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Municipal economics of regional development – infill versus greenfield development

Research output: Chapter in Book/Report/Conference proceedingChapterScientificpeer-review

Details

Original languageEnglish
Title of host publicationRE-CITY. Future City - Combining Disciplines
EditorsJuho Rajaniemi
Place of PublicationTampere
PublisherTampere University of Technology. School of Architecture
Pages59-82
Number of pages24
ISBN (Electronic)978-952-15-3625-0
ISBN (Print)978-952-15-3624-3
Publication statusPublished - 2016
Publication typeA3 Part of a book or another research book

Publication series

NameDATUTOP
PublisherTampere University of Technology, School of Architecture
Volume34
ISSN (Print)0359-7105

Abstract

There is an ongoing debate in academia about the pros and cons of infill development. It has been said that dense city structure can lead to several agglomeration benefits and cost savings, whereas urban sprawl is usually seen as a negative phenomenon supporting an unsustainable lifestyle and leading to increasing municipal expenditures. Contradictive perspectives can also be found. Some studies claim that limiting the land available to build on is raising the prices in housing markets resulting in various problems. It is also alleged that the economic benefits gained through densifying are diminished in cities with a population over 500 000.

In this case study, the analysis is limited strictly to the financial aspects of regional development projects. The main difference when comparing this study to the existing body of literature is that the municipal revenues are considered alongside the expenditures instead of focusing solely on the cost aspects. The net Present Value method is used to analyze three different regional development projects. An ongoing greenfield residential area development project is compared with two infill development projects in the city of Tampere in Finland. The first infill area is situated in the immediate vicinity of the city center and the second is a suburb about eight kilometers west from downtown Tampere. The analysis provides information not only about differences between infill and greenfield projects, but also about the dissimilarities between different types of infill.

The results indicate that from the perspective of municipal economics, residential infill is more profitable when compared to greenfield development. Two studied infill areas start returning profits 25–30 years after the start of the development, whereas for the studied greenfield project the corresponding value is almost 50 years. Despite the undeniable economic benefits, the practice shows that there are still major obstacles preventing the widespread realization of infill in Finland.

Keywords

  • infill development, greenfield development, municipal economics, urban economics, net present value

Publication forum classification

Field of science, Statistics Finland