Are HIS and HMP apartments still worth buying in São Paulo?

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What changed for HIS and HMP apartments in São Paulo?

HIS and HMP apartments are much harder to treat as ordinary investment properties today because São Paulo has turned their housing restrictions into rules that owners, landlords and developers actually have to document.

The big shift came with the tightening of the municipal framework around HIS, Habitação de Interesse Social, and HMP, Habitação de Mercado Popular. Decree 64.244/2025 strengthened income checks, imposed clear maximum sale and rental values, ruled out short-term accommodation, expanded record-keeping duties and gave the city more ways to track whether the apartments are reaching the people they were built for.

The framework has kept moving since then. São Paulo updated the maximum sale prices again in 2026 through Decree 64.895, while newer municipal guidance has made the rules much easier for buyers to understand. That matters because some projects sold in earlier years were marketed with a much looser investment story than the one buyers face now.

At the same time, affordable apartments are selling extremely well. Secovi-SP says São Paulo sold 114,000 new homes in the twelve months ending in June 2026, while 67% of the 143,700 units launched over that period were in the Minha Casa Minha Vida segment. In the first half of 2026, MCMV launches rose 31% while launches in the middle and upper-middle market fell 28%.

HIS/HMP and MCMV are different legal categories, but they compete for many of the same lower-ticket buyers. So the question has become more interesting, not less: affordable housing is one of São Paulo's busiest markets right now, while HIS/HMP ownership has become considerably more regulated.

What do HIS and HMP actually mean in São Paulo?

HIS and HMP apartments are regulated affordable homes that receive planning advantages in exchange for being kept within defined income groups.

São Paulo allows developers of these units to use benefits such as favorable development rights, planning incentives and, depending on the project, tax advantages. The city accepts those concessions because the resulting apartments are supposed to remain accessible to lower- and middle-income households.

There are three main bands. HIS-1 currently covers households earning up to R$4,863 per month. HIS-2 reaches R$9,726. HMP goes up to R$16,210.

São Paulo also caps the selling price. Following the 2026 adjustment, the ceiling is R$276,102.20 for HIS-1, R$383,636.74 for HIS-2 and R$537,672.71 for HMP.

Those ceilings are central to the investment case. The buyer may get an apartment below the price of a comparable unrestricted unit, especially in expensive locations close to metro stations or major job centers. In return, the apartment carries rules that an ordinary residential unit does not.

Can a normal investor still buy a HIS or HMP apartment?

Yes, some investors can still buy HIS and HMP apartments, but the current rules make the landlord route far more restrictive than buying an ordinary São Paulo apartment.

This point needs care because the rules distinguish between the final household occupying the apartment and an adquirente-locador, essentially an owner buying a unit for regulated rental.

The consolidated municipal decree explicitly recognizes the adquirente-locador and even discusses situations where the owner does not fall inside the unit's target income group. That owner cannot simply move in, lend the apartment to someone else or use it however they like. The permitted route is regulated residential rental to a household that qualifies for the relevant HIS or HMP income bracket, with the required documentation.

The rental status also has to follow the property's legal setup. Units destined for this model carry registry and documentation obligations, and the owner can be asked to produce the tenant's income evidence and proof of rent payments during an inspection.

So a high-income investor should not assume that HIS or HMP is automatically off-limits. The better question is whether the exact unit can legally be bought through the landlord route and whether the resulting restrictions still leave enough return.

That changes the conclusion quite a bit. HIS/HMP can still work as a long-term regulated rental investment. They are a bad fit for an investor who wants complete freedom over occupancy, tenant choice, Airbnb and resale.

Are HIS and HMP apartments actually cheaper than normal São Paulo apartments?

Some HIS and HMP apartments are genuinely cheap, but the label by itself tells us almost nothing about whether the buyer is getting a bargain.

The current citywide FipeZAP sale index puts São Paulo apartments around the low-R$12,000-per-square-meter range. Compact new units in expensive central neighborhoods can sell materially above that because small apartments usually carry a higher price per square meter.

A 35 m² unrestricted apartment at R$12,000/m² costs R$420,000. At R$15,000/m², it costs R$525,000. At R$18,000/m², the same 35 m² reaches R$630,000.

Against those numbers, the HIS-2 ceiling of roughly R$384,000 can be very attractive in the right location.

HMP needs more skepticism. Its ceiling is almost R$538,000, which already overlaps with unrestricted compact apartments in plenty of São Paulo neighborhoods. Paying R$520,000 for an HMP apartment makes little sense if a similar unrestricted unit nearby costs R$550,000.

We would want a visible discount before accepting ten years of extra rules. Around 20% begins to look meaningful. A gap of 5% or 6% is usually too small unless the financing or location is unusually good.

Do the HIS and HMP rent caps kill the return?

The HIS and HMP rent caps do not automatically ruin the yield, but they can become painful for HIS-1 and for well-located units where normal market rents have moved much higher.

São Paulo limits rent to 30% of the maximum household income for each category. Using the current income bands, that means roughly R$1,459 per month for HIS-1, R$2,918 for HIS-2 and R$4,863 for HMP.

If somebody bought at today's maximum legal sale price and somehow collected the maximum permitted rent all year, the gross arithmetic would produce roughly 6.3% for HIS-1, 9.1% for HIS-2 and 10.9% for HMP.

Those last two numbers look unusually high because the regulatory ceiling is only a ceiling. It does not tell us what tenants will actually pay.

FipeZAP's latest available São Paulo rental data put citywide asking rent above R$63/m², with the city's gross residential rental yield around 6.3% a year. Pinheiros was near R$97/m², Itaim Bibi above R$92/m² and Vila Mariana around R$75/m² in the February 2026 neighborhood sample.

A 35 m² apartment at R$63/m² would rent for roughly R$2,200. At R$75/m² it reaches about R$2,625. At R$97/m² it approaches R$3,400.

The categories behave very differently. The HIS-1 ceiling can easily sit below normal local rent. HIS-2 has much more room. HMP's R$4,863 maximum is so high that normal long-term market rent will often limit the landlord before the regulation does.

Is it actually hard to find tenants for HIS and HMP apartments?

Well-located HIS-2 and HMP apartments should still have plenty of potential tenants today, although landlords have fewer people to choose from than they would with an unrestricted apartment.

The restriction is straightforward. A HIS-2 landlord cannot simply accept the strongest applicant if that household earns above the legal limit. The tenant has to fit the category, and the landlord needs evidence supporting the income certification.

That removes some otherwise excellent tenants.

The demand on the other side is huge. São Paulo's broader affordable market has been doing far better than the middle and upper-middle segments. Secovi-SP's first-half 2026 data show MCMV sales up 17% while sales in the middle and upper market fell 22%.

There is also an important new wrinkle. MCMV inventory increased 58% and reached about 52,000 unsold new units. Yet Secovi-SP estimated only about eight months of inventory, with that clearance period staying stable because sales were growing alongside supply.

That is a much better way to read the market than simply saying "there are lots of cheap apartments." Supply is growing fast, but so is demand.

For HIS/HMP landlords, we would therefore worry most about the exact micro-location, the rent relative to eligible household incomes and the paperwork. A useful apartment beside a metro station still has a large audience. A generic unit in an area with hundreds of competing launches is a different story.

Can you Airbnb a HIS or HMP apartment in São Paulo now?

No. HIS and HMP apartments should currently be valued with zero Airbnb income.

The municipal decree is clear that short-duration accommodation amounts to temporary lodging rather than the housing provision these programs were created to support. São Paulo's Housing Secretariat now repeats the prohibition explicitly in its public guidance.

That removes one of the main reasons investors like compact apartments in neighborhoods such as Pinheiros, Bela Vista, Vila Mariana and the central districts.

The difference is bigger than losing a single rental channel. An unrestricted studio can potentially move between a conventional twelve-month lease, furnished medium stays and short stays where building rules allow them. A HIS/HMP owner has fewer options.

We would ignore every investment presentation that uses nightly rates or Airbnb occupancy to justify the purchase. If the long-term regulated rent does not work on its own, the apartment does not work.

Does the 10-year HIS/HMP restriction make resale a problem?

Yes, the 10-year rule can make HIS and HMP apartments noticeably harder to resell, especially if the neighborhood becomes more expensive while the restriction is still running.

For ten years from the relevant legal starting point, the unit has to remain within its HIS or HMP destination. Current municipal guidance refers to the period running from the first commercialization or the Habite-se depending on the applicable situation, while the decree's registry language ties key obligations to the certificate of completion. The safest approach is to verify the exact clock for the individual apartment rather than relying on the sales agent's estimate.

During that period, a resale does not have the same audience as an unrestricted apartment. A normal seller can reach high-income owner-occupiers, investors, parents buying for children and many other buyers. A regulated HIS/HMP resale still has to respect the relevant destination rules.

Price appreciation can also be awkward. The maximum HIS/HMP sale values are adjusted annually using the INCC construction-cost index. A hot neighborhood can appreciate much faster than construction costs.

Suppose unrestricted apartments around a new transport hub rise 12% while the regulated ceiling rises 5%. The owner may be sitting in a location that has become more valuable without being able to monetize the full increase immediately.

Once the restricted period ends, that gap can become interesting, but buyers should not build the entire investment around a future legal release. Individual registry records, project conditions and later rule changes still need to be checked.

For somebody expecting to sell in three to five years, we see the restriction as a major weakness. A household expecting to live there for ten years can afford to care much less.

Are small São Paulo apartments getting overbuilt?

Small apartments are being built at an extraordinary pace in São Paulo, but buyers are still absorbing them fast enough that we cannot call the segment broken today.

The latest Secovi-SP numbers make the scale obvious. Apartments between 30 and 45 m² represented 52% of launches and 64% of sales in May 2026. In March, the same size range accounted for 65% of launches and 62% of sales.

The pattern therefore persists across months rather than coming from one unusually small-unit-heavy launch cycle.

The broader affordable segment shows the same story. Over the twelve months ending in June 2026, 67% of São Paulo's 143,700 new launches were inside the MCMV market. During the first half alone, launches in that segment rose 31%.

Supply is clearly not scarce. MCMV inventory reached around 52,000 units, up 58%. The interesting part is that Secovi-SP still estimates roughly eight months of inventory because sales also rose 17%.

For now, we would call that a competitive market rather than an oversupply crisis.

That makes generic HIS/HMP units less appealing, though. A 32 m² apartment gets no scarcity premium simply because it is small. Location, layout, condominium cost and transport access decide whether one project wins against the dozens of other compact developments competing for the same buyer.

Is HIS-1, HIS-2 or HMP the best one to buy?

HIS-2 currently has the most interesting balance for many buyers, while HIS-1 works best as deeply affordable owner-occupied housing and HMP needs the closest comparison with unrestricted apartments.

HIS-1 has the lowest purchase ceiling at roughly R$276,000. That can create exceptional affordability, but its household income limit is only R$4,863 and its maximum rent works out around R$1,459. For an investor, those constraints are severe.

HIS-2 raises the eligible household income to R$9,726 while keeping the maximum purchase price below R$384,000. The rental ceiling also jumps to roughly R$2,918. In expensive but accessible parts of São Paulo, that combination can create a meaningful gap against unrestricted new apartments.

HMP gives the landlord a much larger tenant-income band, up to R$16,210, and a theoretical rent cap approaching R$4,863. The weakness is the acquisition price. Once the HMP unit approaches its R$538,000 ceiling, ordinary apartments start becoming realistic alternatives.

That is why HMP can look better legally but worse financially. Paying almost the unrestricted price while keeping the restrictions defeats much of the purpose.

Can high condo fees ruin a cheap HIS or HMP apartment?

Absolutely. A cheap HIS or HMP purchase can become a bad deal very quickly when the condominium fee is too high for the people who are supposed to live there.

Imagine a HIS-1 household earning the maximum R$4,863 per month. A R$600 monthly condominium fee consumes more than 12% of gross household income before the mortgage, electricity, water, transport and food.

Investors face the same problem through yield. A R$1,450 regulated rent looks far less attractive if the building regularly generates high non-recoverable expenses, maintenance bills or special assessments.

This risk is easy to underestimate in São Paulo because many new compact developments advertise long lists of amenities: pools, coworking spaces, gyms, laundry rooms, rooftop lounges, pet areas and staffed reception.

The facilities can make a project easier to sell. They can also create a permanently expensive building.

For HIS/HMP, we prefer efficient projects with reasonable common areas and enough units to spread fixed costs. The projected condo fee deserves almost as much attention as the purchase price.

Does financing make HIS and HMP much more attractive for people who live there?

Yes. HIS and HMP can be far better purchases for eligible owner-occupiers than for investors because residents actually use the affordability benefit every month.

Depending on the household and project, buyers may be able to combine the lower property ticket with FGTS, SFH financing or Minha Casa Minha Vida financing where the transaction meets those programs' separate requirements.

The financing backdrop is important right now. Brazil's high borrowing costs have hurt the middle and upper residential market much more than subsidized housing. Secovi-SP's first-half figures show middle and upper-middle launches falling 28% and sales falling 22%, while MCMV launches and sales kept growing.

That divergence tells us something useful about who has the stronger position in São Paulo today. Affordable housing buyers are receiving more support from the financing system than households trying to stretch into ordinary market-rate new builds.

An owner-occupier also suffers less from several HIS/HMP restrictions. Airbnb does not matter if the family lives there. A narrower tenant pool is irrelevant while the apartment is owner-occupied. The 10-year resale restriction becomes less important when the household already expects to stay for a decade.

For an eligible resident who can buy a well-located HIS-2 apartment materially below the unrestricted market and finance it on good terms, we can be quite positive.

Is buying HIS or HMP for capital appreciation a bad idea?

Buying HIS or HMP mainly for a quick capital gain is a weak strategy now, although a large initial discount can still create long-term upside.

The problem is timing. During the restricted period, the owner cannot fully participate in every source of market demand. The buyer pool remains narrower, and the regulated price framework can limit how quickly neighborhood appreciation appears in the transaction price.

That becomes especially important around transport improvements and rapidly gentrifying neighborhoods. An unrestricted apartment can immediately attract wealthier buyers as the area becomes more desirable. A restricted unit cannot simply follow that demand wherever it goes.

There is still a plausible long-horizon thesis. Somebody who buys a HIS-2 apartment for R$380,000 next to unrestricted apartments selling near R$500,000 starts with roughly R$120,000 of apparent market-value separation.

If that buyer lives in the unit for ten years, the discount has already created value through lower housing costs. Any eventual narrowing of the regulated-versus-unrestricted price gap is additional upside.

An investor buying solely because "this will be worth R$600,000 once the restriction ends" is taking a much less attractive bet. Future property prices, future regulation and the exact registry status all have to cooperate.

How serious is São Paulo about enforcing HIS and HMP rules now?

São Paulo is clearly taking HIS and HMP enforcement more seriously these days, so buying on the assumption that nobody will check is reckless.

The current decree spreads responsibility across developers, owners, landlords, final buyers and tenants. Income documentation has to support the required certification. Landlords can be asked for proof of the tenant's income and rent payments. Units intended for rental have specific registry obligations.

The city can also receive information related to property transactions and open administrative investigations when it suspects improper use.

One especially revealing rule concerns empty investor-owned units. If a regulated unit intended for rental is vacant, the owner may have to prove that nobody is secretly using it by producing electricity, water, internet or other evidence. That goes well beyond a symbolic income declaration at purchase.

The potential penalties are also large relative to the upside from cheating. The legal framework allows recovery of development benefits and additional fines, with later purchasers potentially facing proportional liability in certain circumstances.

We would underwrite a HIS/HMP apartment using legal long-term rent and legal resale assumptions only. Anything earned by ignoring the rules should be valued at zero.

What should you check before buying a HIS or HMP apartment?

Before buying a HIS or HMP apartment, we would verify the exact unit's legal status first and calculate the return second.

Mixed developments make this particularly important. One building can contain HIS-1, HIS-2, HMP and unrestricted units. Two physically similar apartments in the same tower can therefore have completely different investment value.

The matrícula and purchase contract should show what category applies and whether the unit is set up for owner occupation or regulated rental. The buyer also needs to know when the 10-year period starts for that specific property and what will remain on the registry afterward.

Then we would compare the price against actual unrestricted competitors. Three or four nearby projects with similar size, age, distance to public transport and condominium quality tell us far more than the developer's claimed "market value."

For a rental purchase, we would test the apartment at a normal twelve-month rent paid by an eligible household. Airbnb revenue gets zero. We would subtract realistic vacancy, condominium costs, property tax where applicable, maintenance and management.

Finally, we would ask who could buy the unit from us in year three, five or seven. If that answer feels uncomfortably narrow, the initial discount needs to be large.

So, are HIS and HMP apartments still worth buying in São Paulo?

Yes, HIS and HMP apartments are still worth buying in São Paulo for the right owner and, more selectively, for regulated long-term landlords; they are poor substitutes for an unrestricted investment apartment.

The strongest case today is an eligible household buying to live in the property. HIS-1 and HIS-2 can put buyers into areas that would otherwise cost much more, while financing support can widen that advantage. Someone planning to stay for ten years also avoids most of the problems that make investors nervous.

HIS-2 looks particularly interesting to us when the discount is large. A good apartment capped around R$384,000 beside genuinely comparable unrestricted units selling for R$500,000 or more gives the buyer meaningful compensation for the rules.

HMP needs a tougher test. Its ceiling is already around R$538,000. If an unrestricted alternative costs R$560,000, paying the extra R$22,000 for freedom over tenants, use and resale will often be the smarter decision.

For investors, the legal landlord route still exists, which keeps HIS/HMP more investable than a simple "social housing only" interpretation would suggest. But the economics now have to survive eligible-tenant rules, rent ceilings, paperwork, the short-stay ban and a restricted exit.

The recent market data do offer one important reassurance. São Paulo's affordable segment remains very active: MCMV sales are still rising, compact units continue to dominate transactions, and even after a 58% increase in affordable inventory, Secovi-SP estimates only around eight months of supply. Demand has so far kept pace with the construction boom.

Our answer therefore turns on the discount. If a HIS/HMP apartment is only slightly cheaper than an unrestricted one, we would pass. When the gap reaches roughly 20% to 30% in a genuinely strong location, HIS-2 in particular can still be a very good purchase. For an eligible household planning to live there for years, the case can be stronger still.

Fact-checked and reviewed by our local expert

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Laura Beatriz de Oliveira 🇧🇷

Commercial, Vokkan

Laura is a trusted real estate expert specializing in São Paulo’s competitive and fast-paced property market. With an in-depth understanding of the city’s commercial and residential sectors, she assists clients in securing prime investments, from luxury apartments in Itaim Bibi to high-yield commercial spaces on Avenida Paulista. Her expertise in São Paulo’s financial and business hubs makes her a key resource for investors seeking growth in Brazil’s economic powerhouse.

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