Rents are going up in Rio's informal housing communities. What, if anything, should the city do about it?

Rio de Janeiro's shanty towns, its favelas, long stricken by poverty and violence, have a new boogeyman: Gentrification.

First, only academics were worried about whether gentrification might really be happening in the favelas. Those fears have since migrated from anxious blog entries to coverage in major newspapers. The international press has now latched on, reporting on the hip restaurants edging into territory more commonly thought of as a drug gang battleground.

Underneath many of these over-hyped stories lays a real question: What would it mean if lower income cariocas are priced out of even the favelas?

Theresa Williamson, of the favela empowerment NGO Catalytic Communities, is emphatic that the loss of the favelas would have a dramatic impact on the city's basic functions. "Rio's favelas are our affordable housing stock," she says. "We have some low-income condos and private housing. We have some public housing. But there is [nowhere near enough to meet] the demand, and public housing is lower in quality than most of the favelas."

Researchers since the 1960s have argued that the favelas, the informal communities which house 22 percent of the Rio's population, might just be a housing solution rather than a scourge to be eradicated, says Neiva Vieira da Cunha, a professor of anthropology at Rio de Janeiro State University and a researcher at the Laboratory of Metropolitan Ethnography. The favela, she says, "seems to have been the solution for millions of Brazilians to have access to urban land and therefore to have the right to the city."

The implications of what shanty town residents are calling "expulsão branca" (white expulsion) could be massive for Rio's 1.4 million favela dwellers. In the past few years, increased prices across the city have spilled over to the informal markets' rents and home values. In prime locations, prices have gone up by nearly 50 percent.

Favelas where pacification programs have brought down drug and gang violence have seen rent increases of up to 200 percent, according to da Cunha's research. Since 2008, those policies have also led to a gradual turnover in favela inhabitants, as well as a shift in the kinds of retail business available to meet newcomers' and tourism needs.

Favelas in the desirable South Zone of the city are already seeing a trickle of international and speculative interest, as expats move in and entrepreneurs start setting up luxury outposts on hillsides with a view. There are suddenly fears that favela chic might be displacing the actual favela.

British musician Tom Ashe spends time with his students near the house he rents at the Pereira da Silva slum in Rio de Janeiro. For many gringos with low incomes, the favelas are the only affordable housing option as the rest of Rio's real estate has soared. (Pilar Olivares/Reuters)

"With the increase in cost of life in the favela, there is a tendency towards removal of the original population and substitution of new inhabitants with higher income, capable of standing up to those new realities," says da Cunha.

Her research suggests long-time favela residents are being pushed to more peripheral regions of the city, where new housing projects are being built.

High rates of home ownership in favelas can mitigate displacement, but some renters are being forced to relocate as they are priced out. And though some migrants have sold their appreciated favela property to retire back in the country, some have found themselves unable to afford to move back after discovering they were less happy with life outside of their favela community.

Yet experts on the ground are urging far flung observers to take a deeper look. "We can see the gentrification phenomenon in its beginning stages," says Williamson. "The media have portrayed it as if it’s far along. And it’s not, and that’s not helpful to the communities, because it paints it as an inevitability."

What will happen will have a lot to do with political decisions regarding property rights in the informal market. Brazil's constitution recognizes an impressive array of rights, including the right to housing and a recognition of the social function of urban property. This means that needy people settling on informal land are generally not evicted, and can eventually gain some sort of legal claim to their homes. But it's unclear whether those titles will hold once they're sold to wealthy outsiders. Speculators are betting they'll be grandfathered in by politicians anxious to whitewash these areas.

That's how these stories have tended to go before. But what if, instead, Rio (selected as the world's top "Smart City" just last month) takes what's happening in its favelas as an opportunity to create a model of community-accessible housing that might eventually help millions of urban poor across the world.

Williamson sees many traits of classic New Urbanism in favelas, even despite the poverty and lack of public services. They have affordable, centralized housing; a pedestrian and bicycle-based transportation culture; proximity to jobs; mixed-use architecture that can be adapted to residents' needs; and strong community bonds.

Can these vital functions be protected, even as gentrification proceeds? And what about the education, health and sanitation services that residents desperately need?

On a social level, there's concern over the potential loss of a unique culture that has evolved over a century of informal occupation. Each favela has its distinct traditions and sensibilities, in many cases reflecting a melting pot of where migrants have come from and its historical trajectory.

Williamson points to possibilities her organization is already working on, ranging from financial education for favela residents so they can avoid being taken advantage of by real estate speculators, to debating community ownership of land. Other possibilities involve cultural preservation and developing economic activities, such as homestays, that could help preserve vital segments of the community rather than displacing residents.

Ultimately, how Rio responds to these economic conditions will be crucial in determining these neighborhoods' future.

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