Achieving a Socio-Spatial Mix? Prospects and Limitations of Social Housing Policy in Santiago de Chile

Abstract

In the Chilean housing sector, the combination of free-market imperatives guiding investment decisions and a long tradition of social housing subsidies has generally had remarkable success in quantitative terms but has also contributed to the large-scale segregation of poor families on the urban periphery. With the goal of a better socio-spatial mix and, ultimately, social integration, the Chilean government recently revised its guidelines for housing subsidies, promoting small-scale social housing in central locations. This paper examines the early effects of this new housing policy in a cluster of the so-called “pericentral” municipalities in Santiago de Chile. Specifically, it raises the question of whether the policy has a chance of achieving its objectives in light of prevailing free-market conditions. We demonstrate strong interrelations between the current dynamics of real-estate investment and government-led housing programs which together continue to promote uneven socio-spatial development and segregation of the urban poor on a smaller scale.

Keywords::

• Housing policy
• affordable housing
• housing market
• Chile
• segregation

Acknowledgements

Research for this article was conducted under the Risk Habitat Megacity Research Initiative, supported by the Initiative and Networking Fund of the Helmholtz Association.

Notes

¹ In the context of this paper, “affordable” housing is understood as housing generally affordable for the urban poor. “Social” housing is affordable housing that has been constructed or acquired via government subsidies.

² The “currency” commonly used in Chile to display prices in land and housing is the Unidad Fomento (UF), an inflation-adjusted artificial construct whose value oscillates between 35 and 40 $US. For easier interpretation, all values in UF are also calculated in $US at a conversion rate of 1:40.

³ The amount used as a threshold was 1000 m² for average annual offer/trimester in a given year, with municipalities filtered out which were below this level in at least three out of the five years (>50 percent).

⁴ Not all building permits given will ultimately lead to construction, as interviews have indicated. Due to development failures, speculative reasons, or failures to originally comply with existing regulations (which require a renewed building permit), the actual number of residential units constructed is estimated to be around 80–85 percent of the number of permits granted.

⁵ Due to data availability, sales numbers include all formal transactions of residential units with a price of >500 UF ($20.000 USD) only. Therefore, most of the housing units which can be bought with funds from the FSV are not included, as their prices are usually below this threshold. Data do not include the municipalities of Cerro Navia, Lo Prado, and San Ramon either.