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Minimum areas in the new Land Use Plan: A disincentive to the construction of social housing in Bogota

Last May 3, 2021 was published the legislation project promoted by the District Mayor’s Office to pass the new Land Use Plan (“POT”) for the city of Bogota. Since June 2004 the last POT has been in force, which has not been updated since then and, consequently, this has difficulted the city’s development. In this opportunity, Mayor Claudia Lopez proposes a POT based on these pillars: i) economic reactivation of the city, with an ecological structure, ii) a generation of a dynamic structure for a long-term land, human and social development and, iii) revitalization the city that has been already built, among others. However, its soc have not been free of debates, which are necessary to build a consensus on the planning instrument.

In the proposal, one of the most controversial points has been the creation of minimum area limit for private units of social interest housing projects (“VIS”) and priority interest housing projects (“VIP”) in Bogotá. Specifically, article 427 of the project establishes that single-family, two-family and multi-family VIS and VIP housing projects must have a minimum habitable area of 42 m2. Likewise, it establishes that Non-VIS projects must at least have 30 m2 of habitable area. Finally, this same article stipulates that the standard square meters per room must be a minimum of 20 m2.

With the purpose of explaining the controversy, it must be outlined that VIS and VIP housing units have a capped sale price to the consumer by regulation (150 and 90 minimum monthly wages respectively). On the opposite, the inputs for the development of these projects, such as the land, only responds to the market’s logic. In other words, the cost what it costs, and the developer must adapt its costs schedules to deliver a profitable house that supplies the demand under quality and security standards.

Thus, the imposition of a minimum area involves the impossibility to build a greater number of units and limits its price per square meter. This has an impact that on the sale price of each unit to the point that it tends to make a reasonable profitability unfeasible in these projects. To mitigate this, developers will be forced to develop the projects in the peripheral areas, since the price of land in these sites is lower. This would imply sacrificing the project’s location, and with that, the buyer would be more marginalized than under the current rules.

In addition to the above, this type of measures ignores the fact that in Colombia there is a plurality in family composition, among which is the unipersonal family, and in these events the required area may be less than the limit established by the project. Therefore, establishing a minimum area limit makes access to VIS and VIP housing more difficult for people who require a real estate with a smaller area than the limit, due to location or price facilities.

In spite of the remarkable intention of the proposal to provide dignifying housing to the people who need it most in quality conditions, the effect of this measure ends up being the opposite, since it would make these projects more expensive and would further limit even more the generation of real estate products that can satisfy the population’s demands in terms of access to housing. With this, we consider that these matters should be addressed by the law of supply and demand, leaving competition and the freedom of enterprise to generate the best projects for the people who require access to different housing solutions and not by making assumptions on a traditional standard that could ignore a very important segment of the population.

However, this reform is still under discussion in will be subject to numerous modifications before the final text is approved, so we will be closely monitoring the progress of this document and the challenges that it implementation will entail.

Authors

Portrait of Jacques Simhon, LL.M.
Jacques Simhon, LL.M.
Partner
Bogotá
Portrait of Sara Lucía Vanegas
Sara Lucía Vanegas
Associate
Bogotá
Juan Camilo Rodriguez Tinoco
Associate
Bogotá