Abstract
The right to adequate housing is an internationally recognised human right. However, more than a billion people are poorly sheltered (UN-HABITAT, 2014). With more than half of the world’s population residing in urban areas, cities are at the frontline to change this. Nevertheless, the provision of affordable social housing imposes many challenges. Local governments frequently do not have the financial means or institutional capacity to overcome the interests of Real Estate’s private investors. Also, it is often unclear whether the State or private investors should bear the costs of housing to low-income families. In Brazil, the discontinuity of government actions, the reduction on housing investments and the fragility or absence of urban, land and housing policies have contributed to the maintenance of an urban structure marked by exclusion and inequality (Chaffun, 1997). Besides, the absence of a National Housing Plan hinders access to central economic resources, leaving the financial burden to address this issue to municipalities. Therefore, policy and fiscal innovation at the local level are fundamental to create a sustainable model of finance for social housing. The central goal of this paper is to shed light on the potential of land-based revenue in boosting the construction of housing to low-income families. The objective of any land-based finance instrument is to raise resources to fund local services and infrastructure investments (Walters, 2011). Accordingly, this paper describes the use of the sale of development rights to finance social housing in Brazil. It focuses on how the Outorga Onerosa do Direito de Construir (OODC) and Certificates of Additional Construction Potential (CEPACs) are combined with other urban instruments to generate funds for the construction of social housing and acquisition of land for the same purposes in São Paulo. This paper reviews previous literature on the sale of development rights, OODC and CEPACs. Also, it analyses legislation, annual reports and policy documents to understand how these instruments operate and are implemented within the context of a megacity like São Paulo. Through this examination, this paper constructs an overview of how land-based revenue is reinvested to counteract the local housing deficit. Also, it contributes to the development and improvement of financial policies for housing elsewhere. The paper consists of five main sections. Following the introduction section, it discusses the concepts of sale of development rights, OODC and CEPACs. The third section introduces the supporting instruments which are used to implement OODC and CEPACs. The fourth section discusses the lessons learned from the implementation of these instruments in São Paulo. The paper concludes with useful recommendations for cities to develop sustainable financial models for affordable social housing. REFERENCES CHAFFUN, Nelson. (1997). Dinâmica global e desafio urbano. In. BONDUKI, Nabil. Habitat: As práticas bem-sucedidas em habitação, meio ambiente e gestão urbana nas cidades brasileiras. São Paulo, Studio Nobel, 1997. P. 18 Walters, Lawrence. (2011). Land and Property Tax: A Policy Guide. UN-HABITAT. (2014). The Right to Adequate Housing. Fact Sheet No.21. Geneva.
