The Covid-19 pandemic has reached almost every corner of the world. Despite the historical development, approval, and distribution of vaccines in some countries, non-pharmaceutical interventions will remain an essential strategy to control the pandemic until a substantial proportion of the population has immunity. There is increasing evidence of the devastating social and economic effects of the pandemic, particularly on vulnerable communities. Individuals living in urban informal settlements are in a structurally disadvantaged position to cope with a health crisis such as the Covid-19 pandemic. Estimates of this impact are needed to inform and prioritize policy decisions and actions. We study employment loss in informal settlements before and during the Covid-19 pandemic in Chile, using a longitudinal panel study of households living in Chile’s informal settlements before and during the health crisis. We show that before the pandemic, 75% of respondents reported being employed. There is a decrease of 30 and 40 percentage points in May and September 2020, respectively. We show that the employment loss is substantially higher for individuals in informal settlements than for the general population and has particularly affected the immigrant population. We also show that the pandemic has triggered neighborhood cooperation within the settlements and that targeted government assistance programs have reached these communities in a limited way. Our results suggest that individuals living in informal settlements are facing severe hardship as a consequence of the pandemic. In addition to providing much-needed support, this crisis presents a unique opportunity for long-term improvements in these marginalized communities. Supplementary Information The online version contains supplementary material available at 10.1007/s11524-021-00575-6.
This Article addresses the recent international trend in development theory and practice towards an “enabling markets” approach in housing policy. This approach delegates to housing markets the responsibility of providing affordable housing and therefore limits the role of government to stimulating the private sector through targeted subsidies. I ask whether an enabling markets policy constitutes an adequate regulatory strategy for the provision of sustainable housing solutions for the urban poor. I explore this question through an in-depth case study of Chile’s housing policy regime, which was a pioneer in the implementation of an enabling markets strategy; for over four decades, successive governments have been able to provide access to housing to a vast portion of low-income residents, in the context of a regulatory framework that favors private real estate development. However, this success story is marred by an important failure. Through its market-based regime, Chile has routinely clustered low-income families on cheap land, usually located at the periphery of the country’s urban centers, and often in areas with poor public and private services. The main argument I present in this Article is that Chile’s commitment towards an enabling markets regulatory regime has helped to reinforce the pattern of urban exclusion, and has prevented the government from experimenting with alternative policy strategies that may be more effective in promoting inclusionary housing. The main limitation of the enabling markets strategy is that it assumes that the delivery of targeted subsidies will generate an adequate supply of affordable housing for the low-income sector. The Chilean experience shows that this assumption is false, because subsidies are rarely sufficient to enable beneficiaries to compete for well-located housing, while private companies have strong incentives to agglomerate low-income housing in the least desirable urban areas. I argue that, in order to promote urban inclusion, governments need to experiment with an alternative policy strategy that I call a “planning housing markets” approach, which involves using land-use governance mechanisms to ensure that low-income housing is fairly distributed within cities.
The COVID-19 pandemic has reached almost every corner of the world. Without a pharmaceutical solution, governments have been forced to implement regulations and public policies to control social behavior and prevent the spread of the virus. There is dramatic evidence of the social and economic effects of these measures and their disparate impact on vulnerable communities. Individuals living in urban informal settlements are in a structurally disadvantaged position to cope with a health crisis such as the COVID-19 pandemic. This paper examines the socioeconomic impact of the crisis brought by the pandemic in informal settlements in Chile. We use a three-wave panel study to compare the situation in informal settlements before and during the health crisis. We show that households living in informal settlements are paying a high toll. Their employment loss is dramatic, substantially larger than the loss reported in the general population, and has particularly affected the inmigrant population. We also find that the pandemic has triggered neighborhood cooperation within the settlements. Targeted government assistance programs have reached these communities; however, this group’s coverage is not enough to counteract the magnitude of the crisis. Our results suggest that governments, the non-profit sector, and the community need to urgently provide economic support and protections to individuals living in informal settlements and consider this opportunity for long-term improvements in these marginalized communities.HighlightsGovernments have implemented large-scale non-pharmaceutical interventions to control the spread of the COVID-19 pandemicThese measures have had dramatic social and economic effects on the population, particularly affecting vulnerable communitiesIndividuals living in urban informal settlements are in a structurally disadvantaged position to cope with this crisisUsing panel data, we document a dramatic employment loss among informal settlements dwellers, substantially larger than the general populationThe pandemic has also triggered neighborhood cooperation within the settlements as well as targeted government assistance, but not enough to counteract the magnitude of the economic loss
Recent decades have seen a strong commitment in development theory and practice toward the idea of promoting homeownership among low-income families, partly based on the idea that property formalization constitutes an important vehicle for social mobility and economic development. However, the empirical evidence on this theory is not conclusive. This paper aims to explore this idea using evidence from Chile, a country that has shown high success in moving low-income families from the informal to the formal housing sector. The data for the analysis comes from a comprehensive survey conducted in 2008 with a representative sample of two groups of low-income households in Santiago: The first group living in an irregular settlement and the second living in subsidized formal housing. Through the use of statistical methods that allow comparison of these samples (matching strategies), we find that market behavior among both groups are not considerably different. The analysis shows that there are no statistically significant differences between the two groups with respect to savings and investments in their homes. The only relevant difference we find is that individuals living in formal housing have more access to loans from commercial stores relative to informal dwellers. We argue that the type of geographical relocation to formal housing may affect the market behavior of low-income owners more than tenure security, in a direction that does not necessary benefit their socioeconomic situation.
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