Rio’s Real-Life Slumdog Millionaires

Brazil’s efforts to clean up the favelas for the World Cup have led to a surprising development: Due to property laws, many slum residents now own some of the city’s best real estate.

Brandon Presser/The Daily Beast

It’s dusk in Leblon, one of Rio de Janeiro’s wealthiest neighborhoods. The sand on its namesake beach turns gray as the sun dips behind the Two Brothers, twin granite spires at the far side of the bay. Beneath the signature stone towers, a cloak of jungle gives way to hundreds of structures that seem precarious in their negotiation of the city’s ruthlessly vertical terrain. Lights flicker on, turning the hillside into a veritable switchboard as night falls on Vidigal, one of Rio’s infamous slums.

Vidigal and the other slums of Brazil—known as favelas—are testaments to years of government neglect and unchecked urbanism. They are palpable reminders of the great disparities between socioeconomic classes across the country, where favela residents have had to construct their homes from found materials and fight for plots of land. But that may be changing. After Rio won the one-two punch bid to host the FIFA World Cup in 2014 and the Olympics in 2016, the city made a promise to clean up its slums and make them safe for visitors.

Now—under the global spotlight of the World Cup—it seems that a new fate awaits the residents of Vidigal, the favela that looms high above Rio. As the sweeping tide of security reforms and gentrification washes over this now-safe neighborhood of tenement housing, its citizen squatters have suddenly found themselves owning some of the most valuable oceanfront real estate in the world.

It may seem like a happy accident, but over a century of political and historical misfires have carefully paved the way for the new legion of unintentional real estate tycoons.

Born in the late 1890s after a military campaign to quash civil unrest in the state of Bahia, the first official slum materialized on a hillock of government land in Rio when thousands of soldiers found themselves without homes. They coined the area “favela” because the native foliage reminded them of the much-hated favela tree further north, known for irritating the skin.

The name stuck, and in the years that followed, a variety of social factors contributed to the rise of dozens of favela settlements around Brazil: the freeing of black slaves, an ever-increasing need for labor in the major cities, and a volatile economy that soared high and crashed hard.

The shape of Rio’s favelas as they stand today was largely sculpted during the 1970s when a lethal cocktail of heightened worker migration, shifting drug routes, and lapsed attempts to thwart squatter camps by the military dictatorship multiplied the number of slums tenfold. By the 1980s, these autonomous communities seemed completely detached from the rest of the city, pirating electricity, lacking any form of cooperative sanitation, and operating under the iron fist of resident slumlords who dealt in drugs, firearms, and fear.

Vidigal was no exception to the rule; it ballooned alongside the other favelas in the ’70s and ’80s when the once-fertile coffee plantations ran dry, forcing farmers to seek a new life in the Big Smoke. While the shantytowns in other metropolitan centers sprawled along the city outskirts, the favelas of Rio gobbled up the areas deemed too difficult to build on by the government—the highest peaks of the city.

The shacks of Vidigal were thrown up indiscriminately on the hillside next to some of the most sought-after real estate in Rio—the beaches of Ipanema and Leblon. Lines were clearly drawn between the wealthy elite “on the asphalt” in comfortable multi-story apartments, and the impoverished favela dwellers who lived conspicuously off-grid.

“Growing up you could hear gunshots being fired between the gangs of Vidigal and their enemies in the neighboring slum of Rocinha,” Glayber Silva, a private guide for Kensington Tours, says.

Silva’s been showing visitors around his native Rio for over a decade and has seen a lot of changes in his city over the last 10 years. He takes travelers into several of the favelas around the city center, noting that the separation between the haves and have-nots is now marked by several gradations of Brazil’s growing middle class. Silva explains that even the term “favela” has become pejorative when used by those who live on the so-called asphalt, and has been replaced with the softer “communidade” instead.

But the progressive absorption of Vidigal and the neighboring slums into Rio’s urban fabric has nothing to do with the softening of the divide of the nation’s socioeconomic classes. Instead, it’s the result of a massive governmental project called “pacification” that began after the city’s successful bids for two of the most-watched sporting events.

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While the government had promised to clean up its slums, the forced removal of any of its residents was not an option due to a loophole in Brazilian law, which grants squatter rights based on a series of criteria that most favela residents meet. According to Silva, who holds a degree in Brazilian law, the legalese boils down to the simple notion that unlawful tenants become the legal owners of the land they occupy after five years of uncontested squatting.

And thus, without the ability to forcibly eject these shantytown dwellers, a plan was set into motion to finally acquiesce the land to the favelados, while neutralizing the areas against the threat of their governing drug lords.

The pacification program began in earnest in 2008 and had two objectives: to seize control of a favela by staging an armed invasion, and to set up a series of Police Pacifying Units—or UPP (Unidade de Polícia Pacificadora in Portuguese)—to maintain security and facilitate integration with the rest of the city.

Today, with several UPP stations set up throughout Vidigal, the area is becoming a full-fledged neighborhood with municipal electricity, waterworks, and national mail service. The pacification program has not only removed the imminent threat of gang violence from the streets and reduced the city’s murder rate, it’s also created a new legion of real-deal slumdog millionaires who suddenly find themselves owning some of the most sought-after land in Rio.

Signs of gentrification are already present throughout the lower parts of the neighborhood that are easily accessible to pedestrians or by car. A handful of small restaurants abut the main street (there’s even a sushi bar of questionable merit), signs for a hostel point potential travelers down an alleyway, posters advertise property sales at astronomical prices, and on Airbnb you can sign up to stay in your choice of freshly remodeled abodes.

Silva, however, believes that the pre-existing prejudice toward living in the favelas will keep wealthy locals from buying in Vidigal, despite its ideal location. This leaves the gentrification of the community in the hands of foreigners, who have already started purchasing the ocean-view properties from the community at sky-high prices.

Although Rio lacks the social mobility of a city like New York, which rapidly transformed the neighborhood of Williamsburg into its current hub of hipsterdom, there’s a second obstacle that threatens to permanently stunt the redevelopment of Vidigal.

Many locals, including Silva, remain skeptical that the pacification program will continue after the Olympics in 2016. Maintaining a constellation of police stations in the city’s crime-ridden favelas is a massive strain on governmental coffers, and a shift in political tides could mean the reallocation of funds to address a different set of problems in the struggling nation.

Should Vidigal’s residents sell now and cash in their millions, or hold tight for a chance to make even more? It’s the ultimate game of real estate roulette. Only one thing remains certain at the moment: Now may be the last time to experience this unique way of life in Rio before the community gentrifies beyond recognition, or before it succumbs to the clutches of its original drug overlords who are waiting to crawl out from the woodwork and reclaim what they believe is rightfully theirs.