The Hidden Wealth of Cities
As the world becomes more urbanized, better budgeting has become a key concern for city leaders everywhere. Unlocking the public value of poorly utilized real estate, for example, or monetizing transportation and utility assets, could and should become core urban strategies.
STOCKHOLM – The world is becoming increasingly urbanized, as more people are choosing to live in towns and cities than ever before. The trouble is, most urban areas are unprepared to manage the influx.
Cities around the world face a looming investment crisis that makes them less livable than they should be. The maintenance of vital social and economic infrastructure, not to mention development planning, is being delayed because of a lack of cash. With local governments’ finances burdened by continuously expanding spending commitments, public resources in many cities are highly constrained.
It doesn’t have to be this way. Even struggling cities own a range of commercial assets that can be used to reverse these trends. Unlocking the public value of poorly utilized real estate, for example, or monetizing transportation and utility assets, could and should become core urban strategies. This does not require privatization, but rather that assets could yield a reasonable return, freeing more resources than most cities currently have on hand. In fact, through smarter asset management, cities could more than double their investments without having to raise taxes or cut spending.