Public-Private Negotiation of the Increase in Land or Property Value by Urban Variant: An Analytical Approach Tested on a Case of Real Estate Development

Maria Rosaria Guarini, Pierluigi Morano, Alessandro Micheli and Francesco Sica
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Maria Rosaria Guarini: Department of Architecture and Design, Sapienza University of Rome, 00196 Rome, Italy
Pierluigi Morano: Department of Science of Civil Engineering and Architecture, Polytechnic University of Bari, 70125 Bari, Italy
Alessandro Micheli: Department of Architecture and Design, Sapienza University of Rome, 00196 Rome, Italy
Francesco Sica: Department of Architecture and Design, Sapienza University of Rome, 00196 Rome, Italy

Sustainability, 2021, vol. 13, issue 19, 1-30

Abstract: The insufficiency of public resources in Europe, which increased due to the debt crisis of 2010, has raised the need for combined financing forms to activate urban settlement transformation processes. Among these is the partial recapture of surplus value generated by interventions that derogate from urban planning tools as a regulation form of the differential rent phenomenon. This form of financing recalls the concept of land value recapture ; it consists of an extraordinary charge of urbanisation (ECU) paid to policymakers. In Italy, the national law (2014) assigns responsibility for ECU determination to local decision-makers. Their plurality of operational guidelines are generally inspired by the transformation value criterion, and are sometimes methodologically incoherent and dispersive in their modus operandi . To support policymakers in the programming of public works within the limits of their available financial resources, the aim of the present work is to test a coherent, rational and applicable procedure in the field of estimation in order to analytically determine the “surplus value” generated by the intervention ante and post urban variant. The proposed procedural model is based on the structural characterisation of multiple methodologies used in practice and in the literature. The procedure was tested on a case study in the Italian context of Rome City. The results deduced from its implementation clarify that the ECU evaluation must also appropriately weigh the mutual benefits according to the “timing” and “riskiness” of the investment.

Keywords: extra-urbanization charge; public-private partnership; 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: 2021
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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