## SÃO PAULO RECLAIMS ITS CENTER

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### Urban context and housing deficit
- São Paulo is described as the Southern Hemisphere’s largest city, with a population of nearly 11.5 million.
- The city has a shortage of 400,000 housing units.
- The São Paulo metropolitan area is stated as 20 million and gained roughly 2 million new residents in the past decade, according to IBGE.
- Brazil’s urbanization increased from 45 percent to 87 percent of the population since 1960.
- An estimated 20 percent of central area buildings are now empty.

### National housing policy evolution (Minha Casa, Minha Vida — MCMV)
- MCMV was launched in 2009 and expanded under the Lula administration after his 2022 reelection.
- Lula’s revived program (relaunched in 2023) included expanded subsidies, lower interest rates, and higher maximum property values.
- In one year, the program sold more than 1 million units, described as half the target set for the end of 2026.
- The program’s lowest income threshold is for families earning no more than $516 a month; those families are eligible for free housing through local lotteries.
- In the program’s early years, many projects were located far from city centers, prompting more than half of lottery winners to ultimately opt out (study of recipients in Rio de Janeiro).
- Researchers found the program failed to reduce poverty in some cases: depending on location, recipients were less likely to be formally employed after moving and spent fewer months each year formally employed.

### São Paulo municipal strategy and downtown revitalization
- São Paulo’s master plan for urban development (approved in 2014) seeks to increase population density along urban transportation corridors and allows taller buildings in exchange for more smaller lower-cost units.
- The plan doubled the number of priority regions for low-income housing, including the city center, and directed a large share of housing budget toward acquiring land for low-income projects.
- Mayor Ricardo Nunes announced the expropriation of five buildings for conversion into low-income housing through public-private partnerships; there are 164 additional properties that meet criteria for expropriation.
- Governor Tarcísio de Freitas proposed transferring government offices from Morumbi to the city center; a share of the 268,000 low-income housing units he promised to build by the end of his term are intended to be downtown.

### Retrofit and social-movement–led projects (case studies)
- The Dandara building (former federal labor court on Ipiranga Avenue) was occupied in 2009 by Unification of Tenement and Housing Struggles (ULCM) and retrofitted into housing; a resident, Marli Baffini, has lived there since 2017.
- Marli and her husband formerly faced a two-hour one-way commute; after moving to Dandara Regis’s commute takes just 20 minutes and they have three subway stops within walking distance.
- Integra (architecture and engineering firm) partners with social movements on retrofits and is seeking approval for four other projects in São Paulo led by social movements, two in the city center.
- Advocates and practitioners say the retrofit model is best suited for government-owned buildings because purchasing private property for low-income housing is often prohibitive.

### Private sector role and market signals
- MCMV has become one of the main drivers for expansion of Brazil’s housing market.
- Brazil posted record new-home sales in the second quarter of this year: more than 93,000 units sold; almost half of those were new MCMV housing, according to the Brazilian Construction Industry Chamber.
- Magik LZ (home-building company) emphasizes building quickly on a tight budget and lists requirements for successful MCMV projects:
  - Developments cannot be more than 10 minutes by foot from public transportation.
  - Projects need access to nearby basic services (supermarkets, pharmacies, bakeries) because most residents do not own automobiles.
  - Party rooms equipped with high-speed Internet and air-conditioning can double as coworking spaces for remote workers.
- Magik’s operations director, Ricardo Zylberman, frames mass unit production as an industrial process requiring quick construction of high-quality, low-maintenance apartments.
- Downtown São Paulo is highlighted as offering opportunities for low-income housing due to available land at reasonable prices near public transportation and retail outlets.

### Financing, barriers, and scale needs
- Caixa Econômica Federal is mentioned as Brazil’s largest mortgage lender; down payments are cited as a major barrier for families participating in MCMV because most are paying rent and struggle to save.
- Inês Magalhães (vice president of Caixa Econômica Federal) states that addressing the low-income housing deficit requires a broad array of policies and more partnerships among states, municipalities, and the federal government; she cites state and local programs that offer subsidies to help families with down payments.
- Quantified housing need cited: Brazil needs 1 million to 1.5 million new units per year to keep the housing deficit from increasing.

### Policy implications and lessons learned
- Locating low-income housing close to jobs, public transportation, and services is critical to avoid exacerbating inequality and to improve employment outcomes for recipients.
- Public acquisition and retrofitting of government-owned vacant buildings can be a cost-effective component of downtown housing supply.
- Coordinated state, municipal, and federal programs—with targeted subsidies to help with down payments—are necessary to scale up housing delivery and enable participation by lower-income families.
- Combining urban master planning (incentives for density and mixed-use development) with MCMV incentives appears central to São Paulo’s approach to reclaiming downtown and addressing the 400,000-unit shortfall.

*Elizabeth Johnson, “SÃO PAULO RECLAIMS ITS CENTER,” F&D, December 2024.*

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_Source: https://www.imf.org/-/media/files/publications/fandd/article/2024/12/johnson.pdf_