OECD work on Cities

Compact urban development


Cities are crucial hubs of economic activity and innovation that can contribute to environmental sustainability by introducing inclusive and sound green growth policies.  

  • What's the issue?

Almost half of the global population currently lives in cities and this is expected to increase to 55% by 2050. At the same time, urban sprawl is increasing at a much faster pace than population growth, with the overall built-up area around the globe having increased 2.5 times over the last 40 years. Uncontrolled urban expansion creates negative impacts, such as higher infrastructure costs and diminished energy and resource efficiency. It can also result in encroachment on agricultural land, forests, open space or wetlands, with a corresponding loss of the economic, recreational and ecological values provided by those ecosystems. Longer commuting times without affordable public transport systems also diminishes access to jobs and services for many urban residents.

Compact urban form, characterised by dense and proximate development patterns linked by public transport systems and with accessibility to local services and jobs, can counteract such negative impacts and maximise the economic, social and environmental potential of cities. It is associated with a wide range of urban benefits, including increased productivity due to agglomeration economies, improved accessibility to urban services, reduced travel times, and a smaller ecological footprint due to lower energy and land consumption.

However, if not managed well, compact cities can result in potentially adverse effects related to increased density such as traffic congestion, air pollution and loss of recreational spaces, and higher land values and housing costs disproportionately affect renters, first time buyers and low-income households. To successfully harness the benefits of compact cities while avoiding trade-offs calls for comprehensive and tailored policy interventions. Policy makers can leverage regulatory and fiscal tools to mitigate negative impacts and secure sufficient housing supply and affordability, sustainable transport, and the quality of the urban environment by preserving green and public spaces. 


  • What can the OECD offer?

OECD work on compact urban developmentinforms evidence-based policymaking to help deliver more inclusive and sustainable cities. Drawing on comparative studies on compact city policies across territories, it assesses a range of policy instruments that can help harness the benefits of compact urban form, and provides recommendations on policy and governance frameworks at different levels of government. 





For further information, please contact Tadashi Matsumoto, Head of Unit, Sustainable Development and Global Relations.


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