Real estate speculation

Shikanosuke Yagaki, Untitled (indoor), 1930–9


It is necessary that the Master Plans leave the rhetoric, leave the condition of fetishes, to become plans of action

Master Plans are under attack in cities across the country: Vitória, São Paulo, Goiânia, Curitiba, Londrina, Maringá, Porto Alegre, Florianópolis, Natal, Recife, João Pessoa, Fortaleza, Rio de Janeiro, Juazeiro do Norte… The list goes on. extensive. Part of this attempt to change socio-territorial regulation are proposals such as occupation of environmentally fragile areas, easing construction rates and land occupation, lowering the consideration paid by real estate companies to increase the constructive potential and expansion of the urban perimeter, among others. These and other measures combine the increase in the pattern of densification and verticalization in strategic areas for rentier gains with urban dispersion that also feeds land speculation, in addition to raising the cost of public maintenance of cities.

In the current situation, the low level of competence of the local government to raise tax collections contrasts with the effervescent expansion of real estate businesses. The increase in Urban Land and Property Tax (IPTU) under the two forms provided for in the Federal Constitution, in time and space, is insufficient to deal with the gigantic problems experienced by the population in the daily lives of cities (although it is necessary to recognize that there is still a lot space to increase IPTU collection). The tax on Rural Territorial Property (ITR) is contained and does not collect for the municipality. The “onerous grant for the right to build” above the basic coefficient, defined in the Master Plan, appears as an alternative source of revenue. In some cities, such as São Paulo, according to data from the Municipal Budget and Finance System, this collection reached more than half a billion Reais in 2020, so we are talking about significant amounts. And there is still the justification, defended by the progressive forces, of capturing for the public coffers part of the so-called “real estate appreciation”, that is, gains resulting from public and private investments in the form of an increase in the price of real estate.

While there was a certain democratic environment in city management (Democratic and Popular City Halls in the 1990s and early 2000s), this collection was oriented towards reducing urban inequality. With the approval of Federal Law 10.257 of 2001, City Statute, which regulates the Urban Policy chapter in the 1988 Constitution, and gives the Master Plan an unprecedented prominence defined, necessarily, with democratic participation, a large part of professionals, scholars and leaders social projects launched themselves in the construction of the utopia of fair and sustainable cities through the Master Plans. With the advance of neoliberalism and the regression of capillary democratic participation, the “business of the city” is radicalized. Master Plans and Land Use and Occupation Laws are now being negotiated between the municipal executive, the local legislature and the real estate market, also compromising public investment, which is essential for so-called urban operations.

Therefore, an articulated and galloping movement of mischaracterization of urban spaces is under way. Increasingly, neighborhoods are giving way to towers that can reach 50 floors (even in medium-sized cities) forming real barriers that condemn the surroundings to a lack of sunlight and ventilation – not to mention the depreciation of the quality of everyday life, whose urban morphology , the result of this wildly irresponsible spatial production, belittles people's daily lives and distances them from social relations on a human scale.

Further, and combined with the demolition of two-story houses or single-story houses in consolidated neighborhoods, there is also the phenomenon of city dispersion, with the expansion of urban perimeters, leading to a significant increase in the cost of urban infrastructure and public and private maintenance of city services. city. As an extensive bibliography shows, the increase in daily trips on public transport is directly related to urban sprawl.

Social inequality in Brazil, one of the greatest in the world, is clearly represented in urban and rural areas. This fracture is known in cities, but not in its real dimensions: informality/illegality is more the rule than the exception. The production of housing in these peripheral neighborhoods does not have registered ownership of the land, does not result from projects by architects and engineers, does not have licensing granted by city halls, does not observe the legislation on land use and occupation or the building code, nor is it backed by real estate financing or the participation of construction companies. In some metropolises, this process is responsible for most of the built space, with tragic consequences for the environment, transport and health. These cities without a State and without a Market (read formal capitalist market) are produced and “managed” by parallel structures: organized crime factions and militias that rely on some collaboration from the public power, as shown by research by the Fluminense Federal University (UFF) recently disclosed.

It is not for lack of laws and plans that our cities are as they are. The Brazilian urbanistic legal framework is very advanced, especially the City Statute, celebrated all over the world. By law, the Master Plans should necessarily be participatory and democratic, in addition to necessarily incorporating budgetary guidelines. But our legislation is not effective. It is not rarely unknown by the judiciary. The fact is that the Master Plan regulates a part of the cities: the formal city or the market city.

Even in the formal city, the occurrence of “works without plans and plans without works” is very common, ignoring the guidelines of the Master Plans. Subways, bridges, viaducts, new avenues, that is, a large part of the public investment in works is directed by a LOBBY which is guided by the capture of real estate or land rents through the increase in property prices, and not by the need of the majority of the population that suffers daily from precarious housing and mobility. As examples, the monorail in São Paulo, which crosses high-income neighborhoods connecting them to the Guarulhos airport; the BRT carioca, which connects Barra da Tijuca to Galeão airport; Salvador's subway, which also goes to the airport; the Fortaleza VLT, among many others.

Although in a precarious way, the urban legislation and the Master Plans guaranteed a certain quality for part of the urban population, until the neoliberal tsunami aided by monetary liquidity, or the financialization of the economy, defined the real estate market as one of the priority investment fields. With the pandemic of the new coronavirus, the increase in unemployment, hunger and violence, collective and even administrative evictions also increase. Approximately 10.000 families were evicted between March 2020 and February 2021. Almost 95 thousand families are threatened with eviction, according to the coordination of the Zero Eviction Campaign. Cities are experiencing a double tragedy in the middle of the pandemic: that of the speculative real estate offensive on one end and the deepening of poverty on the other, with the growth of the real estate market not responding to the needs of the majority of the population who do not have enough income to pay for a financing for the purchase of housing, or following the increase in rents defined by the IGP-M.

Despite the scenario, these offensives are not without answers. They are opposed by groups made up of professors and university students, social movements, NGOs, professional entities – architects, engineers, lawyers, social workers, doctors, etc. – in numerous cities, as shown by the BrCidades network. The local Public Defender's Offices are frequent presences, as well as parts of the Public Ministry and even magistrates. An example of these mobilizations appears in the capital of São Paulo. The Frente São Paulo Pela Vida – which brings together approximately 500 entities, collectives and movements of society – opposes the revision of the Master Plan during the pandemic, a moment in which the majority of society is unable to participate in the process, as determined by the Statute da Cidade – whether in view of the health restrictions imposed during the period, which determine social distancing and isolation of infected people, or due to the impossibility of virtual communication, given the insufficient internet access in households. The Frente São Paulo Pela Vida claims that the revision of the Master Plan is not urgent. It demands, however, an emergency agenda against the established economic and humanitarian crisis that takes care of hygiene, health, food, housing, communication, mobility and income conditions for families and small entrepreneurs in the municipality.

The reconstruction of democracy in Brazil cannot do without the role of capillarized participation that multiplies on the ground of cities promoting information and citizenship. Participatory democracy – in neighborhoods, schools, churches, clubs, among others – allows subverting the manipulation of social media algorithms and shedding light on what the mainstream media treats as a minority context of favela residents. 85% of the Brazilian population that is urban and lives daily sacrifices in the cities, but are not reached by debates about laws that interfere in their living conditions. It is necessary that the Master Plans leave the rhetoric, leave the condition of fetishes, to become plans of action. It is urgent to commit public investment to an Action Plan.

*Erminia Maricato is a retired professor at FAU-USP, founder of LabHab-FAU-USP.

* Pedro Rossi He is professor and coordinator of the architecture and urbanism course at UNIESP and member of the Coordination of the BrCidades Network.

Originally published on the magazine's website CartaCapital.


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