Valuing urban regeneration projects: The case of the Navigli, Milan

Abstract

This paper discusses the challenges inherent in the valuation of the social benefits of urban regeneration projects. The transformation of cities involves public and private investments, whose returns should include calculation of social benefits. Since traditional financial methodologies do not allow to capture the large and complex set of benefits, typically accruing to citizens in terms of quality of life, the application of non-market valuation methods such as Contingent Valuation (CV) and Hedonic Pricing (HP) offers an innovative opportunity. Here we analyse inhabitants' and city users' responses to the regeneration project of the Navigli canal network in Milan to understand how urban communities value such transformations. The Municipality of Milan proposed the project to restore the canal network in 2018 to enhance recreational amenities, improve environmental quality, and reduce negative externalities. While the political benefit from restoring the canals is clear, public and private benefits from the scheme need to be assessed to ensure the scheme's long-term sustainability. This paper presents an assessment (CV) of the socio-economic benefits associated to the reopening of the first section of the Navigli canal network, based on analysis of the views of 583 residents and city users, and compares these results with those of a HP method application developed by Boscacci et al. (2017). The paper explores whether the joint use of CV and HP could overcome their mutual weaknesses, providing a coherent methodology for assessing efficiency and effectiveness of policies and projects. • Valuation of the social benefits of the Navigli urban regeneration project in Milan (Italy). • Comparative analysis of non-market valuation methods such as Contingent Valuation (CV) and Hedonic Pricing (HP). • Application of the CV and HP to assess the social benefits of the Navigli project in support of decision making. • Joint use of CV and HP could overcome their mutual weaknesses. • Providing a coherent methodology for assessing both efficiency and effectiveness of policies and projects.