Olinda: Reaching new heights or lows?

Screen Shot 2014-12-29 at 2.20.52 PMThe tweet above reflects my initial sentiments upon seeing the top news story (“Olinda can have taller buildings”), from the beginning of November 2014. Below is the story from Diario. The problem is not the five-floor increase, per se, but the fact that this will open up the possibility in the future of “another 5 floor” increase. The question, as always, is cui bono?

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“In 2015, contractors who wish to build in Olinda will have a new incentive. A bill is being sent to the City Council to ease the maximum building height of buildings in the region.

The new standard, which should be approved and sanctioned the first months of 2015 will increase by up to five floors, beyond that which is stipulated in Olinda’s Master Plan (Law No. 026/2004). The change can add about 40 units per building constructed, depending on the size of the land, which will generate average earnings of R$1 million to the contractor, and an exponential increase to the collection of municipal coffers.

The expansion is planned only in some areas within the city limits as the Bairro Novo neighborhood, Casa Caiada, Jardim Atlântico, Rio Doce, Bultrins and the areas surrounding the PE-15 highway, just in places with the highest population density and that are more attractive to construction companies. The Historic Center will not be touched.

According to the municipal secretary of Planning and Urban Control, Estevão Brito, the change has been a long-standing demand by contractors. “We have a great concern for the preservation of the city and Olinda lifestyle. But we are allowing the building height increase to meet the housing deficit and stimulate the local economy,” he says.

Brito explains, however, that the bill will allow for the extension on condition that the contractors invest a corresponding monetary value to this increase, as an onerous grant, via construction of public squares and roads within the city. Despite advances, Romero Luz, director of Flamac real estate, a company waiting a year for the approval of a 12floor building in Bultrins, says he will not benefit from the new law.

We’re losing money because the project is stopped. Building in Olinda is expensive. The number of floors is very limited and the ‘impact’ concept there is very rigid. In Recife, a building is consideredimpactful’ if it takes up more than 20 thousand square meters, in Olinda it’s five thousand (m2),” he says.

Construction company project changes

The construction company Flamac waited a long time for a change in the legislation but gave up the initial project. We would not have a way to keep the price of the land down any longer and so we decided to reduce the number of floors. From 12, we went to 10. With this, we will lose 16 apartments, which is a great loss,” said the director Romero Luz.

Like him, Claudio Souza, commercial director of Romarco, a construction company with several projects in Casa Caiada, is not satisfied with the bill. “I think the city should talk more with the construction sector before drawing up such a document, because we have suffered enough to build in Olinda. There are many residents there offering me land, but it doesn’t make sense financially. The numbers do not add up,” he adds.

He believes that with greater flexibility (permission of around eight floors), the city would have a development leap. Olinda has a small revenue. With low tax, there is little money for the city to invest in itself. For every two houses in Olinda, which generate only two IPTUs (housing tax), that can be replaced by 160 IPTUs, the average of a 20-story building.

In addition, the director of Romarco estimates that a 20 floor operation generates up to 80 direct jobs, without mentioning those that are indirect. “With the projects that the city could get, many people would not need to leave Olinda to get a job.” – Source (PT)

For another angle on the same issue, see this post (PT) from Caderno Recifense

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