The economic impacts of urban regeneration projects


Published on 9 January 2012

Author(s): Euromed Heritage News

Type:  Interveiw N°9 - JAN 2012

Financial resources can produce a multitude of basic actions in the historic centres

In the past 15 years, the historic centres of some big cities have experienced significant urban renewal campaigns. These actions of upgrade increase the attractiveness of spaces, the public support for conservation and development programmes, and the interest of private investors. But sometimes the lack of a real strategic vision may cause serious harm to the historic built environment and to the landscape... We spoke with Fouad Serrhini, Ceo of Ader-Fes, Morocco.

In terms of urban regeneration, what are the major budget items?

Given that urban regeneration comes under public action, funding generally remains closely tied to the state and its auxiliaries. as part of the state budget, the space reserved for the restoration of monuments by the Ministry of Culture is still insignificant despite sustained efforts observed during the last 15 years. However the historic centres of some big cities began to know in the last few years a campaign of urban renewal generally included as part of an urban upgrade.

So the communities that are the main institutions responsible for rehabilitation of historic centres were able to mobilize the budgets for urban regeneration under different sources of funding: the budget of the state, as part of the annual budget law; the redistribution of VaT through the Directorate general of local government; the investment budget of the communities; other funds that may come from state and parastatal agencies in the frame of a partnership; donations in the context of decentralised cooperation.

These financial resources can produce a multitude of basic actions in the historic centres such as paving streets and alleys, the «treatment of the facades», the restoration of walls and forts, public lighting, arrangement of squares, etc. These actions have an important role in the development of those areas. They increase their attractiveness, the public support for conservation and development programmes and the interest of private investors. They are the visible face of safeguarding programmes. However, for certain operations, the urban rehabilitation actions undertaken in the absence of a real strategic vision, with little or no professionalism, may cause serious irreversibly harm to the historic environment that has been built and to the urban landscape.

How do you assess the consequences of the economic and social investments?

Today, the economic returns of public investment in heritage is well known. apart from general studies conducted by international organizations, studies and operational research carried out for the assembly of urban rehabilitation projects in the Medina of Fez have shown that these projects have an ERR (Economic Rate of Return) of 10 to 17%. This is mainly due to the jobs created by the projects during their realization and by their use after the conclusion of the project, and to capital gains created by the main and secondary activities, taxes collected by the state during the project implementation and operation, the increase of the number of transactions and their values around the urban rehabilitation projects, etc.

In the field, these findings were highly visible, urban rehabilitation projects in the Medina of Fez (tours, improved access, emergencies roads, squares and small squares, etc ...) had an immediate economic impact, seen in particular by the valorisation of the area and the number of private investments that it has generated.

What funding sources do you suggest?

If our urban heritage today is anything but normal space that was common in the past (thanks to the heritage), it is clear that urban heritage has become almost universally, closely related to community activities, culture, crafts and tourism. Remaining on the latter aspect of tourism, two main findings should be established: i) urban heritage is an essential product for cultural tourism, which is operated almost for free. Tour operators (in the cities that offer a cultural oriented tourism) pay very little for the urban heritage which is the main reason for the trip; ii) these tour operators pay a Tourism promotion Tax (TpT) instead, which does not benefit the urban heritage.

Recently, the Moroccan government has created a company to manage the Moroccan Fund for Tourism Development (FMDT) that has a budget of 15 billion dirhams, with the aim of capitalizing 100 billion dirhams with national and foreign funds. since the inception of the fund earlier this year, premises of heritage interest have emerged.

The challenge, now more than ever, is for the heritage managers to unleash the areas of poverty and begging, and put to put them on the tack to wealth and money... but without loss and disfigurement. It is important not to sell the heritage in order to save it... the equation is complex but not impossible to solve .

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