The Transformative Power of Cities

Urban areas are playing a decisive role in this ‘century of the cities’: cities and their populations are thus drivers of global environmental change, while at the same time being affected by it. The progress of the transformation towards sustainability will depend substantially on the decisions that will be taken in cities over the next few years and decades. We need a paradigm shift away from incremental approaches that are essentially driven by short-term requirements, towards transformative changes with a strategic, long-term view of humanity’s natural life-support systems and the creation of a form of urbanity that promotes human quality of life.

Starting from a global perspective and a multi-sectoral (systemic) and transdisciplinary approach on urbanization, the conference gave special focus to two main issues for future urban development: the role of real-estate markets within the global financial system, and the influence of the increasing digitization of cities and urban living environments.

Sabine Schlacke, Chair, WBGU, Institute for Environmental Law and Planning Law at the University of Münster, Germany

Dirk Messner, Chair, WBGU, German Development Institute, Bonn, Germany

In 2016, the German Advisory Council on Global Change (WBGU) published a report entitled ‘Unlocking the transformative power of cities’, revealing prospects and what is needed for this paradigm shift in urban development. The WBGU describes constraints within which cities’ development pathways towards a people-oriented form of urbanization should be realized, and which, if breached, would put sustainable development at risk. In this regard, all cities and urban societies should pursue development pathways that abide by the planetary guardrails, and they should ensure that universal minimum standards on substantive, political and economic inclusion are adhered to. Furthermore, they should promote ‘Eigenart’: i. e. cities should create the necessary conditions for self-efficiency, quality of life and local identity, and all decision making should take into account the socio-cultural and spatial diversity of cities.

Barbara Hendricks, Federal Minister for Environment, Nature Conservation, Building and Nuclear Safety, Germany

Panelists  

Saskia Sassen, Columbia University, USA
Stephan Bone-Winkel, Beos AG, IREBS International Real Estate Business School, University of Regensburg, Germany
Leilani Farha, UN Special Rapporteur for Housing and Human Rights (video message)
Joseph Schechla, HIC-Housing and Land Rights Network, Cairo, Egypt
Moderator: Karen Pittel, WBGU, Ifo Center for Energy, Climate and Exhaustible Resources, Munich, Germany

For two decades, real estate in general and housing in particular have been at the centre of a historic structural shift in global finance. It is believed, for example, that about 60–70% of banking business transactions in industrialized countries today are related to land and real-estate investment. This impact of global financial markets effects cities in different ways. On the one hand, they are regarded as drivers of economic growth by channelling investment to cities. On the other, the assumption that markets are the most rational means of resource distribution for regulating the allocation of urban land and housing has led to public policies that have abandoned people-oriented city planning and the idea of land and housing as a social good. Financialized housing markets respond to the preferences of global investors rather than to the needs of the communities. It is also argued that the dominant impact of wealth and private investment has often created and perpetuated spatial segregation and inequality in cities; housing disconnects from its social function and becomes only a commodity. Today, residents are sometimes confronted with the fact that, as a result of a wide range of financial products, their homes – and even their neighbourhoods – are owned by bondholders, public stockholders, multibillion dollar funds or even nameless shell companies. It is then difficult to know who might be accountable when it comes to the rights of the tenants. Moreover, in many cities an increasing number of investor-owned homes are left empty due to real-estate speculation. In developing countries and emerging economies, these developments have particularly profound consequences for those in need of adequate housing. The urban poor are pushed out into suburbs where their time and money is further taxed by longer commutes, more expensive transportation and/or insecure tenure.

The interconnections between the global financial system and private investors in the development of cities and urban societies are enormously complex. So far, responses have tended to be very sporadic and reactive with little impact on access to housing for all and sustainable urban development.

However, improvements can probably not be tackled by any single ‘big bang’ solution on its own. Rather, for the transformation of cities towards sustainability the role of real-estate markets needs to be discussed and broader systemic issues regarding the financialization and commodification of housing urgently addressed.

Hans Joachim Schellnhuber, WBGU, Potsdam Institute for Climate Impact Research, Potsdam, Germany

Panelists

Carlo Ratti, Carlo Ratti Associati, SENSEable City Lab, MIT, USA
Shivani Chaudhry, Habitat International Coalition - South Asia Program, New Delhi, India
Moderator: Ina Schieferdecker, WBGU, Fraunhofer Institute for Open Communication Systems FOKUS, Berlin, Germany

The spread of information and communication technologies, which has accelerated since the beginning of the 21st century, is one of the most important global trends. There is no doubt that the emerging ‘digital age’ will have a huge impact on the way cities and city dwellers‘ quality of life will develop. Whether all forms of urban digitization will contribute to people-oriented and sustainable urban development is, however, controversial.

Up to now, the ‘smart city’ rhetoric often promises an urban utopia in which the urban citizen enjoys the full range of technological support: self-driving electric cars take you to the next train station, drop you there and then drive themselves off to park and recharge. A person who has a heart attack can be rescued by sending a drone equipped with a defibrillator long before an ambulance arrives. Multi-functional street lighting switches on only when a person or a car is passing by; it can be simultaneously used for recharging electric cars and provides wireless internet access. Cities will be built using architecture that senses and responds.

Other people are critical as to whether the digital city will be able to solve fundamental problems of urban life, such as access to adequate and affordable housing, a functioning public transport system, avoidance of air pollution, or access to open public or green spaces. Some argue that smart cities, especially in developing countries and emerging economies, might become enclaves that keep out the poor; even public funds are being spent on gated ‘privatopias’ instead of on low-cost housing and basic services. In this sense, digitization can aggravate the urban divide. Furthermore, issues such as privacy, data governance and security are often also ignored by governments and civil society.

Although we don’t know where the digital future will take humanity, we urgently need to discuss how we can steer the digitization of cities in a way that leaves no one behind and supports the transformation towards sustainability.

Sabine Schlacke, Chair, WBGU, Institute for Environmental Law and Planning Law at the University of Münster, Germany

13.00-14.00

Welcome note

Sabine Schlacke, Chair, WBGU, University of Münster

Keynote: Global Urbanisation and the Transformation towards Sustainability

Dirk Messner, Chair, WBGU, German Development Institute - DIE

Keynote: Germany’s Responsibility for Sustainable Global Urbanisation

Barbara Hendricks, Federal Minister for Environment, Nature Conservation, Building and Nuclear Safety, Federal Republic of Germany

14.00-15.45

Thematic session 1: Do Real Estate Markets Lead to Unjust Cities?

Saskia Sassen, Columbia University

Stephan Bone-Winkel, Beos AG, University of Regensburg

Leilani Farha, UN Special Rapporteur for Housing and Human Rights - video message

Joseph Schechla, HIC-Housing and Land Rights Network

Moderator: Karen Pittel, WBGU, Ifo Center for Energy, Climate and Exhaustible Resources

Coffee break

16.30-17.00

Keynote

Cities as Complex, Self-organizing Systems

Hans Joachim Schellnhuber, WBGU, Potsdam Institute for Climate Impact Research

17.00-18.45

Thematic session 2: Digital Cities - Potential or Risk for Sustainable Development?

Carlo Ratti, Carlo Ratti Associati, SENSEable City Lab, MIT

Shivani Chaudhry, Housing and Land Rights Network (Habitat International Coalition - South Asia)

Moderator: Ina Schieferdecker, WBGU, Fraunhofer Institute for Open Communication Systems FOKUS

Conclusions

Sabine Schlacke, Chair, WBGU

19.00-21.00

Reception

Conference team

Concept: Gesa Schöneberg, Benno Pilardeaux

Technical support: Viola Märtin, Mario Rinn, Martina Schneider-Kremer