Housing Inequality and Luxury Accommodation. Evidence from an Italian Case Study for Effective Public Compensation Mechanisms

The current historical period is characterized by the persistence of latent and explicit crisis situations. Several simultaneous factors (pandemic crisis, economic insta-bility, inflationary growth, increasing energy costs) are contributing to a current contingency of pronounced uncer-tainty and difficulty. Furthermore, the issue of housing deprivation must be pointed out in the outlined frame-work. Despite a consistent improvement in the average quality of housing over the past two decades, unfit, non-functional and cramped housing units remain a reality for millions of people. In Italy, the housing emergency is an increasing phenomenon, exacerbated by a high propor-tion of the population at risk of poverty and social exclu-sion. Consequently, a significant segment of the popula-tion, devoid of alternatives, is forced to live in decrepit and unsuitable housing. However, in the last decades, there has been a substantial increase in socio-economic dispar-ities: for the first time in twenty-five years, both extreme wealth and extreme poverty have recorded a drastic and simultaneous increase. While the majority of people has been suffering the negative consequences of the crisis, a subset of individuals has been affected by a solidifi-cation of their economic conditions. Indeed, the luxury market has exhibited remarkable resilience, particularly in the hospitality sector. In this context, the current study aims to analyse the potentialities of the compensation mechanisms, with a particular focus on the application of the Extraordinary Urbanization Contribution, as provided by the Italian legislation, to the redevelopment initiatives in the luxury hospitality sector, highlighting the “greater value” that can be generated. This plus-value, generated through private initiatives and resources, could trigger a virtuous cycle that, through the role of Public Administra-tions, enables the identification of structured alternatives within a more comprehensive framework of urban poli-cies, by contributing to the realization of collective works through effective compensation mechanisms.