Urban Finances

Social cohesion, affordable housing, climate-friendly, energy-efficient and climate-adapted cities, enhanced and qualified central urban areas as well as urban infrastructures, green and healthy cities and, last but not least, the challenges of digitalization require from cities integrated urban development planning, know how, adequate and qualified personnel and, most importantly, investments. Cities need a sound financial basis to be able to manage these tasks in a short-, medium and long-term perspective. The event will present which regulations and mechanisms exist in Germany to make cities be able to achieve this aim. The most important momentum is the legislative coverage of local self-government by the Basic Law as Germany’s Constitution, whose respective paragraph reads: “Municipalities must be guaranteed the right to regulate all local affairs on their own responsibility, within the limits prescribed by the laws. Within the limits of their functions designated by a law, associations of municipalities shall also have the right of self-government according to the laws. The guarantee of self-government shall extend to the bases of financial autonomy; these bases shall include the right of municipalities to a source of tax revenues based upon economic ability and the right to establish the rates at which these sources shall be taxed.” Through a historically grown financial redistribution system – the strong one supports the weak one – the target shall be reached that local and public services may be offered without any regional imbalances. There are additional support programmes, e.g. the National Urban Development Promotion Programme (Städtebauförderung), through which the national level additionally supports cities, e.g. for building attractive and livable inner city areas. Finally, there are public banks offering cities loans at low interest rates to update their infrastructures, such as kindergartens, schools and sport facilities or transport infrastructures and waste management systems. The event will demonstrate that urban development as well as therewith necessary financial means require an overall responsibility, strategy and policy of a nation. Considering the situation in Germany, this is the role of the National Urban Development Policy (Nationale Stadtentwicklungspolitik).