UN-Habitat & New Urban Agenda

6. Financing Urbanization (FI)

Article 14. To achieve our vision, we resolve to adopt a New Urban Agenda guided by the following interlinked principles:

(a) Leave no one behind, by ending poverty in all its forms and dimensions, including the eradication of extreme poverty; by ensuring equal rights and opportunities, socioeconomic and cultural diversity, and integration in the urban space; by enhancing liveability, education, food security and nutrition, health and well-being, including by ending the epidemics of HIV/AIDS, tuberculosis and malaria; by promoting safety and eliminating discrimination and all forms of violence; by ensuring public participation providing safe and equal access for all; and by providing equal access for all to physical and social infrastructure and basic services, as well as adequate and affordable housing;

(b) Ensure sustainable and inclusive urban economies, by leveraging the agglomeration benefits of well-planned urbanization, including high productivity, competitiveness and innovation; by promoting full and productive employment and decent work for all; by ensuring the creation of decent jobs and equal access for all to economic and productive resources and opportunities; and by preventing land speculation, promoting secure land tenure and managing urban shrinking, where appropriate;

(c) (Also CC) Ensure environmental sustainability, by promoting clean energy and sustainable use of land and resources in urban development; by protecting ecosystems and biodiversity, including adopting healthy lifestyles in harmony with nature; by promoting sustainable consumption and production patterns; by building urban resilience; by reducing disaster risks; and by mitigating and adapting to climate change.

Article 15(c)(iv) The support of effective, innovative and sustainable financing frameworks and instruments enabling strengthened municipal finance and local fiscal systems in order to create, sustain and share the value generated by sustainable urban development in an inclusive manner.

Article 43. We recognize that sustained, inclusive and sustainable economic growth, with full and productive employment and decent work for all, is a key element of sustainable urban and territorial development, and that cities and human settlements should be places of equal opportunities allowing people to live healthy, productive, prosperous and fulfilling lives.

Article 45. We commit ourselves to developing vibrant, sustainable and inclusive urban economies, building on endogenous potentials, competitive advantages, cultural heritage and local resources, as well as resource-efficient and resilient infrastructure; promoting sustainable and inclusive industrial development and sustainable consumption and production patterns; and fostering an enabling environment for businesses and innovation, as well as livelihoods.

Article 47. We commit ourselves to taking appropriate steps to strengthen national, subnational and local institutions to support local economic development, fostering integration, cooperation, coordination and dialogue across levels of governments and functional areas and relevant stakeholders.

Article 60. We commit ourselves to sustaining and supporting urban economies to transition progressively to higher productivity through high-value-added sectors, by promoting diversification, technological upgrading, research and innovation, including the creation of quality, decent and productive jobs, including through the promotion of cultural and creative industries, sustainable tourism, performing arts and heritage conservation activities, among others.

Article 107. (Also HSU) We will encourage the development of policies, tools, mechanisms and financing models promoting access to a wide range of affordable, sustainable housing options, including rental and other tenure options, as well as cooperative solutions such as co-housing, community land trusts and other forms of collective tenure that would address the evolving needs of persons and communities, in order to improve the supply of housing (especially for low-income groups), prevent segregation and arbitrary forced evictions and displacements, and provide dignified and adequate reallocation. This will include support to incremental housing and self-build schemes, with special attention to programmes for upgrading slums and informal settlements.

Article 118. (Also UBS) We will encourage national, subnational and local governments to develop and expand financing instruments, enabling them to improve their transport and mobility infrastructure and systems, such as mass rapid-transit systems, integrated transport systems, air and rail systems, and safe, sufficient and adequate pedestrian and cycling infrastructure and technology-based innovations in transport and transit systems to reduce congestion and pollution while improving efficiency, connectivity, accessibility, health and quality of life.

Article 119. (Also UBS) We will promote adequate investments in protective, accessible and sustainable infrastructure and service provision systems for water, sanitation and hygiene, sewage, solid waste management, urban drainage, reduction of air pollution and storm water management, in order to improve safety in the event of water-related disasters; improve health; ensure universal and equitable access to safe and affordable drinking water for all, as well as access to adequate and equitable sanitation and hygiene for all; and end open defecation, with special attention to the needs and safety of women and girls and those in vulnerable situations. We will seek to ensure that this infrastructure is climate resilient and forms part of integrated urban and territorial development plans, including housing and mobility, among others, and is implemented in a participatory manner, considering innovative, resource-efficient, accessible, context-specific and culturally sensitive sustainable solutions.

Article 130. (Also NUP) We recognize that sustainable urban development, guided by prevailing urban policies and strategies, as appropriate, can benefit from integrated financing frameworks that are supported by an enabling environment at all levels. We acknowledge the importance of ensuring that all financial means of implementation are firmly embedded in coherent policy frameworks and fiscal decentralization processes, where available, and that adequate capacities are developed at all levels.

Article 131. We support context-sensitive approaches to financing urbanization and enhancing financial management capacities at all levels of government through the adoption of specific instruments and mechanisms necessary to achieve sustainable urban development, recognizing that each country has the primary responsibility for its own economic and social development.

Article 132. We will mobilize endogenous resources and revenues generated through the capture of benefits of urbanization, as well as the catalysing effects and maximized impact of public and private investments, in order to improve the financial conditions for urban development and open access to additional sources, recognizing that, for all countries, public policies and the mobilization and effective use of domestic resources, underpinned by the principle of national ownership, are central to our common pursuit of sustainable urban development, including implementation of the New Urban Agenda.

Article 133. (Also PV) We call on businesses to apply their creativity and innovation to solving sustainable development challenges in urban areas, acknowledging that private business activity, investment and innovation are major drivers of productivity, inclusive growth and job creation, and that private investment, particularly foreign direct investment, along with a stable international financial system, is an essential element of development efforts.

Article 134. (Also Y) We will support appropriate policies and capacities that enable subnational and local governments to register and expand their potential revenue base, for example, through multipurpose cadastres, local taxes, fees and service charges, in line with national policies, while ensuring that women and girls, children and youth, older persons, persons with disabilities, indigenous peoples and local communities, and poor households are not disproportionately affected.

Article 136. We will support the development of vertical and horizontal models of distribution of financial resources to decrease inequalities across subnational territories, within urban centres, and between urban and rural areas, as well as to promote integrated and balanced territorial development. In this regard, we emphasize the importance of improving the transparency of data on spending and resource allocation as a tool for assessing progress towards equity and spatial integration.

Article 137. We will promote best practices to capture and share the increase in land and property value generated as a result of urban development processes, infrastructure projects and public investments. Measures such as gains-related fiscal policies could be put in place, as appropriate, to prevent its solely private capture, as well as land and real estate speculation. We will reinforce the link between fiscal systems and urban planning, as well as urban management tools, including land market regulations. We will work to ensure that efforts to generate land-based finance do not result in unsustainable land use and consumption.

Article 138. We will support subnational and local governments in their efforts to implement transparent and accountable expenditure control instruments for assessing the necessity and impact of local investment and projects, based on legislative control and public participation, as appropriate, in support of open and fair tendering processes, procurement mechanisms and reliable budget execution, as well as preventive anti-corruption measures to promote integrity, accountability, effective management, and access to public property and land, in line with national policies.

Article 139. We will support the creation of robust legal and regulatory frameworks for sustainable national and municipal borrowing, on the basis of sustainable debt management, supported by adequate revenues and capacities, by means of local creditworthiness as well as expanded sustainable municipal debt markets when appropriate. We will consider the establishment of appropriate financial intermediaries for urban financing, such as regional, national, subnational and local development funds or development banks, and including pooled financing mechanisms, which can catalyse public and private, national and international financing. We will work to promote risk mitigation mechanisms such as the Multilateral Investment Guarantee Agency, while managing currency risk, to reduce the cost of capital and to stimulate the private sector and households to participate in sustainable urban development and resilience-building efforts, including access to risk transfer mechanisms.

Article 140. We will support the development of appropriate and affordable housing finance products and encourage the participation of a diverse range of multilateral financial institutions, regional development banks and development finance institutions, cooperation agencies, private-sector lenders and investors, cooperatives, moneylenders and microfinance banks to invest in affordable and incremental housing in all its forms.

Article 141. (Also UBS) We will also consider establishing urban and territorial transport infrastructure and service funds at the national level, based on a variety of funding sources ranging from public grants to contributions from other public entities and the private sector, ensuring coordination among actors and interventions as well as accountability.

Article 142. (Also PV) We invite international multilateral financial institutions, regional development banks, development finance institutions and cooperation agencies to provide financial support, including through innovative financial mechanisms, to programmes and projects for implementing the New Urban Agenda, particularly in developing countries.

Article 143. (Also CC) We support access to different multilateral funds, including the Green Climate Fund, the Global Environment Facility, the Adaptation Fund and the Climate Investment Funds, among others, to secure resources for climate change adaptation and mitigation plans, policies, programmes and actions for subnational and local governments, within the framework of agreed procedures. We will collaborate with subnational and local financial institutions, as appropriate, to develop climate finance infrastructure solutions and to create appropriate mechanisms for identifying catalytic financial instruments, consistent with any national framework in place to ensure fiscal and debt sustainability at all levels of government.

Article 145. We support the use of international public finance, including official development assistance, among others, to catalyse additional resource mobilization from all available sources, public and private, for sustainable urban and territorial development. This may include the mitigation of risks for potential investors, in recognition of the fact that international public finance plays an important role in complementing the efforts of countries to mobilize public resources domestically, especially in the poorest and most vulnerable countries with limited domestic resources.

Article 152. (Also RCD) We will promote capacity development programmes on the use of legal land-based revenue and financing tools, as well as on real estate market functioning for policymakers and local public officials, focusing on the legal and economic foundations of value capture, including the quantification, capturing and distribution of land value increments.