The policy declared urban land not a scarce resource, demanded flexible planning with minimal state intervention, and set out to remove restrictions so that cities could follow market trends. Decree 420 amended Santiago's intercommunal plan accordingly, enlarging the area available for urbanisation from about 62,000 to roughly 138,750 hectares, a 60% increase that in practice abolished the urban limit. It ran alongside demand-side housing subsidies and the forced relocation of tens of thousands of low-income families out of wealthy communes between 1979 and 1985.
This was the first thoroughly neoliberal urban policy anywhere, and the template later diffused through World Bank land-market advice: planning as supply deregulation plus targeted subsidies rather than public provision. Santiago's sprawl, its peripheral social-housing belts and its extreme socio-spatial segregation became the standard cautionary case in Latin American planning debate, and the reason the urban limit returned as a political question.
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