Expansion of ZEUs and real estate appreciation in São Paulo

This Technical Study combines a data collection effort with a proposal for reflection on the need to improve urban planning instruments for regulating and capturing real estate appreciation.

Firstly, it seeks to characterize the set of properties and owners that will be covered by the expansion of the Urban Transformation Structuring Axis Zones (ZEUs), following the conclusion of the current process of reviewing zoning legislation in São Paulo, currently underway through Bill 586/2023.

Based on these subsidies, we intend to discuss the impacts of this legislative change, especially due to the extraordinary real estate appreciation that will occur in these areas, which raises questions about how this generated value is regulated and appropriated by the public authority that originated it.

This Technical Study is part of a ZeroCem research line, interested in monitoring the effects produced by the review of urban landmarks in São Paulo, and is directly linked to a previous examination (Technical Study 01.2023) which, in the context of approval of the review of the Master Plan (Municipal Law 17.975/2023), spatially represented the swelling dimension of the Urban Transformation Structuring Axes and quantified the expansion of the area susceptible to constructive densification and verticalization in the city.

In these terms, Technical Study 02.2023 seeks to continue this line of investigation through a characterization of the set of lands that will be contemplated and benefited by these legislative changes, in the form of their economic appreciation.

With the current proposal to revise zoning, which promotes the expansion of the size of ZEUs, there will be a large number of private lands that, because they are authorized to build more, will concentrate enormous economic gains arising from these changes in urban landmarks. This is a value generated strictly through the regulatory action of the government: the decision to change legislation is what causes the appreciation of properties.

Therefore, it is necessary to pay attention to the existing urban planning instruments to capture this value, so that it is returned to the community and not appropriated only by the group of individuals who benefit. This perspective is anchored in the guidelines for the fair distribution of the benefits of urbanization, provided for in the City Statute and the Strategic Master Plan of São Paulo.

This issue is absent from the debates surrounding the zoning review. There are no studies estimating the expected appreciation in the areas of expansion of the ZEUs. There is also no analysis of the existing urban planning instruments to verify whether they are properly “calibrated” to contemplate this appreciation or whether they need some kind of update. Without greater clarity regarding this data, there is a risk of losing this public value generated to the private sector, preventing its allocation to financing urban planning and management objectives.

Therefore, the ZeroCem Study aims to take a first step in contributing to this issue by representing the group of owners and lands benefiting from this proposed legislative change, based on information from the municipal registry of the Urban Territorial Property Tax (IPTU), in order to illustrate that this is a significant change in the form of territorial planning, the impacts of which are being little discussed and studied in the current zoning review process.

Complete Study