Affordable Housing vs. Urban Land Rent in Widespread Settlement Areas

Raul Berto, Giovanni Cechet, Carlo Antonio Stival and Paolo Rosato
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Raul Berto: Department of Engineering and Architecture, University of Trieste, 34127 Trieste, Italy
Giovanni Cechet: Fablab S.R.L., 34139 Trieste, Italy
Carlo Antonio Stival: Department of Engineering and Architecture, University of Trieste, 34127 Trieste, Italy

Sustainability, 2020, vol. 12, issue 8, 1-21

Abstract: Social housing constitutes a partial response to the demand for affordable housing. In Europe, there are different forms of social housing, which are distinguishable based on whether they employ a universal or residual approach. The latter is employed by Italian initiatives for social residential construction, the financial instrument of which is the Investment Fund for Housing, a closed-end fund managed by CDP (Cassa Depositi e Prestiti) Investment, which provides public–private partnerships. The main obstacle to the supply of low-cost houses is the high cost of building areas or, in other words, the high urban land rent. The value of building areas is particularly high in urban areas and in widespread settlement areas, for instance, in Northeastern Italy. The main objective of this paper is to identify the trade-off between urban land rent and housing affordability in a social housing intervention in Pordenone (Northeastern Italy). Four different scenarios are developed, the variables of which are: Cost of the area (urban rent), cost of construction works (quality of the buildings), and household income distribution. The results show that achieving the economic and social objectives of a social housing investment simultaneously is not possible in any of the scenarios evaluated. To allow the social groups most in need to access affordable housing would require a reduction of approximately 30% of the estimated cost of a building area.

Keywords: social housing; urban rent; affordable prices; discounted cash flow analysis (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2020
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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