Rethinking Incentives for Circular Urban Regeneration: Lessons from the City of Milan

In recent decades, urban planning has increasingly shifted toward regenerative and circular approaches, placing a new emphasis on urban regeneration. However, existing legislation often fails to fully grasp the multifaceted nature of the issue, which extends beyond mere physical transformation. This limitation is evident in Italian regional policies, where incentives for the recovery of abandoned buildings are defined with limited consideration of contextual conditions. Based on these premises, the paper develops a three-phase evaluation tool to support public administrations in defining fair incentive schemes for urban regeneration. To this aim, the proposed evaluation tool integrates: (i) a property-based financial feasibility assessment based on the transformation value; (ii) a social sustainability assessment at the neighbourhood scale based on a multi-criteria decision analysis (MCDA), and (iii) a rule-based clustering of properties based on use, profitability, and social sustainability conditions. The tool is tested on a case study of 24 abandoned properties in Milan (Italy). The results highlight significant variations in both the financial feasibility of regeneration initiatives and social sustainability across properties, highlighting the need for differentiated incentive schemes. These findings reveal the potential of the evaluation tool to support more equitable and context-aware allocation of incentives toward designing more effective urban regeneration policies.