Recycling the city new perspective on the real-estate market and construction industry

Abstract

Themes related to the conservation of the existing city recently became a relevant issue in national and international public policies. One of the challenges that European Union and Italian authorities seek to pursue is sustainable-cities development on energetic, social and economic levels, discouraging urban sprawl, and promoting reuse of the existing real-estate stock. City reuse instead of its expansion onto greenfields has then become in Italy a priority for the construction industry. The aim of the paper is to point out the potential radical change of the construction industry in Italy and the new perspectives the industry can pursue in the future. Existing city reuse can be undertaken in two ways: through demolition and reconstruction or retrofitting the existing real-estate stock. The preference between the two options depends by real-estate market dynamics and by zoning rules made by local authorities. In the majority of Italian cities, retrofit operations appear to be the true challenge because real-estate market values are not capable of supporting radical city transformations through demolition and reconstruction. Market figures make clear that the shift towards reuse is already under way, with a significant growth of the reuse-segment over the span 2008-2014. Nevertheless, the major costs for reuse and the limited budget of Italian families represent relevant issues standing in the way. So the construction industry confronts a new challenge: innovating reuse technology—with reduced costs and increased effectiveness—and finding new sources of value to support the investment choice. The Dutch Energiesprong case study shows that highly-industrialized retrofit processes and the conversion of the energy bill into a financial source to support stock refurbishment represent the pillars of a disruptive and effective strategy.