Urban Redevelopment and Property Values
The topic of neighbourhood improvement is central to residential appraisal.
Properties in a redevelopment zone often see a price increase after completion but tend to stagnate while construction is on the go.
Looking at the remarkable changes taking place in Cape Town, Johannesburg and Pretoria, it is obvious that regeneration is both possible and successful, if thoughtfully executed.
It is important for urban planners to carefully consider the externalities of redevelopment received by properties in different locations, to maximise the positive impacts of redevelopment on the neighbourhood.
The initial definition of urban regeneration is based mainly on the following themes:
- the relationship between the physical condition evident in urban areas and the nature of the social and political response;
- the need to attend to matters of housing and health in urban areas;
- the desirability of linking social improvement with economic progress;
- the containment of urban growth;
- the changing role and nature of urban policy.
Regeneration has been accomplished in many cities of the world, including in South Africa. However, it is essential that local municipal and business leaders buy into the exercise.
A Mix of Residential and Commercial
Urban redevelopment offers a balance between retail, offices and residential property. This approach ensures sustainability.
An overemphasis on the residential aspect is not optimal, although residents must be able to live in and enjoy the area. With this, the commercial aspect will benefit.
It is important for urban planners to carefully consider the externalities of redevelopment.
When urban regeneration and inner-city revitalisation achieve stasis, the rates per square metre on commercial buildings should increase. As the rates per square metre improve, further investment is attracted into the area, confirming the success of the urban regeneration.
Your Property’s Value
The International Journal of Urban Sciences, suggests that redevelopment on one property brings overall improvements to surrounding properties and the expectation of these advantages are taken into consideration in the pricing of the properties during the construction phase.
In addition, the changes in housing price gradients reveal that the effects of redevelopment are varied with proximity between the properties and the redeveloped site.
It is important for urban planners to carefully consider the externalities of redevelopment received by properties in different locations to maximise the positive impacts of redevelopment on the neighbourhood.
Regeneration takes imagination and foresight but can be financially rewarding. A run-down CBD is no good, but the glow of success when such an area is successfully regenerated could spread throughout the entire city.
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