What Advantages Do Adaptive Industrial Heritage Reuse Processes Provide? An Econometric Model for Estimating the Impact on the Surrounding Residential Housing Market

Abstract

When industrial relics, such as obsolete buildings, sites, and infrastructures, enter into a process of adaptive reuse, they become transformation engines capable of shaping the urban fabric. They provide tangible and intangible links to our past and have the potential to play a significant role in today’s cities’ futures. One unresolved issue is the quantification of the externalities of these transformation processes. If undertaken correctly, adaptive reuse can contribute to the development of social and cultural capital, environmental sustainability, urban regeneration, and, most importantly, economic benefits to the surrounding community. In this sense, understanding the value of heritage is particularly important in light of the new European urban environmental policy movement based on the circular economy, which aims to change the way Member States consume and produce materials and energy. After a review of the externalities generated by the adaptive reuse of disused industrial heritage, the paper will concentrate on the estimation of economic benefits given by a transformation process that affected Turin’s Aurora district (Northern Italy) during the last years. The hedonic pricing method (HPM) was used to investigate the effects of the construction of new headquarters and the redevelopment of an old power plant converted into a museum and conference center. This study used econometric models to identify a significant increase in market prices within 800 m of the site and calculated a EUR 16,650,445 capitalized benefit from the transformation on the surrounding residential building stock. The study thus contributed to the awareness that reused heritage not only improves the lives of residents, but it also has a positive impact on the real estate market, in terms of transactions, as well as market values.

An Evaluation Study on Tourists’ Environmental Satisfaction after Re-Use of Industrial Heritage Buildings

“…Through diverse methods and perspectives, it seeks to determine the optimal utilization of industrial heritage [38][39][40][41]. Concurrently, it explores the effects of industrial heritage building reuse on urban planning, economic development, and cultural preservation [53,54,57]. The objective of industrial heritage reuse has also shifted from preservation to meeting societal needs, with the public becoming the main focus of evaluation [55,59,60].…”

“…Federico Dell'Anna used the hedonic price method (HPM) to determine a significant increase in market prices within the site area, leading to capital gains for surrounding residential buildings. The reuse of industrial heritage had positive impacts on residents' lives and the real estate market [57]. Shaojie Wang et al conducted post-occupancy evaluations from the user's perspective using the importance-performance analysis (IPA) method, multivariate regression analysis, etc., proposing optimization strategies for future sustainable management, maintenance, and design of the project [58].…”

The Effect of Revitalisation on the Value of Residential Premises in Historic Urban Layouts

“…Analyses of the influence of revitalization on property values have been popular among researchers around the world for years. Case studies concerning the influence of the renovation and reconstruction of individual structures understood as buildings or complexes of several buildings on their surroundings should be mentioned in the first place (Ki & Jayantha, 2010;Olbińska, 2015;Wadu Mesthrige & Poon, 2015;Jayantha & Chun Ming, 2015;Jayantha & Yung, 2018;Dell'Anna, 2022). It should be noted, however, that in parallel with the research on the effects of point revitalization projects in the world, cases of the effects of revitalization of entire areas were also analyzed (Rossi-Hansberg et al, 2010;Róka-Madarász & Mályusz, 2013;Chau & Wong, 2014;Rącka & Palicki, 2016;Giusti & Maraschin, 2017;Melo & Cruz, 2017, Wadu Mesthrige et al, 2018De Toro et al, 2020;Budner & Pawlicka, 2020;Ekemode, 2019;Palicki, 2020;Jang & Yoon, 2021;Chau at al., 2021) as well as the effect of the announcement of revitalization plans for larger areas on the real estate market (Bieda, 2017;Bieda et.…”