Santiago de Chile

Chile’s housing policy has efficiently addressed the housing needs of the country’s most vulnerable populations; today, its housing deficit is the lowest in Latin America. The downside of this policy, however, is extremely high socio-spatial segregation: massive, socially homogeneous residential projects located in the periphery of cities. This situation is the result of several factors, including (1) the vast number of annual housing subsidies allocated to low-income households; (2) the government’s entrustment of housing provision to the private sector without controlling quality or location; and (3) the services and urban infrastructure needed to support these new developments.

The capital of Chile, Santiago, is also the country’s the most populous and densest urban area, with its seven million people accounting for 40.5 percent of the national population. Thanks to that density, Santiago is also where the negative spatial impact of housing policy has been most significant. Today, 142 neighborhoods in the Santiago Metropolitan Area (SMA) qualify as a priority for social action. Hence, in spite of a strong, thriving economy that accounts for 41.5 percent of national GDP, the SMA contains municipalities where over 80 percent of housing stock consists of social housing. But without significant social or institutional opportunities offered nearby, these neighborhoods are entering a rapid process of urban and social decay.

In 20 SMA municipalities, more than 70 percent of households do not pay property tax, which depletes the fiscal capacity of municipalities to invest in their districts and provide good services to vulnerable populations.

After two decades (1985-2005) of implementing the housing policy described above, the need for more sustainable housing solutions in Chile has become evident and urgent, with concerns going beyond considerations of the sheer number of units. By 2006, the Ministry of Housing and Urban Development (MINVU) broadened its policy focus, considering housing among its goals for ensuring urban social inclusion for the first time, rather than limiting discussions to solving the housing deficit.

To meet the new objective, new programs and policy instruments were designed, two of which have stood out for targeting the locational attributes of social housing. A location subsidy has sought to increase social housing’s chances of securing a better location by enabling it to purchase land in areas with better urban attributes, while the Program of Social and Urban Integration (PSUI) aimed to generate residential projects with both better location attributes and greater residential social diversity. These policy solutions, however, have proven radically different in practice: the location subsidy completely failed, whereas the integration program has found increasing success.