In 11 years, the São Paulo City Council has approved nearly 6 thousand projects with units focused on social housing, so-called Social Interest Housing (HIS) and Popular Market Housing (HMP). Since 2014, when the city’s master plan encouraged the creation of this type of property, 5,967 licenses have been granted to interested companies.
Data from the Department of Urban Planning and Municipal Licensing (SMUL), obtained by Capitals Through the Access to Information Act, 2020 was found to be the year with the highest volume of licenses, with 872 licenses issued.
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The inclusion of units for low-income residents in large projects became attractive to construction companies because it began to guarantee urban benefits – including the construction of high-rise buildings in valuable areas at no additional cost.
The policy is designed to move residents with household incomes of up to 10 minimum wages to areas close to job concentrations and public transportation routes.
However, in recent years, part of these apartments, which were supposed to serve this population, became the target of investigation by the São Paulo Public Ministry (MPSP). Many of the units were purchased by investors and began being used for short-term rentals on platforms such as Airbnb – a practice now banned by the city council.
The investigation became a public civil suit, and the case also came under the radar of the São Paulo City Council, which opened a Parliamentary Commission of Inquiry (CPI) to investigate the fraud. The members of the Council intend to prepare a draft law to correct any problems in the current legislation on this subject and to tighten the rules already in place.
The City of São Paulo says it has identified, through notifications and fines, cases where there is evidence of fraud on public policy. 28 fines have been imposed so far. As it turns out CapitalsHowever, the majority of scammers are low-storey buildings, located on the outskirts of the city, and not in the expanded center, where the practice of fraud in public policy has gained strength.