Financing Social Housing Through the Sale of Development Rights — The Case of São Paulo
Résumé
The right to adequate housing is an internationally recognised human right. However, more than a billion people remain poorly sheltered (UN-HABITAT, 2014). With over half of the world’s population residing in urban areas, cities are at the frontline to change this scenario. Nevertheless, local governments often do not have the financial means or institutional capacity to overcome the pressures of the Real Estate Market. Also, it is frequently unclear whether the State or private investors should bear the costs of housing to low-
income families (Walters, 2011). In Brazil, the discontinuity of government actions, reduction in housing investments and fragility or absence of urban, land and housing policies have contributed to the maintenance of an urban structure marked by exclusion and inequality (Chaffun, 1997). Besides, the absence of a National Housing Plan hinders access to central economic resources, leaving the financial burden on municipalities. The goal of this paper is to explore the potential of land-based revenue for boosting the construction of affordable social housing. It describes the experience of São Paulo in using the sale of development rights to finance housing for low-income families. It focuses on how the Outorga Onerosa do Direito de Construir (OODC) and Certificates of Additional Construction Potential (CEPACs) are combined with other urban instruments to finance social housing and land acquisition for the same purposes. This paper reviews previous literature on the sale of development rights, OODC and
CEPACs. Also, it analyses legislation, annual reports and policy documents to understand how these instruments operate and are implemented within the context of a megacity like São Paulo. Through this examination, this paper constructs an overview of how land-based revenue is reinvested to counteract the local housing deficit and, hopefully, contributes to the development of sustainable finance models for social housing elsewhere.