## São Paulo Reclaims Its Center ## Source details **Canonical URL:** [São Paulo Reclaims Its Center](https://www.imf.org/en/publications/fandd/issues/2024/12/sao-paulo-reclaims-its-center-elizabeth-johnson) ## Other formats - [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) ## Bibliographic details - Authors: ELIZABETH JOHNSON - Published: December 3, 2024 --- ### Overview - 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. ### Background and program evolution - 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). ### Learning from past outcomes - 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. ### Downtown revitalization and retrofitting strategy - 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. ### Case study: Dandara building and social-movement partnerships - 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. ### Private sector role and project design requirements - 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): - Access to public transport is fundamental; developments cannot be more than 10 minutes by foot from public transportation. - Projects need access to nearby basic services, including supermarkets, pharmacies, and bakeries, as most residents do not own automobiles. - Adaptations for remote work: party rooms equipped with high-speed Internet and air-conditioning to double as coworking spaces. - Emphasis on an industrialized, fast, high-quality building process requiring limited maintenance. - Developers still find downtown São Paulo attractive for low-income housing due to available land at reasonable prices near transit and retail. ### Remaining challenges and policy recommendations - 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: - Prioritize low-income housing projects near transit corridors and services. - Use government-owned vacant buildings for retrofits where feasible. - Coordinate state, municipal, and federal subsidies and land acquisition to reduce barriers to participation in MCMV. - Engage social movements and residents in renovation planning to improve uptake and project outcomes. ### Key statistics and figures - 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 *Elizabeth Johnson, "São Paulo Reclaims Its Center," F&D Magazine, December 2024* --- ## Content in this bundle - **SãO Paulo Reclaims Its Center** - [SãO Paulo Reclaims Its Center (Markdown version)](/-/media/files/publications/fandd/article/2024/12/johnson.pdf.md){rel="alternate" type="text/markdown"} - [SãO Paulo Reclaims Its Center (PDF)](/-/media/files/publications/fandd/article/2024/12/johnson.pdf){rel="external" type="application/pdf"} --- _Source: https://www.imf.org/en/publications/fandd/issues/2024/12/sao-paulo-reclaims-its-center-elizabeth-johnson_