What is a brazilian “Operação Urbana”?

by Ricardo Trevisan, architect and city planner

The Operação Urbana definition from FAUUSP professor Csaba Deák, PhD: a tool for urban intervention, developed from french ZAC (Zones d’Aménagement Concerté) and from São Paulo previous experience on ‘operações interligadas’ (late 1980’s). It has been largely used on increasing land buiding potential, against a collateral private funding for public urban actions.

This disposal was consolidated by the 2001 Federal Law “Estatuto da Cidade” (a kind of “Cities’ Act”), which states that “operação urbana” is one package of public development and disposals managed by the prefecture (brazilian smallest sphere of public power) and it’s a collaboration of properties’ owners, dwellers, permanent users and investors. The goal is to get structural urban changes, environment benefits and social improvements.

Actually, the “Operação Urbana” is a way to make urban renewing projects to come true with public and private funding.

Brazilian cities’ master plans can set three reference built-land area ratio, called Coeficiente de Aproveitamento (CA):

a) minimal CA: if built area is under this ratio, the urban land is signed as not performing its expected social function and can have its taxes increased up to 15%. After that, it can be expropriated by the government. The owner is refunded by public debt securities along ten years;

b) basic CA: if built area is up to this ratio, brazilian law assume density of population has low impact on urban facilities (ther is no need of facilities growing or improvement). No collateral is due to prefecture.

c) maximum CA: this is the higher built-land area ratio developers can have paying an extra tax to prefecture (collateral). It is called Outorga Onerosa. This money finance public works, usually facilities expansion in urban outskirts.

All these disposals are respected, but the Operação Urbana goal is urban renewing. It is capable to transform whole urban sectors, if used with intelligence.

How does Operação Urbana works?

The government defines the limits of intervention by law. Inside these boundaries the payment of Outorga Onerosa (extra tax to uso maximum built-land area ratio, also called CA) is done to a specific fund and the money is used inside this area. This rule is defined by brazilian Federal government.

In some cases, the government (of the city) sells this extra tax payment through a kind of security named CEPAC. (Certificados de Potencial Adicional de Construção), also regulated by the federal law Estatuto da Cidade. It has the advantage to have better governance, it needs approve by CVM, a severe federal organism to equity securties valitation.

How does CEPAC works?

The city issues CEPAC as a security. Private real estate developers use them to pay for aditional built-land area ratio inside the Operação Urbana boundaries. The CEPAC is the only way of doing this payment inside those limits, and is sold by audiction in many issues. Each issue has one ore more audictions.

In São Paulo city, the audictions are organized by Bovespa.

The CEPAC prospect must specify the public works will be done with that funding.


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