The property tax in Brazil is an annual tax on urban land and buildings administered at the local government level. The tax base is derived from market value and is standardized across different local authorities, although procedures for establishing the tax base and rates vary considerably.

In the city of Porto Alegre, the cost approach is the method traditionally employed for assessing real estate property for taxation purposes. No legal requirement exists concerning intervals between valuations, and the last general valuation took place in 1991. In years without valuations, the tax base has been readjusted uniformly according to prevailing inflation rates. The property tax rates are progressive, with sliding rates for six classes of assessed values to insert an element of “ability-to-pay” into the system. The tax is calculated by the sum of each portion of the assessed value multiplied by the respective rate for that class. The maximum rate for residential property reaches 1.2 percent.

Analysis of the Current System

A recent analysis of the property tax system in Porto Alegre sought to provide a full examination of the relationship between assessed values and sale prices. Some of the results are summarized below.

Assessment level and uniformity

Residential apartments in Porto Alegre were assessed on median at only 34 percent of their sale prices, much less than the statutory level of 100 percent. Using the coefficient of dispersion about the median [COD] of the assessed value to sale price ratio as a measure of variability, the results showed a low degree of assessment uniformity (approximately 36 percent). In Brazil, there are neither local nor national standards for evaluating assessment performance. By comparison, a commonly accepted degree of uniformity for single-family residential property in the United States is a coefficient between 10 and 15 percent. Figure 1 illustrates the ample spread of the assessment ratios in this study.

Factors determining assessment inequity

To examine the simultaneous effects of the factors determining assessment bias, a multivariate model was used to investigate both vertical and horizontal inequities. The model detected a large number of factors causing systematic differences in assessment levels, including location attributes, building quality, building year, presence of elevators and similar variables. Vertical assessment regressivity was also identified.

Assessment method

It is plausible to assert that the method traditionally employed for assessing real property, that is, the cost approach, is a major cause of the lack of assessment uniformity identified in this study. Some theoretical weaknesses of the approach are associated with the extensive number of simplifications implemented by the local authority to make its application easier, and these adjustments are likely to have determined assessment bias. Inconsistencies with the standard cost model include the lack of connection between cost tables and the performance of the real estate market, and low correlation between the ad hoc depreciation rates adopted and the reduction in price caused by age, obsolescence, or deterioration of building structures. Furthermore, lack of systematic control over valuation performance seems to have contributed to the high inaccuracy of assessed values.

Time lags between valuations

The method used to make an overall adjustment to assessed values based on prevailing inflation rates for years without valuation has clearly contributed to the reduction of the tax base. For instance, properties were assessed on median at 38 percent of their sale prices in 1993, but only 27 percent in 1995.

Effective versus statutory rates of property tax

Rates for residential property are progressive according to six classes of assessed value. The effective rate results from the actual amount raised from property taxation, without regard to tax evasion, divided by the sale price. The statutory rate results from the expected tax that could be raised per property, if the tax were established on the basis of sale price, divided by its sale price. The effective rate is much lower than the statutory rate and represents on median only 0.17 percent of sale price.

Improper assessment practices have affected the distribution of the tax burden, not only because assessed values do not bear a consistent relationship to sale prices but also because many properties are classified incorrectly. The actual property tax revenue collected in the period under study represented approximately 25 percent of the potential revenue to be raised if assessed values were equal to sale prices.

Causes of Poor Property Tax Administration

Historical factors may help to explain the current poor administration of the property tax in Porto Alegre and its inefficient use as a revenue source. During the 1970s, large transfers of revenue from the central government and private estates to municipalities complemented the revenue raised at the local government level. Consequently, local authorities were not interested in collecting their own taxes, and taxpayers were used to paying insignificant property tax bills. The achievement of good performance in terms of valuation and an acceptable degree of assessment equity were secondary issues.

Recent financial crises combined with the urgent need for public investment in infrastructure equipment and services have stimulated some local authorities to improve their tax systems. However, due to the high visibility of the property tax and taxpayer antipathy, efforts to recover revenue and achieve assessment equity often result in tax revolts. Furthermore, changes in the tax base must be approved by locally elected members of the Chamber of Councilors. Whenever general valuations are planned, the Council members are responsible for supporting capping systems in the name of protecting the poor and retired taxpayers. However, the capping systems actually favor high-income and wealthy taxpayers because low-income and retired taxpayers can receive relief based on their income.

Since 1991, two proposals for altering the property tax base in Porto Alegre have been rejected by the Chamber of Councilors because the estimated value of some properties would have been adjusted over the inflation rate at the time. However, the existing vertical assessment inequity means that high-valued properties are the ones benefiting from poor property tax administration.

Recommendations on Revising Practices and Attitudes

Knowledge about the weaknesses of a particular tax system is fundamental for its improvement, and the analysis undertaken in Porto Alegre provides greater understanding of the current system, the degree of assessment inequity and its main causes. For the first time, the drawbacks and weaknesses of the system are both quantified and measured, including which properties are benefiting from the system and the amount of revenue being lost. Now Porto Alegre has the opportunity to improve its property tax system on the basis of accurate data rather than political expediency.

Several measures would contribute to the overall equity of the tax system while also improving revenue collection to provide the community with higher standards of living:

§ Reassessment of properties based on current market values using the sales comparison approach to assessing residential property, such as multiple regression analysis (MRA), artificial neural networks (NN), or multilevel modeling (hierarchical linear models – HLMs).

§ Systematic control over assessed property values, including testing before the release of the valuation roll to recognize and adjust for eventual bias in the estimated tax base.

§ Assurance of regular assessment updates.

§ Establishment of market adjustments to assessed values based on ratio studies for years without valuation.

§ Transparency in the administration of the property tax, especially in graduating the size of the tax burden, instead of overriding estimates of market values arbitrarily for this purpose.

§ A definition of minimum standards for assessment performance at the local or national level.

The achievement of property tax equity and the provision of a high standard of public services are common goals for politicians, the community, administrators and others. Public officials need to take advantage of new technologies for property tax assessment and data gathering to make tax systems operate both efficiently and fairly. However, technical improvements are just a part of the process. It is also vital to work on public opinion. An important step is to encourage dialogue between community residents and politicians, showing the drawbacks of the current system and the consequences of keeping its structure. Confidence in the property tax system is likely to increase if revisions are discussed seriously in the public domain.

Claudia M. De Cesare is an assessor in the Department of Local Taxation for the Municipality of Porto Alegre. She received a Lincoln Institute Dissertation Fellowship in 1999 to support the research reported here and in her Ph.D. thesis, which she completed at the University of Salford in England. The Lincoln Institute is continuing to develop educational programs with administrators, politicians, scholars and the community in Porto Alegre to help improve the equity and efficiency of the property tax system.

Proposition 13, adopted by a referendum in California in 1978, was the most notable in a series of relatively recent actions to limit the property tax in the United States, and many experts view it as a watershed in state and local public finance. The property tax in virtually every state is now limited to some degree by statutorily or constitutionally imposed base restrictions, rate limits or revenue limits. These limits have influenced the use of the property tax, and there is substantial evidence that the rate of growth of the property tax has declined. The mix of funding for local expenditures also has changed, as cities, towns, counties, school districts and special districts are relying more and more on user charges, special fees, franchise fees and local option sales and use taxes.

The limits on the property tax also have many policy and expenditure implications. There is evidence, significant in some cases and simply indicative in others, that the property tax restrictions have fostered a variety of policy outcomes in the delivery of services to citizens. Some of these tax limits have affected educational outcomes: reduced the number of teachers in classrooms, reduced the qualifications of individuals entering the teaching profession, and reduced student performance in math, reading and science.

The literature detailing the possible effects of property tax limits on local government also reports the following changes: reduced infrastructure investment by local governments, reduction in the rate of salary increases for public employees, and a shift to state-controlled revenue sources that has led to the centralization of power toward state governments (Sokolow 2000). In this context, property tax limits may reduce intergovernmental competition and the discipline on the growth in government that results. Few observers would disagree that Proposition 13 and its imitators in other states have resulted in substantial nonuniformity in the property tax system (O’Sullivan, Sexton and Sheffrin 1995).

These outcomes illustrate the competing tradeoffs that accompany property tax limits. Depending on individual perspectives these consequences could be considered a plus or a minus. Supporters of Prop 13 and its derivatives want lower property taxes and less government (at least for others), but it is unlikely they also want less government for themselves. David Sears and Jack Citrin (1982) have labeled this behavior the “something for nothing” syndrome.

Therese McGuire (1999) notes that among public finance economists the advantages of the property tax for funding local governments approach “dogma.” In an opinion survey of more than 1300 Canadian and U.S. members of the National Tax Association, 93 percent of the respondents with training in economics favored the property tax as a major source of revenue for local governments (Slemrod 1995). This result probably explains why the World Bank and other international advisory groups are spending significant sums of money and offering assistance to improve and implement the property tax in developing and transitional countries. However, it also presents an interesting dilemma: experts support the property tax but voters want to limit it. Why the conflict?

Advantages of the Property Tax

The property tax provides local governments with a revenue source that they can control and avoids the strings that normally accompany fiscal transfers from a regional, state or national government. The result is local autonomy that allows local governments to select the level and quality of services demanded by local citizens. The property tax is relatively stable over the normal business cycle and provides a dependable funding source to local governments that must balance their budgets. Stability is important for certainty in operating budgets and is critical in the financing of long-term debt obligations.

The importance of a stable revenue source has been painfully exposed during the recent economic downturn in the U.S. State governments that are funded by less stable revenue sources are scrambling to balance their current and future budgets by cutting services and increasing taxes and fees. The fact that the property tax is imposed on an immobile base and is difficult to evade also makes it an attractive source of revenue for smaller governments.

Political accountability is another important element of the property tax. A noted function of a responsive tax system is one that provides price signals, or political accountability, on the cost of government to citizens. Compared to almost all other taxes, the direct and visible nature of the property tax suggests that it scores relatively high in this regard. The case for political accountability becomes even stronger when zoning for land use is included in the discussion. Bruce Hamilton (1975) has demonstrated that the property tax, when coupled with local zoning, becomes a benefit tax that leads to efficient outcomes. The combination of property taxation and zoning is the way many public finance scholars describe the characteristics of local finance in the U.S.

Disadvantages of the Property Tax

On the other hand, the property tax is difficult to administer. It requires substantial administrative effort on the part of public officials to discover and maintain the property records of every land parcel. Even with effective methods to discover property, determining its taxable value has always been a challenge to public assessors. Unlike other sales taxes and income taxes, there is no annually occurring event to place a market value on unsold properties. Assessors must value property as if it had sold. Assessors also confront limited budgets and a finite number of trained experts.

Nevertheless, we want public assessors to value property, land and the improvements to land accurately, and to do so as inexpensively as possible. Fortunately, progress has been made in the technical area of property valuation. It is now common to find large and small taxing jurisdictions using statistically driven valuation processes to estimate property values based on carefully designed hedonic models. The technical advantages of statistically driven appraisal systems in terms of efficiency and effectiveness are substantial.

However, the advantage of accurate and timely property appraisals highlights what I believe is a fundamental problem with the property tax and why it receives such low marks from taxpayers and elected officials. When an assessor conducts a reappraisal, the outcome is likely to increase assessed property values. If there is no reduction in the tax rate that was applied to the old tax base, the local government that relies on the property tax receives a potential windfall. It is not surprising, then, that in such situations the assessor and the assessor’s office are quickly identified as the villains of the tax increase. More importantly, these circumstances are powerful incentives to not reassess property regularly and thus avoid the angry backlash of property owners and voters.

Public finance experts have an expectation that the assessor will follow the legal and professional requirements and value property according to state law and professional practice. But, because of the uncertain political outcome when property is revalued, the assessor may act in self-interest, understandably being more concerned about reelection or reappointment than in ensuring that property is revalued properly. A system has been created that requires a reappraisal process and penalizes any assessor foolish enough to ignore it, but over time such avoidance behavior can foster nonuniformity in the property tax.

Political Challenges and Full Disclosure

We have solved many of the technical problems of property appraisal but not the political problems. Nevertheless, I believe there is at least one viable response to the political challenges: states and assessors can adopt a process of truth-in-taxation or full disclosure. The logic of full disclosure design is simple. A chilling effect on property tax growth is posited to occur when the “real” causes of increased property taxes are exposed to property owners. Helen Ladd (1991) states that full disclosure laws “tighten the link between taxpayer voter demand and local budgetary decisions.”

The standard annual tax notice, common in thousands of local tax jurisdictions, does not create a similar chilling effect. A typical tax notice informs property owners about the assessed value of the property, often a modest percentage of market value, tax rates listed in mills, and the total taxes due. If any increases in the assessed value of properties are not offset by reduced tax rates, the new assessed values create additional revenue for the taxing authority. In fact, elected officials can honestly boast that property tax rates have not changed and thus avoid most of the responsibility for any tax increase. An analysis of the behavior of elected officials in Massachusetts found precisely this type of behavior following several cycles of increases in assessed value due to revaluations (Bloom and Ladd 1982).

A property tax full disclosure law generally proceeds in the following manner. Local taxing districts are required to calculate a rate that, when applied to the tax base, produces property tax revenue that is identical in amount to the property tax revenue generated during the previous year. The rate to accomplish this is often referred to as the certified rate; it is calculated by dividing the new assessed value into the property tax revenue from the previous year. The resulting rate is the rate that, when applied to the taxable value of the taxing jurisdiction, will generate the same amount of revenue as the previous year.

This process forces elected officials to reduce the property tax rate—or at least acknowledge that any increase is their choice. If the elected officials choose not to reduce the rate, a public notice must be given that a tax rate increase is anticipated. The public notice is generally carried in a newspaper with specific requirements about the size, placement and language of the notice. In some states a preliminary tax notice is also sent to the taxpayers before that actual budget is adopted, to announce when and where the particular budget hearings on the issue will be held.

Full disclosure laws are intended to create a system with opportunities for input on property tax rate changes and the subsequent size and mix of government, but not at the expense of informed outcomes (Council of State Governments 1977). Full disclosure laws have the aim of a process to inform citizens and limit the rate of growth in property taxes. Nevertheless, like the property tax, full disclosure laws have not enjoyed universal or even modest acclaim. Researchers hold full disclosure laws in such subdued regard that when studying the implications of property tax limitations they commonly classify states having full disclosure laws among the states having no property tax limits.

It is not surprising that many observers suspect that full disclosure laws have little influence on policy outcomes. In states with full disclosure laws, the property tax increases more rapidly than in states with legally binding limits. This suggests that, because full disclosure laws cannot prevent all growth in the property tax, the strongest antagonists of the property tax and the often single-minded opponents to any growth in government will never find the approach acceptable.

However, I believe that full disclosure laws, like property tax limits, have other positive unintended outcomes. They may facilitate improvements in the administration of the property tax because they create a climate that fosters more frequent property tax appraisals by elected county assessors and more thorough and rigorous intervention on property tax matters by state revenue departments. If I am correct, the result is improvement in property tax uniformity. If this posited outcome is validated, then full disclosure laws can and should be judged beyond their immediate role in controlling the rate of increase in the property tax.

Gary C. Cornia is a visiting senior fellow of the Lincoln Institute this year and a member of the Institute’s board of directors. He is also professor in the Romney Institute of Public Management at Brigham Young University and president of the National Tax Association.

References

Bloom, H.S. and Helen F. Ladd. 1982. Property tax revaluation and tax levy growth. Journal of Urban Economics 11: 73-84.

Council of State Governments. 1977. 1978 Suggested State Legislation 37. Lexington, KY: Council of State Governments, 125-28.

Hamilton, Bruce. 1975. Zoning and property taxation in a system of local governments. Urban Studies 12 (June): 205-211.

Ladd, Helen F. 1991. Property tax revaluation and the tax levy growth revisited. Journal of Urban Economics 30: 83-99.

McGuire, Therese J. 1999. Proposition 13 and its offspring: For good or evil. National Tax Journal 52 (March): 129-138.

O’Sullivan, Arthur, Terri A. Sexton, and Steven M. Sheffrin. 1995. Property taxes and tax revolts: The legacy of Proposition 13. Cambridge, England: Cambridge University Press.

Sears, David O. and Jack Citrin. 1982. Tax revolt: Something for nothing in California. Cambridge, MA: Harvard University Press.

Slemrod, Joel. 1995. Professional opinions about tax policy. National Tax Journal 48: 121-148.

Sokolow, Alvin D. 2000. The changing property tax in the West: State centralization of local finances. Public Budgeting and Finance 20 (Spring): 85-102.

Una versión más actualizada de este artículo está disponible como parte del capítulo 7 del CD-ROM Perspectivas urbanas: Temas críticos en políticas de suelo de América Latina.

Los proyectos de reurbanización a gran escala (denominados grandes proyectos urbanos o GPU) plantean muchas dudas sobre las consecuencias de la urbanización subsiguiente provocada por la intervención. Los GPU se caracterizan por el impacto que tienen en una parte significativa de la ciudad, a menudo con el uso de algunos nuevos instrumentos fiscales o reguladores y la participación de una amplia red de agentes e instituciones. Se espera que estos proyectos afecten los precios del suelo, reciclen la infraestructura y las instalaciones existentes o creen otras nuevas, y atraigan otras construcciones nuevas.

Los GPU como instrumento de política urbana han sido objeto de controversia y debate considerable en toda América Latina. Se argumenta a menudo que promueven la exclusión social y la renovación de edificios para aspiraciones de la clase media, tiene efectos limitados en la estimulación de actividades inmobiliarias y requieren grandes subsidios públicos (a veces ocultos) que a menudo quitan recursos fiscales de otras necesidades urbanas. A pesar de su creciente popularidad en América Latina, existe poca evidencia empírica para apoyar estas críticas.

Este artículo presenta el caso de un GPU introducido en São Paulo, Brasil, en 1996 como una “operación urbana” para reurbanizar un área de ingresos medios que constaba en su mayor parte de hogares unifamiliares que iba a ser atravesada por la prolongación de la Avenida Faria Lima. El proyecto es conocido como el Consorcio de Operaciones Urbanas de Faria Lima (OUCFL). Examinamos los principios económicos que afectan el rendimiento fiscal del proyecto y su oportunidad para recuperar plusvalías, evaluamos los cambios en densidad residencial y analizamos los cambios en la distribución de ingresos y la estructura de la propiedad. Por último, ofrecemos algunas sugerencias de políticas sobre cómo y cuándo usar esta clase de instrumento en función de estas evaluaciones.

¿Qué es una operación urbana?

Una operación urbana es un instrumento legal que trata de proporcionar a los gobiernos locales el poder de llevar a cabo intervenciones relacionadas con mejoras urbanísticas y de planificación municipal en asociación con el sector privado. Identifica un área particular dentro de la ciudad que tenga el potencial de atraer inversiones inmobiliarias privadas para beneficiar a la ciudad en su totalidad. Los índices de planificación municipal apropiados (es decir, zonificación y otros reglamentos sobre coeficientes de construcción, índices de ocupación y usos del suelo) se redefinen según un plan maestro, y las inversiones se hacen en infraestructura nueva o reciclada.

Una operación urbana permite a la municipalidad recuperar (a través de medios negociados u obligatorios) los incrementos del valor del suelo relacionados con los subsiguientes cambios de uso del suelo. En comparación con otros instrumentos de recuperación de plusvalías, estos fondos están destinados o justificados dentro del perímetro del proyecto y serán compartidos entre el gobierno y el sector privado para inversiones en infraestructura urbana y subsidios de las inversiones inmobiliarias privadas para apoyar el proyecto mismo.

Cada operación urbana en Brasil es propuesta por el poder ejecutivo y aprobada por el poder legislativo de la jurisdicción. En el caso de São Paulo, esta autoridad fue creada en la Ley Orgánica Municipal (Constitución de la Ciudad) en 1990, que se incluyó más adelante en la nueva ley de urbanización brasileña (Estatuto de la Ciudad de 2001). Los primeros proyectos propuestos fueron la Operación Anhangabaú (más tarde ampliada como parte de la Operación Centro de la Ciudad y denominada Operación del Centro) y Água Branca, seguida por las operaciones de Água Espraiada y Faria Lima. Después de aprobar el nuevo Plan Maestro de la ciudad en 2001, se generaron otras nueve operaciones urbanas. Se espera que estos trece proyectos afecten del 30 al 40 por ciento del área edificable de la ciudad de São Paulo.

Financiación de Faria Lima

La operación urbana de Faria Lima (OUCFL) fue propuesta y aprobada en 1995 con el objetivo de obtener recursos privados para financiar las inversiones públicas necesarias para comprar suelo e instalar infraestructura con el fin de ampliar la Avenida Faria Lima. Se estimó que estos costos ascendían a aproximadamente US$150 millones, dos tercios para adquisición de suelo y un tercio para la avenida en sí. Al proyecto se opusieron muchos interesados por motivos que iban desde el origen de los fondos (es decir, avanzados del presupuesto local a través de una deuda nueva) hasta preocupaciones del vecindario (una de las cuales pudo mantener sin cambios los coeficientes de edificabilidad [floor area ratio o FAR] y excluirlos legalmente de la zonificación de OUCFL) y problemas de diseño técnico.

Los estudios técnicos realizados en su momento indicaban que sería posible aprovechar 2.250.000 metros cuadrados potenciales más de los ya permitidos por la legislación de zonificación de la ciudad y consecuentemente se modificaron los FAR. Estos derechos de construcción adicionales fueron garantizados contra un pago mínimo del 50 por ciento de su valor de mercado usando el instrumento existente Solo-Criado (venta de derechos de construcción). La OUCFL despertó gran interés por parte de empresarios inmobiliarios. No obstante, este instrumento también fue cuestionado por su falta de transparencia, su enfoque de “proyecto a proyecto”, y la arbitrariedad en la forma en que se establecieron precios relevantes que después se usaron para calcular el valor de los derechos de construcción adicionales.

En agosto de 2003 ya se había autorizado un total de 939.592 metros cuadrados, o casi el 42 por ciento de los 2.250.000 metros cuadrados totales posibles. Se aprobaron más de 115 proyectos inmobiliarios, incluidos casi el 40 por ciento de edificios comerciales y el 60 por ciento de edificios residenciales de alta calidad. No obstante, los recursos (aproximadamente US$280 millones) obtenidos de estos proyectos aprobados no habían compensado completamente los gastos (US$350 millones, incluidos el capital más los intereses) relacionados con la ampliación de la avenida, teniendo en cuenta los elevados intereses reinantes en Brasil durante los casi ocho años desde la ejecución de los gastos. Así, aproximadamente el 80 por ciento del costo (aunque mayor que el anticipado) se ha recuperado mediante el proceso de Venta de Derechos de Construcción. Desde julio de 2004, la compensación de estos fondos de avance se obtuvo mediante el ingenioso y nuevo mecanismo de recuperación de plusvalías conocido como CEPAC, siglas que significan Certificado de Potencial Adicional de Construcción. Un CEPAC representa un metro cuadrado.

La introducción de CEPAC

Aunque los CEPAC se definieron en el Estatuto de la Ciudad de 2001 de Brasil, no fueron aprobados por el CVM (equivalente brasileño de la Comisión de Bolsa y Valores de EE. UU.) como libremente comerciables en la Bolsa de Valores Brasileña hasta diciembre de 2003. El reglamento establece que el precio de cada certificado sea definido por una subasta pública y que puedan ejecutarse en cualquier momento los metros cuadrados correspondientes de derechos de construcción (que también incluyen cambios de uso e índices de ocupación) expresados en cada certificado. El reglamento indica también que se pueden emitir nuevos lotes de certificados (y venderse en subastas) sólo después de confirmarse que los recursos capturados por la venta previa han sido destinados de forma efectiva al proyecto. Para asegurar este uso designado, los ingresos se depositan en una cuenta especial, no en el tesoro municipal. Desde el punto de vista de los inversores privados, esta designación asegura la aceptabilidad de este instrumento de recuperación de plusvalías a su propia valorización. Al emitir un número menor de certificados que el número de derechos de construcción potenciales —es decir, al gestionar su escasez— el sector público puede beneficiarse de la valorización y poder así recuperar la plusvalía “ex-ante” (Afonso 2004, 39).

La aprobación final de los CEPAC para la OUCFL y todos los pasos necesarios para lanzarlos al mercado financiero se produjo a mediados de 2004, y la primera subasta a finales de diciembre de 2004 generó casi 10 millones de reales (unos US$4 millones), correspondientes a la venta de unos 9.000 CEPAC de un grupo autorizado de 650.000 metros cuadrados. Los certificados de OUCFL se vendieron a un valor nominal de 1.100 reales (unos US$450) por metro cuadrado sin un precio adicional como resultado del proceso de licitación.

Esta situación contrasta con la operación urbana de Água Espraiada, que se esperaba que fuera completamente financiada por CEPAC desde su inicio. En su tercera subasta, los certificados ya estaban alcanzando los 370 reales por certificado en vez del valor nominal de 300 reales fijado para esta operación. Una subasta más reciente en Água Espraiada vendió 56.000 CEPAC y alcanzó 21 millones de reales (US$9,5 millones), reflejando un precio por certificado de 371 reales. Este contraste de precios refleja los distintos valores nominales originales en los dos proyectos. En el caso de OUCFL los urbanizadores de compraron (y acumularon) derechos de construcción por adelantado, para beneficiarse de las reglas más flexibles antes de las aprobaciones de la CVM. El precio de los certificados en Faria Lima empezó siendo de más de 1.100 reales porque es un área más valorada. En Água Espraiada los urbanizadores estaban dispuestos a pagar un precio mayor que el valor nominal original, ya que los certificados eran menos caros y había una mayor demanda.

Implicaciones de los precios del suelo

Los precios del suelo sin ocupar y de las áreas urbanizadas experimentaron un aumento considerable en algunos bloques dentro del perímetro de OUCFL durante los años 90, pero disminuyó en otros bloques. No obstante, el precio promedio del metro cuadrado de nueva urbanización descendió en toda la región metropolitana de San Paulo (RMSP) en todas las franjas de precios, cuando se comparan los precios promedio de 1991 a 1996 con los de 1996 a 2000.

Después de controlar una serie de atributos relacionados con el carácter variable de las urbanizaciones y su ubicación, las estimaciones de precios mostraron un aumento relativo inequívoco después de haber dado comienzo a la operación. El precio promedio por metro cuadrado dentro del perímetro de OUCFL aumentó de 1.680 reales en el período de 1991–1996 a 1.920 reales en el período de 1996–2001, lo que representa un aumento del 14 por ciento, mientras que los precios en la RMSP disminuyeron de 1.210 a 1.060 reales, lo que representa un descenso del 12 por ciento en el mismo período (1,95 reales/1,00 dólares estadounidenses en diciembre de 2000). Así pues, el precio por metro cuadrado en OUCFL era aproximadamente un 26 por ciento mayor que el de RMSP. El precio por metro cuadrado en OUCFL fue un 38 por ciento mayor que el precio promedio en la RMSP en 1991–1996, y aumentó a un 81 por ciento en 1996–2001.

¿Fue este aumento capturado por la municipalidad el previsto? Considerando que el costo de la construcción es en promedio aproximadamente igual a 1.000 reales por metro cuadrado, la subasta de 2004 (la única hasta ahora) capturó casi todo el valor añadido a los precios actuales. El sistema previo anterior a CEPAC capturó aproximadamente el 50 por ciento o más, dependiendo de la capacidad y del éxito de los negociadores municipales, y de la exactitud del precio de referencia. CEPAC ahora cambia este porcentaje y el valor nominal del instrumento puede recuperar todo el incremento del valor o incluso más, dependiendo de la relación de este valor nominal con los precios del mercado, y de los resultados de futuras subastas. Al comparar un proyecto de reurbanización financiado completamente por bonos de construcción (como CEPAC) y otro financiado totalmente por tributos inmobiliarios generales, no existe ninguna duda de que el anterior es menos regresivo que este último. Incluso con un tributo inmobiliario progresivo, con tasas que aumenten según los valores, parte de los costos serían pagados por hogares más pobres.

Esta evidencia de que aproximadamente el 80 por ciento del costo del proyecto ya se ha recuperado, en combinación con la subasta de los derechos de construcción restantes mediante CEPAC y el impacto de la apreciación de la propiedad en los ingresos de tributos inmobiliarios actuales, indica que el proyecto no sólo debe pagarse por sí mismo sino que realmente genera una plusvalía fiscal para la ciudad en general en los siguientes cinco o siete años.

En efecto, los cambios causados al sustituir casas unifamiliares más antiguas por nuevos edificios residenciales y comerciales produjeron un cambio sustancial en la recaudación de tributos inmobiliarios en el área de la OUCFL. Muchas parcelas e incluso bloques enteros habían sido ocupados por casas de uno o dos pisos construidas en los años 50. Muchas de estas estructuras tenían derecho a un coeficiente de descuentos por obsolescencia de hasta un 30 por ciento del tributo inmobiliario. Fueron reemplazadas por edificios nuevos, más altos y de mayor calidad para los que el descuento era nulo. Nuestras estimaciones indican que las diferencias en recaudación de tributos inmobiliarios por metros cuadrados construidos puede haber aumentado al menos 2,7 veces y hasta 4,4 veces más. Es decir, el tributo inmobiliario promedio por metro cuadrado aumentó a un mínimo de 588,50 reales hasta un máximo de 802,50 reales desde 220,95 reales si la casa tenía más de 25 años, o desde 179,70 reales si la casa tenía más de 30 años.

Implicaciones sociales

El caso de la OUCFL ofrece una oportunidad única para cuantificar cambios en las características de residentes antes y después de la intervención, ya que hay datos disponibles a nivel de seguimiento del censo para 1991 y 2000, y la intervención empezó en 1996. Nuestro análisis de renovación y desplazamiento de residentes más pobres confirma principalmente las conclusiones de Ramalho y Meyer (2004) de que los ingresos promedio han aumentado relativamente en la mayoría de los bloques dentro del perímetro de la OUCFL. En lo que se refiere a las normas brasileñas, la clase media-alta fue desplazada de la región por el 5 por ciento más rico de hogares en el área metropolitana. Los datos del censo también mostraron que la densidad residencial descendió entre 1991 y 2000, de 27 a 22 residencias por hectárea, aunque estas cifras pueden estar distorsionadas porque reflejan la razón de residencias totales en todo el área, no un promedio de las razones por parcela donde se convirtió el uso del suelo.

Los datos de 1991 indicaron que la población ya estaba abandonando el área de la OUCFL antes de la aprobación de la operación urbana, pero este éxodo se intensificó después de 1996, generando parcelas desocupadas en el proceso de configuración del sitio para acomodar a las nuevas urbanizaciones de edificios altos. Al mismo tiempo, aumentó la densidad de construcción. El número promedio de pisos por nuevo edificio en el área aumentó de 12,6 en el período de 1985–1995 a 16,7 en el período de 1996–2001. El número de viviendas por edificio aumentó de 37,1 a 79,6 en los mismos períodos.

Esta contradicción aparente entre la menor densidad residencial y el mayor número de viviendas se explica en parte por la construcción de edificios comerciales que reemplazaron muchas residencias unifamiliares en parcelas pequeñas o de tamaño promedio. La OUCFL provocó una concentración inmobiliaria considerable, ya que los nuevos edificios comerciales y residenciales reemplazaron las casas y requirieron áreas de suelo más grandes para proyectos arquitectónicos de clase alta. Los 115 proyectos aprobados entre 1995 y agosto de 2003 que solicitaron aumentos en los coeficientes de utilización requerían un total de 657 parcelas, o un promedio de 5,7 parcelas por proyecto.

La combinación del aumento en nivel de ingresos y la reducción en densidad de hogares indican que el proceso de renovación avanzó dentro y fuera de la región de la OUCFL durante los años 90. No obstante, éste no es un caso clásico de renovación para la aspiración de clases medias, donde las familias pobres son expulsadas de un área debido a diversas presiones socioeconómicas. En este caso fueron mayormente las clases medias-altas quienes fueron desplazadas. Excepto en lo que se refiere al pequeño núcleo de favelados restantes (Favela Coliseu), la región estaba ya ocupada por personas que pertenecen a los sectores más ricos de la sociedad.

Algunas observaciones de política

Este artículo contribuye al debate sobre la gestión social de valoración del suelo proporcionando evaluaciones de datos reales y elementos económicos. Estos elementos faltaban en la mayoría de los análisis, y creemos que este vacío en las publicaciones ha contribuido a una interpretación incompleta de las implicaciones de una operación urbana y a recomendaciones de política pública equivocadas.

Nuestra conclusión es que el mecanismo de financiación de CEPAC por sí mismo no aumenta la característica regresiva de las operaciones urbanas, ya que sin esos bonos de derechos de construcción toda la inversión en reurbanizaciones sería financiada por impuestos generales. Si el proyecto de la OUCFL fuera inadecuado en términos de distribución de ingresos, hubiera sido aún peor sin el mecanismo de recuperación de plusvalías. En vez de eso, CEPAC y el mecanismo de recuperación de plusvalías usado previamente ofrecieron dos características deseables en cualquier inversión pública: cobrar a los nuevos terratenientes es al menos neutro en términos de distribución de ingresos; y los beneficiarios principales terminan por pagar el proyecto.

Además, el mecanismo de operación urbana ofrece incentivos para la reurbanización. Dado que la mayoría de los proyectos aumentan los precios del suelo y echan a los pobres de la región, sería mejor invertir todo el presupuesto municipal en proyectos a pequeña escala. Esto es lo opuesto a lo que ocurrió con la reurbanización de la rica área adyacente de Berrini donde los urbanizadores decidieron la forma de concentrar su inversión, resultando en una concentración aún mayor de ingresos que en el área de la OUCFL. Debido a la falta de acción de los gestores de política en ese caso, la municipalidad no capturó ningún valor de Berrini, pero pagó el costo completo de la infraestructura.

El uso de bonos de derechos de construcción puede disminuir el aspecto regresivo de la urbanización, pero hacer que un proyecto sea verdaderamente progresivo requiere atención en el lado de los gastos, financiando toda la inversión a través de instrumentos como CEPAC. La limitación principal sobre la distribución de beneficios a los pobres es que la ley establece que todos los fondos recogidos mediante la recuperación de plusvalías (CEPAC u otros instrumentos) deben invertirse dentro del perímetro de la intervención. Una forma de que estas intervenciones sean más progresivas es invertir en actividades que suministren extras a los pobres, como transporte público, educación y salud. Además, la legislación importante permite que la administración seleccione un área dentro del perímetro de una operación urbana y la declare zona especial de interés social (ZEIS) donde las parcelas se pueden usar exclusivamente para vivienda social de bajos ingresos.

Otra alternativa es establecer áreas de vivienda social dentro del perímetro de la operación urbana. Al subsidiar viviendas de bajos ingresos con dinero de urbanizadores y nuevos terratenientes, no habría una distorsión de precios fuera de la industria de la vivienda. El subsidio resulta de la segmentación del mercado y de la transferencia de la renta adicional a hogares pobres. Se trata de una gestión social real de valoración del suelo.

Ciro Biderman está afiliado al Centro de Estudios de Política y Economía del Sector Público (Cepesp) en la Escuela de Ciencias Económicas y Empresariales de la Fundación Getúlio Vargas de São Paulo, Brasil. Es profesor visitante de desarrollo internacional y planificación regional en el Departamento de Estudios y Planificación Urbanos del Massachusetts Institute of Technology, Cambridge.

Paulo Sandroni es economista y profesor en la Escuela de Ciencias Económicas y Empresariales de la Fundación Getúlio Vargas.

Martim O. Smolka es Senior Fellow y director del Programa sobre América Latina y el Caribe del Lincoln Institute.

Referencias

(Estas publicaciones sólo se encuentran en portugués).

Afonso, Luis Carlos Fernandes. 2004. Financiamento é desafio para governantes (La financiación es un desafío para los gobernantes). Teoria e Debate Nº 58, Mayo-Junio: 36–39.

Ramalho, T., e R.M.P. Meyer. 2004. O impacto da Operação Urbana Faria Lima no uso residencial: Dinâmicas de transformação (El impacto de la Operación Urbana Faria Lima en el uso residencial: dinámicas de transformación). Mimeo. São Paulo: Lume/FAUUSP.

Biderman, Ciro y Paulo Sandroni. 2005. Avaliação do impacto das grandes intervenções urbanas nos precos dos imoveis do entorno: O caso da Operação Urbana Consorciada Faria Lima (Evaluación del impacto de los precios en la propiedad cerca de intervenciones urbanas a gran escala: El caso del Consorcio de la Operación Urbana Faria Lima). Lincoln Institute of Land Policy Research Report (Abril).

China ha experimentado un crecimiento económico rápido desde 1978, cuando adoptó una reforma económica y políticas de apertura hacia el mundo. Se ha convertido en la segunda mayor economía del mundo en términos de PIB, y su recaudación tributaria ha experimentado un crecimiento anual promedio de alrededor del 20 por ciento desde la reforma fiscal de 1994.

No obstante, muchos gobiernos subnacionales de China han experimentado problemas fiscales y han incurrido en grandes deudas locales en los últimos años debido a numerosas competencias del gobierno central no financiadas y la gran brecha fiscal entre las necesidades de gasto y la capacidad para generar ingresos. Por ejemplo, en 2008, los gobiernos subnacionales de China han sido responsables por el 79 por ciento de los gastos totales del gobierno, pero sólo del 47 por ciento de los ingresos gubernamentales totales (Man 2011).

A diferencia de muchos países desarrollados, los gobiernos locales de China (provinciales, de prefectura, de condado y municipales) no tienen ninguna autoridad legal para imponer tributos o pedir préstamos, y el impuesto sobre la propiedad desempeña un papel muy limitado en la estructura de financiamiento público a nivel local. En consecuencia, muchos gobiernos locales recurren a fuentes de ingresos extrapresupuestarios, imponen aranceles para el derecho a arrendar el suelo, otras tasas y recargos, y obtienen préstamos bancarios de forma indirecta para financiar las inversiones de infraestructura y desarrollo económico local.

Durante el período de 1991 a 2008, los aranceles para el arriendo del suelo (también llamados aranceles de transferencia del suelo) aumentaron del 5,7 por ciento de los ingresos totales del presupuesto local al 43,5 por ciento. Esta dependencia excesiva de aranceles para el arriendo del suelo ha sido criticada como un factor importante en el crecimiento del precio de las viviendas y el aumento de casos de corrupción y disputas sobre suelos en China.

Problemas con el sistema tributario actual

El sistema actual de impuestos sobre el suelo y la propiedad en China genera una cantidad limitada de ingresos, aun cuando se gravan cinco tipos de impuestos sobre la propiedad inmobiliaria en las diversas etapas de producción (ver tabla 1). Los gobiernos locales cobran el Impuesto a la Ocupación de Suelos Agrícolas y el Impuesto al Valor Agregado al Suelo (IVAS) en el momento de adquirir y transferir el suelo. En el momento de la toma de posesión, se cobran el Impuesto al Uso Urbano del Suelo y el Impuesto sobre la Propiedad Inmobiliaria, y finalmente se cobra el Impuesto a la Escritura cuando se transfiere el título de la propiedad.

Este sistema tributario tiene muchos problemas y debe ser reformado estructuralmente. En primer lugar, los diversos impuestos sobre el suelo y la propiedad constituyen solamente un 15,7 por ciento de los ingresos tributarios a nivel local. Es una fuente de ingresos inestable e inadecuada para los gobiernos locales de China. Los funcionarios de los gobiernos locales han dependido de otras fuentes de ingresos, como el arriendo de suelos del estado a emprendedores inmobiliarios a cambio de un arancel fijo importante, para financiar proyectos de capital y desarrollo de infraestructura. En 2010, los gobiernos locales de China recaudaron 2,7 billones de RMB en concepto de aranceles de arriendo de suelos, además de 8,3 billones de RMB en impuestos y otros ingresos presupuestarios. La relación entre los aranceles de arriendo y los ingresos tributarios totales fue del 32,5 por ciento, comparada con el 4,5 por ciento en 1999.

En segundo lugar, la estructura actual de impuestos sobre la propiedad en China aplica una mayor carga tributaria en la etapa de transacción que durante la posesión. Por ejemplo, la recaudación del impuesto anual sobre el uso urbano del suelo y el impuesto sobre la propiedad inmobiliaria durante la etapa de posesión ascendió a sólo el 6,44 por ciento de los ingresos tributarios locales en 2008, mientras que alrededor del 9,25 por ciento de los ingresos tributarios locales se recaudó en las etapas del desarrollo del suelo y transacción de la propiedad.

En tercer lugar, las propiedades residenciales ocupadas por sus dueños no están incluidas actualmente en la base tributaria del impuesto sobre la propiedad inmobiliaria, lo que restringe la capacidad del gobierno para recuperar la plusvalía del mercado de vivienda en pleno auge debido a la privatización de viviendas de interés social, el crecimiento de los ingresos de la población y la inversión masiva en infraestructura urbana. Para 2010, la tasa de propiedad de viviendas alcanzó el 84,3 por ciento de la bolsa de viviendas urbanas del mercado formal, y los valores de las mismas han experimentado aumentos sustanciales en los últimos cinco años en muchas de las grandes ciudades (Man, Zheng y Ren, 2011). Pero la exclusión de las propiedades residenciales del impuesto sobre la propiedad inmueble creó desniveles de riqueza y una demanda excesiva de viviendas con fines de inversión y especulación, lo que aumentó la cantidad de viviendas vacantes en muchas ciudades costeras.

Finalmente, a diferencia del sistema de impuestos sobre la propiedad en muchos países desarrollados, en China no se grava el impuesto de acuerdo al avalúo de la propiedad. En lugar de ello, su valor es el 1,2 por ciento del precio original, menos un 10 al 30 por ciento por depreciación, o un 15 por ciento de los ingresos reales por arriendo de la propiedad. Los funcionarios gubernamentales tienen poca experiencia en la estimación del valor de mercado de las propiedades existentes, una destreza fundamental para poder establecer un sistema moderno de impuesto sobre la propiedad.

Recientes avances en la reforma del impuesto sobre la propiedad

El gobierno central de China ha estado explorando la posibilidad de reformar su sistema actual de tributos sobre el suelo y la propiedad desde 2003, cuando propuso oficialmente por primera vez el establecimiento de un sistema moderno de impuestos sobre la propiedad. En 2006 se seleccionaron seis ciudades para realizar proyectos pilotos, y un año después se amplió esta cantidad a 10 ciudades.

En 2010, la Administración Estatal de Impuestos (AEI), que está a cargo de este proyecto piloto, ordenó a cada provincia que seleccionara por lo menos una ciudad para realizar ensayos de avalúo de propiedades, con el objeto de verificar el precio de venta declarado por los propietarios para el impuesto a la escritura. Estos ensayos han tenido un importante papel en la preparación técnica e informática de avalúos masivos futuros del valor de la propiedad. El 28 de enero de 2011, las ciudades de Shanghái y Chongqing recibieron permiso para recaudar impuestos sobre la propiedad de segundas residencias y residencias de lujo de reciente adquisición, respectivamente.

Logros importantes

La reforma del sistema de impuestos sobre la propiedad en China intenta establecer un sistema para gravar las propiedades existentes (incluyendo tanto el suelo como las estructuras edificadas) anualmente de acuerdo a su avalúo, con el objeto de generar una fuente significativa de ingresos para los gobiernos locales. Este sistema utilizará varios métodos de avalúo, tales como la comparación con los valores de mercado, su costo y los ingresos generados, y se aplicará a propiedades comerciales e industriales, así como también a propiedades residenciales, incluyendo aquellas ocupadas por sus dueños.

Algunas ciudades piloto, como Hangzhou, Dandong y Chongqing, han estudiado e implementado distintas versiones de Avalúo Masivo Asistido por Computadora (CAMA, por sus siglas en inglés). El AEI ha estado capacitando a funcionarios de las agencias tributarias locales de cada provincia en el desarrollo de un sistema CAMA y sus aplicaciones. También ha intentado establecer normas tecnológicas para cada método de avalúo.

En 2005, el AEI diseñó un ensayo de regulación de avalúo de propiedades inmobiliarias, con 12 capítulos y 40 cláusulas que estipulan los métodos de recolección de datos, las normas y el sistema CAMA. Todas las ciudades piloto han concluido su simulación de avalúo y han calculado las cargas y los ingresos tributarios utilizando distintos escenarios de tasa de impuestos. En 2011 se seleccionó a, por lo menos, una ciudad de cada provincia para realizar un avalúo de propiedades recién adquiridas para recaudar el impuesto a la escritura.

El avance más importante tuvo lugar a comienzos de 2011, cuando Shanghái comenzó a recaudar impuestos sobre las segundas residencias recién adquiridas por residentes y sobre las primeras residencias de no residentes de acuerdo a su valor de transacción, previa exclusión de la base tributaria de 60 metros cuadrados por persona. La ciudad de Chongqing está apuntando a la residencia unifamiliar existente y a los apartamentos de lujo recién adquiridos por residentes o segundas residencias adquiridas por no residentes. El programa excluye 180 metros cuadrados para residencias unifamiliares y 100 metros cuadrados para apartamentos en Chongqing.

Se ha impuesto el tributo sobre la propiedad a alrededor de 8.000 parcelas en total en estas dos ciudades, si bien este experimento de un año de duración recaudó sólo una pequeña cantidad para el financiamiento de viviendas de bajos ingresos. Aunque la base tributaria, la tasa tributaria y la recaudación han sido muy pequeñas en estas dos ciudades, estos esfuerzos representan un gran paso adelante para la reforma del impuesto sobre la propiedad en China.

Desafíos futuros

La reforma del impuesto sobre la propiedad en China todavía enfrenta enormes desafíos, aun cuando los ciudadanos y los medios de comunicación ya la comprenden mejor. En primer lugar, ha encontrado resistencia desde varios grupos de interés influyentes. Los mayores adversarios de un impuesto sobre la propiedad son los funcionarios gubernamentales locales, además de los inversores y especuladores inmobiliarios. Muchos gobiernos locales creen que la adopción de este impuesto reducirá el valor de las viviendas y, en consecuencia, reducirá la demanda de suelo, lo que disminuirá sustancialmente los aranceles por arriendo de suelo en manos estatales. Además, los funcionarios de los gobiernos locales son evaluados según el papel que cumplan en la estimulación del crecimiento de la economía local, y los proyectos de inversión en infraestructura se usan frecuentemente como un estímulo para el desarrollo de la economía local. Los funcionarios quieren acceso ilimitado a los aranceles de arriendo del suelo, porque se pueden recaudar y gastar con muy poco control y pueden generar una gran cantidad de ingresos durante el período de ejercicio de un funcionario.

Un segundo desafío es el progreso lento de los preparativos legales y de avalúo para el sistema de impuesto sobre la propiedad. Se tienen que promulgar leyes y reglamentaciones sobre el impuesto, incluyendo leyes y normas de avalúo. Habrá que capacitar y certificar a hasta 100.000 valuadores en las normas correspondientes. En tercer lugar, todavía no existe un consenso sobre cómo definir la base tributaria, sus exclusiones y exenciones; la asignación de responsabilidades de administración, fijación de tasas y avalúo; y la distribución de los ingresos tributarios. Y, por último, la falta general de familiaridad con el impuesto sobre la propiedad crea continuos malentendidos e interpretaciones erróneas acerca del impuesto.

Al mismo tiempo, cada vez más residentes urbanos comprenden que un impuesto sobre el avalúo de la propiedad comercial y residencial recaudado anualmente puede generar una fuente sustentable de ingresos para los gobiernos locales y reducir su dependencia de aranceles y cargos de transferencia de propiedad que contribuyen a incrementar el precio de las viviendas. A raíz de la política del gobierno central de restringir la compra de viviendas y de ajustar la oferta monetaria, los aranceles de arriendo del suelo han comenzado a disminuir en muchas ciudades en 2011.

Según un informe reciente del Instituto de Índices de China (2012), los aranceles por transferencia de suelos en 130 ciudades han disminuido un 11 por ciento en comparación con 2010. En Shanghái y Beijing han caído un 16 y 35,7 por ciento, respectivamente. Esta reducción significativa puede también ofrecer oportunidades a los gobiernos locales para encontrar maneras más sustentables de equilibrar la promoción del crecimiento económico con el suministro de bienes y servicios públicos. A largo plazo, el establecimiento de un sistema de impuestos sobre la propiedad para sustituir gradualmente los aranceles a la transferencia del suelo ofrece una manera eficiente, equitativa y sustentable de financiar los desarrollos locales y los egresos gubernamentales.

El impuesto sobre la propiedad se ha percibido como una manera efectiva de reducir los precios de la vivienda, amortiguar la especulación y reducir las tasas de viviendas vacantes. Muchos investigadores creen que los gobiernos locales han tratado de limitar la oferta de suelo para aumentar los precios y maximizar los ingresos, produciendo un rápido aumento de los precios de la vivienda y la falta de viviendas económicas en las zonas urbanas de China. La imposición de tributos sobre la propiedad residencial puede aumentar el costo de oportunidad de dejar las propiedades vacías o sin usar, y reducir los incentivos para el comportamiento especulativo. El impuesto se percibe también como una manera efectiva de reducir la brecha de ingresos y riqueza entre los residentes urbanos y desalentar la inversión especulativa en el sector inmobiliario.

Conclusiones

La reforma del impuesto sobre la propiedad de China está progresando en el área de investigación y experimentos de aplicación, y ha comenzado a ser mejor comprendido y aceptado por los ciudadanos y los gobiernos locales. Pero el establecimiento exitoso de un impuesto sobre la propiedad como una fuente importante de ingresos para el financiamiento público local requiere no sólo de técnicas de avalúo y de diseño tributario sino también de determinación política y de una reforma administrativa. Esta reforma podría generar un cambio fundamental en las relaciones intergubernamentales y el papel del gobierno en la estructura política y económica de China.

El Instituto Lincoln comenzó a respaldar las investigaciones relacionadas con la tributación de la propiedad conjuntamente con el gobierno chino en 2004, con la colaboración del Centro de Desarrollo e Investigaciones del Consejo Estatal, el Ministerio de Finanzas y la Administración Estatal de Impuestos (AEI). En 2007 se estableció en Beijing el Centro de Desarrollo Urbano y Política de Suelos de la Universidad de Peking y el Instituto Lincoln, en parte para ayudar a organizar conferencias internacionales y programas de capacitación para funcionarios de las agencias tributarias de las ciudades piloto. El Centro continúa apoyando a expertos nacionales e internacionales para realizar actividades de investigación y proyectos de demostración en el área de impuestos sobre la propiedad y temas relacionados.

Sobre el autor

Joyce Yanyun Man es senior fellow y directora del Programa para China del Lincoln Institute of Land Policy, y es directora y profesora del Centro de Desarrollo Urbano y Política de Suelos de la Universidad de Peking y el Instituto Lincoln.

Referencias

China Index Institute. 2012. http://www.chinanews.com/estate/2012/01-04/3580986.shtml

Man, Joyce Yanyun. 2011. Local public finance in China: An overview. In China’s local public finance in transition, eds. Joyce Yanyun Man and Yu-Hung Hong. Cambridge, MA: Lincoln Institute of Land Policy.

Man, Joyce Yanyun, Siqi Zheng, and Rongrong Ren. 2011. Housing policy and housing markets: Trends, patterns and affordability. In China’s housing reform and outcomes, ed. Joyce Yanyun Man. Cambridge, MA: Lincoln Institute of Land Policy.

National Bureau of Statistics. 2009. China statistical yearbook. Beijing: China Statistics Press.

In the aftermath of the Great Recession, the financing of U.S. public elementary and secondary education has become particularly challenging, given the close link between school finance and property taxation. Across the nation, the sharp drop in housing prices that triggered the recession led to reductions in property tax revenues. Public schools derive more than 80 percent of their local own-source revenue from the property tax (McGuire, Papke, and Reschovsky 2015), and nearly half of total property tax dollars collected in the United States are used to finance public elementary and secondary education (U.S. Census Bureau 2014, U.S. Census Bureau 2013).

As a means of encouraging new research on these issues, the Lincoln Institute of Land Policy organized a conference on “Property Tax and the Financing of K–12 Education” in Cambridge, MA, in October 2013. The Fall 2014 issue of Education Finance and Policy features five of the conference papers along with two additional works submitted as part of the journal’s call for papers for the special issue, which underwent the journal’s peer review process. We served as guest editors, working closely with the journal’s editors, Thomas A. Downes and Dan Goldhaber. Thanks to funding from the Lincoln Institute, the special issue is available for free downloading until January 2016 from the website of the Association of Education Finance and Policy (www.aefpweb.org/journal/free-fall-2014).

Challenges for Funding K-12 Education

Using revenue data from the National Center for Education Statistics (2014), we determined that in real per pupil terms, total revenues devoted to public education fell by 6.2 percent from September 2008 to June 2012. Although comprehensive figures are not yet available for the most recent years, existing evidence points to a continued decline in financial support for public education. Data from the U.S. Census Bureau’s Quarterly Summary of State and Local Tax Revenue indicate that per capita real local government property tax revenues (for school and nonschool purposes) were 2.7 percent lower at the end of fiscal year 2014 than they were at the end of fiscal year 2011. And a survey conducted by the Center on Budget and Policy Priorities found that, in at least 35 states, real per-student state education aid was lower in fiscal year 2014 than in fiscal year 2008 (Leachman and Mai 2014).

Many school districts around the country responded to reduced revenues by laying off employees. In fact, the U.S. Bureau of Labor Statistics (2013) reports that between the employment peak in June 2009 and the trough in October 2012, education employment by local governments fell by 357,400—a decline of 4.4 percent. During this same period, public school enrollment grew by 0.9 percent (National Center for Education Statistics 2013).

Current projections signal significant increases in both K–12 enrollment and cost per pupil. The National Center for Education Statistics (NCES 2013) projects that per pupil expenditures will increase from an average of $10,518 in the 2009–10 school year to $12,530 in 2021–22. The NCES also projects substantial increases in public school enrollment, although growth projections for specific states vary and are generally much higher for the southern and western states (8.9 percent and 12.7 percent from 2010 to 2021) than for the Northeast and Midwest (2.2 percent and 2.4 percent). Although public policies and priorities can change, based on current policies and revenue projections, it is unlikely that revenues in support of public education will grow fast enough to match the projected growth in student enrollment and in costs.

National data indicate that in 2011–12, 10 percent of total public education revenue came from the federal government, with the rest split fairly evenly between state and local government sources (U.S. Census Bureau 2014). Federal government programs in support of education are classified as domestic discretionary expenditures. While to date Congress has done little to rein in the growth of spending on entitlement programs, it has mandated strict limits on the growth of domestic discretionary expenditures through the Budget Control Act of 2011 and the fiscal year 2014 Congressional budget agreement. The Congressional Budget Office (2013) predicts that, relative to GDP, domestic discretionary spending will decline through at least 2023. Given these overall spending caps, along with competition from other pressing domestic needs, reductions in real per pupil federal education support appear likely.

School funding systems vary tremendously across states, and future trends in state support for public education will differ greatly across states as well. However, many state governments face several long-run structural problems that are likely to constrain future state funding for public education. On the revenue side, many states have narrow sales tax bases that exclude many services and, as a result, fail to grow proportionally to their economies. The revenue problems are exacerbated by the inability of states to collect sales taxes on many Internet and mail order purchases. In the past few years, a number of states have adopted individual income tax cuts. These tax cuts have generally been enacted with no offsetting revenue increases, or they have been funded using revenue from one-time state budget surpluses.

On the spending side, funding for K–12 education must compete with other priorities. In many states, spending on Medicaid will grow faster than state tax revenues, a trend influenced in part by the aging of the population. Many states are also facing large and growing unfunded pension liabilities. Addressing these unfunded liabilities will undoubtedly require substantial increases in state government pension contributions. Although polls indicate that voters favor increased spending on education over spending in other areas, unless state governments make politically difficult decisions to increase taxes, states’ growing Medicaid and pension obligations may crowd out spending on K–12 education (Pew Research 2011).

With diminished prospects for growth in funding from federal and state governments, local school districts will likely play an increasingly important role in funding public education. Increasing local government funding for public education will require the politically difficult step of increasing property taxes, or, if that proves impossible, the development and widespread adoption of alternative sources of local government revenue. Neither strategy will be easy to implement.

This rather bleak picture of the prospects for public education funding raises a number of research questions. For example, can state governments adopt policies that would make the property tax more publicly acceptable? What role do alternative local sources of revenue play in funding public education? Can their role be increased? Is it possible to design state education aid systems that result in a more steady flow of state aid during economic downturns? Can state policies aimed at providing property tax relief be made more effective? Can state aid systems be reformed in ways that increase the educational opportunities of all students? The Property Tax and the Financing of K–12 Education considers these and other questions.

Conclusion

Three central themes emerge from this special issue. The first is the potential for unintended consequences to arise from state legislation. Eom et al. find that New York’s prominent property tax relief program, STAR, induces voters to increase school spending and raise property taxes, thereby undercutting much of the intended property tax relief. Jeffrey Zabel finds that property tax overrides in Massachusetts have led to increased racial segregation. And Phuong Nguyen-Hoang finds that the use of TIFs in Iowa has led to modest reductions in education spending.

A second theme is the potential for state school finance and property tax policies to provide greater advantages for high-wealth or high-income school districts than for low-wealth or low-income districts. In some cases, this pro-wealthy tilt is an explicit program feature. For example, the sales price differential adjustment factor in STAR channels a disproportionate amount of property tax relief to the wealthiest school districts. Likewise, Michigan’s state aid system sends about 7 percent more state aid per pupil to the wealthiest districts. In other cases, the tilt toward wealthier districts arises in more indirect ways. Chakrabarti et al. find that high-wealth school districts are likelier to increase property tax revenues in response to cuts in state aid. Zabel notes that higher income towns are more likely to pass property tax overrides. Nguyen-Hoang finds that TIFs have a greater negative effect on school spending in low-income or low-wealth districts than in high-income or high-wealth districts. Finally, Nelson and Gazley find that well-off districts are more likely to receive revenue from school-supporting nonprofits, and their per-pupil contributions tend to be higher.

A third theme is the enduring importance of the property tax as a funding source for public education in the United States. Papers by both Nelson and Gazley and by Downes and Killeen demonstrate that non-tax revenue plays a relative minor role in the funding of public schools. And no evidence suggests that the share of revenue from student fees and charges, school-supporting nonprofits, or from miscellaneous non-tax revenues has increased during or after the Great Recession.

These findings suggest that in order to ensure sufficient funding for public education into the future, efforts should be made to make the property tax a more appealing source of revenue. These property tax improvements might include the expansion of well-designed targeted property tax relief programs, such as circuit breakers, the adoption of property tax deferral programs for taxpayers facing high property tax burdens or rapid increases in their property tax bills, and improvements in tax administration that focus on increased transparency.

Given the great diversity in school finance and property tax systems across the U.S. and the fiscal challenges ahead, the papers in this special issue cannot possibly provide insights into the full range of policies needed to assure adequate and equitable funding for public education. However, it is our hope that these papers will be thought-provoking for both policy makers and researchers, and also inspire additional research on property taxation and school funding.

Contents

Introduction to Special Issue on the Property Tax and the Financing of K–12 Education
Daphne A. Kenyon and Andrew Reschovsky

Did Cuts in State Aid During the Great Recession Lead to Changes in Local Property Taxes?
Rajashri Chakrabarti, Max Livingston, and Joydeep Roy

Michigan and Ohio K–12 Educational Finance Systems: Equality and Efficiency
Michael Conlin and Paul Thompson

The Unintended Consequences of Property Tax Relief: New York’s STAR Program
Tae Ho Eom, William Duncombe, Phuong Nguyen-Hoang, and John Yinger

Unintended Consequences: The Impact of Proposition 2½ Overrides on School Segregation in Massachusetts
Jeffrey Zabel

Tax Increment Finance and Education Expenditures: The Case of Iowa
Phuong Nguyen-Hoang

The Rise of School-Supporting Nonprofits
Ashlyn Aiko Nelson and Beth Gazley

So Slow to Change: The Limited Growth of Non-Tax Revenues in Public Education Finance, 1991–2010
Thomas Downes and Kieran M. Killeen

About the Authors

Daphne A. Kenyon, Ph.D., is an economist who is a fellow at the Lincoln Institute of Land Policy and principal of D. A. Kenyon & Associates.

Andrew Reschovsky, Ph.D., is a fellow at the Lincoln Institute of Land Policy and a professor emeritus at the University of Wisconsin-Madison.

References

Congressional Budget Office. 2013. Updated Budget Projections: Fiscal Years 2013 to 2023. Washington, DC (May). www.cbo.gov/sites/default/files/cbofiles/attachments/44172-Baseline2.pdf.

Leachman, Michael and Chris Mai. 2014. “Most States Funding Schools Less Than Before the Recession,” Washington, DC: Center on Budget and Policy Priorities, Updated September 12. www.cbpp.org/cms/index.cfm?fa=view&id=4011.

McGuire, Therese J., Leslie E. Papke, and Andrew Reschovsky. 2015. “Local Funding of Schools: The Property Tax and Its Alternatives,” chapter 22 in Handbook of Research on Education Finance and Policy, revised edition, edited by Helen F. Ladd and Margaret Goertz, Routledge, 376–391.

National Center for Education Statistics (NCES). 2014. “National Public Education Financial Survey Data,” School Year 2010–11. http://nces.ed.gov/ccd/stfis.asp.

National Center for Education Statistics (NCES). 2013. “Projections of Education Statistics to 2021.” http://nces.ed.gov/programs/projections/projections2021/index.asp.

Pew Research. 2011. “Fewer Want Spending to Grow, But Most Cuts Remain Unpopular.” Center for People and the Press. February 10. www.people-press.org/2011/02/10/fewer-want-spending-to-grow-but-most-cuts-remain-unpopular.

U.S. Bureau of Labor Statistics. 2013. Table B-1a: Employees on Non-Farm Payrolls by Industry Sector and Selected Industry Detail, Seasonally Adjusted. Current Employment Statistics, Establishment Data. www.bls.gov/web/empsit/ceseeb1a.htm.

U.S. Census Bureau. 2013. 2011 Annual Survey of State and Local Government Finance, State and Local Government Data. www.census.gov/govs/local/.

U.S. Census Bureau. 2014. 2012 Data, Public Elementary-Secondary Education Finance Data. www.census.gov/govs/school/.

Una versión más actualizada de este artículo está disponible como parte del capítulo 3 del libro Perspectivas urbanas: Temas críticos en políticas de suelo de América Latina.

El caso de Mexicali, capital del estado fronterizo de Baja California (México), es ejemplo destacado de una reforma exitosa hecha al sistema fiscal inmobiliario en la década de 1990. En apenas unos cuantos años, el gobierno municipal pudo aumentar las entradas provenientes del gravamen inmobiliario, así como también fortalecer sus finanzas y modernizar sus sistemas catastrales y de recaudación. Más aún, Mexicali llevó a cabo esta reforma adoptando un sistema de tributación sobre el valor de la tierra nunca antes aplicado en México, y los cambios contaron con la aceptación de la ciudadanía. A pesar de los problemas y errores surgidos a lo largo del proceso, esta experiencia ofrece lecciones provechosas a entidades interesadas en emprender reformas futuras del sistema fiscal inmobiliario, en México u otros países.

Consideraciones económicas, políticas y técnicas

Emprender una reforma del sistema fiscal sobre la propiedad inmobiliaria no parecía ser tarea fácil ni en Mexicali ni en ninguna parte de México. Desde 1983, el gobierno local ha tenido la responsabilidad de fijar y recaudar los gravámenes a la propiedad inmobiliaria, aunque ciertas responsabilidades aún recaen sobre las autoridades estatales. A lo largo de la década de 1980, tanto la recaudación del gravamen inmobiliario como los ingresos municipales en general sufrieron una caída estrepitosa causada por la combinación de una fuerte espiral inflacionaria, la recesión económica, la falta de interés político , y la insuficiente experiencia y capacidad administrativa de los gobiernos municipales, quienes preferían depender de fuentes de participación en los ingresos fiscales.

Como resultado de las mejoras en el rendimiento macroeconómico de la nación, a inicios de los noventa se dieron las condiciones para un cambio en la situación, aunque ciertos factores políticos y técnicos redujeron los incentivos para que muchos gobiernos estatales y municipales iniciaran una reforma fiscal. No obstante, el gobierno federal de Carlos Salinas de Gortari (1989-1994) se lanzó a mejorar las finanzas municipales mediante un programa de modernización catastral impulsado por el Banco Nacional de Obras y Servicios (BANOBRAS), un banco de desarrollo público.

Incluso antes de que este programa y otras políticas nacionales comenzaran a influir sobre los gobiernos municipales y estatales, Mexicali tomó la delantera en la reforma al sistema fiscal. En 1989 el presidente municipal electo, Milton Castellanos Gout, entendió la importancia de fortalecer las finanzas municipales y comenzó a trabajar para elevar los ingresos tributarios al comienzo de su mandato. Para actualizar los valores catastrales, contrató los servicios de una empresa privada dirigida por Sergio Flores Peña, graduado en planificación regional y urbana en la Universidad de California en Berkeley. Flores propuso al nuevo presidente abandonar el sistema impositivo de base mixta (construcciones y suelo) y adoptar uno basado exclusivamente en el valor del suelo, y diseñar un modelo matemático para calcular los precios del suelo.

Más que atracción por las creencias teóricas o ideológicas asociadas con un impuesto sobre el valor de la tierra, Castellanos sentía que dicho gravamen era una manera fácil y rápida de aumentar la recaudación de ingresos, y asumió el riesgo político de proponer un Comité Municipal de Catastro integrado por organizaciones de bienes raíces, organizaciones profesionales y representantes de la ciudadanía.

Los resultados fueron espectaculares desde dos puntos de vista: primero que todo, el nuevo impuesto elevó los ingresos rápidamente (ver fig.1); y segundo, no hubo oposición ni política ni legal en contra de las medidas fiscales por parte de los contribuyentes. El aumento de ingresos por concepto de mayores gravámenes a la propiedad inmobiliaria y ventas de bienes raíces ¾la mayor fuente de ingresos municipales¾ permitió al presidente poner en marcha un importante programa de servicios públicos. No obstante, al año siguiente Castellanos decidió disminuir el control fiscal y no actualizar los valores del suelo, lo cual llevó al abandono del modelo matemático que había sido creado originalmente para ese propósito.

Tanto el Comité Municipal de Catastro como los funcionarios gubernamentales que estaban a cargo de la oficina de valuaciones y de catastro se opusieron a fijar los nuevos valores catastrales. Estas personas carecían de la capacidad técnica para manipular el modelo y temían disminuir su poder y control si dejaban el asunto en manos de la empresa consultora privada. Como resultado, se abandonó el modelo matemático y en lo sucesivo se definieron los valores del suelo mediante un proceso de negociación y convenios entre las autoridades locales, los representantes electos y el comité.No obstante, no se modificó el sistema de cálculo del valor catastral de base suelo.

Al mismo tiempo, el gobierno de Castellanos lanzó un programa de modernización catastral con recursos financieros del gobierno federal. Sin embargo, dado que el presidente consideraba que ya se había logrado el objetivo principal de aumentar los ingresos, relegó a un segundo plano la modernización del sistema catastral y no se pudo lograr el mismo éxito.

En las administraciones subsiguientes varió la política de recaudaciones tributarias y modernización catastral. El próximo presidente, Francisco Pérez Tejeda (1992-1995), era miembro del mismo partido político (Partido Revolucionario Institucional, PRI). Durante su primer año de gobierno hubo un descenso en los ingresos por gravámenes a la propiedad inmobiliaria, y los impuestos aumentaron sólo al final de su mandato. Pérez abandonó el programa de modernización catastral, pero mantuvo el sistema de tributación sobre el valor de la tierra.

La siguiente administración estuvo presidida por Eugenio Elourdy (1995-1998), miembro del Partido de Acción Nacional (PAN) quien fue el primer líder de un partido de oposición en Mexicali, aun cuando un miembro del PAN había gobernado en el ámbito estatal de 1989 a 1994. En la administración de Elourdy se actualizaron los valores catastrales, hubo un crecimiento continuo de la recaudación del gravamen inmobiliario y se volvió a implementar la modernización catastral. La actual administración de Víctor Hermosillo (1999-2001) está continuando con la reforma catastral.

Evaluación de la experiencia de Mexicali

Sin duda alguna, el proceso de reforma fiscal ha convertido la recaudación del gravamen inmobiliario en la más rápida e importante fuente financiera de los gobiernos municipales. Esta recaudación representa actualmente más del 50 % de los ingresos municipales locales. El rendimiento relativo del gravamen inmobiliario respecto a los ingresos totales de Mexicali está muy por encima de los promedios estatales y nacionales (15,3 % en 1995, comparado con 8,4 % para el estado y 10,3 % para todo el país). Los funcionarios del gobierno municipal que están a cargo de los sistemas catastrales y de valuación están bien preparados, poseen el conocimiento técnico y están conscientes de la necesidad de conducir reformas permanentes dentro del sistema. El ejemplo de Mexicali ha sido ya imitado en el resto del estado de Baja California y en el estado vecino de Baja California Sur.

El caso de Mexicali ofrece lecciones importantes. La primera de todas es que los gravámenes a la propiedad inmobiliaria son fundamentales para fortalecer los gobiernos municipales, no sólo para recaudar ingresos suficientes para el desarrollo urbano, sino también para proporcionar a los funcionarios gubernamentales las destrezas necesarias que les permitan organizar el sistema fiscal de una forma exitosa, legítima y transparente ante los ojos de la ciudadanía.

En segundo lugar, una reforma al sistema fiscal sobre la propiedad inmobiliaria es algo que requiere visión, liderazgo, y sobretodo, voluntad política y compromiso por parte de los dirigentes. Asimismo, el éxito de una reforma que vaya acompañada por un aumento de impuestos, requiere también contar con una base técnica sólida y con aceptación por parte del público.

En tercer lugar, se demostró la enorme utilidad del impuesto sobre el valor de la tierra para lograr una reforma exitosa en una etapa temprana. Claramente, la razón fundamental para adoptar dicho sistema tuvo que ver más con un abordaje pragmático que con bases o posiciones teóricas sobre diferentes filosofías. Sin embargo, ello no debe impedir que los funcionarios gubernamentales, asesores, expertos y el público en general emprendan un análisis cuidadoso de las diversas consecuencias de tal abordaje en términos de eficiencia económica, justicia y equidad fiscal.

Aunque el sistema de impuesto sobre el valor de la tierra tuvo éxito en el caso de Mexicali, no debe ser visto como una panacea aplicable en todas las situaciones. Es importante reconocer que el impuesto sería muy poco útil sin otras medidas que deben ser consideradas como parte de la reforma al sistema fiscal sobre la propiedad inmobiliaria, tales como modernización catastral, transparencia en la fijación de tasas impositivas y participación del público. Por último, es importante ver las reformas al sistema fiscal sobre la propiedad inmobiliaria en otras ciudades del mundo como procesos integrales, y no como “éxitos” o “fracasos”. Tal como el caso de Mexicali, son experiencias que combinan aciertos y desaciertos. Lejos de ser ejemplo de una reforma perfecta, Mexicali es una buena experiencia de aprendizaje porque demuestra que los cambios sí son posibles incluso cuando no lo parecen.

Manuel Perló Cohen es investigador del Instituto de Investigaciones Sociales, Universidad Nacional Autónoma de México. Para este estudio recibió apoyo del Instituto Lincoln. Perló Cohen ha participado en numerosos cursos y seminarios patrocinados por el instituto en varias ciudades de América Latina.

Figura 1. Recaudación del gravamen inmobiliario en Mexicali, 1984-1998

Fuente: Secretaría de Hacienda y Crédito Público. Tesorería del XVI Ayuntamiento de Mexicali. Instituto Nacional de Estadistica, Geografia e Informatica.

Government-owned property is exempt from local taxes almost everywhere in the United States, but this situation is based less on logic than on now-outdated historical considerations. Remarkably, there are no comprehensive estimates of the value of these exemptions. For comparison, the value of property tax exemptions for nonprofit institutions (excluding houses of worship) was about $900 billion in 1997, and charitable properties (including hospitals and universities) accounted for about $500 billion of this figure (Cordes, Gantz and Pollak 2002, 89). Even without comprehensive data, it is clear that the amount of government-owned land is vastly greater than nonprofit holdings. However, the exempt status of government land barely provokes complaint (except in the western states where federal landholdings are enormous) whereas exemptions for nonprofit organizations are frequently challenged.

Historical Background and Federalism Today

Government-owned property traditionally has been exempt from taxation in order to avoid an empty ritual whereby the sovereign taxed itself. The implicit assumption of a single sovereign was quite reasonable in Elizabethan England, where the property tax first took root, but not so in the U.S. today. The myriad school districts and special districts that now compete with counties and municipalities for property tax revenues were virtually nonexistent in the nineteenth century. Today there is no economic reason to exclude all government property from the tax base.

Exemptions for private, nonprofit entities grew out of the government exemption. In the seventeenth century, private parties did not always wait for the Crown to repair their bridges, causeways, seawalls or highways. They assumed this responsibility whenever self-interest required and the purse permitted. The capital-intensive nature of such activities that relieved government of a burden made a property tax exemption a logical tool for encouraging private initiative. Thus the first charitable exemptions were a type of quasi-government exemption, subsidizing private parties who discharged public responsibilities.

Charitable exemptions for the alleviation of poverty began as a separate category, because reducing poverty was not originally considered a government responsibility. The change in this attitude over time had the effect of diminishing the distinction between alleviating poverty and relieving government of a burden, but these remain two separate bases for the charitable exemption. Before the New Deal of the 1930s, U.S. counties had the primary governmental responsibility for poor relief, through maintaining almshouses and work farms. The principal public expenditure required for them was for land and construction, since the residents did the day-to-day work of running these facilities. In this situation, a property tax exemption made sense. If a charitable organization did not build such a facility, the responsibility would fall to county government and would be funded through property taxes. It was easy to see a clear and convincing connection between the alleviation of poverty, relief of a government burden and a property tax exemption.

Modern U.S. federalism has undermined these connections. There is no single sovereign now, but rather 87,000 units of government, including 19,000 municipalities, 16,600 townships and towns, 3,000 counties, 13,700 school districts and 34,700 special districts, which often overlap in complex ways. The property tax is virtually the sole source of internally generated revenues for school districts and special districts. A government exemption can be administered so that no unit of government need pay taxes to itself, while taxpayers outside the taxing jurisdiction who benefit from the property would pay the tax.

Valuation of unique government property and infrastructure is a problem, but it is not insurmountable. A new addition to generally accepted accounting principles requires local governments to carry on their balance sheets the depreciated value of their physical assets, including infrastructure, which can be a starting point for valuing such property. Already local government property is taxable in 11 states, provided it lies outside the owner’s boundary. For example, a reservoir owned by a water district can be taxed by the town or county where the reservoir is located, and the tax can be collected through increased water rates charged to the utility’s customers.

The strong consensus in favor of exempting government property is due to inertia, power and precaution. The federal government has vast landholdings, collects no property taxes, and therefore would oppose any tax on government property. Besides, the Constitution shields it. State governments also have extensive holdings and do not benefit from property taxes to any significant degree, so they too would oppose taxing government property. Local governments, special districts and school districts would be the net beneficiaries if government property were taxed, since their own property holdings are small in comparison to federal and state governments, yet the property tax provides almost 40 percent of their revenue (U.S. Census Bureau 1998).

Charitable Exemptions as Sovereign Exemptions

As long as government property is exempt, the case for charities is strengthened. Evelyn Brody (1998; 2002) argues that the states, by conferring benefits of sovereignty on nonprofit institutions, are acknowledging the underlying independent, self-governing nature of those institutions. “Tax exemption carries with it a sense of leaving the nonprofit sector inviolate, and the very concept of sovereignty embodies the independent power to govern” (Brody 1998, 588). Under federal tax law, neither charitable institutions nor local governments are taxed on net income, contributions or interest income from bonds, but both are taxed for payments made for services rendered. Considering charitable nonprofit institutions as quasi-sovereign allows us to make sense of “the rules in the tax scheme that operate to curtail rather than enhance the economic strength of the charitable sector. After all, rival sovereigns rarely feel comfortable letting the other grow too powerful” (Brody 1998, 586).

The U.S. Supreme Court, in Walz v Tax Commissioners, 397 U.S. 664 (1969), supports the position taken by Brody: “[Exemption] restricts the fiscal relationship between church and state, and tends to complement and reinforce the desired separation insulating each from the other (emphasis added).” Churches, and by extension other nonprofit institutions, are sovereigns in their own domain, which is circumscribed by a higher sovereign—state government.

Conversely, arguments used to attack certain charitable exemptions can also be applied to the governmental exemption. Critics of nonprofit tax exemption focus on large, property-rich and financially strong organizations, calling them commercial enterprises (Balk 1971; Hyman 1990; Gaul and Borowski 1993). This category includes colleges, universities, hospitals and nursing homes. No state prohibits charities from engaging in commercial activities, but 8 states out of 43 responding to the survey described below prohibit charities from earning a profit, even for institutional purposes. All states prohibit the charitable owner of exempt property from distributing profit to private parties. “It is a well-established principle of law that a charitable institution does not lose its charitable character and its consequent exemption from taxation merely because recipients of its benefits who are able to pay are required to do so, as long as funds derived in this manner are devoted to the charitable purposes of the institution” (American Jurisprudence 1944).

Commercial enterprises of local government are generally tax exempt, including air and marine ports, electric power generating facilities, water treatment and distribution plants, golf courses, package liquor stores and parking garages, to name a few. If commercial activity is to be the test for taxation, this should be applied evenhandedly and extend to government property as well.

A Survey of State Charitable Exemptions

Every state exempts charitable property, but the meaning of “charitable” varies quite a lot because its legal antecedents are traceable to the English Statute of Charitable Uses of 1601. Policy makers have shown considerable ingenuity in adapting an ancient law to modern needs, and ingenuity breeds variety. A Lincoln Institute-sponsored survey explored the laws in each of the 50 states to clarify the definition and application of “charitable” property tax exemptions.

As befitting a sovereign, private nonprofit institutions enjoy a constitutionally protected tax exemption in almost as many states as do local governments. The constitutions of 38 states make reference to exemption of local government or private institutions, or both. States have probably been reluctant to define charity statutorily because the judicial branch is the final arbiter of constitutional matters. Four states authorize legislatures to grant exemptions without giving specific direction; only 9 (including all 6 New England states) are silent. Specific exemptions are mandated in 27 states, and are discretionary in 16. Arizona, Missouri, Nebraska, North Carolina and Virginia are in both categories because they mandate some exemptions (usually governmental) but give their legislatures discretion with respect to other classes of institutional property.

Only 10 states have statutory definitions, and they show very little similarity (see Figure 1). Four of them define charity in terms of a public benefit, two in terms of relieving government of a burden, and one (Florida) could be placed in either category. Other individual states define charity in terms of relief of poverty or deriving income in the form of donations, or simply by listing exemption-eligible activities, with a slight overlap with relief of poverty. Five state definitions (Florida, Nebraska, New Hampshire, North Carolina and Pennsylvania) are extremely broad, which essentially punts the issue to the judicial branch.

The lack of a discernable pattern in judicial opinions arouses suspicion that courts must work backwards from a desired result to develop standards and tests. The situation today parallels the first half of the twentieth century, when bureaucrats and judges were gatekeepers to the nonprofit sector, approving or denying a petition for a nonprofit corporate charter, and they “used their control to promote the causes they believed in” (Silber 2001, 6). Awarding a nonprofit charter is now a ministerial act, but property tax exemption for charitable purposes remains subject to a variety of state laws with idiosyncratic judicial interpretations in every state. Confusion in the public debate over the charitable property tax exemption is the sure result. In devising tests, courts sometimes conflate public benefit with relief of poverty, and the result is unenforceable. Either one or the other must take precedence. Unless statutes are clear, courts are free to choose and to switch back and forth.

The case of hospitals is illustrative. Although one will find exempt hospitals in every state, the law is ambivalent. Hospitals have constitutional protection in only 3 states, while in 17 they are exempt only because the court regards them as “institutions of purely public charity.” The famous 1985 decisions in the supreme courts of Utah and Pennsylvania that undermined hospital tax exemption were health care cases. The courts concluded that the hospital (Utah) and the consortium of hospitals (Pennsylvania) were not in fact charities. Without putting too fine a point on it, the judicial remedies were based on the principle of relieving poverty.

Much angst and legal conflict could be averted if relief of poverty could be treated as separate and distinct from public benefit and relieving government of a burden, and fortunately it can be quantified. If a legislature wants a particular type of institution (e.g., hospitals) to relieve poverty, then the state should tax the hospitals, but award each property owner in the group a tax credit equal to the amount of service they give away up to their tax liability. This proposal raises the thorny question of how to measure the value of services priced below market, but the problems are surmountable (see Bowman [1999] for a method for hospital services). Solutions to these complexities are not likely to introduce the element of arbitrariness that pervades judicial decisions today.

H. Woods Bowman is associate professor in the Public Services Program at DePaul University in Chicago, Illinois. He was a visiting fellow at the Lincoln Institute in 2001 and he contributed to the Urban Institute book, Property Tax Exemption for Charities, edited by Evelyn Brody (2002).

References

American Jurisprudence. 1944. Taxation 51 § 602.

Balk, Alfred. 1971. The Free List: Property Without Taxes. New York: The Russell Sage Foundation.

Bowman, Woods. 1999. Buying charity care with property tax exemptions. Journal of Policy Analysis and Management vol. 18, no. 1 (winter): 120–125.

Brody, Evelyn. 1998. Of sovereignty and subsidy: Conceptualizing the charity tax exemption. Journal of Corporation Law vol. 23, no. 4 (summer): 585–629.

_____. 2002. Legal theories of tax exemption, quasi and real. In The Property Tax Exemption: Mapping the Battlefield, Evelyn Brody, ed., 145–172. Washington, DC: Urban Institute.

Cordes, Joseph J., Marie Gantz, and Thomas Pollak. 2002. What is the property-tax exemption worth? In The Property Tax Exemption: Mapping the Battlefield, Evelyn Brody, ed., 81–112. Washington, DC: Urban Institute.

Gaul, Gilbert and Neill A. Borowski. 1993. Free Ride: The Tax-Exempt Economy. Kansas City: Andrews McMeel.

Hyman, David A. 1990. The conundrum of charitability: Reassessing tax exemption for hospitals. American Journal of Law and Medicine vol. 6, no. 3: 327–380.

Silber, Norman I. 2001. A corporate form of freedom: The emergence of the nonprofit sector. Boulder, CO: Westview Press.

U.S. Census Bureau, U.S. Department of Commerce. 1998. Statistical Abstract of the United States 1998, table 500 (reporting 1995 data).

Figure 1: Statutory Criteria for Charitable Organizations

Arizona requires “qualifying charitable organizations” to spend at least 50 percent of their budgets on services to state residents who receive “temporary assistance to needy families benefits or low income residents…and their households” [A.R.S. § 43-1088 G(2)].

In Florida, “Charitable purpose means a function or service which, if discontinued, could legally result in the allocation of public funds for the continuance of the function or service. It is not necessary that public funds [actually] be allocated, but only that such allocation is legal” [F.S. §196.012]. Houses of worship are exempt under a separate statute.

Hawaii defines charitable purposes as “community, character building, social service, or educational nature, including museums, libraries, art academies, and senior citizens housing facilities qualifying for a loan under the laws of the United States” [H.C.A. § 246-32(c)(2)].

In Montana charities must accomplish their activities “through absolute gratuity or grants” [M.C.A. § 15-6-201(2)(a)(i)].

In Nebraska charities must operate “exclusively for the purposes of the mental, social, or physical benefit of the public or an indefinite number of persons” [R.S.N.A. § 77-202(1)(d)].

A New Hampshire charity is one that performs “some service of public good or welfare advancing the spiritual, physical, intellectual, social or economic well-being of the general public or a substantial and indefinite segment of the general public that includes residents of the state of New Hampshire…” [R.A. § 72:23-1].

In North Carolina, “A charitable purpose is one that has humane and philanthropic objectives; it is an activity that benefits humanity or a significant rather than a limited segment of the community without the expectation of pecuniary profit or reward. The humane treatment of animals is also a charitable purpose” [N.C. Gen. Stat. § 105-278.3(d)(2)].

Pennsylvania requires: (1) relief of poverty; (2) advancement and provision of education, including secondary education; (3) advancement of religion; (4) prevention of treatment of disease or injury, including mental retardation and mental disorders; (5) government or municipal purposes; or (6) accomplishment of a purpose that is recognized as important and beneficial to the public and that advances social, moral, or physical objectives” [10 Penn. Stats. § 372].

A South Dakota public charity “must receive a majority of its revenue from donations, public funds, membership fees, or program fees generated solely to cover operating expenses; it must lessen a government burden by providing its services to people who would otherwise use government services; it must offer its services to people regardless of their ability to pay for such services…” [S.D.C.L. § 10-4-9.1].

Texas defines charity by reference to the type of activity such an organization undertakes. T.T.C. § 11(d) lists 19 activities, including: (d)(1) “providing medical care without regard to the beneficiaries’ ability to pay…”

Large-scale urban redevelopment projects (termed grandes projectos urbanos or GPUs in Spanish) raise many questions about the impacts of subsequent urban development induced by the intervention. GPUs are characterized by an impact in a significant part of the city, often with the use of some new fiscal or regulatory instruments and the involvement of a large network of agents and institutions. These projects are expected to affect land prices, recycle existing or create new infrastructure and facilities, and attract other new buildings.

GPUs as an urban policy instrument have been the object of considerable controversy and debate throughout Latin America. It is often argued that they promote social exclusion and gentrification, have limited effects in stimulating real estate activities, and require large (sometimes hidden) public subsidies that often draw fiscal resources from other urban needs. In spite of their increasing popularity in Latin America, there is little empirical evidence to support these criticisms.

This article presents the case of a GPU introduced in São Paulo, Brazil, in 1996 as an “urban operation” to redevelop a middle-income area of mostly single-family homes that was to be traversed by the extension of the Faria Lima Avenue. The project is known as the Faria Lima Urban Operation Consortium (OUCFL). We examine economic principles that affect the fiscal performance of the project and its opportunity for value capture, evaluate changes in residential density, and analyze changes in income distribution and ownership structure. Finally, we offer some policy suggestions on how and when to use this kind of instrument based on these assessments.

What is an Urban Operation?

An urban operation is a legal instrument that seeks to provide local governments with the power to undertake interventions related to urbanistic and city planning improvements in association with the private sector. It identifies a particular area within the city that has the potential to attract private real estate investments to benefit the city as a whole. The proper city planning indexes (i.e., zoning and other regulations on construction coefficients, rates of occupation, and land uses) are redefined in accordance with a master plan, and investments are made in new or recycled infrastructure.

An urban operation allows the municipality to capture (through negotiated or mandatory means) the land value increments associated with the subsequent land use changes. In contrast to other value capture instruments, these funds are earmarked or internalized within the perimeter of the project to be shared between government and the private sector for both investments in urban infrastructure and subsidies to private real estate investments to support the project itself.

Each urban operation in Brazil is proposed by the executive and approved by the legislative branch of the jurisdiction. In the case of São Paulo, this authority was created in the Lei Organica Municipal (Constitution of the City) in 1990, which was later inserted in the new Brazilian urban development law (Statute of the City of 2001). The first proposed projects were the Operation Anhangabaú (subsequently expanded as a part of the Downtown Operation and renamed Center Operation) and Água Branca, followed by the Água Espraiada and Faria Lima operations. After the approval of the city’s new Master Plan in 2001, nine other urban operations were generated. These thirteen projects are expected to affect 30 to 40 percent of the buildable area of the City of São Paulo.

Financing Faria Lima

The Faria Lima urban operation (OUCFL) was proposed and approved in 1995 with the aim of obtaining private resources to fund the public investments necessary to purchase land and install infrastructure in order to extend Faria Lima Avenue. These costs were deemed at the time to be approximately US$150 million, two-thirds for land acquisitions and one-third for the avenue itself. The project was heavily contested by many stakeholders on grounds ranging from the source of the funds (i.e., advanced out of the local budget through new debt) to neighborhood concerns (one of which managed to keep the floor-area-ratios [FARs] unchanged and legally excluded from the OUCFL zoning) and technical design issues.

Technical studies carried out at the time indicated that it would be possible to take advantage of an additional potential 2,250,000 square meters beyond what was already permitted by the city’s zoning legislation, and the FARs were changed accordingly. These additional building rights were granted against a payment of a minimum of 50 percent of their market value using the existing “Solo-Criado” (Selling of Building Rights) instrument. OUCFL aroused great interest on the part of real estate entrepreneurs. This instrument nevertheless was also questioned for its lack of transparency, its project by project approach, and the arbitrariness in the way relevant prices were established and then used to calculate the value of the additional building rights.

By August 2003 a total of 939,592 square meters, or nearly 42 percent of the available total of these 2,250,000 square meters, had already been licensed. More than 115 real estate projects were approved, including nearly 40 percent commercial buildings and 60 percent high-quality residential buildings. Nevertheless, the resources (approximately US$280 million) obtained from these approved projects had not fully compensated for the expenditures (US$350 million, including principal plus interest) associated with the expansion of the avenue, considering the high interest rates prevailing in Brazil for the nearly eight years since the realization of expenditures. Thus, about 80 percent of the cost (albeit more than anticipated) has been recovered through the Selling of Building Rights process. Since July 2004 the compensation for these advance funds was obtained through an ingenious new value capture mechanism known as CEPAC, an acronym for a Certificate of Additional Potential of Construction. One CEPAC represents one square meter.

The Introduction of CEPACs

Although CEPACs were defined in Brazil’s Statute of the City of 2001, they were not approved by the CVM (Brazilian equivalent to the U.S. Security and Exchange Commission) as freely tradable in the Brazilian Stock Exchange until December 2003. The regulation establishes that the price of each certificate is defined by public auction and that the corresponding square meters of building rights (which also include use changes and occupation rates) expressed in each certificate may be executed at any time. The regulation also states that new batches of certificates can be issued (and sold through auction) only upon confirmation that the resources captured by the previous sale have been effectively earmarked to the project. To ensure this designated use, the revenues are deposited in a special account, not in the municipal treasury. From the perspective of the private investors this designation ensures the acceptability of this value capture instrument at its own valorization. By issuing a lower number of certificates than potential building rights—that is by managing their scarcity—the public sector may benefit from the valorization and thus be able to capture value “ex-ante” (Afonso 2004, 39).

The final approval of CEPACs for OUCFL and all the necessary steps for launching them in the financial market occurred in mid-2004, and the first auction at the end of December 2004 generated nearly R$10 million (about US$4 million), corresponding to the sale of approximately 9,000 CEPACs out of an authorized stock of 650,000 square meters. The OUCFL certificates were sold at a face value of R$1,100 (about US$450) per square meter with no observed premium pricing as a result of the bidding process.

This situation contrasts with that of the Água Espraiada urban operation, which was expected to be fully funded by CEPACs from its start. In its third auction, the certificates were already capturing R$370 per certificate against a face value of R$300 set for this operation. A more recent auction in Água Espraiada sold 56,000 CEPACs and captured R$21 million ($US9.5 million), reflecting a certificate price of R$371. This pricing contrast reflects the different original face values in the two projects. In the case of OUCFL developers bought (and stocked) building rights in advance, to benefit from the more flexible rules prior to the CVM approvals. The certificate price in Faria Lima started at more than R$1,100 because it is a more valued area. In Água Espraiada developers were willing to pay more than the original face value because the certificates were less expensive and thus in greater demand.

Land Price Implications

The prices of vacant land and developed areas experienced a considerable increase in some blocks within the perimeter of OUCFL during the 1990s, but decreased in other blocks. Yet, the average square meter price of new real estate development fell throughout the Metropolitan Region of São Paulo (RMSP) in all price bands, when comparing the average price from 1991 to 1996 with those of 1996 to 2000.

After controlling for a number of attributes associated with the changing character of the developments and their location, the price estimations showed an unequivocal relative increase after the operation was launched. The average price per square meter within the OUCFL perimeter increased from R$1.68 thousand in the 1991–1996 period to R$1.92 thousand in the 1996–2001 period, a 14 percent increase, while prices in RMSP decreased from R$1.21 thousand to R$1.06 thousand, a 12 percent decrease in the same period (R$1.95/US$1.00 in December 2000). Thus, the price per square meter in OUCFL was higher than that of RMSP by around 26 percent. The price per square meter in OUCFL was 38 percent higher than the average price in the RMSP in 1991–1996, and it increased to 81 percent higher in 1996–2001.

Was this increase captured by the municipality as anticipated? Considering that the cost of construction in average is around R$1,000 per square meter, the 2004 auction (the only one so far) captured almost all of the value added at current prices. The previous pre-CEPAC system captured about 50 percent or more, depending on the capacity and success of municipal negotiators, and the correctness of the reference price. CEPAC now changes this percentage and the face value of the instrument may capture all the value increment or even more, depending on the relation of this face value to market prices, and on the results of future auctions. Comparing a redevelopment project financed totally by construction bonds (like CEPACs) and one financed totally with general property taxes, there is no doubt that the former is less regressive than the latter. Even with a progressive property tax, with rates increasing according to values, part of the costs would be paid by poorer households.

This evidence that about 80 percent of the total cost of the project has already been recovered, combined with the auctioning of the remaining building rights through CEPACs and the impact of the property appreciation on the current property tax revenues, indicates that the project should not only pay its own way but actually generate a fiscal surplus for the city as a whole over the next five or seven years.

In effect, the changes caused by substituting older single-family houses with new residential and commercial buildings resulted in a substantial change in property tax collection in the OUCFL area. Many lots and even entire blocks had been occupied by single- and two-story houses constructed since the 1950s. Many of these structures were eligible for a discount coefficient for obsolescence of up to 30 percent of the property tax. They were replaced with new, taller and higher-quality buildings for which the discount was null. Our estimates indicate that the differences in property tax collection by square meters constructed may have increased by at least 2.7 times and up to 4.4 times. That is, the average property tax per square meter increased to a minimum of R$588.50 up to R$802.50 from R$220.95 if the house was 25 years old, or from R$179.70 if the house was 30 years old.

Social Implications

The OUCFL case offers a unique opportunity to quantify changes in resident characteristics before and after the intervention, since data at the census track level is available for 1991 and 2000, and the intervention began in 1996. Our analysis of gentrification and displacement of poorer residents mainly confirms the findings of Ramalho and Meyer (2004) that the average income has increased relatively in most of the blocks inside the OUCFL perimeter. By Brazilian standards, the upper-middle class was displaced from the region by the richest 5 percent of households in the metropolitan area. The census data also showed that residential density fell between 1991 and 2000, from 27 to 22 residences per hectare, although these figures may be distorted because they reflect the ratio of total residences in the entire area, not an average of the ratios per plot where land use was converted.

The data from 1991 indicated that the population was already leaving the OUCFL area before the approval of the urban operation, but this exodus intensified after 1996, generating vacant plots in the process of site-assembly to accommodate the new high-rise developments. At the same time, building density increased. The average number of floors per new building in the area increased from 12.6 in the 1985–1995 period to 16.7 in the 1996–2001 period. The number of housing units per building increased from 37.1 to 79.6 over the same periods.

This apparent contradiction between decreased residential density and increased numbers of housing units is explained in part by the construction of commercial buildings that replaced many single-family residencies on small and average-sized lots. OUCFL induced considerable real estate concentration as the new commercial and residential buildings replaced the houses and required greater land areas for high-class architectural projects. The 115 projects approved between 1995 and August 2003 that requested increases in the utilization coefficients required a total of 657 lots, or an average of 5.7 lots per project.

The combination of the increase in income level and the reduction in household density indicates that the gentrification process advanced in and around the OUCFL region during the 1990s. Nevertheless, this is not a classic case of gentrification, where poor families are driven out of an area due to various socioeconomic pressures. In this case mostly upper-middle classes were displaced. Except for the small nucleus of remaining favelados (Favela Coliseu), the region was already occupied by people belonging to the richest segments of society.

Some Policy Observations

This article contributes to the debate about the social management of land valuation by furnishing real data assessments and economic elements. These elements have been missing from most analysis, and we believe that this gap in the literature has contributed to an incomplete interpretation of the implications of an urban operation and to mistaken public policy recommendations.

Our conclusion is that the CEPAC funding mechanism itself does not increase the regressive characteristic of urban operations, since without those building rights bonds all the investment in redevelopment would be financed by general taxes. If the OUCFL project were inadequate in terms of income distribution, it would have been even worse without the value capture mechanism. Instead, CEPAC and the value capture mechanism used previously offered two desirable characteristics of any public investment: charging the new landowners is at least neutral in terms of income distribution; and the primary beneficiaries end up paying for the project.

Furthermore, the urban operation mechanism offers incentives for redevelopment. Given that most projects increase land prices and drive out the poor from the region, it would be better to invest the entire municipal budget in small-scale projects. This is the opposite of what happened with the redevelopment of the adjacent high-end Berrini area where developers decided how to concentrate their investment, resulting in even more income concentration than in the OUCFL area. Because of inaction by policy makers in that case, the municipality did not capture any value from Berrini, yet paid the entire cost of infrastructure.

The use of building rights bonds may diminish the regressive aspect of land development, but to make a project truly progressive requires attention on the expense side, by funding all the investment through instruments like CEPACs. The main limitation on distributing benefits to the poor is that the law establishes that all funds collected through value capture (CEPACs or other instruments) must be invested within the perimeter of the intervention. One way to make these interventions more progressive is to invest in activities that will furnish spillovers to the poor, such as public transit, education, and health. Moreover the relevant legislation allows the administration to select an area inside the perimeter of an urban operation and declare it a zone of special social interest (ZEIS) where lots can be used only for low-income social housing.

Another alternative is to establish social housing areas within the perimeter of the urban operation. By subsidizing low-income housing with money from developers and new landowners, there would be no distortion in prices outside of the housing industry. The subsidy results from segmenting the market and transferring the extra rent to poor households. This is real social management of land valuation.

Ciro Biderman is affiliated with the Center for Studies of Politics and Economics of the Public Sector (Cepesp) at the Economic and Business School at the Getúlio Vargas Foundation in São Paulo, Brazil. He is a visiting fellow in international development and regional planning in the Department of Urban Studies and Planning at Massachusetts Institute of Technology, Cambridge.

Paulo Sandroni is an economist and professor at the Economic and Business School at the Getúlio Vargas Foundation.

Martim O. Smolka is senior fellow and director of the Lincoln Institute’s Program on Latin America and the Caribbean.

Photograph Credit: wsfurlan via iStock / Getty Images Plus.

References

(These publications are available only in Portuguese.)

Afonso, Luis Carlos Fernandes. 2004. Financiamento eh desafio para governantes (Financing is a challenge to government). Teoria ane Debate No. 58, Maio-Junho: 36–39.

Ramalho, T., e R.M.P. Meyer. 2004. O impacto da Operação Urbana Faria Lima no uso residencial: Dinâmicas de transformação (The impact of the Faria Lima Urban Operation on residential use: Transformation dynamics). Mimeo. São Paulo: Lume/FAUUSP.

Biderman, Ciro, e Paulo Sandroni. 2005. Avaliação do impacto das grandes intervenções urbanas nos precos dos imoveis do entorno: O caso da Operação Urbana Consorciada Faria Lima (Evaluation of property price impacts near large-scale urban interventions: The case of Faria Lima Urban Operation Consortium). Lincoln Institute of Land Policy Research Report (April).

Faculty Profile, John H. Bowman