San Antonio Water Mega-Project: Senate Discusses Expropriation and Resource Allocation

Original article: Megatoma de San Antonio: Senado revisa expropiación y uso de recursos

The government’s decision to expropriate part of the water mega-project at Cerro Centinela in San Antonio has reignited the debate surrounding the housing crisis in the country. This measure was announced in early December, just days before the deadline of a court ruling mandating the evacuation of the settlement.

This week, the General Comptroller’s Office took note of the decree authorizing the allocation of resources for the expropriation, allowing progress in the administrative process and enabling the use of public funds to move forward with the measure.

The Ministry of Housing and Urbanism (Minvu) specified that the expropriation involves approximately 100 hectares of a private land of 215, which is home to more than 4,000 families, making it one of the largest encampments in the country.

According to Exempt Decree No. 88, the state would disburse approximately $11 billion, equivalent to about 0.23 UF per square meter, with funds sourced from housing projects by Serviu that were not executed.

Minvu has emphasized that this is an exceptional situation. They reported that for six months, attempts to reach a purchase agreement with the landowners were unsuccessful, and the imminent evacuation, combined with a lack of alternative plots with sanitary feasibility, compelled the state to intervene to prevent a social and humanitarian crisis.

The government has also defended the legitimacy of the process, asserting that a court eviction order does not eliminate the state’s expropriatory power. They clarified that the measure is not intended to bypass the court ruling but to facilitate the implementation of a housing plan that helps comply with it.

The Interior Minister, Álvaro Elizalde, stated that the government will proceed with the eviction as mandated by the judiciary, but with precautions due to the scale of the encampment, which supports over 10,000 individuals, ensuring that the process is well-directed before the current administration concludes.

Despite this, analyses indicate that the final cost could be higher. According to Ex-Ante, the $11 billion is merely the baseline, with anticipated costs rising to between $20 billion and $30 billion in the event of legal complications, in addition to significant urbanization and subsidy expenses.

From the private sector, the Chilean Chamber of Construction criticized the decision as delayed and risky in terms of property rights. Technical warnings about the precedent this could set for other large encampments in the country have also been raised.

Consequently, the San Antonio case emerges as a pivotal issue. For the government, it represents an exceptional response to a housing emergency; for its critics, it poses complex questions regarding costs, incentives, and long-term effects.

Senate Debate

This topic was discussed this week in the Senate’s Housing Committee, although neither Interior Minister Álvaro Elizalde nor Housing Minister Carlos Montes attended; technical authorities from Minvu, Serviu, and attorneys involved in the process represented them.

Gloria Maira, the minister’s delegate for the San Antonio mega-project, provided a detailed account of the settlement, noting that the encampment began to form in 2019 and solidified after the pandemic. As of August 2024, the land accommodates 4,136 families, totaling 10,251 individuals, distributed across five polygons.

Maira emphasized that over 65% of the population belongs to the 40% most vulnerable groups according to the Social Household Registry, a figure that rises to 80% if considering up to the 60% threshold. Additionally, she refuted claims about a high prevalence of individuals with second homes or previous subsidies, confirming these cases do not exceed 10% and 3%, respectively.

Minvu further explained that following the eviction ruling confirmed by the Supreme Court, alternatives were evaluated, noting the land lacks sanitary and urban viability. In this context, community organization among families was promoted, forming 40 cooperatives representing over 3,700 households that will remain integral to the housing development plan.

Senator David Sandoval indicated that the Cerro Centinela case is merely the most visible representation of a structural problem, reminding that there are 1,428 encampments in Chile, home to over 120,000 families. He questioned the system’s efficiency and the minimal execution of resources earmarked for precarious settlements, stressing that the crisis cannot be addressed on a case-by-case basis.

From a technical and legal standpoint, attorney María Francisca González explained that prior to opting for expropriation, a technical commission was convened with the municipality and landowners, but the process failed due to price disparities and requirements deemed untenable by the ministry. She added that the valuation of 0.22 UF per square meter was conducted by a specialized private firm and that once the process commenced, an independent expert commission set a provisional compensation of approximately 0.25 UF per square meter.

The regional director of Serviu, Nerina Paz, stated that expropriation is a tool already used in other cases and these processes usually extend beyond a single government’s term. She detailed that the procedure is now moving towards the judicial phase, with resource allocation and subsequent state acquisition of the land.

During the session, senators such as Carlos Kuschel and Yasna Provoste expressed concern about the source of the resources used for the expropriation and their potential impact on housing projects in other regions, additionally questioning the low execution rate of the Program for Precarious Settlements.

The Executive responded that the funds come from resources that would not be executed this year, and their reallocation does not imply the cancellation of projects but rather their postponement.

 Furthermore, it was reported that a long-term agreement has already been signed between Minvu, Serviu, the Seremi, and the cooperatives, outlining a housing plan expected to take between eight and ten years, beginning with macro-urbanization and subdivision of the land.

Thus, the San Antonio case solidifies as a turning point in housing policy: for the government, a necessary response to a social emergency; for its critics, a complicated signal regarding costs, management, and long-term effects.