Economic Theory for Urban Renewal

Abstract

To discuss urban renewal processes from an economic viewpoint requires contributions from a number of different strands of economic theory. The general demand for buildings derives from the needs of producers and consumers for urban space and their ability to pay for such space. Urban renewal comes about through action within the construction and development industries and will only occur under conditions which those industries find satisfactory or are prepared to tolerate. The urban renewal decision results from a view being taken about the economic life of existing buildings and the potential earnings or utility to be gained from a refurbished or replacement building. The value of existing and potential buildings depends upon the nature and workings of the urban land market at given points in time. Thus it is pertinent to examine in turn: the demand for construction; the supply of construction; the urban land market, the economic life of a building and the renewal decision. In this section the reasons and possibilities for state intervention in the renewal process and the economics of regeneration are also examined.