Changing public space

increase in the number of rules or cameras in the area (Cybriwsky, 1999; Kohn, 2004; Low, 2005).
The second possible effect, therefore, is that the private-sector involvement leads to restricted
access of public space. The two effects are elaborated below. Section 4.4.3 briefly discusses how
private-sector involvement could also affect redeveloped public space in other ways.
4.4.1 Budget
Private-sector involvement in urban redevelopment might make more funds available to upgrade
public space. Local governments tended to give low priority to the design and management of
public space, as other responsibilities took precedence such as sanitation and road maintenance
(Carr et al., 1992). In many cases, the capacity to provide continuous upkeep and maintenance
has always been limited and is further decreasing as a result of caps on public budgets. However,
local governments currently face a growing competition to attract the increasingly mobile
higher-income residents, tourists, investments, and businesses. They realise that it is not sufficient
to only have a number of impressive buildings and events in the city, but that public spaces of
good quality can also lend a positive image to the city and its lifestyle. To find the appropriate
budget to redevelop public space, local governments need to turn to the private sector, which – in
contrast to the public sector – can usually raise the required investments.
As described above, investors such as pension funds, life assurance companies, and large stock
market listed property companies have become increasingly aware that it can be in their own
interest to invest in the quality of public space to enhance the market appeal and long-term rental
potential of their property (Blank, 2007). A clear example of this positive return on investment
is the 1961 incentive zoning policy that was enacted in New York City. Here, developers were
stimulated to create ‘privately owned public spaces’ (POPS) in or on their property in exchange
for extra floor surface (Kayden, 2000; Smithsimon, 2008). This had positive effects for both the
public and the developers: over 500 new POPS were created between 1961 and 2000, which led
to an increase in the rental potential of the property. A policy instrument similar to incentive
zoning does not exist in the Netherlands, but the idea that public space increases the property
value has become common and has acted as incentive for the private sector to invest in public
space.
The financial contribution by the private sector can range from direct and semi-direct to
indirect investments. In the first option, private parties buy land from the local government and
finance the development and management of both buildings and public space. Sometimes the
land is sold to the private sector for a nominal sum, because it is also held responsible to invest
in the outdoor space. This direct financial contribution mostly occurs in the development of new
neighbourhoods at the city’s edge, but can also take place in the city centre. The investment of
the private sector can also be semi-direct. In this case, the local government redevelops public
space, but the private parties – usually owners of property abutting the redeveloped public
space – provide extra investments to boost the municipal budget. This could be voluntary
as well as compulsory through special assessments. In the Netherlands, this is known as
baatbelasting (Overwater, 2002). This implies that local entrepreneurs are forced to pay a certain
contribution (depending on the function and size of their property), because they supposedly
profit from the improvements in public space. The contribution is limited to the redevelopment
costs; the management costs cannot be recouped (Needham, 2007). The third mode of
financial contribution of the private sector refers to situations in which the local government
redevelops public space with the yields raised through the sale of the land, in Dutch known as
77