Less Can Be More: Questions About the Relations Between the Maximum Utilization and Great Utilization of Urban Land

Abstract

The maximum use and development of an urban lot is defined by its highest amount of saleable built area, bounded by the urban regulations and by predetermined land uses. In its turn, the optimum use and development can be defined as the one that offers the best returns to real estate business. This double definition has led to the questionable conclusion that urban regulations would work as an impediment to reach the optimum level of development. As a consequence, the optimum level would necessarily imply in higher or at least equal amount of saleable area, as compared to the maximum level. However, this understanding does not coadunate with the characteristics of the real estate business. In its permanent search for extra profits, real estate developers are always elaborating various strategies to redefine their products, aiming at reaching a better use for each new urban lot. Such strategies are more difficult to implement as higher is the neighborhood building standard, and more consolidated is its urban profile. For this reason, the presence of distinct projects in such areas is rare, and usually the built environment is marked by the exhaustive reproduction, in each regulation cycle, of projects based on the maximum built area of the lots. Based on a recent residential case in the high income neighborhood of Leblon, in Rio de Janeiro, this work explores the possibilities of obtaining an optimum land development, lower than the maximum built area allowed by the local urban regulation, but higher in terms of profits, and that can still guarantee the payment of full land rent, which is a condition to the business. With the goal of contributing to a better understanding of this segment of the real estate market, this study brings out some conditions to attain this goal in consolidated high income level neighborhoods.