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WORLD CITIES

REPORT 2016

URBANIZATION AND
DEVELOPMENT
Emerging Futures
Urbanization and
Development:
Emerging Futures

World Cities Report 2016


First published 2016 by United Nations Human Settlements Programme (UN-Habitat)
Copyright © United Nations Human Settlements Programme, 2016
All rights reserved
United Nations Human Settlements Programme (UN-Habitat)
P.O. Box 30030, Nairobi, Kenya
Tel: +254 20 7621 234
Fax: +254 20 7624 266/7
Website: www.unhabitat.org

DISCLAIMER
The designations employed and the presentation of the material in this report do not imply the expression
of any opinion whatsoever on the part of the Secretariat of the United Nations concerning the legal
status of any country, territory, city or area, or of its authorities, or concerning delimitation of its frontiers
or boundaries, or regarding its economic system or degree of development. The analysis, conclusions
and recommendations of this report do not necessarily reflect the views of the United Nations Human
Settlements Programme or its Governing Council.
The Report is produced with official data provided by governments and additional information gathered by
the Global Urban Observatory. Cities and countries are invited to update data relevant to them. It is important
to acknowledge that data varies according to definition and sources. While UN-Habitat checks data provided
to the fullest extent possible, the responsibility for the accuracy of the information lies with the original
providers of the data. Information contained in this Report is provided without warranty of any kind, either
express or implied, including, without limitation, warranties of merchantability, fitness for a particular
purpose and non-infringement. UN-Habitat specifically does not make any warranties or representations as
to the accuracy or completeness of any such data. Under no circumstances shall UN-Habitat be liable for any
loss, damage, liability or expense incurred or suffered that is claimed to have resulted from the use of this
Report, including, without limitation, any fault, error, omission with respect thereto. The use of this Report
is at the User’s sole risk. Under no circumstances, including, but not limited to negligence, shall UN-Habitat
or its affiliates be liable for any direct, indirect, incidental, special or consequential damages, even if UN-
Habitat has been advised of the possibility of such damages.

HS Number: HS/038/16E

ISBN Number (Series): 978-92-1-133395-4


ISBN Number (Volume): 978-92-1-132708-3
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WORLD CITIES REPORT 2016


Foreword
Ban Ki-moon
Secretary-General
United Nations

Since the 1996 Habitat II Conference in Istanbul, the world has faced many opportunity. It takes place as the world embarks on efforts
serious challenges, including rising inequality, increasing insecurity in many to implement the 2030 Agenda for Sustainable Develop-
places and the widening impacts of climate change everywhere. But we have ment, which gives a prominent role to cities. Habitat III
also made major advances in medicine, life expectancy, information and com- is expected to discuss and agree on a New Urban Agenda
munications technology, governance and human knowledge. On both the posi- aimed at enhancing the contribution of cities to sustain-
tive and negative sides of this ledger, cities have been a able development, and at ensuring that cities are inclu-
primary arena where change takes place. sive, safe, resilient and sustainable.
As the world has transformed, so have urban This new World Cities Report presents a
areas. Today, cities are home to 54 per cent of the world’s number of issues that this New Urban Agenda should
population, and by the middle of this century that figure address. I commend its analysis and documentation to a
will rise to 66 per cent. While cities face major problems, wide global audience, and encourage all stakeholders to
from poverty to pollution, they are also powerhouses of make Habitat III a success in pointing the way forward in
economic growth and catalysts for inclusion and innova- designing and managing cities so that all their inhabitants
tion. With vision, planning and financing, cities can help can enjoy lives of dignity.
provide solutions for the world.
This year’s United Nations Conference on
Housing and Sustainable Urban Development — known as
Habitat III — in Quito, Ecuador, is a timely and important
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WORLD CITIES REPORT 2016

Introduction Joan Clos


Under-Secretary-General,
United Nations Executive Director, UN-Habitat

The world has changed remarkably since the Habitat II Conference took place governance, finance and learning that can sustain posi-
in Istanbul in 1996. Twenty years appears to be a short span of time, but our tive change. The Report unequivocally demonstrates that
ideas, practices, modes of production and consumption, demographic struc- the current urbanization model is unsustainable in many
tures, as well as education and health conditions have drastically changed. The respects, puts many people at risk, creates unnecessary
way cities are shaped, their form and functionality have also been transformed costs, negatively affects the environment, and is intrinsi-
over these years. Many of these changes have been for cally unfair. It conveys a clear message that the pattern of
the better, but others for the worst. urbanization needs to change in order to better respond
The growth of the world’s cities, from the north to the challenges of our time, to address issues such as
to the south, and from the east to the west, is ingrained in a inequality, climate change, informality, insecurity, and the
culture of short-term economic benefit and often unbridled unsustainable forms of urban expansion.
consumption and production practices that compromise The Habitat Agenda adopted at the United
the sustainability of the environment. The causes may vary Nations Conference on Human Settlements (Habitat II)
according to different contexts, but uncontrolled growth, in 1996 was influential in the recognition of the right to
privatization of public goods, lack of regulations and institu- adequate housing, sustainable human settlements devel-
tions as well as forms of collective indolence are often the opment in an urbanizing world, and the increased partici-
key factors behind a model of urbanization that is becoming pation of the private sector and non-governmental organi-
highly unsustainable. Urbanization is at the same time a zations in the urbanization process. It reinforced the role
positive force underpinning profound social, political and of local authorities and stirred progress in strengthening
economic transformation. fiscal and financial management capacities. However, in
Urbanization and growth go hand in hand, and general terms, implementation, financing and monitoring
no one can deny that urbanization is essential for socio- have remained major challenges.
economic transformation, wealth generation, prosperity The New Urban Agenda that is expected to
and development. As this Report asserts, the emerging be adopted at the Habitat III Conference cannot afford
future of cities largely depends on the way we plan and to ignore these shortcomings. It should convey a sense of
manage urbanization, and the way we leverage this trans- urgency in the implementation of policies and actions that
formative process to ‘provide the setting, the underlying can no longer depend on political schedules or opportun-
base and also the momentum for global change’1. istic moments, but should, instead, be set in clear, well-
The analysis of urban development of the past defined agendas. The New Urban Agenda should adopt a
twenty years presented in this first edition of the World city-wide approach to development with concrete actions,
Cities Report shows, with compelling evidence, that there setting out clear funding mechanisms and effective means
are new forms of collaboration and cooperation, planning, of implementation and monitoring.

1. United Nations (2013) Sustainable Urbanization, thematic think piece prepared for the 2030 development agenda, New York.
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WORLD CITIES REPORT 2016


Habitat III and the New Urban Agenda should that work as a framework for action based on UN-Habi-
establish critical connections to the 2030 Agenda for tat’s three-pronged approach to planned urbanization – an
Sustainable Development and other international agree- effective and enabling legal and institutional environment,
ments. The Report is very explicit on the need to ensure improved urban planning and design and vibrant local eco-
a strong convergence among these agendas as a way of nomic development.
complementing and improving the implementation of the Finally, the Report expounds the most impor-
Sustainable Development Goals (SDGs), particularly those tant levers for the transformative change of cities. These
with an urban component. include planned city extensions, planned city infills, land
The research, data, knowledge, practice and readjustment programmes, basic services and housing
experience of UN-Habitat has facilitated the production plans and public space planning and regulations. The
of this highly informative Report. Its different chapters need to put in place a new global monitoring framework
collectively present a path to sustainable urban develop- to assess how countries and cities implement this Agenda
ment that the New Urban Agenda must consider. and the urban components of the SDGs is also highlighted
A set of principles that guide major shifts in in this Report.
strategic and policy thinking are presented to ensure that The success of the New Urban Agenda is about
human rights, the rule of law, equitable development and values, commitments and collective efforts. It is for the
democratic participation are the bastions of this Agenda. Habitat III Conference to steer the ‘emerging futures’ of
The Report also elaborates on the strategic components our cities on to a sustainable and prosperous path.
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WORLD CITIES REPORT 2016

Acknowledgements
Authors: UN-Habitat Core Team
Eduardo Moreno (Branch Coordinator); Ben Arimah (Task Manager); Raymond Otieno Otieno; Udo Mbeche-Smith;
Anne Klen-Amin; Marco Kamiya

Authors: External Consultants


Richard Stren; Patricia McCarney; Graham Tipple; Sai Balakrishnan; Vanesa Castán-Broto; Edgar Pieterse; Bruce
Stiftel; Sarah McCord Smith; Brian Roberts; Trevor Kanaley; Michael Cohen

UN-Habitat, Research Unit Interns


Belinda Kaimuri; Cibelle Kojima

Statistical Annex
Robert Ndugwa; Julius Majale; Joel Jere; Demissew Gebreyohannes; Antony Abilla

Administrative Support Team


Nelly Kang’ethe; Beatrice Bazanye; Anne Idukitta; Mary Dibo; Jacqueline Macha

Contributors: UN-Habitat Staff


Raf Tuts; Robert Kehew; Claudio Torres; Marcus Mayr; Elkin Velasquez; Laura Petrella; Remy Sietchiping; Sohel
Rana; Jackson Kago; Charles Mwau; John Omwamba; Ndinda Mwongo; Christophe Lalande; Fernanda Lonardoni;
Sonja Ghaderi; Robert Lewis-Lettington; Gianluca Crispi; Ananda Weliwita; Imogen Howells

International Advisory Board:


Christine Platt; Daniel Biau; Edésio Fernandes; Jaana Remes; John Ebohon; Maha Yahya; Prabha Khosla; Reza
Pourvaziry; Yu Zhu; Edgardo Bilsky; Shipra Narang Suri

Special Technical Contribution


Asian Development Bank: Anand Chiplunkar
Inter-American Development Bank: Javier Leon; Robin Rajack; Michael Donovan; Patricio Zambrano-Barragan;
Nora Libertun de Duren; Huascar Eguino; Axel Radics; Ophelie Chevalier; Jose Brakarz; Gilberto Chona
Ericsson: Anna Bondesson

Financial Support
Government of Norway

Partners
International City Leaders

Expert Group Meetings


Toronto: International City Leaders, Toronto, Canada and Shahr Bank
New York: International City Leaders and WAIC

Editorial Consultant
Thierry Naudin

Advocacy, Outreach and Communications Team


Gordon Weiss; Victor Mgendi; Jeanette Elseworth; Erick Otieno; Grace Thama-ini; Lynne Karago; Ivy Mutisya;
Andrew Ondoo; Caroline Gacheru; Julius Mwelu, Fredrick Maitaria

Design and Layout: Peter Cheseret, Euclide Namema


Mobile Application Development: Kenneth Kamau
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WORLD CITIES REPORT 2016


Contents
Foreword................................................................................................................................................................................................................................................. iii
Introduction............................................................................................................................................................................................................................................ iv
Acknowledgements................................................................................................................................................................................................................................. vi
List of Figures, Boxes and Tables.............................................................................................................................................................................................................. xi
Acronyms and Abbreviations.................................................................................................................................................................................................................. xiii

Chapter 1: From Habitat II to Habitat III: Twenty Years of Urban Development........................................................................ 1


1.1 The Beginnings.................................................................................................................................................................................................................. 3
1.2 Cities: A Gathering Force................................................................................................................................................................................................... 6
1.3 Urban Governance and Finance........................................................................................................................................................................................ 10
Governance: Decentralization and local democracy..................................................................................................................................................... 10
Decentralization without adequate finance................................................................................................................................................................. 10
1.4 The Continous Growth of Slums ..................................................................................................................................................................................... 13
1.5 The Challenge of Providing Urban Services...................................................................................................................................................................... 14
1.6 Cities and Climate Change............................................................................................................................................................................................... 16
1.7 Inequality and Exclusion ................................................................................................................................................................................................. 17
1.8 Upsurge in Involuntary Migration.................................................................................................................................................................................... 21
1.9 Rising Insecurity and Urban Risk...................................................................................................................................................................................... 22
1.10 The Need for a New Urban Agenda.................................................................................................................................................................................. 24

Chapter 2: Urbanization as a Transformative Force................................................................................................................. 27


2.1 The Dynamic Economic Transition of Cities...................................................................................................................................................................... 31
Productivity in cities .................................................................................................................................................................................................. 31
Cities in the global economy...................................................................................................................................................................................... 32
Cities and employment creation................................................................................................................................................................................. 33
Cities and inclusive prosperity.................................................................................................................................................................................... 34
Poverty and urban-rural linkages................................................................................................................................................................................. 34
2.2 Evolving Spatial Form of Cities......................................................................................................................................................................................... 36
New urban configurations.......................................................................................................................................................................................... 36
Urban sprawl, suburbanization and peri-urbanization ................................................................................................................................................. 37
The transformative potentials of urban space ............................................................................................................................................................. 37
2.3 The Essential Role of Cities in Sustainable Development................................................................................................................................................... 38
Urban mobility........................................................................................................................................................................................................... 39
Energy in cities.......................................................................................................................................................................................................... 40
Resilience of cities..................................................................................................................................................................................................... 41
Moving the cities agenda forward: The core challenge of governance ......................................................................................................................... 41
2.4 The Transformative Power of Connected Cities ................................................................................................................................................................ 42
ICT and sustainable urban development..................................................................................................................................................................... 42
The evolution of data in cities.................................................................................................................................................................................... 43
Open data ................................................................................................................................................................................................................. 44
Big data...................................................................................................................................................................................................................... 44
Smart cities................................................................................................................................................................................................................ 45

Chapter 3: The Fate of Housing................................................................................................................................................ 47


3.1 An Enabling Approach for Some, but Disabling for Many.................................................................................................................................................. 49
3.2 Review of Existing Housing Provision ............................................................................................................................................................................... 51
Needs and demand ................................................................................................................................................................................................... 51
The importance of housing for Habitat III................................................................................................................................................................... 52
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3.3 Key Trends with Respect to the Provision of Adequate Housing......................................................................................................................................... 52


The decline of housing as a political priority despite increasing demand...................................................................................................................... 52
Inequality, focus on home-ownership, speculation and neglect of rental housing ........................................................................................................ 53
Increasing reliance on the private sector..................................................................................................................................................................... 54
Affordability: an increasingly elusive concept.............................................................................................................................................................. 54
Land administration and management......................................................................................................................................................................... 55
Migration: positives and negatives for housing supply................................................................................................................................................. 56
Climate change and disasters...................................................................................................................................................................................... 56
3.4 Ending Urban Poverty: Improving the Lives of Slum Dwellers............................................................................................................................................ 57
3.5 Progress Made with Respect to Adequate Housing ........................................................................................................................................................... 59
Regulatory framework................................................................................................................................................................................................ 59
Finance for affordable housing.................................................................................................................................................................................... 60
Community-led finance and development................................................................................................................................................................... 61
Assisting the construction industry............................................................................................................................................................................. 62
Upgrading poor neighbourhoods................................................................................................................................................................................. 62
Improving access to infrastructure.............................................................................................................................................................................. 63
3.6 A New Approach to Housing in the New Urban Agenda ................................................................................................................................................... 65
Developed countries and for the aspiring middle class in transitional and developing countries ................................................................................... 65
Transitional and developing countries ........................................................................................................................................................................ 66

Chapter 4: The Widening Urban Divide................................................................................................................................... 69


4.1 People Excluded and Places of Exclusion........................................................................................................................................................................... 72
Exclusion from socioeconomic space.......................................................................................................................................................................... 72
Exclusion from the collective sociocultural space........................................................................................................................................................ 76
Exclusion from political space..................................................................................................................................................................................... 77
Spatial exclusion........................................................................................................................................................................................................ 78
4.2 The New Urban Agenda: Unfinished Business and Emerging Forms of Exclusion and Marginalization................................................................................ 81
A reinvigorated notion of urban planning and design…............................................................................................................................................... 81
… At the appropriate scales....................................................................................................................................................................................... 82
With the right types of participation…....................................................................................................................................................................... 83

Chapter 5: “Just” Environmental Sustainabilities..................................................................................................................... 85


5.1 Today’s Urban Environmental Challenges.......................................................................................................................................................................... 89
Equal access to resources and services........................................................................................................................................................................ 89
Are environmental risks and climate change impacts manageable?............................................................................................................................... 90
Managing urbanization, land transformation and biodiversity...................................................................................................................................... 91
Responding to decarbonization imperatives ................................................................................................................................................................ 91
5.2 Trends in Urban Environmental Planning and Management............................................................................................................................................... 93
National, local and multi-level governance.................................................................................................................................................................. 93
Integrated approaches to environmental planning ...................................................................................................................................................... 93
The central role of participatory planning .................................................................................................................................................................. 94
Technologically-driven sustainable urbanism ............................................................................................................................................................... 95
Sector-based initiatives for healthier urban environments ........................................................................................................................................... 95
5.3 Governing and Financing the Transition to Sustainable Cities............................................................................................................................................ 97
Leveraging finance for urban environmental action .................................................................................................................................................... 97
Decision-making beyond cost-benefit analysis.............................................................................................................................................................. 98
5.4 Concluding Remarks and Lessons for Policy...................................................................................................................................................................... 99
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Chapter 6: Rules of the Game: Urban Governance and Legislation....................................................................................... 101
6.1 New Times, Intensifying Pressures................................................................................................................................................................................. 103
6.2 Urban Law and Governance Trends ............................................................................................................................................................................... 105
Urban legislation...................................................................................................................................................................................................... 105
Governance............................................................................................................................................................................................................. 107
6.3 Uneven Progress in Decentralization Reform ................................................................................................................................................................. 108
6.4 Local Governance and Power.......................................................................................................................................................................................... 110
6.5 The Legal Imperatives of Urban Development ................................................................................................................................................................ 111
Intergovernmental frameworks................................................................................................................................................................................. 112
Metropolitan government........................................................................................................................................................................................ 113
Public finance reform............................................................................................................................................................................................... 113
Legislating amidst plural regulatory systems............................................................................................................................................................. 114
6.6 Governance and Law for a New Urban Agenda ............................................................................................................................................................. 115
Strategy and long-term planning............................................................................................................................................................................... 116
Service delivery innovations..................................................................................................................................................................................... 118
Advocacy and activism ............................................................................................................................................................................................. 118
Social learning mechanisms for innovation................................................................................................................................................................ 119
Monitoring and evaluation....................................................................................................................................................................................... 119

Chapter 7: A City that Plans: Reinventing Urban Planning.................................................................................................... 121


7.1 The Plan is Dead; Long Live the Planners! From Master Plan to Community Vision.......................................................................................................... 125
7.2 Urban Land: Transformation of Planning’s Core to Address New Views of the Better City................................................................................................ 128
7.3 The New Comprehensiveness and the Challenges of 21st Century Urbanization............................................................................................................. 132
Informal housing...................................................................................................................................................................................................... 132
Economic development............................................................................................................................................................................................ 133
Infrastructure.......................................................................................................................................................................................................... 134
Environmental sustainability..................................................................................................................................................................................... 134
Changing population dynamics................................................................................................................................................................................. 135
7.4 Jurisdictional Integration: Planning Across Geographic Scales, and Political Boundaries.................................................................................................... 135
7.5 Regional Variations......................................................................................................................................................................................................... 136
7.6 Planning Capacity.......................................................................................................................................................................................................... 137
7.7 Urban Planning and the New Urban Agenda................................................................................................................................................................... 138

Chapter 8: The Changing Dynamics of Urban Economies...................................................................................................... 141


8.1 Urban Economies, Prosperity and Competitiveness......................................................................................................................................................... 143
8.2 Urban Economic Growth and the New Economic Geography ......................................................................................................................................... 144
8.3 Urban Development: An Economic Transformation......................................................................................................................................................... 146
8.4 The Dynamics of Urban Economies................................................................................................................................................................................ 147
Global economic growth........................................................................................................................................................................................... 147
Economic policy and globalization............................................................................................................................................................................. 147
Agglomeration economies........................................................................................................................................................................................ 148
Technological change................................................................................................................................................................................................ 148
Global supply chains................................................................................................................................................................................................ 149
Industry clusters...................................................................................................................................................................................................... 149
Infrastructure provision ........................................................................................................................................................................................... 150
Property and land markets........................................................................................................................................................................................ 150
Climate change........................................................................................................................................................................................................ 151
Ageing populations and urban economies ................................................................................................................................................................ 151
Poverty, rising inequality and social safety nets.......................................................................................................................................................... 151
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8.5 The Functioning of Urban Economic Systems ................................................................................................................................................................ 152


National urban policies............................................................................................................................................................................................. 152
Financing and maintenance of urban infrastructure................................................................................................................................................... 153
City systems............................................................................................................................................................................................................ 154
8.6 City Governance............................................................................................................................................................................................................ 155
City governments as facilitators................................................................................................................................................................................ 155
City governance structures....................................................................................................................................................................................... 156
Collaborative urban governance................................................................................................................................................................................ 156
8.7 An Urban Economic Agenda for Cities in the 21st Century............................................................................................................................................. 156

Chapter 9: Principles for a New Urban Agenda..................................................................................................................... 159


9.1 An Analytic Framework for Urban Transformation and the Diversity of Outcomes............................................................................................................ 164
9.2 Urban Dynamics and Imbalances.................................................................................................................................................................................... 165
Geographies............................................................................................................................................................................................................. 165
Ecologies................................................................................................................................................................................................................. 165
Economies............................................................................................................................................................................................................... 166
Cultures.................................................................................................................................................................................................................. 166
Institutions.............................................................................................................................................................................................................. 167
Technologies............................................................................................................................................................................................................ 167
9.3 Defining the Guiding Principles for a New Urban Agenda ............................................................................................................................................ 169
9.4 Regional Urban Challenges and the New Urban Agenda ................................................................................................................................................. 170
Developed countries: Urban opportunities and challenges......................................................................................................................................... 170
Developing countries: Urban opportunities and challenges........................................................................................................................................ 172
Developing countries: Observing differences through a regional lens ....................................................................................................................... 173

Chapter 10: The New Urban Agenda..................................................................................................................................... 175


10.1 The Components of a New Urban Agenda ................................................................................................................................................................. 179
10.2 Key Principles of the New Urban Agenda ...................................................................................................................................................................... 180
10.3 The Components of the New Urban Agenda ................................................................................................................................................................. 181
Adopt and implement national urban policies............................................................................................................................................................ 181
Rules and regulations: Strengthening urban legislation and systems of governance ................................................................................................... 182
Reinvigorating territorial planning and urban design.................................................................................................................................................. 184
Municipal finance: Harnessing the urban economy and creating employment opportunities....................................................................................... 187
10.4 Levers for the New Urban Agenda.................................................................................................................................................................................. 189
Planned city extensions ........................................................................................................................................................................................... 189
Planned city infills ................................................................................................................................................................................................... 190
Land readjustment .................................................................................................................................................................................................. 190
Public space planning and regulations ...................................................................................................................................................................... 191
Re-positioning housing at the centre of the New Urban Agenda ................................................................................................................................ 192
Expanding access to basic services............................................................................................................................................................................ 193
A global monitoring framework for the New Urban Agenda....................................................................................................................................... 193

Statistical Annex........................................................................................................................................................................ 196


References................................................................................................................................................................................. 231
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List of Figures, Boxes and Tables
Figures
Figure 1.1: Urban population at mid-year (1995-2015).................................................................................................................................................................. 6
Figure 1.2: Global patterns of urbanization, 1995......................................................................................................................................................................... 8
Figure 1.3: Global patterns of urbanization, 2015......................................................................................................................................................................... 8
Figure 1.4: Municipal expenditure per country........................................................................................................................................................................... 11
Figure 2.1: Share of GDP and national population in selected cities (developed countries)........................................................................................................... 31
Figure 2.2: Share of national population and GDP in selected cities (developing countries).......................................................................................................... 32
Figure 2.3: FDI inflows, 1995-2014 (billions of US$).................................................................................................................................................................. 33
Figure 2.4: Urbanization and poverty.......................................................................................................................................................................................... 34
Figure 2.5: Global ICT developments (2005-2015)...................................................................................................................................................................... 42
Figure 3.1: Percentage of urban population living in slums (1990-2014)...................................................................................................................................... 57
Figure 5.1: Waste management per capita and urbanization rates in the main regions of the world............................................................................................... 89
Figure 5.2: Risks from climate change, as reported by 110 cities to the Carbon Disclosure Project (CDP)..................................................................................... 90
Figure 5.3: Comparison between individual city and national carbon footprints per capita........................................................................................................... 92
Figure 6.1: How decentralization works.................................................................................................................................................................................... 109
Figure 6.2: The spectrum of civil society action in relation to government................................................................................................................................. 115
Figure 6.3: The institutional components of effective urban governance.................................................................................................................................... 117
Figure 6.4: An ICT-based enabling environment for cities.......................................................................................................................................................... 118
Figure 7.1: Participation in the master planning process and the management of the master plan in Niterói, Brazil..................................................................... 126
Figure 7.2: Built-up area densities in 25 representative cities, 1800-2000................................................................................................................................. 129
Figure 7 3: Average Built-Up Area Densities, 1990-2000........................................................................................................................................................... 130
Figure 7.4: Seoul’s greenbelt in the Korean Capital Region (Gyeongai Province)......................................................................................................................... 130
Figure 8.1: Global trade and financial links increased dramatically in the past 50 years.............................................................................................................. 147
Figure 8.2: Special economic zones: Number worldwide (000s)................................................................................................................................................ 148
Figure 8.3: An economic trade corridor incorporating a network of secondary cities.................................................................................................................. 155

Boxes
Box 1.1: Decentralization with improved financing in Brazil........................................................................................................................................................... 12
Box 1.2: “Tale of two Cities:” New York has become the capital of inequality.................................................................................................................................. 19
Box 1.3: Barbarians at the gate: Buenos Aires’ exclusive neighbourhoods face a heavy new tax........................................................................................................ 20
Box 2.1: Goal 11— Make cities and human settlements inclusive, safe, resilient and sustainable ................................................................................................... 39
Box 2.2: E-hailing: Technological advances in the transportation industry........................................................................................................................................ 40
Box 2.3: Smart Kigali: Connecting 400 buses to 4G Internet.......................................................................................................................................................... 43
Box 2.4: An open data portal for cities and globally standardized city data ...................................................................................................................................... 44
Box 3.1: Biased housing supply in China........................................................................................................................................................................................ 51
Box 3.2: House prices go through the roof in Latin America and the Caribbean.............................................................................................................................. 55
Box 3.3: Major achievements of the Participatory Slum Upgrading Programme............................................................................................................................... 59
Box 3.4: Morocco’s well-developed housing finance system............................................................................................................................................................ 60
Box 4.1: Global employment vulnerability...................................................................................................................................................................................... 73
Box 4.2: The rich-poor gap is widening.......................................................................................................................................................................................... 74
Box 5.1: The UN-Habitat City Resilience Action Plan...................................................................................................................................................................... 91
Box 5.2: The Cities and Biodiversity Outlook: 10 main messages.................................................................................................................................................... 92
Box 5.3: An eco-city project in India ............................................................................................................................................................................................. 95
Box 5.4: Financing eco-technologies in Mexico’s housing sector .................................................................................................................................................... 96
Box 5.5: Decentralized energy provision, Sydney........................................................................................................................................................................... 96
Box 5.6: Preserving culture and traditions in port town of Hoi An, Viet Nam.................................................................................................................................. 97
Box 5.7: Implementing an ecoBudget............................................................................................................................................................................................. 98
Box 6.1: What is urban law? ....................................................................................................................................................................................................... 105
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Box 6.2: Concomitance of different planning provisions: Kenya.................................................................................................................................................... 106


Box 6.3: Complex planning regulations: Mozambique.................................................................................................................................................................. 107
Box 6.4: Dimensions of decentralization...................................................................................................................................................................................... 108
Box 6.5: Participatory budgeting around the world....................................................................................................................................................................... 110
Box 7.1: The 10 Principles of New Urban Planning...................................................................................................................................................................... 123
Box 7.2: Brazil’s “right to the city”............................................................................................................................................................................................... 126
Box 7.3: The “Hong Kong 2030” strategic plan............................................................................................................................................................................ 131
Box 8.1: The Delhi–Mumbai Industrial Corridor (DMIC)............................................................................................................................................................. 145
Box 8.2: Building connectivity: The electronic cluster of Santa Rita Do Sapucaí, Minas Gerais – Brazil.......................................................................................... 150
Box 8.3: The streetwise economics of urban density.................................................................................................................................................................... 153
Box 8.4: Special funds for municipal infrastructure...................................................................................................................................................................... 154
Box 9.1: Stocks, flows and the sustainable urban development agenda......................................................................................................................................... 164
Box 9.2: Primate and secondary cities in developed nations and the New Urban Agenda............................................................................................................... 172
Box 9.3: Primate and secondary cities in developing countries and the New Urban Agenda........................................................................................................... 173
Box 10.1: The New Urban Agenda - defining features ................................................................................................................................................................. 178
Box 10.2: Planning instruments and the notions of context and scale........................................................................................................................................... 186
Box 10.3: Strengthening municipal finance.................................................................................................................................................................................. 188
Box 10.4: The CPI: Measuring sustainable urban development. ................................................................................................................................................... 194

Tables
Table 1.1: Urban rate of change 1995-2015................................................................................................................................................................................ 7
Table 3.1: The do’s and don’ts of enabling housing markets to work.......................................................................................................................................... 50
Table 3.2: Housing and development goals ............................................................................................................................................................................... 50
Table 3.3: Factors impeding housing supply in selected developed countries.............................................................................................................................. 53
Table 3.4: Urban slum population at mid-year by region (thousands).......................................................................................................................................... 58
Table 3.5: Regional and global estimates for improved drinking water........................................................................................................................................ 63
Table 3.6: Regional and global estimates for improved sanitation................................................................................................................................................ 64
Table 5.1: National and local environmental planning and management .................................................................................................................................... 93
Table 5.2: Instruments for environmental integration ............................................................................................................................................................... 94
Table 6.1: Fiscal decentralization – International comparisons – early 2000s ........................................................................................................................... 110
Table 7.1: The 12 key principles of urban and territorial planning............................................................................................................................................ 125
Table 7. 2: Ratio of registered planners to population............................................................................................................................................................... 137
Table 8.1: Structure of output :Income and regions, 2012....................................................................................................................................................... 146
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Acronyms and Abbreviations
3G Third generation of mobile telecommunications technology
ADB Asian Development Bank
BRICS Brazil, Russia, India, China and South Africa
CAF Corporacion Andina de Fomento- Development Bank of Latin America
CBO Community Based Organization
CCTV Closed-Circuit Television
CDS City Development Strategy
CO2 Carbon dioxide
EU European Union
FDI Foreign Direct Investment
GDP Gross Domestic Product
GMS Greater Mekong Subregion
HIV/AIDS Human Immunodeficiency Virus infection/Acquired Immunodeficiency Syndrome
ICLEI Local Government for Sustainability
ICT Information and Communications Technology
IPCC Inter-Governmental Panel on Climate Change
ISO International Organization for Standardization
ITU International Telecommunication Union
LA21 Local Agenda 21
LAC Latin America and the Caribbean
MDG Millennium Development Goal
NGO Non-Governmental Organization
OECD Organisation for Economic Co-operation and Development
PM2.5 Particulate Matter 2.5 micrometers or less in diameter
PPP Purchasing Power Parity
PSUP Participatory Slum Upgrading Programme
Rio+20 United Nations Conference on Sustainable Development
SAR Special Administrative Region (of China; used about Hong Kong and Macao)
SARS Severe Acute Respiratory Syndrome
SDG Sustainable Development Goal
SEZ Special Economic Zone
UAE United Arab Emirates
UCLG United Cities and Local Governments
UK United Kingdom of Great Britain and Northern Ireland
UMP Urban Management Programme
UNDESA United Nations Department of Economic and Social Affairs
UNICEF United Nations Children’s Fund
UNISDR United Nations Office for Disaster Risk Reduction
US United States of America
US$ US dollar
WCCD World Council on City Data
WHO World Health Organization
pter
Cha

01 54 %
HALF THE WORLD’S
POPULATION RESIDES
IN URBAN AREAS.

From Habitat II to
Cities create wealth, generate employment
and drive human progress by harnessing the
forces of agglomeration and industrialization.

Habitat III: Twenty


Years of Urban
The decline in infant mortality
and high fertility has resulted in a
relatively young population. Children

Development and youth aged below 24 account for

Quick Facts
40 %
of global
population.

This represents a great opportunity


in terms of labor force.
1 Urban areas around the world are facing enormous
challenges and changes than they did 20 years ago.

2 Cities are operating in economic, social, and cultural The world population is aging.
ecologies that are radically different from the outmoded urban Globally, the population aged 60
model of the 20th century. or over is the fastest growing at

3.26 %
3 Persistent urban issues over the last 20 years include urban the rate of
growth, changes in family patterns, growing number of urban
residents living in slums and informal settlements, and the per year.
challenge of providing urban services.
In 2015, there were 901 million people aged 60 or

12
4 Connected to these persistent urban issues are newer trends
in the urban governance and finance: emerging urban issues
over, comprising
%
include climate change, exclusion and rising inequality, rising of the world’s population.
insecurity and upsurge in international migration. This represents a
tremendous challenge.

Policy Points
1 When well-managed, urbanization fosters social and
economic advancement and improved quality of life for all.

2 The current model of urbanization is unsustainable in many


respects.

3 Many cities all over the world are grossly unprepared for the
challenges associated with urbanization.
Cities
are responsible
for more than 70 %
of global carbon
dioxide emissions.

In 2014, the Global Protocol for Community-Scale Greenhouse Gas


Emission Inventories (GPC) was jointly established by the World
4 A new agenda is required to effectively address these Resources Institute (WRI), C40 Cities Climate Leadership Group
challenges and take advantage of the opportunities offered by (C40), and ICLEI-Local Governments for Sustainability (ICLEI), with
urbanization. the support of World Bank, UNEP, and UN-Habitat. Incorporating
experiences from the Harmonized Emissions Analysis Tool plus
5 The new urban agenda should promote cities and human (HEAT+) the GPC provides guidelines for reporting and auditing
settlements that are environmentally sustainable, resilient, principles; quantifying city emissions in different sectors; and
socially inclusive, safe and violence-free and economically long term monitoring of local specific objectives.
productive.
PERSISTENT ISSUES AND EMERGING URBAN
CHALLENGES DUE TO INCREASED URBAN POPULATION.

URBAN GROWTH CHANGE IN FAMILY INCREASED CHALLENGES IN


PATTERNS RESIDENCY IN SLUMS PROVIDING URBAN
AND INFORMAL SERVICES
SETTLEMENTS

CLIMATE CHANGE EXCLUSION AND INSECURITY UPSURGE IN


RISING INEQUALITY INTERNATIONAL
MIGRATION

The new urban agenda should promote sustainable cities and human settlements that are
environmentally sustainable and resilient, socially inclusive, safe and violence-free, economically
productive; and better connected to and contributing towards sustained rural transformation. This
is in line with the 2030 Agenda for Sustainable Development, especially Goal 11: to make cities
and human settlements inclusive, safe, resilient and sustainable.

Cities that are sustainable, resilient and inclusive are dependent upon good governance that
encompasses:

Strong effective leadership, which helps overcome


fragmentation across departments, multilevel Inclusive citizen participation in the design
governance and investment sectors when building of infrastructure, urban space and services
consensus and eliciting action on specific agendas legitimizes the urban planning process and allows
cities to leverage their stakeholders’ expertise.

Land-use planning, particularly territorial and


spatial strategies, have been used across different Efficient financing helps foster urban responses
policy sectors to address climate change risks, and to climate change, through the ability to establish
build effective mitigation and adaptation strategies innovative ways to finance sustainable projects.
Public private partnerships (P3s) are one strategy in
which governments leverage private sector capital
Jurisdictional coordination, in sectoral areas such for projects.
as land, transport, energy, emergency preparedness,
and related fiscal and funding solutions. This also
includes addressing issues of poverty and social
through inter-territorial solidarity.
3
Chapter 1: From Habitat II to Habitat Iii: Twenty Years of Urban Development • WORLD CITIES REPORT 2016

1.1 Two decades later, in June 1996, in Istanbul,


the Second UN Conference on Human Settlements
(Habitat II), further contributed to raising global aware-
The Beginnings ness about urban and human settlements issues. Habitat
II was the last in the series of UN global conferences that
took place in the 1990s, and marked for the first time in

T
he United Nations Human Settlements Programme (UN-Habitat) started a UN conference the invitation of NGOs and civil society
in 1976 with the UN Conference on Human Settlements in Vancouver, organizations to speak and participate in drafting the rec-
Canada, at a time when the governments began seriously to perceive ommendations.2 Behind all the organization and planning
the cities under their jurisdictions as “emerging futures” in their own right. that went into Habitat II were trends and changes that
Opening the event, Canadian Prime Minister Pierre Elliott Trudeau aptly sum- were demanding the world’s attention. Many of these
marized the worldwide (and ongoing) challenge as follows: themes were summarized in An Urbanizing World: The
“Human settlements are linked so closely to existence Global Report on Human Settlements 1996.3 Among the
itself, represent such a concrete and widespread reality, myriad issues raised in this landmark document, the most
are so complex and demanding, so laden with questions of important were:
rights and desires, with needs and aspirations, so racked ◗◗ Cities had come to the forefront in strategies for
with injustices and deficiencies, that the subject cannot development, but
be approached with the leisurely detachment of the soli- ◗◗ Poverty and poor housing conditions were increasing
tary theoretician.”1 in incidence
There were two major outcomes of this path- ◗◗ Cities desperately needed competent and accountable
breaking event. The first was the Vancouver Declaration, governance
which urged both countries and the international commu- ◗◗ Citizen groups, community organizations and NGOs
nity to commit to human settlements policies which would were more important and needed more attention,
combine spatial planning with elements of economic, since
social and scientific thinking in order to alleviate the worst ◗◗ Governments would in the future be enablers much
conditions of “uncontrolled urbanization” within a frame- more than providers.
work of social justice. The second outcome, announced In their historical context, these issues fit quite
in a UN General Assembly document of December 1977, comfortably within the overall paradigm of what were then
was the establishment of the United Nations Centre for called megatrends, or patterns of restructuring that popu-
Human Settlements. larly summarized some of the major changes that were
taking place in the world at large. In his bestselling book,
John Naisbitt in 1982 highlighted 10 important changes,
the most notable being: from industrial to information
society; from national economies to a world economy;

1976
Vancouver, Canada
from centralization to decentralization; from institutional
help to self-help; from hierarchies to networking; and
Inception of UN-Habitat at the First
United Nations Conference on Human
Settlements

2000
Millennium Development Goals (MDGs)
2002
World Urban Forum
Eight Millennium Development Goals
The First Session of the World Urban Forum (WUF).
(MDGs) agreed to by all the world’s
countries and all the world’s leading
WUF was formed to galvanized interest in urban
development institutions, including a issues through sharing of new ideas, lessons learned;
Target on Slums exchange of best practices and good policies

1996
Istanbul, Turkey
2001
Habitat + 5 Review
The Second United Nations Reviewing and Appraising
Conference on Human Progress Five Years After Habitat
Settlements (Habitat II) II in June 2001
4

Chapter 1: From Habitat II to Habitat Iii: Twenty Years of Urban Development • WORLD CITIES REPORT 2016
from North to South.4 In 1996, Naisbitt further noted emerged, during the last twenty years since the Habitat
that after the year 2000, Asia would become the domi- II Conference, and make a case for revisiting the urban
nant region of the world.5 While Naisbitt’s themes may agenda. These urban issues can be divided into two major
have appeared evident to many, they did capture the spirit groups: persistent and emerging urban issues. The persis-
of the 1990s in two important respects: the world was tent urban issues, expressed through statistics of urban
changing toward a more global model, and this new model growth and changes in family structure. The persistent
was being driven, to a significant degree by its cities. issues also include the growing number of urban residents
As adopted at Istanbul, the Habitat Agenda living in informal and largely unserviced settlements, and
(241 paragraphs with over 600 recommendations) served increasing concentration of poverty in certain parts of
as the basis for the UN policy on cities for the next two the world. Connected to these persistent urban issues
decades. The main elements of the document were five are newer trends in the governance and finance of cities.
central objectives: Since the late 1980s, but accelerating during the 1990s
◗◗ Ensure adequate shelter for all; and beyond, countries have been devolving more power
◗◗ Promotion of security of tenure throughout the to local governments (and their cities), and grappling with
developing world; the means of financing these new functions. Following
◗◗ Support for vulnerable groups, especially women and this discussion, and in the second Cities create wealth, generate
the poor; group of themes, the narrative turns employment and drive human
◗◗ Provision of adequate and equitable access to basic to emerging urban issues, which progress by harnessing the
forces of agglomeration and
urban services; and include climate change and cities;
industrialization
◗◗ Promotion of decentralization and good urban then to the currently important
governance. and related questions of exclusion and rising inequality
All of these goals were to be pursued within in cities; to issues of urban insecurity; and finally, the
a framework of sustainable human settlements. Although upsurge in international migration.
laudable for bringing urban issues to the global policy A number of basic themes are articulated
arena, the Habitat Agenda has been criticized on several through the issue narrative that follows. One theme is
grounds. A main criticism is that it contains so many rec- that urbanization fosters growth, and is generally associ-
ommendations with no prioritization, and has a level of ated with greater productivity, opportunities and quality of
generality that makes it difficult for policymakers at any life for all. Cities create wealth, generate employment and
level of government.6 Another criticism is the Habitat drive human progress by harnessing the forces of agglom-
Agenda lacked an effective monitoring mechanism, and eration and industrialization.8 Cites also offer greater soci-
as such, there was no systematic way of monitoring the etal freedoms. In the process of urbanization, however,
implementation of the agenda. This made it difficult if not there have been some bumps along the road, many of
impossible to hold governments accountable for failing to which are discussed in Chapters 3 to 8. Many rapidly
implement the recommendations they endorsed.7 growing cities keep sprawling, slums are expanding or
This chapter will trace and examine some consolidating, there is increasing poverty and sometimes
of the most important urban issues that played out, or inequality, cities can be very expensive for new migrants,

2016
Quito, Ecuador
2012
Rio+20: UN Conference on Sustainable The Third United
Development recognizes that the battle Nations Conference on
for sustainable development will be Human Settlements
won or lost in cities (Habitat III)

2002 2015
World Summit on Sustainable Sustainable Development Goals (SDGs)
Development (WSSD) World Summit The international community adopted
on Sustainable Development, Agenda the Sustainable Development Goals, with
21 and integration of sanitation as a a stand-alone Goal (11) on cities
key priority for development
5
Chapter 1: From Habitat II to Habitat Iii: Twenty Years of Urban Development • WORLD CITIES REPORT 2016

Inequality, exclusion
and deprivation creates
spatial inequalities and
divided cities. Ho Chi
Minh City slums by river,
Saigon, Vietnam.
Source: kagemusha /
Shutterstock.com

crime can be rife in large cities, on top of which comes the


contribution that cities make to climate change. While it
is easy to ascribe all these changes to urbanization, such a
causal connection would be superficial.
What is at the root of these dysfunctions and
discontinuities is the current model of development? The
model is a result of relentless globalization, the unfet-
tered transformation of cities into sources of private gain,
a declining attention to public space and community
benefit, and rapid technological change which in the end All these urban challenges are further exac-
increases connectivity while it diminishes accountability. erbated by the failure to create appropriate institutional
Although urbanization has the potential to and legal structures to promote sustainable urbaniza-
make cities more prosperous and countries more devel- tion. Indeed, poorly planned and managed urbanization
oped, many cities all over the world are grossly unpre- – which translates into low densities, separation of land
pared for the multidimensional challenges associated with uses, mismatch between infrastructure provision and
urbanization. Generally, urbanization has relied on a model residential concentration, and inadequate public space
that is unsustainable in many respects. Environmentally, and street networks, among others – diminishes the
the current model of urbanization engenders low-density potential of leveraging economies of scale and agglom-
suburbanization— largely steered by private, rather than eration.
public interest, and partly facilitated by dependence on car Looking at our world through a primarily urban
ownership; it is energy-intensive and lens, we must constantly be concerned about these larger
Although urbanization has the
potential to make cities more contributes dangerously to climate issues. As this chapter traces through the changes that
prosperous and countries more change.9 Socially, the model of urban- have pulsed through cities over the last two decades, it
developed, many cities all over the ization generates multiple forms of will become obvious that urban areas around the world are
world are grossly unprepared for
the multidimensional challenges inequality, exclusion and deprivation, facing enormous challenges. For a framework to respond
associated with urbanization which creates spatial inequalities and to these challenges, UN-Habitat has developed, since its
divided cities, often characterized by first conference in Vancouver in 1976, policies and pro-
gated communities and slum areas. Cities face growing grammes meant to improve urban conditions for all. But
difficulties in integrating migrants and refuges so that they given the changes and transformations that have occurred
equitably share in the human, social, cultural and intellec- over the past two decades since Habitat II, there is now
tual assets of the city, and thus have a sense of belonging. a need to revisit this urban agenda, and to reposition our
From an economic perspective, the model of urbanization approach to urban policy. This is important, given that
is unsustainable due to widespread unemployment espe- cities are now operating on a radically different economic,
cially among the youth and the existence of unstable and social, and cultural ecology than the outdated model of the
low-paying jobs and informal income-generating activities, city of the 20th century.10
which create economic hardship, unequal access to urban The repositioned or new urban agenda should
services and amenities and poor quality of life for many. seek to realize Goal 11 of the 2030 Agenda for Sustain-
6

Chapter 1: From Habitat II to Habitat Iii: Twenty Years of Urban Development • WORLD CITIES REPORT 2016
1.2
Cities: A Gathering
Force
Since 1990, the world has seen an increased gathering of
its population in urban areas. This trend is not new, but
relentless and has been marked by a remarkable increase
in the absolute numbers of urban dwellers—from a yearly
average of 57 million between 1990-2000 to 77million
between 2010-2015. In 1990, 43 per cent (2.3 billion) of The urban
growth rate
the world’s population lived in urban areas; by 2015, this of Africa is
had grown to 54 per cent (4 billion). The increase in urban almost 11
population has not been evenly spread throughout the times more
rapid than the
world. Different regions have seen their urban populations growth rate in
grow more quickly, or less quickly, although virtually no Europe
region of the world can report a decrease in urbanization.
Asia has by far the highest number of people
the urban agenda should propose strategies and living in urban areas, followed by Europe, Africa and Latin
actions to make slums history, ensure the universal
provision and safe and sufficient water and good
America (Figure 1.1). The fact that 2.11 billion people
quality sanitation, eradicate poverty and address in Asia live in urban areas is no longer a development
persistent inequalities that are still prevalent in many scourge as once feared. Being 48 per cent urbanized and
cities across the world
home to 53 per cent of the world’s urban population,13
Asia has become a global powerhouse, generating close to
able Development, which is to: make cities and human set- 33 per cent of world output in 2010.14 China’s remark-
tlements inclusive, safe, resilient and sustainable.11 The able economic transformation is driven by urbanization
urban agenda should respond to the challenges and oppor-
tunities of urbanization, and address the unfinished busi-
ness of the Millennium Development Goals. For instance, Figure 1.1: Urban population at mid-year (1995-2015)
the urban agenda should propose strategies and actions Source: Based on United Nations, 2014b.

to make slums history, ensure the universal provision


and safe and sufficient water and good quality sanitation, Oceania
eradicate poverty and address persistent inequalities that
are still prevalent in many cities across the world and land North America

management in the public interest. Indeed, many of these


Europe
are referred to as the “old” urban agenda, which urgently
Latin America
require attention.12 Above all, the urban agenda should and the Caribbean
prescribe conditions that would facilitate a shift towards
Asia
more sustainable patterns of urbanization, seeking to
achieve inclusive, people-centred, and sustainable global Africa
development. Therefore, the policies that emerge must
World
be implementable, universal, sensitive and relevant to the
local context. They must be participatory and collabora-
0

500000

1000000

1500000

2000000

2500000

3000000

3500000

4000000

tive. They must be inclusive and recognize the rights of


minorities and vulnerable groups. Above all, the policies
must be sustainable. 1995 2015
7
Chapter 1: From Habitat II to Habitat Iii: Twenty Years of Urban Development • WORLD CITIES REPORT 2016

and industrialization; the top ten cities in China account As the urban population increases, the land
for 20 per cent of the country’s GDP.15 The economic hub area occupied by cities has increased at an even higher
of the region is almost entirely urban-based, with its cities rate. A global sample of 120 cities observed between
thriving with investments, infrastructure, innovation and 1990 and the year 2000, shows that while the population
competitive impetus. Asian cities have become critical grew at a rate of 17 per cent on average, the built-up area
nodes in the system of global accumulation and regional grew by 28 per cent.18 It has been projected that by 2030,
As the urban
population development. the urban population of developing countries will double,
increases, Urban growth rates have been much faster while the area covered by cites would triple.19 Such urban
the land area in some regions than others (Table 1.1). The highest expansion is not only wasteful in terms of land and energy
occupied by
cities has growth rate between 1995 and 2015 was clearly in the consumption, but increases greenhouse gas emissions. It
increased at least developed parts of the world with Africa being the has also led to the alteration of ecological systems in many
an even higher most rapidly urbanizing. At the other extreme, the most cities over the past two decades.20
rate
developed regions in the world, led by Europe saw their A second major theme of the demographic
cities growing the least. The urban growth rate of Africa story must be the emergence of many large and megaci-
is almost 11 times more rapid than the growth rate in ties, particularly in the low- and middle-income regions
Europe. Africa’s rapid urbanization is driven mainly by of the world (Figure 1.2 and Figure 1.3). Large cities are
natural increase, rural–urban migration, spatial expansion defined as having between 5 and 10 million inhabitants
of urban settlements through the annexation, the reclas- and megacities as having 10 million or more inhabitants.
sification of rural areas, and, in some countries, negative In both cases, there were remarkable increases over the
events such as conflicts and disasters.16 Given that African last two decades. In 1995, there were 22 large cities,
cities are among the poorest in the world, their growth and 14 megacities; by 2015, both categories of cities had
rates signal a major challenge to their resource base, to doubled (Figure 1.3), as there were 44 large cities, and
build and to sustain adequate infrastructure and public 29 megacities. Most megacities are located in developing
services for their growing populations. countries and this trend will continue as several large
Nearly 20 years ago, many developing coun- cities in Asia, Latin America and Africa are projected to
tries with support from development agencies actively become megacities by 2030.
implemented policies to reduce migration to large cities; Large cities and megacities are influential in
today multilateral and bilateral organizations recommend the global economy. Currently, the top 600 cities with a
policies to encourage migration to enable the poor to fifth of the world’s population that generate 60 per cent
move from lagging to leading areas, in such a way that of global GDP consist mainly of cities in developed coun-
governments can help reduce rural poverty by making tries.21 By 2025, the contribution of the top 600 cities is
migration more efficient.17 expected to remain the same, but the composition will

Table 1.1: Urban rate of change 1995-2015


Source: Based on United Nations, 2014b.

Average annual rate of change of the urban population Entire Period


Region/Area 1995-2000 2000-2005 2005-2010 2010-2015 1995-2015
World 2.13% 2.27% 2.20% 2.05% 2.16%
High-income countries 0.78% 1.00% 1.00% 0.76% 0.88%
Middle-income countries 2.74% 2.77% 2.61% 2.42% 2.63%
Low-income countries 3.54% 3.70% 3.70% 3.77% 3.68%
Africa 3.25% 3.42% 3.55% 3.55% 3.44%
Asia 2.79% 3.05% 2.79% 2.50% 2.78%
Latin America and the Caribbean 2.19% 1.76% 1.55% 1.45% 1.74%
Europe 0.10% 0.34% 0.34% 0.33% 0.31%
North America 1.63% 1.15% 1.15% 1.04% 1.24%
Oceania 1.43% 1.49% 1.78% 1.44% 1.53%
8

Chapter 1: From Habitat II to Habitat Iii: Twenty Years of Urban Development • WORLD CITIES REPORT 2016
Figure 1.2: Global patterns of urbanization, 1995
Source: Based on United Nations, 2014b.

Figure 1.3: Global patterns of urbanization, 2015


Source: Based on United Nations, 2014b.
9
Chapter 1: From Habitat II to Habitat Iii: Twenty Years of Urban Development • WORLD CITIES REPORT 2016

change; as there will be many more cities from China, at very high rates, will show much lower fertility rates.
India and Latin America— an indication that the centre of Over the past few decades, many countries in
gravity of the urban world is moving to developing coun- the developing regions have witnessed decline in infant
tries, particularly towards Southeast Asia. mortality whilst fertility remains high. This has created
Although large and very large cities are in a demographic momentum characterized by a relatively
some ways the leading edge of urbanization, because of young population with children under age 15 accounting
their influence and economic importance, they are not the for 28 per cent of the population, and youth aged 15 to
fastest growing, nor do they represent the majority of the 24 accounting for a further 17 per cent.25 The significant
urban population. The fastest growing urban centres are increase in proportion of persons aged 15 to 24 is referred
the small and medium cities with less than one million to as the youth bulge. There are 1.19 billion people within
inhabitants, which account for 59 this age bracket worldwide with 88 per cent in developing
Although large and very large per cent of the world’s urban popu- countries in 2015.26 Many developing countries with a
cities are in some ways the leading
edge of urbanization, because lation and 63 per cent of the urban high youth bulge face the challenge of youth unemploy-
of their influence and economic population in Africa.22 Despite the ment, which is two to three times higher that adult
importance, they are not the demographic importance and poten- unemployment. This is particularly the case in Africa, the
fastest growing, nor do they
represent the majority of the urban
tial role of such cities, urban plan- Middle East, South America, Central Asia and the Pacific
population ning efforts in developing countries Islands, where the youth account for a sizeable proportion
have focused disproportionately on of the population. Youth bulge may portend a blessing or
the problems of large metropolitan areas, thereby contrib- a curse. It can represent a potential opportunity to spur
uting to urban primacy. If small and medium cities are to social and economic development if countries harness the
fulfil their potential, then they should form part of the power of age-structure transformation. The youth bulge
new urban agenda for developing countries. can also increase the risk of domestic conflict27— in a
A final demographic dimension of urbanization context of poor governance, poor economic performance
involves reproduction and age cohorts. Three important and high levels of inequalities. All these imply that urban
trends stand out. The first is that as more people live in job creation and engaging the youth must feature promi-
cities, the total fertility rate or average number of children nently in the new urban agenda.
per adult woman decreases. The relationship between Globally, the population aged 60 or over is the
urbanization and fertility shows that the relatively poor fastest growing at 3.26 per cent per year.28 This age group
and less urbanized countries have high levels of fertility; rose from eight per cent in 1950, to 10 per cent in 2000;
African countries with the lowest levels of urbanization by 2015, there were 901 million people aged 60 or over,
have high fertility rates, while Western Europe, Japan and comprising 12 per cent of the world’s population. Cur-
North America are highly urbanized with low fertility rates. rently, Europe has the greatest percentage of its popula-
In China, urbanization was responsible for 22 per cent tion (24 per cent) aged 60 or over. Rapid ageing or greying
of the decline in total fertility rates between 1982 and of the population is occurring all over the world, and as
2008; leading to calls for China to relax its one-child policy such, all regions, save for Africa would have almost 25 per
without having adverse effects of its population growth.23 cent of their population aged 60 or over by 2050.29
The developmental dynamics behind this Both trends have a critical influence on social,
picture are important to understand. The highest fertility economic and environmental development. A youthful
rates in the world are for poor, rural countries. As coun- population requires investment in education, training,
tries urbanize, they gain in wealth; and as such, work and recreational and community facilities, as well as innova-
educational opportunities for women tend to increase,
leading to later marriages, and fewer children. The posi-
The world population
tive urban dynamics behind the demographic transition is ageing RapidLY.

25%
to smaller families is complex, and have been studied
intensively,24 but as a general rule, higher rates of urbani-
zation along with growth in GDP lead to lower fertility of the population in all
rates around the world. Over time, it is expected that the regions except Africa will be
poorest African countries, which are currently urbanizing aged 60 or over by 2050
10

Chapter 1: From Habitat II to Habitat Iii: Twenty Years of Urban Development • WORLD CITIES REPORT 2016
tive ways of keeping the youth fully occupied. A rapidly Governments (UCLG) notes that: “in the last 20 years
ageing population places increased demand on health- decentralization has established itself as a political and insti-
care, recreation, transportation and other facilities for the tutional phenomenon in most countries around the world.” From the
elderly. It also has implications for old-aged social protec- As a result, in more than 130 countries, “the notions of late 1990s,
tion and pension schemes in many countries. autonomia local, ‘local self-government,’ ‘Selbsverwaltung’ governance
became the
and ‘libre administration’ have gradually become the norm

1.3
mantra for
in territorial administration in every region.”34 development
An important facilitating factor which sup- in developing
countries
ported the implementation of decentralization initiatives
and legislation was the increasing attention given, in many
Urban Governance countries, to what UN-Habitat called “governance and

and Finance
democracy at the local level.” In country after country,
local governments began to assert more autonomy, their
councillors and mayors came to be elected rather than
From the late 1990s, governance became the mantra for appointed or nominated by higher level officials, and their
development in developing countries.30 Driven largely by role of providing basic services was emphasized. In two
multilateral institutions, the concept of governance has important guiding documents, approved by UN-Habitat’s
been promoted along with decentralization and democ- Governing Council in 2007 and 2009, countries were
ratization. In developed countries governance was in encouraged to operate in adherence with the principle of
response to the growing complexity of governing in a subsidiarity, according to which “public responsibilities
globalizing and multilevel context. There have been two should be exercised by those elected authorities, which
board approaches to governance: the World Bank has are closest to the citizens.”35
adopted a mainly administrative and managerialist inter- Among the implications of this principle,
pretation of good governance; while United Nations agen- which the guidelines further spelled out, were that
cies have emphasized democratic practice and human and elected local authorities should be given adequate legal
civil rights31. UN-Habitat’s Global Campaign on Urban and financial resources to provide services to their con-
Governance,32 launched in the year 2000, sought to advo- stituents; and that these local author-
cate good urban governance worldwide is characterized ities should operate transparently in In country after country, local
governments began to assert more
by: decentralizing responsibilities and resources to local consultation with civil society organi-
autonomy, their councillors and
authorities; encouraging the participation of civil society; zations and local communities. While mayors came to be elected rather
and using partnerships to achieve common objectives. the experience of many nations has than appointed or nominated by
been extremely varied, the fact that higher level officials, and their role
of providing basic services was
Governance: Decentralization so many states have chosen to move emphasized
and local democracy along the path of decentralization
The persistent growth in population and size constitutes a remarkable phenomenon.”36 So far, most
of cities has had many consequences. One of the most decentralization initiatives — as far as cities are con-
important is in their powers and functions. As cities grow, cerned — have had a relatively positive outcome. But the
and spread out over the land, they have been the recipients story is not fully written.
of a worldwide trend to devolve power from the national
to the local level. A World Bank publication claimed that Decentralization without
“decentralization has quietly become a fashion of our adequate finance
time…It is being attempted where civil society is strong, Decentralization is a process, not a final condi-
and where it is weak. It appeals to people of the left, the tion. But to the extent that decentralization has not been
centre and the right, and to groups which disagree with fully realized in practice, many discrepancies and inad-
each other on a number of other issues.”33 The issues equacies have been attributed to questions of finance.
relating to governance, decentralization and a system of Chapter 8 notes that city financing particularly in rapidly
laws and regulations are addressed in Chapter 6. urbanizing developing countries is not keeping pace with
The worldwide agency United Cities and Local the demand for infrastructure and services.
11
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Decentralization — sometimes called devolu- these changes can be seen in the cases of India, Colombia,
tion when real political and financial power is transferred Brazil, and in a number of countries of Sub-Saharan Africa.
from higher to lower levels of government — has been an India is a good example of the recent wave of
issue in many European countries since the latter half of decentralization reforms. The Constitution (72nd Amend-
the 20th century. New regional elected governments with ment) Act, 1992, prescribes two new institutions to
executive and sometimes legislative powers have emerged regulate the flow of funding to municipalities. One new
in Spain, Italy, Belgium, and Portugal. France, traditionally institution is the Central Finance Commission, which
a very centralized country, passed a major decentraliza- both suggests new taxation and financial policies that the
tion law in 1981. In the UK, the devolution of power to states can apply to the municipalities under their sway;
Scotland, Wales and Northern Ireland and the creation of but under the new arrangements since 1992, the Gov-
Decentralization
is a process, not the Mayor of London and the Greater London Assembly ernor of a state is required set up a finance commission
a final condition have changed the political and constitutional landscape. to review the local system, to propose new taxes, and to
The most recent UK election in 2015 showed the strength govern grants in aid to municipalities from the consoli-
of Scottish nationalism; while political agitation for more dated funds of the state.37 In spite of these constitutional
local power continues in some regions and major cities of requirements, results have been limited.
Spain. But just as new initiatives for decentralization were The low level of aggregate municipal expendi-
developing in Europe, very significant decentralization tures in India, relative to GDP can be seen in Figure 1.4.
reforms began to take place in many countries of Asia, With only 1.1 per cent of GDP, municipal expenditures in
Africa and Latin America. India compare very unfavourably with OECD countries,
Following important decentralization reforms but even with other BRICS countries such as Brazil, Russia
in the late 1980s and early 1990s, most countries in and South Africa. In Latin America, several countries have
Asia, Africa and Latin America made major efforts to put significantly changed their municipal financial systems.
them into practice. These efforts involved building more Perhaps the leading example is Colombia, previously a
capacity at the local level for powers and functions now highly centralized country, which went through different
operating locally; establishing revenue generating pro- phases of decentralization, beginning in the late 1970s.
cedures to fund local authorities; and organizing agen- With a new constitution in 1991, more responsibility was
cies and accountable bodies — both administrative and delegated to the municipalities, accompanied by a dra-
legislative — to promote local development and design matic increase in transfers from the central to the local
improved systems of local finance. Important examples of level, so that by 1997, municipalities’ expenditures were
almost seven per cent of national GDP.38 Under the new
constitution, mayors (previously appointed) were elected–
Figure 1.4: Municipal expenditure per country and cannot stand for immediate re-election. At first,
Source: AFD, 2014. Indian Urban Panorama, p. 27; Federal Reserve Bank of St. Louis, 2015, Economic Research; their terms were limited to two years; but this was later
Manoel, Garson and Mora, 2013, p. 63.
increased to four years.39 Once mayors were elected, and
Australia 2.3 since they now had substantial funds to work with, many
Austria 7.4 innovations and improvements in infrastructure emerged
Belgium 6.9 in major Colombian cities. Another good example of
Brazil 8.0 decentralization with improved financing in Latin America
Canada 7.2
is Brazil as discussed in Box 1.1.
Germany 7.2
Many African countries undertook decentrali-
India 1.1
Russia * 6.5
zation reforms in the 1980s and 1990s. This was the third
South Africa ** 6.9 “moment” of decentralization across the continent — a
Spain 6.4 pattern that was consistent with reforms in other parts
Switzerland 9.7 of the developing world.40 This period is referred to as
US *** 6.5 one of “democratic decentralization”41 because this was
*Figure for 2001 when many African countries genuinely attempted to both
** Data for 2003/4; 2007/8 devolve powers to local governments, and to democratize
*** Data for 2013 the process of local governance. Some important exam-
12

Chapter 1: From Habitat II to Habitat Iii: Twenty Years of Urban Development • WORLD CITIES REPORT 2016
ples of this phase of decentralization in African countries half-hearted. In some countries, the share of the revenues
are: the new constitution in South Africa and its famous of local government coming from national resources has
“Chapter 7” dealing with local government, which came decreased in recent years.”45
into operation in 1996;42 a number of new laws in Senegal, One of the best measures of financial
passed in 1996, which changed the Local Government capacity— local government expenditure as a percentage
Code, and transferred powers to localities;43 adoption by of GDP— is very low in most African countries. Informa-
referendum in June 1991 of the new Burkina Faso consti- tion for 18 African countries shows that nine countries are Robust
tution, setting out the main principles of decentralization, at one per cent or less, with Mauritania being the lowest decentralization
is particularly
followed in 1998 by four major laws which organized the with 0.2 per cent, followed by Togo at 0.4 per cent. Five challenging in
decentralization process and set the guidelines for its imple- countries range from over one per cent to 4.9 per cent, Africa, given
mentation; and a new constitution put in place in Kenya in and only three countries (Uganda at 5.6 per cent, South its history
of highly
2010, which did away with provinces and districts, creating Africa at 5.8 per cent and Rwanda at 6.1 per cent) exceed
centralized but
47 counties with elected governors. five per cent.46 Most European and North American local weak states
Robust decentralization is particularly chal- government systems occupy a much higher range as can and extremely
lenging in Africa, given its history of highly centralized be seen in Figure 1.4. In Brazil, often considered a “devel- limited local
revenue
but weak states and extremely limited local revenue.44 oping” country, local government expenditure as a per-
While all the legal and institutional initiatives, cited above, centage of GDP is eight per cent.
shifted some administrative and political power to the A comparison of municipal finance in four
local level, how much financial support was made avail- African countries (Senegal, Burkina Faso, Ghana and
able to the new mayors and governors? Although there Kenya) found that there is a persistence of strong central
are variations across the continent, the short answer is: government supervision over “decentralized” local
not very much. At best, says UCLG, “…the share of public authorities,47 there is relatively weak local tax collection,
expenditure managed by local government remains low and “central ministries … are not, on the whole, con-
and the implementation of decentralization policies is vinced of the effectiveness of decentralization. As a result,

Box 1.1: Decentralization with improved financing in Brazil

With a new federal constitution in 1988, Brazil development, education, the environment, States and municipalities account for
began to devolve considerable functional and health and sanitation. Municipalities can almost half of public sector revenues and
fiscal powers to its municipalities. Having also establish other institutional means of expenditures in Brazil. Municipal revenues
added some 1,500 municipalities to its states participation through the passing of local come from two main sources: own revenue
after 1988, by 2013 Brazil had some 5,570 in its constitutions or “organic laws.” and transfers from the states and federal
statistical records although 75 per cent of these The right of cities to have their own government. Own revenue comes mainly
municipalities had populations under 20,000. constitutions means that they can develop their from property tax and professional tax. On
While the states have some implied own institutions of popular participation. One the average, municipalities raise about 35
power over the municipalities, the latter of the most widely reported local approaches per cent of their total revenues internally, and
were given control of intra-city transport, to this challenge in Brazil is the participatory receive 65 per cent from transfers. In larger
pre-school and elementary education, land budget. The essential element of this institution and wealthier municipalities, the internally
use, preventive health care, and historical and is the democratic discussion and allocation generated revenue is higher; and in smaller and
cultural preservation. On the participatory side, of the investment budget of the city. While poorer municipalities, the proportion of revenue
municipalities were given the right to establish versions of this system have been operating dependent on transfers is higher. By 2007, UCLG
councils of stakeholders or municipal boards. throughout Brazil, the most well-known example reported that local expenditures in Brazil were
These bodies, established in most of the largest of participatory budget in the city of Porto equal to 8.3 per cent of its GDP – the highest
cities include elected councillors as well as Alegre where the practice started in the late level in Latin America.
non-elected representatives of community 1980s. The practice has since been attempted in
groups, who deal with such matters as urban other parts of the world. Sources: Abers, 2000; UCLG, 2010a.
13
Chapter 1: From Habitat II to Habitat Iii: Twenty Years of Urban Development • WORLD CITIES REPORT 2016

unwieldy legal and financial mechanisms are kept in place largely through rural-urban migration, and the challenge
to control the activities of local governments, even when of organizing adequate housing placed the emphasis on
legislation has theoretically granted them considerable large-scale public schemes to build low-cost, affordable
leeway for action.”48 In light of their very rapid growth, housing. As it became obvious that these schemes could
African cities in the second decade of the millennium are not possibly keep up with demand, nor could they be
truly “faced with serious funding problems that hamper managed in such a manner that the most needy would be
the implementation of their responsibilities.”49 the primary beneficiaries, and in the context of a retreat
Overall, decentralization has been an important of the state as a housing provider as shown in Chapter 3,
policy issue over the past two decades. While it has waxed public housing declined as a policy option.
and waned in many countries as central governments have As public housing declined, informal settle-
failed to fully relinquish financial control over municipali- ments burgeoned. Locally, those living in these settle-
ties even when directed to do so by legislation, cities have ments were known by a variety of terms: slum-dwellers,
emerged with generally stronger financial tools than they informal settlers, squatters, maskwota (in East Africa)
had going into the period. But as their growth has continued paracaidistas or colonos (in Mexico), okupas (Spain, Chile
to outpace their ability to provide services for their citi- and Argentina) and favelados (in Brazil). Most of these
zens, they have had to deal frontally with one of the central terms connote stigma in the local culture. Over the years,
Overall, issues of the Habitat Agenda: the need to provide adequate a staggering number and variety of these settlements have
decentralization housing, particularly for the poor. It is at this point that we emerged largely in Latin America, Africa, and Asia. The
has been an
need to discuss the whole question of slums or informal defining characteristics of these areas— now often called
important policy
issue over settlements, particularly in the developing world. slums in the international literature — are their precar-
ious legality and almost non-existent level of services such

1.4
the past two
decades as community facilities, potable water, and waste removal.
In a major study of this phenomenon, The
Challenge of Slums,51 UN-Habitat estimated that in 2001,
924 million people, or 31.6 per cent of the total urban
The Continous population in the world, lived in slums. The report noted

Growth of Slums
that”… the immensity of the challenge posed by slums is
clear and daunting. Without serious and concerted action
on the part of municipal authorities, national govern-
The widespread growth of slums or informal urban settle- ments, civil society actors and the international commu-
ments— particularly in the developing world— became a nity, the numbers of slum dwellers are likely to increase in
central policy issue during the last two decades. Images most developing countries.”52
of slums were ubiquitous, as the favelas of Brazil and Following UN-Habitat’s ground-breaking
the huge, unserviced settlements of Nairobi caught the report, the issue of slums was taken up by both researchers
world’s imagination. But as an issue, and a challenge to and journalists. A number of accounts of the appalling
urban managers, the problem was not by any means new, living conditions in slums and informal settlements
so we can consider it a persistent issue in the classification were published during this period.53 A recent analysis
of this chapter. Slums represent part of the unfinished examines the history and planning architecture behind
business of the MDGs or part of the “old” urban agenda various stalled attempts to redevelop the Dharavi district
that must be addressed by the new urban agenda. This is in Mumbai – a vast area with nearly 750,000 people.
why Target 11.1 of Goal 11 of the sustainable develop-
ment agenda seeks to ensure by 2030, access for all to
adequate, safe and affordable housing and basic services The enormous growth of cities
and upgrade slums.50 largely through rural-urban
migration, and the challenge of
During the1960s and 1970s, international
organizing adequate housing
agencies like the World Bank, and later, UN-Habitat, began placed the emphasis on large-scale
to focus their urban development efforts on improving public schemes to build low-cost,
housing and basic services. The enormous growth of cities affordable housing
14

Chapter 1: From Habitat II to Habitat Iii: Twenty Years of Urban Development • WORLD CITIES REPORT 2016
Redevelopment plans such as the Dharavi Redevelopment Chapter 3 discusses slums in greater detail and The statistics
Project routinely fail: shows changes that have occurred across various devel- on the
incidence of
“…and it is often a good thing that they do. If the grand oping regions. Recent estimates provided by UN-Habitat slums over
visions of master planners –referred to by many in show that the proportion of the urban population living time reflect
Mumbai as hallucinations – were realized, then the social in slums in the developing world decreased from 46.2 per some notable
improvement.
dislocations they would bring about would be unimagi- cent in 1990, 39.4 per cent in 2000, to 32.6 per cent While many
nable. Holding aside the critical question of where they in 2010 and to 29.7 per cent in 2014. However, esti- still live in
would all go, if the hundreds of thousands of “unauthor- mates also show that the number of slum dwellers in the slums, they
have clearly
ized,” “unregularized,” or “ineligible” Dharavi residents developing world is on the increase given that over 880
been receding
were evicted, the city would simply stop working. If the million residents lived in slums in 2014, compared to 791 as a proportion
megaslum were to disappear, then Mumbai would lose so million in 2000, and 689 million in 1990.58 This implies of the urban
many of its drivers, domestic workers, garment manufac- that there is still a long way to go in many countries, in population
over the last
turers, garbage collectors, and office workers that India’s order to reduce the large gap between slum dwellers and two decades
commercial capital would simply cease to function.”54 the rest of the urban population living in adequate shelter
But are people consigned forever to live in with access to basic services. Promoting universal access
slums, or do they move out of slums and into other parts to basic services should clearly be one of the cornerstones
of the city? Longitudinal studies in the favelas of Rio,55 and of the new urban agenda.
in a squatter settlement in Guayaquil, Ecuador,56 show

1.5
that there has been considerable movement both physi-
cally out of these settlements, and into better serviced
neighbourhoods, as well as upwards socially and economi-
cally as families improve their positions in the workforce
through education and economic initiatives. These studies The Challenge of
Providing Urban
reinforce the general argument that migrations around
the world from rural areas to the big cities are part of a
two-stage process.
In the first stage, poor migrants move to low-
Services
income neighbourhoods often of big cities; and in the
second stage, they and their families spread outward and Closely linked to the issue of slums particularly in the
find opportunities in the more established parts of the fast growing cities of Asia and Africa is the challenge of
city. The neighbourhood to which they first migrate, called providing adequate basic services and infrastructure. This
an arrival city by one author, “is linked in a lasting and challenge is central to the economic performance of cities,
intensive way to its originating villages …And it is linked and their ability to provide a minimum quality of life to
in important and deeply engaged ways to the established their citizens. The major services which cities provide
city. Its political institutions, business relationships, social include transport networks, water and sanitation connec-
networks and transactions are all footholds intended to tions, electricity, health, education, and a whole host of
give new village arrivals a purchase, however fragile, on other ancillary services such as street cleaning, the mainte-
the edge of the large society, and to give them a place nance of public spaces and parks, public lighting, archives,
to push themselves, and their children, further into the and cemeteries. When urban services are lacking or are
centre, into acceptability, into connectedness.”57 While severely strained – as in large areas in many poor cities
conditions may be harsh within some of these arrival with large informal settlements – the basic productivity of
cities, says the author, without them the established cities all citizens will be compromised.
might stagnate and die. The MDGs and the recently adopted SGDs
The statistics on the incidence of slums over place considerable emphasis on the improvement of basic
time reflect some notable improvement. While many still services – in both urban and rural areas. But with continuing
live in slums, they have clearly been receding as a propor- population growth, how have urban services and related
tion of the urban population over the last two decades. infrastructure kept up over the last two decades? The story
varies from country to country, and even between cities
15
Chapter 1: From Habitat II to Habitat Iii: Twenty Years of Urban Development • WORLD CITIES REPORT 2016

Public within the same country. But an overall tour d’horizon of capabilities to keep up with rapid demand (Chapter 6).
management some major basic urban services was recently carried out During the 1990s, there were high hopes in some quar-
remains the by UCLG. In this document, the basic services surveyed ters that private sector participation— particularly in the
dominant
approach to included potable water supply, sanitation, solid waste man- area of drinking water provision would be able to fill the
basic service agement, urban transportation and energy.59 supply gap. However, experience has shown mixed results
delivery in most Among the results reviewed, three trends and pure private concessions have become very unusual.
countries; and
the role of local
emerge. First, as countries have improved their economic As an alternative to privatization, a modi-
governments levels, they have tended to improve the proportion of their fied approach known as Public Private Partnership (PPP)
has been urban population able to access basic services. However, emerged in many countries. Typically, this model involves
reinforced since
this trend has been uneven regionally, with Sub-Saharan a contractual relationship between a public oversight
the 1990s by
decentralization Africa and Southern Asia falling behind in urban water agency and a private company— either local or foreign,
initiatives provision. Important considerations here are the rapid or a combination of the two. If the PPP model is defined
increase in population and where the country is poor; broadly, one study estimates that between 1991 and
consequently, cities have not been able to keep up with 2000, the population served by private water operators
the demand for services. in low and medium-income countries around the world
The second trend is the increasing number of grew from 6 million to 94 million; and to over 160 million
attempts to find innovative ways of dealing with the infra- by the end of 2007. Another study shows that “water and
structure challenge. Public management remains the dom- sanitation privatization in developing countries” had taken
inant approach to basic service delivery in most countries; place in 90 countries, in 87 state or provincial jurisdic-
and the role of local governments has been reinforced tions, and in 504 local governments during the period
since the 1990s by decentralization initiatives. But even 1990-2011.60 But experience with the hybrid model of
though cities may have the legal authority to undertake, privatization among low-income countries has been dis-
and to manage large water schemes and large sewerage or appointing. Consequently, PPIAF-World Bank now argues
electricity supply schemes, they do not have the human that this option is more appropriate for relatively upper-
resources, let alone the large-scale capital and technical middle-income countries, where borrowing is possible in
the local currency.61

Many homes in the


southern Philippine island
of Mindanao do not have
potable water.
Source: Asian Development
Bank, CC BY 2.0, https://
creativecommons.org/licenses/
by/2.0/legalcode
16

Chapter 1: From Habitat II to Habitat Iii: Twenty Years of Urban Development • WORLD CITIES REPORT 2016
The third general trend in the supply of basic areas have a crucial role in the climate change arena.
urban services is that common public services are still very Urban areas concentrate economic activities, households,
poor. Slums may be housing a gradually reduced portion industries and infrastructures which are hotspots for
of the urban population as local policies take effect and as energy consumption as well as key sources of greenhouse
incomes increase. However, for the hundreds of millions gases. It is now widely accepted that urbanization brings
at the bottom of the urban system, garbage pickup and about fundamental changes in production and consump-
removal is almost non-existent; toilets, let alone public tion patterns, which when associated with dysfunctional
toilets, are rare; running water to one’s premises is an urban forms and structure of cities, contribute to higher
impossibility; well-funded public education is unavailable; levels of energy consumption and greenhouse gas emis-
and the quality of health services, transport facilities, sions. With more than 50 per cent of the world’s popula-
leisure and open spaces, and even good local food markets tion, cities account for between 60 and 80 per cent of
is low. Investing in infrastructure is therefore an absolute energy consumption, and generate as much as 70 per cent
necessity for the new urban agenda. of the human-induced greenhouse gas emissions primarily
through the consumption of fossil fuels for energy supply

1.6
and transportation.65
Heavy precipitation and extreme weather
events can disrupt the basic fabric and functioning of
cities with widespread implications for the economy,
Cities and Climate infrastructure and inhabitants. In 2014, 87 per cent of Between 1950
and 2005,
Change
disasters were climate-related— thus, continuing the
the level of
20-year long trend of climate-related disasters outnum- urbanization
bering geophysical disasters in the 10 most disaster-prone increased
One of the key emerging issues that cities countries in the world.66 Often, cities in developing coun- from 29% to
49%, while
have to contend with is climate change, which has been tries are particularly vulnerable, both from new extreme global carbon
described as one of the greatest challenges of our time, weather events and the exacerbation of existing poverty emissions
with adverse impacts capable of undermining the ability and environmental stresses. from fossil-
fuel burning
of all countries to achieve sustainable development.62 Especially vulnerable to climate events are
increased by
As shown in Chapter 5, it is no coincidence that climate low-lying coastal areas where many of the world’s largest almost
change has become a pressing international development cities are located (Figure 1.2 and Figure 1.3). Although
agenda simultaneously with urbanization, offering many low-elevation coastal zones account for just two per cent 500%
opportunities for climate change adaptation, mitigation of the world’s total land area, they host approximately 13
and disaster risk reduction. Between 1950 and 2005, the per cent of the world’s urban population.67 A one-metre
level of urbanization increased from 29 per cent to 49 rise in sea levels would pose a great threat to many coastal
per cent, while global carbon emissions from fossil-fuel megacities such as Rio de Janeiro, New York, Mumbai,
burning increased by almost 500 per cent.63 Indeed, sci- Dhaka, Tokyo, Lagos and Cairo. These risks are amplified
entists have reported that 2015 was the hottest year in in cities that lack the necessary infrastructure and insti-
history by wide margin, as average temperature for the tutions to respond to the climate change. Research sug-
year was 0.75°C warmer than the global average.64 This gests that cities that are deeply connected to regional or
has been attributed to increase in greenhouse emissions global financial systems (e.g. Mexico City, Rio de Janeiro,
caused mainly by the burning of fossil fuels, together Johannesburg, Bangkok, Manila, Seoul and Singapore) can
with the El Niño weather event which releases immense potentially spread the negative consequences of any one
heat from the Pacific Ocean into the atmosphere. In this disaster across the global economy with huge systemic
regard, Goal 13 of the Sustainable Development Agenda, loss effects.68
which urges countries to take urgent action to combat The vulnerability of cities to climate change
climate change and its impacts, could not have come at is dependent on factors such as patterns of urbanization,
more auspicious time. economic development, physical exposure, urban plan-
Chapter 5 notes that while climate change is ning and disaster preparedness. Within cities, gender,
a profound global issue, it is also a local issue, as urban age, race, income and location also have implications for
17
Chapter 1: From Habitat II to Habitat Iii: Twenty Years of Urban Development • WORLD CITIES REPORT 2016

the vulnerability of individuals and groups. Low-income reduced stormwater runoff; and stimulated green busi-
groups are being pushed into locations that are prone to ness development.71Arguably, urban emission reductions
natural hazards and four out of every ten non-permanent have a global impact that will benefit future generations,
houses in the developing world are now located in areas thus mitigation policies provide important co-benefits for
threatened by floods, landslides and other natural disas- the current generation, at the local and regional levels.72
ters, especially in slums and informal settlements.69 Municipal governments are best positioned
It is crucial to recognize that cities must also be to make meaningful contributions to greenhouse gas
part of the solution to climate change. Urbanization offers reductions. The Compact of Mayors initiative builds on
many opportunities to develop mitigation and adaptation cities existing climate commitments, to undertake a trans-
strategies to deal with climate change especially through parent measurement and reporting on emissions reduc-
urban planning and design. The economies of scale, con- tions.73 It also aims to reduce vulnerability and enhance
The design and
use of the built
centration of enterprises and innovation in cities, make resilience to climate change, in a consistent and com-
environment it cheaper and easier to take actions to minimize both plementary manner to national level climate protection
is a critical emissions and climate hazards. There are also significant efforts. While cities are well positioned to adapt to climate
area for
opportunities for disaster risk reduction, response and change through appropriate urban planning and design,
climate change
mitigation; reconstruction in cities including through land use plan- this often requires new and improved infrastructure and
the built ning, building codes and regulations, risk assessments, basic services. Consequently, cities worldwide must take
environment monitoring and early warning, and building-back-better advantage of the need to redress existing deficiencies in
consumes
about one- response and reconstruction approaches. housing, urban infrastructure and services, whilst simulta-
third of the To date, the measures envisaged at the global neously creating jobs and stimulating the urban economy.
final energy and national levels have yet to be accompanied by con-

1.7
used in most
countries,
certed measures at the city and local levels. The response
and absorbs of cities to the challenges of climate change has been frag-
an even more mented, and significant gaps exist between the rhetoric of
significant
addressing climate change and the realities of action on
share of
electricity the ground. The critical factor shaping urban responses to Inequality and
climate change is government capacity, which is hindered
by factors that are institutional, technical, economic, or Exclusion
political in character. In developing countries, where
resources are particularly limited, municipal authorities Inequality has become a major emerging urban
might be hesitant to invest in climate change adaptation issue, as the gap between the rich and the poor in most
given the many competing issues on their urban agendas. countries is at its highest levels since 30 years.74 This
Often, municipal authorities have to contend with other policy issue is important to the extent that— in different
“higher priority” issues such as unemployment, backlogs countries and cities— the urban divide both stigmatizes
in housing, inadequate infrastructure and high levels of and excludes. It stigmatizes and even removes large groups
poverty among others. Indeed, the way climate change of the urban population from a socially and economically
is prioritized in relation to other development objectives productive life (Box 1.2); and it excludes, by preventing
such as economic growth, poverty reduction, political sta- them and their children from benefitting from opportuni-
bility, and other social issues plays a crucial role in climate ties to advance in the society at large. While inequality
change responses. and exclusion are closely related as shown in Chapter 4,
The design and use of the built environment inequality has been at the centre of policy discussion. It
is a critical area for climate change mitigation; the built is therefore gratifying that Goal 10 of the Sustainable
environment consumes about one-third of the final energy Development Agenda seeks to reduce inequality within
used in most countries, and absorbs an even more sig- and among countries.
nificant share of electricity.70 In 2005, the City of Chi- In the 1950s, the economist Simon Kuznets
cago’s Department of Buildings launched a “Green Permit discovered an inverted U-shaped relation between income
Program” to promote green roofs which resulted in: inequality and economic growth. In poor countries, he
reduced heat island effect; lower urban air temperatures; argued that there was a substantial income disparity
18

Chapter 1: From Habitat II to Habitat Iii: Twenty Years of Urban Development • WORLD CITIES REPORT 2016
between the rich and the poor, but as countries grew
wealthier, economic growth narrowed the difference.
In this process, as countries experienced growth, mass
education would provide greater opportunities which, in
turn, would decrease inequality and shift political power
to lower income groups in order to change government
policies.75 The increase, then decrease in inequality over
time became known as the Kuznets curve. While this early
thesis has since been criticized and modified, the relation-
ship among income inequality, growth and economic poli-
cies remains important in economic thinking.
In his book The Price of Inequality, Nobel lau-
reate Joseph Stiglitz highlights increasing inequality in
the US “For thirty years after World War II, America grew
together— with growth in income in every segment, but
with those at the bottom growing faster than those at the
top…But for the past thirty years, we’ve become increas-
ingly a nation divided; not only has the top been growing
the fastest, but the bottom has actually been declining.”76
Since the US is largely an urban society, these
national patterns are a reflection of urban inequality.
Large metropolitan areas such as Atlanta, New Orleans,
Washington, DC, Miami and New York experience the
highest levels of inequality, similar to those of developing
country cities such as Abidjan, Nairobi, Buenos Aires and
Santiago— with Gini coefficients of around 0.50.77 Box
1.2 provides a narrative of the nature of inequality in the
city of New York.
The reduction, then growth of inequality in
the US, with a close comparison to Europe over time, has
been traced by Thomas Piketty in his ground-breaking the highest levels of persisting urban inequality; Latin
Rising inequality is
book, Capital in the Twenty-First Century. His calcula- America shows a mixed pattern with high incomes but one of the challenges
tions show that the level of inequality in the US—espe- relatively high levels of inequality; while Asia shows the of urbanization that
has confined many
cially since the 1970s— has been considerably higher lowest levels of urban inequality. The balance of change people to poor living
conditions. Kibera
than that of Europe. Among other findings are that seemed to be positive in terms of decreasing inequality slum, Nairobi, Kenya.
income inequality in “emerging” countries (India, Indo- over time. Still, the story is an open-ended one, not least Source: Julius Mwelu /
UN-Habitat
nesia, China, South Africa, Argentina, and Colombia) because “inequality is multidimensional and cannot be
has been rising since the 1980s, but still ranks below viewed solely through the prism of income.”81 House-
the level of the US in the period 2000-2010.78 While holds may have unmeasured social capital, opportunities
the levels of inequality across Western Europe have been for education or health that enhances their potential
widening since the 1980s, as reflected by the Gini coef- capability to earn income in the future; or assistance
ficient which increased to 0.315 in 201379 compared to in income or kind from friends and relatives. Besides,
0.291 in the late 1980s, the region remains the most how communities organize and how their communities
egalitarian in the world. are planned and located may overcome basic disabilities
UN-Habitat’s analysis of 48 selected cities caused by income scarcity.
shows that urban income inequality in developed coun- China, which has one of the largest urban
tries is not high by international standards.80 Of the populations in the world, has a very complex picture
three main clusters of developing countries, Africa shows of inequality. Rapid urbanization has been associated
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Box 1.2: “Tale of two Cities:” New York has become the capital of inequality

New York City is a microcosm of America’s rising points higher than the national average and The question is who will be around to serve
economic inequality — and of the lopsided 1.8 million people— around one in five — the city’s economic elites that US$14 glass of
nature of the “recovery” that officially began in require food assistance to get by. Almost one cabernet or show them to those great seats
2009, the one most working people have yet to in three of the city’s children live in poverty. at Yankee Stadium? Where will that person
experience. Manhattan is becoming an island of In March 2014, the New York Daily News live? How will he or she raise kids in the city
extremes. The mean income of the top five per reported that the city’s 1,000 food pantries— that never sleeps? Median rental costs in
cent of households in Manhattan soared nine which help feed 1.4 million New Yorkers Manhattan have increased for six consecutive
per cent in 2013 over 2012, giving Manhattan — are straining to keep up with steadily years, and now stand at just under US$4,000
the biggest dollar income gap of any county in increasing demand. per month. And you won’t find that much relief
the country, according to data from the Census At the same time, those at the top of the heading to the boroughs; the median rent in
Bureau. The top five per cent of households ladder have seen their incomes spike, and are Brooklyn is now US$3,172, and in Queens it is
earned US$864,394, or 88 times as much as the driving up prices throughout the city. Sports US$2,934. Owning a home is just a fantasy for
poorest 20 per cent, according to the Census car sellers and Hamptons beach house realtors working New Yorkers. The average cost in the
Bureau’s American Community Survey. The rejoice: Wall Street bonuses hit their highest five boroughs rose six per cent between the
recovery seems to be going to those at the top, level since 2007. The tech industry also is second quarters of 2013 and 2014, and now
much more than those in the middle, while those booming; tech employment grew by 33 per cent stands at US$826,000.
at the bottom may even be losing ground. between 2009 and 2013, and in 2012, those
The citywide poverty rate remained stalled jobs paid an average of US$118,000 per year. Source: Holland, 2014.

at about 21 per cent. Its poverty rate is 6.5 Tourism and entertainment are also booming.

UN-Habitat’s analysis of 48 with growing income and wealth neling remittances back to the regions of origin and thus
selected cities shows that inequality.82 The Gini coefficient reducing regional disparities. Furthermore, migrants work
urban income inequality in for China stood at 0.47 in 2012,83 in export-oriented enterprises, thus valorizing the produc-
developed countries is not high by
international standards.80 Of the up from 0.42 in 2010.84 With the tive investments already made in urban areas of Guang-
three main clusters of developing exception of Shenzhen and Zhuhai— dong and Fujian Provinces.87 While the newer generation
countries, Africa shows the with Gini coefficients of 0.49 and of migrants tends to be much better educated and attain
highest levels of persisting urban
0.45 respectively85— inequality in higher positions in the urban occupational hierarchy, they
inequality
Chinese cities is much lower com- are still at a distinct disadvantage vis-à-vis local residents
pared to other cities in the developing world; although with hukou status when it comes to access to public
this has been increasing in recent decades. facilities and social services. Given the importance of the
Inequality in Chinese cities has been exacer- household registration system to the welfare of so many
bated by the hukou system (legal household registration urban migrants, the Chinese government’s decision in
in the city). According to one count, 205.6 million rural 2014 to reform the system, in order to give cities more
migrants (without hukou) representing about 31 per cent flexibility in dealing with welfare entitlement, is a signifi-
of the urban population were living in Chinese cities in cant and positive step.88
2010; this increased to 230 million in 2011.86 While there One of the physical manifestations of increasing
have been many changes in the situation of migrants, levels of inequality in urban areas is that the phenomenon
most operate at least in the semi-informal sector, and do of gated communities has become more evident in the
not have the right to state-supported health, education or last two decades. These communities share similar char-
housing facilities. acteristics such as separation from neighbouring land by
Increasingly, the migration decision is been fences, walls, or by other constructed or natural obstruc-
viewed as a survival strategy to diversify the range of tions, including symbolic barriers; and filtered or selective
family incomes. Seen in this light, migration to Chinese entry using mechanical, electronic or human guardianship
coastal cities interior has the indirect result of fun- as access-control elements.89
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Chapter 1: From Habitat II to Habitat Iii: Twenty Years of Urban Development • WORLD CITIES REPORT 2016
One of the physical manifestations Box 1.3: Barbarians at the gate: Buenos Aires’
of increasing levels of
inequality in urban areas is
exclusive neighbourhoods face a heavy new tax
that the phenomenon of gated
communities has become more Residents of the Mayling Country Club, a gated community on the outskirts of
evident in the last two decades Buenos Aires that boasts tennis courts, a polo field and a private restaurant, often
carp about the Pinazo River, which runs through four holes of their verdant 18-hole
Gated communities have been increasing golf course. If one doesn’t aim carefully, the river, which is flanked by weeping
rapidly in the US. In the late 1990s, a major study of US willows and navigated by ducks, swallows all the balls launched its way.
housing showed that 40 per cent of new homes in planned A few miles downstream, residents of Pinazo, an informal settlement that has
developments are gated in the West, the South, and south- sprung up along the riverbank, have very different complaints. During heavy rains
eastern parts of the country.90 It has been estimated that the river overflows, inundating their makeshift aluminium and brick homes with
seven million households in the US lived in 20,000 gated sewage. Its gangs are so tough that even police fear to go in.
communities in 2007, with such communities emerging Such inequality is the norm in the suburbs of Buenos Aires, where a quarter
as the fastest growing housing type.91 Although not as of Argentina’s 40 million citizens live. For the majority, life is hard. Less than half
widespread as in the US, a of homes have sewerage and a quarter lack access to piped water. A third have
While the rise of
2004 survey found more than gated communities
no gas; almost as many stand on unpaved streets. But amid this poverty, islands
1,000 gated neighbourhoods in have in part, been of luxury are popping up. A report by the provincial tax office in 2012 suggested
England, with most of these in in response to that there were more than 400 gated developments around the capital, containing
growing crime
the London Metropolitan area 90,000 homes. Most manage their own utilities and security, with CCTV and
and security
and the southeast.92 concerns, they guards patrolling at all hours. Some are small towns in their own right: Nordelta, a
In Latin America, have far greater secure mega-complex on the capital’s northern edge, is home to more than 17,000
the fear of crime has led to the ramifications, people and has its own schools, hospitals and hotels.
leading to
emergence of gated communi- disproportionate A new law proposes to prize open the gates. The Law of Just Access to
ties in almost all major cities to and more intense Habitat, promulgated in October 2013, allows the provincial government to tax
the extent that some of these consumption new gated communities a tenth of their land, or the equivalent in cash, to pay for
of public space,
have now become “gated cities,” increasing
social housing. It also raises by 50 per cent the tax levied on vacant lots in gated
providing full urban services for polarization, neighbourhoods, and allows the government to expropriate lots that have lain
their residents with private high- privatization and undeveloped for five years after a three-year grace period.
segmentation of
ways linking them together.93 In The idea is to give the government more power to intervene in the regulation
urban space
Santiago, Chile, private high- of land, and therefore decrease the unbelievable inequality. An opposition
ways have been built, connecting exclusive quarters of congressman from Buenos Aires, has lodged a complaint that the law is
the city, accessible only to those living in these neighbour- unconstitutional in that it violates the right to private property and opens a
hoods.94 In 2012, Buenos Aires had more than 400 gated dangerous door. Whatever the impact of the new law, the rich and poor of Buenos
developments containing 90,000 homes, thereby further Aires will continue to live jammed close together, but worlds apart.
widening the gap between the rich and the poor (Box 1.3).
Rising levels of crime and growing inequality have in part Source: The Economist, 2013.

played a key role in rise of gated communities in major


African cities such as Johannesburg, Lagos and Nairobi.
In 2004, Johannesburg had 300 enclosed neighbourhoods nities, the provincial government in Buenos Aires enacted
and 20 security estates.95 the Law of Just Access to Habitat in October 2013, which
While the rise of gated communities have in allows the provincial government to tax new gated commu-
part, been in response to growing crime and security con- nities 10 per cent of their land or the equivalent in cash to
cerns, they have far greater ramifications, leading to dispro- be used for social housing (Box 1.3). The law also increases
portionate and more intense consumption of public space, by 50 per cent the tax on vacant lots in gated communities,
increasing polarization, privatization and segmentation of and allows the government to expropriate lots that have
urban space, and segregation between income and social remained undeveloped for five years. How effective this law
groups. In an attempt to curb the growth of gated commu- becomes will be seen in the years to come.
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Chapter 1: From Habitat II to Habitat Iii: Twenty Years of Urban Development • WORLD CITIES REPORT 2016

1.8
others. There are a variety of reasons, complex and often
overlapping, as to why migrants pay thousands of dollars
to smuggling rings to undertake dangerous journeys
on sea to cross from parts of Sub-Saharan Africa to the
Upsurge in Spanish Canary Islands, from Morocco to southern Spain,

Involuntary
from Libya to Malta and the Italian islands of Lampedusa
and Sicily, and from Turkey to Greek Islands.

Migration A large number of migrants recorded to have


entered Europe illegally though the Mediterranean Sea
are from some African countries. Although the African
The upsurge in forced migration across international economy has witnessed relatively high levels of growth,
borders is an emerging issue which has implications and is the second fastest the world,102 high unemploy-
for cities. While involuntary migration is a global issue, ment especially among the youth, inequality, poverty, lack
Europe has been at the forefront of large scale involuntary of opportunities and a sense of hopelessness are driving
migration in recent years steaming from the conflict in the migrants to make this perilous journey in unworthy and
Middle East. However, the bulk of this humanitarian crisis overcrowded boats to Europe. The large black market’s
is largely affecting neighbouring countries, particularly labour force serves as a major pull factor for illegal migra-
Syria.96 Syrian refugees now comprise the biggest refugee tion to Europe.103 Globalization of information generally
population from a single conflict. As the end of 2015, it
97 reinforces the idea of a better life in Europe and drives the
estimated that 2.5 million Syrian refugees were in Turkey, quest for greater prosperity abroad. Refugee migration to
1.11 million in Lebanon, 0.63 million in Jordan, 0.25 Europe has been marred deaths, with the Mediterranean
million in Iraq and 0.12 million in Egypt.98 In Lebanon, Sea being the deadliest route in the world; nearly three-
for instance, Syrian refugees account for over a quarter quarters of reported migrants’ deaths in the world occurred
of the country’s resident population. This makes Lebanon in this sea in 2015.104 The first eight months of 2015, wit-
the country with the highest per capita concentration of nessed the loss of 2,373 lives on the Mediterranean.105
refugees worldwide along with Jordan, which has refugees The influx of refugees to Europe is occurring
from several countries fleeing different crisis. against the backdrop of fight against terrorism, as well as
In 2015, more than one million forced a relatively weak labour market and economic conditions.
migrants and refugees arrived in Europe compared to Consequently, insularity, xenophobia and right-wing pop-
280,000 in 201499— a figure that the European Union’s ulism and anti-immigrant parties are gaining ground across
external border force, Frontex, puts Europe.106 This has led to negative
at more than 1.8 million. The vast
100 The influx of refugees to Europe is public perception of migrants and
occurring against the backdrop of
majority (over one million) arrived by fight against terrorism, as well as a
refugees. Hungary, for instance, has
sea and the rest over land. In Europe, relatively weak labour market and introduced restrictive measures that
Germany is the preferred destination economic conditions have ensured limited access for refu-
The upsurge of migrants, as it received close to gees at its borders. In Demark, the
in forced 1.1 million migrants and refugees in 2015, more than one parliament backed what was considered by many— a con-
migration
per cent of its population.101 This in part can be attributed troversial bill to confiscate the assets of asylum seekers
across
international to Germany’s initial welcoming approach and more favour- worth more than US$1,420 to cover their housing and
borders is an able economic situation. Besides, Germany has an estab- feeding costs.107 Some of the countries that initially wel-
emerging issue lished quota system for the distribution of asylum seekers comed refugees into their cities are beginning to experi-
which has
implications among its federal states, based on their tax income and ence escalating far-right opposition and the spread of anti-
for cities population density. Few countries such as Sweden and immigrant sentiment manifested by a persistent pattern
Austria have taken a large number of refugees relative to of protests and violence against migrants, including efforts
their population. to render shelter uninhabitable through arson and other
Not all migrants are fleeing conflicts, wars or forms of vandalism. At the same time, there has been a rise
oppressive regimes; it has been a mixed-migration flow of in expression of solidarity with immigrants. Some cities
refugees, asylum-seekers and economic migrants among have been avenues for movements that embody empathy
22

Chapter 1: From Habitat II to Habitat Iii: Twenty Years of Urban Development • WORLD CITIES REPORT 2016
1.9
with the plight of migrants; rallies have taken place across
major cities in Europe in show of solidarity with migrants
and to express disagreement with anti-refugee policies.
In Germany, the City of Dresden experi-
enced rallies in support of refugees that countered the Rising Insecurity
and Urban Risk
protests PEGIDA.108 Also, a right-wing rally Offensive for
Germany of about 400 marchers sparked a larger counter-
protest that drew more than 1,000 activists in the City
of Leipzig.109 In London, tens of thousands joined the A major emerging urban issue concerns insecurity and
Solidarity with Refugees rally, urging the UK government increasing risk. Over the past two decades, urban popula-
to do more and to welcome more refugees. 110 In Copen- tion growth and the effects of globalization have enhanced
hagen, over 30,000 people gathered outside the Parlia- the complexities and manifestation of crime and violence
ment building chanting: “Say it loud, say it clear, refu- in cities.116 The fear of crime and violence continues to
gees are welcome here!” Similar events have taken place be pervasive in cities and is one of the top concerns in
in Glasgow and Dublin among other European cities to citizens’ everyday lives. One study showed that 60 to 70
express similar sentiments. This has been a rallying force per cent of urban residents have been victims of crime
agitating for national governments to respect international in those developing or transitional countries where rapid
obligations and commitments, ensure dignified reception urban population growth is at its highest.117 New and
conditions for all refugees and take concrete measures pervasive risks affecting cities include terrorism, urban
against intolerance and xenophobia. warfare, heightened securitization, and disease and pan-
Europe stands to gain from influx of migrants demics. Insecurity and risk undermine the long-term sus-
especially in the face of the threat posed by the demo- tainability of cities worldwide.
graphic trajectory of an ageing popu- Rapid urban growth and
Europe stands to gain from influx
lation and low birth rates in some of migrants especially in the the globalized nature of cities have
countries.111 Local authorities are face of the threat posed by the added new levels of urban health
looking beyond the humanitarian demographic trajectory of an risks. The spread of disease in cities
ageing population and low birth
emergency and seeing migrants as rates in some countries often occurs as a result of inadequate
integral for the socioeconomic devel- infrastructure and services. High
opment of their cities; if migrants integrate well, they are incidence of traffic fatalities, air pollution related respira-
likely to boost the economy of their host city by easing skill tory infections and premature deaths, and communicable,
shortage. Previous experience of refuge crisis shows that vector, and waterborne diseases can all be related to inad-
migrants can, eventually become valuable contributors to equate, poor, or inefficient urban infrastructure.118 Move-
the economic and social development of countries.112 ment between global cities has significantly impacted the
Absence of integration policies can lead to spread of viruses such as SARS.119 For instance in 2003,
the formation of ghettos and marginalized communities, the SARS virus that originated in the Guangdong province
which could serve as breeding grounds for frustration, in China, spread to 30 countries around the world over
disenchantment, vulnerability and even radicalization.113 a 6-month period killing 916 people and infecting 8,422
The City of Leipzig (Germany) which for decades was con- people before it was contained.120 The world learned from
sidered a ‘shrinking city’ can see the arrival of migrants as the SARS outbreak that maintaining a city’s health security
an opportunity for reviving the city. Other German cities will depend on sound urban planning
like Munich, Düsseldorf, Stuttgart and Freiburg have estab- as advocated in Chapter 7, as well as a
lished ‘welcome departments’ within their city halls to very robust and responsive infrastruc-
prepare for the arrival of refugees. Additionally, German
114 ture and health service network.121
ministry responsible for housing has embarked on the con- The outbreak of Ebola
struction of 350,000 public-housing units for refugees, fever in West Africa, and subsequent
The fear of crime and violence
which will likely create an estimated 25,000 jobs.115 spread during the years 2013 to continues to be pervasive in cities
2015, was particularly virulent in the and is one of the top concerns in
underserviced slums of major coastal citizens’ everyday lives
23
Chapter 1: From Habitat II to Habitat Iii: Twenty Years of Urban Development • WORLD CITIES REPORT 2016

cities.122 West Point, in Monrovia, Liberia, “is West Afri- Mall attack in Kenya in 2013, unidentified terrorists asso-
ca’s largest and most notorious slum: more than 70,000 ciated with Al-Shabaab in Somalia killed 67 in the capital
people crowded together on a peninsula, with no running city.132 In April of 2015, an Al-Shabaab siege of a Kenyan
water, sanitation or garbage collection. The number of university campus in Garissa town left 147 dead.133
Ebola deaths in that slum will likely never be known, According to a Kenyan parliamentary report, Kenya has
as bodies have simply been thrown into the two nearby experienced 35 terrorist attacks since 1975, of which
rivers.”123 While urban areas can be the vector for the 26 took place in urban areas.134 The terrorist attacks in
spread of this epidemic, the concentration of population, Paris in November 2015, which simultaneously targeted
Cities are services and effective treatment in a city can also result a concert hall, a major stadium, restaurants and bars, left
increasingly in its local eradication. This was the case in Lagos in late 130 people dead and hundreds wounded.135
becoming
2014, where a rapid, coordinated public health response Terrorism could have adverse implications for
targets of
terrorism as was able to limit the spread of the virus to only 19 persons state-initiated urban development programmes in aid-
they provide (8 of whom died), once an infected passenger from Liberia dependent countries. This because the fight against ter-
high levels of brought the virus to the city. The passenger arrived on rorism might adversely affect the disbursement of devel-
visibility and
impact as a July 20, and by October 20, WHO declared the country opment assistance from donor countries that are affected,
result of their Ebola-free.124 or feel threatened by terrorism could spend more of their
social, political, Cities are increasingly becoming targets of resources in fighting terror and less on development assis-
and economic
centrality
terrorism as they provide high levels of visibility and tance. Less funding could therefore be available for state-
impact as a result of their social, political, and economic initiated urban and infrastructural projects.
centrality.125 High concentrations of people and complex War itself is now being urbanized, with cities
infrastructure leave cities vulnerable to potentially dev- being targeted as sites for the confrontation of opposing
astating attacks and disruptions to vital services.126 The powers, regimes, and ideologies.136 Warfare in cities has
intensification of terrorism and its impacts on civilian meant greater civilian death. For instance, in 2001, the
lives in cities is clearly demonstrated by the over five-fold first 20 weeks of US bombings of cities in Afghanistan
increase of terrorism related deaths in the past decade resulted in approximately 3,500 civilian deaths. An addi-
and a half. Since 2000, the number of deaths from ter- tional 19,000 to 43,000 refugees later died of hunger,
rorism has increased over nine-fold from 3,329 to 32,658 disease and cold as result of the destruction of important
in 2014.127 In spite of the public’s fear of terrorist activi- infrastructure including hospitals, power plants, water
ties, it is important to note that the incidence of terrorist supply utilities, communication systems, and transport
attacks is far surpassed by that of common crimes and networks.137
other types of violence.128 For example, 437,000 people States are now responding to these security
are killed by homicides in each year, which is over 13 breaches by urban militarization which entails the milita-
times greater than deaths from terrorism.129 However, rization of civil society— the extension of military ideas
the number of casualties from terrorism is on the increase of tracking, identification and targeting into city space and
with many victims being private citizens. In 2014, the everyday life.138 Some states or cities are investing in mil-
total number of deaths from terrorism increased by 80 itary facilities and technologies specifically designed for
per cent when compared to 2013— thus making this the combat in cities.139 Militarization is seen as necessary to
largest annual increase in the last 15 years.130 thwart civil disobedience and terrorism and consequently
War itself is
The impact of terrorism on cities is enormous greater limits have been placed on protests and violent
now being
urbanized, and extends beyond civilian causalities to the destruc- measures are more often used to sanction demonstra-
with cities tion of infrastructure and buildings. The attack on New tors.140 Militarization of cities is evident in the security
being targeted York in 2001 left 3,500 people dead but also damaged measures adopted for sporting events, the fortification of
as sites for the
confrontation about 2.8 million square metres of office space and the border security networks, and the deployment of security
of opposing Port Authority Trans-Hudson train station at the World details during large international summits and anti-globali-
powers, Trade Center.131 Large public facilities such as malls, zation protests.141
regimes, and
ideologies
hotels, transit systems and schools are targets of terrorism In the past 20 years, a parallel trend has been
because securitization of large numbers of the public is the intensification and privatization of security and the
extremely costly and difficult. In the Westgate Shopping unprecedented growth of mass urban surveillance to
24

Chapter 1: From Habitat II to Habitat Iii: Twenty Years of Urban Development • WORLD CITIES REPORT 2016
tackle emerging threats.142 At the turn of the current mated that crime and violence cost the country US$9.6 Over
century, annual growth rate of private security was esti- billion from lost sales, jobs, and investment in 2007.154 reliance on
technologies
mated at 30 per cent in developing countries and eight Safety, security and justice are frequently and electronic
per cent in developed countries.143 A study conducted outside local authorities control and are highly central- service
in South Africa showed the number of private security ized. As crime, violence, and terrorism can cut across delivery
has made
guards increased by 150 per cent between 1997 and local boundaries, there is a need for central governments cities more
2006.144 In Latin America, the private security industry to cooperate with, support, and include cities in strate- vulnerable to
with nearly 4 million security agents is growing at nine gies for protection and prevention. Urban safety policies hacking and
cyberattacks,
per cent a year, and is projected to reach about $30 billion need to include both gender and poverty dimensions with
which are
by 2016, which is more than the economies of Peru or El a particular focus on citizens at risk including urban poor, reported to
Salvador.145 youth, women and single female-headed households, and occur as
With the advancement in digital technology the elderly.155 frequently as
every thirty
there has also been a rise in the use of digital camera There is also a need for community based seconds
surveillance systems, license plate recognition, and face approaches and strategies to help reduce risk factors.156
and crowd detection software.146 For instance, London Transferring certain powers of enforcement to the com-
has a camera for every six citizens and in May 2014, the munity level can help ensure that local culture and rec-
city began the UK’s largest trial of body-worn cameras for onciliation justice is taken into account.157 Today, efforts
police officers.147 At the same time, there has been an to take back the city’s spaces are gaining in momentum in
increased diversification of agents, targets, and forms of many cities worldwide. Overall, it is clear that cities need
urban surveillance.148 to involve local communities in designing appropriate
Over the past few decades, the advancement of solutions in order to better tackle evolving urban safety
digital technologies and the development of the internet and security concerns.
have paved a way for a new kind of risk. Cyber insecu-

1.10
rity, which goes beyond physical boundaries, has become
extremely prevalent in today’s digital world. Digital
technology is being deployed in many aspects of a city’s
infrastructure and service delivery systems.149 Over reli-
ance on technologies and electronic service delivery has The Need for a New
Urban Agenda
made cities more vulnerable to hacking and cyberattacks,
which are reported to occur as frequently as every thirty
seconds.150 Lloyd’s of London estimates that cyberattacks
cost businesses as much as US$400 billion a year.151 This, As this chapter has shown, cities are growing every-
in part, explains why global spending on cyber security is where, but as they grow and their problems become more
projected to increase by 8.2 per cent from US$77 billion complex, they learn from each other, and from their local
in 2015 to US$101 billion in 2018 and reaching US$170 communities. In so many areas—urban services, urban
billion in 2020.152 housing, growing inequality and exclusion, and safety and
Urban crime and violence can also be security— new challenges are emerging, even when old
extremely detrimental to economic development by patterns persist. These challenges will in part frame the
impeding foreign investment and the provision of infra- attempt to find a new, and more current urban agenda in
structure and public services, contributing to capital flight order to better structure and regulate the forces of social,
and brain drain, and negatively impacting international economic, technological and political change that are
tourism.153 For instance, the Mexican government esti- pulsing through our cities. Cities will always be “rife with
problems,” even when they are “filled with promise.”158
To effectively address these challenges and take
Cyberattacks cost advantage of the opportunities of urbanization requires a

$ businesses an estimated

US$400
coherent approach. This approach in the form of a new
urban agenda offers a unique opportunity to achieve global
billion a year strategic goals by harnessing the transformative forces of
25
Chapter 1: From Habitat II to Habitat Iii: Twenty Years of Urban Development • WORLD CITIES REPORT 2016

urbanization. The new urban agenda a new urban agenda offers a agenda should be implementable,
should recognize that urbanization unique opportunity to achieve universal, rights-based, sectorally
global strategic goals by
as a force on its own, which, along- harnessing the transformative and spatially integrative, inclusive,
side other drivers of sustainable forces of urbanization equitable, people-centred, green
development can be harnessed and and measurable. Elsewhere, we are
steered through policy, planning and design, regulatory reminded that “… the effectiveness of any New Urban
instruments as well as other interventions to contribute Agenda is whether it is relevant to urban governments
towards national sustainable development. Moreover, the and urban dwellers, especially those whose needs are cur-
challenges posed by urbanization have global ramifica- rently not met.”160 Besides, the new agenda must take
tions that, if not addressed adequately, could jeopardize cognizance of the delivery failures of the recent decades.
chances of achieving sustainable development. It is there- 161 The new urban agenda should have the possibility

fore necessary to shift cities and towns onto a sustainable of articulating different scales, from the neighbourhood
development path. to the global level, and diverse scales of human settle-
It is clear that continuing along the current ments— from the village through the small and medium-
model of urbanization is no longer an option. Cities and sized town, to the city and megacity.
towns can play a greater role in the sustainable develop- For the new urban agenda to induce trans-
ment agenda, and for that they need to be better under- formative change in cities and countries both developed
stood and integrated into the changing global discourse on and developing, it needs to give explicit attention to both
sustainable development. Urbanization affects all human the pillars that can guide this change and the levers to
settlements: rural villages and service centres, small and support the development of a new model of urbanization.
medium-sized towns, cities and megacities. All these set- These pillars and levers of the new urban agenda are elab-
tlements contribute in different ways to national growth orated upon in Chapters 9 and 10 respectively.
Cities that are
environmentally and sustainable development The new urban agenda can shape our emerging
sustainable, Urbanization is vital for delivering sustainable futures, bringing about the sustainable type of develop-
socially development, not only because the urban areas of the ment that is essential for national sustainable develop-
inclusive and
violence-free,
world are expected to absorb almost all future population ment, as its expected outcomes extend well beyond urban
economically growth, but because they concentrate economic activities areas through a range of ripple effects across socioeco-
productive and influence social change. Urban areas also have the nomic and environmental spaces. From an economic per-
and resilient
potential to reduce ecological footprints, connect rural spective, the new urban agenda will support more efficient
can genuinely
contribute and natural environments and create system-based solu- economic growth through better allocation of land, labour,
to national tions. The new urban agenda responds to the differ-
159 capital and other resources, as well as through greater
development entiated needs, challenges and opportunities of cities in connectivity, economic diversification and strategies for
developed and developing countries. creating employment and improving working conditions.
The new urban agenda should promote sus- From a social perspective, the new agenda will promote
tainable cities and other human settlements that are envi- shared prosperity with equitable access to the benefits of
ronmentally sustainable and resilient; socially inclusive, urbanization, underpinned by a rights-based approach to
safe and violence-free; economically
productive; and better connected to The new urban agenda should promote sustainable cities and other
human settlements that are environmentally sustainable and resilient;
and contributing towards sustained
socially inclusive, safe and violence-free; economically productive;
rural transformation. Such a vision and better connected to and contributing towards sustained rural
should be fully in line with the 2030 transformation
Agenda for Sustainable Develop-
ment, especially Goal 11: to make cities and human set- urbanization, with concomitant protective laws and insti-
tlements inclusive, safe, resilient and sustainable tutions. This also includes socioeconomic safety nets that
The new urban agenda represents a para- guarantee access to basic urban services, as well as prac-
digm shift towards a new model of urbanization that can tical actions designed to add value: e.g. employment-gen-
better respond to the challenges of our age by optimizing eration through public services, combating child labour
resources to harness future potentials. This new urban and support to youth in risky situations. From an envi-
26

Chapter 1: From Habitat II to Habitat Iii: Twenty Years of Urban Development • WORLD CITIES REPORT 2016
ronmental perspective, the agenda will protect natural are environmentally sustainable, socially inclusive and
resources, ecosystems and biodiversity at local and global violence-free, economically productive and resilient can
levels, and promote climate change mitigation and adapta- genuinely contribute to national development, prosperity
tion as well as building of resilience, allowing present and and sustainability— in this sense, cities indeed are our
future generations to live in sustainable cities. Cities that emerging futures.

Notes
1. UN-Habitat, 1976. communities in a sustainable manner; 78. Piketty, 2014. 116. UN Chronicle, 2013.
2. Cohen, 2016. iii. to promote social and economic 79. OECD, 2015. 117. UN-Habitat, 2007.
3. UN-Habitat,1996. development; 80. UN-Habitat, 2010a. 118. The Economist Intelligence Unit, 2015.
4. Naisbitt, 1982. iv. to promote a safe and healthy 81. UN-Habitat, 2010a. 119. Ali and Keil, 2006
5. Naisbitt. 1996. environment; and 82. World Bank and the Development 120. Branswell, 2013; WHO, 2013; CDC, 2012.
6. Cohen, 2016. v. to encourage the involvement Research Center of the State Council, P. 121. Misra, 2014.
7. Satterthwaite,1997 (cited in Cohen 2016). of communities and community R. China, 2014. 122. Snyder et al., 2014.
8. Turok, 2014. organizations in the matters of local 83. World Bank and the Development 123. WHO, 2015.
9. Cohen, 2012a. government.” Research Center of the State Council, P. 124. Gholipour, 2014.
10. Ibid 43. Ba, 2007. R. China, 2014. 125. McCarney, 2006; Svitková, 2014; Beall,
11. United Nations, 2015a. 44. Riedl and Dickovick, 2014. 84. World Bank, 2014. 2006.
12. Satterthwaite, 2016. 45. UCLG, 2010. 85. UN-Habitat, 2010a. 126. Svitková, 2014; Beall, 2006.
13. United Nations, 2014a; United Nations, 46. UCLG, 2010. 86. Chan, 2012. 127. IEP, 2015.
2014b. 47. Madiès, 2013. 87. Zhu, 2003. 128. UN-Habitat, 2007.
14. UN-Habitat and UN-ESCAP, 2010. 48. Madiès, 2013. 88. Li, 2015. 129. IEP, 2015.
15. Cadena et al., 2012 49. UCLG, 2010. 89. UN-Habitat, 2007. 130. IEP, 2015.
16. UN-Habitat, 2009. 50. United Nation, 2015a. 90. Blakely and Snyder, 1999. 131. UN-Habitat, 2007.
17. IMF and World Bank, 2013. 51. UN-Habitat, 2003a. 91. Swainson, 2007. 132. New York City Police Department, 2013.
18. NYU, 2015. 52. UN Habitat, 2003a. 92. Blandy, 2007. 133. BBC, 2015a.
19. Angel et al., 2011. 53. Neuwirth, 2005; Davis, 2006; Otter, 2007; 93. UN-Habitat, 2009. 134. Republic of Kenya, 2013.
20. UNEP, 2007. Boo, 2012. 94. Borsdorf and Hidalgo, 2008. 135. BBC, 2015b
21. McKinsey Global Institute, 2011. 54. Weinstein, 2014. 95. The Economist Intelligence Unit, 2015. 136. Graham 2004, 25
22. United Nations, 2014a; United Nations, 55. Perlman, 1976; Perlman ,2005; Perlman, 96. The war in Syria has given rise to the 137. Herold, 2004.
2014b. 2010. largest humanitarian crisis since World 138. Svitková, 2014; Graham, 2004.
23. Guo et al., 2012 56. Moser, 2009. War II. About 12 million people were in 139. Svitková, 2014.
24. National Research Council, 2003. 57. Saunders, 2010. need of humanitarian assistance as at 140. Svitková, 2014.
25. United Nations, 2015b. 58. UN-Habitat2015 GUO estimates ( see August 2015; internally displaced persons 141. Svitková, 2014; Wilson, 2014.
26. United Nations, 2015b. Statistical Annex). within Syria numbered 7.6 million, whilst 142. UN-Habitat, 2007.
27. Urdal, 2004. 59. UCLG, 2014. 4.1 million people had fled the country. 143. UN-Habitat, 2007.
28. United Nations, 2015c. 60. Herrera and Post, 2014. 97. European Commission, 2015. 144. UN-Habitat, 2007.
29. United Nations, 2015c. 61. Marin, 2009. 98. UNHCR, 2015. 145. Daily Mail, 2014.
30. UN-Habitat, 2009. 62. United Nations, 2015a. 99. IOM, 2015a. 146. Lippert et al., 2012.
31. UN-Habitat, 2009. 63. UNEP, 2011. 100. BBC, 2015c. 147. The Economist Intelligence Unit, 2015.
32. UNCHS, 2000; UN-Habitat, 2002a. 64. BBC, 2016a. 101. IOM, 2015a. 148. Lippert et al., 2012.
33. Manor, 1999. 65. UN-Habitat, 2011e. 102. IMF, 2015a. 149. The Economist Intelligence Unit, 2015.
34. UCLG, 2008. 66. International Federation of Red Cross and 103. BBC, 2015d. 150. The Economist Intelligence Unit, 2015.
35. UN-Habitat, 2009. Red Crescent Societies, 2015. 104. IOM, 2015b. 151. Fortune, 2015.
36. UCLG, 2008. 67. Romero, 2009. 105. BBC, 2015c. 152. Cybersecurity Ventures, 2015.
37. Mathur, 2006. 68. UN-Habitat, 2007. 106. World Economic Forum, 2016. 153. UN-Habitat, 2007.
38. Faquet and Sanchez, 2008. 69. UN-Habitat, 2009; Sheuya 2008. 107. BBC, 2016b. 154. World Bank, 2011a.
39. Hoyos and Ceballos, 2004. 70. Bulkeley et al., 2009. 108. German acronym for ‘Patriotic Europeans 155. McCarney, 2006.
40. Stren, 2012. 71. Erlichman, 2014; Kazmierczak and Carter, Against the Islamization of the West’ 156. UN-Habitat, 2007.
41. Olowu, 2007. 2010. 109. The Telegraph, 2015. 157. McCarney, 2006.
42. Section 152 of the South African 72. UNFCC, 2014. 110. Khomami and Johnson, 2015. 158. Sivaramakrishnan, 1996.
Constitution states that: “(1) The objects 73. Dalkmann, 2014. 111. Dahlburg and Condon, 2015. 159. European Sustainable Development
of local government are : 74. OECD, 2015. 112. OECD, 2015b. Network, 2014.
i. to provide democratic and accountable 75. Kuznets, 1955. 113. World Economic Forum, 2016. 160. Satterthwaite, 2016.
government for local communities; 76. Stiglitz, 2012. 114. City Mayors, 2015. 161. Satterthwaite, 2016.
ii. to ensure the provision of services to 77. UN-Habitat, 2010a. 115. Saunders, 2015.
pter
Cha

02
80 %
Urbanization as a
of global GDP is
accounted by cities

Transformative Force Contribution of cities to national income is


greater than their share of national population

Paris: is 16% of the population of France, but


accounts for 27% of GDP
Kinshasa: is 13% of the population of DRC but
Quick Facts accounts for 85% of GDP
Metro Manila: is 12% of the population of
1 Over the last two decades, cities have emerged as the
world’s economic platforms for production, innovation and Philippines but contributes 47% of the GDP
trade.

2 Urban areas offer significant opportunities for both formal


and informal employment, generating a sizeable share of new
private sector jobs. WELL PLANNED AND MANAGED
URBANIZATION BENEFITS
3 Urbanization has helped millions escape poverty through
increased productivity, employment opportunities, improved
quality of life and large-scale investment in infrastructure
and services.

4 The transformative power of urbanization has in part,


been facilitated by the rapid deployment of Information and
Communications Technology.
Economic prospects Drives innovation Contribute to
and quality of life and productivity national and regional
for the majority development

Policy Points
1 Cities have become a positive and potent force for
addressing sustainable economic growth, development and
prosperity and for driving innovation.

2 Realizing the gains of urbanization will depend on how Alleviation Work towards
urban growth is planned and managed, and the extent to of poverty social inclusion
which the benefits accruing from urbanization are equitably
distributed.
Transformative Power of Connected Cities:
3 The need to move from sectoral interventions to strategic
urban planning and more comprehensive urban policy The deployment of information and
platforms is crucial in transforming city form.
communications technologies in cities
4 When ICT is deployed unevenly, it can create a digital supports innovation and promotes
divide, which can exacerbate inequality, characterized by
efficiencies in urban infrastructure leading
well-connected affluent neighbourhoods coexisting with
under-serviced residents in low-income neighbourhoods. to lower cost city services.
In some cases, urban economies are able to
leapfrog stages of development by deploying
new technologies in the initial construction
of infrastructure.
Key issues that position cities at the fore towards enabling
transformative and sustainable development

The dynamic economic Capacity of cities to address


transition of cities in environmental risks;
national and global contexts

01 02 03 04

The emergence of smart and


connected cities, driven by
The evolving spatial
information and communication
form of cities
technologies (ICT), city data
movements and the field of big data

ROLE OF CITIES IN SUSTAINABLE DEVELOPMENT

Sustainable
urban mobility
Cities provides efficient access to goods, services,
play a central role in job markets, social connections and activities
moving the sustainable while limiting both short- and long-term
energy agenda forward. adverse consequences on social, economic,
and environmental services and systems. An
Current global share evolving transformative trend is the shift away
of renewable energy from auto-dependency.

11 %
supply is

The diversity of renewable energy


resources is vast and research indicates Good governance
a potential contribution of renewable is crucial for developing,

60
energy reaching maintaining, and restoring
% sustainable and resilient services
and social, institutional, and economic activity
in cities. Many city governments are weakened
of total world due to limited power and responsibility over key
energy supply. public services, including planning, housing,
roads and transit, water, land-use, drainage,
waste management and building standards.
29
Chapter 2: Urbanization as a Transformative Force • WORLD CITIES REPORT 2016

tive, poorly planned urbanization can potentially generate


economic disorder, congestion, pollution and civil unrest.2
As the mindsets resisting urbanization have
changed, so have city dwellers’ living and working envi-
ronments. Globally, urban centres are expanding due to

T
racking the last twenty years of development reveals a global transfor- their capacity to generate income, contribute to national
mation that positions cities at the core of the development agenda. wealth, attract investments and create jobs.3 Cities are
Urbanization is indeed one of the most significant trends of the past and places of mass production, consumption and service pro-
present century, providing the foundation and momentum for global change. vision, with their scale, density and diversity of social,
The shift towards an increasingly urbanized world constitutes a transforma- cultural and ethnic groups, setting them apart from rural
tive force which can be harnessed for a more sustainable contexts.4 This draws sharp focus to the galvanizing
development trajectory, with cities taking the lead to power of proximity for innovation, including the econo-
address many of the global challenges of the 21st century, mies of urbanization and agglomeration—which together
including poverty, inequality, unemployment, environ- establish the foundation of the transformative power of
mental degradation, and climate change. Cities have urbanization.
Urbanization
is indeed one
become a positive and potent force for addressing sustain- From New York to São Paulo, the upside
of the most able economic growth, development and prosperity, and potential of globalization has facilitated the re-emergence
significant for driving innovation, consumption and investment in of cities as strategic global centres for specialized func-
trends of
both developed and developing coun- Cities have become a positive
tions.5 Cities have become the locus
the past
and present tries. This dramatic shift towards and potent force for addressing for change and the venue where
century, urban life has profound implications sustainable economic growth, policies and actions are mobilized.
providing the development and prosperity, and
for energy consumption, politics, Yet, as shown in Chapters 1 and 4,
foundation and for driving innovation, consumption
momentum for food security and human progress. 1
and investment in both developed cities have turned into nodal points
global change Although some of this change is posi- and developing countries of mounting human, socioeconomic
30

Chapter 2: Urbanization as a Transformative Force • WORLD CITIES REPORT 2016


Workers take a break at a construction site.
Rapid urbanization in Vietnam has brought both
opportunities and challenges to the country. Ho Chi
Minh City, Vietnam.
Source: Tran Viet Duc/World Bank, CC BY 2.0, https://
creativecommons.org/licenses/by/2.0/legalcode

and environmental vulnerabilities, of which inequality,


sprawl and air pollution have become the most visible
manifestations. It therefore follows that a business-as-
usual approach will not be enough to keep up with the
pace of urban growth in the next coming decades.
This chapter presents key issues that position
cities in a transformative role towards sustainable develop-
ment. These transformative issues relate to the dynamic
Increase in people living
economic transition of cities in national and global con- in extreme poverty in
texts; the evolving spatial form of cities; capacity of Sub-Saharan Africa
cities to address environmental risks; and the emergence
1981 205 million
of smart and connected cities, driven by ICTs, city data
2010 414 million
movements and big data.

Cities have become the In virtually all cases, the


locus for change and the contribution of urban areas to
venue where policies and national income is greater than
actions are mobilized their share of national population
31
Chapter 2: Urbanization as a Transformative Force • WORLD CITIES REPORT 2016

2.1
As the world recovers from the global reces-
sion, cities in emerging economies such as China, India
and Brazil have become major sites for business invest-
ment, presenting global companies with unprecedented
The Dynamic opportunities for research and development. By 2030, the
middle class in China – the majority of which will be con-
Economic centrated in urban areas could reach one billion, corre-

Transition of Cities sponding to 70 per cent of China’s projected population.6


Undoubtedly, urbanization will be one of the biggest
drivers of global economic growth in this era, but coun-
As shown in Chapter 8, cities have emerged tries and cities may not equally seize the advantages and
No country as economic powerhouses driving the global economy. opportunities.
has achieved
Cities are engines of economic growth and development.
its level of
development No country has achieved its level of development without Productivity in cities
without urbanizing. Increased productivity due to urbanization The evidence of the positive link between
urbanizing has strengthened the weight of urban areas and reduced urban areas and economic development is overwhelming.
poverty, thus making cities more important to national With just 54 per cent of the world’s population, cities
and global economies. Indeed, the prosperity of nations account for more than 80 per cent of global GDP.7 Figure
and regions is increasingly dependent on the economic 2.1 and Figure 2.2 respectively show the contribution of
In virtually performance of cities. cities in developed and developing countries to national
all cases, the
Large cities are associated with higher levels income. In virtually all cases, the contribution of urban
contribution
of urban areas of productivity and income, given their central role in areas to national income is greater than their share of
to national innovation and job creation, amidst rapidly increasing eco- national population. For instance, Paris accounts for 16
income is nomic and technological complexity (Chapter 8). Sustain- per cent of the population of France, but generates 27
greater than
their share able economic growth is virtually impossible without the per cent of GDP. Similarly, Kinshasa and Metro Manila
of national growth of cities. As cities become more concentrated, the account for 13 per cent and 12 per cent of the population
population economic potential of urban growth is driven by higher of their respective countries, but generate 85 per cent
levels of productivity. and 47 per cent of the income of the Democratic Republic
of Congo and Philippines, respectively. The ratio of the
share of urban areas’ income to share of population is
Figure 2.1: Share of GDP and national population in selected cities greater for cities in developing countries vis-à-vis those of
(developed countries) developed countries. This is an indication that the trans-
Source: UN-Habitat, 2011f. formative force of urbanization is likely to be greater in
50 developing countries, with possible implications for har-
nessing the positive nature of urbanization.
40 The higher productivity of urban areas stems
from agglomeration economies, which are the benefits
30
firms and businesses derive from locating near to their
customers and suppliers in order to reduce transport and
communication costs.8 They also include proximity to a
20
large labour pool, competitors within the same industry
and firms in other industries.
10
These economic gains from agglomeration can
be summarized as three essential functions: matching,
0
sharing, and learning9. First, cities enable businesses to
Auckland

Barcelona

Boston

Dublin

Helsinki

London

Madrid

New York

Paris

Rome

Sydney

Tokyo

Toronto

Vienna

Warsaw

Zurich

match their distinctive requirements for labour, premises


and suppliers better than smaller towns because a wider
Share of national GDP (%) Share of national population (%)
choice is available. Better matching means greater flex-
20
32
10

Chapter 2: Urbanization as a Transformative Force • WORLD CITIES REPORT 2016


0

Auckland

Barcelona

Boston

Dublin

Helsinki

London

Madrid

New York

Paris

Rome

Sydney

Tokyo

Toronto

Vienna

Warsaw

Zurich
Share of national GDP (%) Share of national population (%)
Figure 2.2: Share of national population and GDP in selected cities (developing countries)
Source: UN-Habitat, 2011f.

100

80

60

40

20

0
Abidjan

Addis Ababa

Bangkok

Bogota

Brasilia

Buenos Aires

Cairo

Cape Town

Chittagong

Dar es Salaam

Dhaka

Hanoi

Jakarta

Kabul

Karachi

Khartoum

Kinshasa

Lima

Manila

Mumbai

Nairobi

Rio de Janeiro

Santiago

São Paulo

Shanghai

Yagon
Share of national GDP (%) Share of national population (%)

ibility, higher productivity and stronger growth. Second, cities are deprived of essential public infrastructure. The
2000
cities give firms access to a bigger and improved range of immediate effect of dysfunctional systems, gridlock and
shared services, infrastructure and external connectivity to physical deterioration may be to deter private investment,
national and global 1500
customers because of the scale econo- reduce urban productivity and hold back growth. Cities
mies for providers. Third, firms benefit from the superior can become victims of their own success and the trans-
flows of information and ideas in cities, promoting more formative force of urbanization can attenuated.
learning and innovation.
1000
10 Proximity facilitates the com-

munication of complex ideas between firms, research Cities in the global economy
centres and investors. Close proximity also enables
11 Over the last two decades, cities and met-
formal and informal500networks of experts to emerge, which ropolitan areas have emerged as the world’s economic
promotes comparison, competition and collaboration.12 It platforms for production, innovation and trade. However,
is not surprising therefore that large cities are the most this global connectivity also carries with it concurrent
likely places to spur the creation of young high growth
0 risks, since the wellbeing of cities is greatly influenced
1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

firms, sometimes described as “gazelles.”13 It is cheaper by regional and global dynamics. Urbanization is currently
and easier to provide infrastructure and public services taking place within the context of a relatively weakened
World Developed economies Developing economies
in cities. The cost of delivering
Asia
services such as water,
Latin America and the Caribbean
global
Africa
economy. During the 2008 global financial crisis,
housing and education is 30-50 per cent cheaper in con- the world suffered the most significant economic down-
centrated population centres than in sparsely populated turn since the Great Depression. By October 2008, the
100
areas.14 crisis had erased around US$25 trillion from the value
90 Urbanization
The benefits of agglomeration can be offset by of stock markets globally.16 The pace of world economic
is currently
80
Percentage of population living in poverty

rising congestion, pollution, pressure on natural resources, growth slowed down to 3.1 per cent in 2015, as against taking place
higher labour and property
70 costs, greater policing costs 3.4 per cent in 2014,17 which was significantly less than within the
occasioned higher levels 60 of crime and insecurity often in before the economic crisis. context of
a relatively
the form of negative externalities
50 or agglomeration dis- The economic crisis may well have resulted in weakened
economies. These inefficiencies
15
40 grow with city size, a reduction of the contribution that urban areas make to global
especially if urbanization is not properly managed, and if the national GDP.18 A 2009 UCLG study of the impact economy
30
r = -0.5506
20

10
33
Chapter 2: Urbanization as a Transformative Force • WORLD CITIES REPORT 2016

50

40

30
of the crisis considered the deterioration of the fiscal fronting countries.21 As engines of growth, cities have a
20 position of local governments as its most important con- key role to play in the economic recovery of countries.
sequence.19 Several other factors combined exacerbated In coordination with—or financed by—their national gov-
Employment
is the
10 gateway this crisis and its impact on cities: collapsed tax revenues, ernments, many cities worldwide have adopted new poli-
out of poverty unemployment, higher operational costs for addressing cies and stimulus programmes to recover from the global
for many and social needs, difficulty gaining access to borrowing, disin- financial crisis. In the UK, cities have been instruments to
0
an important
vestment and collapsed public-private partnership activity. revive the economy by driving growth, providing jobs, sup-
Auckland

Barcelona

Boston

Dublin

Helsinki

London

Madrid

New York

Paris

Rome

Sydney

Tokyo

Toronto

Vienna

Warsaw

Zurich
cornerstone
of economic While the effects from the financial crisis porting investment in critical infrastructure, and granting
and social varied across the world, one universal impact was the greater financial autonomy.22
development Share of national GDP (%) Share of national population (%)
decrease in foreign direct investment (FDI), which is an
important contributor to economic growth. During the Cities and employment creation
recession, the world experienced a decline in FDI inflows A further indication of the transformative
by more than 20 per cent, with developed countries nature of urban areas relates to the significant opportuni-
being the most affected. Developing countries, on the ties they offer for both formal and informal employment.
other hand, have been experiencing steady growth in FDI Cities generate a sizeable share of new private sector jobs.
inflows since early 2000s, thereby exhibiting resilience in Between the year 2006 and 2012, the 750 largest cities
the face of the economic downturn in the world created 87.7 million private sector jobs, or
unemployment can be particularly as shown in Figure 2.3. This is in line 58 per cent of all new private sector jobs in their respect
challenging in urban areas, as
cities are often associated with a
with a World Bank study,20 which 129 countries.23 In the UK, cities account for 78 per cent
high concentration of unemployed shows that between 2003 and 2012, of all jobs.24 In the US, metropolitan areas account for 84
people two-thirds of the top FDI destination per cent of total employment and 88 per cent of labour
cities were in Sub-Saharan Africa, income.25 Among African countries, urban employment
South Asia, and East Asia and Pacific (excluding China). grew by an average of 6.8 per cent over the last decade—
The study also notes that FDI remains highly concentrated twice more than the national rate of 3.3 per cent.26 In
in a small number of elite cities. India, between 2000 and 2005, urban employment grew
The rapid-pace urbanization is regarded as a at a rate of 3.22 per cent compared to rural employment,
Abidjan

Addis Ababa

Bangkok

Bogota

Brasilia

Buenos Aires

Cairo

Cape Town

Chittagong

Dar es Salaam

Dhaka

Hanoi

Jakarta

Kabul

Karachi

Khartoum

Kinshasa

Lima

Manila

Mumbai

Nairobi

Rio de Janeiro

Santiago

São Paulo

Shanghai

Yagon

bright spot in the midst of the multiple global crises con- which grew by 1.97 per cent.27
Employment is the gateway out of poverty
for many and an important cornerstone of economic and
Figure 2.3: FDIShare
inflows, 1995-2014
of national GDP (%) (billions
Shareof
of US$)
national population (%) social development.28 Employment is also a key determi-
Source: Based on UNCTAD, FDI/TNC database (www.unctad.org/fdistatistics), last accessed 17 March 2016. nant of peoples’ satisfaction. The integration of rapidly
urbanizing countries endowed with an abundance of
2000 unskilled labour into the world economy can generate
extensive employment opportunities especially in light
manufacturing. This has been the case of East Asia over
1500
the last five decades, and mirrors the recent situation in
Bangladesh with respect to the garment industry in large
cities such as Chittagong and Dhaka.29 In Bangladesh, the
1000
industrial sector currently accounts for 30 per cent of
value-added as against 20 per cent in 1990, with the level
of urbanization at about 35 per cent.
500
Notwithstanding the foregoing, unemploy-
ment can be particularly challenging in urban areas, as
0 cities are often associated with a high concentration of
unemployed people— a phenomenon often referred
1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

to as the urban paradox.30 About 60 per cent of unem-


World Developed economies Developing economies ployment in UK, Japan, Korea, Netherlands and US is
Asia Latin America and the Caribbean Africa
concentrated in urban areas.31 This is likely to be the

100

90
1000

34

500

Chapter 2: Urbanization as a Transformative Force • WORLD CITIES REPORT 2016


0

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014
case in developing countries. The global unemployment FigureWorld
2.4: Urbanization and povertyDeveloping economies
Developed economies
Asia Latin America
2014b;and the Caribbean lastAfrica
rate for 2015 was 5.8 per cent— 197.1 million people, Source: Based on United Nations, data.worldbank.org, accessed 20 January 2016.

which is one million more than in 2014 and over 27


million higher than the pre-crisis period.32 Particularly 100

problematic is youth unemployment, which is two-three 90

times higher than adult unemployment. In South Africa 80

Percentage of population living in poverty


and Spain, youth unemployment currently stands at 51 70
per cent and 42 per cent respectively.33 Global unem- 60
ployment cuts across various sectors, but is particularly 50
severe in finance, construction, automotive, manufac-
40
turing, tourism, services and real estate— all of which
30
are strongly associated with urban areas. A key issue con- r = -0.5506
20
fronting cities, especially those in developing countries,
10
is to ensure that urbanization generates sufficient eco-
nomic growth to provide decent, productive and remu- 0
0 10 20 30 40 50 60 70 80 90 100
nerative jobs for the rapidly growing labour force. Level of urbanization (%)

Cities and inclusive prosperity


A prosperous city supports productivity, infra- 100
structure development, quality of life, equity and social many benefits to local economies, inequality and social As cities
inclusion, and environmental sustainability.34 The foun- exclusion may actually be on the rise,36 especially if the become more
80
dominant and
Subscription per 100 inhabitants

dations for competitiveness translate to cities that retain benefits of growth are not equitably distributed. The interconnected
and grow their skilled labour, enhance their business World60Bank promotes shared prosperity or inclusive eco- in the global
attractiveness, and expand their economic base. As cities nomic growth, which is at the core of sustainable devel- economy,
competitiveness
become more dominant and interconnected in the global opment.
40 Similarly, UN-Habitat has initiated a global city at the local
economy, competitiveness at the local level becomes prosperity initiative in which equity and social inclusion level becomes
imperative for economic growth. In order to sustain inclu- are key
20 dimensions of urban prosperity. The other dimen-
imperative
for economic
sive economic growth, local governments are considering sions are productivity, infrastructure, quality of life, envi-
growth
their capacity to foster important determinants of produc- ronmental
0
sustainability and governance.
tivity, such as higher education, innovation, quality of life,
2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015*
and infrastructure for all. Poverty and urban-rural linkages
In light of the current dispensation, cities and When properly
Mobile-cellular planned and managed,Fixed
subscription urbani-
telephone subscription
Individuals When properly
city regions compete intensely for investment, for the zation can play a keyusing
roletheininternet
eradicating poverty.Fixed (wired)-broadband
This is subscription
planned and
Active-mobile broadband subscription
location of headquarters of transnational corporations, how and why cities have been described as real poverty managed,
for hosting international agencies, for tourist streams, fighters.37 As illustrated in Figure 2.4, highly urbanized urbanization
can play a
for large conventions, for major events such as the Olym- countries are associated with low levels of poverty. Urbani- key role in
pics or the World Cup, or for major political meetings. A zation has helped millions escape poverty through higher eradicating
study of the competitiveness of 48 Latin American cities levels of productivity, employment opportunities, improved poverty
in terms of their attractiveness for external investment quality of life via better education and health, large-scale
identifies five leading cities— São Paulo, Mexico City, public investment, and access to improved infrastructure
Santiago, Rio de Janeiro, and Buenos Aires. 35 The key and services. Nowhere is this more evident than in East
elements determining the attractiveness to investment of Asia, where increase in urbanization
Urbanization has helped millions
these cities include: the size and wealth of the city; the over the last three and half decades escape poverty through higher
number of global firms with offices in the city; the depth has been accompanied by a remark- levels of productivity, employment
and specialization of the financial market; and quality of able decrease in poverty. In the early opportunities; improved quality of
life via better education and health;
life and security. It is worth noting that the most desirable 1980s, East Asia was the region with large-scale public investment and
cities are among the very largest in the region. the highest incidence of poverty in access to improved infrastructure
While economic growth and prosperity bring the world, with 77 per cent of its and services
35
Chapter 2: Urbanization as a Transformative Force • WORLD CITIES REPORT 2016

population living below the poverty line; by 2008, this has


Fruit sellers close to
the new Hanoi - Lao Cai fallen to 14 per cent.38 In China, urbanization occasioned
Expressway, Viet Nam
by massive economic growth helped pull 680 million
Source: Asian Development
Bank, CC BY 2.0, https:// people out of extreme poverty between 1981 and 2010,
creativecommons.org/
licenses/by/2.0/legalcode and reduce the rate of extreme poverty from 84 per cent
in 1980 to 10 per cent in 2013.39 China alone accounts for
three-quarters of the global reduction in poverty.
However, the reduction in poverty associ- the political, social and geographical dichotomy between
ated with urbanization is not automatic.40 Realizing the urban and rural areas; and recognition and understanding
potential gains of urbanization will however depend on of the continuum of urban and rural development.
how well urban growth and its evolving challenges are The transformative power of urbanization
planned and managed, and the extent to which the ben- has important implications for rural areas. Cities act as
efits accruing from urbanization are magnets for rural migration; in developed countries,
In China, urbanization equitably distributed. Formulating migration is driven by better opportunities in urban areas.
occasioned by massive the necessary policies including However, in developing countries, rural-urban migration
economic growth helped pull
effective governance, urban planning is more complex, in some cases driven by rural migrants
680 million
people out of extreme poverty
and finance is a vital precondition
for enhancing the transformative
seeking refuge from disasters such as famine or war.44
Cambodia experienced massive rural to urban migration
between 1981 and 2010, and reduce potentials of urbanization. As devel- during the 1975-1979 conflict, which contributed 14 per
the rate of extreme poverty from
84 per cent in 1980 to 10 per cent
oping countries rapidly urbanize, it cent of total migrants in urban areas, leading to pressure
in 2013 is crucial that the necessary insti- on land, infrastructures and services in Phnom Penh. This
tutions are established. Managing is when the Urban–Rural Partnership Project was launched
urbanization should therefore be an essential component with the double function of improved livelihoods for the
of nurturing growth. If poorly planned and inadequately poor and stronger urban-rural linkages. The overarching,
managed, urbanization will result in the proliferation of objective was to improve conditions in smaller towns to
slums, poverty, more unequal, less productive and less retain potential migrants.
habitable cities. Neglecting cities even in countries with Another facet of the growing interconnection
low levels of urbanization can impose significant costs.41 between urban and rural areas is the physical expansion
Globally, the conventional distinction between of metropolitan regions, which has seen cities extend
urban and rural is changing, with cities emerging as drivers to peri-urban and rural areas. These transitional zones
The
of change in rural areas. Rural areas benefit from urbaniza- enhance linkages between urban and rural areas. Special
transformative
power of tion through increased demand for rural goods, which can mechanisms are needed to strengthen land administra-
urbanization have a significant impact on rural poverty.42 Other bene- tion, including planning systems to respond to rapid urban
has important fits from the urban-rural linkages include increased urban- expansion. Management of land use in peri-urban areas is
implications
for rural areas rural remittances, increased rural land/labour ratio, and critical to balance city expansion so that it does not com-
increased rural nonfarm employment.43 Achieving sus- promise food production. In developing countries, rural
tainable development is more likely if there is a shift from hinterlands can reduce vital vulnerabilities through City
36

Chapter 2: Urbanization as a Transformative Force • WORLD CITIES REPORT 2016


Region Food Systems.45 Such systems should encourage With cities growing beyond their administra-
domestic capital to expand the processing of local agri- tive and physical boundaries, conventional governing
cultural commodities, both for national consumption and structures and institutions become outdated. This trend
for export. has led to expansion not just in terms of population set-
Urbanization can play a key role in eradicating tlement and spatial sprawl, but has altered the social and
rural poverty. Research in India found that an increase of economic spheres of influence of urban residents.52 In
200,000 in the urban population resulted in a decrease other words, the functional areas of cities and the people
of 1.3 to 2.6 per cent in rural poverty.46 Overall, these that live and work within them are transcending physical
urban-rural linkages were behind a reduction of 13 to boundaries.
25 per cent in rural poverty in India between 1983 and Cities have extensive In India, urban-rural economic
1999.47 In Vietnam, a more recent study (2006-2008) labour, real estate, industrial, agricul- linkages were responsible for
found that rural households in highly urbanized provinces
featured higher income and income growth than rural
tural, financial and service markets
that spread over the jurisdictional ter- 13-25%
of the overall reduction in rural
households.48 These urban-rural linkages have transform- ritories of several municipalities. In
poverty between 1983 and 1999
ative implications for global poverty reduction. some cases, cities have spread across
Source: Calì, 2013.
The benefits of urbanization should not be international boundaries.53 Plagued
limited to large cities, but made available to small and with fragmentation, congestion, degradation of environ-
medium towns. The adequate provision of adequate mental resources, and weak regulatory frameworks, city
infrastructure and opportunities in small and medium leaders struggle to address demands from citizens who
cities can promote rural urbanization and contribute to live, work, and move across urban regions irrespective of
achieving balanced population distribution.49 In Korea, municipal jurisdictional boundaries. The development of
migration to small and intermediate towns in mid-1970s complex interconnected urban areas introduces the pos- Urbanization
can play a
contributed to diverse and dynamic redistribution of sibility of reinventing new mechanisms of governance.
key role in
population, induced by specialized local industrial struc- A city’s physical form, its built environment eradicating
tures, proximity to metropolitan cities and the appropriate characteristics, the extent and pattern of open spaces rural poverty
educational standards.50 This is why urban policies must together with the relationship of its density to destinations
not overlook small and medium-size towns, which rural and transportation corridors, all interact with natural and
migrants increasingly favour over larger cities.51 other urban characteristics to constrain transport options,
energy use, drainage, and future patterns of growth.

2.2
The benefits of
UN-Habitat’s principles for sustainable neighbourhood urbanization
planning favour high densities.54 However, density is no should not
be limited to
blanket solution: it takes careful, proper coordination,
large cities, but
location and design (including mixed uses) to reap the
Evolving Spatial
made available
benefits more compact urban patterns can bring to the to small and
medium towns
Form of Cities
environment (such as reduced noxious emissions) and
quality of life.

The dramatic changes in the spatial form of New urban configurations


cities brought about by rapid urbanization over the last Large and small cities are expanding and
With cities
two decades, present significant challenges and opportu- merging to create urban settlements in the form of city- growing
nities. Whereas new spatial configurations play key role in regions, urban corridors and mega-regions. These urban beyond their
creating prosperity, there is an urgent demand for more configurations act as nodes where global and regional administrative
and physical
integrated planning, robust financial planning, service flows of people, capital goods, research and science, ser-
boundaries,
delivery and strategic policy decisions. These interven- vices and information combine and co-mingle, resulting in conventional
tions are necessary if cities are to be sustainable, inclu- faster economic and demographic growth than that of the governing
sive and ensure a high quality of life for all. Urban areas countries where they are located.55 These new configura- structures and
institutions
worldwide continue to expand giving rise to an increase in tions are spatially connected, and are functionally bound become
both vertical and horizontal dimensions. by their economic, socio-political and environmental link- outdated
37
Chapter 2: Urbanization as a Transformative Force • WORLD CITIES REPORT 2016

Mega-regions ages. Examples include the Hong Kong-Shenzhen-Guang- The ensuing pattern of urban development
are playing zhou (Pearl River delta) region in China and the Rio de due to formal or informal peri-urbanization processes is
an increasing
role in various
Janeiro-São Paulo region in Brazil, including the linear characterized by the displacement of population, indus-
dimensions systems of urban corridors like the industrial corridor con- tries and services from the city centre to the periphery,
of prosperity necting Mumbai and Delhi in India (Chapter 8), and the and the creation of new centres with their own economic
far beyond
regional economic axis forming the greater Ibadan-Lagos- and social dynamics. As opposed to the upscale subur-
their own
boundaries Accra urban corridor in West Africa.56 banization of developed countries, the peri-urban areas
These configurations facilitate intense division in developing countries have become divided cities, char-
of labour and knowledge, offering opportunities for eco- acterized by of spatial segregation along socioeconomic
nomic development and prosperity (Chapter 8).57 Mega- lines. These large peri-urban areas consist of informal
regions are playing an increasing role in various dimen- land-use patterns, accompanied by lack of infrastructure,
sions of prosperity far beyond their own boundaries. poor or non-existent public services, with inferior quality
However, while these engines of growth are transforming housing and families living in poverty.
the global economy, they can also lead to unbalanced
growth in a country’s development. Additionally, ineffec- The transformative potentials of
tive and fragmented urban governance across these vast urban space
urban regions poses major challenges for the post-2015 Urban space can be a strategic entry point for
development era. driving sustainable development. However, this requires
innovative and responsive urban planning (Chapter 7) and
Urban sprawl, suburbanization design that utilizes density, minimizes transport needs
More dispersed
patterns of
and peri-urbanization and service delivery costs, optimizes land-use, enhances
urbanization More dispersed patterns of urbanization in mobility and space for civic and economic activities, and
in the form of the form of suburbanization, peri-urbanization, or urban provides areas for recreation, cultural and social interaction
suburbanization, sprawl have constituted a significant trend over the last two to enhance quality of life. By adopting relevant laws and
peri-
urbanization, decades. This trend is hotly-debated; opponents view it as regulations, city planners are revisiting the compact and
or urban sprawl poor land management or as automobile-driven, uncon- mixed land-use city, reasserting notions of urban planning
have constituted trolled growth. Proponents on the other hand view it as a that address the new challenges and realities of scale, with
a significant
trend over the
choice to move outside the congested urban core where urban region-wide mobility and infrastructure demands.
last two decades land is less expensive to suburbs where land and housing The need to move from sectoral interventions
are cheaper, with low-density living often resulting in to strategic urban planning and more comprehensive urban
better quality of life and improved access to amenities.58 policy platforms is crucial in transforming city form. For
The reality of urban expansion and dispersal is evidenced example, transport planning was often isolated from land-
in most cities, spurred not only by individual preferences use planning and this sectoral divide has caused wasteful
for a suburban lifestyle, but also due to: poor land manage- investment with long-term negative consequences for a
ment and lack of sound regulatory control over peri-urban range of issues including residential development, com-
areas; new land subdivisions accommodating highway and muting and energy consumption. Yet, transit and land-
automobile expansion; and enhanced ease of mobility due use integration is one of the most promising means of
to improved commuting technologies. reversing the trend of automobile-dependent sprawl and
The need to
move from The role of the privately owned car in urban placing cities on a sustainable pathway.
sectoral form cannot be underestimated. As important as prior The more compact a city, the more productive
interventions transportation innovations have been, private car owner- and innovative it is and the lower its per capita resource
to strategic
ship has had a more dramatic effect on the city.59 Chap- use and emissions. City planners have recognized the
urban planning
and more ters 5 highlights some of the impacts of the car-dominated need to advance higher density, mixed use, inclusive,
comprehensive urban landscape, which include: higher costs of public walkable, bikeable and public transport-oriented cities.
urban policy
infrastructure, social isolation, higher energy consump- Accordingly, sustainable and energy-efficient cities, low
platforms
is crucial in tion, fiscal problems associated with inner cities sup- carbon, with renewable energy at scale are re-informing
transforming porting services consumed by suburban residents, loss of decision making on the built environment.
city form farmland and reduced biodiversity. Despite shifts in planning thought, whereby
38

Chapter 2: Urbanization as a Transformative Force • WORLD CITIES REPORT 2016


compact cities and densification strategies have entered existing core and suburbs. This will largely depend on
mainstream urban planning practice, the market has resisted local governments’ ability to overcome fragmentation in
such approaches and consumer tastes have persisted for local political institutions, and a more coherent legislation
low-density residential land. Developers of suburbia and and governance framework, which addresses urban com-
exurbia continue to subdivide land and build housing, often plexities spread over different administrative boundaries.
creating single purpose communities. The new urbanists

2.3
have criticized the physical patterns of suburban develop-
ment and car-dependent subdivisions that separate malls,
workspaces and residential uses by highways and arte-
rial roads. City leaders and planning professionals have
responded and greatly enhanced new community design The Essential
Role of Cities
standards. Smart growth is an approach to planning that
focuses on rejuvenating inner city areas and older suburbs,
remediating brown-fields and, where new suburbs are
developed, designing them to be town centred, transit and
in Sustainable
pedestrian-oriented, less automobile dependent and with
a mix of housing, commercial and retail uses drawing on
Development
cleaner energy and green technologies.60
The tension in planning practice needs to be While there are numerous definitions of sus-
better acknowledged and further discussed if sustainable tainable development, many start with the definition pro-
cities are to be realized. The forces that continue to drive vided in the 1987 Brundtland Report: “Development that
the physical form of many cities, despite the best inten- meets the needs of the present without compromising the
tions of planning, present challenges that need to be at ability of future generations to meet their own needs.”62
the forefront of any discussion on the sustainable develop- The goals for sustainable cities are grounded on a similar
ment goals of cities. Some pertinent issues, which suggest understanding— urban development which strives to
the need for rethinking past patterns of urbanization and meet the essential needs of all, without overstepping
addressing them urgently include: the limitations of the natural environment. A sustainable
city has to achieve a dynamic balance among economic,
i. competing jurisdictions between cities, towns and environmental and socio-cultural development goals,
surrounding peri-urban areas whereby authorities framed within a local governance
compete with each other to attract suburban develop- system characterized by deep citizen Despite shifts in planning
thought, whereby compact cities
ment; involvement and inclusiveness. 63
and densification strategies
ii. the true costs to the economy and to society of frag- The newly adopted 2030 have entered mainstream urban
mented land use and car-dependent spatial develop- Agenda for Sustainable Development planning practice, the market has
resisted such approaches and
ment; and presents 17 Sustainable Develop-
consumer tastes have persisted for
iii. how to come up with affordable alternatives to accom- ment Goals that replace the previous low-density residential land
modate the additional 2.5 billion people that would Millennium Development Goals
reside in cities by 2050.61 (MDGs). While cities were not specifically represented in
the MDGs, Goal 11 of the new Sustainable Development
In reality, it is especially these outer suburbs, Agenda (Box 2.1) seeks to: “Make cities and human set-
edge cities and outer city nodes in larger city regions tlements inclusive, safe, resilient and sustainable.”64 This
where new economic growth and jobs are being created stands-alone goal on cities recognizes the transformative
and where much of this new population will be accom- role of urban areas towards building sustainability in the
modated, if infill projects and planned extensions are not post-2015 Development Agenda.
designed. While densification strategies and more robust A core component of a sustainable cities
compact city planning in existing city spaces will help agenda is sustainable infrastructure— the intercon-
absorb a portion of this growth, the key challenge facing nected physical and organizational structure, set of ser-
planners is how to accommodate new growth beyond the vices and system that supports the daily functioning of
39
Chapter 2: Urbanization as a Transformative Force • WORLD CITIES REPORT 2016

Box 2.1: Goal 11— Make cities and human settlements inclusive, safe, resilient and sustainable
11.1 By 2030, ensure access for all to 11.5 By 2030, significantly reduce the number regional development planning
adequate, safe and affordable housing and of deaths and the number of people affected 11.b By 2020, substantially
basic services and upgrade slums and substantially decrease the direct economic increase the number of cities
11.2 By 2030, provide access to safe, losses relative to global gross domestic product and human settlements
affordable, accessible and sustainable caused by disasters, including water-related adopting and implementing
transport systems for all, improving road disasters, with a focus on protecting the poor integrated policies and
safety, notably by expanding public transport, and people in vulnerable situations plans towards inclusion, resource efficiency,
with special attention to the needs of those 11.6 By 2030, reduce the adverse per capita mitigation and adaptation to climate change,
in vulnerable situations, women, children, environmental impact of cities, including by resilience to disasters, and develop and
persons with disabilities and older persons paying special attention to air quality and implement, in line with the Sendai Framework
11.3 By 2030, enhance inclusive and municipal and other waste management for Disaster Risk Reduction 2015-2030, holistic
sustainable urbanization and capacity for 11.7 By 2030, provide universal access to safe, disaster risk management at all levels
participatory, integrated and sustainable inclusive and accessible, green and public 11.c Support least developed countries,
human settlement planning and management spaces, in particular for women and children, including through financial and technical
in all countries older persons and persons with disabilities assistance, in building sustainable and resilient
11.4 Strengthen efforts to protect and 11.a Support positive economic, social and buildings utilizing local materials
safeguard the world’s cultural and natural environmental links between urban, peri-urban
heritage and rural areas by strengthening national and Source: United Nations, 2015a.

Investment in a society and its economy. Sustainable infrastructure is Urban mobility


sustainable that which is designed, developed, maintained, reused, As a factor of inclusion and integration,67
infrastructure
and operated in a way that ensures minimal strain on urban mobility has a specific transformative role. Urban
is pivotal in
planning for resources, the environment and the economy. It contrib- mobility is a multidimensional concept, encapsulating the
the sustainable utes to enhanced public health and welfare, social equity, multitude of physical components pertaining to urban
development of and diversity.65 Investment in sustainable infrastructure transport (air, road, and rail systems, waterways, light
cities
is pivotal in planning for the sustainable development of and heavy rail, cable cars) including the economic, envi-
cities. Despite the importance of urban infrastructure, ronmental and social dimensions of mobility. Sustainable
there is a clear under-investment as characterized by the urban mobility provides efficient access to goods, ser-
backlog and state of deficient infrastructure. Globally, vices, job markets, social connections and activities while
US$57 trillion is needed for infrastructure investment limiting both short- and long-term adverse consequences
between 2013 and 2030 in order to support economic on social, economic, and environmental services and
growth and urbanization.66 This is of particular concern systems. A sustainable mobility strategy serves to protect
with regard to developed countries, where many large the health of users and the environment, while fostering
cities experience serious congestion, and to developing and promoting the city’s economic prosperity.68
countries, where improved basic socioeconomic condi- City dwellers are negatively impacted by inad-
tions have been long overdue. equate and inefficient public transit systems; low-density
development; urban sprawl; and by the growing dis-
tance between residents and their place of employment,
markets, education and health facilities. Although faced
with enormous challenges, behavioral, technological and
political shifts, cities remain at the forefront of transform-
ative changes to improve quality of life through investing
Singapore, Hong Kong and Tokyo are examples of cities where the costs
in connected, sustainable urban mobility.
of car ownership and use have been set high and planning strategies have An evolving trend is the cultural shift away
emphasized development patterns oriented to transit, walking and cycling from auto-dependency. Singapore, Hong Kong and Tokyo
40

Chapter 2: Urbanization as a Transformative Force • WORLD CITIES REPORT 2016


Use of green energy in Dali, People's
Republic of China.
Source: Asian Development Bank, CC BY 2.0, https://
creativecommons.org/licenses/by/2.0/legalcode

Box 2.2: E-hailing: Technological advances in the


transportation industry
Uber is an example of an e-hailing mobile app that connects passengers with drivers
of vehicles for hire. However, unlike conventional taxis, Uber drivers use their
personal vehicles. Currently, Uber operates in 401 cities worldwide.
Uber recently launched UberMOTO, a motorcycle ride-hailing service, in order
to beat the infamous traffic in Bangkok. The service is aimed at providing short trip
services for passengers around the city, where heavy traffic has become notoriously
commonplace. UberMOTO is significantly cheaper than its automobile counterpart.
Apart from its benefits in price, the service is also quite safe, as UberMOTO
are examples of cities where the costs of car ownership motorcyclists are instructed to always bring a helmet for their passengers.
and use have been set high and planning strategies have In some cites, Uber is larger than the traditional taxi industry. In China alone, 170
emphasized development patterns oriented to transit, million people use some forms of e-hailing app. Long waits for taxis, over-pricing,
walking and cycling. In Europe and the US, the popularity uncomfortable old vehicles, and safety concerns are the shortcomings of some
of the share economy has allowed people to move to more traditional taxi services, and provide the reasons why Uber is prospering.
walkable, livable urban communities.69 Consequently, In Australia, diverse jurisdictions are undertaking regulatory changes to cope
urban space is being reimagined, leading to denser and with the disruptive nature of Uber to the taxi and third party driver industry. This is
greener cities, enhanced flow of traffic, improved walk- occurring within an environment of hostility from the incumbent industry providers
ability, and increased use of public transit.70 This shift and citizens seeking more cost effective and better service delivery to meet their
could catalyze reinvestment in public transport and a needs. The growth and development of e-hailing services continues to increase as
reduction in automobile subsidies,71 while also allowing regulatory hurdles are addressed.
for equitable access. New mobility services and products
such as e-hailing (Box 2.2), autonomous driving, in-vehicle Sources: Rempel, 2014; Wambugu, 2016; Cendrowski, 2015; Skyring, 2016; www.uber.com, last accessed 28
March 2016.
connectivity and car sharing systems offer multimodal, on-
demand transportation alternatives.
More compact, better-connected cities with change and ensuring a healthy and livable environment, More compact,
low-carbon transport could save as much as US$3 tril- global efforts in the transition to sustainable energy are better-
connected
lion in urban infrastructure spending over the next 15 pivotal. As cities represent more than 70 per cent of cities with
years.72 This would simultaneously result in substantial global energy demand,74 they have been playing a central low-carbon
annual returns due to energy savings, higher productivity role in moving the sustainable energy agenda forward. transport
could save as
and reduced healthcare costs. The private sector and civil The current global share of renewable energy supply is 11
much as
society can also help city leaders advance sustainable per cent.75 The diversity of renewable energy resources
mobility, with improvements in telecommunications tech-
nology. For instance, the Paris-based company BlaBlaCar
is vast and research indicates a potential contribution of
renewable energy reaching 60 per cent of total world
US$3
has developed an online platform that connects passen- energy supply.76
trillion
in urban
gers with private drivers and allows them to book seats for While many renewable energy technologies infrastructure
long-distance journeys. Increased passenger numbers per remain more costly than conventional sources and are spending over
the next 15
car reduce carbon emissions and improve quality of life.73 often site-specific, it is important to note that invest- years
ment in renewable cleaner energy can reduce health
Energy in cities impacts from air pollutants, which can severely impact
If the world is to achieve its sustainable devel- quality of life and place strains on health care systems.77
opment goals, and reach targets that range from eradi- Increasing renewable energy sources, maximizing con-
cating poverty and social inequity, to combating climate servation and lessening dependence on non-renewable
41
Chapter 2: Urbanization as a Transformative Force • WORLD CITIES REPORT 2016

sources of energy, particularly those most damaging and structure that is already overtaxed from deferred main-
contributing to global warming, are critical steps to sus- tenance, population growth and development.82 As
tainable cities. municipalities plan, design, and implement sustainable
Cities are harnessing local capabilities to infrastructure projects, they need to consider the impact
develop green technologies and renewable energy sources of extreme weather and natural disasters on the city’s
that enhance their ability to withstand climate-related physical infrastructure in order to build resilience.
shocks as well as boosting local economies.78 Govern-
ments are investing in green technologies, presenting an Moving the cities agenda
excellent opportunity for cities to channel their innova- forward: The core challenge of
tion capabilities into a new sector of the economy.79 The governance
economies of scale and concentration of enterprises and There is a growing consensus that good govern-
innovation in cities make it cheaper and easier to take ance is crucial to developing, maintaining, and restoring
A critical
aspect of actions to minimize both emissions and climate hazards. sustainable and resilient services and social, institutional,
the creation and economic activity in cities.83 Many city governments
of resilient Resilience of cities are weakened due to limited power and responsibility
cities is the
construction
The risks that cities are now facing as a result over key public services, including planning, housing,
of physical of climate change and natural disasters (Chapters 1 and roads and transit, water, land-use, drainage, waste man-
infrastructure 5), the pressing short-falls in urban water, sanitation and agement and building standards. As shown in Chapters
that has the
waste management services, and the deteriorating quality 1, 6 and 8, city governments also often lack the power
capacity to
absorb the of air and water, are being experienced in the context of to raise the revenues to finance infrastructure and build
shocks and their rapid growth. A growing international focus on resil- more sustainable and resilient cities. When governance
stresses ience is a core agenda item for cities today. The increase capacity is weak and constrained, cities are limited in their
created by
extreme in severe weather events and natural disasters has high- abilities to take programmatic action on climate change
weather lighted the need for cities to augment their ability to with- mitigation and adaptation. The multiple forms of risk and
events stand the disaster risks they may face, and to mitigate and vulnerability in cities call for more integrated approaches,
respond to such risks in ways that minimize the impact of combining established policies (urban governance, plan-
severe weather events and natural disasters on the social, ning and management) with additional policy leverage,
environmental, and economic infrastructure of the city. powers and responsibilities for local government.84
Consequently, city leaders have been making significant Sustainable, resilient and inclusive cities are
transformative changes and investments in the resilience often the outcome of good governance that encompasses
of their cities. effective leadership; land-use planning; jurisdictional
Any city’s resilience to external shock relies coordination; inclusive citizen participation; and efficient
primarily on effective institutions, governance, urban financing. Strong effective leadership is critical for over-
planning and infrastructure. In this respect, the UN coming fragmentation across departments, multiple levels
Office for Disaster Reduction (UNISDR) has set out a of government and investment sectors when building con-
number of general practical recommendations for urban sensus and eliciting action on specific agendas. Land-use
authorities.80 Since then, UN-Habitat, together with planning across these broad urban regions is another key
the Technical Centre for Disaster Risk Management and criterion for effective governance. Territorial and spatial
Urban Resilience (DiMSUR) has developed and success- strategies are central in addressing climate change risks
fully tested a participatory methodology, known as the and building effective mitigation and adaptation strate-
City Resilience Action Plan (CityRAP).81 gies. Coordination across the metropolitan area is fun-
A critical aspect of the damental not only in areas such as
Sustainable, resilient and
creation of resilient cities is the inclusive cities are often the land, transport, energy, emergency
construction of physical infrastruc- outcome of good governance that preparedness, and related fiscal and
ture that has the capacity to absorb encompasses effective leadership; funding solutions, but in addressing
land-use planning; jurisdictional
the shocks and stresses created by coordination; inclusive citizen
issues of poverty and social exclusion
extreme weather events. Climate participation; and efficient through innovative mechanisms of
change is putting pressure on infra- financing inter-territorial solidarity.85
0

Abidjan

Addis Ababa

Bangkok

Bogota

Brasilia

Buenos Aires

Cairo

Cape Town

Chittagong

Dar es Salaam

Dhaka

Hanoi

Jakarta

Kabul

Karachi

Khartoum

Kinshasa

Lima

Manila

Mumbai

Nairobi

Rio de Janeiro

Santiago

São Paulo
42

Chapter 2: Urbanization as a Transformative Force • WORLD CITIES REPORT 2016


Share of national GDP (%) Share of national population (%)

2000

Including stakeholders in the urban plan- ICT and sustainable urban


ning process is critical to creating liveable, sustainable development
1500
cities, where citizens are active players in determining Central to the communications revolution
their quality of life. Including stakeholders in the design is the deployment of ICT in cities. High-quality infra-
of infrastructure, urban space and services legitimizes structure, innovation, investment, well-connected firms,
1000
the urban planning process and allows cities to leverage efficiencies in energy and budgets, are often cited as
their stakeholders’ expertise.86 Finance, however, can be ICT-driven benefits to cities. However, the potential con-
a major impediment to effective governance (Chapters sequences
500
of this deployment are yet
1, 6 and 8). Municipal governments around the world not well understood. When ICT is Over the last two decades,
are increasingly looking for new and innovative ways to deployed unevenly in cities, it can the transformative power
of urbanization has, in part,
finance sustainable projects. Consequently, partnership create
0 a digital divide— which can
been facilitated by the rapid
with the private sector is increasing since the private exacerbate inequality, characterized

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014
deployment of ICT
sector has capital not available to the public sector. by well-connected affluent neigh-
bourhoodsWorld and Developed
business districts Developing economies

2.4
economies
Asia Latin America and the Caribbean Africa
coexisting with under-serviced and under-connected low-
income neighbourhoods. The affluent tend to have greater
access
100 to these technologies, and ICT can often serve to

extend
90 their reach and control while curbing that of the

The Transformative more 80 socioeconomically marginalized residents.


Percentage of population living in poverty

Over the past two decades, the growth and


Power of Connected 70
expansion
60
of mobile networks has been extensive (Figure

Cities 2.5) and overtaken most predictions, changing the course


50
of development for the post 2015 era. According to the
40
Ericsson Mobility Report, the total number of mobile sub-
30
Over the last two decades, the transforma- scriptions in the third quarter of 2015 was 7.3 billion, r = -0.5506
20
tive power of urbanization has, in part, been facilitated with 87 million new subscriptions.87 For the vast majority
by the rapid deployment of Information and Communica- 10

tions Technology (ICT), and by a revolution in city data to 0


0 10 20 30 40 50 60 70 80 90 100
inform decision-making and propel a global movement to Figure 2.5: Global ICT developments (2005-2015)
Level of urbanization (%)
smart cities. This has been accompanied by deeper con- Source: ITU World Telecommunication /ICT Indicators database, last accessed 16 March 2016.

nectivity and networking of cities and citizens at both the


local and global levels. 100
Cities have to contend with a wide range of
challenges— from crime prevention, to more efficient 80
Subscription per 100 inhabitants

mobility, to creating healthier environments, to more


energy efficient city systems, to emergency prepared- 60
ness among others. To address these challenges, ICT, the
Internet of Things— or networked connections in cities 40
and data— are deployed to improve service delivery and
quality of life. The use of data allows cities to measure 20
their performance and to re-inform investments in city
infrastructure. Cities are increasingly relying on metrics 0
and globally comparable city data to guide more effective
2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015*

and smarter city decision-making that build efficiencies in


city budgets. Mobile-cellular subscription Fixed telephone subscription
Individuals using the internet Fixed (wired)-broadband subscription
Active-mobile broadband subscription

Note: *estimate
43
Chapter 2: Urbanization as a Transformative Force • WORLD CITIES REPORT 2016

For the vast of low-income population in developing countries, mobile as Chicago, London, and Vancouver are implementing
majority of telephony is likely to be the sole connectivity channel.88 digital inclusion programs to ensure that all citizens have
low-income
population in
Although an affordable and reliable Internet is not yet the tools to thrive in an increasingly digitalized world. As
developing a reality for the majority of people in the world, the cities depend increasingly on electronic information and
countries, network, both in terms of infrastructure and content, has technology for their functioning and service delivery, city
mobile
grown rapidly since inception, spurring enormous inno- leaders are proceeding with caution to avoid an unequal
telephony
is likely to vation, diverse network expansion, and increased user distribution of ICT and to examine ways to bridge the
be the sole engagement in a virtuous circle of growth. The number of digital divide.
connectivity Internet users stood at one billion in 2005 and two billion
channel
in 2010, reaching over three billion by 2015.89 The evolution of data in cities
As a transformative force, the deployment of Local governments have come under increased
ICT in cities supports innovation and poverty eradica- pressure to collect and monitor data in connection with
tion, by promoting efficiencies in urban infrastructure governance, infrastructure, urban planning, services, the
leading to lower cost city services. In some cases, urban economy, health, education, safety and the environment.
economies are able to leapfrog stages of development Performance measurement has become fundamental if
As a
transformative by deploying new technologies in the initial construc- policymakers and planners are to make evidence-based
force, the tion of infrastructure. Cities like Hong Kong and Singa- decisions. At the other end of the process, data collection
deployment pore are notable examples of economies that were able enables cities to assess and benchmark performance.
of ICT in cities
supports
to make this leap by digitizing their infrastructure.90 Box Data-driven decision-making has evolved over
innovation 2.3 shows how the city of Kigali in Rwanda is providing time,92 due to advancements such as performance indica-
and poverty internet connectivity to its residents via the public bus tors, big data, data analytics, machine learning, predictive
eradication,
system. In 2010, Curitiba, Brazil was the first city in the metrics and geo-spatial measurement. Data is essential for
by promoting
efficiencies world to connect public buses to a 3G mobile-broadband evidenced-based policymaking and effective investment
in urban network. Such innovation opened up new possibilities in and management of infrastructure in a city. Compara-
infrastructure for traveler services that helped commuters plan their tive analysis and knowledge sharing is crucial to respond
leading to
lower cost city route and enabled them to purchase tickets wherever and to emerging global challenges the associated demand for
services whenever it is most convenient.91 Cities worldwide, such sustainability planning, resilience and emergency prepar-
edness.93 The Internet has played a significant role in
increasing the data availability for cities and the speed at
Box 2.3: Smart Kigali: Connecting 400 buses to 4G which it is collected.
Internet The rapid pace of city growth requires com-
parable high-quality city data and indicators, which are
As part of the broader Smart Kigali initiative, 487 buses belonging to Kigali Bus essential for effective leadership and decision-making.
Services were connected to 4G broadband network in February 2016. This has International standards bodies, such as the International
allowed passengers on board have full access to free super-fast internet. This makes Electrotechnical Commission, the International Organiza-
Kigali the first city in Africa to provide citizens with the free wireless internet in public tion for Standardization (ISO) and International Telecom-
transport. munication Union have begun to address the pressing
The initiative comes after the City of Kigali in partnership with the Ministry of cities agenda with work ranging from smart grids and
Youth and ICT and other stakeholders launched the Internet Bus Project in 2015, smart city infrastructure, to international telecommuni-
which will see all buses not only within Kigali, but also across the country offer cations and management systems. Additionally, the ISO
internet to passengers. Following the launch of the project, last year, five buses were Technical Committee for the Sustainable Development of
connected as a pilot project before the general roll out. Communities is developing a new series of international
The Smart Kigali initiative has seen the start of the implementation of the 4G standards designed for a more integrated approach to sus-
solutions for the benefit of general population in Rwanda, and the aim is to scale up tainable development and resilience. Among these stand-
broadband adoption in the country. ards is ISO 37120: Sustainable Development of Communi-
ties— Indicators for City Services and Quality of Life, which
Source: Bizimungu, 2016. is the first international standard on city indicators.94 Box
2.4 illustrates how cities under the World Council on City
44

Chapter 2: Urbanization as a Transformative Force • WORLD CITIES REPORT 2016


Data (WCCD) network are using standardized indicators
Box 2.4: An open data portal for cities
from ISO 37120 to compare their performance, exchange and globally standardized city data
knowledge and share solutions.
In response to decision-makers’ demand The World Council on City Data (WCCD) is the worldwide
for measurement tools, UN-Habitat developed the City leader in standardized city metrics and is implementing its
Prosperity Index in 2012, which advocates for a broader dedicated standard in many regions. Formally known as ISO
understanding of prosperity in cities, taking in six criteria: 37120: Sustainable Development of Communitie— Indicators
productivity, quality of life, infrastructure, equity, environ- for City Services and Quality of Life, the WCDD standard is
mental sustainability and governance. The broader City a set of 100 worldwide comparative indicators that enable
Prosperity Initiative provides cities with locally adapted municipalities to track annual performance and benchmarking
monitoring capabilities and the possibility to devise indi- data across 17 different categories. Most importantly, ISO
cators and baseline information.95 37120 is a demand-led standard, driven and created by cities,
for cities.
Open data In 2014, the WCCD devised the first international
Open Data is significantly transforming the certification system and Global Cities Registry™ for ISO
way local governments share information with citizens, 37120, which provides a consistent and comprehensive
deliver services and monitor performance. The system platform for standardized urban metrics. The WCCD hosts
enables public access to information and more direct independently verified ISO 37120 data on its Open City Data Open Data is
involvement in decision-making. The Urban Open Data Portal, which displays data using cutting-edge visualizations significantly
transforming
movement aims to foster understanding of government and customized trend analyses, and enables cross-city
the way local
information by the average citizen and is driven by com- comparisons. governments
mitments to transparency and accountability.96 The first 20 cities to become ISO 37120-certified and share
In the US, New York, San Francisco, Chicago, added to the WCCD Global Cities Registry™ include: Amman, information
with citizens,
and Washington, DC, have been at the forefront of the Amsterdam, Barcelona, Bogotá, Buenos Aires, Boston, Dubai, deliver
movement.97 Other cities around the world are also now Guadalajara, Haiphong, Helsinki, Johannesburg, London, Los services
emerging as leaders. In Helsinki, data is released and Angeles, Makati, Makkah, Melbourne, Minna, Rotterdam, and monitor
performance
managed through the city’s Urban Facts agency, in col- Toronto, and Shanghai. The ISO 37120 Standard and the
laboration with neighbouring municipalities, who in turn World Council on City Data can offer accurate independently
release regional data through Helsinki Region Infoshare.98 certified data to support measurement of cities’ progress
In New York, businesses are leveraging open data to dis- against Sustainable Development Goal 11 (“Making cities and
seminate various types of information from public trans- human settlements inclusive, safe, resilient and sustainable”).
port schedules and delays to crime statistics to healthcare
services.99 In the UK, the Greater London Authority has Source: www.dataforcities.org, last accessed 28 April 2016.

set up London DataStore, a free and open data-sharing


portal where people can access over 500 datasets for a
better understanding of local issues and possible solu- nity for cities. Notably, the volume of digital data is almost
tions.100 Opening up data enables local governments doubling every two years.101 Moreover, the increasing use
to support innovative business and services that deliver of Geographical Information Systems allows spatially ref-
social and commercial value. erenced data from diverse sources to be linked, thus pro-
viding a clear picture of what is going on within cities. In
Big data Santander (Spain), solid waste, parking spaces, air pollu-
With Big Data and the Internet of Things, city tion and traffic conditions are monitored through 12,000 Today,
smartphone
leaders are gaining more detailed, real-time picture of what sensors installed around the city, providing city officials tools and apps
is happening within their city. The Internet of Things is real-time information on service delivery.102 proactively
reaching a tipping point. As more people and new types Today, smartphone tools and apps proactively provide
citizens
of information are connected, Internet of Things becomes provide citizens with useful contextualized information,
with useful
an Internet of Everything— a network of networks where while supercomputers are able to query vast quantities of contextualized
billions of connections can create unprecedented opportu- unstructured data and suggest solutions to more complex information
45
Chapter 2: Urbanization as a Transformative Force • WORLD CITIES REPORT 2016

problems. In Los Angeles, software developed by the cesses of public administration…to be more accessible,
city is processing big data to address traffic congestion. efficient, effective and transparent.”106 Singapore has
Using magnetic sensors, real-time updates on traffic flow also been at the forefront of the smart city movement; its
are transmitted, with simultaneous data analysis making Smart Nation Programme seeks to harness ICT, networks
second-by-second adjustments possible to avoid bottle- and data to support better living, create more opportu-
necks.103 nities, and to support stronger communities.107 Singa-
pore was the first city in the world to introduce conges-
Smart cities tion pricing and now by using more advanced systems,
The ever-increasing application of data and the can analyse traffic data in real time to adjust prices.108
Internet of Things is supporting a much more collabora- Technology solutions and the effective use of data are pro-
tive relationship between city governments, citizens, and viding city leadership with new tools and opportunities for
businesses. This trend is driving the smart cities phenom- effective change.
enon worldwide. The definition of a smart city continues Estimates show that the global smart city
to evolve, but a consistent component is the application market will grow by 14 per cent annually, from US$506.8
of ICT and the Internet of Things to address urban chal- billion in 2012 to US$1.3 trillion in 2019.109 Over the
lenges. Many conceptual frameworks of smart cities also next two decades, city governments in the US will invest
consider sustainability, innovation, and governance as approximately US$41 trillion to upgrade their infrastruc-
important components in addition to the application of ture and take advantage of the Internet of Things.110 With
ICT. The International Telecommunication Union defines China’s cities projected to grow by 350 million people over
a smart sustainable city as “an innovative city that uses the next 20 years, investment in smart cities is expected
information and communication technologies and other to exceed US$159 billion in 2015 and US$320 billion by
means to improve quality of life, efficiency of urban oper- 2024.111 In 2014, India announced plans to build 100
ation and services, and competitiveness, while ensuring smart cities in response to the country’s growing popula-
that it meets the needs of present and future generations tion and pressure on urban infrastructure.112 In order to
with respect to economic, social, environmental as well as realize the potential of ICT towards sustainable develop-
cultural aspects.”104 ment, an enabling environment has to be created, with
A smart city can guide better decision-making participatory governance models, the right infrastruc-
with respect to prosperity, sustainability, resilience, emer- ture and technical platforms, including capacity building,
gency management, or effective and equitable service ensuring inclusion and bridging the digital divide.113
delivery. The city of Rio de Janeiro collaborated with IBM,
to create a municipal operations centre that combines data
and information from city and state agencies, and private
utility and transportation companies to collaborate on
logistics and management challenges. The city, faced with
growing concerns in flooding and traffic gridlock, can now Estimates show that the global smart
city market will grow by
monitor data and provide citizens with important infor-
mation via mobile phones and other warning systems.105
Barcelona is a leading smart city for its application of inno-
14% annually,
from US$506.8 billion in 2012
vative solutions aimed at improving city services and the to US$1.3 trillion in 2019
quality of life of its citizens. Barcelona’s smart city model
aims “to use ICT in order to transform the business pro-
46

Chapter 2: Urbanization as a Transformative Force • WORLD CITIES REPORT 2016


Notes
1. Center for Strategic and International 28. World Bank, 2013a. 56. UNICEF, 2012. accessed 15 April 2015.
Studies, 2015. 29. World Bank, 2013a. 57. Heath, 2014. 82. Kessler, 2011.
2. Center for Strategic and International 30. OECD, 2006a. 58. Bruegmann, 2005; Klotkin, 2010. 83. Jabareen, 2013.
Studies, 2015. 31. OECD, 2006. 59. Glaeser and Kahn, 2003. 84. McCarney et al., 2011.
3. WHO and UN-Habitat, 2010. 32. ILO, 2016a. 60. Duany et al., 2010. 85. McCarney et al. 2011.
4. WHO and UN-Habitat, 2010. 33. Statistics South Africa, 2015; Eurostat, 2011. 61. United Nations, 2014. 86. HLURB, 2001.
5. Sassen, 2008. 34. UN-Habitat, 2013a. 62. WCED, 1987. 87. Ericsson, 2014.
6. Ernst & Young, 2013. 35. Rosario University and IDN Consulting, 63. McCarney, 2006. 88. Hanna, 2010.
7. World Bank, 2015a. 2010. 64. United Nations, 2015a. 89. Internet Society, 2015.
8. This section derives mainly from Turok, 36. World Bank, 2013c. 65. Global Cities Institute and GDF SUEZ, 90. Adera et al., 2014.
2011. 37. UN-Habitat, 2010a. 2015; NTNU, 2012; CRC, 2012; Toppeta, 91. Ericsson, 2010.
9. Duranton and Puga, 2004; Rice et al., 38. Chen and Ravallion, 2012. 2010; Fischer and Amekudzi, 2011; Sahely 92. Picciano, 2012.
2006; Venables, 2010; Turok, 2012. 39. The Economist, 2013b. et al., 2005. 93. McCarney, 2015.
10. Jacobs, 1969; Jacobs, 1984; Porter, 2001; 40. World Bank, 2013b. 66. McKinsey Global Institute, 2013. 94. ISO, 2014.
Glaeser, 2011. 41. Annez and Buckley, 2008. 67. Chalas, 2015. 95. UN-Habitat, undated.
11. Cooke and Morgan, 1998; Storper and 42. Calì, 2013; Cuong, 2014. 68. Ministry of Transport Canada, 2011. 96. Silk and Appleby, 2010.
Manville, 2006; Scott, 2006. 43. Calì, 2013. 69. Dalkmann, 2014. 97. Gurin 2014.
12. MIER, 2015. 44. UN-Habitat, 2013a. 70. UN-Habitat, 2013b. 98. Sulopuisto, 2014.
13. Acs and Mueller, 2008. 45. City Region Food Systems encompass the 71. Dalkmann, 2014. 99. Gurin, 2014.
14. Dobbs et al., 2011. complex network of actors, processes 72. Davis and Wynn, 2014. 100. Greater London Authority, 2015.
15. Turok, 2011. and relationships of food production, 73. BlaBlaCar, 2015. 101. Turner, 2014.
16. Naudé, 2009. processing, marketing, and consumption 74. UNEP, 2015. 102. Newcombe, 2014.
17. IMF, 2016. that exist in a given geographical region. 75. US Energy Information Administration, 103. Wheatley, 2013.
18. Cohen, 2016. 46. Calì, 2013. 2014. 104. ITU, 2015.
19. Martinez et al., 2009. 47. Calì, 2013. 76. McCarney, 2006. 105. Singer, 2012; Hamm, 2012.
20. Fiktri and Zhu, 2015. 48. Nguyen, 2014. 77. Kalapos and Mirza, 2012; CBA, 2013; US 106. Bakici et al., 2012.
21. McKinsey Global Institute, 2011. 49. Owusu, 2005. EPA, 1995; Machol, 2013. 107. Prime Minister's Office Singapore, 2015.
22. HM Government, 2011. 50. UN-Habitat, 2008a; Min, 1990. 78. Leichenko, 2011; Coaffee, 2008; Jabareen, 108. Hatch, 2013.
23. Fiktri and Zhu, 2015. 51. UN-Habitat, 2010a. 2013. 109. Transparency Market Research, 2014.
24. HM Government, 2011. 52. UN-Habitat, 2008a. 79. Jabareen, 2013. 110. Transparency Market Research, 2014.
25. UN-Habitat,2005 53. McCarney et al., 2011. 80. UNISDR, 2012. 111. McKinsey Global Institute, 2009.
26. Turok, 2012. 54. UN-Habitat, 2014a. 81. unhabitat.org/un-habitat-and-dimsur- 112. Government of India, 2015.
27. Chandrasekhar and Ghosh,2007. 55. UN-Habitat, 2013a. present-projects-on-urban-resilience/, last 113. UN-Habitat and Ericsson, 2014.
pter
Cha

03
The Fate
of Housing

70 %
Quick Facts
1 Over the last 20 years, housing has not been central to
national and international development agendas.
Housing accounts
for more than
2 The housing policies put in place through the enabling
approach have failed to promote adequate and affordable
housing. of land use in most cities and determines
urban form and densities, also providing
3 Most involvement by governments has focused on helping
the middle class to achieve home-ownership in a formal sector employment and contributing to growth.
that only they can afford.

4 The slum challenge continues to be one of the faces of


poverty in cities in developing countries. The proportion of
slum dwellers in urban areas across all developing regions has
reduced since 1990, but the numbers have increased gradually With the
“Housing at
the Centre”
Policy Points approach, UN-Habitat
seeks to re-establish
1 If the emerging future of cities is to be sustainable, a new
approach that places housing at the centre of urban policies is housing problems
required. and opportunities
2 UN-Habitat proposes a strategy that places housing at in the international
the centre of the new urban agenda and seeks to reestablish development agenda
the important role of housing in achieving sustainable
urbanization.
in an increasingly
strategic manner and in
3 At the national level, the goal is to integrate housing into relation to the future of
national urban policies and into UN-Habitat’s strategic thinking
on planned urbanization. urbanization.
4 At the local level, the importance of housing must be
reinforced within appropriate regulatory frameworks, urban
planning and finance, and as part of the development of cities
and people.
Housing shortfalls Number of urban residents living in slums

represent a challenge 1990 689 million

> In 2010, as many as 980 million 2014 881 million


urban households lacked decent
This represents an increase of

28
housing, as will another 600 million

%
between 2010 and 2030.
> One billion new homes are needed
worldwide by 2025, costing an
over the
estimated $650 billion per year, or
past 24 years.
US$9-11 trillion overall.
> In addition, shortages in qualitative Still, in 2014, 30 % of urban population
deficiency are much larger than of developing countries resided in slums
those in quantity. compared to 39 % in the year 2000.

KEY TRENDS WITH RESPECT TO THE PROVISION OF ADEQUATE HOUSING

Increasing reliance on
The decline of housing as Inequality, focus on home- Affordability: an
the private sector
a political priority despite ownership, speculation and increasingly elusive concept
increasing demand neglect of rental housing

Land administration Migration: positives Climate change


and management and negatives for and disasters
housing supply
49
Chapter 3: The Fate of Housing • WORLD CITIES REPORT 2016

T 3.1
he “emerging futures” of cities will largely depend on whether urban
housing is cast in decent buildings or in loads more unsustainable, ram-
shackle shelter. Housing determines the mutual relationship between
every single human being and surrounding physical and social space. This
involves degrees of exclusion or inclusion in terms of collective and civic life An Enabling
Approach for Some,
which, together with socioeconomic conditions, are the essence of urban
dynamics. That is why the fate of housing will largely
determine the fate of our cities. The sustainable future of
cities and the benefits of urbanization strongly depend on
but Disabling for
future approaches to housing.
Housing accounts for more than 70 per cent
Many
of land use in most cities and determines urban form and
densities, also providing employment and contributing to The Global Strategy for Shelter to the Year
growth.1 That it has not been central to government and 2000 (GSS)2 and the enabling approach3 have dominated
international agendas over the last 20 years is evident in housing policies since Habitat II and the 1996 Habitat
the chaotic and dysfunctional spread of many cities and Agenda, which rests on two pillars: housing for all, and
towns. Since 1996, in Europe and the US, housing has sustainable human settlements in an urbanizing world.4
become more of an asset for investment than a place to The enabling approach reflected the predomi-
live, but when the property bubble burst in 2007-08, nant market-led political and practical thinking of the late
housing investment stalled in many countries, despite 1980s: governments must take care of the elements of
soaring demand, and trust in the market was severely housing supply they could control or handle best. They
dented. In the face of unprecedented urbanization and were to focus on the regulatory framework, and five
population growth many cities developing and emerging housing-related markets: land, finance, infrastructure,
have accrued huge housing shortages. This chapter the construction industry/labour, and building materials,5
reviews the housing sector since Habitat II in 1996 and eradicating bottlenecks and optimizing housing sector per-
offers ways forward. formance (Table 3.1). The private sector, communities and
households were to take over the supply side. Government
was to remain active only in a different way— enabling
instead of doing.6
The enabling approach was soon reinforced
by Agenda 21, Chapter 7 of which promoted sustain-
able urban development. Further international policy on
housing followed in the Millennium Goals included two
housing-related targets: 7c and 7d, 7 and more recently,
the 2030 Agenda for Sustainable Development with
Target 11.1 (Table 3.2). In 2005, the need for urgent
action against future formation of slums was recognized.

Masons work at a new


condominium at Sao
Bartolomeu, a low-
income neighborhood
in Salvador, Bahia.
Hundreds of families
who were constantly
exposed to floodings
and landslides will be
relocated to the new
buildings.
Source: Mariana Ceratti/
World Bank, CC BY 2.0, https://
creativecommons.org/licenses/
by/2.0/legalcode
50

Chapter 3: The Fate of Housing • WORLD CITIES REPORT 2016


Table 3.1: The do’s and don’ts of enabling housing markets to work
Source: World Bank, 1993.
Instrument Do Don’t
Developing property rights Regularize land tenure Engage in mass evictions
Expand land registration Institute costly titling systems
Privatize public housing stock Nationalize land
Establish property taxation Discourage land transactions
Developing mortgage finance Allow private sector to lend Allow interest-rate subsidies
Lend at positive/market rates Discriminate against rental housing investment
Enforce foreclosure laws Neglect resource mobilization
Ensure prudential regulation Allow high default rates
Introduce better loan instruments
Rationalizing subsidies Make subsidies transparent Build subsidized public housing
Target subsidies to the poor Allow for hidden subsidies
Subsidize people, not houses Let subsidies distort prices
Subject subsidies to review Use rent control as subsidy
Providing infrastructure for residential Coordinate land development Allow bias against infrastructure improvements
land development Emphasize cost recovery Use environmental concerns as reasons for slum clearance
Base provision on demand
Improve slum infrastructure
Regulating land and housing Reduce regulatory complexity Impose unaffordable standards
development Assess costs of regulation Maintain unenforceable rules
Remove price distortions Design projects without link to regulatory/institutional reform
Remove artificial shortages
Organizing the building industry Eliminate monopoly practices Allow long permit delays
Encourage small firm entry Institute regulations inhibiting competition
Reduce import controls Continue public monopolies
Support building research
Developing a policy and institutional Balance public/private sector roles Engage in direct housing delivery
framework Create a forum for managing the housing sector as a whole Neglect local government role
Develop enabling strategies Retain financially unsustainable institutions
Monitor sector performance

Table 3.2: Housing and development goals


Source: UN-Habitat 2006; United Nations, 2015a.
Goal Target
MDG Goal 7: Ensure environmental sustainability Target 7c: Halve, by 2015, the proportion of people without sustainable access to safe drinking water and
sanitation
Target 7d: By 2020, to have achieved a significant improvement in the lives of at least 100 million slum dwellers
SDG Goal 11. Make cities and human settlements inclusive, 11.1: By 2030, ensure access for all to adequate, safe and affordable housing and basic services and upgrade
safe, resilient and sustainable slums
51
Chapter 3: The Fate of Housing • WORLD CITIES REPORT 2016

3.2
Box 3.1: Biased housing supply in China

China has eschewed the enabling approach in favour of


robust top-down housing supply in support of massive rural
Review of Existing migration and rapid industrialization since the mid-1990s. In

Housing Provision
1997, 79 million square metres of new urban housing were
built, and over four billion square metres between 2000 and
2010, or more than twice as much as needed to keep up with
population growth. By 2011, annual production had reached
With urban Needs and demand almost one billion square metres, the unit price of which had,
populations
The world’s urban population has soared from however, soared 179 per cent as building heights increased,
expanding at
unprecedented 2.6 billion (45 per cent of the whole) in 1995 to 3.9 billion standards improved and a property bubble began.
rates since (54 per cent) in 2014.8 With urban populations expanding In 2011, the government of China also started to build
1996, it is at unprecedented rates since 1996, it is perhaps unsur- 36 million subsidized dwellings in response to the lack of
perhaps
unsurprising prising that many cities are falling short in housing supply. affordable housing. Despite its good intention, government’s
that many UN-Habitat’s estimates show that there are 881 million housing programmes are affordable to only 20 per cent of
cities are people currently living in slums in developing country households at the average price and commentators report
falling short
in housing
cities9 compared to 791 million in the year 2000 – and 64.5 million empty apartments (20 per cent of all dwellings)
supply all the while the enabling approach has been in force. By by 2010, alongside a lack of stock available to most
2025, it is likely that another 1.6 billion will require ade- households. Many of the empty apartments are in “ghost
quate, affordable housing.10 This should come as a wake-up cities.” At the same time, much of the cheapest housing in
call to governments, urging them to act determinedly to city centres is being cleared and its occupants expected to
enable access to housing for all urban residents. transfer to more costly high-rise apartments at the edge of
In reality, one and the same bias has been at cities.
work across the world: middle-class formal home-owner-
ship has been systematically “enabled”, but ever-growing Sources: Ying et al., 2013; UN-Habitat, 2013a; López and Blanco, 2014; Chang
and Tipple, 2009.
numbers of poor citizens have been durably “disabled”
Middle-class from access to adequate housing, remaining confined in Reflecting long-standing biased supplies, today
formal home-
ownership
single-room or informal housing, not to mention sheer the informal sector provides 60-70 per cent of urban
has been homelessness. While many of the world’s richest countries housing in Zambia,14 70 per cent in Lima, 80 per cent
systematically have significant over-provision of housing, in Eastern and of new housing in Caracas,15 and up to 90 per cent in
“enabled”, but
Central Europe11 and in developing countries, shortfalls of Ghana.16 Such housing usually has at least some of the
ever-growing
numbers of formal housing tend to be very large at present12 and even characteristics that UN-Habitat uses to define slums; poor
poor citizens larger going forward. In South Asia, housing shortfalls are physical condition, overcrowding, poor access to services,
have been particularly acute amounting to 38 million dwellings.13 and poor access to city functions and employment oppor-
durably
“disabled” Furthermore, while housing for the middle class may be tunities.17 There are also many, but unknown numbers
from access over-provided in many cities, the poor are generally under- of, people who live “on the street” individually, in groups,
to adequate housed. Over-supply for the middle classes can result in or as families.18 This is not limited to countries with poor
housing
many empty dwellings (Box 3.1). housing supply.19

In South Asia, housing shortfalls The informal sector provides


are particularly acute amounting to

38 million 60-70%
of urban housing in Zambia, 70 per cent in
dwellings Lima, 80 per cent of new housing in Caracas,
and up to 90 per cent in Ghana.
52

Chapter 3: The Fate of Housing • WORLD CITIES REPORT 2016


The importance of housing approach that places housing at the centre of the new
for Habitat III urban agenda, as detailed later in this chapter.
“For too long we have put the economy and jobs at the

3.3
centre of city planning and development. People are what
make cities and they would follow the jobs. It is now nec-
Given that
essary to think about people’s needs, including where they housing
will live, and put them at the centre of city development.”20 has slipped
(Joan Clos, Executive Director of UN-Habitat). Key Trends with from the
development

Respect to the
Housing is where successive generations find agenda since
shelter to keep healthy, develop, socialize, be educated 1996, housing
and prepare for fulfilling adult lives. In this sense, housing
speaks to every dimension of personal human develop-
Provision of shortfalls
represent a

ment, hopefully generating a double sense of identity and


social belonging. Both are essential to sustainable cities
Adequate Housing challenge
that is hard to
measure
and their participatory governance. If the “emerging
futures” of our cities are to become sustainable, then the This section focuses on the main shortcom-
housing conditions of one billion slum residents must ings of the enabling approach as it relates to government
become sustainable, too. housing policies.
Given that housing has slipped from the devel- There is a general
opment agenda since 1996, housing shortfalls represent The decline of housing as acknowledgement
that enabling
a challenge that is hard to measure. In 2010, as many as a political priority despite the market has
980 million urban households lacked decent housing.21 increasing demand failed to provide
Another estimate shows that one billion new homes Housing has been a major investment in devel- affordable,
adequate
are needed worldwide by 2025, costing an estimated oped and emerging countries during the last 20 years. housing for the
US$650 billion per year, or US$9-11 trillion overall.22 In Over-supply has been fuelled by economically destruc- predominant
addition, shortages in quality are much larger than those tive speculation in Ireland and Spain, and has resulted in low-income
households in the
in quantity; in Latin America, 61 and 39 per cent respec- wasted capital in China. At the same time, some devel-
rapidly urbanizing
tively.23 This suggests that long-term international vision oped countries have accrued substantial shortfalls as a parts of the world
and commitment are overdue to turn housing into an result of poor policies (Table 3.3).
integral part of planned urbanization.24 This is why the Brazil, Ethiopia, India, Malaysia, Singapore
Global Housing Strategy calls for accurate forecasts of and countries in the Middle East and North Africa have
housing needs, including improvements to inadequate, continued to be very hands-on in supply, generating large
derelict and obsolete housing stock, which form the numbers of apartments for low- and middle-income house-
qualitative deficit.25 holds. However, since the mid-1990s, housing for the
There is a general acknowledgement that ena- poor majority has had a low priority in most developing
bling the market has failed to provide affordable, adequate countries, as most have reduced their housing activity.
housing for the predominant low-income households in Most involvement by governments has been focused on
the rapidly urbanizing parts of the world. Besides, at the helping the middle class to achieve home-ownership in a
dawn of 2016, many serious challenges face the housing formal sector that only they can afford.
sector. These include rapid urbanization, urban poverty, At the same time, since 1992, the World Bank
rising levels of inequality, the impact of unprecedented made a major shift from pro-poor housing investment,
immigration, HIV/AIDS and environmental concerns. in slum upgrading plus sites and services schemes, to
Given the daunting proportions of both the policy failure focusing on housing finance, institutional strengthening
and the challenges around the world, and shelter-related disaster relief. Its
housing must become a major part Given that housing has slipped focus has swung from poor to middle
from the development agenda
of international policy and the devel- income countries, from small to larger
since 1996, housing shortfalls
opment agenda in the future. That represent a challenge that is hard loans, from sites and services or slum
is why UN-Habitat is proposing an to measure. upgrading to mortgage refinancing.26
53
Chapter 3: The Fate of Housing • WORLD CITIES REPORT 2016

Table 3.3: Factors impeding housing supply in selected developed countries


Source: Lawson, 2012.

Supply-side issues Examples


Reduction of low-cost supply
The sale of social housing for ownership UK, the Netherlands
Low production of social housing Australia, Canada, the Netherlands
End of taxation incentives for new investment Germany, recently the Netherlands
Development
High cost of land and speculative practices Belgium, New Zealand, Ireland, the Netherlands, US, Australia
Complex and lengthy planning approval processes UK, the Netherlands, New Zealand, Australia
Lack/ high cost of infrastructure UK, the Netherlands, Australia
Non-strategic approach to land use planning and land release Ireland
Constraints on land release (e.g. urban containment policies) The Netherlands
Community opposition to residential development and higher densities UK
Structure and restructuring of housing stock
A relatively high rate of demolition to new supply and investment in urban renewal The Netherlands
Conversion of lower-cost rental housing to ownership UK, The Netherlands, Australia
Oversupply due to major population shifts from economically weak regions Germany
Urban decay and oversupply of poor quality dwellings US, France, Germany
Market inefficiency
High costs of construction Denmark, Switzerland, The Netherlands
Low rents or expected rates of return from new building development Denmark, Canada, Switzerland

Inequality, focus on home- tries have focused assistance on home-ownership while


ownership, speculation and most households could only afford social rental housing or
neglect of rental housing living as renters or owners in the informal sector. In such
For majority of the world’s inhabitants, a context, people with special needs are pushed further
income inequalities are currently more pronounced than towards, and even beyond, the fringes of housing supply.28
they were a generation ago (Chapters 1 and 4). More Where housing finance has been applied, it has tended to
than two-thirds of the world’s population resides in be through mortgages directed to formal dwellings for the
Inequality has
often been
cities where income inequalities have increased since middle class and contingent on a down payment.
increased 1980.27 This inequality has often been increased by Under the enabling approach, help to the con-
by housing housing practices and policies, despite the focus on struction industry has tended to encourage housing for
practices
adequate housing for all. Since 1996, housing inequality the middle classes. There has been almost no parallel help
and policies,
despite the has developed between generations in Europe and else- at the lower end of the housing market. The privatization
focus on where; the post-1945 generation own their own homes of institutional housing has been a popular strategy among
adequate whilst the younger generation have been unable to afford governments and local authorities not only to increase
housing for all
dwellings that their parents could afford. Many young home-ownership but also to encourage labour mobility.29
professionals in developed countries are now relying It has resulted in very high ownership rates, especially in
on Houses in Multiple Occupancy where their parents Eastern and Central European countries, with only Poland
would have bought a dwelling for themselves. and Czech Republic having less than 75 per cent home-
The ownership of one’s own home is a wide- ownership.30
The ownership
of one’s own spread ambition and is the focus of most national housing Over the last 20 years, housing has attracted a
home is a policies. Throughout the world, governments have lot of speculative investment driving prices up. In Korea,
widespread sought to encourage owner-occupation of fully-serviced housing price inflation of 20 per cent per year attracted
ambition and
is the focus of single-household dwellings but, in Asia, Africa and Latin capital but greatly reduced affordability.31 Speculation in
most national America, this has often only been feasible for the middle- housing often leads to high vacancy rates in Las Vegas,32
housing and high-income groups. The World Bank’s change of focus Shanghai, Beijing, and Bangkok.33 In Ireland, for example,
policies
has also pointed international agendas towards increasing there are 14,000 empty dwellings scattered across the
home-ownership. Even governments of developed coun- Republic, including 700 so-called “ghost estates.” Most
54

Chapter 3: The Fate of Housing • WORLD CITIES REPORT 2016


of them now belong to the state through the National
Assets Management Agency, and 4,000 are earmarked
to be handed over for public housing. Repossessions are
likely to have increased the stock of vacant properties to
more than 26,000 by the end of 2014.34 In Japan, there
were some 8.2 million or one in seven vacant dwellings
nationwide in October 2013.35 The private sector is also ineffective in crisis or emer- Low cost township
houses fitted with
One of the effects of focusing on increasing gency conditions. These accommodation issues probably solar heating panels
home-ownership has been that rental housing has fallen need subsidies of some form, or state-provided housing.38 in Verulum, Durban,
South Africa, 2014.
from favour and has had little enablement even though In those developed countries with a strong focus on Source: lcswart /
a growing proportion of low-income urban households in owner-occupation, the private rental market has provided Shutterstock.com

many countries are renters. Young and low-income house- housing for the poor and vulnerable but it tends to have
holds find renting both convenient and affordable. It been of poor quality.39
allows job mobility, provides many women-headed house-
holds with accommodation and allows many older people Affordability: an increasingly
to raise income from their housing by renting out rooms elusive concept Over the last
no longer needed for a grown-up family.36 Even where Affordable housing has been the core concern 20 years,
rental housing programmes have been directed specifi- of the enabling approach. Affordable generally means housing has
attracted a lot
cally at low-income households, e.g. in China, their con- housing expenditure of no more than 30 per cent of of speculative
tribution to low-income housing has been disappointing.37 household income to one that ensures that a household investment
has sufficient left for non-housing in addition to housing driving prices up
Increasing reliance on the private expenditure. 40
sector In developed and transitional countries, afford-
As the state has shrunk in so many devel- able means housing cost at no more than 30 per cent of
oping countries, the private sector has been left to take expenditure at, or at 80 per cent of, that of the median
up the initiative in formal housing supply, which in household’s income.41 In 2009, however, as house costs One of the effects
reality mostly provided just for the more profitable and continued to rise against incomes, the proportion effec- of focusing
on increasing
solvent top few per cent of the population, with privi- tively rose to 40 per cent or more for 12 per cent of house-
home-ownership
leged access to services and in the best location. At the holds in the European Union. This proportion doubled has been that
lower income levels, in developing countries, it is the for private renter households.42 In the US, in 2006, one rental housing
informal private sector through partnerships between in seven households spent more than half their income has fallen from
favour and
households and local artisan builders that continues to on housing; in Italy 42 per cent of households are finan- has had little
provide most housing, usually in tandem with informal cially stressed over housing.43 In developed countries enablement even
land sub-dividers or customary owners as in the case of since the 2008 financial crisis, hundreds of thousands of though a growing
proportion of low-
Sub-Saharan Africa. homes have been repossessed or subject to foreclosure.44 income urban
Neither the formal nor the informal private State of affordability in Latin America and the Caribbean is households in
construction sector has any housing solution for the described in Box 3.2. many countries
are renters
20-30 per cent of the population with the lowest incomes.
55
Chapter 3: The Fate of Housing • WORLD CITIES REPORT 2016

Box 3.2: House prices go through the almost half the households cannot afford the cheapest
roof in Latin America and the Caribbean mortgage.47 In South Africa, the cheapest formal housing
is unaffordable for 64 per cent of households.48 In China,
Formal housing in Latin America and the Caribbean is owners find moving to a better home difficult for lack of
expensive. The relationship between price and income can a proper secondary market where they can capitalize on
be up to three times greater than in the US. This becomes current homes.49
even more serious given the higher incidence of poverty and
informality in a region where close to one-third of households Land administration and
are poor and 57 per cent of urban workers are informal. Urban management
inequality further contributes to this panorama. The enabling approach to land focused on
For about 20 per cent of households in the 18 most developing property rights through regularizing land
representative countries, access to a basic home of 40 square tenure, expanding both land registration and property
meters (price: US$15,000, with a 10 per cent down payment taxation.50 The first two favour expansion of formal
and a 20-year mortgage at six per cent interest) would cost housing finance (mainly through mortgages secured on
more than the 30 per cent income. If considering those land values), while the third recognizes that households
households that could pay but, in so doing, would fall below should pay enough property tax to cover their use of
the poverty line, the proportion would rise to 22 per cent. urban resources.
If the current interest rates offered by the formal banking In reality, land market policies since 1996
sector in each country were used instead of the six per cent have only helped the wealthier groups in most developing
assumed above, the number would rise to 24 per cent. countries, driving much of the housing price increases,
and raising total housing costs.51 In Bogotá, land makes
Source: Blanco et al., 2014. up to half the cost of social housing.52 Access to land
and dysfunctional urban land markets remain one of the
Since 1996, housing supply systems have most pervasive constraints on the provision of adequate
been so focused on large-scale production for sale to the housing. Access to well-located land is an emerging chal-
extent that affordable rental accommodation has been lenge as deployment of large-scale pro-poor strategies is
neglected, pushing up rentals beyond the reach of young embraced: new low-income housing areas are located too
people in many European cities. Developed countries far away from livelihoods and transport costs are prohibi-
promote affordable housing through tax incentives for tive. A number of countries have postponed or abandoned
rental investment, public subsidies to leverage private structural reforms of land and housing laws and regula-
investment, and greater reliance on tions overlooking land as a major input into the provision
Since 1996, housing supply
the land use planning system to cater of housing services remains overlooked.
systems have been so focused
on large-scale production for for housing needs and to generate Often a complex business, land administration
sale to the extent that affordable opportunities for affordable housing. can add high transaction costs to residential development.
rental accommodation has been
The rationale is to stretch limited One-stop shops and easier rules and procedures can make
neglected, pushing up rentals
beyond the reach of young people public funds; increase construction huge differences to development efficiency. Lesotho
in many European cities. output, retain crucial skills, stop the has reduced title registration delays from six years to
decline in rental accommodation and 11 days.53 However, extension of cadastral surveys to
bridge the gap in affordable housing for those between informal housing areas is expensive, inciting richer house-
social housing and unassisted home ownership.45 holds to “raid” land and housing with new full land titles.
In developing countries, the focus of afford- 54 In many urban areas, however, less-than-complete title

ability has been on those who are just under the formal guaranteeing freedom from eviction may be more useful
market rather than households at or below median income. to lower-income owners than full legal title that can be
Indeed, the owner-occupied housing that is affordable to traded on a market.55 Furthermore, community-based
households with 80 per cent of median income is gener- titles can ensure security while discouraging raiding.56
ally built by the informal sector and cannot be provided Many governments have considerable land
formally.46 Even in such success stories as Tunisia, where holdings either because all unallocated land has been
mortgage finance dominates formal housing demand, ceded to them (as in Ethiopia), or because areas have been
56

Chapter 3: The Fate of Housing • WORLD CITIES REPORT 2016


specifically taken over for government uses. In Algeria, supplied dwellings only rights of land use are transferred Property
such land is sold at 80 per cent discount.57 Privileged to occupiers. Any profit on subsequent sale passes back to taxes tend
to be poorly
access to this land and the chance to build more cheaply the government. This depresses the propensity of owners collected
thereon are often granted to developers who only supply to move, hindering the secondary market.66 in many
the better-off among the population. Development of large-scale housing strate- developing
countries
Several countries in Europe intervene in the gies may be challenging in cases where new low-income
land market to gather land together ahead of develop- housing is located too far away from livelihoods, with the
ment and/or to ensure that the gain in value from conver- cost of transport being prohibitive. Moreover, a number
sion to residential use accrues to the public.58 In many of countries have postponed or abandoned structural
countries, the easy land to develop is peri-urban and reforms to the legal and regulatory environment of the
agricultural, with attendant sustainability and food inse- land and housing markets. On the whole, policy-makers
curity concerns, especially where fertile land is scarce.59 still overlook the importance of land as a major input into
“Brown-field” sites are usually developed for middle- and the provision of housing services, and that is why the UN-
high-income housing, benefiting from location near the Habitat National Housing Sector Profiles emphasize it as
city centre or employment opportunities.60 a basic requisite if future housing needs are to be met.67
Among other interventions, land readjust-
ment schemes pool together formal and informal plots Migration: positives and
for development or rationalization of infrastructure and negatives for housing supply
public spaces, while enhancing tenure security. This has Dramatic increases in migration and financial
happened in Germany, Japan, Korea, India, Nepal and Sin- flows have tended to raise housing demand and prices.
gapore. Land swaps also show potential but have not been High-end housing in London or Dubai, for instance, is seen
adequately explored.61 Where land regularization occurs, as a safer haven for savings than banks. Significant cross-
governments may reclaim some of the added value from border worker remittances flow into housing markets in
properties, as in Colombia and the Dominican Republic.62 Egypt, Ethiopia, Liberia, Malawi, Nepal and Ghana.68 In
In Turkey, the housing agency (TOKi) acquires Latin America (Mexico, Colombia, Ecuador, Peru, El Sal-
urban land from other government entities and works vador), housing finance systems have been set up specifi-
with private developers who build high-value housing cally for remittance money.69 Property companies in many
and split the revenue. TOKiİ then uses its share to fund African routinely advertise houses for sale or construction
further land acquisition and allocates the land for “afford- targeted at citizens working in Europe and North America.
able” housing priced at about 30 per cent below market The movement of millions of households
rates.63 within the Middle East and the unprecedented mass-
Property taxes tend to be poorly collected in migration into Europe since 2015 has increased pressure
many developing countries. Although local governments on housing supplies in the reception regions.
have the right to value and extract tax from property,
they tend not to do it and lose on revenues. Taxing idle Climate change and disasters
land is not common but has been used in China and the Housing policies today cannot ignore the likely
Philippines in an effort to bring urban land into resi- effects of climate change, with the attendant higher fre-
dential and other use.64 Land title is often an important quency and numbers of casualties, especially urban fringes
issue for people displaced by conflict. On return, they where the poor in large numbers live at or below sea-level,
can find it difficult to prove ownership, especially if their or on steep slopes.
stay has been protracted in the recipient county. In post- Energy for heating and lighting residential
civil war Liberia, multiple claims are being made and fake buildings significantly contributes to greenhouse gas emis-
title documents fabricated.65 This is a problem that many sions (Chapter 1 and 5). The production of cement gener-
refugees who fled Syria to Europe will have to contend ates about five per cent of global carbon dioxide emissions;
with if they ever return. indeed the manufacture of one ton of cement generates
Enabling efficient markets has often been less one ton of carbon dioxide.70 At the same time, regardless
than successful where governments have retained inter- of their enabling roles, public authorities discourage use
ests in land. In China and Ethiopia, for many privately- of much more eco-friendly earth-based materials.
57
Chapter 3: The Fate of Housing • WORLD CITIES REPORT 2016

3.4
which cities become more inclusive, safe, resilient, pros-
perous and sustainable. Improving the living conditions in
slums is indispensable to guarantee the full recognition of
the urban poor as rightful citizens, to realize their poten-
Ending Urban tial and to enhance their prospects Improving

Poverty: Improving
for future development gains. the lives of
Collective action in dif- slum dwellers

the Lives of Slum


has been
ferent parts of the world has shown
recognized
that living conditions in slums can be as one of the
Dwellers improved. The fact that 320 million
people were lifted out of slum-like
essential
means to
end poverty
conditions between 2000 and 2014 worldwide
The slum challenge continues to be one of the demonstrates that it is possible.74
faces of poverty, inequality and deprivation in many cities in This feat made it possible to achieve, and largely surpass
developing countries.71 UN-Habitat defines slums as a con- the MDG slum target ahead of time. This represents a
The slum
challenge tiguous settlement that lacks one or more of the following positive result, even though the shortcomings of the goal
continues five conditions: access to clean water, access to improved have to be acknowledged, since the target was estimated
to be one of sanitation, sufficient living area that is not overcrowded, at less than 10 per cent of the number of slum dwellers
the faces
of poverty, durable housing and secure tenure.72 Slums are the prod- in the world in 2000. This achievement should motivate
inequality and ucts of failed policies, poor governance, corruption, inap- countries to dedicate more resources to upgrade and
deprivation in propriate regulation, dysfunctional land markets, unrespon- prevent the formation of slums.
many cities
in developing
sive financial systems, and a lack of political will.73 A lasting solution to the challenge of slums
countries Improving the lives of slum dwellers has been can only be achieved through con- Collective
recognized as one of the essential means to end poverty certed efforts of all stakeholders. It action in
worldwide. The impetus for this comes from the targets is important to create an inclusive different parts
of the world
of the successive global development agendas. Upgrading environment that encourages the
has shown
slums moves the world towards a rights-based society in commitment of the authorities and that living
the engagement of the concerned conditions in
communities to enhance a better slums can be
improved. The
Figure 3.1: Percentage of urban population living in slums (1990-2014) understanding of the slum challenge. fact that 320
Source: UN-Habitat, Global Urban Observatory Urban Indicators Database 2015. Similarly, a city-wide approach to million people
slum upgrading is a more sustainable were lifted out
70 of slum-like
than piecemeal improvements. This conditions
60 makes it possible for the physical, between 2000
50 social, legal and economic integra- and 2014
demonstrates
40
tion of slums into the public planning
that it is
and urban management systems that possible
30
govern cities.
20 Although the proportion of the urban popula-
10 tion residing in slums today is lower than it was some two
0 decades ago (Figure 3.1), the absolute number of slum
dwellers continues to increase (Table 3.4). This clearly
Sub-Saharan Africa

Southern Asia

South-eastern Asia

Eastern Asia

Northern Africa

Latin America and the Caribbean

Western Asia

Oceania

Developing Regions

demonstrates the failure of cities to keep pace with urban


growth.75 Currently, one in eight people across the world
live in slums. In developing countries, 881 million urban
residents lived in these poor informal settlements in 201476
1990 1995 2000 as against 689 million in 1990 (Table 3.4). This represents
2005 2010 2014
an increase of 28 per cent in the absolute numbers of slum
58

Chapter 3: The Fate of Housing • WORLD CITIES REPORT 2016


Table 3.4: Urban slum population at mid-year by region (thousands)
Source: UN-Habitat, Global Urban Observatory Urban Indicators Database 2015.
Region 1990 1995 2000 2005 2007 2010 2014
Developing Regions 689,044 748,758 791,679 830,022 845,291 871,939 881,080
Northern Africa 22,045 20,993 16,892 12,534 13,119.1 14,058.3 11,418
Sub-Saharan Africa 93,203 110,559 128,435 152,223 163,788 183,199 200,677
Latin America & the Caribbean 106,054 112,470 116,941 112,149 112,547 112,742 104,847
Eastern Asia 204,539 224,312 238,366 249,884 250,873 249,591 251,593
Southern Asia 180,960 189,931 193,893 195,828 196,336 195,749 190,876
South-eastern Asia 69,567 75,559 79,727 80,254 79,568 84,063 83,528
Western Asia 12,294 14,508 16,957 26,636 28,527 31,974 37,550
Oceania 382 427 468 515 534 563 591

dwellers over the past 24 years. In 2000, 39 per cent of the UN-Habitat has proposed a strategy that puts Although the
urban population in developing countries resided in slums; housing at the centre of the new urban agenda meaning proportion
this declined to 30 per cent in 2014. at the centre of urban policies and at the centre of cities. of the urban
population
The percentage of slum dwellers in urban An incremental approach to slum upgrading can achieve residing in
areas across all developing regions has reduced consider- this, providing adequate housing for low-income urban slums today
ably since 1990, but the numbers have increased gradu- residents in areas that, in most cases, are already located is lower than
it was some
ally since 2000 except for a steep rise of 72 million new close to city centre. This strategy will address the social two decades
slum dwellers in Sub-Saharan Africa. Sub-Saharan Africa and spatial implications of “housing at the centre” while ago (Figure 3.1),
alone accounts for 56 per cent of the total increase in linking with broader urban renewal strategies for planned the absolute
number of
the number of slum dwellers among developing regions city-infill and local economic development, and meeting
slum dwellers
between 1990 and 2014. Indeed, the number of slum the density, diversity and mixed-use requirements. continues to
dwellers in Sub-Saharan Africa has grown in tandem with The broader, more participative and integrated increase
growth in the region’s urban population. the approach to slum upgrading, the more successful it
Despite the progress made in reducing the is likely to be. In 2008, UN-Habitat in partnership with
proportion of the urban population residing in slums, the African, Caribbean and Pacific Group of States and
the time has come to deal with the unfinished business the European Commission established the Participatory
of slums, as implicitly recognized in SDG Target 11.1: by Slum Upgrading Programme (PSUP). The scheme involves
Slum Upgrading
2030, ensure access for all to adequate, safe and afford- enhancing stakeholders’ ability (including authorities Project in Kibera,
Nairobi, Kenya.
able housing and basic services and upgrade slums. and slum dwellers themselves) to understand the multi-
Source: UN-Habitat / Julius
Although developing countries have a large Mwelu

number of slums dwellers, it is also possible to observe


the rising presence of housing deprivation and informality
in the developed world.77 Urbanization is closely associ-
ated with development; slum dwellers will be left behind
in this process, if their concerns are not integrated into
urban legislation, planning and financing frameworks. If
the concerns and travails the urban poor remain ignored,
then the 2030 Agenda for Sustainable Development will
only be achieved partially, and in the process denying
millions of urban residents the benefits of urbanization.
The prevailing unplanned urban growth in the developing
regions and the occurrence of housing informality and
urban decay in the developed world need to be compre-
hensively addressed thought city-wide strategies where
planning, urban economic development and laws and
institutions would play a fundamental role.
59
Chapter 3: The Fate of Housing • WORLD CITIES REPORT 2016

Box 3.3: Major achievements of the Participatory Slum Upgrading Programme


To date, implementation of UN-Habitat’s • National Urban Development and Slum improved durability of constructions, public
Participatory Slum Upgrading Programme has Upgrading and Prevention Policies space and access roads).
resulted in the following major achievements: developed and approved in eight countries • 10 per cent of programme funds committed
• 35 countries implementing PSUP and (Burkina Faso, Cameroon, Cape Verde, Fiji, to community-managed projects.
committed to participatory slum upgrading, Kenya, Ghana, Papua New Guinea and • More than 1,200 local and national
revising policy, legal and financing Uganda). government, NGO and CBO representatives
frameworks for housing, land and slum • 160 cities formally recognizing respective as well as community members trained and
upgrading and prevention, analyzing current urban challenges with particular focus engaged in the inclusive city-wide approach
living conditions in slums, devising and on slums and slum dwellers through a of the programme.
enacting participatory responses. citywide, integrated approach. • South-South learning platforms established
• PSUP has levered almost three times its • 32 city-wide Slum Upgrading Strategies including IT-based learning and participation
original funding through indirect and direct integrating slums into the larger urban platforms, like MyPSUP.org.
country contributions equivalent to 27 context through planning and development • Gender focal points appointed in 35
million Euros contributed to 15 countries. strategies. countries to ensure that all actions are
• 51 signatories to International Declarations • Secure tenure for over 800,000 slum gender-responsive.
committing countries to implementation of dwellers nine countries (Burkina Faso, • 11 countries ready to up-scale the
the right to adequate housing for all and Cameroon, DR Congo, Ghana, Kenya, programme, with the required financing
improved slum conditions (2009, Nairobi; Malawi, Mozambique, Niger and Senegal); already in place.
2012, Rabat; 2013, Kigali). • 67,600 slum households targeted for
• Creation of National Urban Forums and improved housing conditions through Source: UN-Habitat, 2015a.

coordinating bodies in 30 countries. physical works (water and sanitation,

3.5
dimensional nature of the slum challenge and identify
The broader,
more and implement appropriate, sustainable responses.
participative PSUP effectively puts slums on urban agendas and encour-
and integrated ages the necessary policy changes, budget allocations and
the approach
to slum
multi-stakeholder partnerships. Currently, PSUP is opera- Progress Made
with Respect to
upgrading, tional in 160 cities in 38 countries, providing enabling
the more frameworks for at least two million slum dwellers.78 Box

Adequate Housing
successful it is
3.3 identifies some of the achievements of the PSUP.
likely to be

PSUP is operational in 160 cities in Regulatory framework


38 countries, providing enabling Inappropriate regulatory frameworks cause
frameworks for at least inequitable and inefficient land development. In this
2 million
slum dwellers
respect, the enabling approach calls on governments to
reduce regulatory complexity, to assess the costs of regula-
tion and remove both price distortions and artificial short-
ages. It also calls for no imposition of unaffordable stand-
Sub-Saharan Africa alone accounts for ards or unenforceable rules, and that projects should not be

56%
of the total increase in the number
designed without links to regulatory/institutional reforms.
Though some developing countries have over-
of slum dwellers among developing hauled building and planning regulations, many still cling
regions between 1990 and 2014 to, even attempt to enforce, rules that are both too expen-
60

Chapter 3: The Fate of Housing • WORLD CITIES REPORT 2016


sive and ill-adapted for local circumstances. Expensive
rules are counterproductive as they drive the majority into Box 3.4: Morocco’s well-developed housing finance
the informal sector where building standards are sub-par system
and housing does not qualify for bank loans. Morocco has the most advanced and diverse housing finance market in
Where regulations have been relaxed to North Africa. Mortgage lending draws on a variety of sources: public and private
encourage residential construction, benefits have accrued commercial banks consumer credit companies and microfinance. Typical term is 20
for lower income groups. In Hanoi and Bangkok, a key years, housing finance can reach up to 100 per cent loan-to-value ratio and in 2014
factor in affordable housing construction has been the mortgage interest rates fell below six per cent. Twenty per cent of mortgages are
removal of the regulatory constraint on floor-area ratios, assisted by partial government credit guarantees on mortgages for households with
because low-income households can afford flats in low and irregular incomes. The capital market is supportive of housing finance, with
informal five-floor buildings.79 Efforts to increase densi- a diversity of institutions beyond banking. This includes a dynamic insurance sector,
ties by altering floor area ratios or floor space indexes in growing pension funds and the Casablanca Stock Exchange. In 2002 Morocco was
Bangkok have resulted in increased residential supply.80 the first country in the region to allow securitization, which remains underused (only a
In many countries and in cities as diverse as few transactions for a total US$450 million).
Mumbai and New York, planning permission for middle-
or high-cost housing is subject to building low-cost dwell- Sources: AfDB and UN-Habitat, 2015; CAHF, 2014.

ings. In Mumbai, slum dwellers displaced by developers


of high-value commercial sites must be re-housed free
of charge.81 Also in Mumbai, community groups can it was 59 per cent in Singapore, 39 per cent in Hong Kong Where
finance local improvements through sale of Transferable and 29 per cent in Taiwan.85 Where home-ownership rates regulations
have been
Development Rights on their central sites to others to are high, a lower percentage of home-owners are likely to relaxed to
use elsewhere.82 In Recife, Brazil, special zoning enables have outstanding mortgage debt than in countries where encourage
enforcement of dedicated rules in informal settlements.83 homeownership rates are low.86 residential
construction,
Many countries, including Vietnam,84 have reformed In transitional and developing countries, the benefits have
laws and regulations on property rights and transactions focus has been on stronger lending institutions, higher accrued for
to encourage proper market mechanisms and their major number of middle-class mortgage holders, and reaching lower income
groups
role in housing finance. further down the income scale where possible. Attempts
to improve access to mortgage loans have been hampered
Finance for affordable housing by lack of capacity across specialist institutions.87 In Sub-
With regard to housing finance, the enabling Saharan Africa, only South Africa has a longstanding and
approach has concentrated on developing mortgage loans. sophisticated mortgage banking sector amounting to 22
This included calls for private sector lending at positive/ per cent of GDP.88 Even after the 2007-08 financial crises,
market rates and enforcement of foreclosure laws, with 100 per cent loans can be granted in the affordable sector In transitional
government providing prudential regulation and improved of the market. In Morocco, mortgage finance is also well and developing
countries, the
loan instruments. Under the approach, governments developed (Box 3.4). In some countries, governments focus has been
should not allow interest-rate subsidies, nor should they encourage, or own, banks specializing in housing loans, on stronger
discriminate against rental housing investment or allow short-circuiting the issues of affordability and commercial lending
institutions,
high default rates, while at the same time favouring bank risk concern.89
higher number
resource mobilization for housing finance. Lending against pension contributions is used of middle-class
In developed countries, the financial conse- in some countries so that a loan to formal sector or govern- mortgage
holders, and
quences of the “sub-prime” collapse in the US have con- ment workers is secured on a pension pot rather than on
reaching
strained mortgage lending, disproportionately affecting land or a dwelling so the formality of land tenure is not further down
minority households and first-time home-owners who have essential. This sort of loan is common in South Africa, the income
been unable to take advantage of the low prices and interest Namibia90 and Ethiopia.91 In Brazil, employers must pay 8 scale where
possible
rates that have followed. Mortgage debt to GDP ratio before per cent of their employees’ salaries into a pension pot,
the credit crisis varied in Europe from 20 per cent in Italy and several states draw on this for low-income housing pro-
and Austria to 60 per cent in Spain, Portugal and Ireland, to grammes.92 In Mexico, the government-run pension funds
80 per cent in the UK and the Netherlands. By comparison, are still the major lenders. Despite this, there remains the
61
Chapter 3: The Fate of Housing • WORLD CITIES REPORT 2016

issue that most households in developing countries cannot also benefited from privatized institutional housing and
afford housing that can attract mortgages. subsidized “affordable” housing.102
The majority (50-80 per cent)93 build their Where governments have built housing for low-
houses incrementally using savings, loans from family or income households, it had to come with significant subsi-
employers, etc., to finance the stages in which the house dies. Still, in most developing countries, subsidies appear
is built over many years. The secondary housing markets to benefit very few households compared with the need103
in developing countries tend to be sluggish and non-trans- and have a built-in bias against poorer households, even
parent. They often suffer from high transaction costs; for though they are paid for through taxes,104 as they usually
example, transfer tax in Bangladesh is 12.5 per cent of require a minimum income threshold of affordability or
gross price.94 proof of formal employment. In some Latin America coun-
Housing does not seem to have attracted the tries105 and in South Africa, maximum incomes of a few
same enthusiasm in micro-financiers as entrepreneur- multiples of minimum wage are set for better targeting of
ship loans, but it has been shown to the poor. In its successive incarnations over two decades,
Housing does not seem to have be important, particularly in Latin South Africa’s subsidized housing programme has provided
attracted the same enthusiasm
in micro-financiers as America, for extensions, improve- two million dwellings free of charge on serviced plots.
entrepreneurship loans ments and incremental housing Housing subsidies may also have non-housing
supply where it can finance a room, objectives, e.g. for population redistribution or worker
the roof, fitting out an apartment shell, down-payments mobility. In Liberia, they are used to attract back and
towards dwelling purchase, or improving infrastruc- maintain a cadre of educated professionals following years
ture.95 Of the few organizations promoting housing of civil war.106 Furthermore, even in highly-regulated
micro-finance, one of the foremost, Global Commu- societies, it is difficult to maintain effective targeting of
nities (formerly CHF), has been involved in Bosnia, supply-side subsidies, even though they are meant to be
Ghana, Iraq, and West Bank and Gaza.96 Latin America easier to administer than demand-side.107 The failures to
offers several successful examples in Bolivia, Nicaragua reform both the housing sector and attendant subsidies
(PRODEL), El Salvador, and Costa Rica (FUPROVI).97 In have gone hand in hand over the past 20 years, and inef-
Ethiopia, micro-finance also helps purchasers of condo- ficient subsidy systems have endured.
miniums with their down payments.98
Under the enabling approach, any subsidies Community-led finance and
were to be rationalized through transparency, targeting development
the poor and specifically people rather than dwellings. In developing countries and in the absence
Subsidies should be subject to review; they should not of adequate housing finance and official neighbourhood
be hidden or allowed to distort prices. Governments upgrading programmes for the majority, some interna-
and local authorities should not build subsidized public tional NGOs, such as Slum/Shack Dwellers’ International,
housing nor use rent control as subsidy. have stepped in with community-based savings and loans
These principles notwithstanding, many coun- systems, supported by sophisticated lobbying. Operating
tries have provided hidden subsidies for middle class through local affiliates and women’s savings groups, an
housing over the last 20 years. In Europe and North important element of their operations is the Urban Poor
America, various forms of subsidies promote investment Funds (UPF) for settlement upgrading.
in owner-occupation and private rental housing, and more The Urban Poor Funds is an account held at
generally leverage investment in housing.99 However, a level above the savings group into which small pay-
home-ownership subsidies, e.g. mortgage payment tax ments are made by all the members, in addition to their
relief or Home Purchase Certificates,100 tend to benefit own savings. While individual savings accounts continue
only the non-poor.101 Given the gap between the cost of to vouch for holders’ personal creditworthiness, aggre-
the cheapest formal housing, and the financial capacities gation of thousands of tiny additional amounts enables
of prospective middle-class owners, subsidies are popular the UPF as a financial partner of pro-poor improvements
with governments in transitional and developing countries with municipal authorities and other contributors. These
because they allow the rising middle class to find housing umbrella accounts ultimately add up to many millions of
of a standard to which they aspire. The middle class has dollars under the control of those NGOs, earning them a
62

Chapter 3: The Fate of Housing • WORLD CITIES REPORT 2016


respected place at national and international financiers’ have instead often felt the heavy hand of bureaucracy or
tables. In individual urban areas, this mechanism enables ineptitude “disabling” them from effective housing supply.
representatives of the urban poor to take their place in Little progress has been made towards appro-
negotiations on city-wide issues.108 priate standards for materials, including substitution of
Community-driven development has increased performance-based, more environmentally-friendly earth-
in importance since 1996 to be considered by the World based and organic materials for high energy-consuming
Bank and other institutions a major channel for local cement and burnt bricks. A major problem is that the reg-
services.109 It has the potential to make neighbourhood ulations in force in many countries are still are materials-
upgrading more responsive to residents’ demands, more based rather than performance-based.
inclusive, more sustainable, and more cost-effective than
top-down programmes.110 Upgrading poor neighbourhoods
Improving housing and services in existing
Assisting the construction poor-quality neighbourhoods is an obvious way signifi-
industry cantly to improve the lives of slum dwellers. It allows
The enabling approach sought to organize them to continue with their social and economic networks
the building industry in four related ways: eliminating while also improving their housing quality. Upgrading
monopoly practices, encouraging small firm entry, low- poor neighbourhoods should, therefore, have been a key
ering import controls, and supporting research. The activity since 1996.
approach advocated against long permit delays, restraints After 1996, a multi-sectoral approach was
on competition, and public monopolies. Further recom- adopted, with improvements to land tenure, infra-
mendations included support to structure and social services, but
Many governments have indeed
small-scale construction with dedi- improved housing was the entry
re-organized building industries
cated credit mechanisms. 111
but emphasis has been on firms point. Upgrading neighbourhoods
Many governments building for the middle classes has continued to be a major activity
have indeed re-organized building rather than the poor majority in the last 20 years but housing has
industries but emphasis has been ceased to be the entry point. Instead,
on firms building for the middle classes rather than the upgrading programmes now focus more on infrastructure:
poor majority. The property lobby has reaped the ben- improved or first access to services, especially water and
efits of PPP housing projects, encouraging governments sanitation.115
to favour formal developments to the detriment of real- Formal security of tenure is no longer seen
istic efforts benefiting the poor. This is how in Accra or as the prerequisite for upgrading. Experience shows that
Lusaka, consortia with foreign contractors seem to have more flexible and readily available forms, like simple
received tax breaks, import duty holidays, subsidized or house registration, gives residents confidence against the
free land, favourable loans, etc., instead of the small local risk of eviction and access to service connections— and Improving
builders who provide housing for the majority. In Chile,
112 the passage of time will do the rest.116 housing and
the Cámara Chilena de Construcción was a prime mover Community participation can at many stages services
in existing
in designing the original capital subsidy programme.113 In both preserve residents’ sense of belonging and ensure
poor-quality
some countries, assistance to formal contractors has led that the services provided are what local people want, neighbourhoods
to oversupply of upper-middle and high-income housing, value and are ready to look after. Where such participation is an obvious
as in Algeria.114 In Addis Ababa, Dubai and Doha, as in is sought at the planning stage, or is prioritized, it is likely way significantly
to improve the
many cities in China and India, major construction pro- to be very influential in the project’s success.117 lives of slum
jects focus on the middle class, as well as attracting Some countries have made good progress and dwellers
foreign companies. some less so, but upgrading has not generally gone to scale
Smaller contractors, however, have received as a programmatic activity that would eradicate poor housing
little of the help recommended in Table 3.1 even though conditions across cities.118 Among the most successful coun-
they build the housing occupied by the majority of house- tries are Tunisia119 and Thailand where the Baan Mankong
holds. Still unrepresented in policy-making consultations Programme120 was designed to upgrade 200,000 dwellings
and absent in subsequent programmes, these builders by 2011. The success of such schemes may be tempered
63
Chapter 3: The Fate of Housing • WORLD CITIES REPORT 2016

because upgrading almost always increases housing costs; nating land development amongst infrastructure agencies,
secure tenure and better infrastructure come at the cost of emphasizing specific and recovery, effective demand and
the financial insecurity of a debt.121 improving slum infrastructure.
Great strides have been made in water supply
Improving access to infrastructure since 1990. Indeed, the MDG target for improved drinking
The right to adequate, affordable water and water was met in 2010— well ahead of the 2015 dead-
sanitation is implicit and acknowledged in various inter- line.123 The WHO-UNICEF Joint Monitoring Programme
national declarations, covenants, conventions and state- estimates that over 91 per cent of the total world and
ments.122 Adequate housing includes access to water, 96 per cent of urban population currently have access to
sanitation, etc., so the enabling approach favoured coordi- improved drinking water (Table 3.5). Despite the progress

Table 3.5: Regional and global estimates for improved drinking water
Source: World Health Organization/UNICEF, 2011.

Use of drinking water sources (percentage of population)

population that gained access


Progress towards MDG target
Urban Rural Total
Improved Improved Improved

Proportion of the 2015

since 1990 (per cent)


Piped on premises

Piped on premises

Piped on premises
Other improved

Other improved

Other improved
Total Improved

Total Improved

Total Improved
Surface water

Surface water

Surface water
Unimproved

Unimproved

Unimproved
Region Year
Sub-Saharan Africa 1990 83 43 40 13 4 34 4 30 32 34 48 15 33 26 26 Not met 43
2015 87 33 54 11 2 56 5 51 29 15 68 16 52 22 10
Northern Africa 1990 95 86 9 5 0 80 33 47 17 3 87 59 28 11 2 Not met 34
2015 95 92 3 5 0 90 78 12 9 1 93 86 7 6 1
Eastern Asia 1990 97 79 18 2 1 56 11 45 35 9 68 30 38 25 7 Met 39
2015 98 88 10 2 0 93 56 37 5 2 96 74 22 3 1 target
Eastern Asia without China 1990 97 94 3 3 0 92 2 90 2 6 96 67 29 2 2 Met 18
2015 99 96 3 1 0 96 74 22 3 1 98 91 7 2 0 target
Southern Asia 1990 90 50 40 9 1 66 7 59 29 5 73 19 54 23 4 Met 44
2015 96 56 40 4 0 91 17 74 8 1 93 30 63 6 1 target
Southern Asia without 1990 93 59 34 6 1 73 11 62 19 8 79 25 54 15 6 Met 39
India 2015 92 62 30 8 0 86 19 67 12 2 89 36 53 10 1 target
South-eastern Asia 1990 90 42 48 7 3 63 5 58 25 12 72 17 55 19 9 Met 40
2015 95 51 44 5 0 86 17 69 10 4 90 33 57 8 2 target
Western Asia 1990 95 85 10 4 1 70 43 27 22 8 85 69 16 12 3 Met 48
2015 96 92 4 4 0 90 83 7 8 2 95 89 6 4 1 target
Oceania 1990 92 74 18 5 3 37 11 26 22 41 50 27 23 19 31 Not met 26
2015 94 74 20 4 2 44 11 33 16 40 56 25 31 13 31
Latin America & the 1990 94 88 6 5 1 63 37 26 17 20 85 73 12 8 7 Met 35
Caribbean 2015 97 94 3 3 0 84 68 16 10 6 95 89 6 4 1 target
Caucasus and Central Asia 1990 95 83 12 4 1 79 29 50 11 10 87 54 33 8 5 Not met 19
2015 98 91 7 1 1 81 38 43 10 9 89 61 28 5 6
Developed countries 1990 99 97 2 1 0 93 79 14 7 0 98 92 6 2 0 Met 10
2015 100 98 2 0 0 98 89 9 1 1 99 96 3 1 0 target
Developing countries 1990 93 68 25 6 1 59 11 48 29 12 70 31 39 22 8 Met 41
2015 95 72 23 5 0 83 28 55 12 5 89 49 40 8 3 target
Least developed countries 1990 80 29 51 16 4 43 2 41 34 23 51 7 44 30 19 Not met 42
2015 86 32 54 12 2 62 3 59 27 11 69 12 57 23 8
World 1990 95 79 16 4 1 62 18 44 27 11 76 44 32 17 7 Met 35
2015 96 79 17 4 0 84 33 51 12 4 91 58 33 7 2 target
64

Chapter 3: The Fate of Housing • WORLD CITIES REPORT 2016


made, 663 million people worldwide still lack improved available to 82 per cent of the world’s urban population
drinking water.124 with another 10 per cent sharing unimproved facilities.
The global population with improved sanita- As shown in Chapter 1, there has been wide-
tion facilities increased from 54 per cent in 1990 to 68 per spread privatization of infrastructure during the last 20
cent in 2015 (Table 3.6). Notwithstanding this increase, years. Evidence from Argentina, Bolivia, Mexico and
the MDG target for sanitation was missed by almost 700 Nicaragua shows that privatization has delivered both
million people.125 Most developing regions are lagging increased access to services and/or reduced prices for
behind in meeting the MDG sanitation target. Currently, the poor majority, but in the case of Cochabamba, Bolivia,
2.4 billion people worldwide still lack access to improved it has reduced access and/or increased prices. In Sub-
sanitation. At the same time, improved sanitation was Saharan Africa, privatized infrastructure has achieved

Table 3.6: Regional and global estimates for improved sanitation


Source: World Health Organization/UNICEF, 2015.

Use of sanitation facilities (percentage of population)

population that gained access


Progress towards MDG target
Percentage urban population

Urban Rural Total


Unimproved Unimproved Unimproved

Proportion of the 2015

since 1990 (per cent)


Other Unimproved

Other Unimproved

Other Unimproved
Open Defecation

Open Defecation

Open Defecation
Population (000)

Improved

Improved

Improved
Shared

Shared

Shared
Region Year
Sub-Saharan Africa 1990 510 118 27 39 30 21 10 18 8 29 45 24 14 26 36
Not Met 17
2015 988 784 38 40 34 18 8 23 11 34 32 30 20 27 23
Northern Africa 1990 119 863 49 90 6 2 2 54 5 12 29 71 6 7 16 Met
41
2015 177 451 56 92 7 1 0 86 8 2 4 89 7 2 2 Target
Eastern Asia 1990 1 236 934 29 71 5 22 2 41 2 48 9 50 3 40 7 Met
36
2015 1 487 313 57 87 6 7 0 64 3 31 2 77 5 17 1 Target
Eastern Asia without China 1990 71 505 71 - - - - - - - - - - - -
Not met -
2015 85 727 77 82 10 6 2 51 7 17 25 68 9 10 13
Southern Asia 1990 1 191 647 27 54 15 9 22 11 3 6 80 22 6 7 65
Not met 32
2015 1 793 616 35 67 19 7 7 36 8 7 49 47 12 7 34
Southern Asia without India 1990 322 757 29 66 11 17 6 26 8 18 48 37 8 19 36
Not met 41
2015 511 225 40 77 15 8 0 57 16 14 13 65 16 11 8
South-eastern Asia 1990 443 735 32 69 9 9 13 38 5 18 39 48 6 15 31
Not met 39
2015 633 031 48 81 10 2 7 64 10 10 16 72 10 7 11
Western Asia 1990 126 752 61 94 1 3 2 58 2 23 17 80 2 10 8 Met
50
2015 228 476 70 96 4 0 0 89 5 6 0 94 4 2 0 Target
Oceania 1990 6 461 24 75 9 13 3 22 3 59 16 35 4 48 13
Not met 15
2015 10 863 23 76 10 11 3 23 3 60 14 35 5 48 12
Latin America & the 1990 445 206 71 80 6 8 6 36 3 18 43 67 5 11 17
Not met 36
Caribbean 2015 630 065 80 88 7 4 1 64 7 17 12 83 7 7 3
Caucasus and Central Asia 1990 66 308 48 95 3 2 0 86 1 12 1 90 2 8 0 Met
24
2015 83 078 44 95 5 0 0 96 2 2 0 96 3 1 0 Target
Developed regions 1990 1 153 510 72 96 3 1 0 90 3 7 0 94 3 3 0
Not met 10
2015 1 268 643 78 97 2 1 0 91 2 7 0 96 2 2 0
Developing regions 1990 4 147 024 35 69 10 12 9 29 4 25 42 43 6 20 31
Not met 32
2015 6 032 677 49 77 13 7 3 47 8 17 28 62 10 12 16
Least developed countries 1990 509 191 21 37 22 26 15 15 7 25 53 20 10 25 45
Not met 27
2015 939 932 31 47 28 20 5 33 12 28 27 38 17 25 20
World 1990 5 300 534 43 79 7 8 6 35 4 23 38 54 5 17 24
Not met 29
2015 7 301 319 54 82 10 6 2 51 7 17 25 68 9 10 13
65
Chapter 3: The Fate of Housing • WORLD CITIES REPORT 2016

improvements in services in most cases.126 In several nerable.131 At the local level, the importance of housing
cities in South Asia, NGOs and civil society have acted as must be reinforced within appropriate urban planning and
intermediaries representing neighbourhoods to local gov- as part of the development of cities and people.
ernment and public utility companies to jointly raise funds With the “Housing at the Centre” approach,
for community toilet blocks and water supply. 127 UN-Habitat will seek to reestablish housing problems and
opportunities in the international development agenda

3.6
in an increasingly strategic manner and in relation to the
future of urbanization. To reposition housing at the centre
of sustainable development, this framework proposes a
twin-track approach: curative, involving improvements to
A New Approach to current housing stock such as slum upgrading; and pre-

Housing in the New


ventive, involving building new housing stock.132
In the next sections, policies relevant to the

Urban Agenda developed countries and the aspiring middle classes of


transitional and developing countries will be followed by
those relevant to the majority in the developing countries.
If cities’ “emerging futures” must be sus-
tainable, housing must be placed at the centre of urban Developed countries and for
With rapid policies.128 With rapid population growth, high levels of the aspiring middle class in
population poverty and pervasive urban inequality; it is evident that transitional and developing
growth, high
levels of
housing is inseparable from urbanization and should be countries
poverty and a socioeconomic imperative.129 As demonstrated in this
pervasive chapter, the housing policies put in place over the last 20 Maximal extension of mortgage housing finance
urban
years through the enabling approach have not succeeded Mortgages against property values are by
inequality;
it is evident in promoting adequate and affordable housing. Govern- far the cheapest form of home financing, and therefore
that housing ments have backed away from direct supply without should be extended down the market, but with due regard
is inseparable giving sufficient consideration to the markets and regu- for repayment default risk. Governments must consider
from
urbanization latory framework to enable other actors in the process how transaction costs can be reduced, including low-cost
and should to step forward and provide adequate and affordable land titling and uncomplicated ways of establishing legal
be a housing. After a long period “in the wilderness,” housing safeguards and ownership. Loans close to or more than
socioeconomic
imperative
is emerging as an important sector once again. 100 per cent of house value and those in foreign curren-
UN-Habitat’s strategy paper: Housing at the cies should only be used with very great caution.
Centre of the New Urban Agenda seeks to reestablish the
important role of housing in achieving sustainable urbaniza- Improve choice in tenure and consumer rights
tion.130 The strategy proposes to position housing at the Rent laws should ensure an appropriate balance
centre of national and local urban agendas. The strategy between the rights of the landlord to evict troublesome
also seeks to shift the focus from the simple construction tenants and the rights of the tenant to remain in their
of houses towards a holistic framework for housing devel- dwelling without fear of summary eviction. Normally, prices
opment, supported by urban planning, that places people should be left to the market as rent control tends to damage
and human rights at the forefront of urban sustainable the affected housing stock in the medium to long terms.
development. At the national level, the goal is to integrate Instead of landlords subsidizing tenants, housing allowances
housing into national urban policies and into UN-Habitat’s should be paid to the lowest income earners to improve
strategic thinking on planned urbanization. National and their ability to afford rental housing. Where they are lacking,
local authorities should reassume a consumer rights should be introduced to protect buyers of
Housing at the Centre of the leading role in responding to housing housing from poor workmanship by builders. In addition,
New Urban Agenda seeks to
reestablish the important role of
needs, encouraging pro-poor market consumers should be protected from mortgage lenders who
housing in achieving sustainable mechanism and engaging with all encourage consumers to buy dwellings which are likely to
urbanization stakeholders, especially poor and vul- fall in value against the rest of the market.
66

Chapter 3: The Fate of Housing • WORLD CITIES REPORT 2016


Ensure appropriate supply for poorest, disadvantaged oping countries and any arguments on households filtering
With the
and elderly households up through the housing stock are unlikely to be helpful. On “Housing at
For some types of households, housing supply the other hand, the ability to alter and extend (“transform”) the Centre”
is relatively inadequate even in the wealthiest of developed housing enables households to improve without moving— approach,
UN-Habitat
nations. These include the poorest and those household including those living in presumably completed dwellings.134
will seek to
with disabilities and HIV/AIDS, the elderly and very young, reestablish
ethnic minorities, nomads and homeless people. It is Adopt realistic affordability thresholds housing
incumbent on governments to provide appropriate housing As suggested throughout this chapter, afford- problems and
opportunities
and infrastructure solution for these groups along with an ability is the crucible of housing policies; yet, this remains in the
appropriate mix of social interventions. In such housing, misunderstood in most developing countries. The current international
there may be no alternative but subsidized social housing. focus on those households that are marginally too poor development
agenda in an
to afford current mortgages helps only a few, while por- increasingly
Encourage return of residences in city centres tending the risk of default on housing loans. Against this strategic
As historic city centres are conserved and background, it is vital that the Housing Strategy takes a manner and
in relation to
improved, and as commerce and retailing vacate spaces view of affordability that is appropriate to each region and
the future of
in city centres, cities should grasp the opportunity to re- is linked in some way to local median household expen- urbanization
establish residential occupation there. This will not only ditures. Moreover, locally appropriate and affordable
ensure good prospects for city centres but also provide a building and planning regulations should be encouraged
choice of housing solutions to households who value the and continuously assessed for sustainable supply for the
convenience and vitality of central locations. majority of the population. It is vital to
recognize
that the main
Avoid privatization of public rental housing where it Encourage incremental construction through housing
converts it to private rental regulatory framework and finance supplier for
Where public rental housing has been privat- Incremental construction is too important the 60-90 per
cent majority
ized for the benefit of occupiers, it has often been con- in current housing supply in developing countries to be in developing
verted to private rental tenure in short order. This should ignored by policymakers. Regulations on financing, con- countries is
be avoided wherever possible. struction, planning, and infrastructure supply must take the informal
sector
account of and enable incremental development.135
Transitional and developing Neighbourhood servicing policies should take account of
countries the likely growth in population over the years as housing
is consolidated and transformed to reflect residents’
Incremental
Improve supply chains to increase housing stock in changing needs and aspirations. construction is
line with need and demand Enabling more efficient incremental building too important
It is vital to recognize that the main housing and extensions through small loans (US$500-5,000) in current
housing
supplier for the 60-90 per cent majority in developing repaid over one to three years, may well be the most effec- supply in
countries is the informal sector. The Housing Strategy tive housing supply strategy available to governments to developing
must recognize that single artisans and small-scale assist the poor majority. This type of support is already countries to
be ignored by
building contractors are the key suppliers of housing to available in the Philippines.
policymakers
the majority; continuing to ignore them in favour of the
relatively small formal sector supply would be perverse. Selective housing provision for vulnerable groups
In developing countries, especially in Sub- Housing policies must not lose the focus on
Saharan Africa,133 many households are unlikely ever to the poorest and most vulnerable. At the bottom of the
find themselves in a position to sell property. Therefore, income scale, government support should deliberately Housing
policies must
secondary housing markets hardly exist, making it impos- focus on households to strengthen their ability to afford not lose the
sible for them to capitalize on the value of their property adequate housing, especially vulnerable groups (women, focus on
in times of need or to move to more expensive housing. migrants, persons with disabilities and HIV, elders and the poorest
and most
Thus, the “housing ladder”, so important in conventional youth) and offer some subsidy to reduce the costs of
vulnerable
property mechanisms, is weak to non-existent in many devel- slum upgrading.136 At the same time, forced evictions
67
Chapter 3: The Fate of Housing • WORLD CITIES REPORT 2016

which create and reinforce vulnerability, must not be con- prehensive range of options is available to the majority
tinued.137 Better targeting to low-income earners would of the population. In Latin America and the Caribbean,
enable, or enhance, government assistance to more house- rental housing is viewed as an efficient and cost-effective
When holds. This should not be taken as a signal for governments remedy for the quantitative and qualitative housing deficit
implementing to be involved in “low- to middle-income housing” that is that currently affects about 40 per cent of the region’s
any part of only affordable to households above median income. households.141 Affordability may call for subsidies or
pro-poor
housing
housing allowances.
supply, the Develop appropriate alternatives to single household It is important that governments regulate the
right level of dwellings relationship between landlords and tenants in a way that
perceived land
In many developing countries, despite all allows security of tenure for the renter whilst allowing the
tenure should
be in place but efforts to reduce costs, enhance efficiency and improve landlord to evict recalcitrant renters.
that might fall design, basic formal sector housing is too expensive for
short of legally most households. This is largely because housing finance A regulatory framework suitable to all income groups
secure tenure
keeps focusing on formal single-household dwellings In many countries, the existing regulatory
with all services and full tenure security, when it is clear framework does not favour housing supply. A regulatory
that this format is only suitable for the better-off not the audit142 and/or an urban housing profiling exercise143
majority poor. Instead, micro-loans for multi-occupied would result in more enabling frameworks. Building
housing types and extensions to existing housing are prob- codes should be performance-based and planning regula-
ably the most effective way forward for the majority in tions should specify plot sizes, plot space per household,
need of new or improved accommodation. etc., that are sustainable in the long run, allowing multi-
Time has come to recognize that, especially in occupied housing and incremental building, where more
The supply of much of Sub-Saharan Africa,138 the main problem is not affordable. Technocratic solutions and rules-of-thumb on
rental housing that housing is too expensive, but that incomes are too affordability and appropriateness are to be shunned in
should be a low to afford basic formal housing. Therefore, any sub- favour of stronger beneficiary participation in, and trans-
major focus in
the Housing
sidies should be targeted only to the poor. Demand-side parency of, such decision-making.144
Strategy, subsidies tend to be more equitable but usually require
ensuring that a complex administration. Supply-side subsidies should be Promote and improve informal sector supply
comprehensive
limited to neighbourhoods targeted at the poorest. In developing countries, since the informal
range of options
is available to sector provides for most housing needs, policies should
the majority of Ensure choice of tenures reflects need encourage informal sector contractors and make them
the population Land titling exercises, once seen as a necessary more efficient through training, front-end financing, better
precursor to housing improvements, should be de-coupled access to materials and market information, together with
from slum upgrading programmes. When implementing improved apprenticeships through co-operation between
any part of pro-poor housing supply, the right level of per- training institutions and informal builders.
ceived land tenure should be in place but that might fall
short of legally secure tenure. Land administration, titling Promote community-driven housing supply
and allocation procedures should be streamlined for speed Community-led finance for housing and ser-
and simplicity, and result in sufficient security to allow vices has proved to be very effective and should be encour-
confidence in developing simple dwellings. aged. This, and other forms of housing micro-finance,
Forms of joint titling, such as community land should focus on the cost of building one or two rooms
trusts as used in the US139 and Kenya,140 may lead to a or of carrying out a particular building operation such as
Community-
more equitable land distribution than the individualized installing a roof. Such funding would greatly improve both
led finance for
housing and holdings currently used in most countries. the efficiency and the quality of the new development.145
services has Finance for this could, therefore, be extremely important
proved to be Promote rental housing with fair conditions for for upgrading the housing stock.146
very effective
and should be landlords and tenants Infrastructure provision based on access to
encouraged The supply of rental housing should be a improved water and sanitation should be provided, wher-
major focus in the Housing Strategy, ensuring that a com- ever possible, through community-led processes and leave
68

Chapter 3: The Fate of Housing • WORLD CITIES REPORT 2016


local people in charge of management at the local level. Address the challenge of homelessness
Appropriate technologies should be encouraged. Homelessness is a particularly intractable issue
It may be simpler to promote the necessary which has been worsening over the last 20 years. Home-
Homeless
people-centred and community-driven housing supply less people should be included in the Housing Strategy as people should
systems at local authority level than at central government a priority group. The recent formation of the Institute of be included in
level. Thus, it is vital that local governments that are given Global Homelessness at De Paul University, Chicago, is a the Housing
Strategy as a
the duties of planning and implementing housing policies positive step. It aims to include both developed and devel-
priority group
should receive the financial and personnel resources to oping countries’ homelessness in its research and advocacy.
allow them to fulfil their duties effectively.

Notes
1. UNCHS and ILO, 1995; Tibaijuka, 2009. 38. Tipple and Speak, 2009. 2002 by UN-Habitat, the United Nations 106. UN-Habitat, 2015c.
2. The Global Strategy for Shelter to the Year 39. Lawson, 2012). Statistic Division and the Cities Alliance. 107. The argument is that subsidizing a
2000 was adopted by the UN General in 40. Yuen et al., 2006). 73. UN-Habitat, 2003c. relatively few fixed assets is easier to
Resolution 43/181 on December 20, 1988. 41. Woetzel et al.(2014). 74. The Millennium Development Goals administer than subsidizing relatively
3. UNCHS, 1991. 42. Lawson, 2012). Report, July 2015. many households who can move around
4. You, 2007. 43. UN- Habitat, 2011b. 75. Hermanson and/or change their circumstances.
5. World Bank, 1993; Malpezzi, 1990. 44. Fuentes et al., 2013. 76. This figure has been calculated using 108. Archer, 2012
6. UN-Habitat, 2006; Payne and Majale, 45. Lawson and Milligan, 2007. just four out of the five slum household’s 109. Gasparre, 2011.
2004; the regulatory framework has been 46. A series of country studies in Sub-Saharan deprivations in UN-Habitat’s definition, as 110. World Bank, 2003.
particularly neglected. Africa, conducted by the Centre for security of tenure cannot be accurately 111. Erguden, 2001.
7. UN-Habitat, 2012b. Affordable Housing Finance in Africa has calculated yet. The 881 million can indeed 112. UN-Habitat, 2012b; UN-Habitat, 2012c.
8. United Nations, 2014a; United Nations, shown how, in most states in the region, be considered a global minimum. 113. Gilbert, 2012.
2014b. only a few per cent of the population 77. UNECE, 2009; UN‐Habitat, 2013e. 114. Salheen, 2012.
9. UN-Habitat, 2015b. have incomes high enough to attract a 78. The Participatory Slum Upgrading 115. Gulyani and Bassett, 2007.
10. Woetzel et al., 2014. mortgage. Programme (PSUP): http://unhabitat.org/ 116. Gulyani and Bassett 2007.
11. Economic Commission for Europe, 2014. 47. Salheen, 2012. initiatives-programmes/participatory- 117. Choguill, 1996.
12. In Armenia, for example, an eighth 48. Landman and Napier, 2010. slum-upgrading/ 118. Gulyani and Bassett, 2007.
of households lack permanent 49. Yang and Wang, 2011. 79. Bertaud, 2014a. 119. Salheen, 2012.
accommodation or need urgent housing 50. World Bank, 1993. 80. Woetzel et al., 2014. 120. Meaning “Secure Housing.”
assistance (Stephens, 2005). 51. Buckley and Kalarickal, 2006. 81. Woetzel et al., 2014. 121. Chutapruttikorn, 2009.
13. Nenova, 2010. 52. UN- Habitat, 2011b. 82. Nainan, 2008; Burra, 2005. 122. UN-Habitat, 2003b.
14. UN-Habitat, 2012c. 53. UN- Habitat, forthcoming. 83. UN-Habitat, 2011b. 123. World Health Organization/UNICEF, 2015.
15. Hernandez and Kellett, 2008. 54. Woetzel et al., 2014. 84. Tran and Yip, 2008. 124. World Health Organization/UNICEF, 2015.
16. UN-Habitat, 2012b. 55. Payne, 2002. 85. Sassen, 2012. 125. World Health Organization/UNICEF, 2015.
17. This is not universal, however, as cities 56. Midheme and Moulaert, 2013. 86. Neal, 2015. 126. Nellis, 2007.
with very large informal sectors invariably 57. Salheen, 2012. 87. UN- Habitat,2011b; UN-Habitat, 2012a. 127. UN-Habitat and ESCAP, 2010.
have some very high quality dwellings 58. Lawson, 2012. 88. CAHF, 2014. 128. UN-Habitat, 2015b.
therein. 59. As in Egypt (Salheen, 2012). 89. Badev et al., 2014. 129. UN-Habitat, 2015b.
18. Tipple and Speak, 2009. 60. Salheen, 2012. 90. UN-Habitat,2011c. 130. UN-Habitat, 2015d.
19. Busch-Geertsema et al.,2014. 61. Buckley and Kalarickal, 2006;Woetzel et 91. Interview with CBE and HDB officials, 131. UN-Habitat, 2015d
20. http://unhabitat.org/affordable-housing- al., 2014. Addis Ababa, 2014 132. UN-Habitat, 2015d
should-be-at-the-centre-of-cities-joan- 62. UN-Habitat, 2011b. 92. UN-Habitat, 2010c. 133. UN-Habitat, 2010b;
clos/ , last accessed 22 April 2016. 63. Woetzel et al., 2014. 93. Ferguson and Smets, 2010 134. Tipple, 2000.
21. UN-Habitat, 2009. 64. Woetzel et al., 2014. 94. Nenova, 2010. 135. Wakely and Riley, 2011.
22. McKinsey Global Institute, 2014. 65. UN-Habitat, 2015c. 95. Ferguson and Smets, 2010; Greene and 136. Gulyani and Bassett, 2007.
23. UN-Habitat, 2011b. 66. Duda et al., 2005; Ambaye, 2012. Rojas, 2008. 137. UN-Habitat, not dated.
24. UN-Habitat, 2011b. 67. See, for example, UN-Habitat, 2010b; UN- 96. http://www.globalcommunities.org/ 138. UN-Habitat, 2010b; UN-Habitat, 2012b;
25. United Nations, 2015l. Habitat, 2012b; UN-Habitat and ESCAP, devfinance accessed 1st May, 2015. UN-Habitat, 2012c; UN-Habitat, 2015c
26. Buckley and Kalarickal, 2006. 2010; and UN-Habitat, 2015c. 97. UN-Habitat, 2011b. 139. Andrews and Childress, 2015.
27. UN-Habitat and CAF,2014. 68. International Organization for Migration, 98. Interview with Addis Credit and Saving 140. Midheme and Moulaert, 2013.
28. Lawson, 2012. 2010; Meheret and Martin, 2009; UN- Institution. 141. Blanco et al., 2014
29. van Ham et al., 2010. Habitat, 2010b; UN-Habitat, 2012b; 99. Lawson, 2012. 142. Payne and Majale, 2004.
30. UN-Habitat, 2011a UN-Habitat and UN-ESCAP, 2010; UN- 100. As in former Soviet states (Stephens, 143. UN-Habitat, 2011d.
31. Chung and Kim, 2004. Habitat,2015c. 2005). 144. Gulyani and Bassett, 2007.
32. Nathanson and Zwick,2014. 69. UN-Habitat, 2011b. 101. Coady et al., 2004. 145. Israel’s Project Renewal has demonstrated
33. Pornchokchai and Perera, 2005. 70. Rubenstein, 2012. 102. Gulyani and Bassett, 2007. this most convincingly (Carmon, 1992;
34. McDonald, 2014. 71. UN-Habitat, 2003c. 103. UN- Habitat, 2011b. Tipple, 2000).
35. Japan Times, 2015). 72. UN-Habitat’s operational definition for 104. Even though the poor may not pay income 146. Carmon, 1992.
36. UN-Habitat, 2003d. a slum household was agreed through tax, they usually pay taxes on purchases.
37. Yi and Huang, 2014). an Expert Group Meeting convened in 105. UN-Habitat, 2011b.
pter
Cha

04 %
75
The Widening of the world’s cities have higher
levels of income inequalities than
two decades ago.

Urban Divide The world is not only divided by


differentiated access to opportunities,
consumption, public spaces and services,
education, technology and employment,
Quick Facts but more and more by access to income.
1 Today the world is more unequal than it was twenty years
ago: 75 per cent of the world’s cities have higher levels of
income inequalities than two decades ago.

2 Opportunities across diverse individual abilities and


cultural backgrounds that historically characterize urban
dynamics have stalled in many regions of the world.

3 Too many cities today fail to make sustainable space for


all, not just physically, but also in the civic, socioeconomic and
cultural realms.

4 The spatial concentration of low-income unskilled


workers in segregated residential quarters acts as a poverty There is an urgent need at this
trap with severe job restrictions, high rates of gender juncture for new planning visions,
disparities, deteriorated living conditions, social exclusion and
marginalization and high incidence of crime.
strategies, policies and tools that can
transform our planet of cities into a
planet of inclusive cities.

Policy Points
1 Cities are the sites of innovation. They are the places where
new economic ideas crystallize and where heterogeneous
groupings of people learn to co-exist as neighbours.
Occupy Wall Street,
2 The heterogeneity, density and diversity of cities, which
is what makes them nodes of economic innovation and
Ferguson, Baltimore,
democratic progress, has to be managed and planned. Gezi Park are all

3 The challenge of exclusion from urban civic spaces can be


PROTESTS
against
tackled head-on through ‘the right to the city,’ and a rights-
based approach. EXCLUSION
4 Habitat III comes at the right time not only to renew the
international commitment to inclusive cities.
TUNISIA

47%
Fast Still informal
economic labor force
growth accounted for

LOS ANGELES UAE

54 % Labor Force
was informal

61% of labor force were


UNDOCUMENTED
20%
Citizens
95%
Labor force is
made of migrants

- 2010 -
Inequalities in the world
(Gini Coefficient) 10
RICHEST
Latin America &
9
50%
Gini Coefficient means

0.5 8 INCOME
Caribean 7
6
0.47

Africa 0.45 5
4
3
Asia 0.4
2 3%
1 INCOME
POOREST
Eastern Europe & 0
0.35 POPULATION
Central Asia

UN-Habitat
international
alert line

OVER

46 %
are in vulnerable
employment accounting 63% Africa’s labour force is
trapped in vulnerable
for 1.5 billion people
globally employment
71
Chapter 4: The Widening Urban Divide • WORLD CITIES REPORT 2016

Poor people are also excluded from social and political life. The places where they
live seem to concentrate numerous disadvantages that end up by reproducing and
exacerbating other forms of marginalization and exclusion. Varanasi, India - October 2015
Source: Eduardo L. Moreno

U
rban history shows us that cities are the sites of innovation. They are
the places where new economic ideas crystallize, where heteroge-
neous groupings of people learn to co-exist as neighbours, and where
democratic experiments emerge to make way for previously excluded social
groups to be included as genuine decision-makers. The high density of people in
cities facilitates economic growth through better sharing,
matching and learning, and as Alfred Marshal famously
said, just the sheer concentration of people leads to new
ideas because “ideas are in the air.” Not only do cities
feature high densities of people, but their high densities to be undesirable. Racial covenants, discriminatory lending
also force people of different religions, nationalities, eth- practices, state-sponsored infrastructure and a host of other
nicities and sexual orientations to live and work along- public policies created the Fergusons that we see today in
side one another, and in doing so, they get to know “the many parts of the world: cities that are distinctly divided
The high
density of other,” leading to a cosmopolitan respect for differences. into white and black neighbourhoods; rich and poor areas;
people in cities Just as cities are sites of new opportunities and affluent and deprived neighbourhoods. These exclusionary
facilitates inclusion, they can also turn into sites of deprivation and mechanisms are further explained in Chapter 6 through the
economic
growth
exclusion. The 2008-2009 Occupy Wall Street protests notion of “invisible” and “hidden” powers in which political
through better across cities in the US were a collective uprising by low and policy deliberation processes and forums are not an
sharing, and middle-class groups to protest against their exclusion equal playing field.
matching and
from the sharing of urban wealth. The occupation of Gezi The social production of inclusion/exclusion
learning... but
their high Park in Istanbul against the proposed redevelopment of a within cities, then, is not new. But, we stand now at a
densities also public park into a shopping mall was a collective demand to unique tipping point where our planet is, for the first time
force people the city government to not exclude the vast majority of the in its history, predominantly urban. There is an urgent
of different
religions, public who enjoyed the free open space for a small minority need at this juncture for new planning visions, strategies,
nationalities, of publics (developers, more affluent shoppers) who would policies and tools that can transform our planet of cities
ethnicities benefit from the building of the shopping mall. The erup- into a planet of inclusive cities. The need for a new urban-
and sexual
orientations to
tion of violence in Ferguson, Baltimore and other American ization model that contains mechanisms and procedures
live and work cities in 2015 over racialized policing is the symptom of a that protect and promote human rights and the rule of law
alongside one deeper malaise of spatial segregation, where low-income, is part of the guiding principles for a New Urban Agenda,
another
African-American populations have historically been segre- as further elaborated in Chapter 9. At this critical juncture
gated into neighbourhoods that cut them off from better of the global urban transition, we can fall back on laissez
schools, jobs and housing in the rest of the city. faire planning and practices and let the market and other
In short, there is nothing natural about the forces drive urban growth (this, as the urban protests
form and character of the city. Cities are socially produced, show us, can have disastrous consequences). Or we can
and fair rules of the game (Chapter 6) and active plan- seize this moment of a global social ferment to imagine
ning interventions (Chapter 7) play a key role in creating new socially inclusive futures for our 21st century cities.
varying degrees of urban inclusion Habitat II made a com-
Cities are socially produced, and
and exclusion. The most conventional mitment to turning “inclusive cities”
fair rules of the game and active
of planning instruments, zoning, took planning interventions play a key into reality; however, the world today
its definitive form in the post-World role in creating varying degrees of looks very different from how it did
World II context in Western cities, urban inclusion and exclusion in 1996. Global flows of capital,
Just as and was used to separate the different people and ideas across national
cities are
uses that inhabit the city into harmonious zones. But, as boundaries have accelerated, and cities are the staging
sites of new
opportunities amply evident from the protests of the past decade over posts for these encounters. City governments have to
and inclusion, urban inequality, there is a dark side to zoning. The history deal with daunting challenges like how to attract hyper-
they can also of urban planning is replete with instances of powerful mobile capital while also making sure the needs of their
turn into sites
of deprivation groups within societies who have used zoning and other urban residents are met, how to manage the social hos-
and exclusion planning instruments to keep out groups that they consider tilities that could arise as diverse social groups start living
72

Chapter 4: The Widening Urban Divide • WORLD CITIES REPORT 2016


in close propinquity to one another, and how to mediate no longer working in favour of all urban residents. Too There is
amongst different groups as they compete for the same many cities today fail to make sustainable space for all, an urgent
need at this
limited urban resources. Today, the world is more unequal not just physically, but also in the civic, socioeconomic
juncture for
than it was twenty years ago, according to UN-Habitat/ and cultural dimensions attached to collective space new planning
CAF, 75 per cent of the world’s cities have higher levels of – spawning slums, informal settlements, informal busi- visions,
strategies,
income inequalities than two decades ago.1 nesses and jobs, hand-to-mouth livelihoods, destitution
policies and
Habitat III comes at the right time not only to and disenfranchisement. By contrast, prosperous cities (as tools that can
renew the international commitment to inclusive cities, defined by the UN-Habitat City Prosperity Index – CPI) transform our
but to also to act as a catalyst for timely dialogue on the make physical space for all through land use regulations, planet of cities
into a planet of
new planning theories and practices as well as the much- planning and housing; socioeconomic space for all through inclusive cities
overdue policies and actions that can move our urban facilitating frameworks as well as decent work opportu-
societies in the direction of inclusive cities (this is part nities and conditions; prosperous cities also make civic
The
of the fundamental components that the New Urban space for all through effective recognition of rights and redistribution
Agenda should include as elaborated in Chapter 10). cultural diversity (Chapter 10). Yet, people continue to of wealth and
be excluded from socioeconomic and cultural spaces, and opportunities
across diverse
places of exclusion coexist more and more with enclaves

4.1
individual
of prosperity, as the following review clearly indicates. abilities
and cultural
Exclusion from socioeconomic backgrounds
that historically
space
People Excluded
characterizes
Within the planning profession, a small but urban dynamics
seems to have
and Places of
influential group of scholars argue for an urban theory of
stalled in many
justice, and for mainstreaming the principles of equity, regions of the
Exclusion 2 democracy and diversity into the everyday workings of
urban space and policies.6 This means that the formal
world

political and socioeconomic spheres make space for


Never before have the cities of this world newcomers, instead of turning access conditions into a
appeared so starkly as they do today as nodes of economic, series of impossible legal, regulatory and other hurdles
social, cultural and political links within self-contained if that effectively maintain the dominance of vested (largely
ever-expanding spaces.3 Never before have so many new- land-based) interests, and other forms of hidden powers Karial slum, in contrast
to structured housing
comers been attracted to these concentrations of wealth as explained in Chapter 6). units to the right. Dhaka,
Bangladesh.
and productive capacity than today – nor these resources In developed countries, where wages are kept
Source: UN Photo / Kibae Park
been so inequitably distributed that “the urban divide”4
between rich and poor has never looked so wide.
The redistribution of wealth and opportuni-
ties across diverse individual abilities and cultural back-
grounds that historically characterizes urban dynamics
seems to have stalled in many regions of the world; this
is largely because the interactions of interests, concerns,
norms and sanctions commonly referred to as “law,” 5 are
73
Chapter 4: The Widening Urban Divide • WORLD CITIES REPORT 2016

1950s and 1960s, such as Arthur Lewis, had argued that


Box 4.1: Global employment vulnerability the formal and informal economies are separate, and that
Poor job quality remains a pressing issue worldwide. The incidence of vulnerable as the formal economy becomes more prosperous, it will
employment – the share of own-account work and contributing family employment, absorb surplus labour from the informal economy and the
categories of work typically subject to high levels of precariousness – is declining more informal economy will cease to exist. And yet, in countries
slowly than before the start of the global crisis. Vulnerable employment accounts for 1.5 as varied as Tunisia and Mexico, rapid economic growth of
billion people, or over 46 per cent of total employment. In both Southern Asia and Sub- the past few decades has been accompanied by an even
Saharan Africa, over 70 per cent of workers are in vulnerable employment. faster growth in the informal economy.
In addition to limited access to contributory social protection schemes, workers Tunisia, for instance, experienced an economic
in vulnerable employment suffer from low productivity and low and highly volatile slump in the 1980s. The country started liberalizing its
earnings. There are also significant gender gaps in job quality. Women face a 25 to 35 economy from 1986 onwards, and its average growth rate
per cent higher risk of being in vulnerable employment than men in certain countries has been steadily increasing since then. It was during this
in Northern Africa, Sub-Saharan Africa and the Arab States. period of fast economic growth that the informal economy
also grew the fastest, accounting for nearly 47 per cent
Source: International Labour Office, 2016b. of the non-agricultural population in the late 1990s.7 In
Mexico, economists not only showed the positive correla-
low by global competition, foreign and local property specu- tion between economic growth and the informal economy,
lation keeps driving housing prices upward, pushing less but they went a step further to show the contribution of
Too many
cities today affluent categories of the population ever farther to the peri- the informal economy to economic growth: the informal
fail to make urban peripheries – including staff of such basic services as economy “provides low-cost labour, inputs, goods, and
sustainable police, hospitals and public transport. In emerging and devel- services to both formal and informal enterprises, and low-
space for
all, not just
oping countries, where hand-to-mouth livelihoods prevent cost goods and services to the general public, especially
physically, capital formation, little is done to acknowledge “urbaniza- poorer households.”8
but also in tion” and to grant effective land and/or housing rights to In Mexico and Tunisia, as in many other coun-
the civic,
millions of urban residents. Such social exclusion has direct tries in the developing world, growth in the informal
socioeconomic
and cultural repercussions on the socioeconomic spaces of our cities. economy is related to globalization. This is the case, for
dimensions In developing countries, the lack of investment from local instance, with the global supply chains in the clothing
attached to dominant classes, results in thin domestic industry on the industry, where for a single firm, the cotton may be
collective
space ground, turning local employment into a collective survival grown in a country where land and labour are cheap, it is
strategy in low capital, low-productivity, low-wage, labour exported to another country where the yarn is produced,
rights-free enclaves. Micro- and family-enterprises produce and then shipped maybe to Bangladesh. Simultaneously,
goods or services in makeshift workshops, if not in the open thread, buttons and other components are manufactured
air like the roadside furniture makers in Nairobi. The predic- in other countries, and brought into Bangladesh. Once
ament is similar in the manufacturing sector, which is often assembled there, the items are exported to high-end
part of international “value chains” which in the name of markets. The firms belong in the formal sector, not the
global competition ignore labour rights. The result is that on workers. In Tunisia, during the country’s fastest growth
the whole, in emerging and developing countries alike, at period, over 54 per cent of the labour force consisted of
times the formal and informal economic spaces hardly make informal workers who were subcontracted by large export-
any difference in terms of labour rights and socioeconomic oriented formal enterprises.9 Amongst these informal
inclusion (Box 4.1). workers, females are predominant, being preferred over
Prosperous cities make physical The world is seeing a sur- males for a number of reasons: willingness to work for
space for all through land use
prising phenomenon in developing lower wages, lower propensity to organize compared with
regulations, planning and housing;
socioeconomic space for all countries today that was hardly antici- male workers, and higher degrees of pliancy.
through facilitating frameworks as pated by economists: as these coun- The story is not too different in developed coun-
well as decent work opportunities tries witness dramatic surges in their tries. Globalization scholars have pointed to the changing
and conditions; prosperous cities
also make civic space for all economic fortunes, they simultane- nature of the global economy and its impact on American
through effective recognition of ously experience a spurt in informal cities, for instance. Immigration flows, outsourcing of jobs
rights and cultural diversity employment. Economists of the to developing countries, and the retrenchment of social
74

Chapter 4: The Widening Urban Divide • WORLD CITIES REPORT 2016


welfare programmes have deeply affected economic life economy12. In the US, for instance, the neighbourhood Immigration
flows,
in Western cities, as Chapter 8 urban economies further of Harlem in New York City was documented to have a outsourcing
expounds. Middle-class workers who until recently had thriving informal economy exceeding one billion dollars.13 of jobs to
secure formal-sector jobs and reliable safety nets now find The findings of the study led a large American bank to developing
countries,
themselves expelled from the labour market. “Expulsions” recognize the financial demand at the bottom of the and the
instead of forms of exclusion are taking place in these pyramid and to open two new branches in Harlem. The retrenchment of
countries with social groups who until just a couple of finding that informality is cyclical, i.e. grows in parallel social welfare
programmes
decades earlier were secure participants in formal labour with economic growth, has led to widespread concern
have deeply
markets.10 Moreover, informal workers in developed that our societies are now “growing unequally.”14 On the affected
countries are mostly undocumented migrants from lower- one hand, the recent past has seen an unprecedented economic life in
income countries who, because of their legal status, fear increase in wealth accumulated, the world’s middle class Western cities

going to the police or seeking out legal help, thus further has grown at a record rate, and income per capita, as well
entrapping them within these informal conditions. It is as capital and property values have increased considerably
these socially and politically excluded groups that make up in most parts of the world. On the other hand, economic
the bulk of Los Angeles County’s informal workforce: in inequalities have increased and incomes have never been
2005, it was estimated that undocumented workers made as polarized as they have in the past two decades. Asia,
up 61 per cent of the informal labour force in Los Angeles for instance, featured the highest economic growth rates
More than
County and 65 per cent for the sole city.11 in 2012, with aggregate annual GDP growth rate reaching two thirds of
Further, evidence shows that the informal seven per cent (2005 purchasing power parity); but ine- the world’s
economy is not just a developing country phenomenon. quality also increased, by four per cent between 1990 and population
lives in cities
Recent scholarship points to the growing informaliza- 2008.15 OECD countries saw their own overall Gini coeffi- that are more
tion of the urban economy in the US, thus challenging cient increase from 0.29 at the end of the 1980s to 0.316 unequal today
the conventional view that the informal economy is just by 2010, with sharp rises in traditionally more egalitarian than 20 years
ago
a transitional phase on the path to an advanced industrial countries like Finland and Sweden (Box 4.2).16

Box 4.2: The rich-poor gap is widening


Income inequalities have become a universal higher inequality even as wealth accumulated inequalities remain the steepest in the world
concern. The world is not only divided by like never before. although this is the only region in the world
differentiated access to opportunities, In 2010 Latin America and the Caribbean where they are decreasing. One in every three
consumption, public spaces and services, remained the most unequal region in the Latin Americans is poor and one in every eight
education, technology and employment, but world with a Gini coefficient slightly below 0.5 lives in extreme poverty. On average, the
more and more by access to income. More in 2010, compared with Africa’s 0.45. Least multiple between the incomes of the poorest 10
than two thirds of the world’s population lives unequal countries were high-income nations per cent and the richest stands at 28, including
in cities that are more unequal today than 20 (with Gini coefficients around 0.30), followed up to 50 in Brazil.23
years ago.18 by Eastern Europe and Central Asia (0.35). Asia The urban Gini ratio for the region
The gap between rich and poor is stood in between (0.4), exactly on the edge of was 0.494 around the year 2010, denoting
widening in developing countries and emerging UN-Habitat’s “international alert line.”21 In an income concentration way above the
economies but also, more surprisingly, in those general statistical terms, a Gini coefficient of, international alert line. In eight countries
countries that were considered as the most say, 0.47 means that the richest 20 per cent – Brazil, Dominican Republic, Colombia,
egalitarian.19 Although in global terms poverty of the population earn slightly more than half Guatemala, Chile, Argentina, Bolivia and
reduced by half from 43 per cent in 1990 to 21 of total income, while the poorest 20 per cent Nicaragua – the ratio is above 0.5. In another
per cent in 2010 and the middle class increased earn only three per cent of that income.22 seven countries – Honduras, Ecuador, Costa
by 450 million people, income inequalities As for urban inequalities, the evolution is Rica, Panama, Paraguay, Mexico and El
continue to grow. According to the World Bank, sharply contrasted across regions, particularly Salvador– inequalities are “high” (between
the world’s Gini ratio increased from 0.65 in the developing world, as summarized below. 0.49 and 0.45), compared with the “relatively
points in 1980 to 0.70 in 2010,20 pointing to Latin America and the Caribbean: high” coefficients of Uruguay and Peru (below
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Chapter 4: The Widening Urban Divide • WORLD CITIES REPORT 2016

0.42 but still above the alert line).24 the income gap was widening and methods of calculation. In various countries
UN-Habitat and CAF have compiled a UN-Habitat has collected data on income/ urban data is available only for one point in
unique mass of data and information on consumption inequality in urban areas in 24 time and in general inequalities remain quite
income/consumption inequality in LAC, countries from national statistics offices and high. Still, the data suggests an urgent need for
involving a database for 320 cities in 18 other official sources over a period of 20 years African countries to address income inequality
countries, which represent more than 85 per (1990-2010). Again, the results are rather since this economic divide has the potential to
cent of the LAC population.25 On this basis, it mixed, and in general terms African cities come hinder development and stall progress.
was determined that overall, urban inequality second only to LAC for unequal incomes and Asia-Pacific: the economic growth rate
dropped from 0.517 in 1990 to 0.494 (Gini consumption, combining the lowest per capita slowed down to around six per cent in 2014
coefficients) in 2010, reflecting the trend in incomes and major social divides in health, from seven per cent one year before, but the
almost two-thirds of cities, with increases in nutrition, education and basic services. region remains the global leader29 for growth
others. The best performing countries were The most unequal cities in the region and – and for poverty reduction, too. Between
Peru (with a 15.4 per cent drop), Uruguay and probably in the world are in South Africa: in 1990 and 2010, more than 716 million Asians
Mexico (14 per cent) and Panama (13.5 per Buffalo, Ekurhuleni (East Rand), eThekwini have been lifted out of poverty, with the rate
cent). Worst performing were Colombia (a 14.5 (Durban), Johannesburg, Port Elizabeth and falling from 54 to 21.5 per cent of the overall
per cent increase in urban inequality), Costa Tshwane (Pretoria), Gini coefficients stand population.30
Rica (14.3 per cent), the Dominican Republic above 0.7, higher than the 0.64 ratio found in This would suggest that economic growth
(9.6 per cent) and Ecuador (5.26 per cent). Lagos, Nigeria. Another seven cities (out of 42 and income inequality do not necessarily go
The UN-Habitat-CAF study shows in the African sample) feature Gini coefficients hand in hand. Still, according to the Asian
significant variances in income and above 0.5 (“very high inequality”). For all Development Bank, inequality in the region
consumption inequality across the urban and these extremes and the high average, though, rose by four per cent of Gini coefficient
the national scales, confirming that between 1990 and 2008 and the trend has
aggregate national values are seldom significant variances in income and consumption apparently continued in various countries
inequality across the urban and the national scales,
apt to describe what happens in all in recent years. In major economic
confirming that aggregate national values are seldom
urban settings (in eight out of 12 of apt to describe what happens in all urban settings powerhouses such as China, India and
the countries, the Gini coefficients of Indonesia, inequality indicators are
the least and the most unequal city diverts 45 seven cities in the sample remain below the deteriorating.
per cent from the national average). The study international alert line (0.4), with “moderate” Whilst the sample of Asian cities with
concluded, “in order to reduce inequalities, degrees of income concentration.27 However, comparable data is very limited, the highest
in addition to a stable economy and growth, from Ethiopia to Congo to Guinea-Bissau to degrees of inequality are found in Hong Kong;
strong institutions, effective social programmes Sierra Leone, these numbers denote a higher Ho Chi Minh City, Viet Nam; and Chiang Mai,
and strong links between the various levels of prevalence of poverty over wealth. Thailand, with Gini coefficients above 0.5.
government are required.” In Peru, for instance, Progress towards equality across same- Least unequal are Chittagong and Dhaka,
the overall urban Gini coefficient decreased country urban areas has been very uneven. Bangladesh; Fuzhou, Xi’an and Benxi, China,
by 15.4 per cent thanks to improved social and Between 2003 and 2013, while income with Gini coefficients around 0.35 and below
fiscal policies, which expanded access to public distribution has improved in six countries – the international alert line – but here again
services and opportunities.26 Algeria, Benin, Côte d’Ivoire, Rwanda, South denoting widespread poverty and poor public
Africa: any available information about Africa and Uganda – it has deteriorated in services. A new sample surveyed by UN-
nationwide or urban income inequality is another six – Botswana, Egypt, Ethiopia, Habitat showed that in all but one of seven
scant and fragmented. Some time ago, the Mozambique, Tanzania and Zambia. The largest cities, inequalities had steepened between the
British Overseas Development Institute (2006) increases in urban income inequality were years 2000 and 2014: Hong Kong, Colombo,
saw inequality on the rise while making recorded in Botswana and Zambia and the most Delhi, Jakarta and Bangkok, with the last two
exceptions for the Gambia, Kenya, Mauritania significant reductions happened in Côte d’Ivoire recording the highest increases. Only in Manila
and Tanzania). Earlier, the UN Economic and Uganda, as per the existing sample.28 All did inequalities remain stable. If anything, this
Commission for Africa (2004) found that in these figures are to be considered with caution, provides some indication of the steeper urban
Ethiopia, Mozambique, Rwanda and Uganda, since data was compiled using various sources inequality at work in the region.
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Chapter 4: The Widening Urban Divide • WORLD CITIES REPORT 2016


A good example of the role local govern- tion, and preference for fair-minded, Many countries ma