Urban Thinkers Solutions: Exploring Financing Tools and the Promotion of Social Capital

Urban Thinkers Solutions: Exploring Financing Tools and the Promotion of Social Capital

The World Urban Campaign has been actively engaged in the identification of urban solutions through its community of Urban Thinkers in the last six months before Habitat III.
Today, we are exploring one the promising trends for innovation to implement the New Urban Agenda: Financing tools and the promotion of social capital.
One of the corner stones of the implementation of the New Urban Agenda will be availability of finance and the appropriate tools to channels and monitor resources.  Urban Thinkers have explored potential solutions, in particular model and catalytic process allowing scaling-up. They have also looked at promising processes building on social capital with trickled down effects on the most deprived.  The issues are critical and complex.  Urban Thinkers have been looking at the vast array of solutions, sometimes under- explored, taking into account the value generated by social ties ruled by reciprocity, trust, and cooperation, producing goods and services  for a common good. A sample of solutions is revealed below before the Habitat III Conference.

‘Social Capital Credits’, a new Community Currency for Social Good

proposed by Asia Initiative
The currency is designed to counter money-poverty, empower communities, and multiply the impact of aid. Social Capital Credits (SoCCs) combines the best practices of carbon credits and airline loyalty programs to help poor communities climb out of poverty. The initiative engages with individual communities in extensive dialogue to customize SoCC menus to their specific needs and capabilities. People choose what they will do to help their communities (waste management, planting trees, providing labor for local infrastructure building, maintenance, etc.), and what they redeem SoCCs for, meeting their own individual and family needs for healthcare, health insurance, skill training classes, home repairs or telephone talk time.

Civic crowdfunding: a collective option for urban sustainable development

proposed by Co-City
Crowdfunding is a practice of funding projects by raising monetary contributions from a large pool of donors, typically via Internet platforms. Civic crowdfunding, the crowdfunding practice applied to civic project, is an emerging field to achieve a wide range of public interest projects, from social and environmental innovation to urban commons. To date, crowdfunding for urban commons has produced large numbers of urban communities' projects to turn distressed areas into public parks, build local facilities, community centers, etc. Civic crowdfunding is still an emerging field but it already represents a significant opportunity to create new collaborations between citizens, civil society organizations and sub-national governments in order to promote sustainable and inclusive local development.

Land Value-Sharing Financing Tool

Equitable and sustainable urban growth requires a strong financial base, and land plays a key role. Land-based financing tools such as value capture, or “value sharing,” combined with a well-functioning property tax, are critical for providing infrastructure, housing, open space, public safety and other basic public goods and services. The property tax is a proven system for funding the provision of basic goods and services by local government, and it plays a foundational role in local government finance in countries such as the United States and Canada. As a complement to the property tax, land-based financing tools such as value capture make use of the land value created for adjacent private landowners and developers by specific public investments in urban infrastructure. It is possible to measure this “land value increment,” and encourage the private sector to contribute to the creation of infrastructure, such as a transit line and station, at the front end. This strategy has the effect of correcting market failures that, in many cases, prevent public and private investments in infrastructure and planned urban expansions.

Smart Technologies for Smart Buildings

How can we achieve urban and housing affordability? The Building Information Modeling (BIM) tools can support the international community for such challenge. It can change the way we plan, build and manage our cities, optimizing costs throughout the whole project life. The main concept is that the base-module can be employed worldwide with local construction technologies in order to preserve place identity. The aim is soft, materials, labor and maintenance costs optimization in order to increase the housing solutions for people not able to approach good housing solutions and finally promote Real Estate private sector investments in affordable housing. In a graph showing time and costs throughout the projects phases from planning and design to the building end of life, it is evident that the maintenance stage represents the main part of the building life cycle (both in terms of time and costs), remarkably higher than in the other stages. From the very early stages of the project it is possible to control the maintenance costs and develop a LCC analysis. This is the reason why the use of BIM tools supports more efficiently the project instead of using traditional building processes.