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The oven light in Lucia de Oliveira's kitchen is a clue to her biggest nuisance. "It's the rats," she said. "I keep the light on all the time to trick them. They think there's someone around and stay away."

Oliveira's two-bedroom house, part of a colony perched on stilts above the murky Rio Bugre, is a medical danger zone.Besides the rats, there's a 30-foot-high ridge of garbage on the other side of the river. It's the edge of a vast dump that sends foul odors and acrid smoke wafting through the neighborhood.

But relief is in sight for Oliveira, her husband and two children. She's on the list for a new house, a concrete-block dwelling with a firm foundation that at the very least should be rat-proof - and unlikely to tumble into the canal during a rainstorm.

It's part of a slum-renewal project that illustrates the energy being invested in urban initiatives in Brazil, which has been dramatically affected by migration from the countryside to cities. When it's completed, officials hope at least half the 20,000 people living in the precarious stilt community known as "Dique da Vila Gilda" will have moved to more stable houses being built nearby.

If it succeeds, the project will have done more than provide new housing. It will have given the residents temporary jobs and stimulated community organization among them.

The government of Santos, a city of 500,000 that boasts Latin America's largest port and attractive beaches, has invested heavily in a public-participation process for slum housing and other projects. Santos is spending 6 percent of its municipal budget of close to $20-million on a network of residents' councils with elected neighborhood delegates, covering everything from health and education to cultural heritage and the black community.

"They had lots of seminars and meetings to tell us how it was going to be," Oliveira said. "I think it's going to be great, it really is."

Throughout Brazil, small and medium-sized cities are winning acclaim for such initiatives.

The most famous is the program in Curitiba, capital of the southern state of Parana, a city of about 2.5 million people. There, slum dwellers are given bus tokens or food in return for turning in recyclable garbage. A fast bus system with special boarding platforms has succeeded in luring residents away from their cars.

A Habitat report lauds two other state capitals, Belo Horizonte and Fortaleza, for slum housing programs that concentrate on improving dwellings rather than replacing them. In Porto Alegre in the far south, an extensive public consultation process precedes voting on the municipal budget.

Such developments reflect the increased autonomy and taxing powers won by municipalities in the 1980s as military dictatorship gave way to civilian rule. They're often surrounded by intense ideological debates, as national parties use municipal politics to woo large concentrations of urban voters and gain control over sizable budgets.

In Porto Alegre and Santos, the leftist Workers' Party has held the mayoralty for two successive terBut many observers credit continuity as much as any ideological approach for the innovations.

Many of the new initiatives aim to improve living conditions for residents of the "favelas," the squatter settlements characteristic of Brazilian cities. Many favela residents are from rural northeastern Brazil, where a combination of concentrated land ownership, drought and large families produces a steady stream of emigrants.

For years, Brazilian authorities virtually ignored favelas. Under military rule, mayors of state capitals - and of Santos, because of its strategic importance as a port - were appointed by indirectly elected state governors. Now they're elected.

Besides the same moral claim on basic municipal services as anyone else, "favelados" have masses of votes. And slum-improvement projects are springing up everywhere.

Dique da Vila Gilda, in Santos, was first occupied 40 years ago. It sits on the slope of a dike that keeps the river from flooding the island on which most of the city stands. In line with municipal policy, the residents were encouraged to form an association.

"It's easier to find the right way to do housing if you have all the movements together, rather than just us making the decision," Mayor David Capistrano Filho said.

Residents were lukewarm at first, project coordinator Regina Del Cistia said. "They didn't ask for it (the housing project). There was a process of finding leaders. At first no one wanted to run for positions.

"Now they want to be candidates, and they bring us their demands. We have a full-time lawyer here to deal with them. ... We're happy because they're organizing. They're the ones who will guarantee continuity here."

About 250 residents are employed building the new townhouse-style dwellings according to four different designs. About 150 houses are finished and another 800 are planned. The larger two-story models can be expanded by adding a third floor, and there's also a model plan with space for a store or workshop on the ground floor.

Residents will pay a portion of the cost of building the houses in monthly instalments. As in most slum-renewal projects, they will receive formal title to the property, which may make it easier for them to open bank accounts and obtain credit.

Jovelina Alves da Silva, 44, moved with her six children two years ago into a new two-bedroom home. It's small, she agrees - particularly the laundry, barely big enough for a sink and a place to turn around.

"But in the other house there was a weird smell, and when the kids went out it was straight into the mud," she said. "And we were well oriented as to what to expect. We weren't promised a big house."

The garbage dump, which is actually part of a neighbouring municipality, will continue to be a problem. But Santos is offering to transfer the refuse to a mainland site.

Other projects undertaken recently in Santos include improving the foundations of precarious hillside housing, cleaning up the city's extensive beaches and dealing with the spread of AIDS.

Mayor Capistrano wants even greater powers for Brazilian cities, noting that they still need guarantees from the national central bank to issue bonds or borrow from international agencies. "This amounts to a strangling of municipal autonomy, and it should end."

(Distributed by Scripps Howard News Service.)