ITALY: An Introduction to Public Law: Zoning & Planning

Focus on Urban Regeneration

“Urban regeneration” remained a key term for Italian town planning in 2024.

According to data from both the Ministry of Economy and Finance (MEF) and the Agenzia delle Entrate, Italy’s real estate assets continue to be dominated by “older” buildings. Indeed, a substantial portion of the assets, particularly in historic city centres, dates back to the pre-war era or the post-war reconstruction period.

Regenerating old buildings and avoiding soil consumption, with refurbishment and renovation works –including demolition and reconstruction, energy efficiency and removal of architectural barriers – have become a priority in national, regional and local urban planning strategies.

Given the pressing need to revitalise the Italian building assets, the government, regions and municipalities have introduced a series of “incentives” to encourage property owners and developers to undertake renovation and redevelopment projects. These incentives are designed to stimulate economic growth, reduce energy consumption and improve the overall quality of life in Italian cities.

For instance, during the last few years:

• the government further streamlined bureaucratic processes to expedite the approval of urban regeneration projects, making it easier for developers to obtain the relevant authorisations; and
• various incentives were introduced to reduce construction fees for renovation projects of existing buildings.

Taking advantage of these “incentives”, property owners and developers can unlock the potential of Italy’s existing building assets, creating more sustainable, efficient and attractive urban environments.

Town Planning: New Trends

Data centres

The global data centre industry is experiencing explosive growth, fuelled by the formidable demand for digital services.

To meet this growing demand for data centres and avail of the economic benefits they offer, the Lombardy Region issued guidelines (Resolution No XII/2629, 24 June 2024) to provide municipalities and industry players with consistent explanations for siting and building data centres, addressing not only urban planning but also environmental issues.

At the national level, in August 2024 the Ministry of Environment issued guidelines valid throughout Italy for environmental assessments of data centres.

In order to further facilitate the planned investments in this asset class, several legislative proposals have already been presented to the national parliament aimed at defining, in a clear and stable manner, the criteria for choosing the location and for activating of data centres, with the purpose of further streamlining bureaucratic procedures and reducing the time required to obtain the relevant authorisations.

Hospitality industry

The Italian hotel industry has demonstrated a strong ability to recover after the COVID-19 pandemic crisis, with a rapid recovery of tourist flows and an increase in occupancy rates. Throughout 2024, it experienced a period of great dynamism and transformation, confirming its status as a sector of significant interest and economic relevance.

For instance, data from the Lombardy Region and Unioncamere Lombardia shows that the region welcomed over 13 million visitors in the first eight months of 2024, generating 37 million overnight stays – that is, an 11% increase compared to the same period in 2023.

In addition to the foregoing, there is a proliferation of new forms of hospitality, such as hostels and vacation rentals, which expand the available offerings and help attract new customer segments.

In light of these factors, the Italian hospitality sector presents a compelling investment opportunity, offering strong growth potential and attractive returns. Even as the industry continues to evolve and diversify, it is poised to remain a key driver of economic growth and a popular asset class for real estate investors.

Student accommodation

According to the report issued by Scenari Immobiliari and Re.Uni, Italy has seen a steady increase in international students, particularly in major cities such as Milan, Rome, Florence and Bologna.

Modern students seek comfortable, well-equipped and safe living spaces that promote both study and social life.

There is a growing preference for communal living, with shared facilities such as study rooms, gyms and social spaces.

Student accommodation offers relatively stable rental income, making it an attractive investment both for domestic and for international investors.

The Italian government has recognised the importance of student accomodation and has implemented policies to encourage investment in this sector – for instance, by investing specific PNRR funds in student accommodation projects.

The Future Challenges of Italian Zoning and Planning

The State and the relevant local institutions will, hopefully, continue to work together to overcome the bureaucratic obstacles that still hold back the urban planning sector (in terms of certainty and speed of the administrative procedures) and to eliminate certain hurdles.

For instance, intervening in historic centres and in protected buildings has been unnecessarily complex, with a high risk of abandonment and depopulation of old buildings in historic centres.

Moreover, reconciling tourist accommodation needs sometimes conflicts with the demand for housing. The Italian government is already involved in this matter, and some relevant laws have been already adopted to regulate the short rent phenomenon.

These important issues, as well as social housing, energy efficiency and urban regeneration of abandoned and disused buildings, are also being addressed by major Italian cities.

In fact, in 2024 Milan, Bergamo, Rome and Florence either started or approved administrative procedures for the variation of their general urban planning instruments, which constitute an opportunity for investors and the means by which such goals can be achieved.