National Urban Policy Review of Colombia

Assessment and recommendations

Strong and fast urbanisation in Colombia

Colombia is a highly urbanised country. According to the international definition of the degree of urbanisation endorsed at the 2020 Statistical Commission of the United Nations, 64% of the Colombian population lived in cities in 2015, while 25% lived in towns and semi-dense areas and 11% in rural areas (compared with 45%, 32% and 23% respectively in upper middle-income countries). Colombia has urbanised quickly over the past 70 years, as the share of the population living in urban areas according to the latest national census rose from 38.3% in 1950 to 75.5% in 2018. The number of urban inhabitants (living in the core cities of FUAs) rose by 1.3% per year on average between 2005 and 2018 (from 30.9 million to 36.4 million people). The National Administrative Department of Statistics (DANE) expects the share of population living in urban areas to reach 76% by 2050.

Colombia’s rapid urbanisation has mainly resulted from massive flows of rural migrants moving to urban areas in search of better living conditions since the late 1930s. In addition, 50 years of armed conflict and violence have pushed millions of people to flee areas of conflict, most often located in rural areas. As of January 2022, Colombia registered 8.2 million victims of forced displacement. More recently, Colombia has also been the main destination of the Venezuelan exodus. As of December 2020, more than 2.6 million migrants and refugees from Venezuela had settled in Colombian cities.

Colombia has developed a relatively polycentric urban system, with several major cities. Almost 40% of the urban population (13.2 million people) live in the municipal cores of 5 municipalities (Bogotá, D.C.: 7.4 million; Medellín: 2.4 million; Cali: 2.2 million; Barranquilla: 1.2 million; and Cartagena: 1.0 million). Less than 15% of Colombia’s urban population live in the 942 municipalities that count fewer than 20 000 inhabitants in their urban cores.

Around 66% of Colombia’s total population and 80% of the urban population lives in FUAs. According to the European Commission/OECD definition, Colombia has 53 FUAs composed of 106 municipalities, distributed mainly in the north, west and centre of the country. Out of these 53 FUAs, 45 have no commuting zone (i.e. 84% of total FUAs) – a high share compared to other OECD countries (27% on average). Consequently, the share of the Colombian FUA population living in commuting zones is only 2.6%, much less than the OECD average of 23.9%.

Colombia has urbanised through both densification and urban expansion. The urban core areas (cabeceras municipales) of Bogotá, Bucaramanga and Medellín rank among the world’s most densely populated cities (with 17 787, 10 409 and 20 363 inhabitants per km² respectively in 2018). Even when considering the whole metropolitan area, Colombian metropolitan areas, including Barranquilla, Bogotá and Medellín, are amongst the most densely populated among OECD countries (883 inhabitants per km² on average, higher than the OECD average of 644 inhabitants per km²). Colombian cities have grown faster physically than demographically, indicating a phenomenon of urban sprawl. Between 1990 and 2015, the urban footprint in Colombian cities grew on average by 2.50% while the population increased by 2.28%.

Fast urbanisation in Colombia has been accompanied by the emergence of informal settlements. These are located mainly outside of municipal core areas but many are also located within them. Across Colombia, there are 1 517 reported informal settlements and more than 60% of them are concentrated in 6 cities (Bogotá, D.C., Bucaramanga, Cali, Medellín, Neiva, Villavicencio). Informal settlements represent around a quarter of the built-up area of Colombian cities and are home to almost 5 million people.

Strengths and challenges in Colombia’s urban system

Each of the 1 103 municipalities in Colombia presents a distinct set of geographic, demographic, economic and social characteristics. Cities in Colombia have tended to develop in isolation from each other, with little interaction and complementarity between them, notably due to complex geography and precarious transport infrastructure. Despite some progress achieved in terms of inter-municipal connectivity, there is still potential to seize the comparative advantages of cities and leverage economies of scale.

Cities are the engine of economic growth but productivity is low by international standards

Urban areas are the economic engine of Colombia. They account for 85% of the country’s total gross domestic product (GDP) today. Half of Colombia’s real GDP is produced in 23 municipalities and almost 40% in only 5 cities (Barranquilla, Bogotá, D.C., Cali, Cartagena and Medellín). Annual GDP growth in these 5 cities made up 63% of total annual GDP growth in 2016. In line with the concentration of Colombia’s GDP, half of Colombian companies are located in only five cities: in Bogotá, D.C. (29.4% of all companies in 2018), Medellín (8.7%), Cali (5.9%), Barranquilla (3.2%) and Bucaramanga (2.8%).

A large part of the economy is informal, both in Colombia and in its cities. Nearly 60% of all workers in Colombia work in the informal sector – a high share compared to other countries in Latin America, even though the 2012 tax reform cut social security contributions and reduced non-wage labour costs. The share of workers in the informal sector in the 23 main cities and their metropolitan areas was below the national average but still almost half (48%) of the labour force in October-December 2021.

Labour productivity in Colombian metropolitan areas on average is the lowest among all metropolitan areas in OECD countries. With around USD 43 800 per worker in 2018, Bucaramanga is the most productive metropolitan area in the country but one of the least productive metropolitan areas in the OECD. Some factors explaining low productivity levels include the low level of skills compared with other OECD countries; the lack of competition in key sectors, such as transport or telecommunications; the high regulatory burden; and the relatively low levels of integration in international trade. Another challenge is the high share of low productivity small and very small firms. Small and medium-sized enterprises (SMEs) account for about 67% of employment but only 28% of GDP in Colombia (in 2017), much lower than the averages in OECD countries.

Low digital connectivity is also damaging Colombia’s productivity levels, despite important steps taken towards the digital transformation. At the end of March 2021, 8.05 million people had Internet access at home, compared to 6.08 million in March 2019. However, access to high-quality Internet differs across cities and regions. In the capital region, for example, 17% of households have access to fibre connections, while in the region of Vichada, less than 1% of households have access to high-quality Internet. Moreover, digital services are not affordable for the vast majority of the population. In Bogotá, a 30-Mbit landline connection costs about USD 30 per month but, in small towns, the same amount only pays for 2 Mbit. During the COVID-19 crisis, digital technologies allowed part of the population to telework or study remotely, whereas few people had high-speed broadband Internet and the skills to fully benefit from digital technologies.

The Colombian urban economy is characterised by concentration in a few low value-added sectors (e.g. hospitality sector, personal services), skills shortages, high levels of informality, low levels of complementarity among cities, poor infrastructure and corruption. The six largest cities in the country register low levels of productivity compared to other Latin American and OECD countries. Moreover, Colombia’s innovation system is still small, which dampens the development of new economic activities. In 2019, investment in research and development (R&D) represented only 0.48% of GDP, compared to 2.5% for the OECD average. Moreover, despite progress over the last decade, transport and logistics infrastructure, which underpins trade and labour force mobility, remains less developed than in other OECD and Latin American countries. The service sector represents nearly 60% of the national GDP and 70% of the total workforce in Colombia. However, its potential to boost cities’ economy is undermined by high levels of informality (70% of informal workers work in informal enterprises, while the rest work as independent employees) and poor education and training policies that prevent workers from adopting new skills rapidly.

Air pollution in Colombian cities remains high

While air pollution has decreased significantly in major Colombian cities thanks to fuel quality improvement, traffic regulation and the installation of urban mass rapid transit systems, air pollution in Colombian cities remains high due to, among other things, the use of obsolete diesel vehicles, poor overseeing of polluting industries, the growing use of private cars and motorcycles, indiscriminate logging of forest, biomass burning, and an incipient environmental and recycling culture, which poses health threats with increased risks of heart and respiratory diseases. Compared with other OECD countries, air pollution is high in Colombian FUAs on average, with several FUAs registering levels of PM2.5 around 30 µ/m3 or more, which is above the 25 µ/m3 goal level per year. The residential sector is the second-largest consumer of energy in Colombia after road transport, with 41 739 gigawatts hour (GWh) consumed in 2019, However, compared with other OECD countries (e.g. Chile [50 763 GWh in 2018] and Mexico [62 000 GWh in 2018]), Colombia displays relatively low levels of housing-related greenhouse gas emissions per capita.

Municipal waste generation per capita in Colombia stands at less than half the OECD average. Nonetheless, most waste is landfilled due to the absence of waste processing plants in most municipalities. Although waste disposal capacity has increased in recent years, about 30% of landfills still do not comply with environmental standards. In several large cities, they have reached their full capacity and the amounts of waste disposed continue to increase leading to the use of transfer stations and temporary storage. For example, between 2010 and 2019, the amount of waste increased by 7.9% in Colombia, and by almost 20% in Bogotá.

Colombian cities are prone to natural phenomena, man-made disasters and climate change impact

Colombia’s geography makes it vulnerable to natural events such as hurricanes, floods, droughts, earthquakes and tsunamis, particularly in the Andean area and the Pacific coast. Around 15% of urban houses are at risk of flooding and 19% are in a landslide area. It is estimated that natural disasters could knock 1.5% of Colombia’s GDP in the long term. Man-made risks could come from a massive concentration of people and industrial risks. Colombia’s Second National Communication on Climate Change estimates that climate change will increase the average temperature between 2°C and 4°C by 2070, which will be accompanied by changes in hydrological conditions such as a reduction of rainfall by up to 30%. Climate change is expected to affect people’s quality of life, including in rural areas, by accelerating internal displacements and migrations towards cities, putting additional pressure on housing and public services as well as exacerbating marginalisation and poverty.

Critical sectoral policy challenges remain and undermine urban outcomes

A quantitative and qualitative housing deficit is addressed mainly by social housing production and the promotion of homeownership

Colombian cities face both a quantitative and qualitative housing deficit. Rapid urban growth has outpaced the ability of Colombian national and local authorities to provide affordable and quality housing. At the national level, it is estimated that there is an overall housing deficit for 36.6% of households. While the housing deficit is more common in rural areas, about half of households that face a housing deficit live in urban areas. House prices have increased sharply in the past 15 years as a result of a mismatch between sluggish growth in housing supply and fast-rising demand. Between 2005 and 2020, real house prices more than doubled in Colombia (+107.3%), i.e. the highest growth rate among all OECD countries, where real house prices increased by 19.2% on average over the same period. House prices have soared faster than household disposable income. In Colombia, the average household net-adjusted disposable income per capita is USD 33 604, significantly lower than the OECD average of USD 408 376. Between 2006 and 2020, Colombia registered one of the fastest increases in the price-to-income ratio among OECD countries. This is making housing increasingly unaffordable for many Colombian households, especially for first-time buyers. Moreover, about 9.8% of Colombian households (i.e. 1.4 million households) live in housing with structural and space deficiencies (i.e. in terms of the size of the dwelling) for which it would be necessary to add new housing to the existing stock (quantitative deficit). Another 26.8% of Colombian households (i.e. 3.8 million households) live in homes that could be improved through renovation (qualitative deficit) – meaning that 3 out of 4 households in a situation of housing deficit need home improvements.

Social housing ownership is the main pillar of Colombia’s housing policy. While homeownership remains the most common tenure in Colombia (46.2% of households), the private rental sector plays a central role (35.7%, a higher share than in the OECD on average [23.1%] and the highest share in Latin America [e.g. 21.9% in Chile and 15.0% in Mexico]). The share of tenants tends to be higher in cities, with a high proportion of them renting from the informal rental market (e.g. 43.5% in Bogotá). Since 2005, real rent prices have risen by 73.2% in Colombia, one of the strongest growth rates among OECD countries, making the private rental market increasingly unaffordable for many Colombian urban households.

The production of social housing has been increasing considerably in Colombia, occupying an ever-larger part in the general housing production. Between 2011 and 2020, around 2 million housing units of all types were built in Colombia, of which 44% were social housing. Colombia’s housing policy remains almost entirely focused on new social housing ownership, mostly located in urban peripheries. In 2015, the national government created the Mi Casa Ya (MCY) programme to promote access to “social interest housing” (a type of social housing that targets households with income lower than eight minimum monthly wages [MMW]). However, low-income households are not the main buyers of social interest housing. 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.

Colombia’s housing policy remains primarily guided by the idea of steering low-income households towards homeownership. The introduction of the Semillero de Propietarios (SP) programme has contributed to a diversification of housing options towards rental housing, by introducing a rent subsidy. However, its purpose is not to develop formal rental housing as such but to enlarge the MCY programme. Moreover, social housing tends to be of low quality, while the poor quality of the housing production (including in terms of the sustainability of construction materials) and the lack of integration of social housing settlements with the city are exacerbating irregular urbanisation and urban sprawl. Moreover, compared with other countries, Colombia calibrates its housing policy essentially on the basis of the housing deficit to be solved but relatively little on future needs (e.g. how many housing solutions will need to be built in the future to meet the increased number of households). There is currently no clear picture of what kind of social housing units are being effectively subsidised (size and type of housing) and where they are located, especially within urban areas. Such information is necessary to help the Colombian government evaluate the impact of its housing policy, regarding both housing demand and urban development.

Land use plans are the main instrument to implement urban policy but most of them are outdated and underused

Land use plans (planes de ordenamiento territorial, POTs) in Colombia are very complex, mostly outdated and underused. In 2021, 80% of POTs were outdated or in the process of being updated. Similarly, cadastral information for territorial planning is outdated as only 7% of municipalities had updated cadastral information in 2020. Formulating or updating a POT following requirements established by law is a costly and lengthy process for most municipalities. POTs are required to include a large number of topics to meet spatial and urban development objectives. Municipalities tend to lack access to up-to-date and accurate data that are necessary to elaborate a POT. In addition, they do not always have the financial resources or the technical capacity to process data to generate information and knowledge. The process to formulate or update a POT can also be framed by political interest rather than by actual local needs. Moreover, Colombia has a wide range of fiscal instruments to steer land use but these are seldom used to their full potential. For example, incentives for brownfield redevelopment, transfers of development rights and land value capture instruments exist but remain underused, even though they could offer an untapped source of revenue for infrastructure investments.

Despite investments, urban residents face critical mobility challenges

For almost 20 years, both the national and local governments have been working to improve public transport through national transport policies and local mobility plans. Despite these efforts, in Colombia, public transport systems are still characterised by low quality in terms of reliability, comfort, safety and environmental friendliness. A critical challenge for Colombian cities is also to find reliable sources of financing for the operation and maintenance of their public transport systems. 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, as well as infrastructure investment strategies and local development plans more broadly.

Even though public transport is the dominant transport mode in Colombia’s main cities and despite efforts to further increase its use, the number of motorised vehicles is still growing in Colombia. Between 2010 and 2017, the number of motorcycles more than doubled and the number of cars increased by 58%. This increase has partly been due to the lack of adequate and accessible public transport systems, fostering the use of private motorcycles in particular, which urban residents consider to be cheaper and faster. With a 25% rise in the number of road deaths between 2010 and 2018, Colombia has registered the second-highest increase behind Costa Rica, among only 8 OECD countries where the number of road deaths increased over that period.

Colombian urban mobility systems are still grappling with congestion and road fatalities. The dominance of motorised transport has led to time lost in commuting, pollution, increased wear on vehicles and roads, as well as social and psychological impacts due to higher levels of anxiety and stress. In particular, the transport sector is responsible for 12% of GHG emissions in Colombian cities, of which 90% are produced by road transport. Due to the COVID-19 crisis, however, Colombian cities have expanded existing proactive policies encouraging cleaner transport modes, especially through investments in cycling infrastructure. In 2020, Bogotá, D.C. and Medellín, for example, were among the first cities worldwide to announce the expansion of their cycleways.

Moreover, cities were not prepared to implement the physical spacing guidelines imposed by the COVID‑19 health crisis. In 2020, the Colombian government issued the National Policy on Urban and Regional Mobility (CONPES 3991) to contribute to social welfare, the protection of the environment and economic growth of cities, but it lacks considerations on accessibility and a gender focus.

Urban inequality has decreased and safety has improved but more could be done

Colombia’s urban development model so far has not been able to fully address the challenges of poverty and social exclusion in many cities across the country. In particular, the COVID-19 crisis exposed and exacerbated inequality in large cities, where the most vulnerable groups such as migrants, the poor, women and the elderly have been hit particularly hard. A striking manifestation of this inequality is the proliferation of illegal or informal settlements due to the lack of land for affordable housing and the difficulties in benefitting from housing programmes when workers lack stable jobs.

Although social indicators in Colombia have improved significantly over the past decade, the pandemic has wiped out pre-COVID progress. For example, the share of the population living below the poverty threshold had decreased in most capital cities and metropolitan areas between 2012 and 2019. However, that share increased again sharply in 2020 partly due to the COVID-19 pandemic, pushing the incidence of extreme poverty in municipal cores in 2020 back up to higher levels than in 2012 (14.2% in 2020 compared with 7.9% in 2012). While poverty levels are lower in urban areas than in rural areas, inequalities are wider in municipal cores than in less populated centres and dispersed rural areas. In 2020, the Gini index was 0.54 in municipal cores, compared to 0.46 in less populated centres and dispersed rural areas (across FUAs in OECD countries, the Gini index was 0.36 in 2016).

Although security has also improved substantially in Colombia and especially in cities in the past decade, thanks to proactive policies at the national and local levels to curb crime and violence, insecurity remains higher in cities than in rural areas. In 2021, 9.2% of people were victims of crime in urban areas, compared to 6.6% in rural areas. On an international scale, Colombian metropolitan areas are amongst the least safe OECD metropolitan areas (e.g. the number of homicides per 100 000 inhabitants was 23 in Colombian metropolitan areas, against 5.6 in the United States [US] and 2.8 in Germany).

The System of Cities has modernised Colombia’s approach to urbanisation

National urban policies (NUPs) are not a new concept in Colombia, which has at least three decades of experience in developing urban policy frameworks. In a quest to face urban development challenges, in 2014, the national government published the National Policy for the Consolidation of the System of Cities in Colombia (Consejo Nacional de Política Económica y Social [CONPES] 3819, hereinafter “System of Cities”), which aims to guide urban development to support economic growth and competitiveness, and improve the quality of urbanisation to upgrade people’s well-being. The System of Cities is the third generation of national urban development policies since the 1998 Cities and Citizens policy and the 2004 “Guidelines to optimise urban development policy”.

The System of Cities seeks to promote complementarity rather than competition among cities. One of its main objectives has been to prioritise physical and digital connectivity among cities, as most intra-urban development issues were already addressed in other instruments such as POTs and the Organic Law on Territorial Organisation (Ley Orgánica de Ordenamiento Territorial, LOOT), housing policies and municipal mobility plans. The policy also included issues on financing, quality of life in cities and productivity. The System of Cities is a transversal policy as it addresses the urban dimension of a wide variety of issues such as demographics, productivity, cost of living and quality of life, infrastructure, urban-rural linkages, planning and finance.

The System of Cities is largely in line with international benchmarks such as the OECD Principles on Urban Policy and the global monitoring of the state of the NUP carried out by the OECD, UN-Habitat and Cities Alliance. In particular, Colombia’s System of Cities has consolidated the functional urban approach, which is now part of the national policy discourse, reinforced the notion of interdependency between urban and rural areas, stressed the need to foster digital connectivity and introduced tools for overseeing the development of cities (e.g. the Modern Cities Index and the Observatory of the System of Cities). It has also promoted the concept of a compact city, which has been consistently present throughout the various types of NUPs in Colombia.

However, some challenges remain in the System of Cities

While the System of Cities has helped modernise Colombia’s approach to urban development, some challenges can be identified. First, the System of Cities has largely left intra-urban issues to sectoral policies (i.e. housing, transport and environment) and regulations such as the Organic Law for Territorial Organisation (LOOT) and land use plans (POTs). This has prevented coherence across policy sectors and the emergence of a long-term vision for urban development. Second, the NUP lacks a strong environmental and climate change dimension, as it does not define an urban green growth strategy that guides cities in their transition to a circular economy and links urban and environmental performance. Third, housing policy remains largely separated from urban policy and there has been little consideration of how housing finance has affected urban outcomes.

Challenges remain in the governance of the NUP as well. Implementation weaknesses derive from: rigid regulation; an inadequate institutional setting to lead and co-ordinate policy; limited consultation and consensus-building among different stakeholders; insufficient financial, human and technical resources (particularly in municipalities) and limited capacity at the local level. There has been a lack of adequate tools for co-ordination both across levels of government and among municipalities at the metropolitan level:

• Co-ordination across levels of government in Colombia is still weak despite efforts to strengthen it. A key limitation is the overlapping competencies of the different levels of government and the multiple plans that the latter must produce. For example, municipalities, districts, metropolitan areas and departments elaborate POTs that need to be co-ordinated but since municipalities make the last decision on how land is used within their territory, their POT may not always be compatible with higher-level plans. Colombia has created different territorial entities at the intermediate level with the purpose of facilitating co-ordination among governments at the same level and across levels of government. The intermediate level is composed of departments, metropolitan areas, municipal associations, administrative planning regions, associations of departments and associations of metropolitan areas. However, they lack clear competencies and, in many cases, funding. These entities should, in principle, help bridge national and municipal governments but the crowded landscape at the intermediate level is hindering that co-ordination. At the same time, associations of regional and local governments are playing a critical role in supporting vertical co‑ordination to manage the COVID-19 crisis. They are key interlocutors between national and subnational governments, and they identify solutions and support the implementation of emergency measures.

• Although the task force that elaborated the current NUP on the System of Cities identified 18 agglomerations of supra-municipal nature, there are currently only 6 metropolitan areas with a formal statute (Barranquilla, Bucaramanga, Centro Occidente, Cúcuta, Valle de Aburrá and Valledupar) and three agglomerations (Cali, Cartagena and Manizales). The reason why no more metropolitan areas were set up as an associative scheme is that it is compulsory to hold a public consultation with high levels of citizen participation in order to create a metropolitan area. Metropolitan governance in Colombia often faces challenges such as: the dominance of larger and richer municipalities over others; the lack of financing mechanisms; the lack of co-ordination of different POTs at different scales for the same territory; and the lack of binding powers of metropolitan areas. While some municipalities invest and deliver services jointly, many still prioritise their own local objectives rather than those of the broader FUA.

Moreover, the current System of Cities policy does not have an evaluation system. The Department of National Planning (Departamento Nacional de Planeación, DNP) has set up SisCONPES, an online platform to record the progress in the implementation of activities listed in all policy documents, and the Observatory of the System of Cities that helps to collect data on the state of cities. However, there is no provision to evaluate the impact of the NUP.

Since the adoption of the current NUP, Colombia has issued a variety of policies (e.g. the 2017 National Climate Change Policy, the 2018 Green Growth Policy and the 2020 National Policy on Urban and Regional Mobility), programmes (i.e. Biodiverciudades) and regulations (i.e. Metropolitan Areas Law) to manage urbanisation. Although these policies and programmes aim to tackle specific urban-related issues, they might have had the unintended effect of fragmenting the urban policy landscape. Therefore, it may be necessary to consolidate the vision and goals of disjointed policies to promote more transformative, productive, inclusive and resilient urban development.

Colombia is developing a new version of its NUP Cities 4.0

At the time of writing the present OECD National Urban Policy Review of Colombia, Colombia is preparing a new NUP called Cities 4.0 (Ciudades 4.0) to replace or update the current System of Cities. The experience of OECD countries such as Chile and Poland suggests that the NUP should be revised and updated in the medium term to reflect changing national priorities and adjust elements that require recalibration. Moreover, most of the projects or activities included in the action plan of the current NUP have already been conducted. There is also a renewed commitment of the line ministry (Ministry of Housing, Cities and Territory) to embrace leadership in urban policy design and implementation.

The current proposal for Cities 4.0 aims to consolidate the progress already achieved and take urban development to the next level by promoting inter-sectoral co-ordination and an integral vision of urban development. The proposal contemplates five axes around which urban policy should be based: i) improved capacity of local administrations (i.e. financing); ii) sustainability (i.e. adapting lifestyles to the changing environmental conditions); iii) planning and land use (i.e. optimising the existing city); iv) productivity (infrastructure for connectivity among cities); and v) innovation (i.e. use of information and communication technologies). Cities 4.0 has the opportunity to develop a coherent and self-reinforcing strategy to deliver compact, connected, clean and inclusive cities. The new urban policy could help integrate spatial and sectoral policies such as transport, housing, environment, spatial planning and economic development, into a coherent approach beyond current planning silos.

Key recommendations to unlock the potential of a new NUP for Colombia

As Colombia works on updating its NUP to reflect changing priorities, critical aspects need to be considered to ensure that the new NUP is in line with the current national and international context. Building on the accumulated national and international experience, Colombia may wish to include the following elements in Cities 4.0.

Reinforce the place-based approach to embrace the diversity of urban needs

Cities in Colombia present a high degree of heterogeneity, with different levels of economic performance (e.g. unemployment levels range from almost 20% in Florencia to 9% in Cartagena), administrative capacity (e.g. Cali and Medellín have comparable population levels with approximately 2.5 million inhabitants but Medellín has over 34 000 public employees while Cali has 5 600) and social development (e.g. Cali and Manizales have the lowest level of poverty in the country with 21%, while Quibdó has 60% and Riohacha almost 50%) and a majority of small urban centres. However, the current NUP takes a relatively rigid, broad-brush approach and does not provide much flexibility to meet specific local needs. Reinforcing a place-based approach for urban development originally considered in the System of Cities is particularly relevant to tackle the high levels of inequality within urban areas.

Use the new NUP as a tool to deal with the impact of the COVID-19 pandemic

The momentum provided by the pandemic should be seized to adopt a bold approach, taking into account issues prompted by the pandemic. For example, teleworking may remain a feature of the work environment for the long term and more widespread teleworking could eventually help reduce the urban-rural development gap if the digital divide is bridged. Active mobility (cycling and walking) has also gained more prominence and Colombia could use this momentum for reallocating road space and fostering micro-mobility.

Since no government alone can manage urbanisation effectively, the renewed NUP for Colombia should go beyond the provision of technical assistance for land use planning and environmental management plans, to encourage a continuous dialogue between national and subnational governments. This dialogue should not only be on how to recover from COVID-19 but, more broadly, how to move the national urban development agenda forward, how the NUP can create the conditions for more resilient cities in the country and how the national government can support local efforts to improve urbanisation. While this dialogue can nurture a more coherent recovery from both the pandemic and long-term urban challenges (e.g. sprawl), it can also prompt specific responses to local needs.

Continue promoting compact cities to make better use of the existing city

Cities 4.0 should continue promoting compact city development to pursue a more sustainable habitat approach and better planning to manage urban sprawl. Building compact cities – cities that are denser, with less unused land – based on revitalised urban cores could have economic, social and environmental benefits. However, to generate agglomeration economies cities also require a density of transactions and economic activity, which in Colombian cities is very low. Cities 4.0 could therefore include explicit compact city goals by encouraging dense and proximate development, strategies to retrofit built‑up areas and actions to minimise the negative effects of compact cities (e.g. higher land values, traffic congestion).

Mainstream climate change and disaster risk management into urban planning

The impact of climate change, as well as natural and man-made risks, needs to be more effectively considered in urban planning. Colombia’s geography makes it particularly vulnerable to natural extreme events such as hurricanes, floods, droughts, earthquakes and tsunamis. Man-made risks could derive from a mass concentration of people and industrial hazards. As suggested by the experience of Chile, the characteristics of natural surroundings are key determinants to consider in planning socio-economic and territorial development. If not properly taken into account, they can become high-risk elements that endanger people’s safety and well-being, economic development and the environment. Cities 4.0 should provide guidelines so that specific measures are developed in local development plans and POTs to address each municipality’s specific geographical conditions and socio-economic context.

Link urban and rural policies and continue promoting urban-rural partnerships

Cities 4.0 must recognise the interdependency between urban and rural areas, which is a central component of the functional approach to urban and territorial development. The axis on territorial planning and development of the Rural Mission (i.e. task force that assesses rural policy) and a new national rural policy, currently under discussion, provide a window of opportunity to link national urban and rural agendas to regulate the ownership, distribution and conservation of land and natural resources. This would help avoid designing and implementing separate strategies, as it is currently done, to address the challenges of urban and rural areas. Cities 4.0 could make explicit use of urban-rural partnerships as a means to achieve national development objectives and offer a range of institutional and financial incentives to help shape collaborative projects. Some actions that Colombia could consider include developing a range of financial incentives for building partnership projects, promoting urban-rural linkages through land use planning and the Biodiverciudades programme and expanding the scope of co-operation beyond environmental issues.

Introduce an evaluation system

Cities 4.0 should include mechanisms to assess the implementation of urban policy to inform the decision-making process and draw lessons on how cities and functional areas could be managed more effectively. Developing a framework to better monitor and evaluate NUP outcomes will require engaging a variety of actors both at the national and subnational levels. In particular, the Administrative Department of National Statistics (DANE), the Agustín Codazzi Geographic Institute (IGAC), the Ministry of Housing, Cities and Territory (MVCT) and the National Planning Department (DNP) should play a prominent role in this respect.

Key recommendations on leveraging urban-related sectoral policies for better-quality urbanisation

Putting in place an NUP per se is no guarantee of better-quality urbanisation. Its success will depend on the government’s ability to leverage the contribution of sectoral policies to the NUP. As a complement to the above-mentioned recommendations on the formulation of a new national policy, Colombia could consider the following five axes on urban-related sectoral policies.

Adopt a housing and habitat policy geared towards sustainable and inclusive urbanisation

Colombia needs to reconcile housing policy and urban sustainability. Providing affordable, decent and safe housing options for all, in particular for low-income households, is a crucial challenge for Colombia from a social and economic point of view. However, housing policy should not be pursued at the expense of urban sustainability, for example by prompting uncontrolled urban sprawl or building urban spaces that are not viable nor resilient in environmental, economic and social terms. Moving forward, Colombia could introduce quality and sustainability standards in subsidised social housing. Sustainability in social housing production should be addressed in a multidimensional way rather than solely through a green angle (i.e. water and energy savings). For example, other dimensions to consider could include the level of comfort (especially minimum space – which has been highlighted by the COVID-19 pandemic), as well as access to urban amenities and opportunities, ranging from basic services to public transport, culture, education and employment. Colombia should also acknowledge that homeownership is not the solution to everyone’s housing problem. Hence, Colombia should focus its efforts on developing intra-urban decent and affordable rental housing options for low-income households. In addition to social housing ownership and rental housing subsidies, Colombia could consider developing alternative housing programmes to enlarge the spectrum of the housing and habitat policy, for example via subsidies to foster urban regeneration and housing subsidies for assisted self-help production. These could help meet the diversity of needs of low-income households while promoting a more sustainable urban development pattern in Colombian cities. This housing and habitat policy for sustainable urban development should be supported by in-depth and up-to-date data and knowledge on the local dimension of the housing deficit and a more accurate measurement of housing affordability.

Modernise land use planning to manage urban development

Simplifying land use planning tools and making them more flexible could offer a critical tool to shape more accessible and sustainable cities. Colombia could consider streamlining the number of issues to be included in the POTs, emphasising the need to strengthen urban-rural linkages, evaluating projects according to the extent to which they serve community needs, and avoiding restrictive and single-use zoning regulation. To avoid the risk of uncontrolled urban development, Colombia would need to adopt incentives such as fiscal policies (e.g. property taxes and transport-related fiscal instruments) to facilitate land use planning at the metropolitan scale, prioritise urban regeneration and environmental preservation and encourage the private sector to pursue more compact urban development.

Shift the focus from urban mobility to urban accessibility

Expanding access to opportunities through public transport and active mobility should be at the top of the transport agenda in Colombian cities. To support its goal of compact urban development, Colombia could further prioritise affordable mass transit and high levels of active mobility to promote access to opportunities while boosting economic competitiveness and protecting the environment. For this purpose, Colombia could ensure that economic development, land use and mobility planning are conducted with a functional urban perspective and consider the development of a new strategic document on urban development and land use to complement the current mobility policy. Colombia should include affordability issues (i.e. housing and transport costs) in urban planning to build more affordable and connected neighbourhoods. Financing public transport should be seen as an investment rather than a cost. Colombia could thus consider exploring new sources of financing for metropolitan-wide transport such as how cities might cross-subsidise public transport and the use of road pricing and land value capture instruments. Colombia could also explore the viability of creating metropolitan transport authorities to fund transport, reduce competition between modes and facilitate co-operation between public and private operators. In addition, Colombia could include digital connectivity as part of mobility plans as an alternative to physical mobility and as a contributor to decarbonisation by reducing the need to travel. Moreover, Colombia must ensure that local development plans, POTs and mobility plans work in a co-ordinated fashion. Colombia could also use transport policies to achieve wider sustainable development goals by using public transport to support the transition of cities to a low-carbon economy, giving active mobility (walking and cycling) the highest priority over other means of transport for short-distance trips and strengthening current efforts to make public transport gender-sensitive.

Leverage digitalisation for more productive, innovative and inclusive cities

The government should also leverage digitalisation and innovation for more productive, innovative and inclusive cities. While the digital transformation is still at an early stage in Colombia, it can underpin efforts to build more competitive, sustainable and inclusive cities. The national government should play an enabling role to support the delivery of innovative solutions, capacity building and upscaling, including through a national smart city framework adapted to the local circumstances. Drawing on the experience of OECD and G20 countries, a smart city policy framework could help Colombia assess to what extent new (digital) technologies can improve the efficiency, sustainability and quality of public services and infrastructure projects for all residents. With a view to promoting equity and inclusiveness, this smart city agenda should address the heterogeneity of cities in terms of their needs and capabilities. The national agenda should guide the adoption of smart city initiatives at the local level to address issues of safety, environmental protection, welfare and accessibility. Moreover, it needs to offer adequate support to people of all ages and backgrounds in developing digital skills and literacy, so that they are able to access and profit from technological developments. Colombian cities could focus on unlocking their innovation potential through a formal innovation strategy, which should highlight the city’s priorities and objectives on pursuing innovation and the way to achieve them. Initiatives to develop information and communication technology (ICT) skills such as Ciudadanía Digital should continue to be reinforced.

Harness urban policy to advance equity and social justice

Colombia needs to lay the foundations for a new social contract through urban development. To tackle urban inequality, this review proposes two main actions:

• Improving the provision and management of urban public space. According to national regulation, every resident must have between 10m² and 15m² of public space. However, only the cities of Popayán, Santa Marta and Soacha comply with the national standard, while other cities like Barranquilla, Cali, Ibagué and Pereira only provide 4.3m² of public space per capita. Urban public space is sometimes used for activities that constitute law infringements, such as informal trade in the streets, parks and public squares. To improve the provision and management of public space, Colombia could: include qualitative aspects (e.g. access to green areas) in the norms and policies rather than purely quantitative ones (e.g. square meters of public space per person); ensure there is an economic use of public space where relevant (e.g. cities could charge a contribution for economic activities that take place in the streets and squares); connect public space strategies with public transport to make the most of existing infrastructure; and engage a broad range of stakeholders in the preparation and implementation of a public space strategy, including urban safety considerations.

• Upgrading informal settlements. The lack of affordable and accessible housing and land for development has led to the emergence of irregular settlements, generally in high-risk areas, with challenges of insecurity. Colombia needs to upgrade informal settlements, provide them with basic services and affordable infrastructure, and improve housing conditions as well as security of land occupancy rights (i.e. titling). Possible actions include recuperating urban spaces for communities in a situation of vulnerability and exclusion and allowing them access to basic health, environmental, education and cultural services. To fund upgrading, Colombia could explore joining up the finance dedicated to the construction of housing and infrastructure, and using housing microfinance to help low-income households to borrow small amounts of money to improve their homes progressively. Colombia should continue the process of regularising homeownership and assisting vulnerable and low-income households to improve the quality of dwellings. For example, home improvements programmes could provide subsidies to vulnerable households so that they can improve their current dwellings rather than being relocated, unless they are in high-risk areas. Housing improvement programmes should be complemented with neighbourhood improvement programmes designed with community participation as well as income generation measures to enable households to finance their own home improvement and ensure sustainable access to basic services.

Strengthening the urban governance framework

Improving Colombia’s ability to enhance its urban development outcomes depends on addressing the limitations of its governance structure. A key part of success rests in bringing a wide range of actors from both the public and private sectors to work together on achieving a shared vision for cities. It will also entail enhancing capacity for cross-sectoral policy making and ensuring that policy initiatives cascade down from broader national objectives to the neighbourhood level.

Reinforcing inter-municipal co-ordination mechanisms

Inter-municipal co-operation is based on local authorities’ willingness to join an associative scheme whose terms they set themselves in the statutes governing co-operation. Colombia offers several mechanisms that aim to make territorial organisation more effective and efficient. Currently, 86 associative schemes are in place, including 56 municipal associations. About 70% of these associative schemes have been formed around environmental policy goals. Municipal associations are the easiest way for municipalities to join forces around common objectives, and some have been operating for more than 25 years. They reflect a genuine motivation to co-operate, as 90% of municipalities in the country are small (less than 10 000 inhabitants) and cannot afford meaningful investments alone. One way of reinforcing territorial co‑operation in Colombia could be to facilitate single-purpose or multipurpose inter-municipal co-operation, through corporate joint committees whose task would be to support local authorities in economic development planning and policy implementation. The committees should have clear responsibilities and authority.

Facilitating metropolitan governance

Most commonly used mechanisms to promote urban development at the metropolitan level across municipalities in functional areas include: joint development of investment projects between urban and rural areas; co-ordinated public service delivery; and regular meetings among municipal leaders. However, their uptake has been limited so far. Facilitating metropolitan governance in Colombia requires acknowledging the interdependencies between policy sectors (e.g. housing, transport, land use, infrastructure, leisure, etc.) in inter-municipal or metropolitan planning and adopting an integrated policy approach. Municipalities in FUAs should define a multi-sectoral, cross-cutting strategy that guides inter-municipal co-operation. Departments (i.e. regional governments) should be given a clearer role in the promotion of regional integration through investment projects, strengthening their mandate to incentivise regional co-operation for investment projects as technical support or political facilitator of metropolitan governance. Adopting reliable instruments for monitoring and evaluation for continuous improvement of metropolitan outcomes will also help ground further co-operation in solid evidence.

Strengthening co-ordination across levels of government

The Colombian government could continue using the vertical co-ordination displayed during the COVID‑19 crisis to support the planning and execution of the recovery strategy and NUP. Since the 2010s, Colombia introduced the Contratos Plan (contract plan) to co-ordinate investment more effectively across levels of government in a cross-sectoral manner. Contratos Plan, called Territorial Pacts (Pactos Territoriales) since 2018, are investment programmes that focus on improving connectivity and service delivery in lagging areas in key policy domains such as education, healthcare and sanitation. This instrument could continue to help co-ordinate investments, including some adjustments, such as the simplification of the elaboration process and a requirement to focus on concrete investment projects with clear financing sources identified and stated in the contractual document.

Leveraging fiscal instruments to reinforce urban finance and investment

Fast urbanisation has placed a major burden on Colombian cities to finance and build urban infrastructure including roads, public transport systems, utilities such as water, sanitation, electricity, as well as Internet provision. To meet these tasks, Colombian subnational governments obtain revenues from three main sources: direct transfers from the national government, income from assets (royalties) and subnational taxes. Over half of subnational revenues in Colombia comes from direct, earmarked transfers from the national government’s general budget. This means that Colombian subnational governments have limited spending autonomy and need to turn to their own sources of revenue for financing investment projects. In 2020, almost 60% of transfers went to education expenditure, 23% to health, 5% to water and 10% to general-purpose items such as culture, sports and investment.

The 2016 OECD report on Making the Most of Public Investment in Colombia: Working Effectively across Levels of Government concluded that the country needs to adopt a more strategic and regional approach to investment in order to boost productivity. Cities and the national government need to engage in more and better public investment to bridge the large infrastructure gaps and territorial disparities. This requires articulating different investment priorities into coherent territorial strategies. Instead of focusing on individual investment projects, Colombia should move towards a more strategic and regional approach to investment. Colombia needs to establish closer links between planning and budgeting, as well as incentives to support horizontal co-operation across jurisdictions, in particular to strengthen FUAs, which are relatively small in Colombia.

An option for Colombia could be to improve the use of land-based financing instruments, such as the contribución de valorización (betterment levy) and the participación en plusvalías (participation in capital gains). To expand the use of these two instruments, the national government could provide technical assistance to small- and medium-sized cities on how to deploy them and build on their feedback to make the mechanisms more user-friendly. Colombia could also reinforce property tax and update the cadastre. The country has recently introduced the multipurpose cadastre, designed as an instrument of planning and information to address land property, land use, environmental and territorial management issues that each municipality faces. To strengthen cities’ fiscal room and meet urban development goals, Colombia could leverage taxes and fees such as property tax to control sprawl and tax low-density development. The experience of OECD countries recommends “piggybacking” onto higher-level income taxes by levying a tax as a supplement to the national income tax, rather than operating a local income tax. Colombia could also use transport fees to encourage public transit and active mobility, and therefore promote greener urban growth. To support metropolitan planning, Colombia could make the use of charges and fees as extensive as possible by structuring them so that they support cost recovery, particularly in the case of public transport and public utilities, mostly when the metropolitan area provides services likely to be financed with user charges. It is also important that metropolitan areas have more discretion in making decisions about service delivery and managing their budgets.

Building the capacity and capability of subnational governments

Urban development requires: improving the capacity of all levels of government to manage their workforce; promoting evidence-informed policy making; and engaging with stakeholders through participatory decision-making practices. The public service is currently understaffed, which weakens the implementation capacity of both the national and subnational governments. In 2013, subnational governments represented 43% of the Colombian public workforce. Subnational government staff expenditure accounted for around 47% of total public staff expenditure in Colombia, below the OECD average of 63.3% in 2012 (latest available statistics). Although Colombia has made strong efforts to ensure that the public service is staffed by career civil servants who are recruited on merit, there is still a shortage of skilled workforce, which constitutes a bottleneck for the design and implementation of investment projects at the local level. Colombia could explore options such as: professionalising the subnational public workforce; investing in strategic workforce planning (particularly in the largest cities); facilitating staff mobility across levels of government to support skills development; developing the managerial skills of municipal officials; and setting up a programme for the certification of competencies acquired through professional experience to facilitate career development. Of particular importance is to develop the subnational government officials’ skills for engaging the community in discussing local development matters.