Executive summary
Colombia has entered the 2020s with a twofold task: managing the accumulated consequences of fast but disorderly urbanisation spanning several decades, and addressing the impact of the COVID-19 pandemic on cities. Faced with a relatively polycentric urban system, Colombia’s 2014 national urban policy (NUP) -the System of Cities - has helped view urbanisation via the prism of functional rather than purely administrative boundaries of cities. This approach is well-aligned with the OECD Principles on Urban Policy, which were approved unanimously by the OECD Regional Development Policy Committee and welcomed by all ministers of regional policy from OECD member and partner countries in 2019. The System of Cities has sought to guide balanced urban development through a coherent NUP framework and more effective co-ordination across different sectors. However, its impact has been hampered by implementation failures, the lack of an evaluation system, and governance deficiencies. Colombia is currently developing a new NUP, called Cities 4.0, which will need to consolidate the progress already achieved, further promote an integral vision of urban development and strengthen urban governance.
Over the past 70 years, Colombia has gone through a strong and rapid urbanisation process that has not fully translated into economic growth and high productivity levels. The share of the population living in urban areas almost doubled between 1950 and 2018, rising from 38.3% to 75.5% according to the latest national census. Colombia has urbanised both through densification and through urban expansion. Between 1990 and 2015, the urban footprint in Colombian cities grew by 2.5% per year on average while the urban population increased by 2.3%. While urban areas generate about 85% of Colombia’s gross domestic product (GDP), five cities produce almost 40% (Barranquilla, Bogotá, D.C., Cali, Cartagena and Medellin) with the capital Bogotá, D.C. alone accounting for 22.9% in 2018. Average labour productivity in Colombia’s metropolitan areas is also the lowest among all metropolitan areas in OECD countries. Even the most productive metropolitan area in Colombia (Bucaramanga as of 2018) remains one of the least productive in the OECD. Obstacles to productivity include the concentration of the urban economy in low value-added sectors, a low-skilled workforce, a high share of small firms, low levels of innovation, the dominance of the informal economy and the lack of transport and digital connectivity infrastructure. Cities have also tended to develop in isolation from each other, with little complementarity among them.
Migration flows from rural areas, the displacement of rural inhabitants during 50 years of armed conflict, and international migration have stretched the capacity of cities to absorb and accommodate newcomers. Informal settlements now represent around a quarter of the built-up area of Colombian cities and are home to almost 5 million people, 11.2% of Colombian households in 2016. Despite considerable improvement in social indicators in recent years, inequality and insecurity remain high in cities. In 2020, the Gini index was 0.54 in municipal cores, compared with 0.46 in less populated centres and dispersed rural areas (0.36 in other OECD cities in 2016). In 2021, 9.2% of people were victims of a crime in urban areas, compared to 6.6% in rural areas.
Colombian cities face both a quantitative and qualitative housing shortage to meet the population’s housing needs. Between 2005 and 2020, real house prices more than doubled in Colombia (+107.3%, the highest growth rate in all OECD countries). At the national level, around one in three households need a housing solution (e.g. housing for ownership or rent, or housing improvements). Three in four households in a situation of housing deficit need a better home, not a new one. About half of households who face a housing deficit live in urban areas, and many of them work in the informal economy, which limits their prospects of accessing housing credits. In response to the housing challenge, Colombia’s housing policy has focused primarily on the production of social housing and has been steering low-income households towards homeownership. However, a significant share of social housing units is purchased by higher-income households as an investment strategy rather than by those most in need, especially as there is no condition of income or subsidy attached to social housing transactions. A housing rent subsidy has been introduced, but its final purpose is to lead low-income households towards homeownership.
Land use plans (planes de ordenamiento territorial, POTs) are the main instrument to implement urban policy but they are not used to their full potential. In 2021, 80% of POTs in Colombia were outdated or in the process of being updated. Similarly, only 7% of municipalities had updated cadastral information in 2020, which limits its potential use for territorial and urban planning.
Urban mobility systems are grappling with low quality and low reliability in public transport, high levels of congestion and road fatalities. This is partly due to the fact that cities lack reliable sources of financing to operate and maintain their public transport systems. Moreover, transport planning and land use planning are often carried out as separate functions, which leads to inconsistencies between urban mobility plans and land use plans.
More broadly, and despite recent improvements, air pollution in Colombian cities remains high, posing health threats with increased risks of heart and respiratory diseases. Although solid waste generation per capita is less than half the OECD average, most waste is landfilled due to the lack of waste processing plants. Colombian cities are also prone to extreme weather events and man-made disasters but the current NUP lacks a strong climate change component and does not link urban and environmental outcomes.
Gaps in the governance framework have hindered the effective implementation of the NUP. Despite the latter’s emphasis on the functional urban area approach, metropolitan governance arrangements have remained weak due to the dominance of the larger and richer municipality over others; the lack of stable financing mechanisms; poor co-ordination across POTs conducted at different scales; and the lack of binding powers of metropolitan areas. As a result, some municipalities still prioritise their own local objectives rather than those of the broader functional urban area.
Colombian cities present financial and capacity weaknesses. Municipalities have limited spending autonomy (half of their revenues come from earmarked transfers from the national government), and their financing needs, in terms of investment projects, sometimes surpass what they can cover with their own sources of revenue. In 2020, almost 60% of transfers from the national government to cities went to education expenditure, 23% to health, 5% to water, and 10% to general-purpose items such as culture, sports and investment. The public service is currently understaffed both at the national and subnational levels, which weakens the local implementation capacity.
To improve the quality of urbanisation and shape competitive, inclusive and sustainable cities in the post-COVID world, Colombia’s NUP could be recalibrated by:
Reinforcing a place-based approach to make more efficient investments with national resources at the local level;
Using the new NUP as a tool to move forward recovery from COVID-19 and the national development agenda;
Continuing to promote compact cities to make better use of the existing city and manage urban sprawl by setting specific compact city goals and retrofitting built-up areas;
Mainstreaming climate change and disaster risk management into urban planning;
Promoting urban-rural partnerships by linking urban and rural development planning;
Introducing an evaluation system on the implementation of urban policy and its different programmes to inform future urban policy reform.
Although an NUP can provide a coherent vision for national urban development, it is not per se a guarantee of better-quality urbanisation. Its success depends on the government’s ability to leverage the contribution of sectoral policies to urban development goals. Colombia could consider five intertwined policies to drive urbanisation in the coming decade under a consistent, long-term co-ordinated NUP:
Adopt a housing and habitat policy focused on sustainable and inclusive urbanisation. Key actions to consider in order to meet the housing deficit could include broadening the scope of housing policy towards a broader habitat policy by introducing housing subsidies for urban regeneration and assisted housing self-production, and adopting sustainability criteria in social housing production.
Modernise land use planning to curb urban sprawl and offer better quality urban public space by streamlining regulations on how land is used, evaluating projects according to the extent to which they serve community needs and avoiding restrictive and single-use zoning regulations.
Shift the focus from urban mobility to urban accessibility by ensuring that development, land use and mobility planning are co-ordinated within a functional urban area perspective; including: a digital connectivity dimension in mobility plans; exploring new sources of financing for metropolitan-wide transport; including housing and transport costs in urban planning; and promoting clean forms of public transport to support the transition of cities to a low-carbon economy.
Leverage digitalisation for more productive, innovative and inclusive cities. A national smart city framework could help support cities in better using digital technologies to improve the efficiency, sustainability and quality of public services and infrastructure, and develop residents’ digital skills to access services. Cities could also adopt a local innovation strategy that identifies clear priorities and the tools to achieve them.
Harness urban policy to advance equity and social justice. This requires upgrading the provision and management of urban public space; upgrading informal settlements through neighbourhood and home improvement programmes; and making urban regeneration part of an urban safety strategy.
To implement these strategies, Colombia needs to revamp its urban governance framework and improve local government capacity. This involves:
Reinforcing inter-municipal co-ordination mechanisms through corporate joint committees with clear responsibilities and authority.
Facilitating metropolitan planning and investment by defining a multi-sectoral, cross-cutting strategy that guides inter-municipal co-operation at the functional scale.
Enhancing vertical co-ordination of investment across levels of government, notably by focusing Territorial Pacts on concrete investment projects with clear financing responsibilities for each level of government.
Leveraging fiscal instruments to reinforce urban finance and investment by improving and expanding the use of land-based financing instruments.
Reducing the shortage of skilled public workforce in subnational governments by professionalising the subnational public workforce and investing in strategic workforce planning.