The deadline for submitting contributions to the bill proposed by the City of São Paulo to review the Law on Land Partitioning, Use, and Occupancy - LPUOS (Law No. 16,402/16, known as the Zoning Law) ended March 30. The City announced it received more than 2,500 suggestions for the text published on the website Gestão Urbana SP as of last December 15.
The draft of the bill is quite comprehensive and addresses issues ranging from specifics for certain regions in the city to various technical adjustments. The purpose of the revision, according to the city government, is to promote adjustments in the Zoning Law in order to adapt the existing legal provisions to the actual city, without changes to the land uses, the densification coefficients, and the principles proposed by the Master Plan (MP).
Among the proposals of the bill, it should be highlighted the temporary discount of 30% granted over the value of the onerous grant (“outorga onerosa”), which is a financial compensation for developers to construct buildings beyond the basic building potential and up to the limit of the maximum utilization coefficient. The goal is to encourage such developments in the city and, as framed by the municipal executive, raise the gross revenue of the Urban Development Fund (Fundurb), whose funds are intended for urban improvements in the most vulnerable areas of the city.
According to the city government, the current values of the onerous grants were stipulated during the economic boom in Brazil and no longer reflect market price , therefore, in need to be revised. Civil entities question whether a generalized discount is necessary since the MP already provides economic incentive for the development of projects at specific areas of the City, which are specifically those which the strategy envisioned by the master plan seeks to develop.
Another relevant modification is the exclusion of the height limit for buildings located in mixed areas. It aims in reducing the overall cost of the development, which would be passed on to the final consumer in the form of a reduction in the unit price. The argument is that building a higher single tower instead of two or three lower ones results in savings with the structural part of the building (foundations, elevators, water system, engine room), as well as a better use of the ground floor and underground.
The bill provides for the creation of the institute of the "concept building", which proposes a mechanism that will allow the granting of incentives in the form of discounts the onerous grant for those buildings that adopt sustainable initiatives considered financially feasible and immediately applicable to the projects. The MP currently has the environmental quota mechanism, which, although quite innovative, is still recent and needs further regulations for its effective application. The city government alleges that the fulfillment of the environmental quota has resulted in controversial obligations for the developers, such as the need to construct water retention reservoirs of enormous proportions.
The zoning review proposal also makes relaxes the minimum allocation of percentages of areas constructed under the classification HIS-1 - Social Interest Dwellings in range 1 (from 0 to 3 minimum wages) in Special Zones of Social Interest (ZEIS). Under the current master plan, residential and non-residential developments uses located in ZEIS must allocate a minimum of 60% of their total constructed area to HIS-1 designation. With the proposed change, this minimum can be up to 50% if the entire project is intended for social housing. This will allow greater profitability for developers in projects of this type, thereby stimulating supply for the demand in this market section.
Despite the city government's efforts to speed up the process of revision of the zoning law, which has been criticized by various civic entities that plea for greater participation in the management of the process, there is still a long way before any of these proposals actually come into force.
The contributions received until March 30 must be reviewed by the city and eventually incorporated in the bill, which will then be presented to the City Council for review of admissibility, submission to committees, and voting. If approved, the text will proceed for promulgation by the mayor and enactment, when it will finally take effect.
What changes with the proposed review of the Zoning Law?
- Mariana Moschiar Almeida
- Real estate