The Mexican Ministry of Urban Development offered a virtual course entitled “Sustainable Urban Financing Instruments for Municipal and Metropolitan Management” from January to March 2024. The course was developed jointly by the GIZ IKI project CitiesAdapt, on behalf of Germany’s Federal Ministry for Economic Affairs and Climate Action (BMWK) and the Federal Ministry for the Environment, Nature Conservation, Nuclear Safety and Consumer Protection (BMUV), and BIOCITIES, on behalf of the Federal Ministry for Economic Cooperation and Development (BMZ), as well as the Lincoln Institute of Land Policy. Contents from the course are now available in Spanish for download below.
Tailored for public service professionals, students, and practitioners in urban development, the course achieved over 3,000 individuals actively participating in its synchronous and self-paced activities. With contents which correspond to a 40-hour programme, the course was designed to contribute to capacity building for local governments on urban-metropolitan financing instruments.
Its content is segmented in 4 parts — Modules 1, 2, and 3 address urban management, land financing instruments, and financing instruments to support housing, with contents developed with support and expertise from GIZ implemented project BIOCITIS. Module 4 focuses on climate financing mechanisms and was developed through collaborative efforts with GIZ project CitiesAdapt.
| Module 1 focuses on Urban Management and the role of municipal governments, addressing governance in urban decision-making and the importance of stronger municipal finances and democratic revenue increase. It explores economic principles like agglomeration and competitiveness, advocating for prioritizing common welfare over individual interests, especially regarding property. The material also discusses challenges such as informal settlements and land valuation complexities, along with land value capture mechanisms for urban financing. It outlines a public agenda for municipal and metropolitan management, aligning with human rights and sustainable development goals. Additionally, it examines the private sector’s role in urban financing through Public-Private Partnerships (PPPs), highlighting benefits and challenges. |
| Module 2 addresses land financing instruments. This section of the course gives an overview on fiscal instruments, such as property tax, and explains their function in controlling urban growth and aiding territorial policy and urban finances. Another instrument discussed is the “contribution for improvements” (or “contribución de mejoras” in Spanish), which consists of financial contributions made by property owner(s) towards the construction of a public work that enhances the value of their properties. The model also discusses land distribution financing tools, including zoning, flexible zoning, right of preference, parcel regrouping, and Partial Urban Development Plans (PPDUs), and their role to capture land value increases to fund urban development, enhance planning, and optimize land use. Other land value capture mechanisms discussed include transferring or selling development rights and Large Urban Projects (LUPs) — or “Grande Proyecto Urbano (GPU)” in Spanish — which can be used to preserve protected land, generate urban development funds, and transform urban spaces. |
| Module 3 focuses on financing housing development. This section focuses on instruments favoring social housing in Latin America and the Caribbean, addressing strategies and specific examples implemented in the region to improve housing access for the most disadvantaged sectors. It covers rental for social housing and its advantages in terms of flexibility, state efficiency, policies addressing both supply and demand, and urban development contribution. Examples from Argentina, Brazil, and Chile are highlighted, along with discussions on cooperative housing models. The material also discusses instruments favoring social housing in Mexico, outlining detailed strategies, policies, and programs aimed at improving access to decent housing in the country. It discusses historical background, institutional frameworks, regulatory frameworks, plans, programs, and the current situation regarding housing production, deficits, and challenges, including the peripheral location of social housing units and the role of expropriation in acquiring land for social housing purposes. |
| Module 4 explores urban financing and climate change. Contextualizing the challenges posed by rapid urbanization and its climate impacts, this material emphasizes the role of urban planning in climate mitigation and adaptation and discusses integrating sustainability into financing through green and sustainable finance. It also describes specific financial instruments and successful case studies of cities implementing green projects. Addressing the challenge of aligning financing with climate goals, it discusses strategies to mobilize private investments and the role of government policies. Furthermore, this document examines instruments and mechanisms for climate financing, including accessing global funds like the Green Climate Fund. It presents examples of successful municipal projects funded through these mechanisms and discusses national climate financing policies, the importance of government coordination and specific adaptation and mitigation strategies for urban infrastructure and emissions reduction are highlighted, along with the role of municipalities in leading climate action and citizen engagement in climate initiatives. |
Contents of the course in Spanish can be found here:
1. General information on the course
2. Module materials
3. Keynote lectures
- Opening lecture
- Urban economy and land management
- Areas of opportunity and the future of urban financing instruments
- Climate financing mechanisms for municipalities
- Closing lecture
