An evaluation model of the financial feasibility of social housing in urban redevelopment

In many European countries, the implementation of public housing policies is followed by setting, in new constructions or urban regeneration interventions to be realized with the involvement of private investors, the percentage of social housing that private investors are required to realize at their own expense. These percentages, however, are defined at a political and administrative level, in the absence of any form of evaluation to verify the financial viability. The consequence is that the interventions are not always feasible. The model developed in this work allows to define, subject to the constraints of financial feasibility for private investors, the maximum share of social housing to be sustained by the private sector, the administered price of sale and/or lease of social housing as well as the exchange-factor of the area to be redeveloped, with the assumption that the owner of the area, rather than selling, agrees to exchange the land for property to be realized of an equivalent value. Created by borrowing the logic and algorithms of Operative Research, the model is applied to the sample of projects that have passed the pre-selection phase of the call for “urban regeneration and social housing” recently issued by the Region of Campania (Italy). The outcome of the research highlights the usefulness of the model as a tool to support the decisions made by Public Administrations in the planning of social housing.