If you build it
Friday, February 15, 2013
UNTIL 2011 Adriana Palugan, a mother of two, rented a home in Balneário Camboriú, a seaside town in southern Brazil. Now she is buying her own house, one of 166 in Colina do Cedro (Cedar Hill), a new development on a hill overlooking the town. She extols its wonders: bright and spacious with a pool, gym and multi-games court, 24-hour security—and altitude. Her old place was flooded in 2008, and she lost much of what she owned.
Without Minha Casa Minha Vida (MCMV; My House My Life), a federal programme started in 2009 to fund housing for Brazil’s poor and middle classes, Ms Palugan, who works for a car dealership, would have struggled to buy such a home. The price was keen: 100,000 reais ($51,000). Caixa Econômica Federal, a state-owned bank, gave her a subsidised mortgage; the repayments are less than her rent used to be. Caixa has also granted the developers, Abramar, cheap financing for the project’s second phase, two apartment blocks. The funding comes from a workers’ compensation scheme and the federal budget. Buyers cannot already own homes or make over 5,000 reais a month. The lowest earners get the biggest subsidies.