New rules favor real estate investments in downtown São Paulo – 02/24/2023 – Market

Recent changes in municipal urban legislation should increase investments in the center of São Paulo this year, before the new master plan.

The main one refers to the PIU (Urban Intervention Project) Central Sector, approved in September 2022, which covers a perimeter of 2,098 hectares (the equivalent of 2,098 football fields).

The norm replaces the Urban Center Operation, established in 1997, and provides incentives to builders and developers to attract up to 220,000 new residents to the República, Sé, Brás, Belém, Pari, Bom Retiro and Santa Cecília neighborhoods.

“The PIU Setor Central encourages housing densification and provides tools for the public authorities to apply, such as the restoration of historic buildings, including the production of social housing,” says lawyer Marcella Martins Montandon.

The interventions will be financed with the payment of the onerous grant by the company —financial consideration passed on to the municipality to build more than the limits defined by the Strategic Master Plan.

The amounts collected will go to an exclusive fund of the city hall and will have to be applied in the region itself for low-income housing, improvements in public equipment and road network and preservation of municipal heritage.

“PIU Central Sector will attract and encourage the market in the region. The sector already estimates to raise BRL 700 million [nas negociações imobiliárias após os incentivos]”, says office partner Duarte Garcia, Serra Netto e Terra.

“The retrofit law, approved in mid-2021, is another incentive for companies to be interested in the region. The measure authorizes the transformation of buildings built before 1992 for residential use and has a simplified bureaucratic rhythm. The problem is that, currently, few companies specialize in retrofitting in the country”, says Marcella.

Data collected by Newmark at the request of Sheet show that, despite being the region with the largest inventory in São Paulo, the commercial buildings in the center are old, and construction activity —that is, the construction of new developments— is stagnant. According to the study, the last building was built in 2011.

Most of the commercial buildings in the center of São Paulo are more than 50 years old, with obsolete technical specifications, which do not meet the requirements of current tenants.

“Only 1% of the total stock of commercial buildings, around 22,000 m², underwent retrofit. The potential of this type of intervention in the center is high, but, until now, there has been a lack of more effective actions on the part of the city hall for requalification of the region” , says Mariana Hanania, head of Newmark.

According to the real estate consultancy, in addition to reducing bureaucracy in the process of readjusting existing buildings, actions such as reforming sidewalks, increasing security, removing homeless people, creating a cultural center and implementing the PIU Setor Central are necessary.

Other norms of an urban and building nature established in 2022 tend to impact real estate production throughout the city in the coming years. Check it out below:

• Resolution CTLU/001/2022, approved in February, defines the concept of village for the application of restrictions contained in article 64 of Municipal Law No. 16,402/2016 (LPUOS/16). It also brings the possibility of recognizing the mischaracterization of the village after analysis by the CTLU (Technical Chamber of Urban Legislation)
• Resolution CEUSO/147/2022, approved in March, clarifies the waiver of licensing in the case of opening a span in the slab for the installation of vertical circulation (provided that it does not involve structural alteration of the building)
• Municipal Decree nº 61.218/2022, published in April, updates the values ​​of maximum family income for social housing and popular market housing
• Municipal Decree nº 61.311/2022, published in May, regulating the “Retrofit Law”, which grants incentives (tax, building and urban) for the requalification of existing buildings in the central area of ​​the city
• Resolution CEUSO/148/2022, approved in May, brings rules on requests for a Permit to Execution of Demolition in areas covered by more than one tax lot
• Municipal Law nº 17.853/2022, approved in December, regulates the norms for the installation and operation of enterprises formed by a set of kitchens, popularly known as dark kitchens
• Municipal Decree nº 62.135/2022, published in December, updates the values ​​in R$/m² for the purposes of applying the Onerous Grant.

“The norms are dynamic and are renewed to accompany the city’s transformations, as well as due to government changes”, says Marcella.

The lawyer is looking forward to a lively 2023 due to several bills pending in the Chamber, in addition to the promised intermediate review of the Strategic Master Plan, which began in 2021. The São Paulo City Hall has until this month of March to submit the project to the City Council .