A Study on Cost Allocation in Renovation of Old Urban Residential Communities

Abstract

The renovation of old residential communities not only meets the people’s aspirations for a better life, but also promotes the image of a city. However, unreasonable cost allocation in the renovation of old residential communities seriously impedes the multi-channel fundraising and progress of renovation. The general aim of this study was to construct a cost allocation model for the renovation of old residential communities, so as to address unreasonable cost allocation and speed up the renovation. With the government, home owners, and private sectors as the main participants and stakeholders, we constructed a cost allocation model for the renovation of old residential communities based on the structural equation model and the Shapley value. The structural equation model is used for indicator screening and weight computing, while the Shapley value is used for cost allocation. Then, we improved the cost allocation model based on the influencing factors that were screened out. This discovery will increase the cooperation between the government, home owners, and private sectors to fund the renovation of old residential communities, and further improve the progress of renovation of old residential communities. The study results show that by fully taking into account the degree of participation, the degree of risk sharing, the degree of value-added return, and the degree of resource input of participants, the improved cost allocation model makes the cost allocation more reasonable and fairer.