Put Vitor Antony Ferrari and Ivan Kubala

Land regularization is not a topic discussed by most Brazilians, and in the state of São Paulo alone, more than 10 million people are affected by irregular property — the result of invasions, appropriations, etc.

In the absence of a private property title, families living on the lot suffer from several consequences. That is, when a citizen does not have a regularized property title, the citizen in an informal situation does not have a formal address or any officially recognized proof of residence. Thus, as a consequence of this factor, the entire relationship of the citizen with the formal systems is compromised, preventing him or her from having a postal code, and consequently having a bank account, precarious or non-existent urban structures (lack of basic sanitation).

Without proof of residence, citizens are prevented from integrating into the formal banking and financial system. As a result, their credit ratings tend to be the worst (citizens below the poverty line), since there is no real estate to provide more solid collateral structures.

It is worth remembering that the government cannot allocate funds to irregular land, that is, on the city hall map, irregular residences are listed as “non-existent”, thus, as a consequence of the phenomenon, the city hall cannot structure the land for housing — causing the people of the area to live in undignified conditions.

This type of problem is not something that can be solved in a matter of days or weeks, especially because of Brazilian legislation, which makes the regularization process even more difficult. To achieve this, a set of measures is needed to solve the problem of informality in the real estate market. A Bill that aims to facilitate the resolution of this problem was PL 413/2020, authored by Deputies Vinicius Poit (NOVO), Paulo Ganime (NOVO), Adriana Ventura (NOVO) and Kim Kataguiri (DEM).

The project foresees that companies, individuals, residents' associations and other types of private entities may submit land and urban regularization projects in areas of public or private property. Currently, only city governments can propose regularization of lots.

According to the text, once the bill is approved, land regularization may begin to require payment by residents to ensure the financial sustainability of the project. It will also be possible for the owner to transfer the lot to the bank in trust for projects not funded by the government, thus facilitating the obtaining of bank financing.

The deputies argue that the self-financing model of land regularization proposed by the text is beneficial at a time when city governments do not have the capacity to invest and favors municipal coffers. As stated, “Once land regularization of previously informal areas is completed, the possibility opens up for the city government to start charging property tax,” they state.

Furthermore, the text prohibits municipalities from setting minimum area for lots, as is mandatory under current legislation. In addition, Bill 413/2020 also allows the legitimization of possession of urban properties located in areas owned by the public authorities.

Despite the importance of the Bill, it has not yet been approved by Congress. This would be an alternative model for land regularization in Brazil, since it involves private financing and public-private partnerships.