Surface rights in affordable and social housing: a logic-deductive approach for determining the fair redemption value

Affordable and social housing represents a key sector in the pursuit of the objectives of Italian housing policies. The allocation of housing units generally occurs through the application of the surface right institution. During the duration of the concession, the Public Administration (lessor) often provides for the possibility of redeeming full ownership by the leaseholder, upon payment of a monetary amount. The Italian Law No. 448 of 23 December 1998 defines a conventional criterion for determining the amount payable for the transformation of surface rights into full ownership. However, this amount is often entirely disconnected from the prevailing market context, giving rise to significant disparities between the Public Administrations and the involved communities. The present study aims to develop and test a logic-deductive approach for estimating the appropriate redemption value of housing units granted under surface rights for a fixed period. Applied to 106 Italian cities, the proposed methodological approach leads, for each study area, to the determination of a multiplicative coefficient to be used in the formula provided by the applicable regulation. This coefficient, by incorporating the market conditions of the analysed context, ensures a fair and calibrated approach in the estimation of the redemption value. The methodological approach, implemented across different territorial contexts, enables both public and private stakeholders to understand the various multiplicative coefficients to be incorporated into the conventional formula defined by Law No. 448/1998, according to the area of interest, in order to estimate the appropriate amount to be paid for the redemption of each housing unit.