Are cooperatives the answer for upgrading informal neighbourhoods in Brazil?

Are cooperatives the answer for upgrading informal neighbourhoods in Brazil?
challenge

Can cooperatives be an efficient means to speed up regularization and legalization processes of existing informal neighbourhoods to be upgraded? And if yes, in which way? This means a critical look into the co-operative model as a means for slum upgrade, and into the institutional and financial frameworks suitable for each phase of the development.

Current situation
In Brazil, there are two federal policy programmes that deal with housing in cities. On the one hand MCMV (my house my life), that focuses exclusively on new housing, and on the other hand Accelerating Growth PAC, that focuses on existing informal areas. These programmes resulted in a huge backlog and especially MCMV in continuing urban growth and furthering social segregation. Resources for both programmes will be cut in 2016. Time for new plans and approaches. 

At the moment the legal framework establishes (roughly summarized) that up-grading informal areas consists of three phases: regularization (infrastructure improvements), legalization (new status) and improvements of individual houses.

Cooperatives
Time to look at the role cooperatives could play in upgrading existing informal neighbourhoods. The LAB wants to explore and test potentials and pitfalls of the chance inhabitants can have if gathered into a cooperative (stronger legal stand and financial opportunities). Yet cooperatives are not a well known model in Brazil (more common in Argentina and Uruguay) and are, in general, more popular for new building rather than upgrade of the existing.

Workshops
Porto Alegre in Brazil is the only city that has institutionalised cooperatives and has a specific law and a department in the municipality specially dedicated to the topic. Starting from the experience of Porto Alegre, the LAB is developing three workshops with all stakeholders. Goal of the workshops is to seek new ways of governance that can promote cooperatives federal and municipal laws and have a hands on approach with test cases areas for upgrade. 

Results
In a first kick-off seminar positives and negatives were identified by the main stakeholder groups.

  • For cooperatives challenges were: the lengthy processes and bureaucracy, complex legalization, commitment, contracting professionals, overload for municipality staff, lack of communication and small representation. The positive apects were: potentially fast process, legal and financial enablement, in the hands of its members, capacity building (P-P), mutual responsibility (P- P), small scale and site specific, business model close to market, dignity.
  • For the city of Porto Alegre these elements were important: political will, need for flexibility, need for transparency, divulgation and communication, exploration of possibilities for independency of public resources, need for assessment of the Porto Alegre practice: the legal framework, finances and PPP partnerships.
  • For the national level of Brazil, these were relevant: collaboration national, state and local level; promotion and trust of cooperatives; stronger role of state governments; communication between municipality and communities; consider a cooperative agency; necessity of local legal frameworks with clearly defined roles; involve Universities, NGOs, professionals, developers, banks to see legal possibilities.

Partner in this project:
NESC

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