PSI - Issue 64

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Benedetto Manganelli et al. / Procedia Structural Integrity 64 (2024) 1720–1726 B.Manganelli, P. De Paola, F.P. Del Giudice / Structural Integrity Procedia 00 (2019) 000 – 000

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Fig. 1. (a) Building cost – Depreciated reconstruction Cost; (b) Demolition Costs.

However, since the market value is the sum of the two components, land and structure, the operation would result in a loss, corresponding precisely to the cost of demolition. This explains why very often, at the end of the building's useful service life, there is no replacement operation. Therefore, it is common in urban areas to have buildings that, although obsolete and dysfunctional, remain in service for a long time, at least until there is a risk of collapse. Even in the latter case, it may happen that the building is abandoned but not replaced. The economic viability of demolition and replacement can only occur if the regeneration activity results in a surplus of urban rent (ΔUR) . It is easy to imagine that this surplus is proportional to the scale of the intervention. The larger the intervention, the greater the effect on rent. In practice, a neighborhood-scale urban regeneration intervention (demolition and reconstruction) will have significantly greater positive impacts on rent compared to a single-building intervention. There have been numerous cases in which demolition has been used in struggling urban areas, characterized by high degradation, to mitigate the externalities associated with deteriorated properties, resulting in a net positive impact on property values (Bass M. et al.; 2005). Dusan Paredes et al. (2017) argue that the demolition of dilapidated structures is an efficient mechanism to revitalize struggling neighborhoods. The feasibility of regeneration can simply be achieved when the value generated by it exceeds the current value (MV 0 ) , to which the cost of demolition and reconstruction is added: + + − + ( + ) = 0 + ( + ) (1) The final value resulting from the regeneration process can be calculated as the sum of the land value, the built value (replacement cost), and the surplus rental income generated by the regeneration. ( + + + ∆ ) (2) Therefore, the mathematical formula expressing the feasibility of regeneration becomes: ( + + + ∆ )– ( + + − + + )> 0 (3) ∆ + – – > 0 (4) ∆ + > +