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Marta Maria Maia da Fonseca and her husband shared the conundrum of tens of thousands of working class families in Sao Paulo: They couldn't afford to rent an apartment in the city's center and high transportation costs would render even low-rent places on the city's outskirts unaffordable.

The couple and their 14-year-old daughter felt they had no option but to join a group of squatters living in an abandoned building downtown.

Now, the family faces a new housing dilemma. An electrical short circuit started a fire in the 24-story former police headquarters and it collapsed last Tuesday. They spent that night camped out on a plaza in front of a nearby church along with several of other newly homeless families. The next day they moved in with a sister, crammed into a tiny two-bedroom apartment in a neighboring city with six other relatives.

"We have to start all over again," said da Fonseca, who works as a home health aide and has lived in three different squats over 10 years.

The fire, which left at least one person dead, has put a renewed spotlight on a controversial movement of housing groups that have taken over dozens of abandoned buildings in South America's largest city. They argue that it's scandalous to let prime real estate sit empty in a city that needs more than 350,000 new homes to satisfy demand.

But the fire has also raised the specter that the occupations could be death traps, where squatters make improvised connections to electrical lines and do any maintenance themselves. The short circuit that caused the fire happened at a plug where a television, a microwave and a refrigerator were all connected, the newspaper Folha de S.Paulo quoted Public Security Secretary Magino Alves as saying.

City Housing Secretary Fernando Chucre noted that people who collect items for recycling were storing flammable material in the lower stories of the Wilton Paes de Almeida building. The Federal University of Sao Paulo also said a report it commissioned in 2013 when it was considering taking over the building found structural problems.

Brazilian media reported that some of the building's roughly 170 families were paying monthly contributions to organizers that were higher than is typical in such squats, and the Public Security Department said in a statement to The Associated Press that police are investigating the practice of paying rent in such buildings, though it did not elaborate.

Members of other housing groups say any problems at the Wilton Paes de Almeida should not be used as an excuse to discredit the overall movement, which has taken over about 70 buildings in Sao Paulo's historic, old center.

"You can't say this, that we're criminals, that we're vagrants, that we're invaders," said Jose de Anchieta Rocha Junior, a coordinator for the Housing Movement in the Fight for Justice, which runs three squats in central Sao Paulo. "We occupy because there are no housing policies. We occupy because (the buildings were) abandoned, abandoned for decades."

City officials say they will help the now-homeless squatters, promising about $340 immediately and then $115 a month for a year. Da Fonseca doesn't think she'll get anything because her name is not on the city's list of people living in the building — underscoring the precariousness of life in the squat. Many say the sum won't cover rent anyway, let alone replace lost belongings.

"The only way you can find a home for (that amount) are places very far from here, two hours away," said Wilder Rodrigues da Silva, a 35-year-old construction worker who fled the fire with only a small bag of vital documents.

Sao Paulo's historic downtown has suffered decades of urban blight, despite the city's status as Latin America's financial capital and home to much of Brazil's wealth. Major cultural institutions remain but share the area with decaying storefronts and buildings with their windows blown out. The Centro, as the area is known, is home to most of the city's homeless population and a several-block area is so packed with drug users it is known as "Crackland."

Dozens, if not hundreds, of buildings sit empty, long ago abandoned as businesses moved to more modern buildings in new neighborhoods and residents followed.

Since the 1990s, groups have been breaking into the empty buildings in the dead of night and setting up often surprisingly organized squats. In many, residents contribute something to hire a doorman or a cleaner. Rules posted in the lobby of some exhort residents to be quiet, neighborly and observe a curfew. Some have fire-preparation measures, check that wiring is safe and ensure fire alarms are working.

Successive city governments have struggled to revive the Centro, and the neighborhood is now on the cusp of a comeback, but when officials talk of reviving a downtown worthy of a world-class city, fair-housing advocates fear they mean one scrubbed of poor and working class people.

"We are a very unequal country, where the wealth of 100 million people is in the hands of six," said Rocha, of the housing movement. "So I think as much as possible there should be places where a luxury condominium sits side by side with low-income workers."

Chucre, the city housing secretary, says that adding low-income housing in the Centro is a key piece in efforts to solve Sao Paulo's housing shortage and that his department wants to "regularize" occupations led by groups who are not exploiting their residents. In the past, the city has purchased some occupied buildings and plans to turn them into subsidized housing.

"This systemic situation was worsened in recent years because of the economic crisis and the high level of rent in the Centro," Chucre said. The city hopes to increase its capacity to build new homes by working with the state and federal governments as well as private investors.

Following the fire, the mayor's office ordered city agencies to evaluate the 70 buildings now occupied by squatters. Chucre said the city government will work squatters' leaders to fix any problems, and if a building needs to be condemned, officials will help find alternative housing.

Residents of other occupied buildings said the disaster reminded them of the dangers of living in the squats.

Analice Silva dos Santos, 61, moved into a former hotel known as the Maua Occupation after she retired and found she couldn't afford to pay both her rent and for the medication she needs. She has lived through a fire in a squat before, many years ago when she was living in the nearby Prestes Maia Occupation. The fire last week brought back that experience.

"I cried a lot. I'm still crying," she said. "A person never forgets that."