In 1992 the landmark initiative Programa Favela-Bairro (Favela-District Program) was initiated and, amongst other things, altered the de-limitation of districts to incorporate favelas into their borders. 

Economic growth in this decade was extremely low and consequentially government's investments were scarce in the construction of affordable housing, despite the existence of an elitist real estate market.

Large and luxury developments emerged all across barra da tijuca, as well as botafogo, lagoa, jardim botânico, ipanema and leblon - but Rising unemployment meant that new sects of the population were turning to favelas as the only viable housing option.