Optimal decision making on urban renewal projects

Purpose – The aim of this paper is to present a systematic approach to provide decision makers in the Taipei City Government and private developers with an opportunity to review their decisions on urban renewal project selections, and to provide a model which could be adapted for other locations. Design/methodology/approach – Porter's diamond model of competitive advantage is applied to establish evaluating criteria on urban competitiveness quality, and a fuzzy set theory combining the PROMETHEE method is used to determine the priority of projects. In assigning scores for urban sustainability, the expected return for each project is calculated for the economic dimension and a subjective scale has been used for the social and environmental dimensions. Genetic algorithms (GA) are introduced to search optimal solutions considering cost‐score tradeoffs for decisions on investment ratio determination and renewal type selection. The proposed approach is tested by evaluating 13 urban renewal projects in Taipei City. Findings – The three‐stage model proposed by this study has established a comprehensive and systematic approach that considers key factors in urban renewal, assesses renewal projects from the standpoint of urban competitiveness and sustainability, and provides decision makers with helpful guidelines for investment. Research limitations/implications – There is difficulty in re‐examining social and environmental issues of the city government's earlier decisions became decision makers did not fully consider these two issues at the beginning of the planning stage, which is a limitation of this research. Originality/value – The results documented in the paper provide many other cities facing similar renewal decision problems with insightful strategies and useful implications.