Reurba’s Bold Mission: Turning Favelas into Buildings with Community Support

Reurba, a social real estate developer in São Paulo, Brazil, aims to transform favelas into residential buildings while ensuring that current residents benefit from the change. This innovative model involves allocating 30% to 40% of the newly built units to the communities currently living on the land, ensuring they are not displaced but become part of the progress.

The company’s CEO, Duda Alcantara, explained that Reurba’s mission is both social and commercial. “Our challenge is to balance profit with social impact,” she said. Reurba’s approach addresses São Paulo’s housing crisis by utilizing land occupied by favelas well-located near public transportation hubs. This unique model stands out as a private-sector solution to an issue historically addressed by public policy.

How Reurba’s Model Works

Reurba relies on data from Dataland, a real estate intelligence platform under Stocci, a subsidiary of the GHT4 group, to make these projects viable. Cristina Della Penna, CEO of Dataland, highlighted the extensive research into identifying 6,000 potential sites across São Paulo. Each site measures at least 1,000 square meters and is within 1.5 kilometres of metro, train, or bus stations.

Not all locations are suitable. Lands that are contaminated or near protected properties, which face construction restrictions, were excluded. Additionally, Reurba has looked into property tax debts as a strategic entry point for land negotiations. “When there’s tax debt, negotiations often become easier,” said Ms. Della Penna.

In many cases, landowners are willing to relinquish property to settle tax debts, significantly when the land’s value is reduced due to occupation. While some landowners retain legal rights, occupation can significantly devalue properties, making them less attractive for auctions.

Legal Complexities and Community Engagement

The legal landscape for occupied lands can be complicated. Residents could claim properties with long-term occupation through adverse possession laws, but this requires legal action, which many families cannot afford. Additionally, evicting residents is legally and socially challenging.

Instead of confrontation, Reurba prioritizes dialogue. The company works closely with residents to secure their agreement and support. “The project can only move forward if the community is on board,” said Ms. Alcantara. Reurba’s approach includes visiting residents’ homes, understanding their needs, and building trust through discussions.

A fundamental principle of Reurba’s model is to ensure that residents remain in the area where they’ve built their lives. During construction, residents are temporarily relocated, with their rent covered by Reurba. This cost is negotiated with the company and can be offset once the units are delivered.

Reurba’s First Project: Viela Casa Grande

Reurba’s pilot project is in the Viela Casa Grande community in the Vila Clementino neighbourhood of São Paulo. The site, spanning 1,000 square meters, has been occupied for over ten years. Ms. Alcantara has talked with residents for several months to understand their family structures and ensure they are part of the process.

The project’s buildings could also qualify for Brazil’s “My Home, My Life” housing program, backed by Caixa Econômica Federal, a financial partner of Reurba.

Expanding the Vision

Reurba has identified three additional communities in the Vila Mariana and Saúde neighbourhoods as potential sites for future projects. The company is also considering larger areas, such as the Favela do Pau Queimado in Tatuapé, which covers 25,000 square meters, and the Moinho community in Campos Elíseos, with 20,000 square meters.

These projects highlight Reurba’s ambitious plans to bring private-sector solutions to São Paulo’s housing challenges.

A New Role for the Private Sector

Urban planner Tomas Alvim, coordinator of the Arq. Futuro laboratory at Insper Business School praised Reurba’s efforts, calling them “sensational.” He noted that public policies aimed at urbanizing favelas have often fallen short due to high demand and limited resources.

“New solutions like this are very welcome,” said Mr. Alvim. However, he emphasized that such interventions must go beyond simply replacing homes. To succeed, projects must offer residents broader access to amenities such as education, green spaces, and job opportunities. These are necessary for residents to feel in their new surroundings and eventually sell their homes, returning to other favelas.

Learning from Other Initiatives

Reurba’s approach is one of many private-sector attempts at favela urbanization. The Vila Leopoldina Urban Intervention Project (PIU), proposed by Votorantim, is another example. This initiative, which aims to replace the Linha and Nove favelas, was approved in 2023 after seven years of discussions. However, construction has yet to begin, as it awaits city hall’s auction of construction potential certificates.

Despite delays, Mr. Alvim believes private-sector projects offer more continuity than government-led initiatives. He stressed the importance of maintaining social class diversity in urban spaces to ensure sustainable development.

Challenges Ahead

While Reurba’s model shows promise, it faces several challenges. Legal complexities, community skepticism, and financial viability are just a few hurdles the company must navigate. Additionally, as suggested by other developers and social movement leaders, convincing potential buyers to purchase units in areas historically associated with favelas may require offering below-average prices.

Reurba relies on its social expertise through Instituto Vivenda and engages with local leaders to address these concerns. The company believes building trust and maintaining open communication with residents will be vital in overcoming skepticism.

A Step Toward Inclusive Urbanization

Reurba’s efforts represent a significant shift in how São Paulo’s housing crisis is addressed. By integrating social and commercial goals, the company aims to create a model that benefits residents and developers.

While the road ahead is not without obstacles, Reurba’s innovative approach has the potential to inspire other private-sector players to join the effort. As São Paulo continues to grow, initiatives like these could play a vital role in shaping a more inclusive and sustainable urban future.

With its inaugural project already underway and plans to expand, Reurba is not just building apartments but creating a new narrative for São Paulo’s most vulnerable communities.