The most democratic instrument of the City Statute (Brazil, Lei 10.257/2001), and the most neglected. Every Brazilian city with a master plan may use it. Almost none charge what they could.
Charge for Additional Building Rights, OODC. Instrument set out in arts. 28 to 31 of the City Statute. It allows the municipality to require a counterpart payment from any developer that wants to build above the basic floor-area ratio of a zone, up to the maximum floor-area ratio established by the master plan.
Four articles of the Statute are enough to define the instrument. Anyone who has read arts. 28 to 31 has read the OODC.
The engineering of the charge for additional building rights is leaner than that of CEPAC. It involves only three agents. The master plan defines the authorization and the limits. The specific enabling law sets the calibration. The city government collects at the project approval stage. The simplicity is both a strength and a weakness: with no external regulator, the instrument depends entirely on the consistency of three municipal decisions.
Sets the basic floor-area ratio (free of charge) and the maximum floor-area ratio (paid) for each zone of the city. Designates the areas in which the charge for additional building rights may be levied.
Establishes the formula for calculating the counterpart payment, the cases of exemption, and the form of the counterpart. Without this law, the instrument exists and does not function.
Applies the formula to the submitted project, receives the counterpart payment at the approval stage, and issues the building permit. The funds are earmarked for the purposes listed in art. 26.
The formula varies from city to city, but in general it combines five variables. The result of the multiplication is the amount of the charge owed by the development. Calibrating the factors so as to collect revenue without rendering projects unfeasible is the most delicate task in Brazilian urban policy.
Art. 31 of the City Statute mandatorily earmarks the funds collected for the purposes listed in art. 26 of the same law. Eight purposes are in force (inciso IX was vetoed). Some cities operate this earmarking through dedicated municipal funds, such as FUNDURB in São Paulo. Others record the earmarking in the current budget and risk losing traceability.
The two instruments belong to the same conceptual family: both are ways for the municipality to capture part of the value it creates itself by allowing construction above the basic parameter. They operate at distinct scales and with distinct governance arrangements.
| Axis | Charge for additional building rights, OODC | CEPAC |
|---|---|---|
| Legal basis | Arts. 28 to 31 of the Statute | Arts. 32 to 34 of the Statute, plus the law of the OUC |
| Where it applies | In any zone of the master plan | Only inside the perimeter of an OUC |
| Who regulates | Municipality, through the master plan and a specific enabling law | Municipality issues, CVM registers and supervises |
| How it is paid | Directly to the municipality at the project approval stage | With certificates acquired at public auction or on the secondary market |
| Tradability | No security, no secondary market | Book-entry security freely traded |
| Earmarking | Eight purposes of art. 26, frequently operated through FUNDURB | Exclusively within the operation itself (art. 33, § 1º) |
| Scale | Development by development, aggregate revenue reaching the billions in large cities | Large-scale operation, hundreds of millions to billions concentrated within a single perimeter |
| Who uses it | Any Brazilian city with a master plan | In practice, only São Paulo and Rio de Janeiro |
The provision of the charge for additional building rights in the master plan is practically universal in Brazil. Effective collection, at a scale consistent with the densification authorized, is the exception. Three failures, usually combined, explain the gap.
From the master plan to the draft of the specific enabling law, from the calculation formula to feasibility modeling. Urban value capture is not decreed. It is calculated, calibrated and collected, development by development.
Master plan diagnosis, drafting of the OODC enabling law, calibration of the formula, urbanistic feasibility modeling.