Study evaluates social entrepreneurship’s contribution to solving housing problems

The paper discusses how social entrepreneurship can mitigate low-income people’s lack of access to decent housing.
Public Policy
15 September 2022
Study evaluates social entrepreneurship’s contribution to solving housing problems

A new study, “Alicerces para Negócios de Impacto em Habitação” (“Foundations for Impact Businesses in Housing”), presents a systemic view of housing problems arising from insufficient resources and discusses how social entrepreneurship can offer solutions to meet social demands in the area. The paper discusses how social entrepreneurship can mitigate low-income people’s lack of access to decent housing.

The study was written by two professors at Fundação Getulio Vargas’ Sao Paulo School of Business Administration (FGV EAESP), Edgard Barki and Tânia Veludo-de-Oliveira, together with doctoral students Adriana Guedes Arcuri and Fabrícia Peixoto, as well as master’s Ana Tereza Delapedra. The paper, published in GV-Executive, will help managers get a pragmatic understanding of how to work with innovation and purpose in the housing area.

In an original and pioneering way, the article shows how it is possible to innovate while contributing to United Nations Sustainable Development Goal 11 through impact businesses, working together to deliver the right to decent housing and complementing traditional public and private sector initiatives. The study also reflects on social entrepreneurship’s challenges and future prospects in housing.

According to Edgard Barki, when it comes to impacts, the idea is to think about how it is possible to have businesses that work with a traditional model while seeking to deal with some gaps that the state and civil society organizations cannot plug. In this context, the article presents three examples of businesses that are trying to solve housing issues related to land reform, land tenure regularization and solar energy.

“Individually, these projects undeniably have an impact and benefit the lives of their beneficiaries. This article seeks to think about how we can better integrate solutions in order to solve Brazil’s huge housing problem,” says Barki.

Housing problems
 

Poor housing is connected to several problems, including illegal land occupation, unsafe homes and lack of access to basic services such as water and power.

Regarding the first problem, social housing programs have not managed to meet demand for housing, contributing to illegal land occupation.

Many families illegally squat on land and lack minimal conditions for decent housing. The public authorities usually do not have effective control over shantytowns and this means that people’s right to decent housing is denied. They also face the risk of being evicted from their homes if the authorities decide to uphold property rights.

Land tenure regularization is therefore the foundation for improving people’s lives and future prospects, as it offers citizenship and social belonging, thus allowing the population to achieve new dreams and possibilities. Land tenure regularization has profound impacts in the short and long term, and its lack is considered a major inhibitor of the development of emerging countries.

Regarding the second problem, living without access to basic infrastructure such as sewage pipes and in a makeshift house containing a single room with wooden walls affects the self-esteem of residents. Property ownership and access to goods and services are synonymous with success, status and happiness in today’s society.

Finally, in relation to the third issue, people who squat in shantytowns usually end up obtaining access to essential basic services like water and power by making illegal connections to public utilities.

Entrepreneurship in housing
 

Social entrepreneurship uses market logic to solve social problems in sectors such as education, health, financial services and productive inclusion. The housing area has been receiving increasing attention, as companies, foundations and family institutes have made significant investments.

According to Barki, when talking about business or public policy, it is necessary to analyze how to expand initiatives and therefore impact more people. In the academic field, there are three ways to gain increasing scale, which can complement one other: scaling out, scaling deep and scaling up. 

Scaling up
 

Scaling up means expanding the scope of a business by influencing legislation and public policies, so that an issue is not only within the scope of the business but within the scope of civil society. For example, the Terra Nova group, founded in 2001 to work on land tenure regularization, has adopted the concept of sustainable development.

The company has so far brokered 38 land tenure regularization agreements, helped draft bills at federal, state and municipal levels, and contributed to initiatives in the states of Sao Paulo and Paraná to solve land problems. The study mentions this organization as an example, as it set out to change public policies, so it works with the state rather than on its own.

Scaling out
 

The purpose of scaling out is to directly reach more people. A notable example of this is the Vivenda project, which is helping low-income people carry out home renovations.

In 2021, Vivenda changed its home improvement model, adopting social technology and creating a platform called Nova Vivenda, allowing various other organizations to offer services across Brazil.

Scaling deep
 

Scaling deep is based on the ability to change behavior and it can be considered a more complex model. One example is Revolusolar, a pioneer in the creation of solar energy cooperatives in shantytowns. The organization does not just promote access to energy, but also educates communities to help them transform their local energy supply and change their mindset regarding environmental issues.

Future vision
 

High-quality housing is a basic social issue and its shortage accentuates existing social inequalities in Brazil. Solving the housing crisis is complex and it requires action by governments, businesses and civil society. One of the ways forward is social entrepreneurship, which seeks to offer solutions to vulnerable people through market mechanisms.

Looking ahead, the challenge for social entrepreneurship in the housing sector is to work within a framework of holistic solutions and local development instead of focusing on separate interventions.

According to the study’s authors, the answer to the housing problem is not simple and it depends on joint work by foundations, institutes, companies and the state. It is necessary to rethink processes with greater synergy, coordination and co-creation with beneficiaries themselves, who are often denied not just access to decent housing, but also forums to express their opinions.

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