Adaptation to structural economic change is a major challenge for urban economies: the secular decline of crafts, retail and industry has still not been digested in many European cities, both in terms of labour market outcomes and the use of land and buildings. In this context, urban renovation projects are used by public authorities as strategic tools to adapt urban social-ecological systems to structural change, often with mitigated success. Planning professionals are not always connected to research on local economies and decision makers frequently lack a proper understanding of how urban renovation projects are related to socio-economic outcomes. Without such knowledge, however, local economic policies are prone to fads, mimicry and group-think. Instead of being opportunities for value creation and improved well-being they can even amplify inequities within the city.
This essay looks at the challenges and opportunities of developing alternative tools that promote sustainable and resilient local economies. We’ll explore lessons learned from two TURAS case studies. Crucially, we want to engage in a discussion on the next stage in developing useful, replicable tools for other European cities and regions.
The are two practical examples from Brussels and Rome. Both city-regions underwent profound structural change since the 1980s as they transitioned from a diversified economy combining services in the urban core, manufacturing in the urban fringes and agriculture in the periphery to an economy that is more and more tilted towards services. Despite regular spikes in unemployment rates, Brussels and Rome have attractive labour markets for skilled service-sector employees; the two capital cities are also characterized by a large public sector. Both agglomerations are experiencing a strong demand for housing and rising real estate prices.
Structural economic change and increasing real estate prices affect local economies not only in the urban core but also at the periphery. Many manufacturing businesses that have traditionally supplied the jobs for low-skilled employees require access to affordable space and are often incompatible with housing in their immediate vicinity; this has further accelerated their departure from the denser portions of Brussels and Rome. But in many neighbourhoods the physical buildings and infrastructures of urban or periurban manufacturing are still present; some of them have been reconverted to housing or office space, but others are abandoned or underused. The periphery also changes: due to their lower price compared to more central locations, large patches of agricultural land are converted to housing developments for commuters.
Policies aiming at more diverse local economies are not necessarily “fighting the tides of history”. There are compelling arguments why local economies can be more resilient and sustainable if they do not only provide services and housing but also certain locally produced goods and food. The successful implementation of place-based economic policies for resilience and sustainability requires novel tools and strategies.
In the region of Brussels, the debate on local economies is mainly concentrated on the canal area where former industrial buildings are beginning to be transformed into housing. This raises important challenges: how can the canal keep its function as a sustainable means of transportation and its quais house not only people but also jobs? The TURAS project has addressed this challenge by creating the “Bernaerts Procedure” for converting underused real estate assets into local economic hubs.
In the region of Rome, characterized by a much smaller industrial tradition and no important waterways, the rising real estate pressure has mainly affected the local economies of peripheral municipalities. A wave of housing developments have been created on agricultural land, creating a large population of commuters who travel back and forth between their employments in inner-city offices and their homes in monofunctional suburban developments. The challenge of introducing more diversity into the local economies in the Roman periphery has taken the form of increasing the economic attractiveness of regional agriculture as a means of fighting against urban sprawl. The TURAS project supports this strategy by proposing governance tools for regional agro-ecological networks.
The “Bernaerts Process” is a co-creation between ULB researchers, a Brussels municipality and two SMEs that has led to an innovative process that is being tested in one of the municipality’s fast changing neighbourhoods.
The industrial past of Brussels’ canal area still left its marks in the urban tissue and on the local labour market. Although the Bassin Vergote in the Northern section of the canal is still mainly used in its initial function, the central and southern sections of the canal have lost much of their vocation as a transportation infrastructure; the area is abundant of empty or abundant buildings and brownfields. The neighbourhoods on the western side of the canal are the poorest in Brussels; average income is low, unemployment high. But since the 1990s, the area has started to change as real estate developers discovered the area and its potential for profitable housing developments. In many places this has led to the conversion of productive space into housing space; a collateral effect of this trend is the further decline of the canal as a waterway. Around the Bassin Beco, for instance, the waterway has lost its initial logistical function and now serves as amenity for housing and offices.
Over the past 20 years, the Brussels region has reacted to the decline of the canal area with an ambitious urban renovation programme including public investments of more than 1.14 billion euros. However, only 5% of this amount was spent on projects directly related to the local economy. The bulk of the investment was spent on amenities, public facilities and housing. Our research has shown that one of the reasons for little focus on the local economy is the absence of innovative projects and operators.
In order to address this issue, we worked with a local municipality situated in the canal area and two SMEs. The result of this cooperation is the “Bernaerts Procedure”: a tool to turn underused real estate assets into hubs for sustainable economic activity that benefit the local community. The “Bernaerts Procedure” is based on the following general principles:
- Local value: the conversion of underused assets should generate economic value for the local community in the form of locally produced goods or services; facilities or amenities that benefit the local population; or jobs for residents.
- Economic and environmental sustainability: projects should favour the reuse of local assets whenever the environmental costs of destruction/construction are higher than the adaptation of existing buildings; economic sustainability implies sound financial planning and independence from structural subsidies.
- Adaptability: urban renovation projects need adapt to local conditions, especially the demand and supply in the local labour market; governance should be able to adapt to economic changes; physical interventions should be reversible and allow for temporary solutions.
The economic adaptation of industrial buildings is marked a number of obstacles that we studied in a case study of an industrial complex in the municipality of Molenbeek. The “Bernaerts Procedure” is a project management tool that addresses these challenges by:
- Managing transition processes related to the reconversion of underused assets;
- Providing organizational solutions to the coordination problems of these transition processes;
- Charting the most important milestones of reconversion projects, including their chronology and the competences that must be reunited in order to reach them.
The tool can be presented in form of a flow chart showing the chronological order of each step of a typical project (see below). The chart notably reflects the length of the pre-project phase that is arguably the most difficult hurdle. For each step of the process, the tool identifies the actors that are involved in the process and the resources that are necessary to reach the next phase of the project.
Above: Flow chart for the reconversion of underused assets (FR)
One of the lessons of the case study was that at least four complementary competences have to be reunited for a typical project to be successful. First, the inception of the projects requires knowledge of opportunities in the urban tissue (presence of empty buildings, property status, identity of owners, physical state of the building, urban planning affecting the evolution of the building etc). This type of knowledge is typically the domain of urbanists working for private companies or public administrations. Second, in order to host new economic activities most buildings need to undergo physical transformations that need to be identified, planned and budgeted – a step that involves architectural expertise. Third, the sustainability of the project requires a sound economic concept based on knowledge about the local business environment and the identification of entrepreneurs interested in the location. This requires expertise on the local economy and its networks. Fourth, the supervision of the transformation process, the management of legal agreements with property owners and entrepreneurs, financing and the management of risks requires substantial capacity in real estate management.
How can these competences be coordinated? One organisational solution is to create an agency for local economic real estate that provides public administration and private owners with a one-stop solution for converting underused assets into local economic hubs. A prime example of this is Renew Newcastle* (AU) where a non-profit ‘care-taker’ manages public and private real-estate. Reusing Dublin* is a spin-off from the TURAS project which is a platform to identify empty space.
Similar tools from other cities