Towards a sustainable city: Applying urban renewal incentives according to the social and urban characteristics of the area

- Identified a set of subsidies to promote social integration and densification.
- Without incentives 37% of developers would start densification around Metro stations.
- Only 3% would do so is they have to construct socially integrated projects.
- The incentives' effectiveness depends largely on the stations' urban characteristics.
- Incentives are less effective in deprived peripheral stations.

The construction of new urban transport infrastructure transforms the accessibility patterns of the immediate areas, modifying people's movements and, with that, the demand for land, its uses, activities and densities. In the case of the Chilean capital, Santiago, the underground (Metro), has generated sub-centralities, densification and potentiated real estate development in certain parts of the city, but has had negligible effects in others. Our research aims at trying to enhance the positive effects of a mass transit network such as Metro, to improve two large malaises of the city: its increasing urban sprawl and its unacceptable social segregation. Both problems are not unique to Santiago, but are shared by many Latin American conurbations.To do so, we first analysed and classified the areas around Metro stations, based on their social and urban characteristics, and densification potential. We then identified existing and potential subsidies to promote social integration and densification and, finally, we applied a stated choice experiment to real estate developers to inquire into their willingness to build in the vicinity of selected GIS-classified stations. In a previous paper, we discussed the models estimated with the stated choice data, and the expected results of applying packages of incentives for densification in the vicinity of different Metro stations. In this paper, we seek to identify mechanisms to increase both housing density and, at the same time, promote social integration in the vicinity of Metro stations, by identifying a typology of urban areas that respond differently to such incentives.Our results show that the effectiveness of the various incentives depends, to a great extent, on the urban characteristics of the Metro station surroundings. For example, in stations located in the central areas of the city incentives to stimulate real estate activity are not really necessary, as the process is well underway; however, in Metro stations located in industrial areas incentives are more effective in triggering real estate dynamics, especially direct demand incentives for any buyer or with a limited time frame. Finally, in peripheral Metro stations located in low standard social housing areas, the incentives tend to be less effective and are probably not enough to trigger a significant densification or integration process; hence, probably other type of governmental action, such as pilot or demonstration projects, should be sought for these cases.