MUNICIPAL HOUSING IN GUAYAQUIL:

A case study of the program ´Mucho Lote´

Valentina Brevi

A case study submitted in fulfilment of the requirements for the

course Housing

School of Habitat Studies

Tata Institute of Social Sciences

Mumbai

2018
Municipal Housing in Guayaquil 2

Introduction to housing campaigns in Guayaquil

Guayaquil is, still today, the main port of Ecuador. Traditionally, as most port cities in the world, has
had a steady development based mainly on commerce and a continued influx population from foreign
countries and from smaller cities and rural areas of Ecuador. Population grew at regular rates until the
1960s when industrialization began and agriculture decayed due mainly to the collapsed of Cocoa
plantations (Arosemena, 1991). Guayaquil then became not only the commercial city of Ecuador but
the industrial city of the country. Population went from 258,996 in 1950 to 510,000 people in 1962
and finally reached 1,199,000 in 1982. According to Sanchez Gallegos (Table 1) the highest growth
rate the city has seen to date is 5.67 per-cent between 1950 and 1962. To date the city has a
population of 3.5 million and the metro area sums 5 million. Guayaquil and its metropolitan area are
the most populated of the country which´s population is 16.5 million.

Table 1 Population of Guayaquil, created by Sanchez Gallegos 2014

As the city grew in population, city limits changed to include more land as noted in Table 1 from
Sanchez Gallegos, in 1950 it had 1,100 hectares, today the city limits include 34,450 ha. The city
Municipal Housing in Guayaquil 3

grew to the south and north mainly after the 1960s along the main roads where industries settled.
Around those industries the first organized invasions of land began to grow. Most of the area where
informal settlements took place was either hill land or estuaries. As shown in Figure 1, the scale of the
growth and directions it took in relation to the city´s geography. In 1967 the National Unity bridge
was built, creating a direct link from Guayaquil to Samborondón and Durán, the cantonments across
the Guayas river, to which previously the only way of transport was fluvial.

Figure 1 City Growth, drawing by Rossel, 2011

In 1978 universal voting rights were granted. All women and men, illiterate and literate, above 18
years of age have to vote. Before 1978 illiterate persons were not allowed to vote. This brings a
change in the way populist politicians campaigned and managed government. It is at this time that
campaigns to formalize housing intensify. Usually by filling estuaries with garbage and a layer of
earth on top. These, and other actions done by politicians during campaigns or when in power, did not
legalize the land nor did they give any services. In 1967 a decree was expedited to legalize invasions,
yet it was not possible to execute. Several amendments were done to fix the problems but none
actually took care of all the parts involved so that the legalization could actually be executed.

Housing has never been public in Ecuador. The projects promoted by the state are for private
possession of housing. Public housing projects in Guayaquil existed since 1942, mainly by the Social
Security system (IESS) Table 2. The housing provided by IESS was part of the city growth plan, it
Municipal Housing in Guayaquil 4

included full urbanization and services. This housing was meant exclusively for those people who
were affiliated to the IESS, mainly formal upper and middle-class white-collar workers in the starting
years. (Today the IESS covers more than 8.4 million people (IESS, n.d.), but only 41.9% of the
economic active population is affiliated (El Telégrafo, 2016)).

Table 2 Housing production in Guaayaquil. Created by Sanchez Gallegos, 2014

From 1980 onwards, each government proposed a new housing program starting with León Febres
Cordero 1982 campaign “Bread, Roof and Job” which won the elections and the imposition of
neoliberal economics in the country. In 1998 the Bono Solidario (solidarity grant) was established by
the government, “the cost of the final home was $ 400 dollars, the housing subsidy was $ 144 per
home and the balance was cancelled as a two-year term loan, financed by Hogar de Cristo” (Sanchez
Gallegos, 2014). Hogar de Cristo (home of Christ) is a NGO run by the Jesuits, since 1971 they
provide housing for the poor at very economical costs and with finance. By the year 2000 Hogar de
Cristo had a housing factory established to produce house parts of caña guadua (thick bamboo) that
will later be assembled on site (Hogar de Cristo, n.d.). The prerequisite for this houses since 1998 is to
have a legalized plot. See table 3 for housing grants given by the government between 1998 and 2006
for new and improvement housing. These grants were only for the house itself, the services had to be
provided by the Municipal governments, yet they were not assigned the resources for those
improvements.
Municipal Housing in Guayaquil 5

Table 3 Solidarity grants given by government. Created by Sanchez Gallegos 2014

By 1992 under the leadership of the ex-president, now Major of Guayaquil, Febres-Cordero and still
under neo-liberalism, the central government passed the deconcentration law which increased the
revenue of the city substantially. Investment on public works increased from 20% to 50% of the city´s
budget. Febres-Cordero applied the “Iron and Cement” strategy from 1992 to 2000. Beginning a
process of restructuration of the Municipality from inside out. He took advantage of his influence over
the state and proposed several laws to enforce deconcentration and the reform of the local
governments. Among the laws proposed by Febres-Cordero was the Expropriation Law that proposed
a comprehensive and applicable way to legalize invasions.

Housing today

The current municipal administration has been in power since 2000 and belongs to the same political
party as Febres-Crordero. The current major, Nebot, has followed neoliberal strategies for
development to the extent the Ecuadorian Constitution allows him too. With the expropriation and
deconcentration laws in place he was able to restructure the way housing is made available in
Guayaquil.

In 2001 “the council issued a city ordinance that allows to build with characteristics of popular
houses, but without sacrificing quality” (Trivelli, 1986) this ordinance would allow to regulate urban
developments of land plots for the poor to include basic services.

The first housing project promoted by Nebot, after the ordinance passed, was Mucho Lote (lot of plot)
in 2002. It consisted on the Municipality selling the plot at a discount rate and construction companies
that were hired to urbanize the land offer houses for an additional price. The land where this projects
took place was right next to existing encroachments1. Nebot´s intentions were that people would

1
Encroachments at this time were an illegal business. The “promoter” sold the plot of land without services,
only land movement to provide a flat surface and illegal electric connections are provided.
Municipal Housing in Guayaquil 6

prefer a fully serviced legal lot at competitive prices than to buy illegal lands thus stopping land
invasions.

Mucho Lote was partially successful. It was aimed at poor people with monthly income between 400
to 600 usd. To buy the plot of land one could either pay in cash 1,926usd or take a loan with private
banks. In order to take a loan, one must have a valid proof of income that doesn´t exceed 600usd per
month. One must also proof residency in Guayaquil for at least 4 years and not own property within
the city limits. The main complains at the time were that the houses were too small (between 36 to 42
m2 built area, plot 72 to 84 m2) and the ordinances had a cap of 42m2 of built area, legally there was
no possibility of growing (El Universo, 2002).

To have the house people could go to Hogar de Cristo, build their own or buy from the contractor
from 6,000 to 22,000 usd, for which they would have to give a down payment of 900usd and take a
loan with monthly payments of 93usd. As a reference, at the time my only monthly income came
from teaching at the university around 6 or 8 hours per week for which I received a check of around
360usd monthly. I was not able to save nor would I have qualified for the program.

By 2007 the Municipality was still delivering houses under the Mucho Lote program. Some of the
initial problems were solved as transport, parks, schools and commercial areas were included in the
plans.

In 2010 Mucho Lote 2 was launched. This program was completely handed by 5 promoter/contractors
and the private bank. It was aimed at middle-class families who could afford 3,000usd down payment
and around 300usd monthly payment from 6 to 16 years. They could not have a combined family
income of more than 2100usd. (Daldry S.A., n.d.)

“ESSENTIAL REQUIREMENTS:

1. Obtain the FREE APPLICATION, as of November 8, 2010, in the following places:

a) Website: www.guayaquil.gov.ec
b) Publications in national and local newspapers
c) Offices of Real Estate Developers.
d) Integral Municipal Attention Centers (CAMIS).

2. Accredit the last 4 years of residence in the city of Guayaquil, by means of any of the following
documents: voting certificates that cover the last 4 years or work certificate or membership card to the
IESS or certificate of studies or Worksheets of Light or Water, etc.

3. Not having a home, apartment or land in the Guayaquil canton, verified by a certificate from the
Property Registry of the Guayaquil Canton, located in Panama streets 809 and Victor Manuel Rendón,
in which it is indicated DO NOT POSSESS PROPERTY, neither the applicant nor its spouse or partner
(if he has one).

4. For the purchase on credit of a home (the highest price will be $ 35,000.00 USD to this date), you
must prove or verify, that the third part (33.33%) of its INCOMES FAMILY MEMBERS can pay the
monthly dividend of the requested house, and the monthly FAMILY INCOME is maximum 6% of the
sale price of the home, by any of the following documents:
a) In case of dependency relationship: original work certificate or original payment role.
b) In case of not having a dependency relationship or formal business: Sworn Statement (Notary)
Municipal Housing in Guayaquil 7

establishing the monthly family income and the activity to which it is dedicated; both items will be
verified by the promoters and the M. Municipality of Guayaquil to verify its veracity.
c) In the case of having own business (formal merchant): copies of the Municipal Room Fee or
Municipal Patent or RUC [single taxpayer record] or Income Tax Declaration, etc.

COMPLEMENTARY REQUIREMENTS:
1. Fill out the FREE APPLICATION for the "Mucho Lote 2" Housing Program.
2. Attach a copy of the identity card of the applicant and the spouse or partner (if any).
3. Attach a copy of the voting certificate of the applicant and of the spouse or cohabitants (if any).”
[google translation](M.I. Municipio de Guayaquil, n.d.)

In 2009 the municipal council approved the program Mi Lote (My Plot), this program is similar to the
first Mucho Lote and was part of Nebot´s reelection campaign in 2008. The requisites are similar to
Mucho Lote 2. Those who qualified had to make a down payment of 75usd and 25usd monthly for 42
months. By 2013 the fully serviced plots began to be distributed. This format covered some issues of
the previous formats:

1. Time: Previous programs estimated timelines were never met. People who with much effort
managed to make the monthly payments at the end of one year still did not have their houses.
The municipality has learned to manage better timelines not only with contractors but in
terms of announcements and promises of delivery times.
2. Size: Plots are bigger in each plan. The first Mucho Lote plots had a 72m2, Mi Lote plots
have 97m2.
3. Who builds: Mi Lote recognizes that some people can build their own houses therefore it is
not compulsory to buy the house from an assigned contractor.
4. Commercial use: One the main complains of the first Mucho Lote plan was the inability to
have commercial use within the house. The next phases included commercial areas separate
from housing, Mi Lote is the first program to include commercial corridors attached to
housing.

Sanchez Gallegos does an analysis of the population growth of Guayaquil and housing demands.
According to her study by 2014 there was a housing deficit of 90,187, yet these houses existed as
invasions or houses without adequate services.

Of the 8,674 new homes that are formed each year in Guayaquil, 5,569 correspond to lower-income
households, which would be the insolvent housing demand. The need for housing in Guayaquil, for the
lowest income sectors would be:
New housing units per year: 5,569
Cumulative deficit of poor quality housing: 90,187 (Sanchez Gallegos, 2014)
Municipal Housing in Guayaquil 8

Table 4 Municipal Housing Programs 2002 - 2015. Created by Sanchez Gallegos 2014

Conclusion

On the past 15 years the Municipality has been able to allocate 34,500 plots of which 25,000 have
been aimed for lower income groups. The central government also has housing programs in
Guayaquil that continue under similar conditions. Additionally, companies have also gone into
business with housing projects for the poor like Eco-City which offers houses for 234usd a month.

None of these projects are aimed to people under poverty line or for those who are not in the system.
That is to say, to have access to a house one must be affiliated to IESS, which means one must have a
regular source of income. That leaves around 50% of the economically active population unable to
access any kind of housing project, private or public.

It is safe to say that in Ecuador the state (local and central) acts as a mere promoter. Putting a decent
influx of resources into the private sector. Embellishing urban growth, and business, in the name of
housing for the poor. One must also say that looking at the history of the past 17 years, there have
been improvements to the housing programs. At the moment houses that were bought in Mucho Lote
for around 22,000usd in 2005 are sold in the market for up to 60,000usd. Current mortgage regulation
only allows for up to 70% of the house value. This means that there are people able to pay between
12,000 and 18,000 usd cash as down payment for a house in “lower income” areas.

Encroachments have been completely stopped by severe enforcements of anti-encroachment laws.

Population growth rates have decreased in the past years. It would be interesting to know if these or
other policies have played a roll.

These programs are a way to push people into the system which can have multiple effects. The
municipality mainly has used aspirational marketing strategies. The aesthetics of housing, the
enclosing of neighbourhoods all resembles the high-income neighbourhoods. That is not to say that
Municipal Housing in Guayaquil 9

high income aesthetics or urban planning works from an aesthetically, functional or community point
of view.

There are not many studies of housing plans in Ecuador, most of them are very general and look at
historical processes. The economic and cultural impacts of the projects are yet to be study.
Municipal Housing in Guayaquil 10

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