Challenges and Opportunities in a Rapidly Urbanizing World

Based on comments delivered October 8, 2010 at a session sponsored by the International Housing Coalition, Foreign Policy magazine and the New America Foundation

Urbanization: The Debate Is On!

Increasingly, the debate on urbanization bears similarities to the debate on climate change, in that everyone knows that it's happening—developing world cities are growing rapidly due to immigration from rural areas—but doubters continue to argue about trends and statistics to see if they can disprove it, and delay the response.

The truth: we all know that current action is grossly inadequate. And while most policymakers have a rough idea of what they need to do about urbanization, the political decisions are very difficult.  

Hopefully, in the urbanization debate, we won’t wait until the glaciers disappear before we decide that it’s time to do something. Yet current trends are pointing in that direction.

CONCEPTUAL CHALLENGES IN THE URBANIZATION DEBATE: WHAT SHOULD POLICYMAKERS DO?

The first challenge for policymakers—and largely still missing from public debate—is to accept urbanization as a fact. 

It’s happening and will continue to happen. And it needs to be brought into the formal planning and budgetary processes of public and private authorities, from national governments to development agencies and, of course, local governments, which is where the bulk of urbanization is going to be managed.

In fact, urbanization must be embraced as an on-balance-sheet reality.

On the local level, policymakers need a better handle of the facts, data and trends: too many mayors don’t know who is in their city, how big their city is, where the population came from, and how poor it is. Evidence-based policymaking is needed to deal properly with urbanization.

A second challenge for national policymakers is to enlist and empower local government. Urbanization may be a global challenge, but it has to be locally managed. It’s in the small towns, the names of cities that you and I don’t know, that the bulk of urbanization is taking place.

In that sense, there must be a focus on a “system of cities” because future economic growth is going to be highly dependent on how efficient cities are in trading and connecting with other cities. This is something that has been well understood on the east coast of China.

Policy-Makers Should Adopt Long-Term, Flexible Planning Frameworks

Accepting urbanization and bringing it formally into the planning process of private and public authorities is a crucial first step.

Until now, the planning profession has been a very rule-bound and focused on control and regulation. But this doesn't reflect how cities are growing.

City managers urgently need a far more flexible approach that is responsive to the dynamics of urbanization. For example, in many cities there exists a mismatch between municipal boundaries and the functionality of the city; the jurisdiction is one thing and the reality of the city is something else.

It’s very difficult to govern a city when your jurisdictional and administrative boundaries are not aligned, or when your city plans are 30 years out of date.

Policymakers, Accept Current Informality as Reality!

Call them slums or informal or illegal areas...they are the reality and the starting point. The response should be to introduce policies that systematically formalize and incorporate the slums over a period of time. That is how cities will change.

Policy makers should stop looking for the silver bullet that will fix things—it is, rather,  the dull stuff of good governance that will change cities.

At a household level, the challenge is to ask: what policies will help the shack become a house? What policies will help the slum-dweller become a citizen, and the slum become a suburb?

The informal dynamic is what often drives transformation in cities.

In this respect, policy makers need to study the evidence and accept, in the case of shelter delivery, that the vast majority of housing stock in the world today is not produced by the formal or private sectors, but by the urban poor themselves.  

And that should be a central plank of formal housing policy: stop stopping the poor from building their house and, rather, help them to do it better, formally, as part of on-balance-sheet budgeting.

All of these challenges require changes in political debate and behavior, and repetitive, positive action over time. Not magic—just good policies that are fair, well thought out, and consistently followed.

PRACTICAL ISSUES TO CONSIDER IN THE URBANIZATION DEBATE

The bulk of urbanization is taking place in non-metropolitan, secondary cities—which is where the resource challenges are the most intense.

What practical elements must a policymaker promote?

Fix the Urban Land Market

The first challenge is to fix the dysfunctional urban land markets that tend to dominate in most countries and cities.

This is of course easier said than done because these land markets are often tied up with power, politics, and patronage.  A well-functioning and open land market lets everyone know who owns the land, how they got it, and how it can be transferred. It ensures open access to information as well as easier transferability and release of land.

In most cities, outdated regulations constrain urban land markets. This is the case for cities in India, for example.  

Policymakers should adopt  a city-wide view that looks at the overall economic, environmental and social health of the city, rather than just individual  parcels of land. In other words, a citywide planning view is absolutely essential. If nearly half of a city is a slum, it’s not a slum problem but a city problem that requires a fundamental rethinking of the city in its entirety.  

Clearly, the challenge of slums is structural and cannot be solved by `projects’, however well-meaning.

Land market policies that allow for increased densities pay particular attention to the location of the urban poor. Currently the dominant, de facto policy is that the poor get displaced to either the most dangerous land, as seen during the recent floods in Manila, or as far as possible from the city center, thereby adding to the long-term structural failure of the city to function as it should.

Extend Services

Beyond the provision of well-located, affordable land, another practical challenge for policymakers is to gradually formalize and extend services such as water, sanitation, solid waste, education, healthcare, and more to the entire city population (including both backlogs and future planning). 

Failure to deal with this on a formal basis can lead to huge price distortions within markets, with the poor paying more for the same unit of service as the wealthy in the same city. It also leads to the creation of parallel markets, which is worrying for a city's long-term security, since parallel markets can give rise to parallel systems of governance.

If the local government does not provide an essential service, someone else will, putting them in a position of power and authority over those on the service-receiving end. Prime examples of this power transfer can be found in Rio de Janeiro's favelas, where informality and illegality end up empowering slumlords, weakening civil authority and the rule of law. Ultimately, these developments weaken the poor.

Recognize and Accept

A third practical step that’s important: acknowledge the permanence of the urban poor and act accordingly, with a recognition of urban citizenship and the right of the poor to have access to the opportunities and responsibilities that come with being part of a long-term, stable community.

Far too often, this outlook is missing in policy responses.

In addition to securing access to land and services, urban citizenship involves providing access to employment opportunities; the informal sector should be seen as an essential part of the private sector.

Unfortunately, local authorities frequently destroy employment opportunities by dismantling the informal markets—and without offering alternatives. Urban citizenship also requires the extension of those municipal services, which are almost never in the public debate, such as security.

Urbanization Challenges: Enormous and Complex

To contend successfully with urbanization, a gradual and systematic process of formalizing the informal must take place, with incorporation and inclusion the hallmarks of the undertaking.

It's in this way that cities will be created—and societies stabilized.