Transformation area
A transformation area (transformasjonsområde) is an area that will change use, typically from older industry, warehousing or harbour to housing, offices and city life. Instead of developing new, untouched nature, you reuse land that is already built on but has outlived its original role. Together with densification, transformation is one of the most important strategies in Norwegian urban development, because it lets towns grow inwards without eating into surrounding LNF areas (agriculture, nature and outdoor recreation).
Typical transformation areas are disused industrial sites, old harbour and railway land, shopping centre and car-based commercial areas, and outdated commercial buildings in central locations. The driving forces are that a central location has become worth more for housing and offices than for the original use, and that municipalities want to make use of existing infrastructure. These areas often have high development potential precisely because they are large, centrally located and can be given a completely new zoning plan. Bjørvika in Oslo, Sluppen in Trondheim and a number of old industrial areas along the water are examples of large-scale transformation. What they have in common is that waterfront industry and traffic areas have been replaced by dense, city-centre neighbourhoods.
At the same time, transformation is demanding. The old sites may have contaminated ground from earlier industry, which must be surveyed and cleaned up before development. The property structure is often split between many owners, so development requires acquisitions, cooperation or area transfer over time. Buildings worth preserving or cultural heritage sites may have to be kept and integrated into the new development. And because the areas are to take on a new role, an extensive planning process is usually required, with an environmental impact assessment, a new zoning plan and new planning provisions before anything can be built.
For a property player, transformation areas are interesting because they hold scope for large value creation, but also considerable risk and a long time horizon. The value depends on which land use and utilisation ratio the area is finally zoned for, and on the costs of clean-up, demolition and infrastructure. A site in an area earmarked for transformation in the municipal master plan can be worth far more than its current use would suggest, but the gain often lies years ahead and depends on the planning process.
The time horizon is a defining feature of transformation. From the point an area is earmarked in the municipal master plan until the first buildings are complete, a decade or more can pass, with zoning, clean-up, infrastructure and development in several stages. In the meantime, the land is often used temporarily for other activity. For investors, the long horizon means that the valuation is sensitive to interest rates, construction costs and market developments far into the future.
In Placepoint you can examine the properties in a transformation area as a whole: ownership and matrikkel data, the current and proposed zoning plan, and land use purpose, so that you get an overview of structure, owners and development options.
From Placepoint's dictionary: Transformasjonsområde
More information: Plan- og bygningsloven (the Planning and Building Act), Plan- og bygningsloven § 12-5 (land use purposes)
English: Transformation / regeneration area (transformasjonsområde; an area changing use, typically from industry to housing and offices).
Frequently asked questions
What is a transformation area?
An area that will change use, typically from older industry, warehousing or harbour to housing, offices and city life. It reuses land that is already built on instead of developing new nature.
What is the difference between transformation and densification?
Densification means building more densely within the existing urban structure. Transformation means giving an area a completely new use. They are often used together as strategies to let towns grow inwards.
Why are transformation areas demanding to develop?
They may have contaminated ground, a split ownership structure, buildings worth preserving and a requirement for an extensive planning process with an environmental impact assessment and a new zoning plan before development.
Why can a site in a transformation area be valuable?
Because it can be zoned for a new and more valuable land use with high development potential. The gain often lies years ahead and depends on the planning process and the clean-up costs.
How does transformation relate to the municipal master plan?
Areas to be transformed are often earmarked in the land use element of the municipal master plan, which sets the framework a later zoning plan must stay within.