Aravena, 48, will be the 41st recipient of the Pritzker Prize, receiving a $100,000 grant and a bronze medal during a ceremony at the United Nations Headquarters in New York, on 4 April.
Aravena is best known for his work with "do tank" Elemental, an architecture group that aims to tackle poverty and eliminate slums using a participatory approach that engages local communities in early stages of the design process.
Elemental, of which Aravena is executive director, won international praise for its 2004 "half a house" Quinta Monroy development in Iquique, Chile. The scheme was designed to make the most of a tiny budget by building the frame and the essential spaces for each house, leaving the remainder for residents to complete themselves over time according to their own needs and financial means.
Related content: see more key projects by Alejandro Aravena
The success of the project has seen the "half a house" concept deployed at a number of locations across Central and South America.
The group also played a focal role in the rebuilding of Constitución, one of the towns that was almost destroyed by the 2010 Chilean earthquake and subsequent tsunami.
It is the second time in three years that the Pritzker jury has chosen an architect who is best-known for humanitarian design rather than statement architecture.
The 2014 laureate was Japanese architect Shigeru Ban, who is highly respected for his pioneering use of cardboard in disaster relief projects around the world.
The 2016 jury said that Aravena had "meaningfully expanded the role of the architect" through his social housing work.
"Alejandro Aravena is leading a new generation of architects that has a holistic understanding of the built environment and has clearly demonstrated the ability to connect social responsibility, economic demands, design of human habitat and the city," said the citation. "[He] epitomises the revival of a more socially engaged architect."
Aravena is the curator of the 2016 Venice Architecture Biennale, one of the most significant events in the architectural calendar. The biennale will take place in May with the theme Reporting from the Front, which aims to focus on the biggest social and political issues that architects are negotiating with around the world.
He was a member of the Pritzker jury from 2009 to 2015.
Other projects by the architect include a series of major buildings for the Universidad Católica de Chile in Santiago, including the monumental UC Innovation Center, which was named architecture winner in the London Design Museum's 2015 Designs of the Year awards. A major new Shanghai building for pharmaceutical company Novartis is due to complete imminently.
He was selected as the winner of the 2016 Pritzker Architecture Prize by a jury including British architect Richard Rogers, who won the Pritzker in 2007, and Australian architect Glenn Murcutt, who was the 2002 recipient.
"He understands materials and construction, but also the importance of poetry and the power of architecture to communicate on many levels," said the jury.
"The younger generation of architects and designers who are looking for opportunities to affect change, can learn from the way Alejandro Aravena takes on multiple roles instead of the singular position of a designer to facilitate a housing project, and by doing so, discovers that such opportunities may be created by architects themselves."
The jury was led by architecture patron Peter Palumbo, and also included US Supereme Court Justice Stephen Breyer, Chinese architect Yung Ho Chang, Spanish architect Benedetta Tagliabue, Berlin-based writer and curator Kristin Feireiss, and steel magnate Ratan N Tata.
Aravena is the first Pritzker winner from Chile, and the fourth from South America. Brazilian architect Oscar Niemeyer, who was awarded the prize in 1988, designed the UN building where Aravena will collect his medal.
Last year's winner was German architect and engineer Frei Otto. Zaha Hadid, Norman Foster, Rem Koolhaas, SANAA, Toyo Ito and Jørn Utzon are among others on the list of previous laureates, which can be read as a who's who of contemporary architecture.
Read the full citation from the Pritzker Prize jury:
Alejandro Aravena is leading a new generation of architects that has a holistic understanding of the built environment and has clearly demonstrated the ability to connect social responsibility, economic demands, design of human habitat and the city. Few have risen to the demands of practicing architecture as an artful endeavor, as well as meeting today's social and economic challenges. Aravena, from his native Chile, has achieved both, and in doing so has meaningfully expanded the role of the architect.
Born in 1967, and practicing since 1994, Aravena has consistently pursued architecture with a clarity of vision and great skill. Undertaking several buildings for his alma mater, the Universidad Católica de Chile, including the Mathematics School (1998), Medical School (2001), the renovation of the School of Architecture (2004), Siamese Towers (2005) and more recently the UC Innovation Center – Anacleto Angelini (2014). Each building shows an understanding of how people will use the facility, the thoughtful and appropriate use of materials, and a commitment to creating public spaces to benefit the larger community.
In the Angelini Innovation Center, the maturity of this architect is apparent. A powerful structure from a distance, it is remarkably humane and inviting. Through a reversal of convention, the building is an opaque concrete structure on the exterior and has a light-filled glass atrium inside. With the mass of the building at the perimeter, the energy consumption is minimal. The interior has many places for spontaneous encounters and transparency that enables viewing activity throughout. Aravena has created a rich environment of lively, interesting and welcoming spaces.
Alejandro Aravena has delivered works of architectural excellence in private, public and educational commissions both in his home country and abroad, including the United States — a residence and
dining hall at St Edward's University in Austin, Texas — and as far away as Shanghai, China for the pharmaceutical company Novartis. He has undertaken projects of different scales from single-family houses to large institutional buildings. In all his works, he approaches the task with a freshness and ability to start without any predetermined idea or form. He understands materials and construction, but also the importance of poetry and the power of architecture to communicate on many levels.
What really sets Aravena apart is his commitment to social housing. Since 2000 and the founding of Elemental, he and his collaborators have consistently realized works with clear social goals. Calling the company a "do tank," as opposed to a thinktank, they have built more than 2,500 units using imaginative, flexible and direct architectural solutions for low-cost social housing.
The Elemental team participates in every phase of the complex process of providing dwellings for the underserved: engaging with politicians, lawyers, researchers, residents, local authorities, and builders, in order to obtain the best possible results for the benefit of the residents and society. An understanding of the importance of the aspirations of the inhabitants and their active participation and investment in a project, as well as good design, have contributed to the creation of new opportunities for those from underprivileged backgrounds. This inventive approach enlarges the traditional scope of the architect and transforms the professional into a universal figure with the aim of finding a truly collective solution for the built environment.
The younger generation of architects and designers who are looking for opportunities to affect change, can learn from the way Alejandro Aravena takes on multiple roles instead of the singular position of a designer to facilitate a housing project, and by doing so, discovers that such opportunities may be created by architects themselves. Through this approach, he gives the profession of architect a new dimension, which is necessary to respond to present demands and meet future challenges of the field.
Alejandro Aravena epitomises the revival of a more socially engaged architect, especially in his long-term commitment to tackling the global housing crisis and fighting for a better urban environment for all. He has a deep understanding of both architecture and civil society, as is reflected in his writing, his activism and his designs. The role of the architect is now being challenged to serve greater social and humanitarian needs, and Alejandro Aravena has clearly, generously and fully responded to this challenge. For the inspiration he provides through his example and his contributions to architecture and humanity past and future, Alejandro Aravena is the recipient of the 2016 Pritzker Architecture Prize.