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Cities Are Taxing Ride-Hailing Services Like Uber and Lyft. Is This a Good Thing?

Thu, 2018-08-09 18:28

São Paulo is implementing a tax on ride-haling services to mitigate traffic congestion and fulfill the goals in the city’s mobility plan. Photo by Arnaud Matar/Flickr

With ride-hailing services like Uber and Lyft continuing to gain popularity and drawing attention for their impact on congestion and other urban ills, cities from Washington to São Paolo are moving to the seemingly inevitable next step: special taxes.

This is unsurprising. Recent researchshows that ride-hailing services are contributing to dropping public transport rates and increased private vehicle travel on already-clogged streets.

However, new taxes and fees shouldn’t just raise revenue. They can do more than that: they can make cities more livable and transport more sustainable. If ride-hailing is taxed, the mechanism and revenue should be used in carefully targeted ways that improve urban mobility overall.

Taxes on Ride-Hailing Enter the Scene

More than a handful of governments have enacted or are considering fees or taxes, that range from flat-rate fees per ride to taxing as a percent of the ride to systems that target certain types and locations of trips.

These take a variety of forms. For example, Mexico City charges 1.5 percent of ride fare; Washington, D.C., recently raised its tax from 1 to 6 percent of ride fare. Massachusetts levies a 20-cent tax on every trip. Porto Alegre has a monthly fee per licensed vehicle.

A full inventory of city measures to gain revenue from ride-hailing services is provided in a spreadsheet compiled by WRI Ross Center for Sustainable Cities.

Improving Mobility for the City

While new taxes bring in new revenue, these monies aren’t necessarily making it easier to get around. For example, in Rhode Island a 7 percent tax on ride-hailing sends revenue directly to the state’s general fund. In Philadelphia, a 1.4 percent tax sends money mostly to schools and the remaining third to the city’s parking authority. These taxes are also not high enough to change travel behavior in a meaningful way, since transport can sometimes be less sensitive to higher prices.

A tax or charge on ride-hailing—and private traffic as a whole—should improve cities’ transport systems overall, as stated in the Shared Mobility Principles for Livable Cities: “Every vehicle and mode should pay their fair share for road use, congestion, pollution, and use of curb space. The fair share shall take the operating, maintenance and social costs into account.”

While ride-hailing trends are still changing, and will continue to change as technologies evolve, here are considerations for any city to contemplate in levying taxes that not only raise money but improve mobility for residents too:

1. Encourage more sustainable trips for all users.Any discussion should begin with a consideration of allvehicle traffic. People driving their own private cars continue to dominate traffic, and cause congestion, in most cities.

Places like London, Singapore and Stockholm are known for their congestion charges, but no city has yet comprehensively factored in ride-hailing.

Efforts to charge all road users are bubbling up, however. New York City flirted with a proposal to implement a congestion charging zone coupled with ride-hailing fees, but the State of New York balked and implemented only the ride-hailing fees, leaving anyone driving their own personal car into Manhattan’s central business district untouched.

If cities are going ahead with taxes only on ride-hailing, they should encourage sustainable and shared travel over single-occupant rides. This means taxing ride-hailing as a percent of the fare or indexing to distance travelled, rather than a flat fee that would be the same regardless of the ride fare or distance. Most cities are already going this route.

Moreover, shared rides can be taxed at a lower rate than solo rides, or rather, solo rides could be taxed more to incentivize pooled rides. A current proposal in Washington, D.C., aims to reduce the planned tax to 1 percent for pooled rides.

2. Promote equity and access. Taxes should encourage service to transit-poor areas of the city and connectivity to transit generally. Most especially, they shouldn’t hinder new mobility services where they may provide low-cost rides to residents in low-income areas or areas poorly serviced by public transport.

São Paulo, the first city to regulate ride-hailing in Brazil, applies its taxaccording not only to vehicle miles traveled but also equity factors such as whether a driver is a woman and whether the vehicle is accessible to the handicapped. Shared, electric/hybrid, off-peak and weekend trips are all further discounted. A next consideration of cities may be how to incentivize integration with public transit or access to poorly service areas.

3. Invest revenue in multiple modes.Revenue from ride-hailing taxes, like many existing gas taxes or subway fares, should go toward improving mobility systems. It’s also important to support other modes of transport beyond the large public transit systems most commonly assumed to suffer from ride-hailing (like metro rail and buses). Improving road safety or adding bicycle lanes and pedestrian spaces are also ways to support a more holistic approach to urban transport.

Washington, DC’s 6 percent tax on all ride-hail fares will fund the metro area’s public transport agency, yet it is limited to public transport and not aimed at increasing cycling or walking. Fortaleza, Brazil, on the other hand, reduces its 2 percent tax on every trip to 1 percent for companies that make contributions towards urban mobility projects, such as sidewalks, bus lanes, bicycle lanes and bikeshare stations.

Ironically, a more useful guide may be London’s congestion charge, which exempts for-hire vehicles such as ride-hailing services. To reduce traffic in highly-congested areas, the city charges all cars entering central London and uses the £1.7 billion ($2.2 billion) revenue to improve bus services, bicycle commuting and walking, and road safety. And recently, Transport for London is proposing expansion of its congestion charge to for-hire vehicles.

How Does Ride-Hailing Fit the Bigger Picture?

As new mobility services change cities and the way people move, today’s decisions on taxes and other regulations can help shape a more sustainable mobility for all. There is more to consider, in terms of how to tax, how much to charge and where to send revenues—but taking a more holistic approach to understanding the impact of those policies is a good start.

This article was originally published on WRI Insights.

Ben Welle is Global Health & Road Safety Manager at WRI Ross Center for Sustainable Cities.

Guillermo Petzhold is Urban Mobility Specialist at WRI Brasil.

Francisco Minella Pasqual is an Urban Mobility Intern at WRI Brazil.

Toward Thriving Cities for All: Our 2017 Impact

Fri, 2017-12-22 14:13

Analysis by WRI Brasil helped lead to a new federal law in 2017 regulating the construction of 600,000 homes over the next two years. Photo by WRI Brasil

2017 was a tumultuous year in some respects. We’ve seen major natural and man-made disasters, disruptive new politics in many countries, and an upswing in carbon emissions. But it was also a year that strengthened the role of cities at the UN climate summit and we saw countless reminders that there are many good people working to build a better tomorrow.

Our work as a global organization working in more than 60 cities gives us a unique opportunity to see this is true. I am constantly amazed at the many projects and initiatives underway to make cities more sustainable, more equitable and more prosperous places. WRI Ross Center is committed to helping cities become the best version of themselves, and we’re committed to the time and teamwork we know is required to reach that goal. This is not an easy process or a linear one.

That said, there were remarkable stories of urban change around the world in 2017. Please find below our top outcomes as a program, none of which would have been possible without close collaboration with governments, partner organizations and engaged citizens. These are significant changes that will positively impact the lives of millions of people, help avoid greenhouse gas emissions equivalent to those of the entire country of Panama, and encourage billions of dollars in new investment. (For more, see our Impact page, recently updated for the last year.)

Major highlights include:

India Adopts Landmark National Transit-Oriented Development Policy

WRI India contributed technical expertise to inform the Indian Ministry of Urban Development’s new National Transit Oriented Development Policy. This policy represents a paradigm shift in the way the government approaches urban development, investing $30 billion in mass transit systems across the country. It highlights the government’s resolve to address sprawl and unplanned growth and the associated negative environmental and human consequences.

Bhopal Introduces India’s First Fully Automated Public Bike-Sharing System

Bhopal launched India’s first fully automated, public bike-sharing system with 500 bicycles and 60 docking stations. Within three months of operation, the system had more than 20,000 riders, and its estimated to have mitigated 5,325 kilograms of CO2 emissions to date. WRI India spearheaded system design, business model development, and tender documentation and hosted workshops to engage technology suppliers, financing institutions and public agencies.

Chinese and Indian Cities Reimagine Waste and Wastewater

Waste-to-energy technologies capture clean energy, reduce greenhouse gas emissions, and have added economic benefits. WRI India and WRI China engaged with government agencies, city leaders and service providers using a circular economy methodology to help cities reimagine waste and wastewater. The teams analyzed methods; shared knowledge of the risks associated with untreated sludge and the benefits of its reuse; and established relations between decision-makers, government agencies and the private sector in multiple cities.

Safe System Approaches Adopted in Colombia, India and México

WRI Ross Center teams played crucial roles in introducing and advancing Safe System approaches to road safety in three countries adopting innovative new policies. Bogotá (Colombia), Mexico City, and the state of Haryana (India) are pioneers for Safe System, or Vision Zero, approaches, which put forth the idea that although human errors on the road are inevitable, deaths and injuries should not. Each year, 1.25 million people die in road traffic crashes, nearly 90 percent in low and middle-income countries, half of those in cities.

Brazil Commits to More Compact, Connected Development for Largest Social Housing Program

WRI Brasil conducted a country-wide investigation evaluating the social, economic and environmental costs of the design principles of Brazil’s largest social housing program, Minha Casa, Minha Vida. Analysis and a pilot project in Rio Grande showed the added benefits of more compact, connected and coordinated planning – at no added cost – and helped lead to a new federal law regulating the construction of 600,000 homes, benefiting more than 1.8 million people over the next two years.

Belo Horizonte Launches First Citywide Corporate Mobility Plan

After partnering with the State Government of Minas Gerais to improve the commute of its 17,000 government employees, WRI Brasil developed a guide to creating corporate mobility plans. The success of this partnership led Belo Horizonte to develop a citywide policy that encourages large companies, schools and universities to take action in fostering sustainable mobility and help the city reduce car dependency.

Mexico City Commits to Scaling-up Energy Retrofit Efforts

WRI Mexico won a national bidding process to prepare terms of reference for Mexico City to carry out energy audits for public buildings and retrofit them. WRI Ross Center provided strategic direction and facilitation through analytical work and a series of meetings with stakeholders. As an active member of the Building Efficiency Accelerator network, Mexico City has also received support from global partners.

Congratulations to all of these cities and all of those involved in making these projects a success. We look forward to many more in 2018!

Ani Dasgupta is the Global Director of WRI Ross Center for Sustainable Cities, WRI’s program that galvanizes action to help cities grow more sustainably and improve quality of life in developing countries around the world.

New Transited-Oriented Development Policy Has Big Implications for India’s Cities

Wed, 2017-08-23 14:50

A hypothetical development using transit-oriented development principles along a metro rail. Graphic by Neha Mungekar and Nikhil Chaudhary/WRI India

India’s burgeoning cities are famous the world over for their startling vibrancy – and, sometimes, their startling problems. A new national policy, enshrining more transit-friendly development principles, aims to steer urban planning in the world’s largest democracy towards more compact and pedestrian-friendly neighborhoods and streets.

The World Bank projects that India will lead the global urban surge in the decades ahead, adding 404 million urbanites by 2050. However, to date, much of this growth has been unplanned, leading to sprawl and all its attendant effects like longer trips, higher use of private vehicles and more air pollution. The New Climate Economy estimates sprawl could cost India’s economy as much as 6 percent of GDP every year by 2050. Horizontal growth is even cutting into the hinterlands. In 2010, McKinsey estimated that India could save 6.2 million hectares of arable land through more effective land-use planning by 2030.

New policy, adopted by the Ministry of Urban Development in May, seeks to shift current practices to encourage denser, healthier, more productive cities. The National Transit-Oriented Development (TOD) Policy recommends transit and land use strategies for compact, mixed-use development, that gives citizens access both to open space and transport services.

An Inflection Point?

The National TOD Policy is critical to achieving the goal of livable, well-connected communities. Currently, only a small handful of cities and states in India have TOD strategies. The policy will provide a much-needed impetus to encourage more local governments to implement TOD concepts into their urban planning.

Such strategies can spur investment in multimodal connectivity (buses, bicycles, transit, walking, and cars), improvements to pedestrian and cycling infrastructure, and development near transit stations. It might not be too dramatic to say that such an official encouragement may represent an inflection point where compact, coordinated and connected development starts to become the norm across Indian cities.

Indian cities and states that have TOD policies. Table by WRI India

The National TOD Policy highlights the government’s resolve to address issues faced by existing and emerging urban areas. However, the ultimate success of such policies depends on cross-disciplinary integration and partnerships at various tiers of government – not to mention the private sector.

WRI India applauds the new policy and urges policymakers to consider next steps:

  • Government at all levels should review and revise existing policies and regulations to include TOD and promote better understanding of TOD through communications materials.
  • State governments should direct cities to include TOD in their development plans. If they are already prepared, amendments should be issued.
  • States should monitor progress by setting up special departments for TOD implementation. This will ensure that crucial factors, such as financing and governance, are well addressed.
  • City planners should consider the unique needs of individual neighborhoods and evaluate the best use of existing infrastructure.
  • City governments should also identify and create an inventory of informal housing, so TOD is not a stepping stone to gentrification.

The use of transit-oriented development as an urban growth strategy is relatively new in India. Translating policy to action will require a multi-pronged approach. States and cities should take a contextual approach based on local trends, market behavior and city requirements. But if implemented well, the new TOD policy could improve the lives and livelihoods of hundreds of millions.

Prerna Vijaykumar Mehta is the Manager for Urban Development and Accessibility at WRI India Sustainable Cities

Merlyn Mathew is a consultant with WRI India Sustainable Cities

To Improve Core Services, Cities Should Embrace Disruption

Wed, 2017-07-26 12:30

The iPod and streaming services disrupted the music industry. Can cities harness similar innovations? Photo by Toshiyuki Imai/Flickr

Innovative business models can turn entire industries on their head – just ask retail executives how Amazon has changed their world, mobility companies about Uber, or music magnates about Apple’s legacy. How we shop, move, and enjoy music is fundamentally different today from just a decade ago thanks to disruptive changes in these markets.

The phrase “business model innovation” rose to prominence in the startup culture of Silicon Valley, but public administrations could use the same principles to reshape urban life for more productive, sustainable and inclusive cities.

What Is Business Model Innovation?

An iconic example of an industry transformed by business model innovation in recent years is the music industry. At first, the iPod, accompanied by online file-sharing services, changed everything. Then online retail emerged as a cost-competitive alternative to store-based music sales. Together these changes brought the demise of many physical record shops. Nowadays, streaming services such as Spotify no longer sell records but rather provide access to music on demand. Such services are often offered on a “freemium” basis – free access to songs and playlists, interspersed with advertisements that can be turned off for a subscription fee.

The music industry’s evolution exemplifies several aspects of business model innovation:

  • The first is capitalizing on a new value proposition to the end user. In this case, music lovers benefited from greater choice of easily accessible, on-demand music at a lower cost.
  • Second, is the emergence of new channels for value creation. New supply chains, developed in parallel with new MP3 players and phones, helped move music from physical, store-based locations to online files and applications on users’ devices.
  • Finally, new models for capturing value emerged in the form of new cost structures and revenue models. Moving online cut costs for some, while selling access to streaming rather than ownership of a song makes recurring fee-based charges possible compared to one-off sales revenues.
What Does It Mean for Cities?

It is generally thought that new business models emerge in response to changing market conditions and consumer preferences. While not explicitly studied to date, these trends are also underway in cities worldwide. New and rapidly growing cities, changing living standards and consumer preferences, and new technologies are some of the drivers leading to the emergence of alternative business models for common city services. These include changes to mobility, housing and electricity consumption.

Business model innovations in mobility are some of the most visible. Ride sharing solutions – cars, bikes, and taxis that users pay to access, sometimes non-exclusively, rather than own – have exploded. Bike-sharing is taking off even in unlikely places, such as Bhopal, India, where more than 10,000 new users signed up within the first few weeks of the system’s operation. This trend is underpinned by a new value proposition, about point-to-point, no hassle mobility that is particularly attractive to urban users. While shared mobility options continue to coexist alongside public transit and private vehicles, they are becoming a larger part of the urban mobility mix.

In urban energy, decentralized solutions are another example where new business models are reshaping established value propositions, in this case between utilities and customers. By purchasing or leasing solar panels on their own property, city dwellers can exercise greater control over their energy supply, prioritizing lower carbon emissions. They can also establish a two-way relationship with the utility by selling electricity back to the grid or earning money from leasing roof space to a solar company. Decentralizing energy supply through onsite renewables reverses a long trend of increasingly centralized power generation in power plants far beyond city limits – a paradigm that in fact replaced earlier decentralized solutions, based on greater efficiency and economies of scale.

Finally, recent developments in urban land use and housing point toward competing value propositions that could radically change how urban development is carried out. In some cities in the United States and Asia, “transit-oriented development” is displacing decades of auto-centric policies based on the separation of residential and commercial land uses. This comes in response to people’s increasing preference for city-living over suburban lifestyles because they are able to easily access basic services and cultural amenities by walking or public transit. With a major affordable housing gap, estimated to affect 440 million households by 2025, developing country cities need to develop scalable approaches to city living too.

The Need for Experimentation and Governance

Business model innovation has critical implications for cities seeking greater sustainability. It suggests that the same core service needs – e.g., for mobility, energy, water and sanitation, housing – could be satisfied in a range of new ways, through potentially radically different models than are currently in place, including those that are more environmentally and socially sustainable.

But local governments need to actively shape developments in their city. Innovations, especially in their infancy, can have unexpected pitfalls. Cautionary tales about the negative impacts of short-term rental services such as Airbnb and “rogue” bike-sharing companies show local government’s essential role in providing proactive city leadership that anticipates, steers, and where necessary corrects development in real time.

Critically, this is not an all or nothing proposition. It’s clear from the experience of industries that have been disrupted that alternative and established ways of meeting the needs of end users can coexist even as one may be gradually displacing the other (e.g., in home entertainment, where ad-based television coexists with subscription-based services like Netflix).

Fundamental shifts are driven by processes of experimentation, learning and iteration. In the private sector, firms experiment with new ways of doing business to generate profit. In cities, local governments should take inspiration and exercise leadership in working hand-in-hand with the private sector to actively experiment with new value propositions and new channels for value creation and capture to deliver social and environmental benefits to all.

Anne Maassen is the Energy, Climate and Finance Associate at WRI Ross Center for Sustainable Cities. She leads WRI’s work on Financing Sustainable Cities, an initiative with the C40 Cities Climate Leadership Group, funded by the Citi Foundation, focused on helping cities develop business models to accelerate the implementation of sustainable urban solutions.

Real Estate Regulation Act: A Potential Opportunity for Transit-Oriented Development

Thu, 2017-06-08 19:01

Photo by Prerna Mehta/WRI India

The real estate sector is one of the largest contributors to India’s GDP, and it is expected to grow by 30 percent over the next decade. However, it is also considered the “most ambiguous sector to transact under,” with insufficient regulations leading to numerous cases of consumer-developer conflicts and project delays.

After eight years of deliberation to streamline such irregularities, the landmark Real Estate (Regulation and Development) Act (RERA), which was notified by the Ministry of Housing and Urban Poverty Alleviation in 2016, became fully operational on May 1, 2017.

This Central Act has made it mandatory for states and Union Territories (UTs) to establish their own Regulatory Authority (RA) and appellate tribunals which would enforce the provisions under the Act.

By acting as an umbrella regulatory authority and bringing in accountability from states and UTs, RERA seeks to bring transparency in the real estate sector, safeguarding the interests of home buyers and improving financing opportunities for builders and developers.

In February 2017, the Government of India’s Ministry of Urban Development (MoUD) also announced the formulation of the National Transit-Oriented Development (TOD) Policy. This policy looks at integrating land use and transport infrastructure to develop planned, sustainable urban growth centers. For instance, walkable and livable communes with high-density mixed land-use around transit corridors like the metros, monorail and bus rapid transit (BRT) corridors, are currently being constructed on a large scale.

Incidentally, these two forward-thinking policies share common ground – while RERA strives to reform the realty sector, TOD holds the potential to create synergies that eventually lead to sustainable cities with higher densities, increased economic activity and better public spaces. Hence, there lies an opportunity to integrate the two policies, by offering special status to TOD within RERA, paving the way to build compact, connected and equitable cities.

Addressing the TOD Link

In its essence, RERA is indeed a necessary intervention to organize the real estate sector and protect consumer interests. RERA will bring under its domain all projects qualifying as real estate and projects that have real estate as a component.

While complying with the provisions of RERA might lead to a temporary increase in property prices, proactive interventions like the government’s announcement in the Union Budget 2017, to award infrastructure status to affordable housing, will pave way for low-cost finances and increased investment in the sector. If the market has sufficient housing options to choose from, the sector is likely to break even and standardize housing costs for the future. Also, the Act is expected to reduce delays in projects through a single window clearance system.

However, the Act falls short on various counts. To begin with, the overarching guidelines specified in the Act makes no mention of TOD, a prime agenda of the MoUD. With a strong real estate component, one assumes that projects under TOD will have to adhere to RERA, leading to several concerns:

1) While single window clearances are targeted at reducing delays, the Act does not specify the list of approvals that can be sought through this system or its process. Typically, single window clearances do not take into account environmental impact assessments, fire department clearances and so on. Development projects are often held up for years due to lengthy approval processes, and if state-specific procedures are not clarified, it could lead to further delays and confusions.

2) The Act prohibits marketing strategies like pre-launch, that were earlier employed by developers to obtain the initial capital required for a real estate project. Instead, through a fund-channeling mechanism for project development, the Act guards the timely delivery commitment. In such a situation, developers will have to look for alternative sources of funding and financing including their own body. Such prohibitions could be especially detrimental for a new and progressive urban growth strategy like TOD.

3) With a process-oriented approach, RERA can ensure and eventually increase the possibility of obtaining funds for real estate projects. But comprehensive TOD projects, which aim for an infrastructural augmentation of an entire area along with a real estate component catering to a wide variety of users, might suffer for want of funds. This could have a negative impact on the implementation of TOD projects, especially in retrofit situations and at a corridor level.

A Way Forward

If TOD is given a special area status, it will formalize not just the workings of the real estate sector but also its associated infrastructure. By bringing in station area developments within its domain, RERA and TOD can go hand-in-hand, leading to comprehensive development. Regularization of the real estate sector could also benefit TOD projects in terms of procuring finances, streamlining land acquisition processes and timely delivery, thereby making it easier to launch and showcase them. As of today, several states are still in the process of finalizing their RERA rules, giving the concerned state governments an opportunity to incorporate TOD into RERA. This would give a huge impetus to operationalize TOD in Indian cities.

Originally published on WRI India, with inputs from Jaya Dhindaw, Sreekumar Kumaraswamy and Himadri Das

Overcoming the Knowledge Gaps for Transit-Oriented Development: What’s Lacking?

Tue, 2017-03-28 18:44

Transit-oriented development can bring economic, cultural and societal benefits to urban residents. Photo by Bradley Schroeder / Flickr

With an increase in their rate of urbanization, many low- to middle-income countries are feeling additional demand for services, amenities and infrastructure. To address this, several cities have followed unorganized development practices (like building bigger and faster), only to meet additional challenges down the road—displacement, uncontrolled migration, greater traffic, higher land prices, insufficient affordable housing and more.

Transit-oriented development (TOD)—a strategy for creating walkable, compact urban areas with a mix of uses around transit systems—can avoid many of these negative effects and bring economic, cultural and societal benefits to the residents of these expanding cities. However, TOD requires an integrated approach to project implementation at all levels of the planning process, and this can be a challenge for cities worldwide. Decision makers must familiarize themselves with the supporting mechanisms to enable TOD if they are to effectively implement this development strategy, but few resources and tools exist at a global level for building capacity and knowledge.

So how do we overcome these barriers, and what’s needed to take them to scale?

A Lack of Common Knowledge Contributes to Common Barriers

Without an extensive knowledge base, TOD remains vulnerable to three reoccurring implementation challenges: coordinated planning, regulatory frameworks and project funding.

First, a lack of coordination between land and transportation planners has historically prevented an integrated planning approach to land, transportation and economic development. This disconnect has led to lost time, increased infrastructure costs, poor health and the loss of public space. For example, in Warsaw, Poland a demand for housing was not paired with the creation of a transportation network. The result was resident dependence on private vehicles and increased congestion on available road networks. To achieve TOD, participating agencies must set clear objectives for growth, ensuring project momentum through political transitions and between development departments while securing citizen support.

Second, an absence of supportive TOD policies in cities has prevented progress by creating isolated areas of development with little foresight for long-term growth. TOD projects require policies that permit high-density and mixed-use developments, often supported by form-based codes that respond quickly to changing economic patterns and space needs. Without local mechanisms in place for land redevelopment, TOD is restricted by national regulations and financial constraints.

Lastly, because TOD is a capital-intensive venture, initial funding for large-scale projects is difficult for many cities to secure. By creatively using and combining financing mechanisms, cities like São Paulo, Brazil are able to tap into value capture instruments that produce the highest returns for their communities. These models can also indicate which projects and technologies are the most advantageous, but local decision makers often aren’t familiar with the options available to them.

The success of Curitiba’s transport-oriented development strategy can be a model for others. Photo by / Flickr

Key Lessons from Brazil and Beyond

Although the context of a city is always different, many examples of success in TOD have revealed four common lessons for getting it right: the importance of political economy, planning and regulation, finance and implementation.

A strong planning and regulatory framework can help address political economy concerns by ensuring that TOD projects are developed and maintained throughout implementation. Once a project has been accepted, a strong planning and regulatory framework can help integrate individual initiatives into the larger vision for the city or region. The success of Curitiba is widely credited to the vision and agency of its former mayor, Jaime Lerner, who supported investment in public transit systems and green city initiatives. Curitiba’s zoning codes and design parameters were readjusted to attract new development while maintaining the integrity of the city at the institutional level. The Curitiba example also provides insight on the coordination, handover and delivery of TOD projects, as the city established a network of agencies to protect the interests of those who interact with the city at every level.

The appeal of TOD lies in the distribution of transportation modes and the opportunities that are created for those who use transit in that area. For a project to truly encompass inclusive TOD, there must be provisions that offer affordable housing, grow access to a diverse job base and preserve local culture. Unfortunately, this task can become challenging at the finance and implementation stage. To attract private investors, the public sector must be willing to not only take on initial financing, but also promote incentives for affordable housing preservation and production.

For example, Brazil’s Outorga Onerosa do Direito de Construir (OODC) instrument allows developers to build at increased density in exchange for a fee. These funds are then shared with under-developed areas of the city. In São Paulo, for example, between 20 to 30 percent of these funds are then allocated to affordable housing.  Another financial innovation includes tying specific funds to TOD by making loans to developers to build affordable housing as part of the larger city plans. Examples here include the Transit Oriented Affordable Housing Fund of San Francisco, the Arlington County (Virginia) Affordable Housing Trust Fund and the Denver (Colorado) Regional Transit Oriented Development Fund.

New Tools Are Needed to Fill the Knowledge Gap

While extensive research has been conducted on TOD in North American and European cities, little knowledge has been compiled on regulatory frameworks and financing mechanisms in the Global South—particularly with an eye to inclusion and equity. For a project to be successful, decision makers need to become familiar with the challenges related to TOD and how they can support each stage of the implementation process. As global urbanization continues, cities will need to meet the mobility, housing, social and economic needs of their residents in a way that is equitable and sustainable. Transit-oriented development can be critical for achieving this, but new tools, information and resources are needed to empower cities to meet the challenge at scale.

The Next Step in Financing Transit-Oriented Development in India

Wed, 2017-02-01 20:37

Busy Road in Jaipur, India. Photo by EMBARQ / Flickr

India’s urban population is expected to reach 600 million by 2031. Providing infrastructure to accommodate this growth will be a huge task. The Ministry of Urban Development (MoUD) is encouraging Transit-Oriented Development (TOD) as one of its strategies for sustainable urban growth. There has been increased interest in India for scaling-up TOD projects in order to solve issues in existing and newly emerging urban areas. Therefore, it is important to understand that implementation requires cross-disciplinary integration and partnering at various tiers of government.

However, owing to the significant capital investments required, and long gestation periods without definite returns, few have signed on for TOD projects. There is a need to develop suitable financing mechanisms and concrete policy frameworks and regulations to encourage success.

Financing is Crucial to TOD

Successful global practices have shown that TOD cannot adhere to a one size fits all policy, especially when it comes to the financing model involved. Each component of the project needs to be looked at separately and the appropriate financing model applied. In addition, the role of all stakeholders in the financing process and the possible changes to the financing model need to be charted out.

There is significant capital available, allocated by the local, state and central governments, in addition to available funds from public transit agencies, businesses, financial institutions, community based organizations, philanthropies and developers. However, this money needs to be accessed and channeled effectively.

Existing Mechanisms to Finance Infrastructure

At present, there are several financial mechanisms that have been used for large-scale infrastructure projects in India. Depending on the type of project and the stakeholders involved, replicating these models could help future TOD projects get off the ground.

Public-Public Partnership: When two or more public agencies come together for a project, resources and responsibilities are pooled within a partnership agreement. For example, when the Ministry of Urban Development approved the Delhi TOD policy in July 2015, a pilot TOD project was initiated by the Delhi Development Authority (DDA) and the state-owned NBCC (India) Limited to take the project forward.

Credit Assistance: This method is traditionally used for large-scale infrastructure projects in India and involves budgetary support, grants and loans from multilateral or bilateral development agencies. One such example is the Delhi Metro, which is an equity joint venture between the state government and the central government, along with significant soft-loan assistance from Japan International Cooperation Agency (JICA).

Land Value Capture: This method recovers all or some of the increase in land and property value as a result of public infrastructure provision. The Delhi Metro Rail Corporation (DMRC) has successfully employed this financing method through property development. Phase-III of the Delhi Metro is looking to generate funds of close to INR 2500 crore (US $367 million) through the same method. The new Value Capture Framework Policy could help the government recover value generated via public infrastructure investments.

Public- Private Partnership (PPP): This approach involves private finance and advanced technical expertise made attractive with guarantees from the government. For instance, the Hyderabad Metro Rail Ltd (HMR) has been set up as a Special Project Vehicle (SPV) between the state government and the concessionaire, L&T.

Municipal Bonds: Tax-free bonds are issued by Urban Local Bodies (ULBs) in order to finance city improvement projects. The Ahmedabad Municipal Corporation was the first ULB to issue redeemable tax-free bonds in 2005. While the municipal bond market in India has thus far played only a limited role as a funding source, it has a high-track record in terms of repayment across all ULBs that have issued them.

Dedicated Funds Model: The Government of Karnataka has established a Dedicated Funds Model, where money is mobilized by imposing a Transfer of Development Rights (TDR) tax based on the market guidance value of all properties within a distance of 500 meters (1640 feet) from the Phase-II of the Bangalore metro line. The funds would be credited to the Metro Infrastructure Fund and shared proportionately between the ULB and infrastructure providers.

Moving Forward

While TOD has had widespread global success, as with any infrastructure project, TOD will not be successful in India until the question of finance is answered. Infrastructure financing mechanisms should be contextual and financially sustainable. These could include tax increment financing (TIF), betterment tax, user charges, selling of air rights, green bonds, project bonds and others.

An encouraging sign is that the government has become flexible in terms of allowing commercial bank lending, using tools such as take-out financing, infrastructure financing institutions, infrastructure debt funds, external commercial borrowing and foreign direct investments (FDIs). The applicability of existing finance mechanisms and the possibility of innovative methods for financing will be crucial for the implementation and scaling-up of TOD.

This was originally published by WRI India

Live from Habitat III: Talking All Things Mobility at Transport Day

Thu, 2016-10-20 06:04

Natalie Draisin, US Manager, FIA Foundation, speaks at Transport Day at Habitat III. Photo by Alex Rogala/WRI.

TheCityFix is live on the ground from Habitat III. Click here for our full coverage. 

“We need to stop building cities for vehicles, and build cities for people,” remarked Quito’s Deputy Mayor, Eduardo del Pozo, setting the opening tone for Transport Day, hosted by the Paris Process on Mobility and Climate (PPMC). While the host city continues to grapple with air pollution and congestion, the city has made positive strides toward a low-carbon future, including expanding its electric bike share program and nearing implementation for a metro system. With Quito as its backdrop, Transport Day proved to be full of stimulating discussion.

Ensuring Road Safety for the Most Vulnerable Users

“1.8 billion children want to get to school safely every day, but around the world, millions can’t, due to risks of injury or death from cars. This needs to change,” implored Michelle Yeoh, UNDP Goodwill Ambassador.

We often think of unsafe streets and neighborhoods as threatening children’s rights to health and well-being, but as Eduardo Vasconcellos of the CAF Development Bank of Latin America noted, poor urban design can have implications beyond that. Without genuinely safe access to schools, children may have a formal right to education, but no real opportunity to learn. The formal right to education can’t be exercised unless the transport system works for them—and in a safe way.

Vasconcellos elaborated on how unsafe transport systems are failing another vulnerable user as well—the poor. For example, he mentioned how the rich make three times the number of trips as the poor in São Paulo, Brazil, yet they suffer disproportionately. Vasconcellos’s research shows that the poor suffer 12-15 times more traffic fatalities and injuries than the well-off. A more equal city, like London, has a much lower ratio, with the poor suffering three to four times the impact as the well-off. Of course, London still has a way to go to equitably serving all its residents.

Women and gender-specific issues are referenced in 32 paragraphs of the New Urban Agenda (of 174). This should be considered an accomplishment, argued Katia Araujo, Director of Programs, Huairou Commission, but there’s still a lot to do to ensure that the New Urban Agenda works for the most vulnerable users, including children and those less able. Different populations have different needs, and it will be critical going forward that integrated transport and land use planning—an imperative for well-planned cities—works for all people.

All this will require strong leadership at all levels of government. Jean Todt, President of FIA, called on mayors to address the 1.25 million traffic fatalities and 15 million injuries that are occurring every year, as half of these take place in cities. The New Urban Agenda elevates road safety to an unprecedented level, creating an opportunity for action. Andrés Gómez-Lobo, Chile’s Minister of Transportation and Communications, echoed this, emphasizing the critical role that good public policy—like subsidizing fares and integrating metropolitan transport systems—can play in make cities safer and more equal for all.

Comparing Common Challenges for Transit-oriented Development

A session on transit-oriented development (TOD) examined experiences both from the city-side and from the investor-side. Laura Ballesteros, Director of Mobility for Mexico City, noted how weak housing policy in Mexico and weak metropolitan governance allowed for unplanned development over the past several decades of the country’s history. As a result, homes in the Mexico City metropolitan area are about 21 km (13 miles) away from the city center on average, and a staggering 31 percent of homes are abandoned, due to the high costs of transport in these isolated areas. However, she did note that the city and surrounding state are making advances toward an integrate transit system and metropolitan governance.

Madhav Pai, Director of India of WRI Ross Center for Sustainable Cities, discussed the challenges of TOD in the Indian context, including the tension between development with services access and the unaffordability that this tends to bring. Delhi, for example, has been moving forward with TOD projects, but while low parking requirements are a positive sign, disagreement about housing has stymied many projects from moving forward more quickly. Developers typically push for larger unit sizes in order to maximize profits, but this reduces affordability and puts the benefits of TOD out of reach of lower-income populations.

Xiaomei Tan, Senior Climate Change Specialist, Global Environment Facility, discussed the role that banks play in supporting clean vehicle technologies and fuels, rapid transit systems and non-motorized infrastructure. Max Jensen, Head of the Public Transport Division at the European Investment Bank, talked about how EU policy dictates the parameters of the types of projects that the EIB can invest in. Both agreed that there needs to be a range of financing instruments that can be assembled in different combinations depending on the policy, project and context.

5 Priorities for Catalyzing Global Action at the Local Level

From the recent ratification of the Paris Agreement to the Sustainable Development Goals (SDGs) and even the most recent agreement on hydrofluorocarbons in Kigali, Rwanda, the international community is proving that it can make real progress and commitments. More than 61 percent of countries’ national climate plans, known as Nationally Determined Contributions (NDCs), propose actions to mitigate emissions from the transport sector. This is a good start, but how do we break down these global commitments into city-level action?

Holger Dalkmann, Director of Strategy and Global Policy, WRI Ross Center for Sustainable Cities, presented five priorities:

  1. Bring transport initiatives together within national government frameworks – a recent report from WRI shows that transport initiatives can play a major role in galvanizing climate action
  2. Link global processes and commitments – the SDGs, Paris Agreement and New Urban Agenda are all major advances, but how will we bring them together to maximize impact?
  3. Finance is criticalresearch from WRI shows that investment in sustainable transport could save US $300 billion a year, and that achieving these savings is just a matter of shifting investment, not increasing it.
  4. Strengthen institutions and build capacity – many cities lack the technical knowledge and ability to shift to low-carbon transport systems.
  5. Partnerships are key – cities can’t do it alone. A sustainable urban future will require the active participation of civil society, the private sector and people.

Follow our daily coverage of Habitat III on TheCityFix.


4 Keys to Unlock Innovative Urban Services for All

Fri, 2016-02-19 02:50
With rising air pollution to costly traffic congestion and increasingly burdened public finances, cities need to transition onto a sustainable path towards healthy, productive and equitable urban communities. To thrive in the coming urban century, cities will need to innovate ...

Why Sustainable Transport Is a Key Driver of Sustainable Urban Development

Wed, 2016-01-20 21:06
About 80 percent of all wealth generated in the world comes from the cities, which attract millions of people every year in search of opportunities. There are already 3.9 billion people living in urban areas and, in 2050, that number ...

Finding Creative Ways to Finance Transit-Oriented Development in Brazilian Cities

Tue, 2015-11-24 00:07
The Seminar on Latin American Experiences of Financing TOD (September 28) brought together experts in Sao Paulo to discuss ways to implement TOD projects in Brazil’s cities. This blog draws on their analysis to explore TOD in Brazil and ways ...

From BIDs to Bikes: 4 Takeaways from the TOD and Urban Real Estate Conference

Thu, 2015-10-29 01:39
City design is at the root of many of our global problems. With traffic crashes the leading cause of death among young people and congestion burdening the economies of countless cities worldwide, it’s imperative that we develop our streets, neighborhoods, ...

The Challenges of Bringing TOD to Brazilian Cities

Thu, 2015-07-09 20:55

Transit-oriented development (TOD) faces two major challenges in Brazil: finance and governance. Photo by City Clock Magazine/Flickr.

Nossa Cidade (“Our City”), from TheCityFix Brasil, explores critical questions for building more sustainable cities. Every month features a new theme. Leaning on the expertise of researchers and specialists in WRI’s sustainable urban mobility team in Brazil, the series will feature in depth articles on urban planning, sustainable mobility, gender, resilience, and other key themes for sparking more sustainable development in our cities.

Transit-oriented development (TOD) is all about creating cities and neighborhoods that are compact and connected. Previously, we talked about the seven principles of TOD, its economic benefits, and the potential of the Minha Casa Minha Vida (MCMV – “My House My Life” in English) project that works to bring TOD to cities across Brazil. To wrap up our discussion on Nossa Cidade of TOD, it’s important that we recognize and discuss the challenges of making TOD a consistent practice across the country.

170 million Brazilians currently live in urban areas, which is about 83 percent of the national population. When not planned appropriately, development can leave communities isolated and disconnected from city centers, leading to social inequality and exclusion. This pattern of growth restricts residents’ access to the opportunities and services available in central areas.

Disconnected and dispersed cities harm the economy and reduce residents’ quality of life. On the other hand, TOD focuses on connecting people with the city with a sustainable transport network. However, there are often barriers that need to be overcome in order for TOD principles to be successfully incorporated into planning processes.

Throughout recent Brazilian history, cities have often expanded at a greater pace than investments in infrastructure, benefiting central districts but leaving peripheral districts lacking urban services. The result is that low-income populations move outward, where land is cheaper, but where basic needs cannot be met. Reversing this trend requires financial and governance mechanisms that can attract investors, engage local communities, and ensure more compact, connected, and coordinated growth.

Urban mobility programs promoted by the federal government through “PAC da Mobilidade” have facilitated the construction dedicated bus lanes and bus rapid transit (BRT) systems in several Brazilian cities. These programs have created large transport hubs around bus terminals and multi-modal stations, increasing the value of surrounding real estate and creating an opportunity for genuine TOD.

In Brazil, CEPACs (Certificates of Constructions Additional Potential) and the “Concerted Urban Operations” are good examples of financial mechanisms that can help support TOD projects. However, these mechanisms are rarely utilized and often fail to expand access to sustainable public transportation systems. Minha Casa, Minha Vida, as we previously discussed, can produce positive results by building housing estates in central regions or in areas well serviced with public transport. One example of this is the Junção project in the city of Rio Grande.

Land for the MCMV project (marked in red) in the Junction neighborhood of Rio Grande has access to transport (corridor marked in green), public services, and infrastructure. The project is currently in development. Map by WRI Brazil | EMBARQ Brazil.

In addition to funding issues, one of the challenges of implementing TOD comes from the governance side. Public policy often intends to develop affordable housing projects on unused land that have secure access to urban services. However, because management changes, it can be difficult to guarantee that projects will continue. Similarly, legal mechanisms are needed to ensure that TOD is kept a priority throughout urban planning processes. In order to remedy this, decision makers and planners need to follow TOD guidelines to improve mobility and urban development at the individual street and neighborhood levels, as well as at the level of the city as a whole.

To learn more about the challenges to TOD that Brazil faces and the tools that can be used to overcome them, click here (in Portuguese).

How Affordable Housing and TOD Are Coming Together in Brazil

Wed, 2015-07-01 23:25

The Minha Casa Minha Vida housing program in Brazil works to develop affordable housing for low-income populations consistent with TOD principles. Photo by GOVBA.

Nossa Cidade (“Our City”), from TheCityFix Brasil, explores critical questions for building more sustainable cities. Every month features a new theme. Leaning on the expertise of researchers and specialists in WRI’s sustainable urban mobility team in Brazil, the series will feature in depth articles on urban planning, sustainable mobility, gender, resilience, and other key themes for sparking more sustainable development in our cities.

An essential model for creating affordable and compact cities, transit-oriented development (TOD) is the theme of Nossa Cidade this month. So far, we’ve cover the seven principles of TOD and the economic benefits that TOD produces.

Today, we will explore how Minha Casa Minha Vida (MCMV – “My House My Life” in English)—Brazil’s affordable housing program—is transforming current patterns of urbanization in the country. MCMV has been responsible for a third of all low-income housing projects in Brazil in 2013 and is helping bridge the way we think about housing and TOD.

Putting MCMV in Context

Launched in 2009 by Brazil’s federal government, the MCMV has developed nearly 2.2 million housing units (UH) in five years, with an additional 3.9 million planned. The program is currently in its second phase and a third phase this year is in development with guaranteed funding.

This is the largest affordable housing initiative in the history of Brazil. In addition reducing the deficit of the country’s low-incoming housing stock, MCMV aims to foster a stronger economy by funding local construction and giving people control over their homes.

Integrating Housing and Transit Planning

In addition to a ceiling over their heads, people need access to jobs and services in order to live well. MCMV is an opportunity for both. First of all, the program enables home ownership. Second, well-planned TOD can facilitate access to opportunities throughout the greater city.

However, the challenge is ensuring that the land where these homes will be developed is located close to the city center and well-served by public transit. Making this happen requires dealing with numerous political and economic barriers.

But it is possible. The city of Rio Grande designated empty land in the Junction neighborhood as an area of possible interest for MCMV—in order to avoid real estate speculation. The land was donated by the Federal Government to the city and it is an area that is already well-endowed with public services, infrastructure, and access to transport. The vision is to make the neighborhood home to 1,300 low-income families, where they can maintain their social relationships and have access to services, jobs, education, and health resources throughout the city. The project has been supported by WRI Brasil | EMBARQ Brasil and will be a model of TOD in Brazil. See the map below:

Land for the MCMV project (marked in red) in the Junction neighborhood of Rio Grande has access to transport (corridor marked in green), public services, and infrastructure. The project is currently in development. Map by WRI Brazil | EMBARQ Brazil.

Unfortunately, Rio Grande is an exception and not yet the rule. In many Brazilian cities, most development occurs in rapidly expanding residential areas with poor infrastructure, urban services, and transport. Disconnected and distant housing is a burden to both residents and local government. Residents must travel longer distances to access jobs, services, and housing. Local governments face higher costs of infrastructure development and service maintenance—like waste management and public utilities.

Mexico’s Ghost Towns

This neighborhood of Ensenada, Mexico is one of many housing developments that is car-dependent and disconnected from vital city services and infrastructure. Photo by Livia Corona.

Five million homes have been abandoned throughout Mexico, but not because there is a shortage of housing. Entire neighborhoods have emptied out because residents could not continue to live isolated from the city. A decade of building at low cost on the periphery of Mexican cities has culminated in an exodus of hundreds of thousands of families who suffered from a lack of urban services, poor building maintenance, and poor access to transport. Now these deserted areas are isolated and insecure places

According to the Mexican newspaper Magis, stories like this are common on the peripheries of metropolitan areas throughout the country. Between 2001 and 2011, real estate boomed and developers took advantage of loose housing policies, constructing sprawled housing units that were increasingly distant from jobs and basic services in the city.

A Compact and Vibrant Future

A “3D” model of urbanization—distant, dispersed, and disconnected—has been the status quo long before MCMV began. The 3D model is the result of both poor urban planning at the local level and market forces and speculation. Cities need to plan properly for growth, and the MCMV program is a great opportunity for Brazil to foster a more equitable urban future and with a high quality of life for all.

This article was originally published in Portuguese on TheCityFix Brasil.

How Transit-Oriented Development Benefits Local Economies

Wed, 2015-06-24 23:11

Photo by Mariana Gil / WRI Brazil | EMBARQ Brazil.

Nossa Cidade (“Our City”), from TheCityFix Brasil, explores critical questions for building more sustainable cities. Every month features a new theme. Leaning on the expertise of researchers and specialists in WRI’s sustainable urban mobility team in Brazil, the series will feature in depth articles on urban planning, sustainable mobility, gender, resilience, and other key themes for sparking more sustainable development in our cities.

While rapid growth can cause a range of problems for cities, urbanization can also be an opportunity to change how cities are planned, making them more sustainable, people-centered places. Rethinking current patterns of expansion for a more compact and connected model can expand employment opportunity, access to quality public spaces, the supply of sustainable transport, and enhance economic activity.

Many cities are currently growing with a “3D” model of development—distant, dispersed, and disconnected. Expansion without proper planning leads to spatial and social segregation, while also increasing congestion, pollution, and daily travel times. Transit-oriented development (TOD) is a model for planning sustainable urban communities with compact neighborhoods, high population densities, diverse land uses, and abundant public spaces. The goal is to ensure sustainability mobility and economic development.

Compact neighborhoods generate more accessible job opportunities. Mixed land uses and diverse activities at the street level encourage pedestrian traffic, stimulating commerce and the local economy. By planning transit smartly to manage growth, TOD is an excellent vehicle for economic development.

Urban Planning for a Stronger Economy

Low population densities and suburban sprawl increase infrastructure and maintenance costs, and cause additional social costs by requiring people to traveling longer distances. In 2013, congestion recorded in the metropolitan regions of São Paulo and Rio de Janeiro cost Brazilians BRL $98 billion, equivalent to 2 percent of GDP that year. Taking into account the costs resulting from traffic accidents and health impacts, that number would be even higher.

Transit-oriented development (TOD) is a “3C” model for development—compact, connected, and coordinated—that has a direct impact on urban mobility and the economy. TOD reduces travel times, congestion, and emissions—expanding access to different areas of the city and thus stimulating economic activity.

Comfort and safety is necessary for active transport and non-motorized mobility. Photo by Mariana Gil / WRI Brazil | EMBARQ Brazil.

When public transport is designed to serve sparsely populated areas over long distances, service often becomes inefficient. Sprawled systems end up operating at irregular hours, with fewer routes and stations. As a result, both operating costs and user fares go up.

Therefore, one principle of TOD is simply quality public transport. With the quality of public transport directly related to how cities develop, it’s critical that neighborhoods are connected and invest in infrastructure. Good service helps attract new users, reducing car dependency and costs for both people and local governments.

Affordable and efficient service helps connect people to the city. Photo by Mariana Gil / WRI Brazil | EMBARQ Brazil.

Next to quality public transportation, TOD prioritizes non-motorized mobility and car use management. By providing pedestrian-friendly conditions, bike infrastructure, and comfortable and safe public transport, cities can help balance car use. Doing so helps reduce the number of accidents and traffic fatalities, improves public health, and avoids significant health spending .

Another way that TOD can benefit local economies is through mixed land use. Many current housing developments—particularly affordable housing—are not located near urban services and commercial activity. This gap between residents’ needs and their access to resources creates real costs for both people and governments. In addition to the direct costs of travel fares, sprawl wastes the opportunity to generate income at a local level. On the other hand, mixed land use enhances economic activity by diversifying the types of goods and services readily accessible.

Infrastructure and public furniture makes for a more vibrant and diverse urban environment. Photo by Oran Viriyincy / Flickr.

Neighborhoods without commercial activity or high-quality public spaces force residents to travel in order to access the resources they need. Vibrant neighborhood centers and active ground levels facilitate social interaction and avoid the need to travel. This is one way to orient neighborhoods around vital economic activity with a steady circulation of people.

Active neighborhood centers that are attractive can help stimulate the local economy. Photo by Mariana Gil / WRI Brazil | EMBARQ Brazil.

Neighborhoods that more connected require fewer and shorter daily trips. Prioritizing active transport reduces congestion and emissions and expands access to opportunities throughout the city. The planning model we use determines how we move about cities, how much time we spend in transit, and how much money we have to spend. TOD reduces individual and public spending, ensuring a better quality of life for all.

This article was originally published in Portuguese on TheCityFix Brasil.

7 Principles for Transit-Oriented Development

Wed, 2015-06-17 21:26

By managing growth that is compact, coordinated, and connected, transit-oriented development (TOD) prioritizes people over cars. Photo by Fred Inklaar.

Nossa Cidade (“Our City”), from TheCityFix Brasil, explores critical questions for building more sustainable cities. Every month features a new theme. Leaning on the expertise of researchers and specialists in WRI’s sustainable urban mobility team in Brazil, the series will feature in depth articles on urban planning, sustainable mobility, gender, resilience, and other key themes for sparking more sustainable development in our cities.

Poorly planned urban expansion is increasingly distancing people from jobs, services and the opportunities that enable them to live a high quality life in cities. There are currently 170 million Brazilians in urban areas living with the consequences of decades of car-driven development. To reverse this trend and ensure a more sustainable future for all, integrating land use policy and transport planning is essential.

Brazil is the fifth largest country in the world in terms of population and land area, but its pattern of urbanization has been sprawled, uncoordinated, and disconnected. The present situation not only demands motorized trips, but also causes congestion and harmful environmental impacts, and burdens citizens, especially those with lower incomes who spend significant time using transport.

Fortunately, we know how to bring cities onto a more sustainable path with transit-oriented development (TOD). This model of urban planning focuses on dense, compact, mixed-use neighborhoods with vibrant streets and safe public spaces for social interaction.

TOD is the key to more efficient, sustainable, and equitable communities because it prioritizes the “3Cs”: compact, coordinated and connected. By following a TOD approach, decision makers and urban planners can strengthen their communities.

Cities can ensure TOD by focusing on the following seven principles :

1. Quality Public Transit

Photo by Mariana Gil / WRI Brazil | EMBARQ Brazil.

Public transit is strongly linked to urban development. High quality, convenient transport depends on dense and connected neighborhoods. The goal of a transport system is to connect a high number of riders with the city in a comfortable, efficient, and affordable way.

2. Active Transport

Photo by Mariana Gil / WRI Brazil | EMBARQ Brazil.

The interests of pedestrians and cyclists should be at the heart of urban planning. Decision making should shift residents—particularly car users—to active transport. Many commuters already take two non-motorized trips on a daily basis by walking to and from transit hubs to their homes or cars. It is important to build on this and encourage non-motorized transport holistically.

3. Car Use Management

Photo by Mariana Gil / WRI Brazil | EMBARQ Brazil.

Car use and parking policies play an important role in creating a safe, human-oriented urban environment. Since the 1980s, cars have dominated Brazilian cities. Despite individual car trips accounting for 27.4 percent of all urban trips (or 36 percent in cities with over one million residents), car infrastructure is supported with four times the amount of investment that public transit receives.

4. Mixed-Use Neighborhoods with Efficient Buildings

Photo by Paul Krueger / Flickr.

A mixture of land uses enhances the local economy by densifying and diversifying the design of the community. Mixed-use neighborhoods favor short trips by foot or bike. Similarly, buildings should minimize how much energy and water they consume and require for building and maintenance.

5. Neighborhood Centers and Vibrant Ground Floors

Photo by City Clock Magazine/Flickr.

A built environment with adequate public space promotes social interaction between residents. Sustainable urban communities must be sufficiently dense and contain a variety of uses that are complementary to residential life. Public spaces should be connected to the urban transport network and serve as vibrant, human-centered places of activity.

6. Public Spaces

Photo by Marta Heinemann Bixby/Flickr.

The purpose of public space is not only to enhance public life and social interaction, but also to provide a safe environment for pedestrians and cyclists. Public space is the place of encounter, exchange, and circulation within a community. All individuals have the right to access public spaces, regardless of personal, social, or economic condition.

7. Community Participation and Collective Identity

Photo by Fabio Goiveia/Flickr.

Community participation is essential to building a vibrant, inclusive neighborhood that is safe and equitable. Stimulating community participation creates a more equitable, harmonious relationship between varying social groups living in the same area. Respecting the unique identity of local communities results in a higher share of residents engaging in civic, cultural, and economic activities, generating a sense of belonging and ownership of the city.

Making TOD a Reality in Brazilian Cities

WRI Brazil | Brazil EMBARQ recently developed a report called “DOTS Cidades” (Portuguese for TOD)—a guide for policy makers and urban planners for creating cities based on these seven principles. The guide outlines concepts, design strategies, and best practices in public management, planning and urban design, and the transport sector, as well as information about accessibility and environmental requirements.

To read and down the publication (in Portuguese), click here.

This article was originally published in Portuguese on TheCityFix Brasil.

How China Can Leverage High-Speed Rail for Compact Urban Development

Tue, 2015-05-19 21:36

High speed rail connects Zhengzhou with other Chinese cities and has potential to spur compact urban development across the country. Photo by Andrew Stokols.

Many large Chinese cities have developed around transport corridors. Hangzhou and Suzhou, for example, grew wealthy from their position on the Grand Canal, which connected northern and southern China. Today, the country’s high-speed rail (HSR) system is proving to be an equally powerful catalyst for urban development.

China’s HSR system presents an opportunity for transit-oriented development (TOD) around new stations. However, due to a variety of factors, development around stations has often failed to occur in a controlled or compact manner. A more coordinated strategy for TOD around HSR stations could help Chinese cities develop in more compact and sustainable ways.

High-Speed Rail Expands Rapidly Across China

Since 2008, China has built the world’s largest high-speed rail system. Just a decade ago, China had virtually no high-speed rail lines. Today, it has over 12,000 km of passenger-dedicated high-speed rail lines connecting most major Chinese cities. By 2020, the network will connect all provincial capitals and cities with a population of over 500,000—around 90 percent of China’s population.

China’s rapid rollout of high-speed rail is the result of not only massive government investment, but also the low cost of building rail in China. Several factors contribute to these low costs of construction, including China’s low labor costs and the government’s ability to easily procure land. New HSR lines are often built as elevated viaducts across long distances. This method has several advantages: it provides the level surface that high-speed rail requires, and also reduces the amount of farmland that needs to be acquired between cities. The focus on saving costs and maximizing speed, however, has also meant that many new stations are built far outside the city center, where land-acquisition costs are lower.

New Towns Mushroom around HSR Stations

In attempt to capitalize on the high property values caused by transit development, many Chinese cities have proactively planned new districts next to HSR stations. Along the Beijing-Shanghai HSR line, for example, 16 out of 24 cities have planned new urban areas adjacent to HSR stations, as many local officials view HSR as an opportunity to spur local economic growth. Officials even compete with one another to convince national authorities to locate stations in their cities.

The outcome of such development remains unclear. Indeed, a few of these new districts—mostly those in large cities—are on their way to become bustling urban districts, such as the new developments around the East Station of Hangzhou, the provincial capital of Zhejiang province. Many others in smaller cities have languished, like the one in Dezhou, Shandong province (1hr and 20 min south of Beijing by high-speed train). There, a massive plaza dumps passengers into farms and villages far from the city center. Some of these vacant areas may experience development when housing demands catch up, but others will likely remain “ghost towns”.

A high-speed rail station in Dezhou, China was built far outside the city center, amid farmland. Photo from Google Maps.

High Speed Rail Produces Mixed Results for Transit-Oriented Development

Multiple factors influence whether development around high-speed railway stations is successful or not. While transit-oriented design is typically considered a strategy that cities can use to concentrate development around intra-urban transit nodes, like subway and bus stops, it can also be applied to development around inter-city nodes, like HSR stations. The following recommendations would help China leverage its HSR system to spur compact and sustainable urban development:

  • Station location matters: How vibrant new districts are depends largely on how well they can attract businesses, workers, and developers. Yet, in many situations, the decision of where to build new stations is influenced by political factors. For example, large Chinese cities with greater bargaining powers are able to negotiate with the China Railway Company (CR) to place HSR stations closer to city centers, whereas smaller cities might have stations located further out, sometimes over 20 km away. Stations far from the city center with poor public transport connections will be less successful. Additionally, new development could contribute to sprawl and the reduction of productive agricultural land on the periphery of cities.
  • Coordinating regional development: Coordinated planning among cities to avoid inter-city competition is important. Cities served by HSR often aspire to become regional growth hubs. But fierce competition for investments may actually hinder economic growth. Therefore, better coordination in national and regional planning is necessary to ensure that new towns develop compactly.
  • New financing models: In the most successful cases of TOD, the rail company develops and owns the land surrounding stations. Hong Kong’s MTR, considered one of the more successful examples of this model, owns property developments surrounding Hong Kong’s metro stations, like malls, which allow it to fund its rail operations. Japan’s private railroads have also been successful with this model.

Developing and maintaining public transit systems requires sizable investment. Funding transit development through property development around stations offers a way for the central government to reduce its costly subsidies. Furthermore, coordinated development around stations will ultimately increase ridership.

A new “directive” issued by the State Council last year may herald changes on the horizon. Calling for better integration between rail stations and adjacent urban development, the document promotes the ownership and development of land by (CR). But this recommendation doesn’t come with any concrete legal changes.

More clarification and substantive reforms will be needed before China can truly capitalize on its high-speed rail to foster more sustainable urban development.

How a Chinese Megacity is Innovating Finance for Transit-Oriented Development

Mon, 2015-05-04 21:43

To ensure sustainable urban development, Shenzhen, China has been experimenting with several innovative strategies for financing transit infrastructure. Photo by Chris/Flickr.

China’s rapid urbanization has dramatically increased the need for public transit infrastructure.  To accommodate these changes, it’s estimated that China needs to expand urban rail by at least 3000 kilometers by 2020—approximately a $4 trillion investment.

In Chinese cities, funding for large-scale urban transit infrastructure traditionally comes from two sources: sales of land development rights and bank loans. However, these approaches can not only financially burden city governments, but also lead to costly urban sprawl.  Recently, the city of Shenzhen has been successfully experimenting with alternative approaches to overcome these significant challenges. Shenzhen’s experience demonstrates that financing transport infrastructure by harnessing the value of land can also be an opportunity for sustainable transit-oriented development (TOD) in Chinese cities.

Sustainable Development Needs Sustainable Financing

Building a transit station on a given plot of land expands access to transport, which typically raises the value of the surrounding properties as a result. For the average Chinese city, it’s estimated that this added value—known as land premiums—amounts to roughly US $300 million – $1.6 billion. These land premiums from the surrounding property make up about 20 – 90 percent of the cost of developing a single subway line, and can be a potential source of funding for transport infrastructure projects, which often either end up too expensive to be worth the investment or rely on large subsidies from local governments to keep them operating.

This way of capturing land value is commonly known as rail plus property (R + P) development. Since R+P means that one entity develops both rail and property, the future revenue from the property compensates for the construction costs of building rail. This strategy incentivizes developers to build compact developments around stations, as doing so allows them to cash into higher land premiums. R+P has already proved successful in Hong Kong and is a promising solution for making TOD a reality in Chinese cities as well.

Four Strategies for R+P Development

The first Chinese city to successfully pilot R+P at scale, Shenzhen is using four strategies to bring TOD to the region.

1. Innovative Financing Arrangements

Shenzhen realized early on that R+P requires a proper financing arrangement, as city-owned metro operators are not only responsible for the costs and risks of metro construction, but also the new business of property development. Therefore, Shenzhen decided to split land premiums with developers so that projects could be completed without overburdening either side.

In the beginning, metro company had to pay concession fees to obtain land development rights through auction, despite receiving reimbursements from the city to ease its financial burdens. However, since 2011, the city has directly granted land to the metro company as an equity asset, thanks to the national government’s decision to pilot land policy reforms in Shenzhen. To further reduce the costs and risks associated with R+P, the metro company will be allowed soon to form a partnership with developers to share the costs and gains of property development and hedge against fluctuations in the real estate market.

2. Planning Integration

To ensure dense, mixed-use development around transit stations, Shenzhen coordinates agencies and simultaneously adjusts its master plans, detailed land use plans, and transit plans. Planning authorities and the metro company work together continuously to evaluate land values and plan for integrated transit infrastructure and urban development.

To encourage denser development and mixed land uses, Shenzhen created a new type of land use so that planners and developers can co-determine land use and density already at the implementation stage. The city also reformed its zoning code to allow for more flexible commercial, residential, and office development on land parcels that were previously designated for transport use only.

3. Flexible Zoning

Shenzhen expanded land development rights, issuing development rights according to land uses on different building floors. This encourages mixed-used development, as commercial, residential, and underground transit building rights can be obtained separately.

An example of development plans for a metro station, with standard zoning codes on the left and Shenzhen’s new zoning codes on the right. Previously, it was impossible to develop land for other types beyond transport (colored in gray). Now, the zoning codes allows for mixed-uses, (colored by primary land use type). Graphic by WRI.

4. Multi-Stakeholder Dialogue

Shenzhen also has introduced multiple ways for stakeholders to engage one another and work across silos. In particular, the city encourages dialogue between different departments and coordinates with developers to match projects to market demand. In fact, the local planning institute and the metro company have worked closely from the very beginning of the financing and planning stages. Finally, strong leadership and external consulting services can also prove critical to managing complicated urban development. The city realizes that R+P development hinges not only on carefully designed public policies but also on efficient operations at the firm level.

Paving the way for the future

Shenzhen’s success has profound implications for other Chinese cities. If Shenzhen can successfully implement R+P under the same regulatory and legislative environment, other Chinese cities can follow suite. However, R+P does not offer quick wins. In Shenzhen, it took over a decade to implement viable solutions. Hong Kong also took about a decade to make a profit. Change won’t be possible without a booming real estate market, a mature capital market, a capable and willing private sector, and—more importantly—a strong political will that is open to new approaches. Given the need for sustainable transit-oriented development in China, leaders can’t afford to overlook Shenzhen’s successes and the opportunities that R+P presents.

To learn more about Shenzhen and TOD in Chinese studies, click here.

A Conversation About India’s Smart Cities: CONNECTKaro 2015 in Tweets

Thu, 2015-04-30 01:48

At this year’s CONNECTKaro conference, participants discussed a range of topics pertinent to sustainable urban development in India–including smart cities, buses, women’s safety, and safe access to mass transit. Photo by Johann/Flickr.

From April 15 – 16, 2015 over 300 experts—including government officials, policy makers, urban planners, and transport practitioners—participated in a global conversation about Smart Cities at CONNECTKaro 2015. The conference was hosted by EMBARQ India in New Delhi, and key speakers included Nitin Gadkari (India’s Minister for Road Transport and Highways), Marcio Lacerda (Mayor of Belo Horizonte, Brasil), Manish Sisodia (Delhi’s Deputy Chief Minister), Jeff Olson (Director of Alta Planning), and Suresh Prabhu (India’s Minister for Railways).  Here are some of the top tweets, quotes, and discussions that came from the conference’s panelists and participants.

The opening session at #CK2015 discussed the role of smart cities for moving India forward:

200m people will soon move to Indian cities. Which cities? Are there jobs? What quality of life? Jamshyd Godrej at #CK2015 @EMBARQIndia

— Divya Kottadiel (@dkottadiel) April 15, 2015

@nitin_gadkari We need to look for solutions beyond metros, hence the focus on creating #smartcities that become centers of #growth #CK2015

— WRI India (@WRIIndia) April 15, 2015

Participants at CONNECTKaro also explored  land management strategies for smart development: retrofits, redevelopment, and green-field development:

Merely deploying information technology is not the goal of #SmartCities – Dr O.P.Agarwal #CK2015 on land management for smart cities — Lakshmi Rajagopalan (@laksrajagopalan) April 15, 2015

Only 7% of Mumbai’s first Development Plan of 1965 has been implemented – Rajan Athalye Kalpataru @EMBARQIndia #CK2015 @RejeetM — Zainab Kakal (@zainabkakal) April 15, 2015

The session on smart mobility discussed how new technologies can enhance citizens’ mobility experience—from modelling and engineering, to design and planning:

“A Transport Interchange is critical to be created for improving usability of public transportation” Peter Piet #CK2015 EMBARQIndia — UxD Insights (@UxDInsights) April 15, 2015

SDG’s Peter Piet is speaking today at #CK2015 about integrated transport & the lessons India can learn from the UK & other #smartcities — Steer Davies Gleave (@SDGworld) April 15, 2015

“Stories to Watch from Around the World” brought together global experts who shared experiences from their respective countries and discussed the key challenges facing India:

“It’s not just about walking and cycling, its about the quality of life in a #city” Jeff Olson, @altaplanning at #CK2015 #StoriesToWatch

— EMBARQIndia (@EMBARQIndia) April 15, 2015

And a session on transit-oriented development (TOD) focused on the opportunities and challenges of implementing TOD in Indian cities:

New phenomenon of 3D cities – distant, dispersed and disconnected – @ZamoranoEMBARQ TOD session #CK2015

— Lakshmi Rajagopalan (@laksrajagopalan) April 15, 2015

Robin King: Transformation takes time, but its not going to happen on its own. We need creative and transformative policies #CK2015

— Madhuri Dass (@MadhuriDass) April 15, 2015

Participants examined potential solutions that Indian cities can use to address women’s safety in public transport:

“88% of the #women we surveyed claimed that they were harassed while using public #transport.” Ranjana Menon at #CK2015 @ranj87 #Bhopal

— EMBARQIndia (@EMBARQIndia) April 15, 2015

“It is not a women’s issue, it is all the whole city problem” Kalpana Vishwanath Talking #gendersafety #ck2015

— Dario Hidalgo (@dhidalgo65) April 15, 2015

EMBARQ India introduced 5 examples of how emerging businesses are innovating urban mobility. Entrepreneurs from Traffline, Zoomcar, Alta Planning + Design, and Personal Air Quality Systems Pvt. Ltd. presented:

“What #India needs: 500 startups across 10 #cities in the next 5 years” @jyotchadha on #mobility platforms at #CK2015

— EMBARQIndia (@EMBARQIndia) April 15, 2015

The bicycle of the future will not look like the bicycle of today – Jeff Olson at #CK2015 @EMBARQIndia

— Sameep Arora (@asli_alsi) April 15, 2015

Representatives from Raahgiri Day and Equal Streets sat on the panel about India’s open streets movement:

“Cycling for huge population in India isnt an option.We need to find a reason for others to cycle, make cycle available”#CK2015 @EMBARQIndia

— Harry (@haristweet) April 15, 2015

“Better Growth, Better Climate”discussed how India can benefit from global climate and development platforms, leveraging the smart cities initiative to attract funding and grow sustainably:

“Savings in global infrastructure amount to 3 trillion USD by 2030 from more compact, connected, coordinated urban development” #CK2015 — EMBARQIndia (@EMBARQIndia) April 16, 2015

“Provide sustainable last mile #mobility mode options such as walking, cycling and NMT to integrate #SafeAccess” Dr. Sanjay Gupta at #CK2015 — EMBARQIndia (@EMBARQIndia) April 16, 2015

The Global Protocol for Community-Scale Greenhouse Gas Emission Inventories (GPC) was launched in December 2014. A session at the conference discussed case studies and focused on the complexities of applying the GPC:

#CK2015 framing policies are important, but mapping execution & presenting outcomes is more important for #smart city

— iamglobe (@iamglobe) April 16, 2015

An interactive workshop engaged with participants about how to plan, design, develop, and maintain safe access to and around mass transit stations:

“Provide sustainable last mile #mobility mode options such as walking, cycling and NMT to integrate #SafeAccess” Dr. Sanjay Gupta at #CK2015

— EMBARQIndia (@EMBARQIndia) April 16, 2015

In workshop ‘Safe access to mass transit’ learning how to get #SmartCities #CK2015 — Diego Monraz (@MonrazDiego) April 16, 2015

Mr. Manish Sisodia, Deputy Chief Minister, Government of Delhi, talked about the short, medium, and long-term strategies for urban and transport development in Delhi:

“Unless we have confident mass transport for Delhi, there is no solution for traffic” @msisodia #CK2015 — Jyot Chadha (@jyotchadha) April 16, 2015

Cities need connectivity and safe access for women @msisodia #CK2015

— Jaspal Singh (@jaaaspal) April 16, 2015

“Bus Karo” focused on the challenges to improving bus service in Indian cities:

#BRT is not a choice but is necessity – International Energy Agency #CK2015

— Jaspal Singh (@jaaaspal) April 16, 2015

Another session covered the ways that developers can look at energy-usage patterns within communities to make cities more sustainable and equitable:

“What is added to #housing is not affordable and what is affordable is not added” #CK2015 @EMBARQIndia — WRI India (@WRIIndia) April 16, 2015

In light of the growing number of road fatalities across Indian cities, a session on road safety focused on how we can adopt a sound design principles for road safety:

“With the #RoadSafety Bill 2015, we aim to save 2 lac lives in the first 5 years.” Suhaan Mukherjee, PLR Chambers at #CK2015 — EMBARQIndia (@EMBARQIndia) April 16, 2015

A workshop on parking addressed urgent need to combat on-street parking through strong institutional and enforcement mechanisms, and off- street parking through building regulations:

The cost of #parking in India is the the lowest in the world, even lower than Bangaldesh, OP Mishra, Director, NDMC at #CK2015

— WRI India (@WRIIndia) April 16, 2015

— Lakshmi Rajagopalan (@laksrajagopalan) April 16, 2015

What Cities Can Learn From Greater Toronto’s Transit-Oriented Development

Wed, 2015-04-22 03:16

An icon of Toronto, the city’s streetcar not only provides mobility within the urban core, but also integrates with regional transport to ensure transport access to residents on the periphery, as well. Photo by superherb/Flickr.

While there are many inspiring examples of walkable, transit-oriented cities in Europe, there’s also plenty to learn from Canada. For example, with the extraordinary help of Jane Jacobs and other leaders, Toronto has been able to successfully keep expressways out of its historic urban core. Beyond that, leaders have also focused on expanding transit connectivity beyond the city center and into suburban communities.

Thanks to strong leadership and long-term vision, Greater Toronto managed to both build a compact, mixed-use urban hub and expand transit connectivity across the region.

Building on a Vibrant Urban Core

Spadina Avenue is a remarkable example of a complete street, with dedicated lanes for its vintage streetcars, spacious sidewalks, bike lanes, and slow traffic. Passing through the city’s lively university district, it is lined by a continuous stretch of shops, cafes, and restaurants, making it a vibrant place. King Street, similarly, has bike lanes and the city’s iconic streetcar, but the lack of segregated bike lanes makes bike commuting slightly precarious. Fortunately for safety advocates, the average speed on the street is just 7-10 km/hr.

Along the lake, there is bustling construction activity as the city advances its ambitious waterfront redevelopment project. New condominiums are sprouting up along the refurbished Light Rail line, which will have segregated tracks and a large amount of public spaces. With good access to a range of mobility options, Toronto is demonstrating exemplary transit-oriented development (TOD) on the edge of its dense core.

Bringing Bus Rapid Transit to the Suburbs

York—a rapidly growing suburb north of Toronto—is another great example of advancing TOD around bus rapid transit (BRT). The city has plans to build 80 kilometers of rapid transit using buses, and will invest in 20 kilometers of light rail development. The project, called VIVANext, is becoming a standard for good quality BRT in North America. The main line has dedicated median lanes and high quality stations, and buses are large and comfortable. The York Rapid Transit Corporation, with the support of the Government of Ontario, is in the first phase of its ambitious plan.

This project is not just a transit network. It’s about developing complete streets with good sidewalks, landscaping, pedestrian infrastructure and lighting.  As part of the region’s development strategy, the BRT system will provide connectivity to the thriving tech community in Toronto’s core, which is home to IBM, Honeywell, and mores. So far, the plan is working. There are new buildings for offices and condominiums close to the BRT stations, and many more are under construction.

As is common in many cities, there was considerable debate over which transport option to pursue, and the community was divided. In the end, local authorities committed to BRT, but the agreed upon design allows for light rail to be added in the future—a move Ottawa has already done with its Transitway system. Currently, York’s bus system operates frequently and extensively, providing connectivity directly to locations outside the main transit corridor. This is an immense benefit to those who live on the city’s periphery and need access to the center for jobs and education.

While many residents own cars, the investment in transit has been well-received. “The people out here are not anti-transit … you have to make the service time-competitive and reliable, and people will use it,” said Peter Miasek, President of Transport Action Ontario and Vice President of the Unionville Ratepayers Association.

Planning from the Metropolitan Perspective

These two examples from Greater Toronto show that it is possible to advance development around transit if the right mix of ingredients is in place. In both Toronto and York, there is strong leadership from elected officials as well as skilled, results-oriented implementation teams. This has helped each city tackle the difficulties often encountered in decision-making, advancing strong plans, and implementation. Furthermore, leaders have also leveraged adequate levels of funding for preparation and implementation. Without reducing the quality of service to save money, transport leaders have invested in strong design, branding, and communications in order to give public transit an attractive image.

As a result, Toronto doesn’t have just a dense and mixed-use core. It is also bringing accessible transit to the suburbs with remarkable success.


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