Worldwide, the most important element for renewing declining urban areas is investment participation by the private sector, according to a World Bank and Public and Private Infrastructure Advisory Service (PPIAF) report at the World Cities Summit, in Singapore, last year.
Projects focused on urban regeneration seldom receive public sector funding exclusively. According to investment experts Maritime Capital. It requires substantial financial resources, and most cities do not have these funds. The participation of private investors is crucial to determine if a regeneration scheme will work; that is, if it will create urban areas which provide for citizens’ needs in terms of living, working and thriving as individuals.
Why urban regeneration is necessary
In every city, there are pockets of underutilised or urban areas in crisis, most of the time as a consequence of changes in development of urban growth. Countries which are developing are responsible for 90 per cent of urban population growth on a worldwide scale, and declining urban centres are home to citizens suffering from rising poverty and vulnerability. Such areas have a tendency to marginalise and exclude citizens, and can lead to long-term adverse consequences in terms of social and economic upward mobility of such persons.
Success stories signpost the way
The report reviews the regeneration schemes of eight cities around the world – Ahmedabad, Buenos Aires, Johannesburg, Santiago, Singapore, Seoul, Shanghai, and the city of Washington – and documents the path that these have had to travel to face the main challenges in this area.
Drawing on actual, cases of cities in different regions of the world, a review of various projects for urban centres, former industrial or commercial sites, ports, coastal and historic neighbourhoods is presented. Although the cases studied vary in many respects, they have in common an important factor; the participation of the private sector in the regeneration and rehabilitation of deteriorated urban areas.
The report highlights the policy and financial instruments that were successful in each case study, and highlights the problems and challenges faced by each city during their transformation. Four distinct stages are identified for successful schemes involving urban regeneration: scope determination, planning, funding and implementation. Each of these phases involves a set of specific mechanisms that can be used by local governments to develop a systematic design for successful regeneration projects.
City-specific solutions are key
However, when it comes to finding solutions for declining urban areas, there exists no single solution. The report also emphasised that with strong political leadership, any city can initiate a process of urban regeneration, and that the successful utilisation of financial instruments and land management depends on the existence of adequate zoning as well as appropriate property tax systems, and that such systems are properly implemented.
No city is the same as another and, as a response, the World Bank has developed an online tool that focuses on city-specific problems, and its current economic and regulatory circumstances, to assist in decision making. Local governments can access the online resources presented in the report to begin to address the process of economic, social and physical deterioration of urban areas, promoting the sustainable and inclusive future urban development.
The involvement of private sector investment in the regeneration of urban areas is essential, and actively encouraged. It is beneficial for governments, citizens, and individual investors. If you are interested in investing in urban renewal projects, consult expert advisers in the field to fully understand the opportunities and risks before making your final investment decision.