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A tale of three cities: Urban renovation in Latin America

Change stands out in Bogotá and it’s making an impact in Mexico City. It’s visible in Guatemala City, Lima, Montevideo and Santiago. And it doesn’t stop with Latin America’s capitals. It can be noticed in Guayaquil, São Paulo, Merida, Porto Alegre, Medellín, Cuenca, Guadalajara, Monterrey, Cartagena and Veracruz.

Latin American cities may be very different from one another but they share a common experience of “urban renaissance” based on new public transit networks, restoration of historic districts and neighborhood upgrading programs involving local residents. At least 20 cities in this region have forged ahead with high-profile urban improvement projects in recent years. Similar initiatives under way in 20 other cities will begin to change people’s lives over the next few years.


Passengers use elevated stations to board the bi-articulated buses in Curitiba.

An element many of these cities have in common is financing from the Inter-American Development Bank (IDB). The IDB has been more than a source of funding: early on, it identified these three key investment areas and sought opportunities to replicate them across the region, thanks to its participation in three pioneering experiences.

This wave of change started in large cities, but it won’t stop there. “There is tremendous demand coming from mid-size cities,” explains IDB urban development expert Eduardo Rojas. “These cities can resolve their problems at a lower cost than the larger urban areas, and with quicker results.” Brazil alone, he adds, has some 300 municipalities capable of taking on these kinds of projects.

Today, most of the region’s urban renewal projects take their inspiration from one of three programs that the IDB began to support 15 years ag Curitiba, Quito and Rio de Janeiro. From January 2000 to April 2009, the IDB has provided financing for more than 150 projects in cities and 50 programs involving neighborhood upgrades.

Buses like trains

Curitiba, the capital of the Brazilian state of Paraná, launched its Rede Integrada de Transporte at the end of the 1970s with red biarticulated buses that brought the city instant fame. Until 2000, Curitiba was the only city in Latin America with a bus rapid transit system (BRT).

Jaime Lerner pushed for Curitiba’s BRT during his first term as mayor. The city had received federal funds to build a subway, but Lerner was reluctant to spend millions to dig tunnels that would leave streets impassable for years. Instead, he came up with a novel solution: build a public transportation system that would function like a subway, using buses running on exclusive lanes and elevated stations.

Experts and commuters gave Curitiba’s system a warm reception, and a new concept in urban development was born.

The IDB became a partner in the initiative in 1995, when the city announced an ambitious Transporte Urbano de Curitiba project that would expand the BRT coverage and improve service. The IDB helped finance the project with a $120 million loan.


One of the TransMilenio subway-like buses in Bogotá.

In December 2000 Bogotá launched its TransMilenio metropolitan mass-transit system, which drew from Curitiba’s experience. TransMilenio is the most heavily used BRT in the world, carrying 1.4 million passengers a day. It is also the most extensive, with 88 kilometers of exclusive lanes and integrated feeder systems.

“Bogotá showed the world that it’s possible to get subway-like performance at a fraction of the cost and with effective public-private partnerships,” said Darío Hidalgo, new business development director at the Center for Sustainable Transport of the World Resources Institute, a Washington, D.C., think-tank that has worked on several similar projects in Latin America.

The Colombian capital continues to perfect its system. In May 2009 the IDB approved a $10 million loan for an improvement program connected with the Integrated Public Transit System (SITP), the agency that coordinates development plans between TransMilenio, the metro and the city’s metropolitan train network.

TransMilenio has become an international point of reference. In two years, Mexico City’s Metrobús, which started to operate in 2005, has achieved one of the highest productivity rates of all BRTs: 3,000 passengers per bus/day. According to the Mexican NGO Instituto Nacional de Ecología, Metrobús’ productivity savings have topped $15 million a year since 2006.

BRTs, however, can face many challenges. They are not always fully integrated with other modes of public transportation, and exclusive bus lanes sometimes conflict with cities’ road networks.

Nevertheless, the concept of bus rapid transit has taken hold in many metropolitan areas. Counting projects under construction and systems already in operation, there will be BRTs in more than 30 Latin American cities, including Guadalajara, Santiago, Monterrey, Guayaquil, Merida and Guatemala City.

Back to downtown

Quito’s urban renewal project was an ambitious effort to turn the Ecuadorian capital’s dilapidated historical center into a vibrant heart of the city. The project received $41 million from the IDB in 1994, and its success changed the concept of restoring old buildings and preserving urban heritage.

The project was the brainchild of Rodrigo Paz, a visionary mayor of Quito. Until the early 1990s, all cultural heritage preservation projects followed a similar formula: get private donations to restore emblematic buildings and convert them into museums. The buildings gleamed anew, but the restoration left them uninhabitable.

Paz proposed a paradigm shift, viewing historic buildings as part of everyday urban life. “The idea was that the historic center should be a living part of the city, not an isolated museum,” Rojas explains.

To achieve this goal, the city had to consult citizens to learn about their needs and expectations and open a dialogue between businesses and civil society organizations to enlist them as partners in the project.

Quito spearheaded the creation of a public-private company to develop the historic center. The company made deals with different groups, ranging from construction companies and real estate investors to social organizations and religious orders. Ecuador’s capital set an example that has spread to Mexico, where the trust fund for restoring Mexico City’s massive historical center is being headed by the business tycoon Carlos Slim.

Other Latin American cities that have followed in Quito’s path are Montevideo, Guatemala City, Cartagena, Veracruz, Valparaíso and Cuenca.

In Brazil, the federal government delegated the management of urban heritage to state and municipal authorities. In all, 24 Brazilian cities are restoring or planning to restore their colonial districts with financing from a federal program backed by the IDB.

In Mexico, an IDB grant is financing feasibility studies for launching similar projects in seven cities: Monterrey, Colima, Chihuahua, Cuernavaca, Guadalajara, Oaxaca and Pachuca.

Invisible neighborhoods

The third wave of Latin America’s urban renaissance involves projects that expand infrastructure and public services to poor neighborhoods, bringing them into the fabric of the formal city.


Rio de Janeiro's favelas.

In 1995 Rio de Janeiro launched Favela-Bairro, its first neighborhood upgrading program, which focused on improving living standards in city slums and recruiting their residents as agents of change.

The project, which has received $360 million in IDB loans, has been highlighted as a model case by the Massachusetts Institute of Technology. By the time the project’s second stage was launched in 2000, Favela-Bairro was already being exported.

Under the project, the city opened streets and created parks in teeming slums, bringing in basic services such as water, sewage and drainage, garbage collection and public lighting. In addition, schools and day care centers were built, and other social services were provided to combat domestic violence and alcohol and drug abuse.

Residents of the favelas themselves helped implement the program, working on outreach in their communities. Their participation led to reductions in violence, robberies and overall crime.

“We didn’t have to look very far to find what we needed to do, because people told us what they wanted,” says José Brakarz, a Rio de Janeiro city planner who led the IDB team on the project.

Favela-Bairro soon became a model for other cities. Poor neighborhoods in Guatemala City and Salvador, the capital of the Brazilian state of Bahia, have been reclassified as a result of upgrading programs while shantytown dwellers in Lima have been resettled in neighborhoods with basic services. Community activism has put a stop to squatting and improved sanitary conditions; in Caracas, microcredit is helping families make improvements to their own homes.

In some cases, the private sector is also playing a role. In El Salvador, the land development company Argoz offers low-income families lease/purchase deals to acquire plots on the outskirts of cities and advises them on lobbying the government and utility companies to extend basic infrastructure and public services to their new neighborhoods. More than 300,000 families have managed to become property owners through the program.

Projects that bring poor neighborhoods into the urban map pay bigger dividends when local stakeholders—citizens, organizations, businesses—take ownership of the initiatives. “Getting all of the stakeholders involved makes urban renewal efforts sustainable,” Rojas concludes.

A tale of 100 cities

The examples of Curitiba, Quito and Rio de Janeiro have proliferated to the point where virtually all major cities in the region have started urban improvement projects of one sort or another.

IDB specialists are now focusing on the enormous demand from mid-sized cities, which are increasingly facing problems such as traffic congestion and spreading slums. These cities are often overlooked when national governments make decisions on investing in urban areas, since larger cities tend to have more political clout.

Once again, Brazil, a country with 650 municipalities with populations between 50,000 and 1 million residents, seems to have come up with a solution.

Late in 2006 the IDB approved an $800 million line of credit for Procidades, a program that provides direct financing to Brazilian municipalities for urban development projects, including public transportation, neighborhood upgrading and historic district renovation.

To date, the program has financed projects in eight municipalities for a total of $175 million (see box below). Numerous others are expected to be approved in 2009.

Programs like Procidades could bring an urban renaissance to hundreds of smaller cities in the region. They could also become a model for decentralization, another strategic priority for the IDB. “It combines everything we have done and know how to do,” Rojas concludes.

Procidades cities


Morro São José.

Procidades, a program backed by an $800 million IDB credit line for urban improvement projects in Brazilian municipalities, was showcased at a world forum on aid effectiveness held in Accra, Ghana in 2008.

Since its approval in late 2006 until May 2009, Procidades supplied $175 million for projects in eight Brazilian municipalities: Toledo, Maringá and Ponta Grosa in the state of Paraná; Vitória in the state of Espírito Santo; Belford Roxo, Niterói and Nova Iguaçu in Rio de Janeiro; and Campo Grande in Mato Grosso do Sul.

Six other cities were due to receive financing in mid-2009, including Catanduva in the state of São Paulo, Duque de Caxias in Rio de Janeiro, São Luís in Maranhão,  Aracaju in Sergipe and Manaus in the state of Amazonas. The sixth city that will benefit from the program this year suggests that the virtuous cycle of urban renaissance has come full circle: Curitiba.

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