Large Scale Urban Projects

This paper assesses the degree to which a series of large-scale urban projects along the North Axis of the Metropolitan Region of Belo Horizonte (MRBH), Brazil, may have triggered a process of gentrification since 2004. The North Axis is the poorest zone of the MRBH, and it has been the subject of multiple development and investments plans, under the concept of “Aerotropolis”—the globalized metropolis that has an international airport as the anchor for its development. Although initially proposed as Public-Private Partnerships (PPPs), state government had the central role in these projects and funded almost all. These investments include a series of large-scale urban projects, including the Green Line (Linha Verde) corridor, which connects the central city to the International Airport Tancredo Neves, and the relocation of the administrative offices of the state government (Cidade Administrativa de Minas Gerais, CAMG). All these plans and developments were sustained by major investments in road and service infrastructure, including a Bus Rapid Transit (BRT) system. Area plans and investments have likely increased land values and rents in the area, sparking concern about the gentrification of low-income households in and around the area.

Empirical results indicate that the large-scale urban projects such as the CAMG may have increased the land values in the study area at nearly 17 percent. On the other hand, the “MOVE” BRT system may have caused a 14 percent price drop in the study area. Regarding the potential gentrification process, empirical results rejected this hypothesis, mainly because the study area is a consolidated area and the high-income groups have not been attracted to the area.

The study generated the conditions to design and implement another study, focused more on land value increments indeed generated by area plans and investments, covering a wider area and the range of options local governments could consider recovering those increments. More research is necessary to clarify the effects of BRT systems on Latin American cities, a key concern on urban policy nowadays.