Thursday, April 20, 2006


Created Surfaces

In Designing Bioregional Economies in Response to Globalization, the definition of complementary currency is stretched to include a novel system that has been used in Curitiba, Brazil to finance community projects:
Like most cities Curitiba has a detailed zoning plan which specifies the number of floors that can be built in each zone. In Curitiba however, there are two standards: the normal allowable standard and the maximum level. For instance, a hotel with a ground plan of 10,000 square meters is being built in an area where the normal allowable level is 10 floors and the maximum 15. If the hotel owner wants to build 15 floors he has to "buy 50,000 square meters (5x 10,000 sq. Meters) in the 'sol criado' market." The city itself only plays the role of an intermediary matching demand with supply in that market.

But where is the supply for these sol criado surfaces generated? One source is historical buildings. For instance the "Club Italiano" owns a beautiful historic landmark building called the "Garibaldi House." The property has a total ground surface of 25,000 square meters, but the place needed a serious restoration job. The Club did not have the money to restore the building. But because it is located in an area where up to two floors of new construction could theoretically be built, it sold 50,000 square meters (2 floors x 25,000 square meters) to the highest bidder, for instance, the hotel owner mentioned above. The proceeds belong to the Club to administer, but have to be used to restore the property. Therefore the hotel owner ends up paying for restoring the historic edifice in order to obtain the right to build the extra floors of the hotel, without financial intervention from the city.

Other sources of supply for such "created surfaces" are green areas where trees are protected, and the construction of social housing in other parts of the town. Several of the more recent of the sixteen extensive nature parks, open to the public, have been completely financed in this way. The owner of a large plot of land obtained the right to develop one side of the street on the condition that the other side becomes a public park. The new housing has an extra value because it is located at walking distance from the park; the people of Curitiba have another park for their week-end strolls; and the township does not have to go into debt or raise taxes to obtain all of that. Everybody wins.

What is most interesting from our perspective is that this market for "created surfaces" is another type of specialized complementary currency, which enables Curitiba to obtain public goods for which other cities have to obtain traditional financing.

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