Raising municipal revenue through air rights: A case study of São Paulo, Brazil
Cities across the world have ample plans to invest in necessary infrastructure and public assets, but these are often devoid of clear strategies on how to fund them.
In São Paulo, the municipality addressed this challenge by pioneering the use of "air rights". This often underused land value capture (LVC) instrument can be a mechanism to mobilise substantial public resources by recouping part of increase in land value generated by public investments and regulations.
Authors
Flavia Leite
PhD Student, University of California - BerkeleyCamila Maleronka
Professor, University of São Paulo
Juliana Oliveira-Cunha
Policy Economist, International Growth CentreCaterina Soto-Vieira
PhD Candidate in Economics, London School of Economics and Political Science (LSE)
Nick Tsivanidis
Assistant Professor, University of California - Berkeley-
São-Paulo-air-rights.pdf
PDF document • 3.13 MB
Although both instruments aim to monetise these rights, their design and impact differ substantially. Drawing on descriptive analysis of administrative and survey data, as well as interviews with developers and policymakers, this case study examines how the two instruments work on the ground, including how they perform in terms of revenue generation, investment, and urban development outcomes.
The discussion highlights key considerations and lessons for other cities contemplating the adoption of air rights.