Innovative methods for financing urban development: The European Union contribution

Abstract

The financing of projects in the context of urban renewal and regeneration has specificities that partly explain the progressive development of a common European urban policy agenda based on the pursuit of development of more 'sustainable cities and communities'. The paper briefly describes the recent evolution of European Union (EU) urban policy and the incorporation of integrated urban development as a priority for Structural Funds support in the 2007–2013 programming period. Although some restrictions remain, most notably with regard to housing, the fact that urban policy is now part of the mainstream of EU structural policy is one of the major changes in the new financial perspectives. A second major change is the incentive to use non-conventional financial mechanisms to fund EU programmes, aimed at putting into practice the sustainable communities idea. Joint European Support for Sustainable Development in City Areas (JESSICA) is presented as a financial engineering instrument designed not only to stimulate more innovative solutions to addressing urban problems, but also to contribute to significant leverage in the amounts of public and private funds necessary to respond to the challenge of giving new life to European towns and cities.