The São Paulo City Hall is preparing to discuss a draft bill to amend Law No. 16,402/16, the current Land Division, Use, and Occupancy Law (LPUOS), with the purpose of adapting real estate production to the urban policy guidelines defined by the Strategic Master Plan. The document was submitted for review by the public on October 31 of this year, through a participatory process in public hearings mediated by the Municipal Department of Urban Development (SMDU).

As presented, the draft bill brings in targeted adjustments to the parameters of land use and occupation, with the intention of meeting some of the wishes of the real estate market in order to reduce construction costs in the city of São Paulo.

The last stage of the participatory process to discuss the draft bill, which is in its second version, occurred on December 2, 2019. The final version will be sent to City Hall, on a date yet to be defined by City Hall, to be review and debated by city councilmembers.

In summary, the main changes proposed are as follows:

1. Increased construction standards for buildings on terrain with vehicle access made for a street with a width equal to or greater than 12 meters and a minimum setback from the street of 25%, inserted in ZC (Centrality Zones) and ZM (Mixed Zones). The increase, applied on the maximum construction standards currently in force for ZC and ZM, corresponds to 12 meters in height in ZC and 20 meters in ZM. The change will be an exception to the general parameters for these areas, as already contained in Table 3 of the current legislation. Even if the setback requirement is met, the increase will not apply to lots found in the Metropolitan Structuring Macro Area (MEM), or adjacent to ZER (Exclusively Residential Zone) or ZCOR (Corridor Zone), except for the specific parameters of Urban Operations and Consortium Urban Operations. In the material published on its website, City Hall justifies this increase with the expectation of a reduction in the overall cost of construction due to the possibility of building higher towers instead of multiple lower towers.

2. Explicit possibility of pedestrian path exemption on blocks with irregular geometry or other impediments, on perimeters of blocks longer than 150 meters. This possibility was expressly provided for only for lots and slopes with a more than 20% grade.

3. Increase in the maximum number of parking spaces in residential uses of the Urban and Metropolitan Transformation Structuring Zones (ZEU, ZEUa, ZEUPa, ZEM, and ZEMP), with a provision of one parking space per housing unit or one parking space every 60 square meters of computable built area. Controversial, this rule was widely debated when the current law was published, which until then had chosen to limit the number of parking spaces. Critics of this change claim privilege for vehicle transport and increasing vehicle traffic in regions that may already be saturated with slow traffic.

4. Incentives for renovations, with an increase in areas in hospitals, educational establishments, and hotels located in certain categories of Urban and Metropolitan Transformation Structuring Zones (ZEUa, ZEUPa, ZEM, and ZEMP) and in Centrality Zones (ZC), with the possibility of increasing the maximum utilization coefficient by 50% of the general maximum coefficient. Currently, this increase was only provided for ZEU.

5. Provision for requalification of licensed buildings based on the law in force before September 23, 1992, with possible expansion of noncomputable area up to a maximum limit of 20% in relation to the existing built area. However, the implementation of this mechanism is subject to regulation by means of an Act of the Executive.

6. General rule changes in Special Zones of Social Interest (Zeis). The main ones are the detailing of criteria for the installation of public equipment and the application of a minimum percentage allocation of units in these areas, as well as an incentive for the construction of units for the population with an income of up to three minimum wages in Zeis (the draft presents the possibility of granting up to 20% of additional construction potential not computable when there is construction of at least 80% of units for this population).

The draft brings in other changes, such as increasing the Incentive Factors in Zepecs (Special Zones for Cultural Preservation), adjustments in the area parameters for clubs located in Sapavel (System of Protected Areas, Green Areas, and Open Spaces), detailing the calculation of areas in storefront areas and in non-building strips, detailing of the extinction of villas and the opening of public paths, and voluntary adherence to the solidarity quota in developments with a computable built area of less than 20 thousand square meters.

The document does not, however, address the issues of reducing the value of onerous grants and increasing the maximum quota of land per residential unit. This agenda item has already been discussed for the publication of the current law and, according to city hall, the proposals run counter to the provisions of the Strategic Master Plan.