appear as house or building rents), are important in Latin America cities. This affirmation is valid given the existence of a growing integration of different economic interest in urban development, particularly in the monopoly city, and between capital and land ownership .... Not all land is in the hands of a unified capitalist trust, transport costs are still non affordable to a large number of the marginal population as it is to make all land equivalently good as a place to undertake production of commercial activity or to house workers. (Edel,75).

Particularly in developing countries where different production processes persist, strong capital concentration features, land demand in a reduced group of key cities and little state regulations, which allow variations of land prices and a considerable amount of approplatlon to be carried out by land owners if they can transfer their property for the use desired by the owner of capitals. (Edel. 75, Pradilla 88)


Trends of Urban Restructuring in Latin America


e.2 Land cost variations arising from barriers imposed to urban growth. Specific monopolies or general land ownership barriers to capital investments might also limit the use of land for residential or other urban uses creating monopolies and tendencies to rise location costs. The variety of cases is great, and land control can act as a barrier to capital investment in the urban area. Example of this barriers are seldom to be founded in Latin America. However, the "ejidal" land surrounding Mexico-city Is a typical example. This control involves conflict of interest among major classes or subclasses. It involves a limitation on housing and on industrial and commercial space used directly by capital and hence can have an effect on the general rate of profit and space for accumulation.(EdeI.75. )

It is difficult, however, nowadays, seen the extent of how barriers imposed to urban growth might be a limiting factor to investments in urban construction.

In Latin America, nowadays, large central urban ownerships does not exist, the division of the Spanish block gave way to a subdivision of land in many unequal lots. There are general barriers to concentrate land and assemble lots and very little constraints against urban growth. The problem is how to concentrate land for an specific purpose, given the large fragmentation of urban land in small-ownership and the implications of zoning regulations. It would seem that these factors influence location costs as well. In any case, it is the speculative holding (i.e.empty land kept empty and used temporarily as parking facility, petty commerce etc) together with present inflationary rates what creates barriers to make construction of social housing in the central zones possible. These are important issues that requires acute demonstration, not only that there are large holders of iddle land, but that these holdings are barriers to use on a sufficient scale. In order to advance more the theoretical demonstration of the feasibility of (rental) social housing production in central areas is important, as the one built in the beginning of the century, and its effects in the control of land price. I n many Latin American innercities the down-grading process increases squatter-areas, these have been developed, among other, from the same old rental housing condominium and from fractionation of old residences later. Squatters are combined with iddle land, some isolated squatter-lots have high overcrowding rate (more than 3 person per room), but these areas as a whole present a very low rate of land

occupation (about 50%) and FAR much below 1. There exist zoning regulations with FAR up to 3 in these old neighborhoods (PSIS,86). In the short run, these speculative holdings of small or large investors delay construction in the hope of making a better deal, and contribute at leaving large areas of the city sub-urbanized and degradated.

At the long run, potentially speaking, these speculative holding have less possibilities of influencing costs of land locations at a high level than other speculative constraints imposed by the owners of peripheral land that affects the rapid growth of the latin American city, or those that deliberately delay development, through integrated groups of land-using capitalist investments and ownership of land, or the fragmentation of urbanlzable lands on the outskirts of cities or lands within the city on which additional capital could be invested in redevelopment.

In summary concentration of capital has increased the demand for urban space, has increased overall costs levels, has been raising costs of location and trying to reduce housing standards in some particular areas. This is also explained by the sort of land ownership and how some (incipient) land control has impossed barriers to invest in some places, creating extra costs. And a third explanation for the comprehension of housing standards reductions within urban areas is that a financial fraction of capital is posing a barrier to investment in housing, and creates inflated housing rents although not directly creating ground rents (Edel,75).

f. Monopoly land -use and cost of location.

It concerns land uses and rents arising from a more micro-level than that of the expansion of the city as a whole.

Studies generally show the existence of political struggles over land use, and the importance of control over specific lands. Specific monopolies over these spatial areas are the basis of all type of rents. In dealing with particular areas, it is frequently the case that a group or an individual can free itself of competition of others, or alternative may be forced to compete more intensively for space.

Monopoly rent can take many forms. In Latin American cities monopolic rent is worth to


Trends of Urban Restructuring in Latin America


analyze in relation to the cyclical availability of low rent areas in different locations of the city, when squatting and share-housing is a widespread pattern in low-income neighborhoods, varying the relation with the cost of reproduction in relation to labour power of the moment. The large availability of low rent land in the suburbs and areas previously used for agriculture and changed to self-help residential housing looks to be cyclical in relation to the availability of accommodation in the central areas and in semi consolidated low rent areas.

The cyclical character is explained by the changing role of the city in the general accumulation process (Pradilla.78-Burgess). This cyclical relation has to do with the changes in the sources of capital accumulation due to the political interests in power, specially industrialization, mechanization and management of agricultural products, and system of valorization of urban real salaries, etc. Squatters in central locations, particularly by sharing-rooms practices, may obtain unique location, entitling them to ho.using below Its general market price and thus enjoy higher living standards. The traditional cycle explained by J. Turner (Turner, 1968- 1985.) that migrants mobility starts in the central areas to move later to an acquired piece of land in the suburbs for self-help ho.using, might be erroneous when we have to face the evidence that in the large cities, central squatter-areas (own or rental) present low level of mobility and population is ageing because of the possibilities of reducing cost of reproduction. (Gilbert)

Location and its relation to class stratifications Is and element to be studied thoroughly in view of the new changing condltlons in the Latin American cities where the sphere of circulation of commodity has been broader, the inability of the state to solve collective needs for reproduction has made more evident, and, where a cultural modernization has been produced through the massification of communlcatlon means (Slater 85).

The arising of indigeno.us social movements to the polltical urban scene, many of them having a territorial character, generally evidencing lack of city services, organizing independently from the traditional trade union structures and polltlcal parties is making the study of social movements and local management particularly necessary (Ruiz de Zomocurcio,90). Differences in tenure and residential location may play an important role in the social struggle.

The different processes concerning monopolization of land and limitations to. supply land for particular groups, must be analyzed from the point of view of the wage differences among subgroups, as well as with the stratification of the urban structure and the different processes that the city undergoes. Studies done in Santiago have highlighted the feasibility of densification of central consolidated-do.wngrading areas. These studies has been done compararing the cost of locating a resident in the up-grading periphery of the same city (CIAPEP,85).

h. Monopoly land use and zoning regulations.

The Latin American city has been considered as an essential component of valorization of capital and of reproduction of labour force, and many analysis has highlighted the city as fixed capital needed to. achieve a series of stages in the econornlc process.

Most ofthe cities including suburbs and self-help settlements as well, have been constructed by private investors. Real estate developers as well as petty developers have one overwhelmingly obvious objective: they want to make money. Nevertheless, it is likely to agree that private enterprise has generally not been successful in creating satisfactory cities, keeping environmental standards and maintaining the natural landscape.

Urban structure in Latin American cities show that the situation is quite different among countries. Noticing particular differences between the cities which started earlier with the process ot urbanization, many even in the last century and those where the process of industrialization started later in the present century. The urban structures ot the first type of countries, present classical features of state intervention in the form of some zo.ning regulations regarding use and rent control, given the pressures.frorn the different branches of capital, to intervene in the process of reproduction of labour force regarded by the import substitution model of industrialization. The other ones, with retarded urbanization, and traditionally linked to a sort of aqro-expcrt model and retarded manufacturing of consumption go.ods, of the assemblage-and-packing type with lncorporatlon of very little aggregated value in the process, separated the state from the control of the labour reproduction process, have left the building en-


Trends of Urban Restructuring in Latin America


vironment regulations to market requirements solely.

In fact in the case of many Central American cities there exist building and sub-dlvlslon regulations concerning health and security controls but seldom sectorial land regulations, regarding location price and appropriate standards regarding infrastructure and city services. There is seldom urban development regulations concerning consolidation and up-grading mechanism for low-rent settlements, taking into consideration local people demands.

The process of agglomeration, contributes to create and accentuate a complex land market, characterized by combined land use and building forms. Monopoly logic is to be found overall in the city, here stands an old wooden detached house, there a new modern building located backwards in the site,-to let space for parklnq-, there a raw street under construction, next door is a public office, a university building located next to a farm, a new highway ring is opened next door, leaving small multiform empty spaces aside the modern shopping center, the restaurants, the parkings or the market place in general. The search for profit is shaping the whole environment.

The developers of the new houses, appartment flats or shopping centers has first to assemble enough lots, that have not been used to their full economic potentials, so that there is room for a new development. ''The process of buying and assembling lots take place secretely in order not to be affected by higher offerts of competitive real estate contraries". Nothing could be more damaging to the coherence and planning of the central areas of the cities and discouraging urban renewal, than the existence of a large number of arbitriarly shaped lots with their ownership divided among thousands of individuals. The development of these lots is subject to the rules of the real estate game played by inescroupulous actors. On the other hand, the constraints to upgrade spontaneously built settlements at the periphery, and limitations to supply vital services and infrastructure networks is based upon the same principles of lack of local government intervention and lor non adequate sectorial regulations in the development process of the settlements worsened by the constraints resulting from the ownership pattern. The exagerated low density pattern, with detachable - progressive built housing patterns,- which gives space for building rental houses in the lot for extra earnings-, combined by an inefficient and

non coherent urban layout, typical component of a self help human settlement, produces unfavourable relations between residential areas and circulation networks discouraging possibilities of being supplied of infraestructure at reasonable costs, restraining the possibilities to increase land value for the time being.

On the other hand if private real estate entrepreneurs are producing fragmentary, non responding to any given context, non coherent, waste in the city centre, it looks like social housing public projects as well as developing agencies produce also dull and unimaginative environments in the planned periphery. It is an important factor which makes working class sett~ements to lower their market rents as well.

A crucial issue in Latin America architectonical discussion, concerns those large parts of the cities and towns were large-scale re-development will never occur. It seems that a process of block-by block, or lot-by lot will only continue, and their will be no way of achieving spatial coherence nor minimum urban development standards. Zoning regulations have been often established by lawyers and/or municipal engineers in order to control building forms from the point of view of public health and other specific considerations (size and forms).

Zoning regulations have been accepted by real estate entrepreneurs and petty-constructors, but the question has not yet been raised nor by the new-urban movements nor by popular economic organizations.

A difficult issue for the analysis of feasibility of urban restructuring is the lack of popular conslousness about the way how things are developing so far. It seems that without the intervention of sectorial-scale development projects negotiables between people organization and democratic local authorities, the only process that will occur and that will continue to do so is the typical piecemeal modifications, lot by lot basis.


Trends of Urban Restructuring in Latin America



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Economic Perspectives



The most general economic thresholds that outline the future conditions of Latin America development can be summarized as follows:

1. Latin America faces in the following decade a serious external restriction. To the exaggerated weight that means the service of the foreign debt it must be added a gloomy International economic panorama, on which the phantom of a possible new world recession is always present, recession that should affect considerable those economies more open to commerce and international financing. All these factors advise to develop and consolidate strong internal economies more resistent to external changes.

2.The dualism and economic heterogeneity has became deep as consequence of the application of neo-liberal policies and to the impact of the crisis. Nowadays, more than ever, live together an "upper class economy", modern, of high technology and high salaries with a "marginal economy", backward, with strong unemployment features, under employed and precarious living conditions. The social polarization and incomes in no longer sustainable in the long run.

3. The privatization and des-nationalization of previous public activities, generally done because fiscal or private pressings, has not produced the expected results: major productivity, efficiency or economic democratization. On the contrary, it facilitates real estate and patrimonial concentration and distract private resources, financing and technology of other more needed investments.

4. The challenge of technological development and transformations resulting from the automatization in the structure of capital and labour relations.

New technological development can mean a grave threat to Latin American when replacing raw materials (i.e. copper) by new materials and the adverse impact of the advances of biotechnology over the competivity of the agriculture and in general the threat of obsolescence of the present lndustrlal stock. But also can mean in some countries the widening opportunities. Because on the one hand, it can overcome the traditional dichotomy in labour intensive and capital intensive technic giving space for a new phase full with creativity and flexibility, this is to sayan intensive

educational accumulation On the other hand eliminate restrictions that only huge plants to be rentable.

All this features according to many authors is supporting the needs of democratization and open dialogue between social democratic and socialistforces. Is resulting on renewed ideas on the role of the State and the constitution of a mixed economy. Is meaning the support for a more significative presence of the State in the new required export production and of import substitution, also in those sectors were exist tendency for monopolies and concentration of economic groups. This must not be understand to exclude the modern dynamic private sector, but rather to find complementarily between public and private investments, between individual interest and social welfare. Also the State must give the conditions for private initiative on which independent workers can be expressed, small, autonomous entrepreneurs that to-day constitute the informal productive sector.


1. We must be conscious that the technique shall not by itself save this countries from the actual crisis. The technological development does not guarantee growth neither international competivity and also neither the social welfare and the possibility of a sustainable an even development. The social, the technological and economical transformations must be understood as three complementary challenges that are only feasible if are pushed as different aspects of a same process.

2. The state must develope and active role in development where the technological aspects receive a prioritarian dimension.

3. Is impossible to think in national isolated actions . If Latin America will to conserved it autonomy, further than year 2000, must elaborate a common strategy concerning technological challenge.

In short it mean to constitute a new sort of mixed economies able to organize the national productive effort on a two fold perspective. In the external able to confront. the challenges of a difficult international environment. In the internal, able to open opportunities of productive employment for all the citizen.



Economic Perspectives



Rafael Saitua. Rotterdam november 1987


The early 70s are characterized by a sharp decline in economic growth around the world. In the 7 leading capitalist countries, the average economic growth between 1950 and 1973 was about 4.2% per year (whereas) between 1974-85 this percentage fell to an average of 2.6% per year (IMF 1987)

Economists from different schools of thought agree on the fact that the recent decline is more than a cyclic economic regression. However, on the causes of this phenomenon there exists - as is usual amongst economists - a difference of opinion. The English economist Maddison for example, has said that a new phase of capitalism has started in the early 70s, a phase that is characterized by the collapse of the Bretton Woods system of fixed currency exchange rates, by the oil crisis, the decline in rates of productivity and the restriction of public spending by governments no longer so willing to implement Keynesian (demand-) policies in answer to the sudden decrease in demand (Maddison 1982). The opinion of the so-called "regulationist" school (Aglietta M. 1982, Boyer R., Mistral J. 1983) is that the 'intensive accumulation regime'. that is the "golden" cycle of growing productivity, rising wages, more sales and thus more profit, resulting in an increase in accumulation and economic growth, has been interrupted.

An analysis of the merits of different theories around the structural decline of economic growth is beyond the scope of this brief introduction. I will therefor only speak about the consequences for Latin American countries of the sharp change in the "trends". The economic decline in Latin American (LA) countries has occurred later than in "developed" countries, yet the recessive tendencies took on much stronger forms with (notoriously) severe consequences for the living conditions of millions of people. Between 1973-80 the average economic growth-rate in LA was still at 5.6% per year (CEPAL 1985), whereas in the same period in the developed countries growth had fallen to 2.5% per year (OECD 1987). The maintenance of economic growth in LA succeeded at the cost of

(even) greater foreign debts, financed mainly through commercial banks, banks that possess enormous liquidities from the oil-producing countries; this is the so-called "recycling of petro-dollarsBecause inflation was rising real interest rates were very low -sometimes even negative.


Seven ieading capitalist



latin-American countries

" 0 J. i



The growth-rate of export-incomes was higher than the interest rate, therefor the relationship debts/export did not become out of proportion - thus the increase in foreign debts cannot be called "explosive" in this sense. After the second 'oil shock' the situation changed completely. The main goal for monetary authorities was the limitation of inflation, which lead to restrictive monetary policies. The advance of prices was not met in a proportional increase of the quantity of money, which resulted in a shortage of cash.

"Reaganomics" consisted of restrictive monetarian policies combined with tax-reductions (following the recipe of the 'supply-side economists'), and produced a large deficit in national budget(s), which has been financed through loans on the capital market. This brought down inflation and advanced real interest rates significantly. Also, because more investments were made in dollars, the value of the dollar went up. The consequences for "third world" countries were disastrous.

This was mainly caused by a worsened "terms of trade" - about 20% for LA as a whole and 35% for countries without oil-export between 1977 and 1983 (CEPAL 1985).

The deficit on the (current account of the) balance of payments of several LA countries reached a vast amount in 1980 and 81 (CEPAL 1981). The reasons can easily be seen: namely the rapid increase in real interest rates (most loans had been agreed on variable interest rates) and the previously mentioned worsened "terms of trade".


Economic Perspectives


UReal interest rates"

(Llbor less rate of the change of non-oil developing countries export unit values)

1974 1975 1976 1977 1978 1979 1980 1981 1982 1983

-12 6


-6 0

19 21 12



Source: IMF

This deficit is to a large extent covered through new loans, adding considerable sums again to the already existing debts. The explosive growth of foreign debts - together with the enormous costs of these loans - and the severe decline of the 'terms of trade' eventually had to influence the economic growth of the area.

Development 01 the terms of trade (,,) of Latin American countries

1977 1978 1979 1980 1981 1982 1983

19&4 1985 1986

100 93


102 96

87 8J

82 80 72

(.) Ratio of export prices to import prices

Source: CEPAL, IMF

The scarcity of currency is a bottleneck that has affected growth and employment everywhere. Between 1980 and 85 the economic growth In LA countries was an average of 0.2% per year and the income per capita dropped by about 8% during this time (UNCTAD 1987).

For the poorest countries the situation has grown into dramatic proportions. In Bolivia, the Gross Domestic Product (GOP) declined between 1980 and 1985 with some 14% and the income per capita with approximately 26%. Unemployment rates of more than 20% are no exception in Latin America, in some countries like Bolivia for example the figures rises up to 40%.

As I mentioned before, the enormous costs of the servicing foreign debts playa dominant role. In 1985 the net transfer by LA countries totalled 30 billion dollar or 6% of the GOP of LA - for Bolivia it meant 12.9% of the GOP. To illustrate the burden of these payments they can be compared to the German payments after the first World War. These amounted to 3% of the GOP and were largely financed through US loans (Fishlow 1985). The burden of the foreign debts make It necessary to drastically reduce import. The consequences of this for the people, especially the poorest

groups, are catastrophic. Moreover, this affects investment capacity, since capital goods often need to be imported.

In order to return to stable growth in LA it is necessary to bring investments back to a reasonable level and to increase the import of capital goods from Industrialized countries - as long as economic structures do not change. Precisely these aspects have been hit by severe blows in the last few years.

The burden of debt in Latin American countries




Debt as % exports



Interest payments as 96 of exports




Since 1980, Latin American imports dropped by one third, while gross investments dropped by 27%. Under such trends, any attempt to restructure economy or to encourage import substitution is doomed to failure.


As is known, the IMF has a vital role with its posltlon of "mediating body" in the negotiations between the banks and countries concerned. Most of the loans are being provided by private banks, yet these will not agree upon flexible repayment unless the country concerned has an agreement with the IMF on the economic policies it should carry out (CEPAL 1984). However, the situation has begun to change since Brazil - after the moratorium - started to negotiate directly with the banks, without IMF involvement. New contracts between Brazil and the banks are of mayor importance, as they may set a trend for other negotiations between the indebted countries and the banks. The conditions that IMF imposes before it "gives the green light" for further loans can be summarized as follows:

- Drastic devaluation of the national currency in order to restrict imports and stimulate exports. Measures such as import taxes and export subsidies are being rejected, because these would lead to a wrong allocation of funds.

- Limitation on public spending. Here, the aim is a balanced governmental budget.

- Reduction of consumption through the lowering of real wages.


Economic Perspectives


- Restrictive monetary policies, so as to bring down inflation.

This set of measures Is supposed to create a capacity for payments and to make the production of 'tradables" (goods suitable for the international market) profitable. Thereby, the provision of new loans would be feasible again. This belief is based on the assumption that the debt-crisis is not so much a problem of solvability but rather of liquidity. In other words: under normal circumstances of economic growth in the "developed"countries, and with normal availability of credits at the banks, the problem of the foreign debts would solve by itself after a few years.

Several critics have strangely attacked these assumptions. Particular the exaggerated expectations with respect to the effects of deval uatlon have been attacked. According to orthodox theory, a country would undergo a temporary recession after the devaluation because - through the raises of prices of import - purchasing power will decline. However after a certain period export would start to increase, whereby growth could be restored. It is assumed that after some time the 'export effect' will dominate and groVIJth will speed up (this is the so-called J-curve: restoration of growth after recession).

K. Jansen and R. Vos, amongst others, have polnted out an important aspect of the IMF approach. They underline the fact that it doesn't consider the economic structure of the countries concerned. In each case, the measures are more or less the same.

However, the expected increase in export will be very modest if the economic structure of the country implies that exports relies on price-in-elastic primary products, or if the export is obstructed; by protectionist measures somewhere else, or by a lack of economic growth in the trading partners. Then, devaluation will produce a permanent recession (the country stays in the lower part of the J-curve). Because in times of recession import declines, the balance of payments will improve. But this happens at the expense of economic growth and employment opportunity.

According to the American economist L. Taylor, the IMF measures will often lead to very deep recessions ("overkilling") because each of the measures functions in a recessive way. In this context, the necessary investments - which are needed to change the economic structure and to

guarantee economic growth in the lang term - will not be made.

The UNCT AD economists have put forward the aggregated international effect of the I MF policies. When several countries simultaneously try to stimulate export and restrict import through devaluation and "austerity", the results will not meet expectations. To lower expenditure and import in one country means the limitation of export possibilities for potential trading partners, resulting in a slower economic growth over the whole. Thus the position of debt, measured by the relation of debt to product or debt to export, will hardly change at all (Sakhani 1985).

The position of the IMF could - under specific internal conditions - only have positive results in an international climate favorable to the stimulation of exports.

Since a large number of developing countries are forced to implement IMF-guidelines, the policies can only be successful if an incentive comes from the developed (industrialized) countries. At present, this can not be expected to happen. The restrictions on import adapted by the developed countries, and their meager growth perspectives (most prognoses assume a growth on the coming years of about 2.5%, leaving aside the effects of the collapse of the stock-exchanqe) do not allow for such expectations.

The prospects look even bleaker when the tendency towards a worse terms of trade is taken into account. The components that are likely to determine future economic growth (electronics, information, etc), and the "low-material" nature of technological development, will contribute to the aggravation of the trend.

Most probably the measures propagated by the IMF - should they be implemented - will have disastrous impact on the economic growth, employment and social stability of many LA countries. Most of the poor sectors will suffer even more hardship.

The new democratic governments of some LA countries are now facing the crucial and difficult choice of whether to accept IMF conditions, stretching social tensions to the limit and putting the opportunities of democracy at risk, or to


Economic Perspectives


neglect the conditions and confront the international financial world.


Should the present tendencies of the world economy continue, the burden of the foreign loans and implementation of the IMF measures will lead to a poor growth in many of the LA countries. In such a context, the massive unemployment can not be reduced significantly In a reasonable period of time. The solution of the problem of unemployment requires an accelerated rate of economic growth.

Simulations that we have carried out for the case of Chile have shown that a growth of 6.5% per year is needed to dissolute 'official' unemployment within 7 years. The hidden unemployment has not yet been taken into consideration (M. Ossandon and R. Saitua 1987). It is impossible to reach this growth rate in the present context of foreign debts.

Better opportunities could be found in an international climate that is characterized by coherence in the economic policies of a number of LA countries. Economic integration, stimulation of mutual trade and targeted collective import substitution form the crucial features of such cooperation. This implies that some countries abandon the IMF guidelines and join forces in order to obtain more flexible conditions of their repayments. Remission of (parts of) the debts could be an important element of the new conditions.

When LA is considered as a whole, and taking into account the restrictions of the external sector - and that will constitute a problem even under flexible repayment conditions - there are two alternatives which would activate economic growth. A combination of the two would also be feasible and even desirable:

a. to increase the growth of export

b. substitution of import

Alternative a. would be feasible with an increase in economic growth in the "developed" countries or a higher acceptance In these countries of products imported from the 'third world'. Neither of these conditions are likely to be fulfilled at present. In order to prevent a repetition of the mistakes that have been made in earlier attempts to substitute import, we consider that the following

two conditions need to be imposed on the processes:

1. the substitution of import must go together with economic integration, thus developing the market on a scale that allows for efficient production levels

2. the substitution of import must be selective so as to prevent "fragmentary" investments in new production capacities. "Clusters" of production processes must be selected, with which a significant synergetic effect can be reached, and whereby the possibilities for growth in the long term are optimal. In this way the products concerned can compete on the international market in the long run. Also this requires a balanced stimulation of import substitution without neglecting export. (In other words major attention is paid to the substitution of import, without neglecting to stimulate export.)

After the numerous failures of the attempts to encourage economic integration in LA, the strategies described above will attract some skepticism. However, th~ fact that the need for integration is now more urgent then ever before, might be called a favorable circumstance.

The efforts of the past have failed because the ruling elites in several countries considered that they would be better off, letting economic relations with the developed countries prevail, where there seemed to be more stability and growth.

Increasingly such beliefs are being undermined by the phenomena of slow economic growth in the "developed" world, the (immediate) scarcity of currency in the less developed countries and the restrictions on export from the "third world" Imposed by the developed countries. More and more the "developing countries" need to rely on each other.

Although it may not be necessary, we would like to stress once more that a satisfactory solution to the problem of the foreign debts is crucial for the future of LA countries. More specifically it is vital for the future of a great many people - especially for the poorest.

In more than a few 'developing countries' democratic processes have been starting - hesitantly In some cases. These processes can only succeed in a context of economic growth, better opportunities for employment and better


Economic Perspectives


living conditions for the most deprived sectors of the population. If this can not be achieved, the democratization Is doomed to failure.

Lawrence Klein, the American economist and Nobel prize winner, is convinced that a solution needs to be found soon. Interest payments could be subsidized, or parts of the principals be remitted. This could be decided upon in a worldconference, while the IMF, the World Bank and the rich countries need to finance the solution (NRCHandelsblad, oktober 28, 1987).

The heart of the matter is, after all, to give democracy a chance in many of the countries in the so-called "third world".


Aglietta,M,19s2,"Regulatlon et Crises du capttallarne", catrnan-Levy.

Boyer, R, Mistral,J, 1983,'~c:c:umulation, Inflation et Crlse",PUF.

CEPAL,1985,"Estudlo Econ6mico de America Latina y EI Caribe",Santlago de Chile.

CEPII, 1984, "Economie mondiale1980-1990: ta Fracture?", Centre d'etudes prcspecttvea et d'tntormatlon, Economica, Paris.

Fishlow,A,1985,'The debt crisis in historical perspective", in "The Politics of debt", M.Kahler,Orwell University press.

Jansen K, Vas R, 1985, "Crisis en aanpasstnq in de derde wereld", Economische Statistische Berichten, 20~11-1985, Rotterdam.

Maddison,A, 1982, "Ontwikkelingsfasen van net kapltatlsme", Het Spectrum.

OECO., 1987. "OECO Economic Outlook",Paris.

OssandonM, saitua R, 1987, "Bultenlandse Schuld, economtsche groei en de mogelijkheid van de mocr atl sch e ontwlk ke tlnq In Chile".mlmeo.

Sakbani,M, 1985, "The crisis otthe international economic system: proposals for monetary and tlna nclal reforms", Trade a nd Development, UNTAO Geneve.

Taylor, L, 1984, "Structu fa I Macroeconom Ice", Inc. Publishers, New York.


Rent Theory and the Price of Urban Land



Spatial Organization in a Capitalist Economy

Extract of part II: Spatial organization of the Production Process.

Chapter 4. Location and Space: Use-value and Value.

Csaba Deak

A dissertation submitted for the degree of Doctor od Philosophy at the University of Cambridge.

King's College

March 1985.

The foregoing critique of rent theory has led us to a starting point for the analysis of land price and spatial regulation of the process of production and reproduction. Firstly.rather than a transfer of surplus between classes, the payment for location (of which the most usual form is land price) is an instrument of spatial organization of production in the measure that the same production Is governed by market.Secondly.such payment for location has been transformed since the early stages of capitalism from rent-form into price-form as capitalism evolved into its maturity and concomitantly urbanization developed,land price being only one,ifthe most common, of its possible forms. Thlrdly.tha payment associated with the local of production or consumption is a payment not for a ("monopolized") power of nature, but for a location within urban space which is itself an historical product.that is, a product of labour. A study of land price is therefore necessarily a study of spatial regulation of production, which develops the role of land price both in the process of production and consumption (at the local individual level) and in the process of accumulation (at the social level), while accounting for the production or urban space itself within the accumulation process.

As the market price of commodities regulates the quantities and the techniques according to which those commodities will be produced.Since the market price of location enters the price of production of commodities, price of location and price of commodities are determined simultaneously and spatial regulation and both quantitative and qualitative regulation of production are inextricably bound together. In other words, market price of all

commodities is only determined together with an associated spatial distribution of production, and conversely, the price of location is only determined for a social demand as manifested in the market prices of all commodities to which it has given rise through the operation of the law of value - that is, under the constraints of the requirements of labour, means of production and location of the production of commodities and the equalization of the rate of profit on capital - the form in which the requirements of production enter the production process. Thus a theory of capitalist regulation is incomplete without an account of the spatial regulation. But there cannot be a "theory of spatial regulation" - to be appended to a "theory of production as such", for space without a production process is as inconceivable as a production process without space. The approach to either "production as such" or to spatial regulation of production must go through the process of production as a whole.


4. i Location and space

4.2 Location and space in capitalism

4.3 Use-value and the payment for location

4.4 Value and production of space

4.5 The payment for location and accumulation

4.6 The need for planning in spatial organization


The concept of location and space derives from the social practice of production and reproduction within a social division of labour.AII society needs a territory to live in; with social division of labour this territory is structured into space. (1) Individual activities l.e., processes of production and of reproduction require a location and the interaction between such activities connects the locations where the former take place accordingly.The simplest - the most abstract - representation of space is mathematical space. In mathematics a space is defined by the way in which distances between points are measured: a metric.ln other words, space is made up by


Rent Theory and the Price of Urban Land


j~ 1
, <?>
<8> I
0 ~ 0 .,_
d = x + y d =- ax + y
J Yl'
0 0
I I 0
ii ~
d c (x2 + /)! d = (ax2 + /)! fig. 4.1.-Mathematical space, A space is defined by a metric, which is a representation of how to move from one point of the space to another. For the given metrics, the contours in thick line represent equidistant points from C. Although thIs Is not theirmain purpose, the . examples do correspond to models of quite usual concrete spatIal structures: the Ol1hogonal grid" the same in whIch ones moves easIer (say fasteJ In one of the directIons then along the other the plain on which movement is free in all directions (the sea, aIr, or a desel1T; and the same on a slope along Ox.

points - dimensionless locations - related to each other In a specific way described by the metric which defines it. Location and space are defined simultaneously, the constituent matter of space is the relationship between the locations in lt.and the specificity of space consists in the specific way in which locations are related to each other.

I n material world in which actual society live,both the locations and the relationships between them which build up the economic space must materialize and for that, they must be produced. Locations, from "points" become flnlte.dellmlted extensions of territory.the elemental expression of which is the juridical form of property (or previously,feudal) rights - a plot of land, a built floorspace (factory,dwelling,office etc.unit) - materialized in a superstructure on, beneath or above the earth's surface. (2) Similarly, relationships which make up economic space are paths, roads, wires, cables, pipes, aerials, satellites etc.,by means of which material objects and people may be conveyed from location to location.These are physical structures - collectively an infrastructure - and must be built in order to come into existence.Only then a distance between two locations (in length, in time, in monetary cost), orthe relationship between locations,or the structure of space, or ultimately space itself,do materialize. Economic space is a product of labour.


Now the specificity of space in capitalism is best seen in the light of the transformations brought about by the supersession of the feudal mode of production by the capitalist commodity production. In feudalism, the dichotomy country-town arlsed from the separation of production (in the country) and exchange/consumption (in the town). The commodity-form was subordinated to the prod uctlon for su bsistence, being restricted to the excess product.The very existence of the commodity-farm-and of the class of merchants - depended on the existence of "separated markets and spheres of production" that made possible "buying cheap and selling dear" (Merrington 1975: 177).The rise of capitalism is precisely the transformation process in which the commodity form becomes generalized and dominant, the production for subsistence and the production of excess as such (rent) are subsumed in the production of values in the form of commodities by wage labour under the command of capital, and ex-


Rent Theory and the Price of Urban Land


change becomes an exchange of equivalents in a unified market.Thus whereas in feudalism the separation of production from exchange/consumption within a constellation of separated markets entailed the dichotomy town/country and the fractioning of the territory into a constellation of local space, capitalist commodity production within a unified market entails the reduction of the former town/country dichotomy and the reduction of the constellation of local spaces to a single space in which commodities, labour and capital flow freely and at a scale great enough to support an autonomous process of accumulation - as that realized historically within the boundaries of the modern nation-state.

Buill·up 0"'0 Ki" 1

Fig. 4.2 Growth of a feudal town: Moscow A short history of the succesive rings of fortifications reads thus:

"The original fortified enclosure, the Kremlin, was gradually divested of funstions other than defence and authority (both temporal and spiritual), as craft manufacture, trading, and the residences of merchants, artisans and labourers moved into a trading quarter to the east, know as the Kitay Gorod. This, too, was walled in time, but the growing town spread outside it into new artisan suburbs - the semi-circle of the Belw Gorod or White Town. The Belw Gorod was also walled in the sixteenth century, but by then Moscow was expanding still further out into a ring of newer suburbs, called the Zemlyanoy Gorod or Earthem Town, which in 1592 was also protected by an earthen bank and palisade ( ... )In 1742 the expansion of Moscow far beyond its old, media val limits of the Earthem Town was recognized by the establishment of new city bounds, the Kamer-Kollezhskiy VAL, or Wail ... Unlike the earlier walls, the Val was not a defensive work, but a customs barriers ... "(Figure and quote from S utcl iffe, Ed, 1984: 356-7) .

The unified market requires that its space is sufficiently homogenized by an infrastructure of transport and communications so that,although differentiation within space does perslst.ta) its homogeneity ensures that no independent regimes of autonomous accumulation (in what would be a de facto separate market) emerge. Such process of homogenization than overrides both the old distinction town/country and the multiplicity of towns and countries, that is, of local spaces. The town outgrows its walls behind which it guarded the wealth it did not produce.Many towns grew bigger than their walls before: that only stimulated the building of new ones on a greater perimeter and they accumulated during the centuries a collection of concentric and successive rings of fortificatlons.But now no new wall will be built (4): the "town", the "city" has no limits anymore; in fact.there is no more city.

There is a continuous space that is homogeneous because the locations within it are interchangeable and therefore different from one another so that the same space is differentiated for being homogeneous. Both the homogeneity and the differentiation of space are incessantly molded by the intervention of capital and labour. Each epoch adds a transformation and the "natural" basis is buried ever deeper under an ever-increasing number of layers of historical transformation. (5)

Town,country,forest,lake, flora and fauna become subjects for archaeology. Instead, this space has land uses. All human activity: banking, services, commerce, residence, industry, leisure, agriculture and even nature (confined to the zoological and botanical garden, the nature reserve or the national park) become land uses in appropriate zones and districts, supported by appropriate buildings, regulations and services. This is urban space, a historical product, every portion whereof being subjected to the relations within the whole - relations, these being the very relations of capitalist production and social reproduction. (6) Urban space Is the space of a unified market in the commodity-economy.


We may now sum up the foregoing and investigate the nature of the payment for location in capitalism. Location is a use-value for any activity of production or reproduction, being as it is a


Rent Theory and the Price of Urban Land


necessary condition to the exercise of any such activity. Location is a physical structure (building) supported in general directly on land.

The distinctive features of different individuallocatlons stem from the respective positions of the latter in urban space. Urban space is the sum total of (the locations interlinked by) an infrastructure - roads, networks, facilities etc. -bullt and serviced by social labour, that provides forthe requirements of the economy and that makes location "useful". Insofar as the regulation of the commodityeconomy, and with it, the spatial organization of prod uction (and reproduction) is carried out by the market, location commands a price, itself established on the same market. There arises therefore a payment for location because location is a use value and because it is marketed as a commodity endowed with exchange value. the payment for location enters the price of production of commodities along with the payment for the other conditions of production; labour and means of production.

The market price of commodities that regulates the relative quantities of commodities to be produced thus regulates simultaneously the spatial distribution of the production within the urban space (7) and regulation of production necessarily implies spatial organization through the instrument of the payment for location. the latter may take, as it historically did, the form of rent or price according to the length of the period for which location is secured as a condition for production. It will be seen below (chapter 6) that one of the forms becomes predominant in each specific stage of accumulation, the price form for being the predominant form in contemporary capitalism.

Location itself may materialize in a variety of ways in the urban space and these concrete forms do not "explain themselves" except as location. Because historically the overwhelming majority of locations have been supported by land, and perhaps more importantly. because in feudalism land was the only "source of wealth", that is, the support of the dominant form of production of excess product, the payment for location came to be confounded with the payment for land. Indeed, throughout the history of Political Economy, land has remained identified with location, a "space required as an element of all production and all human activity" (Cap.III:774). The analysis of the payment for location was further removed from the nature of the latter as it arises in capitalism when, the payment for land whether in rent form or price

form, the same analysis constructed the form "capitalist ground rent" or simply "land rent' that actually meant the transformation of a category: "rent" from one mode of production to the next, namely, from feudalism to capitalism.

"Land" commands therefore a price because and only because it is a support for location. Conversely,wherever location is not supported by land.a payment for it arises all the same. Although land is the most common support for location in the urban space, it is by no means unique- indeed, with the constant transformation of urban space to the needs of the development of production, ever newer forms of location emerge and increase their own variety. Concessions for fishing and sea-farming in national territorial waters or for off-shore oil production give rise to rent-like payments for locations in the oceans, while on satellites similar payments arise e.9.,by communications relays and soon by industries wishing (and having the resources or enjoying state subsidies (8)) to take advantage of techniques of production in low graVity and vacuum conditions. In the latter case some of such locations may be relatively "fixed", as on satellites in a geostationary orbit, but equally well they may be actually "moving", pointing to the fact that in urban space not only location is not necessarily supported by 'tand" but it can be dissociated from the concept of "fixity" with respect to an earthly referential system. The use value of a location obviously does not depend on any such restriction.

Location being a use-value traded in the market as a commodity, there arises the questions of its consumption and of its value. We return to the latter in connection with the production of space below, but although both are related to each other, the question of the consumption of location can already be answered in part. but locations do became the flow of technological innovations that accompany the development of production brings about changes in the spatial requirements of production and reproduction to which space - if not the individual location - must constantly be adapted through additional labour. Therefore no particular location is - as the price-form of payment suggest-a "permanent" condition of productlon.or possess an intrinsic use value. The use value of a location Is transformed incessantly and the individual economic activities must in their turn, adapt to the changes in the urban space appearing again and again


Rent Theory and the Price of Urban Land


on the market as "consumers" trading for suitable locations.


We have seen that urban space is a product of labour. It is not so much that urban space loses its "natural" content - it is certainly made up of matter found in nature. it is rather that whatever transformations nature had gone through up to any particular time, it - nature and the product of past labour - can be transformed again so that no permanent elements in it are to found. This is why it is fruitless to try to discover the natural element in space - as with rent theory - to try to determine the amount of nature and the amount of labour "contained" in space at any specific historical epoch in order to measure the value of space - as with the theory of embodied labour. Both such approaches that seek to determine what is rather than what is becoming imply the concept of equilibrium, as if an equilibrium (of the productive processes, of spatial distribution of activities stc.) could instantly arise on the basis of an existing structure - only to be offset in the next Instant. Our focus is rather on the transformations wrought into space by labour in consequence of the development of the productive forces that necessarily accompany the accumulation process. indeed, "production of space" is transformation of space in the strong sense that the end-product of spatial interventions is not any particular ("new") structure but the transformation of a particular structure itself. Physical structures that come into existence in the process may remain - and parts of them do remain - unchanged for some time, if only waiting to be transformed as soon as the need for it will be felt. even while they remain unaltered in their physical form however, such parts of the structure do change as use values while the production process develops - as we have seen above in connection with the use value of locations, or as the examples of many "historic towns" conserved virtually intact through long periods, at times, centuries, vividly illustrates. (9) The point is that interventions into space - production of space- is about transformation, rather than either conservation of exlstlnq structures, or the attainment of a particular structure that could only be conceived as an "ideal". It is the incessant transformation of space that is required by the development of the production process.

The production of urban space is governed by laws different from those of commodity production owing to the fact that it cannot be produced as

individualized use value. the labour spent in the production of any particular commodity is socially validated in consumption through the sale of the commodity as a use value. if the commodity is useless, it cannot be sold and the labour spent in its production, validated. the labour spent in the production of space cannot be validated in the same way because space is not a use-value: space as such cannot be used by an individual process of production or consumption. Use value in space is represented by the locations contains in it - but locations being a position in space, it cannot be produced as such. Any intervention at particular portion of space amounts to a transformation of the whole space, an ultimately of all the locations contained in it. What is produced is space, whereas locations - use values - result collectively. This means that the production of space cannot be governed by law of value imposed in a market and therefore must be carried out collectively at the social level. A quantum of the productive power of society (abstract labour) is devoted annually to the production of the sum total of changes in physical infra- and superstructure (10) needed to adapt urban space to the requirements of production and reproduction. the labourtime spent in the production of space over a certain period represents the value of the latter. This value is by no means a deduction of a surplus value that "otherwise" would be somehow higher: on the contrary, it is one of the very conditions of the production of surplus value. Without transformation of space there can be no sustained production, so that the labour spent in the prod uctlon of space is as necessary as the labour spent in the reproduction of the means of production, and the same is true for all other labour necessary to upkeep the state apparatus, that is, to reproduce the legal, political and administrative superstructures of production.

Marx came perhaps closets to a formulation of the role of labour spent in the production of space in the passage on transport when investigating the circulation period of capital in the commodity form in Grundrlsse (pp.521 ss).He certainly sees such labour as necessary and even the idea that it is unproductive (of surplus value) is couched in very cautious terms. Let us consider the passage (P 533):

labour may be necessary without being prod uctlve. All general, communal conditions of production - so long as their production cannot yet be accomplished by capital as such and


Rent Theory and the Price of Urban Land


under Its conditions - are therefore paid for out of a part of the country's revenue - out of the government's treasury - and the workers do not appear as productive workers, even though they increase the productive force of capltal.(11)

Here clearly the workers appears as unproductive workers because they work in a sector of the economy that had not been commoditized -"production cannot .... be accomplished by capital as such" -- so that their "surplus labour time, although (it may be) present in the product, is not exchangeable". Later, in Capital, Marx - contrary to his own design - holds to such appearance, actually retroceding from this tentative formulation "which cannot be sharply defined yet at this point" (id, \. ibid.) and virtually restricts his investigation of capitalism to the production of commodities as Sweezy points out correctly.(12) But the commodity form even though it is dominant in capitalism, encounters its limits not due to some external force, on the contrary: the limits to the commoditization of production and thus the production of non-commodltlzable use values belongs in the dialectic of capitalist production. (13) Therefore, if values are the expression of socially necessary labour, they cannot be restricted to commodities. (14)

Neither the labour to produce the spatial structure, nor the labour to produce the [urldlco-polltlco-administrative superstructures are explicitly treated in the classical formula of valorization

VE = V + VS


in which the wage relation divides the total abstract labour, or the value of the total labour of society, VE, into the value of the labour power, V and surplus value VS in commodity production only. in order to explicitly incorporate those portions of social labour, we may then write

VS = VA + Vl + VT

where VL and VT are the labour times spent in the production of space and in all other activities of the state, respectively, and VA is value available for accumulation (capitalist' consumption disregarded, as henceforward). Then (1) becomes

VE = V + (\I A + Vl + VT)



VA = VS - (\Il + VT)


Alternatively, VL and VT may be concluded in labour time necessary to reproduce all the conditions of production. If W is the labour time to reproduce labour power (wage goods) and direct means of production (capital goods) used up In commodity production, then we may write


This time (1) becomes

VE == (W + Vl + VT) + VS

(4.1 b)




The first formulation is centred around the distinction productive/unproductive labour, whereas the second, around the distinction necessary (productive and unproductive) / surplus labour. The formulations are obviously equivalent.(15) The rate of accumulation, a measure of the expansion of the productive power of SOCiety, defined as surplus labour time over total (productive and unproductive) necessary labour time is, in the first formulation


e = ------------

V + (VL + vr)


and in the second formulation, which will be used henceforth for being consistent with the capital/wage labour relation defined at the social level,we have


e = -------------



From the point of view of accumulation,all that matters Is the amount of abstract labour spent in the production of space as a portion of necessary labour. The distinction productive/unproductive labour is another division of social labour that refers to the distinction commodity production as against production of use values but it cannot account, by itself, for the fact of expanded reproduction or accumulation.


Rent Theory and the Price of Urban Land


The value of the labour power spent in the production of space dispels objections such as raised in classical political economy in connection with the rent theory that the payment for land can enter the price of production of commodities. the labour spent in the production of space is validated indirectly and at the aggregate level through the consumption of the commodities that have been produced over the urban space. The transformation of urban space gives rise to new payments for locations contained in it and occupied by new individual processes (techniques) of production.These payments are incorporated into the price of production of commodities so that value in space is finally validated in this mediate form in the consumption of commodities. "Value of a location" however,has no meaning since as we have seen, no portion of space has any specific content of abstract labour: any labour effected on any portion of space re-defines (transforms) urban space as a whole.(16) Accordingly, -and just as in the case of commodities - the price of a location does not arise from its supposed value but simply as a requirement of the organization of production under the prevailing conditions of competition between capitals. Because commoditlzatlon and with it, market regulation cannot be generalized across the whole of the capitalist economy, the conditions of competition are circumscribed by state Intervention. As the flow of capitals between firms and industries is regulated to a lesser or greater (according to the stage of accumulation) extent through taxes, subsidies, direct intervention, regulation affecting concentration and centralization of capital, cross-(national) boundary controls and so on, so is spatial localization framed by zoning by-laws, property taxes, public enterprise etc., so that the price of location carries out organization merely within the confines of the remaining "freedom" of the market.


Following classical rent theory, price of location (in the form of the price of land) has been as a barrier to capital accumulation leading to widespread theses about nationalization of the land as remedy. (17) An archetypal form of the argument reads:

... the purchase price of the land (capitalized ground rent subsumed under the legal fiction of the value of the land) has the effect of withdrawing capital from investment in agricultural productlon.Privete land-ownership (large or small) serves

as an obstacle to the development of productive forces in agriculture. (18)

Such a view is to confuse capital with a sum of money.Its) The only thing which would accelerate accumulation in this connection is a reduction of the labour time necessary to produce space Vl), thus reducing total necessary labour time M - and we have seen that this has nothing to do whatsoever with the price of land.

If land had no price (and spatial regulation would be carried out by central planning, an event as unlikely as complete anarchy of production), all that happened is that the corresponding amount of money would be withdrawn from capital investment,from the price of commodities and from wages - that is,from circulation - and the monetary expression of abstract labour would change accordingly. But the amounts of labour spent, the techniques of production and Ultimately the rate of accumulation SVN would remain unchanged. All that would be effected (excluding, in latter case, the denomination "price of land") or in the case of mere variations (such as those arlsmq from legal regulations such as land use zoning that do not do away with land price but interfere with the magnitude of the latter) in the price of the land, the proportions of the flows under the same denomination which make up capital advanced for production,but without affecting VSN or even the (money-irate of profit.

The above example shows, incidentally, that the argument behind the idea of "rational planning" is the same as that holds that "rent" hinders accumulation: planning - through land use zoning, public enterprise etc. -would make production "more efficient". We can already conclude from the foregoing, however, that planning - that is to say, state intervention - does not arise in order to increase efficiency (the rate of accumulation) that "otherwise" would be lower but rather, out of sheer necessity imposed by the limits to the commodltizatlon of the economy. In other words, state intervention does not make commodity production more efflclent- it makes it possible at all.


If the pure and simple "abolition" of the payment for locations would not by itself alter the condl-


Rent Theory and the Price of Urban Land


tions of production (provided that an equally "efficient" planned regulations is put into the place of market regulation) and therefore, of accumulation, the intuitive perception, In a market-regulated economy, that land prices are ''too high", still does or may have a meaning. Namely, it may mean that urban space is too differentiated or conversely, not sufficiently homogenized by infrastructure, resulting in fierce competition for suitable locations. In other words: more labour invested in spatial infrastructure, even if it is diverted from direct production of commodities (20) (Le.,allowing for "lost'productlon of surplus value during the period of construction), would make production more efficient overall (accumulation faster), because it would reduce overall necessary labour V over a certain time period during which the effects of such investments would be felt (that is, before it would be used up or become obsolete).

For example,if the diversion of 10% of the labour power for 2 years builds a transport system (or an improvement in the existing one) which reduces necessary labour (or prevents its increase)by 5% for a further 18 years, such investment results in a reduction of necessary labour and, if total labour time remains unchanged, in a corresponding increase in surplus value, and a still greater (relative) increase in the rate of surplus.

Both the decrease in necessary labour V and the increase in the rate of surplus e would depend on the extant value of e. Thus, the new surplus value SV' = aV' (yearly average over the whole period of 20 years) will be


18(1+ e -2(0.1)

eV' = 1 + ----------------------------. eV



_QJL eV' + 1 + e - 0.2


eV 20

showing that the increase in surplus value is positive for e 4.5 (that is, for all e less that an unlikely high 4.5, above which the gains do not compensate for the loss of all the surplus value produced by the 10% of the labour power in two years of the

construction), and is generally the greater, the smaller is the starting value e. In particular





.03 .05 .10 .15 .33 .55

.078 .099 .151 .202 .391 .563

160 97 50 35 17 13

uncomfortably low rates below 5% would be more than doubled whereas rates above 50% would increase by around 10% or less.

the foregoing numerical example can be given a general expression.Namely,if improvements takes x years for 1 00 A

percent of the labour power and reduces necessary labour by

100 percent for a further T years, we have



x(1 - A) + T (1 + Ie)





~ = k[e(k-1) -1} e


it goes without saying that any gains through a reduction of the necessary labour time are not automatically incorporated into surplus labour time - that will depend on the organization of the labour process in which both workers and capitalist take a part (as opponents, because of their respective immediate interests both as individuals and as classes) - but reduction of


Rent Theory and the Price of Urban Land


necessary labour is a necessary, if not sufficient,condition to increase the rate of surplus (production of relative surplus - value) in a regime of intensive accumulation.

The example above shows, on the one hand, why investments in spatial infrastructure is particularly advantageous at times of crisis when the rate of surplus value is low; and quite apart from the circumstances that it constitutes a convenient outlet for commodities because in the old structure of production abstract labour spent in their production cannot be validated.

History illustrates the close association between crises and railway, transport, construction etc. booms. After the huge-scale accumulation of industrial fixed capital throughout the industrial revolution, accumulation was checked by 1830 - which is also the time of the first railway boom. (21) At the eve of the renewed industrial expansion spurred by "Free Trade" (1847) came the second and biggest ever (in England) railway boom (22) that paved the way to the "golden age of the manufacturers", the 1850s and the 1860s. When finally the great depression set in, it came accompanied for the first decade by ''the peak for all transport {railways and ships} ... reached in the 1870s". (23) Similarly , the skyline of American cities (New York,Chicago) was transfigured by the mushrooming of skyscrapers both in the eve - the 1920s and in the wake - the 1930s - of the great crisis. The Empire State Building,built in 18 month 24 hours a day by "pre-recession cheap labour"(24) is only the most famous specimen of a populous species created by that construction boom that raised investments in infrastructure to over half of total fixed capital formation. (25) The current crisis did not fail to bring the attention of some to the need for renewed investment in in" frastructure either (26), with no decisive result however. This is probably due to the fact that the rate of accumulation within the commodity sector has been maintained so far into the crisis (end of 1984) by an unprecedented policy of accumulation of debt (foreign, public, banking, corporate, consumer's, mortgage -now totalling about US $8 trillion, or two years "national income) pursued by the United States, so that it looks as if the rate of surplus e was high.

On the other hand it is also readily apparent in the above analytical example that virtually all the variables involved in the assessment of the effects of

the envisaged investments are beyond the reach of individual capitalists even in terms of information , let alone of control. A crisis unequivocally indicates the need for a reduction of total necessary labour as a proportion of social labour power. From this, however, no rule can be derived as to the distribution of necessary labour between the commodity-producing sector (or within this, between the "departments" producing means of consumption and means of production, respectively) and the state sector (and within this between the production of space and the production of all other services). In connection with the formulation of necessary labour

v = W + VL + VT

earlier on we had emphasized that a reduction of labour necessary to produce space would increase the productivity of social labour, but of course, an equal reduction of necessary labour in "all other activities" of the state (VT) or in the commodity sector (W) would increase labour productivity equally. A fall in the rate of accumulation provokes a "crisis" that signals that production must be transformed, namely some of the components of necessary labour must be reduced. This can be done by means of redistributing the use of labour power - that is, by reorganizing the labour process - on the basis of some regulation. In capitalism a model of the economy, as it were, is constituted in the commodity economy, where the rate of accumulation is posited as profit materialized in the capital/wage relation and which is left to the regulation by competition on the market. If comrnodltlzatlon could be extended to the whole production, the latter could be entirely regulated by the market - a supposition the absurdity of which is reflected in the fact that the whole of social production would be "anarchic". A society cannot be anarchic nor can social relations be entirely reified. The commodity sector therefore retains its dependence on the state sector and conversely; for both are part of the same whole. The regulation of production is therefore achieved in the first instance by the market and In a second instance by conscious (planned) intervention carried out by the state through trial-and-error and guided by the sign emitted from the commodity economy. The regulation of commodity production comes to a regulation of competing individual processes of production under the conditions arising both from their own competition - generally referred to as market


Flent Theory and the Price of Urban Land


forces - and from the activities of the state generally referred to as state intervention. To accountfor the concrete. production process however, it becomes necessary to distinguish the concrete forms of capital that take part in the former with respect to their rigidity towards changes in the production process. The foregoing example was in fact already about production of, fixed capital, that is to say, the production of a given structure that would increase the productivity of labour for a lasting period: the regulation of the production process, both In the case of the individual processes of commodity production and in the case of direct production of use values as of. spatial infrastructures, makes it necessary to introduce the distinction fixed capital - circulating capital and the related concept of techniques of production.


(1) In primitive communism in which production is not individualized, the territory need not be structured Into space.Of course members of the community do move from place to place within the territory, but the latter is used in its natural form and is not transformed through labour; locations do not become Individualized.This is what allows such communities to move from one territory to another under the effect of some external impulse, as an aggression from another community or society or the mere seasonal variations of nature. Small numbers of such forms of society have survived up to our day, as for example some Indian groups living in the Amazonian region and that are still allowed a territory large enough to keep their native form of life.

(2)Note that the simplest form of location. a plot of land, is already a social product materialized - even If we disregard the fence around it - in a written

legal tittle, the concreteness of which was heavily felt by all the small freeholders of England in the 17th century right after the aboJitionof feudal forthe institution of baurgeois (private property) rights to land (Hill, 1967:147).

(3) Differentiation and hamogenization go hand in hand - a particular location is different from any other only because they belong tothesame space that is sufficiently homogeneous to include both-two lacations not belonging to. the same space are not different,they do not compare.See also below and further, Section 4.5.

(4) The inutility,and even disutlllty.of such fortifications around towns could not have been more graphically demonstrated than during. the 1.848 European revolutions in the siege of Vienna: the enemy- students, workers and sections af the middle classes of Vienna - was within the walls,and the troops of the Emperor without. Eleven years later the same city provided also an example of reinterpretation of "security" in towns, in the competition brief of one of the first urban (re)development plans (see Section 8.4 on the emergence of planning), the Ringstrasse competition: "The influence of the army survived the fall ofthe fortifications ... The competition brief itself required the retention of the barracks to south of the old town and the planning af new ones in the north. Communications between these. two military strong points had to be laid out on a geneliOUs scale to permit rapid troop movements." (Breitling,1980:40).

(5) The following does not apply to 'local'' economies only - or else all economy is local:" the structure of local economies can be seen as a product of the combination of "layers", of the successive imposition over the years of new rounds of investments, new forms of activity" (MasseY,1984:117-8,first formulated in Massey,1979).

(6) The word "urban" and its derivates have not been consistently used in contemporary writing.The predominant meaning associated to it has been "city-like"or "town-like",as for instance in Merringtonwho,after discussing the reduction of the town/country dichotomy in capitalism,speaks of the "de urbanization of the metropolis" as synonymous with "dissolving [of1 the city into the urban region"Merrington, 1975: 190) --the correct use would be "urbanization of the city rather than "deurbanlzatlon". Similarly, "urban" has been used in contra



and the Price of Urban


distinction to 'rurat''But we have seen that the dichotomy town/country had not transformed in capitalism (into a supposed urban/rural dichotomy); it had been annlqullated altogether,"dissoiving" both the town and the country into the urban space.This is why "urban region","urban economy" etc. do not posses a specific content.as witnessed by the failure of many attempts to grasp the former (for a review and critique of such attempts, see Ball,1979).To designate what the cities: and town have become,we use "urban agg!omeration", a cOllvenient expression for it alludes to the fact that it refers to concentrations of activities at rather higher than average densities, and further, that its boundaries are unimportant and depend on some arbitrary definition,as planners of land use zoning all know.

(7)"The natural price [price of production] of a commodity is simply the price which must be paid, under competitive conditions, to guarantee the production of this commodity on some given scale" (Rowthorn 19S0:183-4,quoted earlier in parti.ln this definition of production price it is not stated.but it is obvious that "to guarantee the production" must include that the same commodity is able to conquer (to pay for) a suitable location for its production at the appropriate scale.

(8) New processes of production frequently pay for location in the form of rent rather than price, for reasons discussed in Chapter (5 below, and for similar reasons they frequently enjoy state subsidies. In the case of a planned 'spatial" (extra-tarrestrialllaboratory alluded to in the example.such subsidies are anticipated in the range of hundreds of million dollars.A further note may be of order here,because locations have been associated so closely for so long with a "natural" basis, lndestructible etc. The payment for a location on a satellite might appear as a payment towards its costs of production, because it is "entirely" man-rnade.Thls will be discussed again later; but it can already be observed that nothing in the example given here would change if the same "space station" to support the laboratory would be establlshed.let us say.on the Moon.

(9) Or simllarly.vthe means of communications and transport handed down from the manufacturing period soon become unbearable trammels on Modern Industry" (Cap 1:363).

(10) Infrastructures: that support juridical units of location defined at the level of the Earth's surface.or (when defined on land) plots. suoerstruc-

tures.bulldlnqs, inside the plot.which may (but not always) give rise to further individual locations like flats or offices. The relevant distinction betvveen infrastructure and superstructure is that the former falls into the realm of "public" - so that both its production and use are necessarily performed collectively whereas the latter may be produced, serviced and used in possession by indivlduals, that is to say, within the realm of private propsrty.ln what follows we will be concerned mainly with infrastructure, but it is useful to note that the distinction between infra- and superstructure, and the precise delimitation of a "location" both depend on the way -which may adapt to social practice through time - in which private property is defined in this territory.

(11) Where we can safely assume that the closing expression is a slip of the pen that should read: " ... they increase the productive power of labour (at the service of capital)".

(12) Sweezy (1972) :4985.

{"13} In contradiction to the view held by Uno (t 964) followed by Seklne (1967) and others and who.havlnq developed the logic of Capital to its ultimate consequences.reaches the conclusion that a "purely capitalist society" cannot develop because of the limits to the commodltization of the economy. It is only a further logical step then to hold that "the bourgeois state [is] an institution alien to capital" (Sekine,1967:154).

(14) We follow Aglietta's view that as necessary, or abstract, labour.so values can be defined at the social level only (Aglietta,1976,especiallv pp.38-47).Despite this view,however,Aglietta ends up restricting value to the commodity-form in which socially necessary labour is directly validated" and the production of uses-values (non-commodities) enters as a division of profits.whlch then can be read back into the field of value as "simply an ex-post result without major significance" (op.clt..p.sz).

(15) Rowthorn provided a formal demonstration of such equivalence in another example. He showed that if an economy the labour power in the private sector.E, is skilled and in the educational (qovernmentat'unproductlve") sector the labour power E is unskilled and provides those skills, the total value in the private sector is E ( 1 + E / E) = E + E . "this result could have been obtained directly by regarding all labour performed in the economy as unskilled [that Is,


and the Price of Urban Land


"homogeneous abstract labour" " simply adding up the: labour nU",'''Tl sectors" (Rowrhorn, '1980:24

and then in the two

(16) This is in fact til€! :%1111e with commodities as

well - that "embody" amounts of

labour only - where even the amount of abstract labour necessary to modity is devoid of

labour can be defined at

any prevailing Failure to ra"'r\,',n so-called t~·:,n"fr.n.~",t·i,~n '·"',"i.l"llan-.

tlon of values into 1979,Agiietta 1967 and an latter, Driver 1981). In this "nlm"'''''''''.~

that driver solved the transtorrna-

tlon problem p.l. bstterwould be to say

that in Aglietta's view it is not a and prices do not balonq to the same realm.Anyhow, if it is more difficult to see that there is no meaning in "value of because it appears as if comrnodltlos can be produced, the same becomes far more selt-evldent in the case 01 locatlons In space, themselves inconceivable in isolation.

(17) Even though it has been also amply pointed

out that private of land is essential to the

depossesslon of from his means sub-

sistence, that is to say, 10 the existence of wage labour and therefore to about nationalization 01' level of political debate from

& Catalano.t 978:

Japan (Uno, 19f34: 1

(18) Hindess (1 Catalano (1987) :52.


production and labour. Tile ,""u,n?.r<

these appear in total is an outcome

regulation of productlon.In

ganization enters the of

means of the payment for location that is a of total capital aovanced as of productlon-Let us note in that rents in capitalism

a production rent is paid out of "excess

notion peculiar to rent theory.as is that there exists a class of landowners who own the land but nothing else (so that they cannot be capitalist). Surely,feudal rent was performed (rather that paid) during the production period and its result appeared at the end.just as with wage labourers' surplus labour. But the feudal landlord controlled the production process ensuring thereby both the production and the ap-

of surplus - a condition that is clearly not present in capitalism, as any classical economist and Marx were at pains to stress.

(20) This is no! a necessary assumption. More generally this example is about a temporary decrease in the rate of surplus during which

is so that the rate of

in the future.

(22) Expenditure on construction only approached 10% of national income

(2~1)(id.ibid,) FW1her: "The [transport] industry contributed to the growth of national output not only by virtue of its own productivity increases but also reducing the costs of other in"Transport costs of bulky goods halved between 1820 and 1866, and tramp-shipping freights fell by over 40% from 1871 to 1911 - (ld.lbld.).

(24) Amery, Colin (1984) "Cityofdreadfu! height" Financia! times July 2:15.


(26) In Great Britain, "demands for increased on infrastructure projects featured stron~Jly" at an annual conference of the Confederation of British Industry convened to "present the Prime Minister with a list of the industry's priorities" (Financial '!984:6).!n the US, a 1982 (August 2) issue of Newsweek featured on its cover:"The Decaying of America (Its Dams,Bridges, Roads and Wa.ter Systems Are Rapidly Falling Apart)" and forwarded an estimate of US $3 trillion as the "cost of needed repairs" (p.22).US Government spending on infrastructure had actually fallen from 197a to 1981 by about 25% In absolute terms,





Marisa Carmona, Delft cl989

a, The trends

With the return to democratic the main issue in many South American countries is how to recuperate and/or integrate the exist.ing cies of political participation of popular movements, into the State organism and to the economy. The democratic process is confronted with a paradigm of historic dimension: to

for creative and imaginative ways to conciliate institutions and political practices of representative democracy with the trends of the new industrial processes and imperatives of lnternatlonal division of labour with state decision making mechanisms. This taking into consideration, that new social movements, with new forms of democratical participation have arisen during the authoritarian decades.

This new reality of new urban social movements, which embraces the majority of the population living in substandards conditions, challenge the simple understanding of planning as linked to blue printed possibilities of intervention upon the different processes that occur on a determinate society. In fact, planning has been commonly conceived as a question of establishing rational criteria and strategies that can be applied to the different sectors, in order to achieve certain objectives under different social situations and according to different forms of state-direct or indirect intervention- and negotiations -conclllatlon between interests of powerful social groups (Corraggio, ).

The question is that economical, social, spatial and political processes are submitted to historical interactions according to the modes and rhythms of capital accumulation and it consecutive form of state interventions. Being the forms national unity and the process of democratization central to the transformation process.

In many countries the exhaustion of the democratic-industrialist development, parallel to a rapid phenomenon of commodification embracing large sectors of the population, and an accuts tertlarlzatlon of the economy together with cultural modernization are transforming social actors, and deepen even more the contradictions which arise from the uneven spatial organization of the cities. It seems that the Industrial- class-practices of a.

typical type of serial industrialization, have entered a crisis and have been replaced by thousands of new segmented social collective practices, located territorially in the urban space.

Some huge urban agglomerations are also reaching the stage of intensive accumulation, producing particularly rapid changes in the urban processes, but are not able to expand the benefit of it growth to all the population as well.

The possible intervention in productive and spatial processes will be a fundamental paradigm in Latin America in the year 2000 and needs to be placed in the general re-orienting tendency ongoing in the social sciences, which is centered on the problem of power. It is necessary to re-conceptuallze the new forms of doing polltlcs and new forms of planning. Means to review the traditional relationship between public and private sphere, the political and the social, and specially the conceptualization of the State both as product and as producer.

The question of urban restructuring is linked to the combined and cyclical processes of expansion, concentration and tertlarlzatlon of the economy and therefore any intention to transform the urban process shall look into the particularities of the development of the urban market and the feasibilities of state regulations 011 it

It seems like the main paradigm concerning the transformation of the construction environment, particularly that of the most vulnerable population, is linked to the capability to accelerate and reorientate economic growth while articulating both socially oriented programmes with sectorial interventions. This interventions can be planned in order to allow changes in an increasingly coordinated way, democratizing the city and to economize resources of all kinds.


Democracy and Urban Planning





Abstract from an Interview in "Cuedernos Urbanos" 18/11/86 by R. Nunez with arch. JORGE RUIZ de SOMOCURCIO. Municipal Department of Urban Development, Lima.

Doing away with chaos and improvisation in the field of Urban Development was a major issue in the municipal programme of lzqulerda Unida (IU).

Below, arch.Jorge Ruiz de Somocurcio indicates that important steps have been taken on the road to democratization of urban space and urban life, by the city administration of Lima in the 80 ies.

- What was Lima like in i 983?

JRS: First of all, we had to create an authority. We were convinced that this authority should be accompanied by the agencies that belonged to focal institutions. An agency without executive authority is really of no use. Secondly we were confronted by a town that had been constructed ahead of the planning. And the plans had been totally exceeded by the progress of the city. Thirdly, we found a pattern of constructing the city in which the needs of low-income sectors were not met at all in terms of investments plans and which was resulting in a poor form of city development.

At the same time we saw that the city, in significant proportions, had been giving way to unregistered forms of organization and participation, which needed to be incorporated in the new ways of city development.

- The control over land use was a major issue in de IU programme. Have you been able to avoid the urbanization of agricultural areas by private interests?

JRS: We have partly succeeded. However, the pressure on such land has been very great because obviously the agriculture zones can represent a greater potential land rent as urban land than as agricultural land. Yet this is so because the agricultural potential has not yet been developed. A market of 5 or 6 million people can perfectly well guarantee high levels of rentability. What has happened is that the central government, who are

responsible for agricultural matters, did not show any interest and were involved in an ongoing sacrifice of these zones.

Thus we see, for example, that our country, not particularly rich in green areas, invests 25 thousand dollars to gain one hectare from the desert, whereas on the other hand it consumes it most valuable agricultural land resources like Saturn devoured his children. These agricultural zones are not only productive areas but also form an ecological belt around the city. They should be incorporated in the city as recreational areas for the sectors that are deprived of this at the moment.

- Maybe the most important achievement of this city planning office was the new Development Plan for Metropolitan Lima.

The criticism that has been revealed against the Plan - probably because of lack of knowledge aboutthe method of preparing the Plan - was not directed at the necessity of urgency of a plan but rather at the absence of a strategy for city development. Some opponents of the Plan suggested that it cannot be reduced to a diagnosis - that it should contain a strategy for the long term. Is this representing a valid criticism of the Plan or does it rather show ignorance concerning the method of formulating the Plan?

JRS: I think that, what has been claimed by certain spectators who represent certain viewpoints towards the urban issue, is precisely something we want to avoid and we want to distance ourselves from it. We do not believe that the city should accommodate to ideal images, nor that it is possible talk seriously of making statements without defining beforehand the instruments that should be used. Because we, on the contrary, would like to make proposals that do not have any condition on their implementation. We can not support measures that do not have the attributes to intervene realistically. We have proposed more than a model, as has often been ascribed to us. We propose a method of drawing plans with the understanding that this has to be based on an urban authority, with the participation of city agencies; principally those bodies that have been involved in constructing the town. For example: urban control is an instrument. Physical legal sanitation is an instrument. The land use law expropriation law, they are instruments,


Democracy and Urban Planning


Only in this way can progressive action be undertaken to confront these most critical aspects of the city.

Personally, I do not have much confidence In those great visions for the distant future in a country and a town that are submitted to the pressure of the International Monetary Fund and where there is little control on the prices of export goods. It is really very difficult to say in a serious way that we have an image of the city to be complete in the next twenty or twenty five years.

- Does that mean that the Development Plan is not going to be visualized in plans?

J RS: Reality has shown us that precisely the forms of planning up until today, the form that our critics want to reclaim, are obsolete. They were inadequate for an orientation of the direction of the city. Plans are instruments. They are not the goal. A city is not being made in order to correspond to plans. The plans are nothing other than guidelines. They exist and they are being implemented in relation to the behaviour of the major agents of urban development such as the productive economy, the main road system, the established aspects of land use, the determination of densities, etc.

What we have tried to constitute in the first place is a method for planning and we believe that progress has been made in this direction. Unfortunately, it Is very hard to reverse the forms that have been making the city for decades.

- Is it a Development Plan or a Political Plan?

JRS: Every development plan is a political project, because as a plan it implies a certain concept of what aspects of the urban society should develop.

What does the Plan do? It identifies the most important aspects, the most significant components of the urban progress. We want to advance on this basis with a set of measures and actions, part of which belong within the Municipality and part outside.

- Is it not utopia to want to construct a bridge between the formal city and the real city? JRS: There is no alternative. I think it is more utopia to pretend that the city coincides with the drawing of a plan. Our major achievement has been to create space for a new type or urban development. Some bases have been established.


Social Movements and Community Participation



Marisa Carmona

In most Latin American cities urbanization processes with very similar features and according to the particularities of their form of national integration and the type of articulation to the external market have been developed.

The phenomenon of a high concentration of resources, power and decisions in some of the cities, urban centers and residential networks, in detriment of others leads us to try to look for some new political approaches and forms of interventions, different from the model of lndustrlal-dependent-city, that had already started to fail in the sixties and was obstructing a rational and balanced territorial arrangement.

The economical and spatial planning adjustments designed by imposition of IMF and International Banks in the eighties did not operate since the great public and private investment expected by the new pollcles did not arrive or did have completely different destination to the ones expected (J.Ruiz de Somocurcio). On the contrary, in spontaneous and self-built settlements of the periphery, in the overcrowded squatters of the inner city and in the illegal occupations of land, different types of people organizations amongst the urban poor unexpected by all planning procedures which brought completely new forms of participation and community inputs, emerge.

There are all kinds of popular organization: women centers, youth committees, organizations for the unemployed, community kitchens, organizations for the (illegal) tending of electricity, against eviction. for indebted water bills, for a glass of milk, for employment promotion, and also Popular Planning Councils, Agencies to wire the lots, etc. All those organizations, now exist amongst most of the urban population and they are threatening all traditional forms of urban planning, management and control of the larqe metropolis and of local governments in the continent.

The economic, social and political conditions of Latin America in the eighties is very different to the one in the forties when urban planning started. Nowadays the continent faces a recornposltlon of the international division of labour in which the continent has few possibilities of influencing in a determinant way the ongoing process. The volume

of exports increases while the amount received in exchange diminishes because of prices failures. Latin America transfers 30% of its savings abroad only by concept of payment of external debt at the moment, whensince 1983 world trade has started to rise again.

On the contrary, the income per capita is regressive and is less than in 1980. The enormous weight of the foreign debt in Latin America difflcults any sort of provision related to public investment in large and small cities.

The city of the future is an indebted city, with millions of unemployed or sub-employed living without city services and without any possibility of being covered by urban Infra- structure on short or long terms. The city is a source of unpredictable new forms of popular organization which necessarily result in new forms of making urban planning and making policies at a local- government level.

The trends concerning social movements interactions in the spatial and political reorganization are as much as effective articulations can aloow a greater direct or indirect local governments intervention in the management of the different actions. In this publication the main trends concern the transformation and consolidation of the different residential networks,' regarding the delivery of land, services and urban infrastructure, and in general, all those sectors where is reflected that the existing modes have been inappropriate, insufficient, uncontrolled and selective and need to be reformulated.


Social Movements and Community Participation




Glulletta Fadda. 1990

Some planning theoreticians have questioned, since the 70's, preexistent development models given the serious urbanization and development problems and the resulting and progressive deterioration of habitat and standard of living the current world and particularly developing countries are confronted with. Simultaneously, they have suggested the possibility of "an alternative development" or "another development" that will stress quality rather than quantity and will focus on aspirations for a fairer and a more equalitarian and democratic society. In such a development, objectives for optimization of environment and standard of living would play a capital role and distribution of services and goods would be more balanced and rationalized. These proposals mean a change in planning philosophy and all of them state that some key notions such as Participation, Democratization and Eco-development(2), among others, are to be included in the new model.

Within this perspective, the present paper deals mainly with the first notion, that is the analysis of Participation opportunities by local organizations being deeply involved in a given urban situation. Our considerations and inferences as to the degree of involvement of these organizations are based on the study of Venezuelan reality and some mobilizations in Caracas Metropolitan Area (CMA) and, more particularly, on a detailed analysis of the participation process of one of its neighborhood communities: the one of "el barrio(3) La Mor{m(4).

Before suggesting some initiatives and recommendations to improve the action of certain community groups, some theoretical points are reiterated here that, even though already clarified in other papers, are considered to be necessary to have a better understanding of the problem.

On the basis of a review ofthe concept of Participation (Fadda, 1988/a), Pearse and Stiefel's approach (1980:95) was adopted. According to it, Participation is understood as an "encounter" (in its broadest sense: from convergence to confrontation). That is to say, as a social relationship in

which processes resulting from actions promoted ''from above" cannot be separated from processes coming from actions taken "from below" as being discrete. They are designed as parts of the same relationship or "encounter" of diversified interests to share the decision-making power. In the "encounter", excluded sectors are confronted with those controlling the provisions according to which it is possible to have an access to resources, services, status and power. This way of envisaging Participation makes it easier to check "the frequent anti-participation nature of established institutions, as well as the transformation of power structures as indicators of a successful participation actlon.," (Pearse and Stiefel, 1980) and leads to an evaluation of losses and gains from the "encounter". On the other hand, it does not reject a priori Participation coming "from below", nor Participation promoted "from above", because organized efforts might come from any side. At the same time, Participation is defined as "organized efforts to increase control over resources and regulatory institutions in given social situations by groups and movements excluded until then from such a control" (Pearse and Stiefel, 1980: 92-93).

The previous approach led us to attach much importance, in the analysis of our participation process, not only to community actions, but also to aptitudes, conception and interventions, for or against participation, by the State and ruling groups(5). The reason for this is that such groups proved to be the main protagonists of the "encounter" to be studied and since their respective actions are interrelated, they are mutually determined. Consequently, the final effect of the "encounter" will not be the one delineated by any of the participants, but the erratic result of a complex relationship of multidirectional forces. Therefore, it would be impossible to understand a participation phenomenon by approaching it from a single pole of action.

Posed in these terms, our analysis shows a series of limitations. Nevertheless, some possibilities for participation processes in our reality are already envisaged. Thinking that our remarks are likely to be beneficial to other experiences, to a possible action of communal initiatives, to local action groups and groups of cooperation in the Third World, and within our purposes of search for strategies to revert the trends of the current urbanization and develop-


Social Movements and Community Participation


ment models, some recommendations are suggested.

In our opinion, in order to achieve higher levels of Participation, a fundamental requirement is to try to fill in the gap between political society and civil society. Therefore, it is necessary to strengthen the latter over the former, by having a larger participation in the decision- making process regarding specific problems. However, in our case, the evident existence of a State being traditionally strong, centralist and paternalistic in front of a weak civil society really challenges the viability of this aspiration. Besides this, there is another difficulty: the fictitious character of the so-called consensus in relation to the need for higher levels of Participation. In operative terms, this implies that civil society should be warned against a possible lack of coherence between the complaisant or even propitiating declarations made by the State and ruling groups and their corresponding behaviors and policies rather unfavorable to Participation. On the part of the State, some recurrent attempts at co- optation(6), to establish "clientelistic relationships" and, in general, to transform a more structural community struggle into mere claims are foreseeable. Given these circumstances, the community has to reach higher degrees of social organization and self-empowerment. (Friedmann, 1988).

Being the main participants in our "encounter" always the State and the ruling groups 'from above", and some sectors of the civil society "from below", it should be agreed that for a mutual approach, actions should come from both parties. Nevertheless, given what was already mentioned, it is seemingly very unlikely that the redistribution of power involved in Participation be undertaken spontaneously from the top. An indispensable requirement and a firstpriority to achieve it would then be a constant pressure through a stable organization and mobilization of civil society. Obviuosly, a process of this sort means conflict, since power transfer from centers has not been usually and historically gratuitous, but grievously conquered. This conquest may need long periods of struggle and its possibilities and terms will largely depend upon the government system. The latter represents a transcendental element and those countries that are living under a democratic regime will be more likely to consider the possibility of obtaining an improvement in this sense than those that are not.

In spite of the democratic character of the reality studied, in the analysis of the Venezuelan

hegemonic parties' discourse, it was found that their respective concepts of Participation and their corresponding behaviors obstruct the occurrence of substantial changes in the application of governmental strategies and policies rather than facilitate them. Furthermore, such conceptions tend to legitimize the parties themselves and generally result in assistance and paternalistic actions regarding communities. Therefore, as long as this behavior will not be modified, Participation levels encouraged by these groups will still be the lowest ones. In our opinion, this behavior can be modified, either by the group's internal initiative, through civil society's pressures or changes in the ruling hegemonic groups. What follows is a discussion about the three options mentioned above, which would not necessarily be exclusive to each other.

First, parties usually split, at an internal level, into factions that are more open to power socialization than the hegemonic ones. Therefore, a reconditioning of power relations within those ruling groups could determine a change in their (internal and external) policy regarding Participation. A way to cooperate could be to encourage an awareness, within these groups, about the conceptual and practical importance of a real and non-ideologized Participation.

It is obvious that this aspect is closely linked to the second one. That is, to the external pressures exerted by civil society and acting as catalysts for the political society's internal processes. This is a key point for the objectives of the present paper. In this regard, it has been observed that different Latin American countries are going through, both at national and local levels, a significant and strong social process requiring larger Participation.Thisprocesshas provedconsiderablein urban areas. Inourcase,thecommunitymanagedinseveral occaslonstolmposelts criteria onthe decision-making process and, if that force opposing the State intervention had not existed, the final result would have been very similar or equal to the line drawn (or to the one not drawn) by the State. This implies the existence of some conjunctures favorable to a transfer of power. Even though these are usually temporary circumstances, their presence could even be more stable. Therefore, emphasis should be put on the hypothesis according to which a conjunction of this type of actions should lead to a modification of the civil society I State relationship as


Social Movements and Community Participation


well as to a reduction of the gap between both agents. Consequently, it should make it possible to open new Participation channels. This phenomenon allows to predict the possibility of a progressive influence by urban civil society on political society and the resulting feedback of the participation process. Besides, it allows to show optimism regarding the possible evolution and development of urban participation processes since, as it was already said, civil society's dynamism represents an indispensable requirement and a priority to develop Participation. Therefore, in our opinion, vital importance should be attached to this avenue, already started in some realities, for it to be more activated, promoted and improved, or to become extensive to other areas less organized. In this regard, information about and dissemination of Participation experiences would be highly interesting. To analyze and evaluate their successes and failures could also be useful in order to learn from these experiences and no to repeat the same mistakes. Similarly, a suitable cooperation system in this sense could be to look for new ways of assistance and training.

On the other hand, since, in our opinion, a hypothetical conjunction of movements could lead to a proliferation of Participation spaces, it would be advisable to promote in these community improvement plans the coordination, the integration and the confederation of different isolated initiatives. In this sense, there is a rather positive experience in Caracas: the "Federaci6n de Asociaciones de Comunidades Urbanas (FACUR)" (Federation of Urban Community Associations), which has been efficient and influential, and has conquered Significant levels of power, for it has been able to impose some criteria on matters of great importance such as the Organic Law of Municipal Regime or the Law for Elections. As Geigel Lope-Bello (1979) has pointed out, FACUR was born thanks to the "belief that an effective protection of its interests depended upon the organization of a common front. Therefore, the concept of establishing a single agent to represent residential organizations as a whole grew and developed. At any time, the grounds for solidarity were strictly pragmatic: "United we stand, divided we fail". In 1971, the Federation of Urban Community Associations (FACUR) was founded." (page143) ... "its activities focused on four main areas: against the systematic violation of national laws, ordinances and other regulatory instruments for urban development, in favor of a higher juridical and administrative rationality in city-planning management and, particularly, in the reform

or adaptation of new legal texts and of Caracas metropolitan integration, in favor of more honesty in the fulfillment of public functions by councilmen, and for a more active community partlclpatlon, both in the election of authorities and in the decision-making process" (p. 145). In the last ten years, FACUR has developed considerably: in 1979, membership was of approximately 50 and today (1989) is over 200.

Regarding this same aspect and in more general terms, it is worth polntlnq out that since, in our opinion, the neighborhood movement in our realities is far from giving rise to political parties, it only plays a part in civil society, and within its boundaries the strengthening of such movement appears to be a priority objective. This implies its mobilization in pursuit of conquest and transfer of power shares from the State to said movement.

Concerning the change of hegemonic groups at national level, that is the third aspect, it surpasses the expectations of the study undertaken. However, it can briefly be said that, presumably, as governments will present more soclallzlnq ideas, there may also be a larger distribution of decision- making power, thus strengthening Participation.

From the viewpoint of communities' actions, it should be first stressed the importance of becoming aware that it is almost impossible for those communities to be spontaneously granted "from above" the right to participate in decisions affecting them. Therefore, communities' organization and mobilization require again unavoidably Participation "from below", The School of Neighbors in Caracas is one example of a community organization aiming at, among other things, creating awareness about community problems. Said School was founded in 1980 with the participation of neighborhood leaders. It tries to pass on experience from leaders to neighbors and to teach them their duties and rights as well as how to put them into practice. At present, the School covers three areas: 1) Training workshops on organization of Neighborhood Associations, city planning for neighbors, basic laws of interest, etc.: 2) Professional assistance by different types of experts: lawyers, engineers, architects, city planners, sociologists, economists, etc.; and 3) Information through a Documentation Center, radio programs and publications.


Social Movements and Community Participation


With respect to the importance of mobilizations, it has been observed that the moment they leave aside the objectives referred to their fundamental civil, cultural, educational, social, and medical care rights and start dealing with mere claims, organization weakens and loses the higher levels of participation acquired. An involution occurs then in the power relations reached and the State is therefore more likely to assimilate and co-opt such organization. Consequently, mobilizations tend to become less important when they start dealing with mere claims. Nevertheless, it is obvious that poor communities are more likely to organize themselves to tackle and try to solve their most pressing and contingent material problems. Thus, it is necessary to insist on the convenience of dealing with more transcendental objectives going beyond mere claims, even among the most indigent communities. Again, self-training and educational communal organizations are useful tools. As Villasante points out (wid), "the challenge is to form responsible citizens so that with everybody's help it will be possible to recover the quality levels of what is urban".

Some drawbacks detected in the analysis of our case and that are usually common in this sort of processes are also very instructive. One of great importance is isolation from other communities. This isolation may favor the achievement of immediate claim objectives, but it is counter-productive to more significant aims which could result in a more structural participation process. This drawback should be considered and overcome for a hypothetical conjunction of mobilizations. Another drawback, considered as such by the protagonists themselves of the case under study, was the absence of a well-trained raising generation of leaders that would contribute, among other things, to the permanence of such movement in time.

In spite of such constraints, many mobilizations give rise to moments of self-empowerment, in which the community manages to modify State policies and assumes the making of some decisions. These moments and their corresponding strategies are the ones that show the potentiality of community initiatives. This is the reason why they should serve as a demonstration to other communities. It is worth mentioning that "moments" and/or "conjunctures", rather than stable or definite situations, have been dealt with for this transfer of power because they are not usually permanent in time. Nevertheless, each "moment" is a contribution to the general progress of the

process and since it goes backwards and forwards, going forwards should be stressed over going backwards. Besides, the moments and strategies mentioned above should be intended to last longer, so that the highly desirable reduction of the gap between political society and civil society could also become more definite. The conjunction of mobilizations could leave more room for Participation and, in the same fashion, extension of parttclpatlon effects in time could give more ata bUity to it. If participation practices last longer and occupy more spaces, they will develop and reduce such gap.

Finally, the "encounter" between civil society and political society will definitely guarantee higher levels of participation, an a strong social process development, as long as a higher disposition to reclamation "from below" be accompanied with an opening to these strategies at the top. According to our concept of "encounter", there is a mutual stimulation and feeback between both processes. However, historically, actions and strategies "from below" have been the ones that have made it possible to defeat inertia at top levels. This highlights the capital importance initiatives from communities have. Such initiatives should be supported and promoted by avoiding, nevertheless, any type of coercion, co-optation, "cllentellsrn" or any other form of intervention alien to the organization. Furthermore, the foregoing seemingly means that educational community processes play a key role in action and cooperation for communal initiatives. However, in our opinion, speaking about education, in this context, is a "doubleedged knife" since it is easy to start ideologizing and stimulating interferences foreign to the group. This is another limitation to be considered when taking the necessary steps. Community Participation experts should include research on, analysis and dissemination ofthose initiatives in educational programs because such Participation, through the scientific study of cases and the contribution of theoretical, explanatory, appraising, critical and interpretive elements of reality, implies a feedback for participation praxis.


Social Movements and Community Participation



(1) Some of the aspects discussed In this paper come from a research work conducted by the author for her Doctorate Thesis (CENDES, UCV), 1987, intltled "Partlclpaclon: Dlscurso Politico y Praxis Urbana. Caracas, 1973-1983".

(2) For a review of these proposals, see Fadda 1987/a: page 73 and following.

(3) The term "barrio" (slum) in Venezuelan colloquial language gives by itself the idea of a precarious settlement.

(4)For a specific description and analysis of the case "EI Barrio La Moran" and mobilizations in Caracas Metropolitan Area, see Fadda 1987/b and Fadda 1989. For a deeper study, see Fadda 1987/a.

(5) For an analysis of political discourse on Participation by ruling groups, see Fadda 1988/b.

(6) The term "co-optation" has been defined as the process of absorbing new elements into the leadership or the policy-determining structure of an organization as a means of averting threats to its stability or existence (Thompson and Mc. Ewen, 1958).


FADDA Giulietta. (HUH/a). 'Partlclpaclon:

DiscursoPolltico y Praxis Urbana/Caracas (1973/1983)". Tesis de Doctorado, CENDES, UCV.

FADDA Glulletta. (1987/b). "Urban Social Movements in aracas: Their Connection with Urban Policies. A Case Study of "EI Barrio La Moran". TRIALOG 13/14: 12-17

FADDA Giulietta. (1988/a). "Revision crftlca del Concepto de Participaci6n como base para la formulaclon de un instrumento de anallsls", URBANA 9: 1 09-126.

FADDA Giulietia. (1988/b). lila Partlclpaclon en el dlscurso polftlco venezolano (1973-1983)". Cuadernos del CENDES 8: 57-77.

FADDA Giulietta. (1989). 'Partlcipaclon como 'encuentro' entre el Estado y una comunidad urbana de Caracas". URBANA 11: (in press).

FRIEDMANN John. (1988). "Del Poder Social al Poder Polftlco, Autocapacitaci6n colectiva y cambia social". URBANA 9: 83-99.

GEIGEl lOPE-BEllO Nelson. (1979). La Defeosa de la Ciudad.Ed. Equinoccio. Caracas.

PEARSE A. &. STIEFEL M.. (1980). 'Partlclpaclon Popular: Un Enfoque de Investigaci6n". SOCIALISMO Y PARTICIPACION 9: 89-108.

THOMPSON J. &. Me. EWEN W.o (1958). "Organizational Goals and Environment". American Sociological Review, Vol. 23.

VllLASANTE Tomas R. wId. "Metodologfa de Anallsls sobre Segregacion y Asoclaclonisrno cludadano". Mimeo. Madrid.



Trends of Urban Design



"For a city to be city, it must be a great house, and a house is not a house when it is not at the same time a little city".


Francisco Colombo.


One could say, in general, that urban trends have been correlated with architectural trends. Architecture's compromise with the city can be summed up by saying that, although it may operate on two levels, in the microstructure as well as the macrostructure.it we works with the same system of relations - and in both of them the aim is conforming the habitat. In order to understand the new tendencies of the Latin American cities, one must realize that they do not each form a unique whole, formal and coherent, but rather that in many instances they have arisen from identical patterns of foundation.

Urban restructuring is always a partial form of operating in cities. It is working in a complex and contradictory urban reality - exactly as it is in the developing and dependent countries. But it seems the only economic form of working in this context.

We will see, on the basis of the cases that we are going to study, that the mayor problems that we come across are not just those of conservation, restauration or rebuilding, but precisely the more general issues that characterize the urban areas of these underdeveloped countries: the fundamental needs of housing, infrastructure, etc. These are the problems that are most important, and they have the compromise to characterize through these programmes those disintegrated cities, or else they will run the risk of losing their own identity.

It will be necessary, therefore, to rethink the ways, the instruments and the methodology for the intervention policies because one needs to use to the utmost the local human and material resources.

It is only through a profound analysis of the historical, political, social, climatological and geographical differences,

in combination with a critique of the additional factors that modify and affect the spatial, urban and territorial processes in each city,together with those converging and coinciding factors just mentioned, specially the structural conditions of dependence, - it is only then that we will be able to try and work out a diagnosis and a possible hypothesis for their further development.

At this point it becomes important to understand that, apart from some exceptions [notably the cities of Ouro Preto and Salvador de Bahia (Brasil) and Guanajuato and Taxco (Mexico)], the South American cities were founded and developed in accordance with the Spanish royal Laws of the Indies.

Even in Tenochtitlan, capital of the Aztec empire, built in the form of a cross, and Cuzco, the capital of the Inca empire, organized around a central square (both cities the perfect expression and synthesis of how urban these cultures were), there was a narrow fusion of the new Spanish colonial urbanism with the urbanism from before the Conquest. This led to the use of the Spanish grid-model on a large scale.

The cities founded by the Spanish from the middle of the decade 1520-30 adapted themselves to this model.The designs used for the new Latin American cities (the "chess-board") was an improvement over the simple village-form derived from the "castrum romanum",

According to some, the Spanish grid originates in the Renaissance, indeed from Alberti and Vitruvio; others maintain that it stems from the Spanish Reconquest, who in turn had found its inspiration in the orthogonal French, English and German medieval cities. The grid was formed by equal, square elements (occasionally rectangular), one of which was left open, not built-up, to be used as a square. Around this square stood the cathedral or the church and the town hall or the government building, depending on the importance of the town. Smaller open places were left open in front of the churches as un-roofed atriums.

The regulations of 1573 and the Laws of the Indies, published for the first time In 1681, contain many further rules: they prescribe the width and the orientation of the streets, according to the climate, the position of the square according


Trends of Urban Design


to whether the town was on the coast or inland, reservation of common terrain, etc.

The urban grid model plants a determined morphology, as its two-dimensional development defines it in two ways. Only after the erection of the buildings, does the street appear as an urban structure. The same can be said of the block-building or "manzana'', marking the difference between public and private spaces, open and closed places.

Colonialism-appropriation, exploitation and management of "raw materials" (men, plants, minerals, animals) to the profit of a minority in the name of the "general interest"- involves a complex set of interactions between the "mother country" and the overseas territories.

The history of colonialism is divided summarily into two successive periods. The first has its beginnings in the 15 th century with the maritime and coastal "conquest" and extends up to the 18 th century. It is the mercantile phase that "by institution of capitalist economy for the feudal system, gave a prodigious impetus to overseas trade. In fact, economist have shown that the mines of Mexico and of Peru confirmed the monetary ascendancy of Europe. The era of mercantilism and absolutism is characterized however by the primacy of the agricultural economy and the colonial exchanges often took place through the batter of product. The control of capital is the business of the banks and companies of the mother country that control the maritime traffic. Production is regulated by protectionism, concession and monopoly.

The cultural dependence that is characteristic of colonial America, gives to the cities and their architecture a provincial aspect. This phenomenon of provlnclallsm is the consequence of the derivation, imitation of, and submission to, the activities of the creative centres of development. It is obvious that at the moment there exist regional differences of expression in the cities and their architecture, but what they have in common is their provincial aspect.

"Urban colonialism" and the emergence of the merchant and bourgeoisie are connected.The concept of "artistic centre" as opposed to the "provincial periphery". In the 17 th century, the "Europe of the Capitals colonises not only "overseas" shores, but also her own rural and mining possessions.

According to Darcy Ribeiro, the Latin American cities were administrative and commercial centres, most of them built as ports, although some in the mountains or in the interior. The civilization of gold and silver gave birth to the first metropolitan colonial centres of Mexico and Cuzco. Another wave of goldrush and diamond exploitation created the urban net in Brasil a century later. Its metropolises were Ouro Preto and Rio de Janeiro. Before that, in the context of the sugar trade, Bahia, Olinda and Recife were built. Later still, rubber would make flourish Manaos and Belen, and the coffee Sao Paolo.

These Latin American regional economies had been planned as trading posts, and stood in connection, through the ports, with the metropolis. They were not connected between themselves when they became independent. When independence had been achieved, projects of communication-roads, harbors and towns became urgent in order to provide the necessary services to the land, and to try and change the fragmentation that the Spanish colonialism had produced in the region. As the heir of the Spanish colonization, the Interior Colonization continued along the same lines as far as the lay-out of the towns was concerned. The administrative, provincial and municipal divisions, as well as private properties, and even the very lay-out of roads and railways were organised according to the Spanish grid.

At the same moment a new cycle of a modern exporting economy begins. The orthogonal axis derived from the Spanish grid then began to take the same direction as the geographical parallels and meridians. At that time, the English were the principal instigators of the new modern mercantile colonization model

(especially on the Atlantic Coast), and in the 19th century they would be the leaders of the new ideals of free trade and political independence (although only when it was on other people's lands).

In this way, a new stage of economic colonialism began. As a consequence of the development of the independence and trade, and later as the product of the rnetropoilzatlon of the big cities, one could see around 1860-1880 the tendency of physical growth of the current Latin American rnetropollses: radial in Buenos Aires, Mexico City, Montevideo, Rosario, Lima, Cordoba, Santiago; linear in Caracas and Bogota; fragmented


Trends of Urban Design


towards a radial model in Rio de Janeiro and Quito. All of these on the basis of the Spanish urban grid. On the other hand, some isolated experiences in the 19th and 20th centuries all ude to the construction 'ex nova' of cities without the Spanish urban grid model. This the case with the creation of the city of La Plata (Argentina) in 1882, in Brasilia (Brasil) in the 20th century, and Ciudad Guyana (Venezuela) .

These models of classical inspiration, in the case of La Plata, and modern inspiration (the precepts of the ClAM) in the case of Brasilia and Ciudad Guyana, were unique cases originating all from the new political forms of appropriation of land. They did not generate other urban typologies, they were not repeated, and they remained as unique cases in the Latin American architectonic and urban context.


a. Fragmentation process

The urbanization process in Latin America has its own special characteristics, which somehow casts doubt on the conclusions drawn from the analysis of the urbanization process in countries with developed economies. In Latin America, urbanization is not a direct consequence of industrialization, but anticipates it. There was no decrease in population figures. On the contrary, they remained high, as the result of a fast and continued population-growth, and of the exodus from the towns in the rural areas to the cities. Owing to the natural growth of the population within the cities, their demands are more than the production capacity of the infrastructure and services that the public and the private sector, produce. And this, without even speaking about the "quality" of this production, i.e. without analyzing how the product "city" is distributed among the social groups. Neither has this process served to broaden the political participation of the population. The urbanization as it is felt is the result of a spontaneous reaction against the structural situations that have been indicated several times above. The direct consequence of this rapid urbanization was the overflow of the majority of the cities out of their original nuclei. From there, new atypical places were created outside the original cities. The elements generating the urban fabric, l.e, the street and the block or "rnanzana" were replaced by other forms

of urban landscaping, generally inspired by the Modern Movement: the separation of pedestrians from vehicles, the "dwelling machine", that after more than 50 years after its first projects in Latin America still fail to create the urban life of the old cities because they lacked the flexibility of old, concerning its multiple and simultaneous functions as well as the possibility of adding and subtracting to the urban fabric.

The majority of these urbanlzatlons are planned by the state. Product of the internal immigration to the metropolis, and in the case of some industrial cities as Sao Paulo or Buenos Aires immigration from neighbouring countries, there arose spontaneous settlements of different names in every country or region: "poblaciones", "favelas", "villas miserias", "cantegril", etc. The State, and especially under military dictatorships related to economic power groups, has created ghetto-urbanizations to relocate the former groups. These neighbourhoods were planned with the "conceptions of the Modern Movement", applied in this case with a double sense, clearly repressive and generating alienation and urban marginality.

The "new lands" thus emptied entered once again onto the property market of supply and demand, thus creating the so-called real-estate urbanlzations, products of the differential rents of the land.

From the 30's, the economic life of latin America was under foreign control, mainly by the U.S .. Thls new form of economic dependence is not like the former Spanish or British dependence, which built settlements in the territories as a form of economic control. This new form of control does not leave traces on the land, it is characterized by economic management, and through It, by political control. The numerous plans of economic aid for Latin America can in general be grouped into three periods: the "Allanza para el Progreso", under the supervision of John Kennedy, the Kissinger-plan, and after these two had failed the new plan by Bush to remit the foreign debt. These forms of aid have constantly compromised our economies, and contributed through the financial speculations to the erosion of resources and the fragmentation of the land.

The two Mexican historians Vargas Salguero and Rangel focus the future of the crisis of ar-


Trends of Urban Design


chitecture and urbanism in Latin America around a central subject. It operates in three dimensions:

- It belongs to the rationalist world movement, which is nowadays in a process of decomposing due to its insertion in the capitalist system.

- It belongs to the dependent capitalism of an underdeveloped area.

- As a consequence of the former, it is directly linked to the future history of a powerful elite.

This facts is giving its landmarks. The drastic defeat of the model of industrial development (dssarroltlsmo), that until the 50's was the main goal of capitalist development, in continuous ascension, finished dramatically with the goals and illusions of the oligarchies to consolidate prosperous nations.

The inflation continue, the super exploitation, the tendency to revival the old model of export economy and des-industrialization, are the expression of dependency towards the hegemonic centers (USA namely) and has precipitated these nations towards a crisis which end is not perceivable within the present structural framework. The national states takes into crisis not only economic solutions but also the cultural ones. Architecture goes between both, falling dangerously. until such degree, that as an answer their is arising a continental movement of school of architectures that are demanding explanations and objective solutions: in fact are common problems the history is the same.

In front ofthose large urban areas built by self effort of pauperized masses which quality of life threaten and enhance political actions of the dominant groups, Fernando salinas postulates continue being valid facts. in latin America the eXisting links of formal architecture and the State, makes of this last, as the only one that make something in what concern "architecture of social interest" in massive dimension. The problem lies that In the performance of such architecture operates the populist policy of masses manipulation that is designed in function of the interest of the groups in power and therefore it remains on a second place the solution to popular needs of both the formal as the informal groups.

The factors mentioned above have created urban areas with economic, administrative and tertiary centres, subsidiaries of the metropolises, homogenized by common market mechanisms

and common regulation modes. The constant growth of these areas, and particularly of their cities. has contributed to the fragmentation of the territory and destroyed its equilibrium.

There are many factors that contribute to the fragmented formation of our cities. This has to do in the first place with a constant growth of the city and its population in the context of an urban structure that is increasingly composed of parts that are separated according to segregated activities and human groups in different settlements. and weakly interrelated. This urban structure expands through an addition of planned or spontaneous fragments that often propose models of cities imported from the industrialized metropolis or creations inspired by contaminated traditional models that hardly ever operates as "parts" with their own functional identity. The urban fabric is a scattered and strongly divided structure, increasingly characterized by its discontinuity and rupture, in which the uncontrolled growth. the plurality of centres and the often spontaneous polarity, are the representatives of the patterns of the new urban fabric.

While on the one hand we speak of the city as a complex continuity of social, political, cultural and symbolic Interactions in space, it is certain that on the other hand our cities are "cities of parts", built as fragmentations, and at best only by recovering or re-adding parts of this urban fabric. New methods for analyzing the relations between architectural typology and urban morphology have been proposed, with the aim of recreating continuity. It has been thought that it is possible to create the conditions for a new town-planning that do not refer to the dominant and dependent mode anymore.

We believe that understanding the "city as a fragmented entity" is a static view ofthe problem, but it would be important to analyses the relations that are generated there, as these relations are difficult and impossible to classify, and they can be understood only from their own dynamic reality.

This fragmented city, and it forms, is part of the contradiction where we have to confront the problem, is not an academic definition, but it does express the way of life of the city, its articulations, its relations and maybe its essence.


Trends of Urban Design


b. The parts

Also, in most cases, the degradation of the old nucleus in these cities seems to be connected with its loss of role, it is no longer the centre of the city, it has lost its capacity of place of reference for social relations, economic activity, cultural life, collective memory and when some central functions survive, they have to do only with a traditional part of the city.

These historical values of the morphology and the urban image are often ignored or forgotten, and only those are recognized to which the colonial culture has given any value or special place.ln reality, these old nuclei are, in this fragmented urban fabric, a kind of internal periphery. In each of the cases that we are going to present, the contradictions between a disintegrated and inefficient urban fabric will take us to the theme of the recovery and the requalification of the exlstlnq city, and particularly of its oldest parts, which generally are the most down-graded.

Much research has been done on the recovery of foundation patterns, thus rescuing pieces of urban fabric of great architectonic significance and determinant of a urban morphology. The bestknown among them is probably the recovery of the historic centre of Havana, where the new aim of revaluing the pre-revolutionary city, in view of possible urban Interventions, led to the study of the conditions offered by the systems of blocks or "manzanas". Here too, the block represents the mould and the basis of the whole urban fabric. In most cases, urbanlsatlons take place outside the original foundations of the city, in what we call the periphery.

We have referred to them before, and we could add here that this uncontrolled process of growth of the metropolises has not only created new nuclei, as e.g. in the case of Caracas, but that it has also compromised old neighbouring towns, incorporating them into the city as suburbs, as is the case e.g. in Mexico City and Buenos Aires.

Much research, analysis and even projects have been carried out concerning the centres of these cities and their peripheries, and similarly about the relations between them. Nowadays, our cities are characterized by facts old and new, these great urban peripheries already form part of the urban history of our cities.

However, there exists in the greater part of the latin American cities an Intermediary space between the centre and the periphery, that we call "central periphery". I n this space, we find that almost 90% of the land and the buildings is private property, the product ofthe parcelling up of the block.

What has been built in this part of the city are thousands of single-family dwellings, small shops and small family industries.

This area shows a low density of inhabitants, and in most cases, a high degree of urban degradation which is in contrast to the real capacity of the area's, its infrastructure of service, social equipment and transport.

On the other hand, given these conditions, the price of land in this sector Is higher than in the periphery. In this place, the urban morphology creates itself, from day to day, thus developing its own contradictions. It will be important, therefore, to recognise the city in its totality, analyzing these parts as its economic and built-up inheritance, with each of these parts composed of a system of relations between urban form and architectonic typology, accepting that these urban spaces are charged with hierarchical symbolic values that give a different meaning to the city's architecture.


Programs and instruments of design.

The failure of the great urban renovations, with their large scale demolitions and reconstructions, is well-known. This is true, not only in the urban historical fabric, or in fabrics with special morphological qualities, but also in the parts of the urban fabric least valued.

The damage of such interventions, economically inmaintainable, produce, in the structure of the city, sectors lost forever to urban life. One has to select, therefore, the aims and the instruments for the requalification of the city, by designing a strategy of urban interventions that generate the desired impact on the urban fabric in its totality. Seen in this perspective, the recovery of the structuring elements of the urban fabric turns out to be essential.


Trends of Urban Design


While the priorities of urban policies are always dictated by the urgency of certain primary needs (the problem of housing, the basic infrastructure, etc.), the question of urban requalltlcatlon is always this first group of problems:

1. The reorganization of the functional morphological structure of the city in its totality, returning a role to the older nuclei and reinforcing the character of the newer parts;

2. A transformation of the fragments, in part interrelated, individualizing the possible elements of continuity within the urban fabric;

3. A construction of an urban identity on the recognition of differences, accepting the recovery of the historical values, even the most recent ones, and avoiding the risk of a "modernization", based on abstract standards, but revaluing in turn the human and economic resources and the specific spatial configurations of the different contexts.

This means that we have to individualize and requalify functions and spaces that enrich and work towards a greater integration of the system of relations between the different parts of the city, being important instruments for the homogenization to arrange transport and services with a real sense of public service to interrelate all the parts of the city. At the same resolving, although indirectly, structural problems (such as housing), spaces and public services, thus improving the habitat's conditions. Housing in the Latin American countries is always deficient, and the problem is growing fast It is extremely complex issue inasmuch it embrace different sectors, housing production, industrial production, public works, and services. Moreover exist inappropriate land policy and land regulations which accentuate segregations in the low rent areas. To the high costs of infrastructure (services and transport) of the periphery areas, must be added the costs of social equipment (schools, centres of social assistance, etc.) and that of the housing cost itself. This without counting the cost of urban life, recreation and environment.

If we understand that one of the greatest - and characteristic - problems of these cities Is their disproportionate size (with a low density of inhabitants, inefficient Infrastructure networks and with a significant quantity of empty spaces), we will understand that if we have an adequate legislation to control the disproportionate growth of the city, the new programs and the new projects should be

planned in these areas (the central periphery) of the city, densifying the urban fabric and creating, by the diversity of functions and retanons.malor possibilities of integrated life, l.e, urban life. Once again these interventions would dialectical permit the regeneration of the urban fabric, renewing or recycling part of it or filling it in where the empty spaces permit. New programs will have to recover the block's flexibility and its cadastral division (referring to the possibility to add or subtract without altering the environment), with collective housing programs that permit, at the same time, and on pedestrian level, other programs related to commerce, administration and production.

It is clear that these developing countries, with their lack of financial resources, and with these modern cities, expensive and with their disintegrated parts and areas, have to be offset against a city that can really be understood as an indivisible and dynamic fact, and which in its methodology of intervention takes into account the careful evaluation of the conditions of the population involved, particularly the socloeconomic conditions.

The new architectural programs for the city would have to be devised in an absolutely democratic way, involving the totality of all the inhabitants, as well as the organizations.

Careful study of the typology, in function of the rescue of ways of life, modes of relation and archltectonlcal forms, will have to be faced simultaneously with the new programs, thinking carefully and creatively about the particular conditions of each place, the climate, the environment, the symbols and the necessary rationality of realization and construction.

The adequate legislation, that we mentioned above, will also have to take into account concepts of urban forms, land uses, and necessary densities of inhabitants; it will have to be aimed, in each zone, at a decentralization of the power of decision, to be implemented through the municipalities and other city organizations that permit to adapt these norms to the real and specific needs of each place, to the collective memory, so that finally it will recreate and reflect the implicit idea of the city in its different parts and relations.


Trends of Urban Design


The greater part of the architects who currently work with the cities, were trained in the Modern Movement. The Modern Movement (with strong influence in Brazil, Mexico and Venezuela and in groups of architects in Argentina, Uruguay, Chile and Colombia) has fed theorically the current laws of land use, urbanlstlc factors and indicators. In the best of cases, these laws of land use are of a very general character, lacking complementary regulations that would guarantee their enforcement, given the fact that in many cases they are at odds with the national Constitutions where private property is concerned, which renders them unenforceable in practice.

The fifty years of experience with zonings (theory of urban division par excellence) have shown their inefficacy through the segmentation that has been produced in all contemporary cities. It is becoming clear nowadays that the "four functions" do not enable us, in the analysis of the city, to understand or interpret it better, maybe because of the fact that, when the city is divided, you "ipse facto" obtain the non-city.

Finally, these laws, codes, master plans, zonings regulations, etc., are technocratic to such a degree (generally issued by the central powers that ignore local or regional characteristics, qualities of the environment, urban levels, referents, architectonical heritance, symbols and the collective memory of the place) that they lack the possibility of real application because in the last instance they ignore the relations of these dynamic social processes, the authentic creators of the urban space.

In the "master plans",- always a failure-, seem to have prevail only a function of punishment, instead of a real comprehensive interaction of relationship in the city, therefore they are seldom respected or not used.


-Arnerlca Latina en su Arquitectura. Relator Roberto Segre.Serie America Latina en su cultura. Siglo XXI editores. 1985

-Revlsta 2 da Construcciones de la Ciudad. NO.19

-Edita: Cooperativa independiente de trabajo social.Grupo "2C" SCI.

- Revlsta Lotus NO.14lntervenciones Urbanas en Europa.

- Revista Lotus NO.26. Arquitectura y colonial ismo

-Bevlsta Lotus NO. 41

-Bevlsta Urbanistica NO.SS

-Revista Historia de la Ciudad, NO. 39/40.




Trends of Urban Restructuring in Latin America


Marisa Carmona Juan Bernal Ponce Paul Meurs

Gerard Stalenhoef de Ayguavives


Trends of Urban Restructuring in Latin America



Problems. policies and prospects.

Marisa Carmona, Delft 1990


The crisis of the 80's have produced huge cultural and economic transformations in Latin America. Inequalities have increased and differences in opportunities and in quality of urban life have grown, together with a tendency towards commodification and cultural modernization, these multiplying even more social tensions in the region.

The 80's have been called the "lost decade" and Latin America has decreased its living average to that of 12 years ago. The productive potential of the region has increased only in 1.3 % in circumstances that in the previous 20 years an average rate of 5.8% was scored. This 1.3% was not able to answer the social demands of the population that grew 2.2% per year and the per capita product was reduced 8% between 1980 and 1989.

Amongst the economic aspects of the crisis we can highlight the high rates of foreign indebtedness and the significant recessive tendencies in strategic economic sectors, both reduce possibilities of maintenance and/or expansion of stable employment and hinder the production of necessary goods and services. These facts combined with a generalized undiscipline in fiscal obligation, and internal savings, produces important shortages in investments and public expenditures making it more difficult to solve basic needs of the every day poorer population.

The crisis of the 870's is believed to be damaging even more the situation of those sectors living under the poverty line and is making it even more complex the find the solution to these problems.

The question is that in the next 10 years the population of Latin America will increase in more than 80 millions, to reach 525 millions in the year 2000, and whether the continent will be able to recuperate from its losses and at the same time satisfy the minimum demands in housing, work education and health demanded by the new 80 millions. The pressure of the IMF concerning the form of payment and service of the external debt repeats in fact the dilemma of the primacy of surplus expatriation over the consolidation of an accumulation


regime directed towards the internal market. The IMF pressure encourages the countries to return to external accumulation regimes based on primary exportation modes, which are leading towards a strengthening of the conditions for the reproduction of "elitist" regulation forms, different to those developed in the industrialized countries, because forms are imposed by a high- 1y concentrated interest group. This appears to hinder, once again, the development of a mass consumption society, the amplification of the middle class and to achieve a more democratic urban structure.

In what concerns urban development, the trends to make economies more competitive and to equilibrate the balance of payment have made it necessary for many countries to liberalize the urban market. This de-regularization is giving the State a subsidiary role only in the control and supply of affordable land, public services and infrastructure facilities for the needed population. The state is no longer able to prevent social housing savings to be melted in the capital market whirlpool and to be dedicated to other necessary national obligations, l.e. the payment of the foreign debt, increasing the gap between production needs and consumption of the lower groups.

Chile was the first country that introduced drastic economic adjustments, others as Mexico and Venezuela are just finishing a similar process, and Brazil, Argentina and Peru have been announcing similar trends. Nevertheless it seems that these modes of regulations in Chile have increased even more social contradictions and urban poverty acquires new dimensions. New social movements, both functionally and territorialy rooted, have been flourishing in the urban space, which seems to be of a very different nature to those existing in previous decades, which were linked to production process -a sort of state protected industrialization process-, now obsolete.

These new movements challenge the new institutionalization and are deeply related to the endure of the democratization process in the country. This trend is placing the accent on trying to re-study the relation between private and public dimensions and specifically the conditions for the production of the metropolitan space in the different countries of Latin America.




Juan Setna. Ponce


Housing Policies in Chile


Mar/sa Carmona. Delft. 1990

Illustration on chilean Housing Policies.


In Chile urbanization started around 1860 and increased at the break of the century. In 1900 the urban population was about 40% of the total chilean population. A very high rate similarly to the one that nowadays still present many developing countries.

This early concentration of population is a phenomenon that had important social consequences and shaped the role of the state. The first "social housing" legislation appear in the second half of the XIX century, and was directed to control the proliferation of "ranchos" within the urban limits. Between the end of last century and the beginning of this, numerous "poblaclones'' were built by philanthropist initiative. Most of them took the form of the conventillos and "cites" and started to shape a particular urban morphology, the "barrios obreros" of the city. (1)


The first social housing Law was passed in February 1906. The Law was rooted in the Belgium Law of 1894 and the French Law of 1894. This legislation facilitated the hygienic up-grading of settlements, however, the magnitude of the housing shortage overpassed the Law itself and very soon it was considered inefficient. This Law created the Workers Councils in the whole country but until 1913 housing solutions for about 6.000 persons was found. (2)

In 1925 Law Decree N.308 replaced the former Law and created the Superior Council of Social Welfare. With this law 43 new settlements were built, but a great number of renters could not afford the contract. The Council of Social Welfare was replaced by the Popular Housing Junta in 1931 (Junta de la Habitaci6n Popular) in order to ameliorate the significative housing shortage of the time. In fact "Callampas'', spontaneous settlements and "Ioteos irregulares", were all sort of illegal occupation of land, growing at the edges of the city, becoming larger every year, which made evident the shortages of housing saving and investments. The same Law also sanctioned the General Building Ordinance in order to "develop an integral urban ordering in all cities of the country".

1 Interior of a Cite of the end of XIX century. According to Oscar Ortega . 2 . Cile Garcia. 1911. CA 41 .


Housing Policies in Chile


The Law created a series of instruments and mechanism facilitating subsidies applications and seconded the Ministry of Public Works, the technical aspects of the Plan. The Lawdefined the ''vivienda econ6mica" (social housing) and the "Huertos Obreros" (workers farms).ln 1933 the Master Plan for Santiago was approved as well (3). In 1936 the Departamento de la Habitaci6n (Housing Department) was created in order to concentrate and strengthen social housing construction.

Only in 1943 an effective impulse in favour of popular housing was given by the compulsory taxation of the 5% to industrial utilities. In 1953 the Corporation of Reconstruction and Emergency and the Caja de la Habitaci6n were fused and the first National Housing Plan was developed.

The balance of achievements is extremely meager. From the beginning of social legislation up to the creation of the Housing Corporation in 1955, only 79.041 social houses were built, an average of 1.650 houses per year. Very poor if we take into account that the population in the 47 years increased from about 3.000.000 to 6.000.000 persons, and in order to absorb this deficit the country should have built 450.000 low cost houses.

The administrations that followed, Alessandri, Frei, Allende and Pinochet, formulate housing policies of very different orientations, with diverse social goals, developed different strategies within similar lnstitutlonal and legal frameworks.

In the last three decades chilean population grew from 6.500.000 to 11.500.000 ,that is whith 76.9%. In the same period, the rate of urban concentration increased 80%. On the other hand the housing shortage increased five times, from 150.000 to 850.000 housing units approximately, which means that one on the three families live actually in an irregular situation (4). During 1953 and 1984, about 1.000.000 houses have been built, and the gross density has significantly decreased, accentuating urban problems and making shortage of city service evident.

The tendency to density reduction is due to the low-density pattern of self-built settlements in the periphery, the speculative nature of real estate market and new pattern of "sub-urbanization" of the high income groups. In Santiago the density in 1900 was 100 inhabitants per hectare, and this was reduced to 80 inhabitants per hectare. The metropolitan area grew from 2750 ha in 1900 to almost 50.000 in 1989. This reduction of density reflects as well the deep complexity of the housing conditions, inasmuch the overcrowding rates of the population scored as the higher figures of all de century, almost 180.000 families are sharing a housing unit with other family in Santiago, while family composition, in strict sense, have been reduced to 4.5 person per family.

1.The four door type,192Q,lnventario de una Arquitectura anonima.


Housing Policies in Chile



2.1. The State

The stagnation of the model of import-substitution and the neo-liberal reorganization of the economy are the most important facts shaping present chilean urban policies.

In general we can assume that urban policies in Chile have oscillated cyclically between two major conceptions, a structuralist and a liberal one (5), and the state can be considered as playing two main roles concerning accumulations regimes and forms of interventions (driving and subsidiary role).

2.1.2. The Internal Market Protectionist State.

The chilean experience with a driving and popular state brought almost three decades of outstanding economic and social development, and which was directed to the internal market. During this period state actions, have assumed two main forms: a direct one, through the creation of public enterprises, as means of inducing development; and other indirect one, through the implementation of a number of instruments of regulation, planning and promotion of private activity.

a. Since 1930, with the creation of the Production Foment Corporation (CORFO), the chilean state devotes itself to guide the industrialization process, supported in three principal axes: electric energy, petroleum and steel production. The state's initiative succeeded to mobilize the needed funds, the technology and the organization capacity for the construction of dynamic and efficient public enterprises. This three activities are transformed in dynamic factors for private activity as well, stabilizing the supply of basic inputs, and supporting the demands of derivative inputs. Also it contributed to the growth of development poles in the North and in the South of the country as well.

I n a second phase of the state activity, the development of the beet sugar strengthened agrarian production. The building of cellulose plants gave a significant impulse to the forestry production as well. Finally, the expansion, nationalization and "statization" of the copper mines, was an essential step forward in the national development, allowing the repatriation and captation for the country of a huge econornlc surplus generate<;! by this activity.

b. The second modality bywhich the state induces development is the application of the diverse regulation instrument and the promotion of private activity and through the progressive formulation of planning and programming mechanisms.

Within the first one we find the public financing of private activity and the application of taxes, subsidies and differentiated duties which will affect the relative rentabllltles of the private activity and guiding investments. Also price control policies are used together with salaries control and fixing the type of exchange rates as stabilizing policies. The financial policy achieves the goal of increasing and stabilizing the amount of private investments together with the orientation according to programmatic guidelines. In the same way the fiscal policy regulates private activity. The elaboration and implementation of sectorial programmes of development with the formulation of guidelines help ordering public and private activity looking to complement efforts.

Outstanding examples are the development of fishery and fruit production supported by' the CORFO in the 60's that had enduring character.

Later national and territorial ordering of priorities, policies and resources allocations with global plans together with regional comprehensive plans, have been elaborated first by CORFO and later by the national Planning Office (ODEPLAN).

2.1.b.Subsiciiary State.

In substantial terms, the Chilean subsidiary State is based on the idea that the State must not intervene in the functioning of the market, nor in the activities of the private sector who can successfullyfulfill. The main reason is that individual decision making is superior to a collective one. Altogether individual decisions, motivated by the wishes to maximize individual welfare, generate usually superior quality global decisions rather than those achieved collectively. Only in very exceptional cases, when the failure of the market in the provision of some goods and services is evident, state intervention in subsidiary way it is justified.


Housing Policies in Chile


Fig.1 Anual Average of housing constructtontssz- 1986/m2 for each inhabitant.

ALESSANDRI (1959· aq)

F REI (1965·70)

UN A~O 525.600 min. ',

tnsttturc do ClllnciflsAlallllldro Llpschut.


DECADE (millions pesos of 1977)



GNP 290554


356447 240979


Private Capital 203366

FBKF 50489

Exports 41666

Imports 7442:1

100 100




100 100 100 roo



t 14000

A.verage Wages ~

43.63 104,51


Nedium Average wageiave.per,h¥ EmplGYffient¥~.'*






100 100

Fig.2. Average building time per house in the different periods {1959-1986}



"-- ;








8,6 0.4


94 81 96.1


Priv~[Gnsum"p:h 20:01 FBKF p.h,$ 4~97

Source: Ch{le 2000 O,Rosa125

127,5 10(1,8 88.3

U pesos 1977

., •. Thousand~ of person~



The perttcipetlon of Chilean economy in the World Trade during 19851s tess than the half of 1950. The same exclusion and marginalization tendency affects all Latin America except Brazil; However the chilean exclusion is greater than the one affecting the Region.

The conclusion of the period can be synthesized as follows:

1. The GNP of 1985 surpass only in 22.70/0. tOdhe one of 1974.

2. The private consumptlonln 19851s 18.5%higher than 1974.3. The Gross Formation of Fixed capital is only 4% higher than 1974.

4. The only dynamic factor are the exports with an annual growth rate of 8.6% , which means than 1985 are 1,48 times bigger than 1974.

5. The imp on in 1985, are only 5% of tfile one in 19t14

6; The real wages in 1985 are 6% inferior than 1(9,74.

7: The pafitiCipatiofl of wages in the GNP is 41;.7% in 1'g74 and 31,9% in 1985: In the period 1960~ 1·97~j;was 42,.50% and 44,6% in theper/od 1960-197!3;.

8. The ave1iage product of a waged labour in 1/9,85 is 4;% Inferior tneo in 1974. 91 The pJilvate consumption per inhabitant in 1;985:, is almost the same than 19:-14. 10. The Gross Forma tlon of Fixed cepltelin 1985 ie 12% inferior than in 1974 (OutOsvaldoRosales: La EconomlaChilena tendenclas y Perspectivas. The stadistics used are ftom CEPAL.)


Housing Policies in Chile



1970 1985

Degree of Industrialization 1 1L r; 22,\ 24,5 23. i 26c4 ;OF') I"J 20~ 1
l..U;.(. J../-l,i.
lnd.Pr oducti on Activity '1 100 100 100 iOO 243 190.1 115.3
Metal-mechanic & man. prod. 3 24,5 14.7 22c3 n.d 28,5 14. j 19~2
Manufactured Export 4 100 100 100 100 2'''0 680.8 852.9
Metal-mechanic axpor t 5 19,4 19,1 144.4 ?'l '1 27~8 12a 1 10
Geographic Invest. Rate 20.2 19.4 20.5 20.8 16,1 16.6 12.2
Gross Forlll.of Fixe capital 6 100 100 iOO 100 202.5 16823 91.1
Canst. Electric.Energy 7 100 100 100 100 269.7 !' .. ~t:' "7 140.9
'1~I.J ... ) =============================================================================================

I, Manufactured production in 5NP, 2.Mining,manufactured and construction in constant value 3. Data for 1970 and 1980.4. Index in millions dollars.5 Data from CEPAL.

6. Index of values in constant prices, 7. Fi}:e index

Source:CEPAL. Anuario Estadistico de America latina y el caribe. Edition 1986,Santiago 1987. Cited: Oscar Munoz Goma. La lndustrializacion Chilena.

During this period Chile present an important industrial withdrawal not only in respect to Brazil but also in respect to a less industrialized country as Colombia and in respect to Latin America as a whole.

In degree of Industrialization (relative participation of manufactured production in GNP) as well as in absolute level of industrial production or in meta/mechanic component of production, are all showing withdrawal of Chilean economy in respect to Latin America.

In gross term this period coincide with an enormous export growth of Latin American industry (12 times). However this was very influenced by Brazil (26 times), Chile (8 times), Colombia (7 times). But in what concern the metal mechanic, chilean exports it is reduced from 14.4% to 10,0%, while Latin America increase from 22 to 33%.

This shows the dismantling of the metal mechanic industry, in favour of the development of export industries linked to exploitation of national resources, speciallyagro-industries, fishery and timber. This development has permitted the diversification of the export base and has incorporated new regions to the productive development and have displayed an in edited management capacity in the country. However, this is nou« sufficient solid base for industrial growth in long term which it should be support progressively in activities with intensive technologies and greater aggregated value. On the other side the productive development based on natural resources it is exposed to the vulnerability of the International Market.



_._-._-----------------_ ..... _-------------_.
1960 1970 1980 1 't82
Latin America 4 4 2 !
LaLAmer.2xcl.B 6 5 ~ -t
,_, L
Central America 148 100 68 52
Andes Pact 21 20 12 8
Colombia 66 61 41 25
Peru 131 117 83 49 Gross Formation of Fixe capital

It is precisely in this sensible indicator on which is noticed the withdraw of this last 15 years, particularly the 80'ies shows a grave move backwards. The participation Chile in the FBKF in Latin America has been reduced in 1/3 of that it was 25 years ago, withdrawing dramatically in front of the processes ocurred in Centre American Market and Andes Pact.


Housing Policies in Chile


Analytically it corresponds to the cases that the failure of the market is noticed that private rentability is smaller than the social rentability, such as those generated by external technological economies or des-economies or those that produce "public services" whose consumption is evidently collective, without being able to organize efficient markets in order to support its production . . In this category we could lalso include, even spite I if it is not a real case of market failures, the case of natural monopolies, where private exploitation is giving place to a higher price than the social production costs, and therefore, to rnonopollc profits; and in the cases that given the concentrated distribution of income, the market is not producing the necessary goods and services "for the poor" (education and public health) being necessary a subsidiary role of the state. The application of this doctrine hase been expressed in different ways, in Chile the submission to the neoliberal orthodoxy increased since 1973, and culminated with the crisis 1982-1983 and the official recognition that the experiment have failed. During those years the strong lnstltutlonaltty of the country, the one that has implemented for decades an industrial policy and a productive capacity, was dismantled. The productive capacity was completely weakened and lost all competltivity with respect to the Latin American region. Therefore it can be said that a des-industrialization took place. (See charts 1.2.3).




power in the private sector has been re-built, reinforced by the presence of transnational groups. Different to those groups of the former decade,whichwere organized around some banks, these new power groups are rooted in industrial enterprises, commercial and traditional services, constituting mother-enterprises of ample and various sets of productive activities.

This model of the late 80'ies is centralized around productive enterprises which have been consolidating financially and have been benefited by the macroeconomic policy, that has favoured exchange sectors, especially export activities (7). The exchange policy has maintained the real value of foreign money. The financial policy has controlled the financial costs of the enterprises. The salary policy has frozen real wages. All that has contributed to a strong economic recuperation initiated in 1984. In 1987 the profits of 1980 have been doubled, and have been developed an optimistic vision amongst managerial and financial sectors.and reinforced by the capital profits obtained by privatization of state enterprises. Different to the 1970 neoliberal model, the present one corresponds much more to a process of transnatlonatlzed capitalist modernization, which excludes, in the short and medium term the middle and popular classes, which continue in a sustainable impoverishment process. (charts 4.5.6.)




WDrld E>:PGrt

Expor+ AUlD!

,+------ .. --~---------.- .. -----------------------
0,47 0, "38 O. ~,9 0123 0.2
L+ It; 6.73 9.7 5.78 4.56
\ 1. 9 n 0'1 ,/'1 'I 14.92 16.95
J'.}r It. ",L., ,
97.6 iu. 36 110.3h 95.72 94.69 E~nQ(t ~ndrs Group

ExpDrt C2ntr~ Am;ri[~n Markel


Si1\!f fe UNCHiD: HarODook of IntOI fi ~ti ond Ir ade and Oevehprn2nt Stati sti [S~ 1986 Ei~~crated O.RDsalesLa e[u~olia chilena.Tendencias y prespect1Js.1988

The transformation of the productive apparatus can be characterized by the reformulation of the economic organization system, specially concerning the role of the State and the Private Sector; a financial and commercial opening to external market; the development of a financiallogica; but overall is the obligatory imposition of a regressive system of income distribution and of the social costs of the economic adjustments(6). A reorganization of the industrial structure started at the

. end of the 80's. Conglomeration of big economic




Formation of fixe cap. per inh. 1 thousands pesos of 19771 Index 11960=1001



5759 113

4410 86




Housing Policies in Chile


On the same way the stock of fixe capital per inhabitant, that every year is added to the National Economy is to-day inferior in more than 15% to that of 1960 and 1/3 to that of 1970. In other words we are in front of a dynamic process of Impoverishment of the chilean economy.


1951-i960 i96H970 1971-1980 1984
VenezL!ela 432 338 480 184
Argentina 145 205 284
Me}:i CD 110 174 278 225
Costa Rica 1"~ 226 18i
Colombia 157
Chile 73 1'11 117 1(1)
Latin Alner i ca 103 130 210 (I:'')
Chile in 'I. Latin A 71 94 ;::i. 66
wl,' Respect to Latin America of the 50's, the Gross International Investment per inhabitant (in dollar of 1970), was 71% of Latin America average. In the next decade, such index reaches 94%, making evident an impoverishment and in the next decade this index will again present a dramatic fall down.

z.z.Houslnq Policies

The housing policies resulting from these conceptions can be roughly characterized as follows:

1. The State conceived as having an important role in the distribution of income through the realization of public works and housing programmes oriented towards the deprived sectors. These programmes take place in the same market structure, that combine both public and private interest but have different objectives.

2. Urban development seen simply as a question of control of land-use, locations of activities and transport networks which could be managed by means of Master Plans that control private enterprises and public investments.

2.8. The structuralist approach

In the structuralist approach the housing problem is not identified as a result of disequilibrium of the housing market, but rather as a problem related to the low rate of development. According to this approach "urban marginality" is an expression of the dominant form of socio-economic relations which is a structure incapable of resolving the

determinant elements of the housing problem.These elements, among other include:

a. the insufficient income of the population,b. a speculative urbanization, c. scarcity of state resources,d. a rudlrnentarytechnoloqy and high levels of unskilled labour-force resulting in high building costs; e. political-administrative limitations; f. monopolistic and excluding nature of housing production.

According to this approach the solution of the housing problem cannot be solved simply by stimulating the private sector, but only by more fundamental measures that attack the problem at its roots. This means setting up priorities that stimulate economic development and propose housing solutions that are related to available resources, which are assumed to progressively increase in relation to the rise in employment. The state here assumes an important role both in the financing and distribution of dwellings and semi-urbanized lots (sites and services and aided self-help projects). These programmes are oriented towards low income groups which are traditionally excluded from the housing market but which constitute an important electoral base necessary to realize a progressive model for income redistribution.

The subsidization of cheap housing and semi-urbanized plots is understood to be a form of income redistribution. However, the structure of the land market and the dominant relations of production within the housing sector remain unchanged.The forms of production of housing remain: - a monopoly industrialized sector (real estate developers). - a traditional organized sector with a low organic composition of capital, a sizeable skilled labour force and a large mass of unskilled labour-power, - an unorganized sector of unskilled, labour force that is directed towards self-help buiiding.The industrialized sector assumes a determinant role being able to control prices and loans, which contribute to a rapid transformation of the urban fabric and the image of the rapidly changing city.

2.2.b. The Free Market Policy

In this case housing is identified as a commodity and thus the housing problem is seen as the result of disequilibrium between supply and demand.The problem is measured in terms of "shortages" and solution seen as the supply of largest number of solutions through the activities


Housing Policies in Chile



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Housing Policies in Chile


of the organized sector. Measures evolved to stimulate the private sector by attempt to channel idle capital or foreign loans towards the construction sector and taking advantage of the large existing pool of unemployed labour. In this way the economic and technical relations involved in the financing,production and commercialization of housing, is oriented towards those sectors of the population which had effective demand. This form of production of housing generated great profits for real estate and land developers and the financial bodies which controlled all phases of housing production.

They buy land, build the houses, sell them and grant credit to the consumers.With the initial deposits of the buyers, these agencies are able to payoff their national and international creditors, who had financed the operation. The real estates entrepreneurs operating in this sector tended to maximize their profits by manipulating the land market and rationalizing operations (decreasing the use of skilled labour).

There is a tendency towards the creation of monopolies which became powerful sources of pressure on governments, because they represent and mobilized a significant part of the economy (at the level of industry and employment). The resulting price of housing, including those provided by the State is so high that even public housing projects forthe lowest income sectors are too expensive for the vast majority of the population.

I n this approach the origin of the housing problem is seen to be the poorer strata of the population who has insufficient purchasing power to constitute "effective demand". Programmes are set up for these strata with housing standards more in line with their low incomes e.g. sites and services projects, core housing programmes, self-help housing projects. Along with the organized or unorganized labour-power of the users, national private enterprises and international organizations play an important role in these programmes.


s.t.Pertcd (1959-1964).liberal.

3.1.1. Main lines of the housing policy.

The housing policy is inserted in a National Development Plan the main goals of which are

to increase the GNP. Great importance was given to those investments in agriculture, mining and industry, reducing housing investments. The main lines were;

-Housing programmes can only answer population demographic growth and some natural hazards. -ln order to strengthen formation of capital and to concentrate savings in the build ing activity, a new financial policy (private Saving and Loans associations system) was created and existing public Institutions (CORVI) reorganized, supporting a regime of increasing capitalization and giving to accumulative capitals a social meaning. -Housing standards in line to purchase potentiality of the different sectors. -The weight of responsibilities was assigned to the private sector, limiting the action ofthe public sector. -A system of incentives and franchises to private capital was established, namely the DFL2 decree in order to activate construction.- Use of self-help potentials of the very poor.

3.1.2. Social Housing Main action lines

a. The Eviction Programme consisted of the massive eviction of illegal and sub standards settlements (callampas) to urbanized lots. b. Minimum unit, semi-urbanized site with an initial nuclei of sanitary cell (toilet and kitchen) of 8 m2.c. Medium units, within 35 and 84 m2 and d.Superior units, 66 and 84 m2 with high quality finishing.

3.1.3. Effects

In fact Alessandrl's liberal government, started the first coherent housing policy, based on the already evident fact that the pressure of the masses on account of their needs, had turned into a threat to the social order. Construction and Banking Sector received special franchises in order to enlarge saving capacity. Through Public Competition the Housing Corporation supported the intervention of the private specialized sector in the direct construction of the programme of social housing, and the system of


Housing Policies In Chile




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Housing Policies in Chile


incentives and franchises to private capital, stimulated the investments in dwellings not exceeding 140 square meters (named economic programme). With it, a high increase of construction activity followed and a vigorous, though short termed, activation of the economy was attained.

There was an increase of industrial growth featured by the simple substitution of imports and the accelerated expansion of urbanization. The capitals drawn from the agriculture, found in construction, through DFL 2, a magnificent investment field fully protected from taxes in a manner never seen before.ln turn the lnterarnerlcan Development Bank (BID), took risk in supporting such policies as part of the ongoing Alliance for the Progress programme.

Such policY,if it possessed social objectives, was condemned to failure.lt went not further that being a good short term real state business and directed to the sector able to shape a demand, the middle class and the high income groups. The violent inflation set loose on the third year of that government,made it possible to apply the mechanism of readjustment on the housing loans: the so called "economic" dwelling never reached the hands of the large majorities. The large building enterprises assumed a determinant role, the strategic building industries,(steel, cement, wood, glasses, petrochemical,etc.) controlled by national and/or foreign monopolies, were free to fix their own prices, the banks were controlled by the same monopolies. This fact give advantages in the market, while absorbing In their enterprises the banking credit.The economy of the country had already reached the so called "easy import substitution" level, and was necessary to expand the internal market, diversify its exportation and other measures, which were not included in Alessandri's political programme, such as: the agrarian reform, nationalization and expansion of basic row materials production and in general the opening of new production horizon.

a.z.Pertod 1964-1910. Christian democratic regime.

It is the government of President Frei that discovers and uses, with political cleverness the enormous potential resting on the new human settlements spread around the cities.The position of christian democrats was to incorporate these masses to the sphere of circulation of basic commodities which was far excluded. The housing policy was structured to permit a real process of

State intervention in the popular consurnption.The policy presents a very favorable trend. On one side a programme of social changes, income distribution, agrarian reform, urban integration of marginal population and a recognition that country oligarchies were in fact big barriers for achieve further development. This modern postulates received large financial support from the AID, the BID the WB.

3.2.1.Main Lines:

- An "adequate" housing solution must be affordable by any socio-economic group. -The State shall attend preferentially vulnerable low-incomes groups. -Housing cost must be totally or partially paid, never given. -The State shall afford the lack of purchase potential of certain sectors, charging the difference to its own account. -The solution to the housing problem must consider the initiative and participation of the most affected sectors, which shall be assisted by the State. -The housing units must count with social services and infrastructure in order to complement family life and support community development.

3.2.2. Social Housing Actions lines are:

-The Public Sector increases its importance in orientation of Housing policies and programmes, specially with the creation of the Ministry of Housing.·

-The Plan of Popular Saving is a new relation established between the State and the family to stimulate saving of low income sectors in order to improve the housing situation. The Plan rationalize in only one system, the diverse alternatives of collectives and individuals loans. The Plan presents five categories related to people affordability of households earning less than $100 every month.The lower two categories correspond to Sites and Services, the next to a basic unit of 20 m2, a unit of 40 m2 and the last to a 46 m2 department in a four stories collective bufding.

-The Sites and Services, was defined as the realistic way to attend massively sub-standard population with irregular incomes and to anticipate In the organization of larger sectors living in squatter areas. It consist of a public programme of loans for the acquisition of semiurban sites. The simplest programme is the lot of 160 m2, supplied with latrine, stabilized roads,


Housing Policies in Chile



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Housing Policies in Chile


water network with public taps and electricity network. In some cases a "mediagua" (emergency wooden hut of 3 x 6m) is supplied. On a second phase the urbanization will be completed with ali services, including sewerage, electricity, water and paved streets.

-The Operation 20.000/70 consisted of organization of communities in self-help programmes all over the country, building housing elements or industrialized housing complex with the possibility of starting later independent popular enterprises. The programme contemplated 20.000 units for the year 1970, and also supplying the human settlements with fabrics for the production of concrete panels, asbestos-cement and wooden elements. Included a first phase of a core unit of 36 m2 without internal sub-divisions, which will be completed and supplied with services on a second phase. A third phase included the ampliation to 18 m2. --- The Department of Popular Promotion is created, in order to organize low income dwellers around their basic needs. Human settlements receive social and technical assistance, by promoting modern system of organization imposed by the hegemonic political party and government structures. This system aimed at developing ideology of cooperation and participation.

-The Law of Neighborhoods Joints is approved in order to organize the entire population around functional and territorial needs.

-The Programme of Urban Renewal started with the creation of the Corporation of Urban Renewal (CORMU), at the Ministry of Housing. This policy consists of expropriations and demolishing central bad downgraded urban location, and replacement by a high rise and high density housing re-development (15 to 20 stories) for middle incomes, according to classical concepts of modern development of the end of the 60' s decade.

I n the Metropolitan Area of Santiago great attention was paid to the re-structuring of the city; amongst other the Urban Development Plan contemplates a Transport Plan which seeks a coherent integration of urban activities and residential networks. This Plan was thought to be started with the building of an underground (Metro), combined construction of high-ways (rings) and a new structure of public transport system. The first line of the metro construction was started.

3.2.3. Effects of the Policy

Christian Democratic housing policy as highly significant in relation to the traditional former policies.

Massive Sites and Service programme as coherent with the changes in the economic policy, willing to transfer public investments to those directly productive sectors and on the other hand giving urgent solutions to historically postponed population. Nevertheless the policy contributed to the rapid urban growth, encouraged speculative development practices and strengthened differentiation of residential networks. The urban centers extended in very short time, in atomized locations, through substandards,low-rise, low-densltles typologies, which added many constraints for future urban consolidation. Only water and electrlclty could be supplied in the future decades, being outstanding the shortages of drainage, pavement and sewerage, without mentioning, the lack of city services and transportation. The segregation is worth to be measured by the large distances to activity concentration locations which increase inequalities in working opportunities, recreation and culture in general.

Urban Renewal programmes of CORMU, on the other hand, did neither contribute to the consolidation nor to the structuring of the urban fabric, processes required urgently by urban centers in expansion. This renewal carried out at great cost, helped urban segregation by reallocation low incomes groups living in central downgraded areas in the marginal communes, and was not able to push re-development works and improve these areas, due to the lack an integral coherent approach, including mechanism for land cost control and location of the new activities In the central area.

Between 1960 and 1970, only 360.000 dwellings were built, in spite of which, the housing deficit grew in the same period from 406.000 to 585.000 units. The period is also characterized by the growth and consolidation of a strong real estate sector, with important interest in Industry, Banking, Saving and Loans Housing associations and decided influence in the administration and housing policy of Chile (8).

The public sector growth was enormous, given the policy to organize and mobilize marginal

1970 1982 70/82 1970 1982 70f82 1970 1982
Santi ago 288656 226330 -2.01 79952 66359 -1. 54 3.6
Independenci a 95637 87355 -0.75 21844 20200 -0.65 4.4
Conchal i 117405 157188 2.46 24927 29663 1. 46 4.7
Huechuraba 22217 55859 7.99 4794 10729 6.94 4.6
Recoleta 141m 162650 1.16 29527 33669 1.10 4. a
Provi denci a 121104 114770 -0.45 29425 mas 1. 69 4.1
Vitacura 40340 71316 4.86 8172 15908 5.71 4.9 5
La Barr enechea 10628 24404 7.17 1870 6410 10.81 5.7 4
Las Coodes 112590 167199 3.35 23009 41377 5.01 U 4.0
Nunoa 149001 169196 I. 06 34281 42582 1.82 4.3 4.0
La Rei na 55048 79631 3.12 12100 19560 4.08 4.5 4.1
Haeul 73111 115450 3.88 14774 24619 4.35 4.9 4.7
Penalalen 50983 137224 8.60 10532 29547 8.98 U 4.6
La Florida 58698 191299 10.:\5 13525 46815 10.90 4.3 4.1
San Joaquin 115085 124537 0.66 23915 20046 -1.43 4.8 6.1
La Granja 77283 114757 3.35 13981 21410 3.62 5.5 5.4
La Pintana 37994 73730 5.68 8145 14587 4.98 4.7 5.1
San Ramon 59033 97804 4.30 12912 18331 2.96 4.6 5.3
San Miguel 93784 88152 0.51 20105 18180 -0.B4 4.7 4.8
La Ci sterna 80512 95944 1.47 17552 20220 1.20 4.6 4.7
EI Bosque B8939 143416 4.06 17667 28685 4.12 5.0 5.0
P Agui rre Cerd 141592 146341 0.28 2629B 27035 0.23 5.4 5.4
Lo Espejo 89861 120736 2.49 15118 21006 2.78 5. q 5.7
Estaci 00 Centr 131161 142770 0.71 28024 29486 0.42 4.7 4.8
Cerri lias 35402 64922 5.18 7515 13165 4.78 4.7 4.9
Maipu 44234 113639 B.18 8m 25278 9.07 5.0 4.5
Quinta Normal 133187 128675 -0.29 29342 25894 -1.04 4.5 S.O
te Prado 53365 104063 5.72 !l855 21202 4.96 4.5 4.9
Pudahuel 50847 97423 5.57 10001 19478 5.71 5.1 5.0
Cerro Navia 82274 138876 4.46 17307 25896 3.42 4.8 5.6
Renca 49209 94229 5.74 9790 17980 5.20 4.9 5.2
Quilicura 11297 22489 5083 2183 4724 h.M 5.2 4.8
TOTAlES 2711271 3672374 2.55 589260 796026 2.54 U 4.6

Housing Policies in Chile



Housing Policies in Chile


population. The Ministry of Housing grew up to 48.000 public employees. However, the Law of Neighborhoods, which legislate the popular participation at Municipality level, contributes to the recognition and organization of a wide sector of the urban population, and the channeling their vindications through the Municipalities. These new organizations were territorial (neighborhoods) and/ or functional nature (mother centers). In 1970 four years after the sanctioning of the Law, there were about 800.000 families, some 4.000.000 inhabitants, (about 40% of the country population), who belong to social organizations, whose existence and motivations arise from the problem of subsistence, housing, employment, health etc.The National Trade Union (CUT) which have increase membership of total labor force from 10.3% in 1964 to 19.4% in 1970, started to look as well new links with the territorial and functional organizations through the channels available in chilean way of doingpoliticsatthetime, the political parties. Since the 30 ies popular parties have been leading the vindications of homeless, and dialectical relationships have been built amongst the urban popular mobilizations and local government chosen members in low income districts. (9)

The critical nature of the housing deficiencies noted, the burocratlzatlon of housing institutions and the general economic deterioration are all expression of the non solved question of the protectionist state in behalf of the lower sectors.The maximum expression is the illegal occupation of land, specially at the end of 1970, it is estimated that about 300.000 persons were living in the well organized occupations of land in the outskirts of the big cities. The growing acuteness of the social struggle and the emergence of new popular power in the squatters settlements and newcomers (campamentos), will explain the changes originated in the co-relation of social forces which gave preference to the programme of the Popular Unity (10).

3.3 .Perlod 1970-1973.Popular Unity

The left Popular Unity, tried to carry out changes in the national structure of properly, leading to suppression of the monopolist character of property. Precisely in the persistency ofthis power and power centers of political and economical domination lies the crux of chilean under-development. The main changes produced in the country are the nationalization of the main resources (copper, nitrate, iodine, iron, etc), the purchase by the state of the great strategic or distribution

enterprises or monopolies (76 enterprises), the nationalization of key strategic banks, insurance and foreign trade and the agrarian reform involving expropriation of all larger estates over 80 ha of basic irrigation and all badly exploited lands.

3.3.1. MainLines:

The housing policX of the popular unity, was based on its commitment towards the lower and margina~ized groups, therefore the policy gave

the state greater control in the housing market In order to open the accessibility to the large majority.

-Housing is a right thus it is a duty of the State to to supply It. -Houslnq must not be matter of profit, thus must not be structured according to economical parameters but according to needs and social conditions. -Housing can be a powerful instrument able to accelerate and facilitate development of human and social values. - Therefore must exist a uniform conception of land use, housing and household equipment. -Housing must be structured through residential homogeneous networks avoiding urban segregation. -Urban land must satisfy preferably social and housing needs. -Social equipment is a way of integration of low income settler to an urban life rich in human.political and social content.

3.3.2. Action Lines:

In i 971, a short Emergency Plan was intended at the development of massive construction plan of a social housing programme (90.000) urbanization and social services through the Agencies of the Ministry of Housing, with as goal the reduction in a prudential short term, of a considerable part of the housing shortage. Without aiming to recuperate the invested costs,of the very low-income sectors, but contributing by dynamizing the stagnant economy by generating direct and indirect employment In the bullding sector through traditional and industrialized systems. Initially the plan did not encourage the self-help as a priority programme and the housing built by the programme should be minimum 36 m2 (both in high rise as low rise development), able to extend progressively.

-A special programme for "campamentos" was initiated with as goal the attention of the illegal occupations of land. Having in mind the high standards of community organization of these


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Housing Policies in Chile



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Housing Policies in Chile


settlements, the programme structured the assistance through direct contact, in order to tackle the most needed shortages from the very bottom, creating a totally new style of assistance and planning. Dwellers were incorporated to participate in the urban, housing and services planning process, harmonizing the technical and legal assistance, to the social requirement, aspirations and demands. This resulted from real potential to be incorporated and integrated directly in the planning and construction operations.

The densification, filling-up programme of CORMU, confirmed the 1010 and 1020 medium rise, medium density typology of the former regime (up to four stories), inasmuch permitted concentration of activities, diminishing distances amongst residential areas to working places,and to administrative, cultural and recreational centers, and also was implemented a medium rise- medium density programme of progressive development apartment unit. A consolidation programme of public services and community facilities was organized to be directed to sites and services (operaciones sltio) new development areas in the outskirts of the cities.

CORMU also included social housing high rise programmes of 54 and 80 m2 .


Amongst others the following measures were taken: increasing of state control upon private Saving-and Loans Housing Corporations; to support the Small private enterprises and Cooperative movements; the implementation of a Direct Administration System of state-built dwelling ; the establishment of a Building-Workers-Union together with a regional system of fixed wages; decentralization of the activities of the Ministry of Housing and autonomy of local corporations; redesign of standard dwelling types in order to make them more adequate to economic, social and geographic needs; deep concern to increase productivity and rationalization of building activities, creation of CIMEC a National office for Building Materials; the incorporation of all territorial organizations in the process of decision making and most important the creation of provlntial bodies of planning and decision making where all involved interest should be democratically represented (Housing Sectorial).

Popular Unity 1 000 days experiment failed both due economic and political reasons. Lacking sufficient

size and coherence, and plagued by management difficulties, the state controlled sector of the economy did not fulfill its task of capturing surpluses from the private sector and directing them for capital accumulation. The public sector developed a large deficit and the combined forces of opposition in Congress denied the government the legal instrument to raise the needed additional revenue. Gross geographic investments dropped in 1971 to 13.1% of GNP and in 1972to 11.9%. Production levels declined in 1972 and particularly in 1973, and unemployment rise (11). Social programmes amongst other the housing programme contributed to increase inflation. This reflects the depressive effects of the convulsed period inmedlately preceding the coup of September 1973 and the economic policies introduced by the militaries.

3.4.Period 1973=1990. Neo-liberal

3.4.1. Main lines:

The principles of the Housing Policy of the Neoliberal regime Is rooted In the subsidiary nature of the State and can be summarized as follows:

-Housing is a commodity that is acquired through effort and save. The household and the State share responsibility. -Income is the fundamental factor for the solution of the housing problem. -Saving is the major effort complemented by state subsidy. -Housing policy is not sectorial, but congruent to goals of economic growth and social and political re organization of the country. -The State will support and incite private initiative so the sector can takes an increasing responsibility. -The State will assume normative functions, subsidiaries towards the vulnerable economic sectors. -The State will assure every social sector an own expedite channel of accessibility to housing according to the socio-economic standards.

3.4.2. Action Line.

-The Social Housing Programme (1975):places the administration of the programmes in the SERVIU (regional agencies that replace offices of Ministry of Housing), is aimed to give solutions to those sub-standards economic sectors and is financed by the 5% housing taxes. The building typology Is a unit of an average built area of 36 m2 and a lot area of 60 m2, with the costs of


Housing Policies in Chile


'1 s:


7 .J




11 fi


ar Number of families 2 min e~isting dwelling stock 3

Absolute shortage: column 2 - 1

Household in shortage dwellings :column 4 - la) B~ Dwelling shortages-MINVU 1982

which correspond as follows:

-~llcampamentosll and site and services '-squatters, Dvercfowding,and others

-shortages of rural dwelling (difference between Ibl and Ie) correspond to household of larger incomes with shortage dfiell i nqs)

305500 (e1)

292000 le2i

i24500 (c3)

TOTAL B Estimation for Classification of Housing Needs

C. Needs of new housing

tor families without houses (a)

For campamento clearance 15% of Ie)

For de-overcrowd households 50% of (c2)





D. Improving needs (reparation and reconstruction)

Middle income families Families of campamentos

Families of squatters and other 50% of (c2) F-:uralFamilies (c3)


259000 146000 1245000

Sub total for imprDvement GRAN TOH\L

source: Joan Mac-Donald. Elaborated S.Gonzalez and A.Rodriguez

Source SAlEH 78 and Dockendorff 78;

Estimation of shortage in 1982

- Accumulative shortage (MINVU 88 i)

- Natural growth+reposition 77-82

- min dwellings built lINE.)

Total Estimative shortage 1982

De proposition for 10 years solution means:

a. Dwellings built for accumulative shortage

b. Dwellings built for growth and rep





1713162 846000

(a) (bl (ei

846000 102000 744000


22000 744000

294000 343 8i:

846000 1001.

84500 69000



Housing Policies in Chile


8.000 saving quota, -for both renting and buying purpose.

-Housing Subsidies programmes: Since 1987 subsidies are designed to answer to an increasing number of the population.

-The Basic Cell: is understood as the first stage of a social housing unit and redesign to answer the requirements of the lower sectors (eviction of campamentos). The built area is 24 m2 and the lot is 100 m2 with a cost of 225 UFo

-The Municipalities presented a programme of "Social Housing" and Sanitary-cell Unit in order to attend to the needs of marginal groups directly at local level, including homeless families overcrowding with relatives ("allegados"). The built area is 18 m2 and the cost is 220 UFo Through a system of Points the population can receive a house of about 200 UFo The previous save and the socioeconomic condition of the applicant are the assessment conditions.

The housing subsidy programme initiated in 1978 has suffered various modifications, the goal is to supply a fixed subsidy and the guarantee of a mortgage credit in order to enable low income families to acquire a housing directly and freely in the housing market. About seven programmes are designed which can be summarized in two types:

1. The supply of finished basic or popular units, subsidized up to 75% of the value.

2. The direct supply of housing subsidies, valuable instruments which permit beneficiaries to direct purchase of a unit in the market.

According to official numbers (13) the 30% of the beneficiaries belong to the 5% of low income of the population. The rest 70% to families with about 2 minimum salaries a month. The housing subsidies benefit medium-low sectors with an average income of $180 dollars per month.

3.4.3. Evaluation

a. EconomiC changes.

The impact of the free-market policy and the subsidiary role of the state, can be seen from various aspects. At regional level the effects of the expansion of the external commerce, enormous concentration of capital, produced regional une-

qualities, growth and development in some regions (aqro-lndustrlal zones) and deep depression in other centers (Valparafso,San Antonio).

The impact of the economic "shock" contributed spatial segmentation in the cities while unemployment rate grew from 4.2% in 1973, to close 17 % in 1985. This fact together with the liberalization and de-regulations of public services and infrastructure, and the new institutionality at local level, accentuated differentiation of residential networks. We can analyse in the metropolitan area of Santiago the impact in two periods, before and after the crisis of 1982-1983.

I n the first period, a sort of combination of political authorltarisrn with a drastic decrease of real salaries, producing constraints in social housing production and an over-density in cities, is the result. With the new housing demand, one is obliged to settle down in the existent buildings stock, being hardly impossible to purchase or acquire a new site or house in the low rent areas. A concentrated phenomenon of overcrowding, never seen before in the country is produced, with the characteristic that is not only affecting low income groups but middle classes as well.

The second period is noticed by the effects of the "protected democracy" regulations, which contribute to speed again the city growth and to enlarge the differentiation and segmentation of residential networks, given the combined expansion and concentration process that the freemarket system requires. According to data of Sergio Bitar, in 1982, 20 % of the chileans concentrated 40% of incomes while in 1988 the same 20% has increased the concentration to 60% of national incomes.

The implication of deterioration of real salaries and capital concentration can be measured in terms of the part of the population which Is no longer be able pay mortgages obligations. Studies made by FEDACH indicate that the number of population with debts ascend to 880.000 households,(14), about 2.500.000 persons (20% of the country population) are involved in the drama of the UFo This is expressed in the increasing gap produced between the readjustment of wages (often below the IPC (index of Consumption prices) and the readjustments of the mortgage credit, which produce non solvency in the payment of the debt.


Housing Policies in Chile


b. Demographic and spatial changes

Since 1970 chilean cities are experimenting low rhythm of growth,2.5% per year, given that more than 80% of the national population had already turned to be urban during previous decades.Modernlzatlon of urban life and commodification have also contributed to reduce chilean average urban family in the city of Santiago (about 4.5 person per family). The population of Santiago grew from 3.853.275 inhabitants in 1980 to 4.300.000 inhabitants in 1988, has about 830.000 houses, and 180.000 families are "allegadas", they are sharing the same house with another family. From these families, 60.000 correspond to middle income groups, fact that expresses that the economic crisis is generalizing.

The existing differentiation in residential networks can be seen in terms of their characteristics and ongoing processes.

While the East of Santiago is undergoing a new process of elltalrs development, hardly comparable to previous high income development, the southern and western cone is suffering a process of precarious consolidation to rapid "tugurization". Important part of the central zone is receiving new commercial and banking activities and suffering a process of rapid modernization, other central areas are overcrowding and downgrading.

The city occupies about 53.000 ha, which means a gross density, close to 80 inh/ha. (15). It grew 2.5 times from 1959 to 1979. The growth tendency is strengthened further more in 1979 by the suppression of building restrictions and the establishment of an enormous urban expansion zone of 100.000 hectare strengthening a process of des-urbanization which revealed an a-culturallzatlon pattern, which has little to do with traditional patterns of the inner city's morphological values.

In terms of incomes residential areas presents difference up to 30 times. The average monthly income in EI Castillo (new settlement development for evicted population) is $15.620 pesos (52 dollars},in some eastern sectors of La Reina more than $500.000 pesos ($1.600 dolars). The drinking water consumption presents differences up to 8 times (100 to 800 liters per person) (see map). Population density of La Cisterna (old consolidated popular district with high level of overcrowding) with 198.6 inh/ha and Santiago (central district, showing changes of land use and residential activities) 96.34 inh per ha, and Oulllcura a

growing low income district 28.9 inhab/ha, the lowest. National female mortality rate is 4.85 for each 10.000 children borne alive, being 2.5 inthe wealthy districts of Santiago and 5.46 in the Southern part. In 1979 existed 285.142 private cars in Santiago, an average of 74 veh/1000, in Pudahuel however this rate is only 26 veh/1000 inhabitants.

The further consolidation of the real estate sector, strengthen the liberalization of zoning regulations, in order to support specific uses, principally those that produce more rentability. Example of thls is the "Fundaci6n" building in the business centre, of the Hong-Kong-Schagai Banking Corporation where has been permitted a FAR of 1 :14 (16). The Holiday Inn Hotel example, expresses as well the lack of contextuatlzatlon permitted in the present regulations. The adaptability of ;zoning and land use regulation to the interest of the potential investors, is in tune with the position of Ministry of Housing advisor, the economist of the Chicago University Arnold Harberger.

"I am not so frse-rnarket-lst as to think that is better to have a city without zoning regulations. But there can be such bad Leaislation, that it would be better not have any." ... the urban planner is as the chief of a restaurant that must prepare dishes according to the interest of the clients .. (17).

Former governments commitments for urban re-structuring through re-densification, fillings vacant central land, renewing downgraded areas, are discouraged by letting market forces work freely, accentuating concentration of top activities and capital in determinate locations and a low-rise-Iow-density development to the rest of the city. The low salaries and the speculative housing market accentuate sub-urbanization. It makes that 65% of Santiago's metropolitan area consists of self-standing or semi-detachable houses. Being the cornposltion,- as example in a low income district of Santiago (La Plntana)-, as follows: 54,4% are detachable houses built in solid material, 4.1 % of timber, 38.6% are "media-aguas" a wooden hut considered as initial cell and 2.92% are built with through-away materials. Considering Santiago's cold winters the losses of caloric rate is considerable, diminishing dramatically in the lower stratas of the population, which spends as much as 40% of their incomes during the winter month only for heating purposes. (see map)


Housing Policies in Chile


e.state intervention and land cost

The segmentation of the city is not only determined by the market alone, but also the state intervention contributed with the forced eviction of thousands offamilies (29.000 families about 187.000 persons) of central areas living in "carnparnentos", which are moved to the poorest districts. The situation of this population worsened concerning income opportunities and city services and lightly improved in regards of area per inhabitant. (see chart 10 on people assessment of new locations).

This eviction policy towards the city outskirts denounces the contradictions of the free market logic, that support the move of the non solvent demand to the periphery in place of trying to densify and activate redeveloping in areas on downgrading process. A recent study done by the Development Corporation of Santiago (Comparative Cost for the Location of a resident in the Santiago Commune vs the periphery), here is highlighted the difference in investments necessary to reincorporate a new resident In the central (peripheral) area.The investments score high for the re-settling in the inner city given that the costs are 21.30 UF against 380.58 UF of creating a site on a new development.

To make this analysis it has. been taken into consideration the investments and operational costs of drinking water supply, sewerage and rain water, electricity and paving (access streets and interior path) Also the cost of services represented by health, education, security, sport and recreation have been analyzed.

Some of these costs, in the new developments, are paid by the users directly and are incorporated to the costs of the dwelling, but others should be afforded by the State.

For the central area of Santiago there has been calculated the existence of vacant land to house about 60.000 families,- considering only one floor re-development pattern which could easily be considered of being of two and three stories as welL-

The problem is that the existence of vacant land is founded atomized in thousands of isolated lots which challenge coherent development plans of intervention for popular use.

In Chile as well in other Latin America countries nowadays large central urban ownerships no longer exist, the division of the spanish bloc gave

rise to a subdivision in many unequal lots. There are general barriers to concentrate land and assemble lots. The problem is how to concentrate land for a given purpose, given the large fractionation of urban land in small-proprletorship and the implications of some zoning regulations. In any case the speculative holding (Le.empty land devoted to parking use, or for petty productive activities requiring large sites, etc) together with present inflationary rates the one that forms barriers to working class housing in the central zones. In order to advance more is important the theoretical demonstration concerning feasibility of social rental housing schemes in central areas as well.

In Chile as well as in many Latin American inner cities exist squatters interwoven in the urban grid. This developed from traditional rental housing development of the beginning of the century and later resulting from fractionation of old residences. This squatters are combined with idle land as well and informal activities proper of central locations. In spite of having high overcrowding rate (more than 3 persons per room) some isolated lots, these areas as a whole present a very low rate of land occupation (about 50%) and FAR much below 1, due the idle use of the land for speculation purposes, existing zoning with FAR up to 2 in these old neighborhoods. In the short run these speculative holding of small or large investors delay construction in the hope of making a better deal, and contribute at leaving large areas of the city sub-urbanized and degradated.

These speculative holding have however, potentially speaking, less possibilities of high levels of -absolute- land rent at the long run than other speculative constraints imposed by the owners of peripheral land that affects the rapid growth of the Latin American city, or those deliberate delaying developments by integrated groups of land-using capitalist investments and ownership of land, or the fragmentation of urbanizable lands on the outskirts of cities or lands within the city on which additional capital could be invested in redevelopment.

c. 1. Water and sewerage

The liberalization and privatization of city services score high to increase differentiation in the cost of the land regarding particular locations, which contributed as well to differentiate land use in the city. In fact, in spite of the large


Housing Policies in Chile


coverage of drinking water service (97,5% of the city housing stocks), 30% of the families are not able to pay the monthly bill of the newly privateown companles.About 1.300.000 persons are affected by the liberalization and are discovering new forms of channeling their demands.

I n front of the organized mobilization of these groups, the State answer with a populist measure : at the same moment that the huge debt of the private banks is condoned, the 90% of the debts for water and sewerage of the low-lncorners is also reduced. This measure will benefit 200.000 families, about 20% of Santiago families, however it is an electoral measure, in the months previous to the plebiscite to reaffirm the government of Pinochet for another period. The costs of this measure are 500 millions pesos only, less than the 0.5% of what the Government has gifted to the banks and private enterprises on financial problems, in the same years (17).

c.z, Transport.

The de-regularization of transport, increases differentiation between residential networks, deep differentiation of costs for locations, at the time that it is one of the most determinant factors of the air pollution of Santiago.

In Chile great importance is given to public transportation (buses, taxi-buses and metro), which represents 69.7% of the trips, "walking" rep~ resents 16.4% and private cars 9.7% If we discount the "walking"( economic depression ) public transportation increased to 83,4%. , and private cars 11.6%.

The present liberalization of imports produced the hitherto unknown fact that Santiago presents a highewr rate of taxis per person than New York City (18). The official tendency is to wait for a market equilibrium in this respect.The modification to the Law 18.696 determines free routes,with very few regulations. This variable has enormous impact an the low-income outskirts districts. In 1968 43% of the poorest families spent 3.9% of their income in transport, in 1978, 40% of the poorest spent 6.1 %

of their income in this item. .

Nowadays the weight of transportation in the monthly budget is worsened. This expenditure lncreases from 4.1% in 1980 to 26.5% in 1988 (19). This dramatic situation is pointed as one of the most outstanding problems in all surveys done in marginal locations (see chart *) and has as consequence the diminishing of trips or changing of

means, as bicycle and even walking. This fact is making evident that social housing modernization according to neo-liberal conceptions in Chile has been measured only in terms of more available m2, than in real improvement in quality of life.

The de-regularization of transport determines Santiago's high rates of pollution, which is reaching a dangerous level.

d. Decentralization and local government.

Parallel to de-regulations of Public services and privatization of education and health, another modernization resulting from the new Political Constitution of 1980 is the one of the Municipal Law. The policy answers directly to the concept of "protected democracy". With this Law the Major of the cities are elected by the President, and these elects the members of the Regional Development Council (COREDES). These councils choose the members of the Communal Development Council. In this respect the Neighborhood Law of 1964 was modified and the procedure is to register in equal terms the participation of community organizations (functional, mother centre, youth centers; territorial, neighborhoods centers) with natural or juridical persons that are outstanding because of their "relevant" role In society. Theses activities are "those that contribute to district economic development" and are elected amongst those that present major investments, produce greater volume of gooos and services, pay greater contributions to the fiscal and generate employment, this is to say they are the district's entrepreneurs. With this Law the authoritarian image is aimed to change through responsabllltles delegation. The goals are: I. a relation between the civil society (in interdiction) and the State, II. to increase the social (and political) base of the regime granting some decision power to established instances. III. to develop a system or a participation structure which permits the dis-association between the social and the political sphere (i.e. the political parties) IV. to establish restricted and excludant participation mechanisms (20).

With this proposal of "protected democracy" they have not only excluded vast social and political sectors (amongst these are the unions and all territorial organizations born in Chile in the last 20 years) but they have also benefitted the direct participation and representation of monopolic interest of the private sector.


Housing Policies in Chile


e. Efficiency of the policy, the marqlna] condition. (21)

In Chile, urban marginality Is materialized by the figure "pobladoras". This has traditionally been related to the periphery of the cities, and in Santiago it is estimated on about 2.4 millions persons, (correspond to half of the population of the metropolitan region). The ecologic spatial marginalization of the 'pobladores'' is an excluding pattern that has been accentuated in the recent years as result of the ongoing economic and social policies, and which facilitate the concentration of the population in particular areas. In fact, during 1979 and 1984, thousand pobladores have been taken away from their "carnpamentos" located in residential areas for middle and high incomes and re-located in more poor districts of the same metropolitan region, in areas were the investments per capita of the public sector is five times smaller than in the districts where they were erased.

The tendency towards marginalization is also revealed in the economic situation of the "pobladores". Of Santiago "poblaclones" households three quarters of them are situated below the limits of extreme poverty, and more than the half lives in absolute indigence. On the other hand the households present higher overcrowding rates than 20 years ago, this as a result of the accumulated housing deficits.

The accentuation of the exclusion process is shown as well in the level of the labour market. The unemployment rates, for example are much higher than the averages of the whole Metropolitan Region (26 against 16%), inequality that also was not so evident two decades ago. If we analyze the type of employment of those who declare as being working, we can see that the "pobladores" are located in a extreme marginal position with respect to the whole labour stratification and that the relative Importance of the ones employed in the productive sector is little. Labour marginality and unemployment affect principally the youth.thouqh this group presents the higher schooling rates.

Nevertheless from these spatial and economical excluding tendencies it is not possible to conclude the existence of a "pobladores world" completely segregated from formal society. Together with the marginalization process pointed formally, an inverse processes have been developed (this Is to say of integration and participation), that can be explained from the inertia of modernization and classic "developing" current. For instance, in the

"poblaclones" can be observed a high rate of old-youth (15-29 years) highly superior to the national one, but which shows that age structure of predominant child population of twenty years ago is no longer existent. The majority of adults "pobladores" has been born in Santiago itself,

which reverts the situation ofthe 60's (22). The scholarship index is notoriously higher: half of the groups 24 years or older has finished basic education (8 years of study) and only 5% presents any formal education. Without question the 'pobladores" is are social group that has experimented an accelerated Incorporation to the classic pattern of urban and modern life,in the last decades

Besides this, because of the existence of some process it is difficult to conclude the existence of exclusion. It is the example of the labour market, in the first place the value of labour as a channel of social integration has been diminishing in front of the importance which arose from cultural socialization, specially in the youth. In second place - it is also the case of the youth- there is a certain adaptation of occupations or sub-occupations in the service sector, with a strong preference to the self-standing-employment revealing multiple relationships between the marginal condition and the global economic system.

Nevertheless the "exclusion" notion is necessary as argument in favour of the existence of a particular "pobladores world" with significative expressions regarding the modern society as welLlt is the case of the activities of the "popular economic organizations", which show an associative character. They assign an unusual value to organizational features, to the effort, to the use of own resources and development at the interior of the organizations , solidarity , participative, democratic and self-determination values. However these organizations have been incited by the church or other base support institutions, in order to create an alternative space and are usually found amongst social groups with less labour opportunities (Le.women) and very few amongst youth and men.

In summary in Chile is not possible to talk of a "marginal world" excluded from modern society, homogeneously backwards and uniformly traditional. The poor urban groups are partially and diversified integrated In or excluded from the society.


Housing Policies in Chile


3.5. Period 1990 and forward. (Christian democrat and socialist alliance)

The Housing Policy of the period that has started is inserted in the economic threshold, characteristics of which are among other things:

1.The future trends, full of external restrictions. To the exagerated weight of the foreign debt we must add the vulnerable position of the country with respect to commerce and international financial sources. Factors that advise to develop and consQlidate a stronger internal economy, more resistent to external changes.

2. Dualism and economic heterogeneity have deepened as consequence of the applications of neo-llberal policies. The social polarization and the incomes are no longer sustainable inthe long run term.

3. The privatization and. de-natlonallzatlon of prevlous public activities. have not produced the expected results: major productivity, efficiency and economic democratization. On the contrary, it has helped real estate and patrimonial concentration and distract private resources, financial and technology. of other more necessary investments.

4. The challenge of technological development and transformatlon of the production process resulting from automatization in the structure of capital and labour relations.

5. The. existence of inedit forms of popular partiCipation which again challenges the integration of these political tendencies into the State organ and into the economy in general.

All these features lead to renewed ideas about the role of the State and the constitution of a new sort of mixed economy by including a. private area of popular economy. It is the support for CI. more significant presence of the State in the new required export production sector and import substitution, also in those sectors where exists tendency. for monopolies and concentration of economic groups. This. does not mean the exclusion of the modern dynarnlc private sector, but rather to find adequate complementarity between public and private investments, between individual interest and social welfare. Also the State must give the conditions for private initiative on which independent workers can express themselves, small self-supported entrepreneurs, that to-day constituting the informal productive sector.

The Housing Policy reflects the pragmatism of the former postulates: the maintenance of a subsidiary role of the state for large social sectors by strenghtening the capital market and encouraging housing savings and subsidy. system.To intervene the financial market in the case of the non solvent demand, to prlorlze the attention to the "alleqados'' through developing new areas, and to return the decision making to democratic organizations, and to revise the city. services privatization process of former regime according to parameters including efficiency as social Impacts effects as well.


Housing Policies in Chile




regime period

total built: annual ave-: population

N=dwellinq : area dwelling unit

dwellings ~ rage dwell~ : middle period 1000 inh ~ public-privat-average

Alessandri 1'159-1964 182791 I 30461 , 7896000 , 7 ;-;_;; 52 89 67
1 , .s ~ ':1.J
Frei 1964-1970 239156 , 700l::i, 904~'OOi) , 4. 40 C'~ "'it::' 62
! '''~ !u.J7 I Ji i s
Al lende i ~'71-1973 156397 52132 I 9850000 I <=: '10 48 ,0 1:';
; ; \.;'~ ;_: I 1.! 00
Pinochet 197H986 438591 I 33745 I 1 1144000 ; 3~ 02 57 71 68 source: reAL. Hechos Urbanos 83; March 89


----------_ ..... _-------------------------
I size of the site 74.8 12.6 16.0 I
I housing quality 72.0 16.0 12.0 I
\ housing size 45.6 20.8 33.2 I
I family independence 46.0 31. 6 22.4 \
I neighbour quality 28.8 36.4 34.8 I
I distance f ami 1 y & friends 13.6 19.6 64.4 I
I distance work 14.8 ! 1. 6 73.6 I
I distance work source 3.6 10.4 73.6 I
I distance servi ce, health 18.0 18.0 64.0 I
I distance school 24.8 'H'i 38.4
I L ... '. J..
I creche 26.0 24.4 38.4
I distance to commercE' 7.2 14.4 77,2
I urb an i z at ion 66.8 20.8 10.4
I electricity 50.8 28.4 19.6 I
I telephone 0.0 7.6 92.4 I
I public transport ~~ " 23.6 51. 2 I
I i:J.L I
I mar ket 35.6 28.8 "11:' '1 I
I JJ.i... I
I -------------------------------------------
I source: Hechos Urbanos.S7 O.Segovia,July 89:
--------------------------------------------- After evictions the family receive a minimum solution from the local government, mostly in a high dense low-rise development. Lots are about 100 m2. The families coming from degradated conditions perceive a consolidation of their housing situation, but the families coming from 'cempementos' or other consolidated situations (mostly 11 years of exlienee) perceive a remarkable worsening of their housing conditions.

On the other hand the xperience of the illegal occupation as the one of Campamento Silva Henriquez has been conceived as a solution by a high number of dwellers: the answer to the question whether the illegal occupation has modified the situation the answer was as follows:

17.54% (was martain); 15.79% (was improved); 63.16% (was solved) and only 3.51 % said the illegal occupation has worsened their previous condition.

In the eviction settlement, the problem is that one of the three family heads is unemployed (or involved in emergency work established by the government PEM or POJH). Most of the working activity is informal, the average income is only $15.620 (extreme average minimum $10.109) 55% of the famifies are not able to pay housing mortgages (average debt 15 month). One of the four families can not pay the electricity and one of the three families can not pay the water bill,


Housing Policies in Chile



1.From the middle of the last century many philantropic societies started to built houses, important to mention here are the Society Leon XIII that initiated in 1891 the building of working class developments, the Society for Primary Education created by the Archbishop of Santiago and the San Vicente de Paul of the Asuncion Church and the Church of Inmaculada Concepcion. Amongst other is worthwhile to name the "Mercedes Valdes" development a very well known 60 houses development of 4 rooms patio and kitchen buyilt with solid materials, with ceiling and floor of wood, another is the poblaci6n San Vicente with 232 small houses and some "conventillos". Presented 2 rooms, a corridor that joined the street with the internal patio and present also a kitchen a place to watch clothes and a w.c. ("the place"}.Another remarkable working class development of the time was the Poblaci6n Pedro Lagos, with three separated buildings, with 133 rooms each of them has a individual patio and a kitchen.

Also in the first year of this century we find initiatives that started from the workers itself, a group of them in Concepcion (800 krn South of Santiago)in 1909 formed a Cooperative and built their own houses, in 1925 was legislated on this matter and was extended considerable the system of cooperative-societies. Also by initiative of the entrepreneurs, many constructions was built for being used by the workers of the same enterprises, in free basis or as tenants. Important example is Lota the cool mine enterprice In 1904,which built for the miner two floor buildings of2,3 and 4 rooms with common services and community facilities. Also in Schager, 18 paviliions , each house with 3 rooms and common services, Paper and Carton manufacture, Textlels, Sugar company, Grain, etc are important example of this working class development of the end of last century and starting of this one.

The construction of working class housing by the State started with the promulgation of the 1906 Law nO. 1839 oversoclal housing.

2.From this period it is necessary to point out as well, that a very peculiar concept of settlement was developed, which determine a strong landmark of chilean downtown image. The morphological pattern of the small street with the continuous and compact row dwelling type, with a strong hierarchy

of road networks and public and private open spaces contribute to re- shape the spanish manzana.lt is the modern form of utilizing the spanish gridiron which reorganized the old urban fabric of the former century.

The rationalization of design and construction elements shall be seen also as an important background of the sort of building rationalization and pre-fabrication features that the country shall later on achieve in social housing schemes. Important spatial achievement is the urban-social sphere and the concept between private and public spaces. The creation of the pedestrian path (pasale) , the Inner courts, the combination of commercial and housing functions, the low-rise high density continuous edification, the efficiency in infrastructure utilization, the earthquake proof structures, etc, are all part of the achievements of the first half of the century.

3.The Master Plan for Santiago 1930.The plan was made by the viennese planner, K.Brunner.

4.for housing shortages see two interpretations later in the text, Joan Mc. Donald and A. Rod riguez.

5.Studies done by E.Pradilia 1974-1989 have highlighted the character of the housing policies in Latin America , the role of the state and the power structure, the cyclical character according the sort of political regimes have been also highlighted. Beside is also the studies of S.Jaramilio 81, and Martha Schteinghart. Gabriel Pumarino, 1973. Las polfticas de Viviendas en Chile, Urbanizacion dependiente en America Latina, Recopllaci6n Manuel Castella

6.0scar Munoz Gomez, La lndustrlallzaclon chilena, Chile hacla e1200. Desaffos y Opciones. 1988

7. Sergio Bitar, La Economfa chilena en la econorma mundial. 1988. Ed. Nueva Sociedad.

8.Construction is an activity registering a low contribution to the gross geographical product.but that is highly significative as a dynamizing element of short term economic activity. It is outstanding for its insufficient technological and capitalization level. As far as business organization is concerned,it has held a high degree of pressure overthe State. It likewise


Housing Policies in Chile


registers a monopolic structure., In the field of dwelling and equipment, from a total of 600 building enterprises in the country, 40 of them concentrate 70% of the activity ,generating an income that is highly superior to that of industry.

9. Another indicator of political mobilization of the popular sectors is the behaviour of the percentage of votes received by the socialist and communist parties in congressional elections

1957 (10.7%); 1961 (22.1%); 1965 (22.7%); 1969 (28.1 %). Source Direcci6n General del Registro Electoral, Chile, cited by C.Fortin.The State and capital Accumulation in Chile ,paper for workshop on Industrialization and the State in latin America, Amsterdam, CEDLA, september 1978.

10.Parallel with the process of economic stagnation it was developed a rapid process of social and political mobilization, partly induced by the government partly by left parties. The process of electoral mobilization can be measured by the percentage of eligible voters that have voted in presidential and congressional elections: 1958 (P):42.9%;1961 (C):42.9%; 1964 {P):74.6%; 1965 (C): 66.2%; 1969 (C) 61.2% and 1970 (P): 75.9%. Source. _ C.Fortin. op.cit.

11. Growth of industrial production and levels of Unemployment, 1970-1973.


1970 1971 1972 1973

Growth of industriai

production (%compared

14. I 2~ 8 -4. 3
0 T T Q T Q 7
Wa ,_, · ... 'l '"' ,.L: with previous year)

%unemployed over total

labour force (Dec).

Source: (C. Fortin op.cited)

State Control over Industrial Enterprises



"The area of social and mixed ownership in the Industrial sector", in S.Sideri and B.Evers (eds) Structural Change in a Dependent Economy: Critical Studies of Allende's Economic Policies (The Hague, Nijhoff).

The continued expansion in the number of state controlled during the second half of 1972 was not accompanied by any Significant increase in the economic importance of the state sector in terms of total sales. The original plan was based on the establishment of a large and coherent state-controlled area, but due to opposition power 25 out of 76 enterprises that the government regarded as fundamental to establish a viable state control sector remained outside the nationalized area, conversely a large number of economically unimportant enterprises had been incorporated into the public sector because of pressure from the workers.

12. Note: UF = 4200 pesos 1989 (= 14 dollars) 300 pesos = 1 dollar

The monthly average income of a low income settlement in the District of La Pintana is 15.500 pesos.

13. Conferencia Latinoamericana y del Caribe.Vivienda:Desarrolio econ6mico y social, Bogota Colombia, 1986, Ponencia Chile:

Situaci6n de los Mecanismos de Acceso a la vivienda en Chile. Charles HOLMES.

14.Figure 1 indicates the number of households affected by mortages not able to be payed back.

Millions Average

N.credits of UF

AmGt':ilt UF

Bank Mortages 152~075

Saving & Loans A::.s~ 7{\ 745

Lt:: :; !,h':~ .::.



Min~ of Housing




/ .... '

Retiring Funds Ass; 20~OOO


Source: IGstituciones Financieras y SUDerintendencia

de Santos. In HU 89

which can be distributed as follows:


Bank Debtor (Bankl 410:000 S%L Ass}Retir:Fdsl Ministry debto~5





Housing Policies in Chile


From the figures can be concluded that the debtors are medium and low income sectors, about 81.9% of the mortages debt of all the banking system is located below the 800 UFo

Another conclusion is the unequal distribution of the amount of the debt.The debtors segment below 1.300 UF are 26,6% of the total and concentrate about 58% of the debt, inversely those located in ranges below 700 UF are 46,9% and concentrate only 17.5% of the total debt.

Source: Programa Urbano SUR, Hechos Urbanos , Septlembre 1989.

15. Density of urban population


year population area density

Santiago (a) 1980 3.353.275 48.992 78.65

london (b) 1971 6.970.100 54.032 129.00

Tokyo (c) 1975 8.644.237 58.015 149.00


a) INE Estudlo Sofretu-GADE and Norte.

b) London facts and figures, Greater London Council, 1978

c) Planning of Tokyo, Tokyo Metropolitan Government, 1977.

16.Miguel Lawner 's calculations/in Chile 2000 Chile 2000.

17. Miguel Lawner. op.cit.

18.Politica de Transporte "La desregularizaci6n del mercado de transports. Ed.SUR. Morales 1988

19. Taller Norte. estudlo de Transports. 1988

20. Informe sobre la situaci6n de los gobirnos locales en Chile, Vicente espinoza,Alfredo Rodriguez, Alex Rosenfeld, Santiago Abril 1988. centro de Estudlos Sociales y Educaci6n.

21.Ediciones SUR, Proposlclones No. 14. Marginalidad, Moviminetos Sociales y Democracia.Eugenio Tironi. Agosto 1987.

22. The migration movements were outstanding analytical features of the sixtieth and the relation with the country side component of a marginal behaviour in the cities.

Comparing actual place of birth with the one of 20 years ago, the situation is vel}' different.



.lr'~:...if·::, ',_~::':.I_ .-,.~,~,:


24.The crisis of Hindered Accumulation in Brazill and questions of urban policy. Csaba Deak,July 1988. BISS 10 MeXico City. C.Ominami and R.Hausmann,op.clt.


Housing Policies in Chile



Alvarado Luis,Rosemond Cheetman,Gast6n Rojas, Moyilizaci6n SQcjal en tQrnQ 81 Problema de 18 vivienda, in Revista EURE n.4, Santiago, March 1972

Bitar,Sergio. La economia chilena en la economla mundial. Chile hacla e1200. Torno II

Carmona,M. Social HQusing in Latin America, Delft University press,1987.

Calder6n Fernando, Jelln Elizabeth. Clases Soclales y Movimlentos Sociales en America Latina. Perspectivas y Realidades . Proposiclones 14. Ed.SUR 1987

Cheethman Rosemond EI sectQr PrjvadQ de la construcci6n: patr6n de dominacion in Revista Eure n.3, Santiago, October 1971.

Friedmann,John y Lackington,T., Hyperurbanizatlon and national development in Chile: some hypotheses, Urban Affairs Quartely, Junia. 1967

Lawner Miguel. Technology and Social Housing. Seminar Social Lawner Miguel,La vivienda PQPular.Chile Hacial e12000. Tomo II. 1988

Housing in Third world countries. Delft University OfTechnology 1984

Ominami, C. Nuevas modaljdades de insercj6n internacional. Chile Hacia el 2000.1988

Pradilla, E. (1976) "Notas acerca del Problema de la Vivienda". IdeolQlJfa y SQcjedad. 16,70-107.

Pradllla, Emilio, La politica urbana del estado Colombiano, in M.Castelis (compilador) Estructura de clases y polfticas urbanas en america I.at.i.na.._Ediciones Siap, Buenos Aires, 1974, published also in IdeQlogia y SQciedad N.9 enera marzo 1974, BogQt6 Colombia,

Munoz Goma Oscar. La industrializaci6n chilena. Chile hacla e12000. Tomo II

Pradilla Cobos E. y Castro Garcia C. Los I[mites de la Desconcentraci6n territQrjal. Revista Interamericana de Planificacion. N 89 1990

Rodriguez Alfredo Por una Ciudad demQcratica.Ediciones SUR 1983

Rodriguez Alfredo Veinte AOQs de las PQblaciones de Santiago, resumen en proposiciones n4. Ediciones SUR 1987

Rodriguez a.,Rosenfeld A,Esplnoza V., Informe sobre 18 Sjtuaci6n de IQs Gobiernos LQcales en .Qbile." Centro de Estudios Sociales y Educaci6n .Abril1988.

Rosales o. La Economfa Chilena.Tendencias y perspectivas. Chile hacia el 2000.Tomo II pag.15-25

Rofman,Alejandro. EI fenQmenQ de la concentraci6n y centralizaci6n en America Latina: elementos para una discusi6n, Revista EURE.VoI2 n 5 1972

Riofrlo Gustavo and Rodriguez Alfredo. o.eJn: vasores a invadidQs. Desco. Lima.

Schteingart Martha, EI Sector jnmQbiliarjQ Y la vivjenda en la crjsis, in Comercio Exterior, n.8 vol 34.1984. Banco nacional de Comercio exterior. Mexico D.F.Mexico

E.Tironl. Marginaljdad.MQyjmjentQs Socjales y Democracia. Ediciones SUR. (editor)

E. Tlroni Pobladores e Integraci6n Social. ProposjciQnes 04.1987, Ed.SUB.SantiagQ

Touraine Alain .La Centralidad de los Marginales. Proposiciones 14. Ed.SUR.1987

Hechos Urbanos ,Documentacin SUR. 25,30,40,53,75,76,77,78,81,82,83,84,85,86,87, 8889,92.



Housing Policies in Chile

The aerial photo shows the downgrading central residential area In Santiago. Notice the urban morphology (partition of the spanish

bloc, dwelling typology) answer to spatial requtrements eXisting at the beginning of the present century,now almost obeotete,


Urban Development Policies in Chile



Ministry of Housing and City Planning. Chile. May 1985. (replace 1968 and 1982 policies)


In this chapter some points concerning the present policies of urban development in Chile are highlighted, emphasizing the backgrounds and goals that feed the specific policies of the different issues.The idea is only to present the legal framework and conditions where city transformation is taking place. It is noticed the need to develope studies on the effectivity in controlling the urban development and the possibilities of urban restructuring the various urban networks.

In respect of Urban Policies the following issues shall be highlighted:

I. Urban land Policies

II Infrastructure Policies

III. Urban services Policies

IV . Policies concerning the planning and regulation instruments of urban development. V. Policies concerning community participation.


1.1. Macro-typology of land.


Different uses and investments rates characterize urban land and its surroundings. This fact together with the different development potentialities that exist, makes necessary the application of differentiated normative and actions for each type of land.


To distinguishes macro-areas that shall correspond to the application of macro-normative upon the land.

Specifi c policies

a. Urban and rural

The first classification distinguishes upon urban and rural land.

Urban land is the area comprehended within the urban limits. Rural area is the rest of the territory.

A human settlement presents urban characteristic and therefore shall be subjected to urban planning when the following conditions are fulfilled:

- a minimum population of 300 inhabitants.

- a minimum density of 30 inhabitants/ha.

- one service element

The urban land is planned through Urban and Intra-Urban Regulator Plans. The rural land is planned according to its relationship with the urban through Urban -Regional Plans. When necessary specific projects of agriculture villages will be applied.The urban limits shall be reviewed each 10 years. The law permits also exceptions.

.b. Urban areas.

The urban areas are constituted by three:

- consolidated areas

- developing areas

- special areas

The limits of these three areas are revised each 10 years, also exceptions can be made.

b.t. Consolidated areas.

Are those areas equipped with a complete urbanization, understanding with this that it is such urbanization standard that enables land to

. be subdivided and to receive edification properly connected to urban networks and city services.The external limits are the "consolidation limits', and are adjusted with a maximum periodicity of 6 months. According to the Law and its Ordinance proper administration and information system will be implemented.

b.2. Developing areas

Are those areas outside to the consolidated areas, able to receive the expansive growth of the city prevented for the coming 30 years after the sanctioning of the Regulator Plan.

"Developing areas" are divided in three subtypes in function of its development priority on


Urban Development Policies in Chile


the 10 years time. Exceptions are for cities with slow or null rhythm of urban growth.

The Law shall fixe the sort of demographic projection for each 10 years and the evaluation of the population that should be incorporated in the consolidated area through urban renewal process.The population density of each sub-developing area shall be equal to or i.5 time the average density of the adjacent consolidated area.The criteria in order to determine the form and location of each sub-developing area are fixed by Law considering amongst other factors the following:

- Market tendencies.

-Feasibility and costs of road extension and ser-


b.3. Special areas

The areas are planned according its special use and character.They are submitted to restrictions concerning urbanization and edification. It is concerns airports, river shores, sea shores, large national parks, ecologic protected areas etc.

.c, Rural Area

Rural areas are considered also within the Urban development Policy because:

-Urban areas tend to grow to rural zones. Therefore it is of great importance to study its characteristic concerning infrastructure, edification and division in the moment they are incorporated to the urban area.

-Because some rural areas are constantly developing, with aggregation and densification process and on a given moment they need to be subjected to urban planning.

-Because in rural areas new settlements arise that without having a city character presents characteristic of urban nuclel.l, e.mining and tourist settlements.

1.2. Growth


The 1988 policies shows great difference to the previous 1982 Urban Development Policies concerning the fundament of land availability.

The 1982 was written under the influence of the very strong liberal-military ideological concep-

tlons, The former in spite of being strongly market-oriented still assigns to State control mechanism a subsidiary role:

a. Land is an economically scarce resource , due to its character of non previously produced useful commodity, which supply is limited.

b. In the measure that the urban land is used with more intensity a better use of services is made and infrastructure and transport cost are reduced.

c. People must have the freedom to choose alternative location in the city. Nevertheless when the growth, through certain alternatives, results on higher social costs than other alternatives, people that choose for the first one shall compensate community because of those higher costs.


a. Enable an intense occupation of urban land, in relation to the character and inhabitable rate of such occupation.

b. Orient growth towards the consolidated areas through Urban Renewal.

c. Enable the process of city extension to follow stages that enable homogeneous and continuous urban areas to exist, compatible with free enterprise.

Specific Policies

.1'1. Urban Renewal

The State must support and stimulate Urban Renewal in the consolidated areas, through the Rehabilitation and Renewal.

With respect to the first one, the State shall establish a legal and technical frame and economic stimuius for private initiative to take place.

With respect to Renewal, the State can act directly in order to attain the acqulsltlon, to empty land and unification of lots necessary to fix building conditions according to the Ordering and the Director Plan for each case. Performed this task, the State must bid such lots according to conditions that assure its future construction through the private enterprise, in the moment and form foreseen by the Law.


Urban Development Policies in Chile


b. Low rise growth.

Is the growth of the city in the area able to be urbanized, according to priority appointed formerly.

Besides the direct costs of all new urbanization, that are absorbed by the owner, this normally generates to the community "indirect costs" or "social costs" of three types:

- connecting costs

- services costs

- operational costs

The amount of such costs is related to the distance of the new urbanization to the consolidated area.The Law establishes the form on how people interested in occupying these areas, shall compensate community on the social costs that such occupation generates. Some general criteria are:

-In the occupation of first priority "developing areas" the developer shall pay all the connecting costs and a reduced percentage of the minimum service costs.

-ln the occupation of second priority "developing areas" the developer shall pay all the connecting costs and average costs of services. This urbanization shall deliver special taxes to the Municipalities equivalent to 10 years of operation.

-In the third priority location, the developer shall pay total urbanization and services costs .plus a tax equivalent to 20 years of operation.

-When the State takes the role ofthe developer and when the goal Is housing programmes for low income families, the same requirements must be fulfilled.

The Law establishes the minimum amount of dwelling demanded for each sub-area in order that this development can be self-sustained of services and infrastructure facilities.The Law also regulates the development process of these areas and the observance modes of urban facilities.

c. Densities.

The Regulator Plans shall establlshe the minimum and maximum occupation norms. The Law shall fix the parameters that shall be used, related to build volume and/or population density, both related to useful urbanized area.

1.3. Activities to be located in the urban land.


a. People has the freedom to locate legal activities upon the urban land; nevertheless such freedom is limited by the rights and welfare of the rest of the population.

b.The activities that people do on the land produce direct and indirect effects on the neighborhoods, on the sector and on the city itself.

c. Local administration looks after the general welfare, thus has the right to establish norms to ordering and regulate,prohlblting and make permissible the development of the different activities to be located In the urban land.


Are all those resulting from the previous fundament, and aim to regulate harmonic development of the cities and to regulate the effects of activities, also to permit and facilitate the good performance of market oriented activities.

Specific policies

a. It is established the way how activities must be evaluated and the form on how they can be located in the urban land. Also it is described an administrative mechanism in order to make expedite such classification.

b. In the Regulators Plans must be established the different categories of locations. Permitted, restricted and prohibited.

c. Location of activities are conditioned according to its inhabitable rate in relation to neighborhoods and sector.

d. The Law fixes certain degree of permanency through time being in order to insure Investments at long term.

a.Conditioned the changes of dispositions concerning location of activities to a democratical authorization of the affected citizen through a strong and organized participation of the community in the transformation of the Regulators Plan.