Financing major repairs in apartment buildings through infill development: Exploring views and benefit requirements of the owner-occupiers
Abstract
Purpose
The purpose of this paper is to study views of owner-occupiers concerning infill development as a mechanism for financing major repairs in apartment buildings and financial benefits they require from the infill development for accepting it near their homes (on the plot of their housing company).
Design/methodology/approach
The data used draws upon a survey of 894 respondents concerning residents’ views on infill development in Finland. The required financial benefits from the infill development were questioned in both relative proportions of the expenses related to major repairs and concrete monetary sums.
Findings
First, the findings indicate that the financial benefits owner-occupiers require in order to accept infill development are significant, covering about two-thirds of the costs of major repairs during following ten years or over 75 percent of an (imagined) upcoming pipeline repair. Second, approximately one-fifth of the respondents regard that no economic benefit is enough to make them support infill development. Third, people’s decision-making concerning infill development is complex, involving also many other factors than monetary.
Practical implications
This paper provides insight into the feasibility of infill development as a means to finance major repairs from the perspective of owner-occupiers. The paper has strong policy implications as it highlights the significance of the public authorities and their policies in enabling the infill development.
Originality/value
This is the first academic study to focus on owner-occupiers views and financial requirements for the infill development as a means to finance major repairs in apartment buildings.
Keywords
Acknowledgements
This work was supported by Academy of Finland (Grant Number 255390), City of Helsinki, Kiinko Real Estate Education and Doctoral Programme in Built Environment. The authors would like to thank two anonymous reviewers for their insightful comments on an earlier version of the article. Thanks also to Eero Valtonen and other participants of Research Seminar in Real Estate held at Aalto University in 2016 for their helpful comments on the earlier version of the manuscript.
Citation
Puustinen, T., Pennanen, K., Falkenbach, H., Arvola, A. and Viitanen, K. (2017), "Financing major repairs in apartment buildings through infill development: Exploring views and benefit requirements of the owner-occupiers", Property Management, Vol. 35 No. 5, pp. 508-527. https://doi.org/10.1108/PM-08-2016-0045
Publisher
:Emerald Publishing Limited
Copyright © 2017, Emerald Publishing Limited