The Big Bang for Cities: Four Themes That Drove An Urban 2015

Published: Wednesday, December 30th, 2015 by Lenora

Last year, 2015, was the Big Bang for cities. The Ted Talk-listening “popular intelligentsia” was suddenly as fascinated by the best managed and most sustainable cities as the most insecure and exposed. Whether stories of rapid, chaotic urban growth in developing economies or the path to developing dynamic, inclusive, sustainable and resilient cities, urbanization has truly landed as this generation’s major challenge and opportunity.

Here are some favorite topics and articles from 2015, including a few of our own. We assume you can find good content on New York, London, Paris and any other major developed capital anywhere.

By contrast, the focus of DevelopingSmartCities.org is on key cities and markets in the developing economies. Where efforts in major developed economy cities are mentioned here, it’s because they point to a trend or a replicable effort.

The 2015 themes that pushed cities like Mumbai, Mexico City and Manila, among others, into the limelight and over the edge were: (1) smart cities, (2) sustainability and climate change, (3) inclusion and social justice and (4) business, finance and investment. In fact, many of these themes wove together in ways that raised the profile of the urban dialogue – and that 2016 will certainly test.

Smart Cities. The frenzy for “smart cities” stirred the potential to digitize and process every aspect of urban life through computers. Even “old” urban infrastructure issues, like urban water, transport and energy, were swept into the smart cities blogosphere where they were given new life in articles, conferences, prizes, books, academic initiatives and organizations, of which some of the most interesting are:

  • Narendra Modi’s India Smart Cities Challenge launched a large-scale competition for India’s cities to leverage technology to “promote economic growth, strengthen governance, and improve results for urban residents.”
  • City Science combines MIT’s deep academic roots in urban planning, architecture, engineering, analytics and data with the savvy, cool and do-tank approach of the MIT Media Lab. MIT also has a long history of engaging on international development issues.
  • Rethinking Smart Cities from the Ground Up,published by Nesta, the UK social innovation NGO, brought together top-down approaches and bottom-up technologies for citizens with a focus on information sharing, rides and goods, community security, improved air quality, direct democracy, collective planning and more. Beijing and Mumbai figure as strongly as London and Paris here.

Sustainability and Climate Change. In the run-up to and at the COP21 climate talks in Paris, mayors spoke and acted forcefully on the role of climate action at the municipal level:

  • The IFC has been energizing green housing with a smart cities-leaning, technology solution that aims to broaden the audience for green housing, as well as facilitate financing of and investment in green project development.
  • The C40 Cities Climate Leadership Group (C40) and research partner Arup released Climate Action in Megacities (CAM 3.0), “a groundbreaking and definitive assessment of how the world’s leading mayors have taken on the urgent challenge of climate change.”
  • Our article, COP21, Global Affordable Housing and Resilient Communities,” made the connections between the big picture at the government and national level and the call-to-action for real estate developers and investors.

Inclusion and Social Justice. “Occupy” raised the temperature on rational, urban engineering thinking to themes around poverty, education, security, integration and civic engagement in cities.

  • The State of Housing Microfinance, authored by Habitat for Humanity’s Center for Innovation in Shelter and Finance, highlighted the success of small-scale finance for home improvement. Microfinance institutions’ borrowers for housing products are majority self-employed women as with traditional lending. Improvements can include upgrades for energy efficiency and renewable energy.
  • Takeaways for Housing Innovators: Hardware vs Software Approaches to Smart Cities looked at how people-focused affordable housing businesses create financial and intangible value.
  • With the Rio Olympics coming up in a Brazil mired in scandal and stagnation, scrappy, creative NGO Catalytic Communities has taught us about the strength and vibrancy of Rio’s favelas, as well as the controversies of and trade-offs made by the municipal government in displacing those communities.

Business, Finance and Investment. Combining actionable amounts of money with an endorsed and validated mission will always, for better or worse, draw talent, ideas and vehicles for both. I would argue that this factor, the mobilization of capital for urban “impact investment,” provided a big push for cities in 2015 that will grow in 2016:

  • REITs in South Africa have started to improve liquidity for developers of affordable housing. See this short article by the Oxford Business Group and the portfolio overview of sole residential REIT Indluplace).
  • Finance and investment innovation and deregulation drove the beginnings of a shift in India (as with new FDI rules and an embrace of PPPs) and several countries in Africa (summarized by Kecia Rust of the Center for Affordable Housing Finance in Africa or CAHF here). CAHF’s Housing Finance Yearbook for 2015 expands on finance, business and country studies.
  • Development finance institutions like KfW of Germany actively built out their affordable housing portfolios with a policy emphasis and investment thesis driven by environmental sustainability considerations, pioneered in Mexico’s EcoCasa. Look at Paquime, an EcoCasa program participant, and investments in International Housing Solutions in South Africa.
  • The new Green Bank Network being launched by the NRDC starts with one emerging market partner, GreenTech Malaysia, but with the potential and interest of more. As Green Banks have financed major urban energy initiatives like Property Assessed Clean Energy (PACE) and energy efficiency proejcts in the US, perhaps this bodes well for similar efforts elsewhere, like China and India.
  • Currently focused on New York and not internationally, Google hired former Bloomberg LP CEO Dan Doctoroff to run Sidewalk Labs. Tumml, a new accelerator in San Francisco, also drew participation from big urban names, as well as funders, to help new (mostly) social ventures address a range of challenges in city life.
  • Still, DevelopingSmartCities.org had to ask: “Are Smart Cities Startups Focusing on Inclusion?” It’s starting, and more is coming.

Where is housing in all this? Housing is embedded in many places here and in the pages of DevelopingSmartCities.org. These articles above are largely about the urban landscape for housing. Check in here for our own favorite housing stories and leaders.