Abstract
In recent years, the influence of neoliberal principles has led to an experimental application of new market-oriented approaches in the field of urban studies, in order to achieve different objectives of public interest, from the compensation of land use restrictions to the acquisition of areas for public services. Also in Italy, the use of equalization and non-financial compensation mechanisms has been influenced by internationally consolidated models, such as the Transfer of Development Rights programs (TDR). The key issue concerns the legal autonomy of development rights from land ownership, allowing their trade in the municipal market and thus, in theory, balancing private and public benefits. The scientific debate focuses on the several opportunities, in terms of planning effectiveness and flexibility, but also envisages the risk to generate unfairness, deregulation and other speculations. The paper aims to assess the positive and negative impacts of a generalized use of TDR in the urban governance and in the real estate market, adopting a case study research method. The experience of Milan has been investigated, analyzing the municipal registry of development rights. The results highlight strengths and weaknesses of the market of development rights application, in particular the risk of encouraging real estate speculation, in the same way as financial markets. Conclusions suggest the need of a more effective integration of market-based tools in the planning and regulatory framework, avoiding that their uncontrolled use could weaken the role of public authority in the local government.
Highlights
This paper aims to investigate the potentialities and limits linked to the operation of a municipal market of Development right (DR), in order to assess the role of Transfer of Development Rights programs (TDR) in the implementation of planning objectives and the risks associated with the financialization of the real estate sector and the resulting speculation
The analysis focuses on the case study of the City of Milan, which represents the largest Italian city, in terms of population, that have experienced a generalized TDR in the urban plan
The temporal distribution of annotation requests on the registry shows a gradual increase over the years, while the number of new sending areas that generated DRs for each year appears to be almost stable over time (Fig. 1)
Summary
The economic theory has often expressed trust in the free market, considered able to ensure a higher efficiency in the allocation of resources compared to any kind of public regulation and to achieve conditions of balance that are more advantageous for the economic operators and for the community, even in the presence of externalities (Coase 1960). Such liberalist perspective is founded on the illusion of a perfectly competitive market, neglecting the presence of collusive monopolies and oligopolies (Salzano 2008).
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