Financial Models for the Effectiveness of Urban Regeneration Initiatives

With reference to the urban regeneration interventions issue, in the present research an innovative model for the ex-ante financial verification of the projects is proposed. The model starts from the logic underlying the Break-Even Analysis (BEA) and modifies some of its starting hypotheses that in specific situations are inconsistent with the real market mechanisms. In this sense, in the paper, the explanation of the proposed innovative model hypotheses is carried out and the comparison with those ordinarily used in the BEA is developed. In particular, the linearity of total revenues and total costs, including in the classic version of the BEA, is not considered among the assumptions of the innovative model, and new parameters are defined. The proposed model can represent an evaluation tool to support the decision-making processes for the private and public operators’ investment choices, able to rapidly analyze the financial feasibility of the initiatives to be implemented on the territory. The outputs obtained from the application of the assessment model can guide the determination and the selection of the interventions to be developed and, integrated with more detailed evaluation analysis, can promote a successful cooperation between the public entities and the private investors for effective city development.