**2.2 Economic sustainability**

It comes as no surprise that in urban regeneration projects, economic sustainability and viability are critical, influencing social and environmental sustainability performance, in addition to the decision to demolish or reuse. Costs of retrofits, property taxes, financing and rate of return on investments may result in rehabilitation costs being higher than new construction. While these factors can act as economic barriers, they also pose an opportunity for regulatory bodies to incentivise and facilitate the

economic sustainability of housing regeneration and retrofits. Currently, government incentives, tax credits and housing policies often act independently as opposed to synergistic tools to support adaptive reuse and broader sustainability goals [14, 15].

A major barrier to urban regeneration and adaptive reuse is the short-term, capital-intensive investment required to achieve long-term sustainability outcomes. Collaborative efforts are required to realise these complex, multi-stakeholder projects, and these collaborations are reliant on sustained financial support to be successful [1, 16]. The availability of public funding and low-cost finance to the private industry not only helps reduce the initial financial barrier to adaptive reuse but also helps mitigate the prevalent risk of unexpected challenges and costs. Another important benefit from reusing and retrofitting individual housing is the contribution to economic, social and environmental value in the surrounding neighbourhood. Looking beyond the market value of a building is essential to maximise neighbourhood scale effects, considering externalities and spillover effects in the surrounding urban environment. In addition to job creation, improvements in housing quality and neighbourhood services, urban regeneration of heritage through its adaptive reuse is a means to achieve smart growth principles, encouraging compact development, use of existing infrastructure and higher densities [1, 4]. Developers and owners must balance the economic benefit of developing a site to its highest development potential, with the high opportunity cost forgone for building retrofits and conservation. Studies call for a broader approach to analysing return on investment that includes social and environmental qualities to adequately measure the community-scale benefits of urban regeneration and adaptive reuse [13, 15].

Through the planning and design stages of urban regeneration projects, planners have the opportunity to make a significant difference in environmental and economic outcomes for development. As a strategic process, planning for adaptive reuse is an effective tool for intensification, redevelopment and provision of affordable housing in existing neighbourhoods. In comparison to the more rigid factors of capital investment and asset condition, which define the feasibility of retrofits and adaptive reuse at the project level, regulation and policy created through planning are relatively dynamic, providing a key opportunity to enable larger-scale transformation and synergy [10, 14].

While a lack of resources to incentivise and regulate private industry and individual homeowners in Canadian cities can be a barrier to achieving sustainability, planners and municipal authorities are starting to address these issues on a larger scale, focusing on neighbourhood effects and affordable housing. Land use planning plays a critical role in the delivery of place-based outcomes such as complete, mixeduse communities that go beyond single-use zones to offer a diverse range and mix of housing options, densities and tenure [2, 16]. Zoning is a powerful land use tool, directly impacting the form, use, scale, occupancy and other aspects of our cities, including the sustainability and viability of adaptive reuse projects [17].
