Opportunities and challenges of the new Master Plan

Leitura de 7min

JLL’s José Cardim and Simone Shoji offer a brief assessment of the new urban development plan recently approved by the City of São Paulo.

Encourage construction in areas that are already well served by public transportation and allow larger buildings in such areas, while inhibiting the concentration of buildings inside neighborhoods where urban mobility infrastructure is more sparse – these are just some of the guidelines established by the Master Plan that was recently approved by the City São Paulo, with some vetoes. The importance of the new rules and the challenges that they create are some of the points discussed by José Cardim, director of Transactions, and Simone Shoji, a JLL specialist in the real estate market, in the following interview:

 

Panorama – In your opinion, what is the real importance of the new Master Plan?

Simone Shoji – The current mayor wants to have the city grow in an orderly manner and the Master Plan was developed to do just that. It determines that São Paulo be organized from a constructive point of view, leading to some improvements to traffic, project quality and the outlying regions. One of the main goals of the Master Plan is to have people working closer to where they live, but this is a question that demands further study; it can’t be solved just by passing a law, but rather with a whole set of public measures.

 

Panorama – What are the challenges going forward?

José Cardim – Areas with a better supply of public transport and infrastructure can now be more densely occupied, whereas there are lower floor area ratios in the more outlying areas and inside the neighborhoods. One challenge for developers is to build in higher-density areas, because it will become more difficult to balance land and building costs against the selling price. Another area of difficulty relates to the compulsory reduction in the number of parking spaces in new buildings. It will take some thinking about how best to deal with this question. I understand that the Plan seeks to ensure greater urban mobility, giving priority to public transportation, and limiting the number of parking spaces in new developments will discourage car use in the city. This is a great challenge, because it is essential that, in return, the city offers more and better public transport.

Simone Shoji – Developers also have to adapt to new concepts established by the new Master Plan. One thing I would mention, for example, is the ‘Solidarity Quota’, which is the compulsory donation to the municipality of land or resources for construction of social housing. This requirement kicks in when the built area of the project exceeds 20,000 m². Another thing is the Maximum Quota Part of Land per Unit, which is the housing density relationship between the total land area and the number of dwellings that will ideally be built.

 

Panorama – What stands out in terms of opportunities?

Simone Shoji – The plan encourages better utilization of ground floors in buildings, by opening things such as shops and galleries. It’s a concept known as ‘active frontage’. This develops the trade and services sectors, while benefiting building users and the population in general. City Hall will also offer fiscal incentives (exemption or rebates in taxes such as IPTU, ITBI and ISS) for setting up companies in outlying areas of the city that have high population density. Changes will start to be felt when City Hall clearly defines the Strategic Economic Development Hubs.

José Cardim – There is an interesting opportunity in retrofit, which allows for the modernization of existing buildings. In this case, coefficients such as the relationship of parking spaces per square meter are retained, given that they were allowed earlier. The Master Plan can stimulate investment in older structures where there is a desire to modernize, and this generates activity in the market. When the rules defined by the new Master Plan come into force, São Paulo could receive multi-use buildings with shops, parking and residential units all in the same tower, located close to Metro (subway) stations and bus corridors where the goal is to increase the population density.

 

Panorama – Which neighborhoods will tend to benefit from this change?

José Cardim – The plan aims to create better areas for low-income people. This means that new Special Zones of Social Interest (ZEIS) such as Campos Elíseos, Santa Efigênia, Bela Vista, Brás and Pari will tend to benefit.

 

Panorama – The new Master Plan foresees creation of ‘pocket parks’ that have existed in the United States for more than 40 years. Is this part of a drive to create a more sustainable city?

Simone Shoji – The idea of pocket parks is to turn spaces into places where citizens can rest and enjoy leisure. With respect to the São Paulo Master Plan, I see pocket parks as interesting in this regard, creating seating areas for people who live or work round about. However, they are not necessarily intended to make the city greener or more environmentally sustainable. If they really are created through public or private initiative, they will be welcome spaces for neighborhood socialization. It has to be a very positive action.