Social outcome-based regeneration: a new vision for the renewal of our cities

By Andrea Ruckstuhl (Lendlease) Fiorenza Lipparini (PlusValue) Filippo Addarii (PlusValue)

A great masterpiece of Italian Renaissance is “The Ideal City” attributed to Piero della Francesca. This urban perspective on a square in which every building is designed to follow a divine-like plan and every architectonic detail is in harmony with the totality is the archetype for urban design to this day: the computational and efficient rationality as the absolute master of the planet. But if we distract the sight from the hypnotic beauty of the image an obvious question should come to mind: Where are the people? They are the only reason for a city to exist. Their diverse and chaotic lives make a city alive.

In addition to people being the main reason for the existence of urban settlements, people are the engines of city development and prosperity. People’s activities and institutions make urban spaces alive. They are the source of any success.

The need to rediscover the full value of this simple fact has moved us to reflect on urban regeneration and to come up with a new approach. This is now more urgent than ever, as the majority of the world population live in cities. Since 1990, migration to urban areas has become a global trend with 54% of the global population living in cities and the proportion being forecasted to grow to 66% by 2050.

In the last decades, urban regeneration has been a driver of cities’ growth, leading to the creation of ever more mega-cities with over 10m population. A need for space associated with better life quality and work opportunities has driven the first era of urban regeneration projects. Indeed, major investments in infrastructure and real estate have catalysed efforts to create new businesses and services as cities have expanded.

However, plans have taken a different turn when implemented. Fast and often uncontrolled urban development has had a negative impact on the quality of space and affordability for local communities, who were forced to relocate when unable to afford the costs of regenerated neighbourhoods. All in all, new developments have too often lowered the quality of life for large swathes of the population, driving up inequality and reducing social cohesion. This is ethically unacceptable and, in the long run, cripples the sustainability of cities as drivers of innovation and prosperity.

Therefore, we propose a radical change of paradigm for urban regeneration: shifting from material to social development. This is a Copernican Revolution, as social values and increasing prosperity of communities become the drivers for the master plan, capital investment and governance. Naturally, this is a new business model for regeneration. By engaging with and investing in communities, urban regeneration ensures that physical assets increase in value over time. This is social outcome-based regeneration. Profitability is generated not by buildings and infrastructures but by the wellbeing and productivity of communities using those assets.

Here are the three main pillars of social outcome-based regeneration.


The first two components synergically combined to design the master plan are community and digital design.

Community design means understanding population dynamics, habits, movements, interactions, as well as needs and aspirations, in order to devise a population model and identify elements which could facilitate and reinforce positive dynamics and offset negative ones. The model should look at different layers of dynamics, including not only all drivers e.g. living, working, free time, sport; but also the main elements of constraints e.g. access, circulation, security, weather. The entire exercise requires the involvement of civic entrepreneurs and civil society to positively engage the community

Digital design means figuring out how technology can make life easier and empower individuals and community action. Technology is changing the way we work, live and play to an extent and at a pace which are unprecedented. Digital design opens enormous opportunities for innovation and improvement of life and business both online and offline, i.e. impact on physical and social design. Technology can also be disruptive and misused. Great attention must be paid to privacy, security and ownership of data.

Physical Masterplanning follows. Once a clearer understanding of the community dynamics is achieved, the building blocks of the master plan provide solutions for the physical design which will allow the community to magnify positive interactions and achieve positive outcomes. This is not to turn into social engineering: the goal is to support existing dynamics and collective aspirations. The design is a collective effort that includes diversity in views and experiences; a multiplicity of goals and identities all united in diversity – the motto of the European Union.

At this stage, all the elements which “make a space” should be considered, including the availability and quality of public spaces, green areas and buildings. It is also important to design the place keeping in mind that “beauty” is a key objective, where all these elements come together, and where art and music can complete the space, linking the community to the physical components and creating a sense of belonging. All expressions of creativity should populate every moment of daily experience: shared, augmented and constantly transformed by digital technologies. We want to turn streets into art galleries and public spaces into cultural platforms.

Masterplanning is a living exercise that replaces the master plan. A place is never the same but it constantly evolves with the community. This simple concept should be part of the physical brief of the master plan. How do we make the place resilient and able to adapt to change? Where do we invest to make sure that we can always meet fast-changing needs and take advantage of even more fast-changing technologies? The principles of living, working and playing are changing, and any new space being created should not only capture changes but embrace them. Should the capital be invested in the hard and unmovable brick and mortar model or should we be looking at different materials and different models of owning, using and moving within the space created? These are the questions that make the master plan a living exercise.

Capital market is part of masterplanning, since the ability to attract investors is key to ensure a conducive ecosystem where old and new businesses can thrive. Long-term investors are ready to invest large sums for urban transformation, but demand a clear plan on value generation in all its expressions, including social impact and environmental sustainability. Greater transparency could mean greater investments, alignment of public and private interests and, ultimately, diffused prosperity.


Social impact investing as an investment philosophy that strikes a balance between private profitability and public value creation is transforming capital markets and, in our view, is a core component of urban regeneration – not just a mere fix of social problems which might damage the regeneration project.

Social impact investing supports communities in all their needs and aspirations, starting with civic engagement and entrepreneurship. Yet, this is not the whole story. Access to social impact capital can attract people and their initiatives to come and work, live and enjoy the new place. Then, a new paradigm for urban regenerations emerges. Firstly, we will be serving a selected market of informed and committed users, providing much-needed capital to a clear, identifiable and direct new market. We will provide better design and closer market response. This is true for any initiative in the service space. Secondly, by encouraging the creation of new products and services aiming at improving the quality of life of people living, working or visiting the new place, we will make the place more attractive, therefore driving more demand and an even more selective market for our impact initiatives. This is a circular economy where demand is expressed and answered via dedicated capital allocated to design and delivery of better services and products, aiming at achieving both economic returns and positive social outcomes with a systemic effect on community improvement.

The upside for investors is multiple as well. They will benefit from the SII component embedded in the project financing of urban regeneration, as resident communities are more resilient and better served, which in turn means their investment in the place will maintain and grow in value over time in a way which would be otherwise impossible. Institutional investors might also consider – and indeed this already happens –  to invest in the new place with a combination of capital allocation. On the one hand, the traditional alternative assets that include real estate and infrastructures, all elements that are fundamental in an urban regeneration project. On the other hand, the social impact component. This second strand will increase the total value of the investment as better products and services will improve community quality of life. It’s a win-win offer for investors, businesses and communities.


The third pillar of our approach, that we provisionally define as ‘the enterprise model’, strikes at the core of the governance and business model of urban regeneration. This is still work in progress and needs validation. The goal is to invest and capture the value generated by a successful place and its prosperous community (or the other way around).

A traditional real estate or infrastructure model would determine its value based on a discounted future cash flow that can be higher or lower depending on the stability and visibility of such cash flow, its maturity and the risk associated with it.

We have already discussed the possibility that a well-designed master plan and a better-managed community, supported by the social impact investing component, would increase the value of the whole operation by creating a resilient, equitable and prospering community.  From the perspective of investors, this would translate to increased certainty of cash flow, making the project more attractive.

But what if we can demonstrate that the community growing in the new place, over time, performs better than others? That students get better marks, scientists and businesspeople are more successful and the perceived quality of life is higher than in comparable places across a range of indicators: from access to childcare through quality and variety of cultural offer to lower rates of physical and mental sickness?

Beyond comparatively decreasing the “public” cost of that community, can this result be defined and  described into a model and, as such, become the core competence of the urban regeneration industry? Can the creation of positive, measurable and replicable socio-economic outcomes become the main know-how of an enterprise and, similarly can the ability to manufacture a car or a smartphone to the highest standards, be recognised by the market and priced accordingly? Can the traditional future cash flow be replaced by a multiple analysis? Can investment not be limited to the development of office blocks, retail space or even new services, but be directed to an urban enterprise that has better quality of life as a product?

It might look ironic but looking back in history this was the interpretation that Ambrogio Lorenzetti gave of the development of the city of Siena a century before Piero della Francesca. In his famous “The Allegory of Good Government”, the Italian painter represented the prosperous city as a hustling and bustling community based on a variety of activities, kinds of people and effective institutions. There is no geometrical order but a lively and happy place. That was the symbol of great Italian Communes in the Late Middle Ages and, we propose, should serve as an inspiration for the renewal of our future cities.

This article expresses the view of the authors without any implication or commitment by the respective organisations