{ "title": "São Paulo Reclaims Its Center", "sourceUrl": "https://www.imf.org/en/publications/fandd/issues/2024/12/sao-paulo-reclaims-its-center-elizabeth-johnson", "canonical": "https://www.imf.org/en/publications/fandd/issues/2024/12/sao-paulo-reclaims-its-center-elizabeth-johnson", "overlayPath": "/en/publications/fandd/issues/2024/12/sao-paulo-reclaims-its-center-elizabeth-johnson/index.md", "summary": "Brazil’s megalopolis combines federal and municipal programs to retrofit buildings in the downtown area", "sections": [ { "heading": "Overview", "content": "- São Paulo is the Southern Hemisphere’s largest city, with a population of nearly 11.5 million, and faces a shortage of 400,000 housing units.\n- The city and federal government are combining lessons from previous programs with new incentives to retrofit downtown buildings and increase low-income housing supply." }, { "heading": "Background and program evolution", "content": "- The federal housing program Minha Casa, Minha Vida (MCMV) launched in 2009 and added more than 8 million housing units, but drew criticism for contributing to inequality and urban sprawl.\n- Under President Lula (in office 2003 to 2011; returned to office in 2023), MCMV was revived in 2023 with expanded subsidies, lower interest rates, and higher maximum property values; in one year it sold more than 1 million units, half the target set for the end of 2026.\n- During Jair Bolsonaro’s presidency, the program was dramatically reduced; Lula’s revival aims to improve access to jobs and services compared with earlier iterations.\n- Brazil’s urbanization: since 1960, city dwellers rose from 45 percent to 87 percent of the population; the São Paulo metropolitan area of 20 million gained roughly 2 million new residents in the past decade (IBGE)." }, { "heading": "Learning from past outcomes", "content": "- Early MCMV projects were often located far from city centers; this prompted more than half of lottery winners in a Rio de Janeiro study to opt out of the program.\n- Study findings: depending on location, recipients were less likely to be formally employed after moving; residents in regions without jobs and infrastructure spent fewer months each year formally employed and were more likely to switch jobs.\n- The lowest income threshold in MCMV (earning no more than $516 a month) remains eligible for free housing allocated by local lotteries." }, { "heading": "Downtown revitalization and retrofitting strategy", "content": "- São Paulo’s 2014 master plan aims to increase population density along urban transportation corridors, allowing taller buildings in exchange for more smaller lower-cost units; it doubled the number of priority regions, including the city center.\n- An estimated 20 percent of central area buildings are now empty.\n- Mayor Ricardo Nunes announced expropriation of five buildings for conversion into low-income housing through public-private partnerships; there are 164 additional properties that meet the criteria for expropriation.\n- State Governor Tarcísio de Freitas plans to transfer government offices from Morumbi to the city center; a share of the 268,000 low-income housing units Freitas promised to build by the end of his term are downtown.\n- Federal agencies own dozens of empty downtown properties that could be retrofitted into low-income housing." }, { "heading": "Case study: Dandara building and social-movement partnerships", "content": "- Dandara, formerly a federal labor court on Ipiranga Avenue, was occupied in 2009 and later retrofitted; a resident, Marli Baffini, moved in 2017.\n- Resident outcome example: Regis’s commute reduced from a two-hour one-way beginning at 5 a.m. to a 20-minute commute; the apartment is within three subway stops.\n- São Paulo–based firm Integra retrofitted Dandara and collaborates with social movements (ULCM); it is seeking approval for four other projects led by social movements, two in the city center.\n- Activists play a central role in renovation decision-making and contribute to project success; retrofits are most feasible in government-owned buildings because purchasing private property is prohibitively costly." }, { "heading": "Private sector role and project design requirements", "content": "- MCMV has become a main driver of Brazil’s housing-market expansion; Brazil posted record new-home sales in Q2 of this year, with more than 93,000 units sold—almost half of which were new MCMV housing (Brazilian Construction Industry Chamber).\n- Builder requirements for successful MCMV projects (Magik LZ):\n - Access to public transport is fundamental; developments cannot be more than 10 minutes by foot from public transportation.\n - Projects need access to nearby basic services, including supermarkets, pharmacies, and bakeries, as most residents do not own automobiles.\n - Adaptations for remote work: party rooms equipped with high-speed Internet and air-conditioning to double as coworking spaces.\n - Emphasis on an industrialized, fast, high-quality building process requiring limited maintenance.\n- Developers still find downtown São Paulo attractive for low-income housing due to available land at reasonable prices near transit and retail." }, { "heading": "Remaining challenges and policy recommendations", "content": "- Caixa Econômica Federal (vice president Inês Magalhães) notes addressing the low-income housing deficit requires a broad array of policies and more partnerships between states, municipalities, and the federal government.\n- Down-payment assistance is critical: subsidies at the state and local level can help families who struggle to save while paying rent.\n- National need to stabilize the deficit: Brazil needs 1 million to 1.5 million new units per year to keep the housing deficit from increasing.\n- Policy focus areas:\n - Prioritize low-income housing projects near transit corridors and services.\n - Use government-owned vacant buildings for retrofits where feasible.\n - Coordinate state, municipal, and federal subsidies and land acquisition to reduce barriers to participation in MCMV.\n - Engage social movements and residents in renovation planning to improve uptake and project outcomes." }, { "heading": "Key statistics and figures", "content": "- Population of São Paulo: nearly 11.5 million\n- Housing shortage in São Paulo: 400,000 housing units\n- MCMV total units added since inception: more than 8 million housing units\n- Urbanization: 45 percent (1960) to 87 percent (current) city-dwelling share\n- São Paulo metropolitan population: 20 million\n- Population gain in past decade in metro area: roughly 2 million\n- MCMV lowest income threshold eligibility: earning no more than $516 a month\n- Year of Lula’s first MCMV launch: 2009\n- Year MCMV was revived with expanded incentives: 2023\n- Target by end-2026: (implicit) double of the one-year sales; in one year MCMV sold more than 1 million units, half the target set for the end of 2026\n- Master plan approved: 2014\n- Central area buildings empty: an estimated 20 percent\n- Buildings expropriated announced by Mayor Nunes: 5\n- Additional properties meeting expropriation criteria: 164\n- Promised low-income units by Governor Freitas: 268,000\n- Dandara building occupied: 2009; resident move-in example: 2017\n- Developer sales in Q2: more than 93,000 units sold; almost half were new MCMV housing\n- Maximum walking distance to transit for projects: 10 minutes by foot\n- National annual required new units to stabilize deficit: 1 million to 1.5 million new units per year\n\nElizabeth Johnson, \"São Paulo Reclaims Its Center,\" F&D Magazine, December 2024\n\n---\n\n Content in this bundle\n\n- SãO Paulo Reclaims Its Center\n - SãO Paulo Reclaims Its Center (Markdown version){rel=\"alternate\" type=\"text/markdown\"}\n - SãO Paulo Reclaims Its Center (PDF){rel=\"external\" type=\"application/pdf\"}\n\n---\n\nSource: https://www.imf.org/en/publications/fandd/issues/2024/12/sao-paulo-reclaims-its-center-elizabeth-johnson" } ], "bullets": [ "[Markdown version](/en/publications/fandd/issues/2024/12/sao-paulo-reclaims-its-center-elizabeth-johnson/index.md)", "[Structured JSON version](/en/publications/fandd/issues/2024/12/sao-paulo-reclaims-its-center-elizabeth-johnson/index.json)", "[Bundle manifest](/en/publications/fandd/issues/2024/12/sao-paulo-reclaims-its-center-elizabeth-johnson/bundle-manifest.json)", "Authors: ELIZABETH JOHNSON", "Published: December 3, 2024", "São Paulo is the Southern Hemisphere’s largest city, with a population of nearly 11.5 million, and faces a shortage of 400,000 housing units.", "The city and federal government are combining lessons from previous programs with new incentives to retrofit downtown buildings and increase low-income housing supply.", "The federal housing program Minha Casa, Minha Vida (MCMV) launched in 2009 and added more than 8 million housing units, but drew criticism for contributing to inequality and urban sprawl.", "Under President Lula (in office 2003 to 2011; returned to office in 2023), MCMV was revived in 2023 with expanded subsidies, lower interest rates, and higher maximum property values; in one year it sold more than 1 million units, half the target set for the end of 2026.", "During Jair Bolsonaro’s presidency, the program was dramatically reduced; Lula’s revival aims to improve access to jobs and services compared with earlier iterations.", "Brazil’s urbanization: since 1960, city dwellers rose from 45 percent to 87 percent of the population; the São Paulo metropolitan area of 20 million gained roughly 2 million new residents in the past decade (IBGE).", "Early MCMV projects were often located far from city centers; this prompted more than half of lottery winners in a Rio de Janeiro study to opt out of the program.", "Study findings: depending on location, recipients were less likely to be formally employed after moving; residents in regions without jobs and infrastructure spent fewer months each year formally employed and were more likely to switch jobs.", "The lowest income threshold in MCMV (earning no more than $516 a month) remains eligible for free housing allocated by local lotteries.", "São Paulo’s 2014 master plan aims to increase population density along urban transportation corridors, allowing taller buildings in exchange for more smaller lower-cost units; it doubled the number of priority regions, including the city center.", "An estimated 20 percent of central area buildings are now empty.", "Mayor Ricardo Nunes announced expropriation of five buildings for conversion into low-income housing through public-private partnerships; there are 164 additional properties that meet the criteria for expropriation.", "State Governor Tarcísio de Freitas plans to transfer government offices from Morumbi to the city center; a share of the 268,000 low-income housing units Freitas promised to build by the end of his term are downtown.", "Federal agencies own dozens of empty downtown properties that could be retrofitted into low-income housing.", "Dandara, formerly a federal labor court on Ipiranga Avenue, was occupied in 2009 and later retrofitted; a resident, Marli Baffini, moved in 2017.", "Resident outcome example: Regis’s commute reduced from a two-hour one-way beginning at 5 a.m. to a 20-minute commute; the apartment is within three subway stops.", "São Paulo–based firm Integra retrofitted Dandara and collaborates with social movements (ULCM); it is seeking approval for four other projects led by social movements, two in the city center.", "Activists play a central role in renovation decision-making and contribute to project success; retrofits are most feasible in government-owned buildings because purchasing private property is prohibitively costly.", "MCMV has become a main driver of Brazil’s housing-market expansion; Brazil posted record new-home sales in Q2 of this year, with more than 93,000 units sold—almost half of which were new MCMV housing (Brazilian Construction Industry Chamber).", "Builder requirements for successful MCMV projects (Magik LZ):", "Developers still find downtown São Paulo attractive for low-income housing due to available land at reasonable prices near transit and retail.", "Caixa Econômica Federal (vice president Inês Magalhães) notes addressing the low-income housing deficit requires a broad array of policies and more partnerships between states, municipalities, and the federal government.", "Down-payment assistance is critical: subsidies at the state and local level can help families who struggle to save while paying rent.", "National need to stabilize the deficit: Brazil needs 1 million to 1.5 million new units per year to keep the housing deficit from increasing.", "Policy focus areas:", "Population of São Paulo: nearly 11.5 million", "Housing shortage in São Paulo: 400,000 housing units", "MCMV total units added since inception: more than 8 million housing units", "Urbanization: 45 percent (1960) to 87 percent (current) city-dwelling share", "São Paulo metropolitan population: 20 million", "Population gain in past decade in metro area: roughly 2 million", "MCMV lowest income threshold eligibility: earning no more than $516 a month", "Year of Lula’s first MCMV launch: 2009", "Year MCMV was revived with expanded incentives: 2023", "Target by end-2026: (implicit) double of the one-year sales; in one year MCMV sold more than 1 million units, half the target set for the end of 2026", "Master plan approved: 2014", "Central area buildings empty: an estimated 20 percent", "Buildings expropriated announced by Mayor Nunes: 5", "Additional properties meeting expropriation criteria: 164", "Promised low-income units by Governor Freitas: 268,000", "Dandara building occupied: 2009; resident move-in example: 2017", "Developer sales in Q2: more than 93,000 units sold; almost half were new MCMV housing", "Maximum walking distance to transit for projects: 10 minutes by foot", "National annual required new units to stabilize deficit: 1 million to 1.5 million new units per year", "**SãO Paulo Reclaims Its Center**" ], "related": [ { "title": "SãO Paulo Reclaims Its Center", "role": "document", "sourceUrl": "https://www.imf.org/-/media/files/publications/fandd/article/2024/12/johnson.pdf", "summary": { "path": "/-/media/files/publications/fandd/article/2024/12/johnson.pdf.md", "mime": "text/markdown" }, "binary": { "path": "/-/media/files/publications/fandd/article/2024/12/johnson.pdf", "mime": "application/pdf" } } ], "alternates": { "markdown": "/en/publications/fandd/issues/2024/12/sao-paulo-reclaims-its-center-elizabeth-johnson/index.md", "json": "/en/publications/fandd/issues/2024/12/sao-paulo-reclaims-its-center-elizabeth-johnson/index.json", "bundleManifest": "/en/publications/fandd/issues/2024/12/sao-paulo-reclaims-its-center-elizabeth-johnson/bundle-manifest.json" }, "generatedAtUtc": "2026-09-15T19:38:39.157Z" }