displaced by the olympics: Can Favela Residents Gain Market-Rate Compensations in Rio de Janeiro?

March 20th, 2015

Annemarie Gray and Lawrence Vale

An unevenly urbanizing world exerts distinct pressures on the poorest neighborhoods of cities. With increasing frequency and intensity, these forces trigger citizen-activist movements to resist the displacement that so often accompanies high-end real estate developmentThis sometimes happens with relatively little media attention, but when global mega-events such as the Summer Olympic Games are involved, the level of scrutiny becomes just as global. And, in contested urban neighborhoods, the decisions taken around short-term mega-events often have extremely long-term consequences.

IMAGE CREDIT: Catherine Osborn- Vila Autódromo has become an international poster child for community-led resistance against Olympics-related development

The city of Rio de Janeiro in Brazil knows these pressures all too well. After hosting the World Cup last summer, the city is gearing up for the 2016 Summer Olympic Games. City officials are framing rapid development as an opportunity to transform the city far beyond the ten days of Olympic competition, including a renovated historic port district, multiple Bus Rapid Transit (BRT) lines, and a 1.18-million square meter Olympic Park and media station that sits along a lagoon in the newly-booming Barra da Tijuca in the West Zone of the city. However, progress on Rio’s Olympics-related infrastructure and legacy development projects has been rocky and widespread public demonstrations beginning in 2013 have drawn into question the legacy of such massive public spending. Officials planning the Olympic Park site are facing an additional challenge: the demands of a particularly well-organized group of longtime residents of a community called Vila Autódromo. Not only does the community occupy roughly 44,000 square meters of what is now prime real estate but it is also perceived as a favela, the loaded Portuguese word for an informal settlement, in a metropolis long notorious for its contentious relationship with the poor.

First settled by fishermen in the late 1960s, the neighborhood has evolved into a formal, well-established neighborhood of approximately 3,000 residents who hold legal title to their land. However, since winning the Olympic bid, officials have provided a series of rationales for why the neighborhood cannot remain in place, as outlined in a 2013 article by DRAN-affiliated MIT researchers, “The Displacement Decathlon.” In recent years Vila Autódromo has become an international poster child for resistance against Olympics-related development and attracted attention from the New York TimesAmnesty InternationalNPRThe Guardian, a local documentary film group, and extensive coverage in the English-language community reporting siteRioOnWatch, as well as a wide range of Brazilian news outlets.

Official data on those displaced by Rio’s mega-event development are hard to come by. An organizing group known as The Popular Committee for the World Cup and Olympics has been working to track human rights violations and evictions since Rio won the Olympic bid in 2009. Their2014 report cited 4,772 families—16,700 people in 29 communities—that have been displaced in the city. 3,507 of those families—12,275 people in 24 communities—have been displaced due to projects directly linked to World Cup and Olympics development. The report cites another 4,916 families in 16 communities currently at risk of displacement.

Ongoing negotiations for Vila Autódromo’s land are setting a critical precedent for these favelas at risk of displacement: residents report market-rate compensations for their land and homes, rather than the more token forms of payment typically offered in the past. Residents still clinging to their place in the community say that sums from R$2.3 to R$2.5 million, or approximately US$800,000[1] to US$870,000, have been offered to some families. Each family’s case is different, according to residents’ accounts, so no standard protocol exists to determine what constitutes adequate compensation. In negotiations with residents in October 2013, the Mayor promised additional compensation for renters and those who owned multiple properties in the community, as well as “market-rate” compensation for those whose homes were valued at more than R$275,000 (US$96,700) –the price of 40-square-meter 2-bedroom apartments being offered as recompense. By residents’ own estimates, around half of the original dwellers have now accepted deals offered by government officials and moved out of the community. Many have accepted the offer to move to a new subsidized housing development under the federal Minha Casa Minha Vida program, which has beenheavily criticized for poor quality construction since its launch. The remaining families are still in negotiations with officials or say they are opposed to leaving at any price. Longtime resident Maria da Penha puts it bluntly: “[I] will not give up [my] 22 year history for 15 days of Olympic Games.”

Residents report feeling significant pressure to accept deals offered by the government. City officials and residents negotiate individually and in private, so those remaining are rarely aware of the price and terms offered or accepted by their neighbors. Moving has only become an increasingly attractive option as the inconveniences of neighboring demolitions and the ongoing construction of the adjacent Olympic Park – ascaptured in recent photos – disrupts their daily routines. These stories mirror accounts in other communities facing similar eviction threats.

In drawing lessons from the Vila Autódromo story, we should keep a few details in mind. What constitutes “fair” compensation is difficult to determine. A January 2015 index of real estate prices in Barra de Tijuca cited R$10,000 per square meter, up from R$4,000 per square meter in January 2008 before the City won the Olympic bid. A modest 120-square meter home in Vila Autódromo would sell for R$1.2 million (US$422,000) by that metric, so $R2.5 million for a larger home appears to be reasonable compensation. However, considering that the land is slated to be converted into a luxury condominium development near a brand-new transportation hub after the Olympic Games, this still may be well below what could be considered “market rate.” There are also inherent challenges in placing a monetary value on a longtime favelacommunity, as its urban form has been constructed incrementally over multiple generations and embodies uniquely mixed use and adaptive qualities that are without parallel in formally-constructed neighborhoods, as well as non-monetary losses which cannot be compensated with cash.[2]

Vila Autódromo is also a special case in a few ways. The impressive organizing efforts led by the Residents’ Association have benefited greatly from the strong support of lawyers, university partners, and an English-language media platform, Rio on Watch, to help tell its story and garner international media attention. Its location as the primary well-established favela directly adjacent to the massive Olympic Park undertaking allows for a relatively clear delineation of its boundaries and a clean, cohesive narrative of its claim to its land, which some other favelas facing eviction threats may not have.

Nevertheless, this highly visible, negotiated compensation may set an important precedent for other favela communities facing both imminent eviction and long-term development pressures if it can be seen as a significant step towards an eventual standardized procedure of valuation, negotiation, and compensation for favela land and property. It represents a subtle yet critical shift in the public perception of the favela from an informal, marginalized collection of homes towards a formal, well-established neighborhood deserving of the same housing rights protections as any other.

Annemarie Gray is a recent graduate of MIT’s Department of Urban Studies and Planning and a former Fulbright Research Fellow in Rio de Janeiro. She currently works as a project manager for the Cambridge Housing Authority in Cambridge, MA.

Lawrence Vale is Ford Professor of Urban Design and Planning at MIT, where he is Director of the Resilient Cities Housing Initiative (RCHI), and a DRAN-affiliated faculty member.

[1] Note: This article uses the exchange rate from February 27, 2015 of 1 Brazilian Real = 0.35 US Dollars.
[2] The Displacement Research Action Network has been exploring new tools, such as the Eviction Impact Assessment Tool to help communities more precisely measure these costs.