New São Paulo Master Plan approved: mid-term review expands the possibility of constructing taller buildings and introduces other new features

On June 26, 2023, the São Paulo City Council approved Bill No. 127, of March 28, 2023, which provides for the revision of São Paulo’s Strategic Urban Master Plan, in force since July 31, 2014, under Law No. 16,050. After the approval by the City Council, the text will be submitted for the analysis of Mayor Ricardo Nunes.

Among the main changes approved by this Bill are:

• the expansion of the area along public transportation hubs in which buildings with greater height limits can be constructed;
• permission to build taller buildings, provided that a part of the apartments is aimed for social housing; and
• changes in the criteria to define the number of parking spaces per apartment nearby subway and train stations, as well as bus corridors.

In general, among the changes introduced by the revision, is the possibility of constructing taller buildings alongside public transportation hubs. Under the current text, these buildings can be constructed within a radius of up to 600 meters from train, subway and monorail stations, while the revision implements a radius of 700 meters, representing an increase of approximately 36% in the area of the hubs.

Similarly, the revision provides for the possibility of constructing taller buildings nearby bus stops and corridors, with a radius expansion from 300 to 400 meters, representing an increase of about 78% of the covered area. This immediately raises the question of whether this type of infrastructure can support this density gain and the few compensation mechanisms established.

In addition, one of the main aspects of the proposed change is the incentive to social interest housing (“HIS”). In line with the possibility of constructing taller buildings, the substitute text allows for the possibility of increasing the floor area of buildings that allocate part of their units to HIS.

Thus, the voted text establishes that for the developments that meet the condition mentioned above, the floor area ratio of residential buildings located in the Special Social Interest Zones (“ZEIS”) can increase up to 50% (the floor area ratio is the relation between the area of the land and the projection of the construction on such land). Preserving this social housing allocation is a controversial topic, since nothing, other than the necessary municipal oversight of developers, can ensure its use by the public for which such units are intended.

Another topic brought by the revision of the law is the change in the number of parking spaces per apartment. The legislation currently provides that for each apartment unit to be built, one parking space must also be provided, regardless of the unit size. This matter is closely related to the transportation infrastructure in its different modes. Once the substitute text is approved, apartments with more than 30m² are authorized to have one parking space (at no additional cost for the developer), or for every 60m² of constructed area, an additional parking space will be provided, also at no additional cost. Apartments with less than 30 m² may not have a parking space.

If, on the one hand, the changes in the legislation provide an incentive for developers to build projects in the areas surrounding public transportation hubs in order to meet the housing demand, on the other hand, these changes raise issues that must be considered in the projects. In addition, another topic for consideration is the use of the new units that could have been licensed in a special way and, equally, should not have, in theory, a different use from the one for which they were conceived.

The commercial use of certain areas, such as the “dark kitchens”, among others, is another aspect that deserves attention and study when a business or residential initiative is designed in the city of São Paulo.

Demarest’s Real Estate team is monitoring the approval of the São Paulo Master Plan revision and is available to provide any further clarifications that may be necessary.