Here is the rewritten HTML article:
The Conversation
Estrutura empresarial, controle e violência: um raio-x da indústria imobiliária do tráfico e da milícia nas favelas do Rio
by Ivan Zanatta Kawahara
For decades, the idea of precarious urbanization and improvised housing has been associated with favelas and deprived communities in Rio de Janeiro. However, it is no longer true that these communities live in a reality of housing that is vastly different from this old vision.
A study conducted by my team and I on the real estate market in Rio’s favelas reveals a complex reality. On the one hand, a large contingent of regular workers in the construction industry, merchants, and public servants, among others, who are involved in the production, sale, and rental of legal properties. On the other hand, a strong presence of drug trafficking and militia in this same market, involving a network of “laranjas” (shell companies), real estate agents, entrepreneurs, and investors.
In this context, the territorial control exercised by these armed groups allows them to control the activities of formal real estate agents, through extortion and forced regulation of construction projects.
The article “Os grupos armados e a organização do trabalho no mercado imobiliário” (Armed groups and the organization of work in the real estate market), published in the Revista Cadernos Metrópole, is the result of seven years of research. To produce this study, I used interviews, media monitoring, bibliographic research, denunciations from the public ministry, and my own experience in land regularization programs. This diversity of sources is due to the scarcity of continuous and comprehensive data on the real estate market in favelas and the aggravation of this difficulty in relation to the activities of armed groups in this market.
From invisibility to the tragedy of Muzema
The production of rental housing is an old issue in Rio’s favelas. This is because many of them emerged from direct construction by property owners, or supposed property owners. In many cases, local small business owners who rented these houses to their own employees.
Over the 20th century, this practice became increasingly managed by crime. However, it did not prevent regular residents from investing in the construction of their own homes for rental. But with criminalization, this universe of rental housing production in favelas became invisible, and was left behind by both the media and academic studies.
Until the day, April 12, 2019, when two buildings constructed and managed by the local militia, the Escritório do Crime, collapsed in the Muzema favela, in the West Zone of the city. A tragedy that killed 24 people and made the real estate market in Rio’s favelas gain strength in the media agenda – at the same time revealing the extent of the involvement of armed groups in this industry.
The concealment of constructions in favelas, and their subsequent revelation along with the activities of armed groups, made it seem that the entire housing market in these communities is dominated by crime. My study indicates the opposite: the militia and drug trafficking operate in a market that already existed before. And in many cases, it is extorted by these groups. The Muzema collapse reinforces the need to understand the intervention of armed groups, but also the real estate market in favelas in a broader sense.
The organizational structure of armed groups
The analysis of the real estate production of armed groups indicates that there is an organization with various agents in distinct functions. Despite the differences in the information found on the production of drug trafficking and militia, at least four seem to be fundamental and exercise similar functions in the organization of both groups:
1) the entrepreneur partners act in prospecting for new lands to be occupied, occupation, parceling of the land, management of works, division, sale, rental, administration, and financing of properties and all other activities necessary for the exploitation of the real estate industry;
2) the investor partners acquire property units from the entrepreneur partners, in the planning or construction phase, at lower prices, seeking future gains through the sale and rental of these properties;
3) the real estate agents search for clients and lands suitable for occupation, manage the sale and rental of properties;
4) the “laranjas” assume the legal ownership of property, contracts with energy and water concessionaires, companies, bank accounts, rental contracts, and responsibility for works before the authorities, in order to conceal the true owners and the organization of the group.
Although the agents of the real estate production of armed groups follow a well-defined hierarchy, that is, everyone knows what orders to follow, each of them seems to act with a certain autonomy. They seek the best way to profit from their business and are organized to not harm each other and to collaborate with the overall operation.
For example, networks of information, including involving public agents, were identified that alert about the activities of the police and regulatory bodies, allowing the responsible for the constructions to have the possibility of stopping works and hiding clandestine connections in water and electricity networks. When the illegal act is discovered, the costs of bribery are divided.
The autonomy of real estate agents is, at the same time, a way to expand the management of projects, involving a larger number of people in operations, and to conceal the involvement of real estate agents with armed groups.
Territorial control and extortion
Armed groups also benefit from their territorial control. In Rio das Pedras, it was indicated that the local militia, through its control over the residents’ association, charges a tax on residents and other real estate agents to build above the second floor.
In Rocinha, the same occurs from the fifth floor and for constructions in public areas and that expand the limits of the favela towards the forest. This is a way to restrict the activity of competitors and to increase resources for their own businesses.
This charge functions as a “protection tax” against possible embargoes or demolitions executed by the public power, that is, what armed groups sell is the ability to prevent the action of the public power.
In the case of militias, mechanisms of extortion of lands and properties were also identified. In Rio das Pedras, there is a rule imposed by the residents’ association that determines that the responsible for a collapsed building has their land confiscated.
Extortion of lands by debts resulting from the schemes of agiotagem of militias was also indicated in various cases. In addition to the expansion of the militias’ real estate portfolio, these mechanisms ensure a more effective collection of debts from residents and prevent the presence of authorities due to collapses.
The impasse of public power
The high profitability of real estate production in favelas is sustained by a growing demand for housing in its price range. The typology of housing, usually apartment buildings, indicates a concern of entrepreneurs to adapt production to demand in favelas, seeking to build the largest number of units in the smallest space and with the lowest investment possible, cheapening the housing unit.
The great demand of the population for these housing units is another problem regarding the possibility of public power control, including in cases of constructions by armed groups.
The buildings constructed are quickly occupied, and the occupation generates an impasse for public power that cannot provide housing in sufficient volume. In 2019, in Muzema, the city hall’s attempt to demolish the buildings built by the militia was met with a dilemma, in which defending the residents who had legally acquired their properties seems to result in indirect benefits for the militia. Real estate market agents perceive this impasse and incorporate it into their strategies.
Ivan Zanatta Kawahara is currently a researcher at the Housing and City Group of the Rio de Janeiro Metropolitan Observatory, Federal Fluminense University (UFF); graduated in Architecture and Urbanism from EAU/UFF, specialist in urban sociology from PPCIS/UERJ, master’s degree in urban and regional planning from IPPUR/UFRJ, and Ph.D. in architecture and urbanism from PPGAU/UFF.
The text does not necessarily represent the opinion of the GGN Journal. Do you agree or have a different point of view? Send your article to [email protected]. The article will be published if it meets the criteria of the GGN Journal.
“Democracy is a fragile thing. Defending it requires a courageous and contundent journalism. Join us: www.catarse.me/jornalggn“
