Analysis on financial consequences of spatial decisions: framework and case studies

A large number of policy decisions at both the spatial and other policy departments have an effect on the financial value of an individual property. In the current society, where the economic crisis and the debate about the position of the government have changed the conditions for the development of a spatial policy and the realization of real estate projects, arguing about the financial impact of spatial policy decisions is more than ever relevant. In 2014 the Flemish spatial development department initiated a research into the financial consequences of spatial decisions regarding private owners and into the actual performance of the existing financial compensation systems in Flanders. The study also defined and operationalized the concept of real estate value and made an in-depth analysis of thirteen different cases and their impact on the total real estate value within a defined time period. The cases used a wide variation of financial valuation techniques (comparative method, hedonic method, capitalization rental income, residual value method). The cases illustrated that the current compensation mechanisms are mainly focused on the ‘zoning’ of the properties. Changes to generic regulations or changes to the floor space of the property (e.g. limit/ increase number of floors) also have significant effects on the real estate value but are not captured within the actual regulations. Flanders intends to implement those new insights about financial impacts of spatial development and planning. Increasing the spatial efficiency and further exploring and harmonizing the compensation mechanisms in Flanders are two major challenges for the new Spatial Policy Plan of Flanders