SUSTAINABLE URBAN AND HOUSING DEVELOPMENT OECD PERSPECTIVE Tadashi

SUSTAINABLE URBAN AND HOUSING DEVELOPMENT: OECD PERSPECTIVE Tadashi Matsumoto, Ph. D. Coordinator, National Urban Policy, Climate Change and Green Growth Cities, Urban Policies and Sustainable Development, OECD Presentation at the XIX International Academic Conference on Economic and Social Development 12 April 2018, Moscow, Russia

URBAN POLICY IN THE GLOBAL CONTEXT

Better Policies for Better Lives: “Productive Economies, Inclusive Societies” Global Financial Crisis Economic Efficiency Productivity Well-being “How live “ Inclusiveness Cities Environment Sustainability Social Equity

Labour Productivity Growth G 7 Productivity paradox: • ↑technology • ↑skills • ↑integration (GVC)

Bigger cities are often more productive. Yet, it is not fully applicable in all places Labor Productivity of cities per region Source: OECD 2015), The Metropolitan Century: Understanding Urbanization and Its Consequences, OECD Publishing, Paris 5

Urbanisation alone is not enough for economic development 6

City productivity and administrative fragmentation Productivity falls by 6% for a doubling in number of municipalitie s 7

Making Cities Work for All : Cities tend to be more unequal than countries Gini coefficient of household disposable income, 2014 Source: Boulant, J. , M. Brezzi and P. Veneri (2016), "Income Levels And Inequality in Metropolitan Areas: A Comparative Approach in OECD Countries", OECD Regional Development Working Papers, No. 2016/06, OECD Publishing, Paris. DOI: http: //dx. doi. org/10. 1787/5 jlwj 02 zz 4 mr-en

National Urban Policy Frameworks: Why cities matter? • Most people live in cities. Governments that ‘get cities right’ can improve overall well-being. • Cities are also complex dynamic systems, in which the actions of households and firms, as well as the interactions among different strands of public policy, typically have large positive or negative spillover effects on others. • Cities affect national economic, environment and social outcomes. Ø Cities provide opportunities for higher levels of government to address these in a coherent, integrated way. Density of settlement and activity implies greater policy complexity and greater need for policy coherence, particularly in periods of dynamic change. 9

Main lines of work at the OECD • Reviews of metro-regions and national urban policy to identify opportunities to address competitiveness, sustainability and governance challenges (34 metropolitan reviews, 7 national urban policy reviews e. g. , Kazakhstan, 2017) • Horizontal analyses targeting, for example, urban competitiveness, climate change, urban green growth, land use, and housing affordability • Policy dialogue to facilitate knowledge exchange and best practices to inform policymakers’ agendas (e. g. , Roundtable of Mayors and Ministers) • Statistical indicators on urban and metroregions – the fundamental tools for enhancing crosscountry comparison and improving policy evaluation (OECD Regional Database, OECD Metro Database) 10

NATIONAL URBAN POLICY

Policy coherence across levels of government requires national leadership • National policies affect urban development Ø National legislation establishes the ground rules for cities. Ø National governments intervene directly in a large number of policy domains that affect cities – yet explicit national urban policies are often narrowly conceived. Ø Inter-municipal co-ordination needs support from above. • Major domestic policy challenges require a multi-level approach: Ø Neither cities nor national governments alone can address the main competitiveness challenges. Ø Environmental policies have a strong, place-based dimension, especially in cities. Ø Inclusive growth requires both economy-wide and local measures. 12

Policy coherence is often lacking • National governments intervene directly in a large number of policy domains that affect cities – yet explicit national urban policies are often narrowly conceived. • Fiscal frameworks often contradict sectoral policies. Ø Example: property taxes and urban sprawl. Ø Example: fiscal rules and the management of transfers. • Land-use, economic development and transport planning are often segregated. Ø Example: congestion charges and parking fees. Ø Example: development bottlenecks, “drainage” projects. • Transversal policy challenges are often reframed to “fit” sectoral policy templates. Ø Example: accessibility is redefined as mobility. This can increase sprawl, emissions and even (paradoxically) the fragmentation of urban space. 13

Interactions among pillars are the key 14

The three-fold aim of NUPRs • Improve co-ordination of national-level policies that affect urban development • Increase the coherence between national and sub-national/ city-level policies and correct perverse incentives • Provide levers to improve coordination across municipalities within urban areas 15

National Urban Policy Programme (NUPP) • Launched during the Habitat III Conference in Quito, Ecuador, UN-Habitat, OECD, and Cities Alliance. It draws from history of partnership on National Urban Policy (NUP) between three organizations. • The joint initiative aims to contribute to the implementation of the NUA and other global urban agendas and to achieving sustainable human settlements for all, leaving no one behind, through the development of NUP.

Five pillars of NUPP

LAND, PROPERTY AND HOUSING AFFORDABILITY

Land property are by far the most important forms of capital U$ billion PPP Disaggregated capital stock (six-country sample) 35000 30000 86% of the total capital stock, corresponding to USD 249 trillion (extrapolated for the entire OECD) 25000 20000 15000 10000 5000 0 Property (buildings, infrastructure) Land Machinery & Inventories Other natural Intellectual Equipment resources property Other non financial assests Cultivated biological resources Note: Data includes Australia, Canada, Czech Republic, France, Japan and Korea. Source: OECD National Accounts Table 9 B

Housing costs have risen strongly in most OECD countries Inflation-adjusted property prices (1995=100) Australia Belgium Canada Switzerland Denmark Spain Finland France Germany United Kingdom Ireland Italy Japan Netherlands Norway New Zealand Sweden United States Average 400 350 300 250 200 150 Swede n Norway Ireland UK Germa ny Japan 100 50 0 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Housing construction in economically successful urban areas has not kept up with growing demand.

• Land use regulations should aim to prevent sprawl… • …but have to provide sufficient space to construct housing for growing populations • Otherwise, house prices rise Annual change house prices (2000 -2012) Restrictive land use policies can lead to rising housing costs 6% 5% 4% 3% 2% 1% 0% -1% -2% -3% -4% -1. 50% -1. 00% -0. 50% 0. 00% 0. 50% Annual change in developed land per capita (2000 -2012) 1. 00%

Jo b In iv no ity E va ac ff ti. o ce on S f ss er pu vi i b. ce bil it se s rv ac y ic es ce ss de S oc live ia r le y qu it y S a U P fe rb ol ty an lu ti gr on ee E re ne n d rg uc y ti S ef on us f i ta ci in en T ab ra cy ff le i c m fl od ow e S ch ub oi je ce ct H iv ea N e et w lt el h pe H l-b r o ca ei us ng in pi g ta co be st ne s fi t/ co st ct ro du P Costs and benefits of compact urban form Per capita costs/benefits of 10% increase in density (in US$ equivalent) Owner Renter External effects $200 $150 $100 $50 $ -$50 -$100 -$150 -$200 -$250 -$300

THANK YOU Contact: Tadashi. MATSUMOTO@oecd. org