Package
Overview
Brownfield
site development is promoted by the government as the basis of sustainable
urban regeneration. It can reduce transport costs and pollution, generate
employment for deprived urban communities, and bring investment and
people back into the inner city. Yet, urban regeneration initiatives
have often had the opposite effect by encouraging long distance commuting,
providing employment opportunities for city-users, rather than city-dwellers,
and creating new forms of social exclusion as local people are pushed
out of their communities by expensive, high-class residential and
commercial developments. At the same time local communities are often
excluded from the decision-making processes as the necessity to make
developments commercially viable shifts priorities away from social
and/or environmental objectives.
The commercial viability of brownfield sites is one of the key elements
in the investment decisions taken by financial institutions which
potentially provide the main source of private funding for urban regeneration
schemes. The majority of research in this field has frequently failed
to address how risk is perceived and measured within the societal
and economic framework of investment decision-making. Although these
risks can be conceptualised as ‘barriers’ to brownfield
regeneration, financial institutions are also aware of a range of
potential ‘returns’ from this kind of development. Financially
these sites and areas may be able to help diversify property portfolios,
provide higher returns than less risky investments, create new areas
of demand, and give access to government grants and partnership support.
It has also recently been observed that brownfield sites represent
an opportunity for Socially Responsible Investment (SRI). Recent changes
to UK pension fund regulation requires disclosure of whether social,
environmental or ethical considerations are taken into account in
the selection, retention and realisation of investments. This has
been bolstered by shareholder pressure, ethical issues, and an appreciation
of the societal role of investors. However, despite recent initiatives
such as the Igloo Urban Regeneration Fund, it has been difficult to
attract institutional investment to brownfield locations in the UK.
Few institutions have invested in physical regeneration projects in
inner city areas because of a perceived range of risks, lack of incentives
and low returns.
The challenge for policy-makers is, therefore, to facilitate brownfield
investment by reducing the perceived and actual risks of commercial
failure whilst ensuring that developments contribute to social inclusion
and sustainable regeneration. This requires the development of interactive
forms of governance in which a variety of perspectives are drawn upon
and included in local decision-making processes.
Click
here to link to a document containing further information on this
project.
(PDF file 276kb)
Package
organisation:
| Joe Doak |
Principal Investigator
|
University of Reading,
Centre for Real Estate Research |
0118 3786420
a.j.doak@reading.ac.uk
|
| Nikos Karadimitriou |
Researcher |
University College,
London Bartlett School of Planning |
0118 3786036
ucftnik@ucl.ac.uk |
