Financing is one of the biggest challenges for urban renewal projects. Cities are expensive to run and public Hinds often fall short. Corporations have a role to play hut, in Latin America, they face political and economic constraints.
"Private sector participation is an important component of any good urban development practice by a local government," said Ellis J. Juan, general coordinator of the Emerging and Sustainable Cities Initiative at the InterAmerican Development Bank. "Some sectors where revenue sources are easier to identify and monetize are more prone to public private partnership structures," he explained, and mentioned telecommunications and energy, with cash flows drawn from user fees. Urban transport, water and sanitation, however, "are more difficult" as user fees normally do not cover 100 percent of service costs, and may require subsidies.
For a long time, a Brazilian city has been held as the gold standard for urban renewal in Latin America: Curitiba. "It is still a model of continuity for the development of urban policies that pursue efficiency and environmental sustainability," said Architect Eduardo Rojas, an urban development consultant for the World Bank.
Rojas largely credits the Curitiba Research and Urban Planning Institute with the success. But he points to problems associated with the city's growth, including the displacement of lower income populations and polluting companies to the periphery. He is impressed with a Colombian city that some years ago was a "nogo:" Medellin. "It adopted a social urbanism approach," prioritizing the social and physical integration of marginalized residents."
Interestingly, a public company that operates as a private one was instrumental in die city's renaissance: Empresas Publicas de Medellin (EPM), owned by the city, yet it operates as a private company. In close cooperation with the municipality and local businesses, EPM brought about a comprehensive urban renewal through an array of public-private partnerships, earning Medellin the distinction of Most Innovative City in 2013, awarded by the Urban Land Institute, which considered it one of the most notable urban turnarounds.
Andres Blanco, sector coordinator institutions for development and senior specialist at the Inter-American Development Bank, said PPPs may be an efficient manner to develop land and rehabilitate public properties for private rental housing. "Municipalities sign contracts giving the right of use to private...