Public participation and the economic gain in real estate- and urban development for project developers

Abstract

Public participation is often regarded as something of an obstacle in urban development. However, it can be beneficial for project developers and other initatiors of projects in urban development and can potentially lead to economic gain for the developer. To research if there is any economic gain in the eventual results of a project, and to what extent public participation has an impact on this, costs and value are the focus points of this research. Economic gain does not mean more profit, but decreased costs as well. More specific, one of the largest cost factors in project development are the costs that come with delay. Often, this delay is caused by opposition and litigation in the permit-application phase of a development. To research this, the following main question will be used: ‘’To what extent can project developers benefit economically from engaging public participation in complex urban development projects?’’ This research will take several financial factors into account: (1) primary costs of public participation, (2) secondary costs of public participation, (3) primary costs of legal processes and (4) secondary costs of legal procdures. The primary costs are the costs that are directly coming from an activity and the secondary costs are the costs that originate indirectly from these activities. To research this, two phases of case studies are used. The first phase of case studies is done to gain insight in the direct and indirect costs of public participation and legal processes, afore determining in the second round of case studies if public participation decreased the chances of (non)participants starting legal procedures or caused any other forms of delay. The first round of case studies is done through a financial analysis of multiple cases, the second round is one in-depth casestudy complimented by interviews with developers, legal advisors, and (non)participants themselves. A cross-analysis is done of the results to determine to what extent public participation helps to smoothen the process and decrease the chances of legal processes, and if so, how it financially contributed to the financial result of the project. The research is rounded off with practical recommendations for developers on how to include public participation in their development process to maximize the potential of public participation initatiated by developers.