Peru’s Ministry of Housing, Construction and Sanitation has proposed new rules that would require mixed residential developments to reserve at least half of their sellable floor area for social interest housing, known as VIS.
The draft supreme decree, currently open for public comment, sets out minimum thresholds for projects that combine social and conventional housing and that operate under special urban planning parameters tied to VIS designation.
How the thresholds would work
Under the proposal, the 50 percent requirement would apply to what the regulation calls the “useful sellable area” of a project, not to the number of individual apartments. This distinction means the obligation is calculated by floor space rather than unit count.
The draft also introduces a new subcategory called Vivienda de Interés Social para Vulnerabilidad Urbana, or VISVU, aimed at families that do not own a home and have not previously received state housing assistance.
In projects that combine all three types, standard VIS units would need to make up at least 40 percent of the area for sale, while VISVU units could not fall below 10 percent. Together, the two social categories would need to cover at least 50 percent of the total sellable area. In projects mixing only VISVU and conventional housing, the VISVU portion could not exceed 30 percent.
Industry response
Alfredo Lozada, institutional manager of the Confederation of Real Estate Developers of Peru, known as Codip, said previous regulations had already included mechanisms to encourage VIS development, but that the current framework does not set a mandatory percentage. He said the existing rules leave municipalities that want to offer construction incentives to decide the sellable area threshold themselves.
Lozada said the underlying logic of the proposed scheme is that projects receiving public benefits should carry obligations to generate social housing. He added that developers working in the VIS segment are reasonably accustomed to operating under such frameworks.
Angello Rivera, a real estate partner at law firm Osterling Abogados, said the measure would have a direct impact on the commercial, financial and architectural design of mixed projects, because a larger share of each development would be subject to the rules and price caps that govern social housing. He said the effect of the requirement would depend on whether the mandated percentage allowed projects to remain financially viable, noting that viability depends on land cost, density, financing, sales pace and construction costs.
Rivera said the requirement could be considered reasonable because urban planning benefits represent a concession from the state in exchange for participation in the social housing segment, but that care must be taken to ensure the percentage does not upset the financial equation of projects.
Luis Aliaga, a real estate law specialist, said developers choosing to enter the VIS regime would need to rethink how they structure and finance their projects, because the conventional portion would need to absorb a larger share of the development’s profitability. He noted that participation in the VIS regime is not mandatory, and that developers who opt for standard building parameters would not be subject to its requirements or its benefits.
Unresolved questions
Specialists identified several points requiring clarification before the regulation takes effect. Rivera said the rule would need to specify which areas are included or excluded from the useful sellable area calculation, such as parking spaces, storage units and common areas, and called for a clear methodology to prevent differing interpretations between municipalities and developers.
Aliaga said it would also be necessary to define the exact moment at which compliance would be verified, whether at the building permit stage, at project completion, or at the point of registered title subdivision.
Codip said its own observations focus on how the percentages are differentiated among the various categories of social housing included in the proposal. José Salardi, Codip’s executive director, said the industry group participated in technical working groups during the drafting process but that the ministry is responsible for the final text. He said the group is continuing to review the pre-publication draft in order to submit additional technical proposals.
The comment period on the draft regulation runs until August 1, after which the ministry will publish the final text.
