EU Sustainable Urban Regeneration

On Wednesday 16 April 2008, RICS organised its second out of four evening lectures on EU Sustainable Urban Regeneration. Mr. Rob De Wildt, partner at Rigo Research & Advies in Amsterdam presented a case study on using a Social Cost Benefit Analysis (SCBA) model on sustainable urban renewal projects in The Netherlands.

RICS co-organised this seminar in cooperation with the Urban-Housing Intergroup of the European Parliament.  The Urban-Housing Intergroup President and Member of European Parliament Mr. Jean-Marie Beaupuy provided the opening remarks, stating that Europe has an important role to play and a good message to spread. The main challenge lies in how to spread that message effectively.

Rob presented a case study on Rotterdam, the second largest town in The Netherlands. Due to its specific demographic and economic structure, Roterdam is in a more difficult spot than other large dutch towns. Value is generally lower, making it more difficult to develop

Urban renewal is a long-term, continuous and necessary process but in general not profitable. If a traditional cost-benefit analysis foresees a negative outcome, the private sector will not get engaged.

In these cases government intervention can provide the necessary stimulus to make a project happen. As governments do not have limitless means at their disposal, any decision to invest public money should be based on legitimacy, necessity, effectiveness and efficiency.

One method of assessing whether spending public money on urban renewal projects is justified is conducting a Social Cost-Benefit Analysis (SCBA). SCBA defines the welfare effects of a project. These welfare effects can be:

• Direct: Quality of houses, quality of neighbourhood, accessibility, transport, public space, shops, education and jobs;
• Indirect: Health, safety, density, image and the perception of the social environment;
• External: Air quality, neighbourhood effects and noise;
• Distributional: Income, employment, ripple-effect.

Pilot studies undertaken by RIGO show positive effects for urban renewal projects, although exact measurement remains difficult.

The discussion that followed made it clear that including social aspects in a cost-benefit analysis is not an easy task. What can be included, where does it stop and how is it measured?

One of the key words during the debate that followed was ‘quality’, especially:

• Quality of services. Good quality housing is one thing, but if the services don’t follow, the perception of quality will remain low;
• Quality of life indicators should be factored in. Ultimately, urban renewal is about people.
• Quality of design. There needs to be a certain amount of “pride of place”

Sustainability is about the triple bottom line of people, planet and profit. Urban regeneration can not be sustainable if the people and the environment are not taken into account, but in the end it needs to make economic sense for the private and public actors involved.

Social Cost-Benefit Analysis is an attempt to value a project in a broader sense. Perhaps a next step should be a sustainable cost-benefit analysis. Not every benefit can be expressed in monetary terms, but it might convince those involved that sustainable urban regeneration can be beneficial for all.

If you would like more information please contact Sander Scheurwater at sscheurwater@rics.org