The Inevitable Crisis of the Brazilian Housing Finance System

Abstract

This paper summarises the major trends which produced a crisis in the Brazilian Housing Finance System (SFH) during the first half of the 1980s . It constitutes a first effort to contextualise the question within the broader economic framework of recent Brazilian development . It holds the thesis that the crisis was inevitable, due to both the SFH's original operational format and several inconsistent measures adopted piecemeal according to political and economic convenience .

Metodologia box-jenkins aplicada ao setor habitacional: um estudo de caso

“…Em 1966, o SFH superou as dificuldades relacionadas aos riscos de inflação devido ao aumento no número de financiamentos habitacionais impulsionados pelos programas de poupança (Baer & Beckerman, 1980). Nesse sentido, para solucionar os principais problemas enfrentados pelo SFH, em curto prazo institui-se programas para atração de poupanças populares, enquanto que, em longo prazo promoveu-se investimentos em financiamento imobiliário, porém, essas medidas acarretaram em sérios problemas ao SFH devido às fragilidades nas condições inflacionárias (Valença, 1992 (Brasil, 1964). Nessa perspectiva, o SFH surgiu para atender a quatro características principais: construir novas casas e promover negócios, alavancar as contratações no setor da construção civil, permitir acesso a casa própria, além de promover financiamentos sólidos e autossustentáveis, com taxas de juros não abusivas (Valença, 1999;Valença, 1992 (Valença, 1992 (Morettin & Toloi , 2006).…”

social and spatial inequalities and areas of vulnerability in the cities

“…Porém, era também importante, no contexto da redemocratização do país, livrá-lo de instituições emblemáticas das políticas "sociais" dos governos militares, sendo o BNH a mais importante delas. Estranhamente, o banco foi fechado, mas os ordenamentos do SFH, a causa de suas disfunções econômicas, não foram substancialmente alterados, passando a Caixa Econômica Federal a operar a política habitacional do país desde então (Valença, 1992;1999).…”

The trajectory of social housing policy in Brazil: From the National Housing Bank to the Ministry of the Cities

“…Inspired by the British 'Rightto-Buy', the government also began the sale of government owned housing, or the 'function dwellings' in Brasília, in the wake of its 'patrimonial reforms'. This was a stock of housing rented at subsidized prices to government personnel due to their high rate of 6 On the SFH crisis, see Valença (1992); on the situation leading to and following the closure of the BNH, see Valença (1999Valença ( , 2007. On the BNH-SFH format and development, see Andrade and Azevedo (1982), Bolaffi (1991), Maricato (1987) and Valladares (1986).…”

“…In this case, the Fundo da Compensação da Variação Salarial (or FCVS), a fund under the responsibility of the government which had been created during the 1970s with mortgage holders' contributions, was supposed to clear the debts owed to the creditor institutions -private and public. But due to the huge difference in the indices adopted for the monetary correction of wages, repayments and the growth of the debt, this fund would be insufficient to cover the remaining debts as contracts came to an end (Valença, 1992).…”

“…And although in theory there were schemes that allowed cross-utilisation of SBPE (savings accounts) and BNH (FGTS) resources, in practice the two legs of the SFH operated quite independently. It is worth noting also that the Brazilian SFH has always been a centralised system of housing finance but with a decentralised network of housing promoters throughout the regions (e.g., COHABs, cooperatives organized under the INOCOOP, building societies, pension funds and private housebuilders) (Azevedo, 1996(Azevedo, , 2007Valença, 1992Valença, , 1999Valença, , 2001. Following the general economic crisis at the beginning of the 1980s, all the system's sources of finance were affected negatively.…”