Applying Threshold Analysis to Stimulate the Sustainable Renewal of Cities

Paper i proceeding, 2005

This paper describes the threshold analysis for economic growth developed by Boleslaw Malisz in the 1960’s reflecting the city and region planning debates in Poland and Great Britain at that time. Malisz developed a simple method for growth that considers the rational use of all options, natural and man-made. Discussed first are the spatial limitations that arise during the process of development and renewal of city structures. Malisz’s method helps select the best solutions that limit barriers that impede the process of planning with the lowest threshold costs. His method applies to the range of investments that are linked to fixed expenditures made with the aim to increase the existing capacity of resources. These thresholds affect the costs of adapting the material environment to city development. Typically, large studies are undertaken either to build new city areas increasing the number of inhabitants or alternatively, raise the standard of existing areas through renewal. Yet another kind of big investment is the revitalization of a city’s post industrial areas. This paper then discusses the differentiation between threshold costs and the “normal” costs of city investments. Threshold costs are relatively fixed and are not location dependent. Malisz distinguished between threshold costs and low, but rising costs that result from worsening site development aspects, from those of “jumping costs” which involve one-time expenditures to be borne at fixed moments. Site exploitation costs should be also considered. Typically, the threshold costs together with exploitation costs must be reduced to achieve effective economic investments. Finally, the differences between the identification of threshold limitations and the strategy of overcoming thresholds are explained. Good examples of overcoming threshold costs for further investments are provided. These include: the building of Rotterdam’s Erasmus Bridge connecting the city with its post industrial areas and Bytom’s renovation of its main square, buildings, technical infrastructure and communication system to stimulate new planning in cooperation with IBA Emscher Park. Yet another sample is building of the light rail and streetcar public transportation systems in Portland, Oregon, USA to connect city districts providing better access to the city center. Such strategies underscore the larger benefits of leveraging strategic public investments to stimulate private growth and urban vitality.