Real Estate Prices Fall in Cantagalo, Pavão-Pavãozinho

By Chris Kudialis, Contributing Reporter

RIO DE JANEIRO, BRAZIL – With an estimated 4,000 to 6,000 combined residents, the neighboring morros (hills) of Cantagalo and Pavão-Pavãozinho offer picturesque views of Copacabana Beach and an ideal location between several of Rio de Janeiro’s most popular tourist destinations. Pacified in December 2009, the favela communities were early models of Rio’s Police Pacifying Unit (UPP) program between 2010-2013.

Yet a turbulent 2014 marked with gunfire, violence and multiple murders has highlighted growing discontent with UPP occupation, and sent previously skyrocketing real estate prices slingshot back down to earth.

From early 2010 to the end of 2013, both favela residents and Residents’ Association functionaries describe Cantagalo and Pavão-Pavãozinho as relatively safe and pleasant places to live. Governed by drug trafficking units before pacification, the favelas saw a drastic reduction in drug distribution after UPP took over.

“It was calm here for several years,” Larissa Nascimento, a lifelong Cantagalo resident, said to The Rio Times. “Not everybody trusted the police, but there was less violence after (the UPP) came in.”

Nascimento, 35, is one of several registered Cantagalo home owners to see their real estate values skyrocket over the past few years. Her two-bedroom home, once valued at R$20,000 as recently as 2009, valued as much as R$90,000 during the favela’s real estate peak in summer 2013. “Last year, just about everything was worth $80,000 or more,” said Luiz Bezerra, president of Cantagalo’s Associação de Moradores (Residents’ Association), “Most places here were worth three or four times their pre-pacification values.”

2014 brought change to the favelas as tension between occupying UPP patrol and residents escalated. Though gunfire was reportedly exchanged as early as January, an April 22 clash between police and drug trafficking groups resulted in the death of 26-year-old Douglas Rafael da Silva Pereira, a professional television dancer and resident of Pavão-Pavãozinho.

A resulting protest of Pereira’s death made international headlines the next morning, as residents set fire and showered homemade explosives onto Rua Sá Ferreira, a main road near one of the favela entrances. In an exchange of gunfire with police, at least one additional favela resident was killed and another injured.

The incident and negative press helped drop Cantagalo and Pavão-Pavãozinho real estate prices to near pre-pacification levels, says Bezerra. A home that valued at R$80,000 in 2013 now values between R$40,000-$50,000, he said.

Though several Rio favelas hosted deal-seeking international fans during the 2014 FIFA World Cup, realtors at a local Nova Aliança real estate office say April’s events made renting out homes in Cantagalo and Pavão-Pavãozinho nearly impossible for residents.

“Most World Cup visitors were keeping up with news here in the months before the games started,” said an executive realtor at Nova Aliança, speaking on condition of anonymity per company policy. “And when they heard ‘Cantagalo and Pavão-Pavãozinho,’ they immediately associated these communities with that incident.”

The Nova Aliança representative says international investment has tailed off as well, at least temporarily. Though she once received up to 10-15 combined phone calls and inquiries per week from international investors, the representative says that number has now declined to roughly 3 to 5 calls per week.

Cantagalo and Pavão-Pavãozinho aren’t the only so-called “pacified” favelas to deal with recent violence. In July, the popular Vidigal favela also saw a downward dent in its real estate market following the murder of hostel owner Mille Ballai.

“At the end of the day our neighborhoods still have their problems,” said Nascimento. “They aren’t where we need them to be yet. And people wanting to buy here should understand that.”