SP experiences a micro-apartment boom in uptown – São Paulo

A change of landscape is underway in the bourgeois and bourgeois neighborhoods of São Paulo, and goes beyond the obvious verticalization. Trade continues at street level: no longer in houses converted into shops, but on the ground floors of buildings. Among new apartments, one of the main trends is to be compact: 250,000 launches between 2014 and 2020. On the other hand, business buildings, if associated with Sao Pauloare becoming rarer, a movement that some experts consider irreversible.

Among the addresses most sought after by the market are Jardins (central region), Pinheiros (west) and Vila Mariana (south). The change tends to bring a new profile to the neighborhood – such as younger audiences, singles and couples without children, in addition to attracting more businesses and services. For most new residents, this is an opportunity to live closer to work and the city center – acquiring larger properties in central neighborhoods is impractical for young people. On the other hand, the former residents fear worsening traffic and noise pollution in neighborhoods many of which have a more residential profile.

We are witnessing a boom in studios and small apartments for the middle and upper classes (up to 45 m²), mainly launched after 2019 and not completed, according to a survey by USP engineers and architects. For this reason and for the fact that several of the properties already delivered have been sold, but are still without inhabitants, the transformation is gradually being felt. With the end of the isolation caused by the pandemic, the former inhabitants also evoke a feeling of increased insecurity, amid the profusion of construction sites in the streets. For specialists, the question is whether there will be support for compact housing or whether expectations will be disappointed, with buildings full of apartments waiting for tenants.

The rise of compacts is catapulted by a 2016 decree linked to the zoning law, which allows them to be classified as “non-residential”. Regardless of whether they function as a “lodging or housing service” in practice, categorization provides access to stimuli from the Master plan (from 2014) – because dwellings are not counted in buildings when they total 20% of the total (they can be built “free of charge”, without paying the fees usually required) and are in a building with residences, because it configures “mixed use”.

Since the decree was issued, 64 “mixed” buildings with non-residential kitchenettes and residential apartments have been launched by 2020, according to the USP survey, authored by Carlos Henrique Yui Morello, Gabriel Kiyoshi Wadamori Lima, Lucas Fabri de Araújo and Fernando Shikô Toma, under the direction of Professor João Meyer. The team cross-referenced data from the Brazilian Society for Heritage Studies (Embraesp), work permits and developers.

The count does not include “budget” properties, up to R$240,000, sometimes just as small – of these, 211,100 were launched from 2014 to 2020. Most new studios and micro apartments are concentrated in upscale southern and western neighborhoods. There are also a significant number in Santana (north) and in part of the east, notably Tatuapé. About half are around subway and train stations and bus lanes, areas with legal incentives for population growth.

Reduced footage is a trend in foreign metropolises, in the most popular areas. In 2021, a video of a New York resident went viral for the size of the house, in which the bathroom sink was next to the kitchen counter. This year, an article in the New York Times raised the question “Do I really need a bathroom?” about the experience of a decent-sized apartment with a shared bathroom. São Paulo, in practice, is far from this situation, as it is still considered low density.

Among developers, in addition to the incentives of the Master Plan, we are betting on compacts to redistribute parking spaces, which can only be built without additional bills if they are limited to the same number of apartments. For example: the studio is sold without space for a car, and another unit, with more bedrooms, has two spaces.

In terms of behavior, the companies speak of a growing public who live alone and in couples without children, open to solving daily requests in common areas (such as the laundry room and the terrace) and living more actively in the neighborhood, for whom height would not be a problem. . In addition, the format is adaptable for short-term accommodation (AirBnb), with a size similar to hotel rooms.

Market intelligence analyst Thais Carvalheiro, 34, is among those who bought a compact apartment. For a year, he lives 34 m²) in Cambuci, central region. “There is no way for a bourgeois to buy the first 60 m2 apartment in the region. It’s impossible,” he explains. She even looked for options in the Sé, but the possibility of not having permanent neighbors (only guests on short-lived platforms) discouraged her. Before moving in, he hired an architect to optimize the space – the TV, for example, can face both the bedroom (opened by a sliding door) and the living room.

The idea is that the property is a first step and, in the medium term, can be sold to buy another, but not necessarily so much bigger. As she lives alone, she feels that the current size is sufficient. “If I lived with other people, I wouldn’t have room for privacy, only in the bathroom.”

Compaction also impacts properties with more bedrooms. Commercial Director Ana Albinati, 31, lives with her husband in a 34m² property, with 2 bedrooms, one of which has been converted into an office. Although he affectionately calls it a “matchbox” and chooses to have up to five visitors at a time, he thinks that’s enough. “In our building, there are people with three children, with two Labradors, in these factories.”

Studios and one-bedroom compacts have particularly attracted investors, all the more so with the record low interest rates from 2018 to 2020. They are intended, in large part, for rental. This is the case of engineer Renato Oliveira, 47, who acquired two compact cars in four years, both on long-term rental. “I looked for noble regions (Gardens) and close to the center.”

USP’s João Meyer acknowledges the demand for compacts, but considers it to be less than the supply of new versions, even counting fixed accommodation and short-term rentals. “The vacancy will be huge.” He believes that the classification of this standard as “non-residential” should be reviewed. In practice, some of the micro-units classified as “non-residential” are sold as housing from the outset and can even be modified later to increase their size.

“The real estate market has basically made studio apartments to stay. The supply of residential properties, in fact, which will be rented out for the person to live in, has increased. And that was not the purpose of the law (Master Plan), which was to generate more jobs (near housing),” he says. The law review process has been paralyzed since Monday, after a preliminary decision deemed the accessibility of the digital platform created by the town hall to be insufficient.

For Antonio Claudio Fonseca, professor of town planning at Mackenzie, the proliferation of pacts also dialogues with the “change in the culture of living in the city”, which sees public space as a power to be exploited, and the decline in the income of population. “It’s happened before and we think it’s going to accelerate a lot in the years to come. It’s a revival of the episode from the 1940s, with kitchenettes.

For Nabil Bonduki, a professor at USP who was rapporteur for the Master Plan in the Chamber, developers can exaggerate on compacts, but that will be regulated by the market. “Diversity in size and type of residents is not necessarily bad. Copan (building in República, downtown) has a four-bedroom kitchenette, and everyone thinks it’s wonderful,” he says.

Due to the number of studio launches, Setin even returned land for developments that would only be paid for if they included micro apartments. Founding partner of the promoter, Antonio Setin believes that some of the companies in the sector have set up compacts where there is no vocation for the profile. “The market has been driven to manufacture products like this, regardless of the real estate vocation,” he points out. “Just to have parking spaces.”

Still with part of the projects aimed at this sector, Vitacon estimates that more than half of the developer’s target audience is single, divorced, “expatriates living in São Paulo” and couples who have decided not to live together. “It’s a less childish, more pet-friendly, and more single public profile. Something that’s here to stay,” says CEO Ariel Frankel.

There are also the dissatisfied. Coordinator of the Pró-Pinheiros movement, publicist Rosanne Brancatelli, 59, calls the verticalization taken advantage of by the Master Plan “destruction of the landscape”, because it involves the demolition of houses and small buildings. “The problems for the future will be enormous,” he laments, referring to the possible increase in traffic. “These are huge buildings in narrow streets.” The Coletivo Pinheiros, which has about 70 merchants, says that small establishments have been replaced by franchises in the face of high rents and the crisis generated by the pandemic.

“There must be a densification in these regions, taking care not to ignore the areas of urban and cultural interest”, believes Bonduki, who defends taking more advantage of the transport structure. “There’s no point in spending billions on subway miles, millions per station, and getting no return.”

Exclusively commercial buildings, in turn, lose space. From 2012 to 2016, there were 732 new projects, compared to 249 the following five years, indicates the Diagnosis of application of the Master plan made public by the Town hall in April. The decline is 65%, affects all areas of the city and began even before the pandemic, according to data from the town hall.

Meyer points out that this sector depends on market niches and more geographically concentrated demands. “Corporate properties, with high technology, will always be in demand,” he says. The survey identified a jump from 91 to 456 mixed buildings launched, or 401% more in ten years. But the distribution is uneven. The increase was 1031% in neighborhoods such as Vila Mariana and Pinheiros, and did not exceed 15% near metro stations further south on line 5-Lilac, such as Giovanni Gronchi and Capão Redondo.

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