depending on size – the average cost of the larger houses in the range of 20-40 square meters were R$11,600 (US$4143), and for the smaller units (20 square meters), R$5600 (US$2000). This compared with under R$2000 (US$714) for improvements to existing housing. Resettlement costs are generally higher than in-situ upgrading, and the larger the house, the higher the cost. The terrain in the Novos Alagados area also required heavy engineering which increased the costs of new housing.

Per capita costs for the social programs varied as well, from a high of R$3500 (US$1250) for the CEDEP ( _Centro de Educação Desportiva e Profissionalizante_ ) training program (in housing maintenance skills) to a low of R$180 (US$64) per year for the CEDEP sports programs.

Comparative data on such costs are rare. A recent study (Flood, 2004) estimated costs for upgrading on a regional basis. The estimates for the Latin America and Caribbean Region were US$2440 per _household_ (based on 5 persons per household) for the construction of basic housing, and another US$712 per _person_ for other upgrading activities including land, infrastructure (including social infrastructure), and capacity building.<sup>1</sup> A study of self-help housing programs in Central America estimated the average costs at US$3168 for new housing of 36 m<sup>2</sup> ; US$2112 for new housing 25 m<sup>2</sup> ; US$1584 for 18 m<sup>2</sup> ; and US$792 for the smallest units at 9m<sup>2</sup> .<sup>2</sup> Other upgrading costs totaled US$2018 per household, or US$404 per person for land and infrastructure. These costs are not dissimilar from the estimates for Novos Alagados II.

The 2004 study with comparative data noted that the estimation of costs can depend greatly on several factors.<sup>3</sup> Among them, i) upgrading of densely populated informal settlements can be considerably more expensive than building new units in available plots. This is due to several factors -- the land is of poor quality, access is difficult, the operations have to be done in an area already inhabited, and some removals are always necessary, implying high resettlement costs; ii) upgrading costs depend on the nature of the site. Informal settlements are generally built on steep hillsides, sloping or rocky ground, heavy or unstable soils, flood-prone sites, or areas with poor drainage where it is particularly expensive to upgrade; and iii) house construction costs depend on the materials and technology used, the size of house, and the quality of fittings. These findings seem to be consistent with the cost data from Novos Alagados II.

> 1 See Flood, Joe 2004, “Cost Estimate for Millennium Development Goal 7, Target 11 on Slums.” Background Report for UN Millennium Project Task Force on Improving the Lives of Slum Dwellers and UN-HABITAT, Urban resources, Elsternwick, Australia, also in, Millennium Project, 2005, Improving the Lives of Slum Dwellers, http://www.unmillenniumproject.org/documents/Slumdwellers-chapters5-8.pdf 2 See, Millennium Project, 2005, Improving the Lives of Slum Dwellers, <u>http://www.unmillenniumproject.org/documents/Slumdwellers-chapters5-8.pdf; Adapted from FUNDEVI,</u> 2001, (Fundacion para el Desarrollo de la Vivienda Social Urbana y Rural); Angel, et.al., 2004, “Rapid Urbanization in Tegucigalpa, Honduras:  Preparing for the Doubling of the City’s Population in the Next 25 Years.”  Woodrow Wilson School for Public and Intenrational Affairs, Princeton, University, Princeton, N.J; Acevedo and Pleitez, 2003, Opciones de Financiamiento Para Una Politica de Vivienda Populare en el Salvador, San Salvador, Programa de las Naciones Unidas para el Desarrollo.  . 3 Flood, 2004.

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