Creating Positive Externalities
Renovations, restorations and construction projects are often associated with disruption, noise, dust, resource intensity and high energy use. Their impacts are typically understood through what is temporarily lost or disturbed: comfort, routine, accessibility or stability. Yet large-scale restoration projects also create moments in which places, relationships and local economies can be reshaped. When approached with long-term intention, construction becomes more than a technical process of renewing buildings. It can strengthen local employment pathways, support businesses, reinforce community identity and generate forms of social value that extend well beyond the site itself.
This challenge sits within a broader puzzle: how can regeneration create value without reinforcing exclusion or displacing the communities that already give places their identity? Research has long pointed to the risks of class-based redesign processes that prioritise physical upgrading while weakening local ownership and participation, calling instead for approaches that combine top-down policy frameworks with bottom-up community engagement (Parés et al., 2017; Bianchi, 2019). Our experience conducting a social impact assessment for Dolphin Square, a 1,200-unit housing estate in Central London, showed that positive externalities cannot be seen as automatic by-products of construction activity. They emerge when social value is deliberately embedded into procurement, governance, spatial design and community engagement from the outset of a project.
Local economic anchoring through procurement and employment design
The economic footprint of restoration projects is shaped long before construction begins. If the objective is to create positive externalities, procurement and employment strategies need to be designed in ways that retain economic value within the surrounding area and strengthen local skills development through apprenticeships, internships and training pathways. One of the most effective ways to achieve this is by redirecting, as far as possible, employment generated through construction into nearby communities. In practice, this requires early engagement with supply chains, collaboration with council-linked employment and skills channels, and the involvement of local subcontractors from the outset of the project.
The strongest outcomes are achieved when procurement frameworks are built around long-term collaboration between contractors, intermediaries and training institutions rather than isolated local-hire targets. Research on social procurement in construction shows that procurement design matters more than procurement rhetoric (Loosemore et al., 2023). In other words, social value outcomes do not emerge simply because they are included in procurement statements. They depend on whether employment, training and local participation are structurally embedded into delivery processes from the beginning. Employment-focused social procurement has, for example, been shown to reduce structural barriers to entry for disadvantaged workers by connecting training pathways with actual job opportunities on site through cross-sector intermediaries (Suchowerska et al., 2024). In the UK context, this logic has increasingly been formalised through the Public Services (Social Value) Act 2012, which requires broader community outcomes to be considered in contracting decisions (Cabinet Office, 2025). Together, these findings support the broader assumption that local authorities and project owners can play a significant role in increasing local employment rates and earnings for lower-paid workers through more deliberate spending on local suppliers (Wontner et al., 2020). Our work at Dolphin Square showed how this can operate in practice. Contractors were encouraged to recruit locally where possible, engage with council skills brokerages and support apprenticeships and T-level placements. As a result, a significant proportion of the demolition workforce came from within a short radius of the estate, helping to anchor employment benefits within the surrounding area.
Stabilisation and enhancement of on-site economic ecosystems
Restoration projects also influence the resilience of the businesses operating within and around them. Commercial tenants often experience uncertainty during long construction phases, particularly in mixed-use estates where disruption can affect accessibility, visibility and daily activity. Yet projects that maintain continuity, communicate clearly and protect the identity of a place can strengthen local economic ecosystems during periods of change.
At Dolphin Square, the site identity itself functioned as an economic asset, attracting users from beyond the immediate area and sustaining demand despite ongoing construction. Throughout the restoration period, services operating on site continued to benefit from the estate’s long-standing reputation. Patients from outside the immediate area were still drawn to the site because of the trust and recognition associated with the estate. This highlights how reputational capital can be maintained, and in some cases strengthened, through careful communication of place identity. In other words, positive externalities can be achieved when leveraging on local multiplier effects, whereby project expenditure circulating through nearby businesses and households generates additional rounds of local economic activity (Moretti, 2010; Bartik, 2020). Projects with locally embedded supply chains and workforces tend to retain a greater share of this value within the surrounding area, strengthening the resilience of the wider economic ecosystem. The implication for project design is therefore broader than the long-term performance of the building itself; it also concerns the economic sustainability of the environment in which the project is situated.
Production of new social infrastructures through shared space design
Shared spaces function as meaningful social infrastructure and should be embedded within a wider strategic vision rooted in the needs and routines of local communities (Fiorentino, 2024). Communal spaces such as cafés, terraces, gyms or co-working areas function as what Brown and Barber (2012) describe as “soft infrastructure”: spaces where social life is continuously reproduced through repeated interaction. Their value lies in their ability to create overlap between different social groups and create a common sense of belonging. This form of social mixing emerges when spaces enable informal and low-friction encounters embedded in everyday life (Jones and Evans, 2008). Blokland’s concept of "public familiarity" (2017) is useful here: the value of shared public spaces lies in the accumulation of superficial, everyday interactions that generate a sense of belonging and attachment as well as a fluid relationship with place identity.
At Dolphin Square, communal spaces became central to maintaining social continuity during the restoration phase. The estate’s long-standing social identity, shaped over decades by residents and users, was treated as part of its heritage. Events, informal gatherings and participatory initiatives continued alongside the works, preserving the social rhythm of the estate while its physical fabric was being renewed. Shared areas such as the café, terrace, gym and co-working spaces created opportunities for interaction across different user groups. Residents brought friends and family into communal spaces, gym members stayed after classes to socialise, and co-workers described the spaces as part of their daily routine, allowing them to move naturally between focused work and informal interaction. Existing activities such as the weekly Wednesday Tea and summer events were sustained, while new initiatives including book clubs and resident-led groups began to emerge. These experiences reflect a broader principle articulated by Day (1990): buildings are “places of soul”, shaped as much by relationships and shared routines as by architecture itself.
Spillover of social value beyond the site boundary
Positive spillovers are strongest when projects operate as connected nodes within a wider local ecosystem (Fiorentino, 2023). It should be acknowledged that the effects of restoration projects also extend into surrounding neighbourhoods when spaces and activities remain open to external communities. The long-term value of positive spillovers, however, depends on whether residents' needs, continuity and local ownership are actually protected over time. At Dolphin Square, these positive spillovers were already visible during the restoration phase. Communal spaces such as the café and terrace increasingly attracted interest from nearby residents and local associations. Relationships with surrounding communities began to strengthen through shared use of spaces and continued engagement at the time of our research, and the estate also established partnerships with charities and community organisations, which extended its social footprint beyond the estate itself.
References
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