EUROPEAN COMMISSION Brussels, 20.11.2017 COM(2017) 657 final REPORT FROM THE COMMISSION TO THE COUNCIL on the Urban Agenda for the EU



1.Introduction The Pact of Amsterdam, agreed by the Member States of the European Union (EU) in May 2016, has been prepared in close cooperation with the Commission. It establishes the Urban Agenda for the EU which is a historic step on the path towards a closer association of cities to the development of EU and national policies. It gives an opportunity for cities to come up with concrete actions in favour of a better regulation, better funding and better knowledge of EU and national policies. This is an innovative working method putting multi-level governance in practice, the agenda being jointly steered by all involved partners on a voluntary, inclusive and equal basis. Twelve issues which are particularly important for urban development have been identified and will be addressed in an integrated way. In June 2016, the Council of the European Union confirmed the importance of the Urban Agenda for the EU and called on the Commission and EU Member States to fully engage in its implementation. The Council conclusions on the objectives and priorities of the EU and its Member States', which has been adopted for the Third United Nations Conference on Housing and Sustainable Urban Development (Habitat III), present some key features for urban development. They call for an integrated and place-based approach, together with a long-term vision, which is necessary in order to promote well-managed, socially inclusive and safe, resilient, resource-efficient and environmentally sustainable as well as economically prosperous cities of all sizes. The Urban Agenda for the EU is fully in line with this. Cities are important drivers of economic growth in the EU. It is in cities where most citizens live, where the biggest share of the Gross Domestic Product is generated, where a large part of EU policies and legislation are implemented and where a significant share of EU funds is spent. In addition, cities are actors of open innovation, enabling multi-level, multi-dimensional and multi-sectoral interactions between different stakeholders involved in the co-creation, co-design and co-implementation of integrated and innovative solutions. Cities are also the places where opportunities arising from the urban context can be seized (e.g. low emission transition, circular economy, clean mobility, cultural offer, etc.). At the same time, many challenges have a strong impact on cities and it is there that they are best addressed. These challenges can be related to global issues (e.g. unemployment, migration, impacts of disasters exacerbated by climate change, water scarcity, sustainable production and consumption or biodiversity loss, grey and black economy, etc.) but they can also be related to local issues, linked closely to the quality of life of their citizens (e.g. air quality, recreational space, traffic and noise levels, water pollution, etc.). The White Paper on the future of Europe underlined that "many Europeans consider the Union as either too distant or too interfering in their day-to-day lives" . As cities are one of the closest levels of governance to the citizens, working with them can bring the EU closer to them. Therefore, the EU and cities, together with Member States, Regions and stakeholders, should work hand in hand to have policies adapted to the needs of cities and hence deliver visible improvements to the daily lives of people. The momentum on urban issues has not only been on the rise in the EU but also globally where the EU and its Member States have been instrumental in shaping the New Urban Agenda. The latter reflects and reinforces the principles and key messages of the Pact of Amsterdam. The New Urban Agenda is creating a mutually beneficial relationship between urbanisation and sustainable development and will guide urban development policies and financing for the next 20 years. The Urban Agenda for the EU contributes to the external cooperation towards sustainable cities worldwide and strengthens the potential for inclusive, safe, resilient and sustainable urban development, framed by the new European Consensus on Development and the upcoming Staff Working Document on Cities and Local Authorities in third countries. The Council of the European Union has recognised that the Urban Agenda for the EU is a key delivery mechanism for the New Urban Agenda within the European Union . The Urban Agenda for the EU also gives an important impetus to several other international agreements. This is particularly the case for the Agenda 2030's Sustainable Development Goal 11 calling for "cities and human settlements" to be "inclusive, safe, resilient and sustainable" and other urban related goals. It also supports the Paris Agreement on climate change which is the first-ever universal, legally binding global climate deal recognising the critical role of cities in reducing emissions as well as the Sendai framework for disaster risk reduction . Finally, it has inspired the development of the recently adopted 'Union for the Mediterranean Urban Agenda'. The objective of the present report is to describe the initial stage of implementation and the preliminary results of the Urban Agenda for the EU until October 2017. The first part is dedicated to implementation and underlines the key features of the working method. The second part is dedicated to the results and presents the impacts that the Urban Agenda for the EU had so far on policy making as well as some preliminary proposals in terms of better regulation, better funding and better knowledge through the first draft Action Plans. 2.Implementation The Urban Agenda for the EU constitutes the 'umbrella' for all urban policy initiatives. As such, it should be implemented by all relevant actors at all levels. The Partnerships (groups of experts from the Commission, Member States, cities and stakeholders) play a key role. In these, all the governance levels are involved in every stage and work on an equal footing thereby sharing the responsibility of results and cooperating on a daily basis: EU Institutions and Advisory Bodies, Ministries of Member States, regional authorities, urban authorities as well as stakeholders. After one year of experience, the members consider that the working method is very positive as it promotes ownership and improves the content of the outputs. Twelve priority themes have been identified in the Pact of Amsterdam. These were chosen taking into account the priorities of the EU 2020 strategy for smart, sustainable and inclusive growth: Inclusion of migrants and refugees; Urban poverty; Housing; Air quality; Circular economy; Jobs and skills in the local economy; Climate adaptation (including green infrastructure solutions); Energy transition; Sustainable use of land and Nature-Based solutions; Urban mobility; Digital transition; and Innovative and responsible public procurement. These priority themes are addressed taking into account a number of cross-cutting issues which reflect some of the important policies of the EU, especially the territorial dimension: the need to have a good cooperation between cities and rural areas; the importance of small and medium-sized cities; the added-value of a good urban planning which can affect urban sprawl and activity in city-centres; the links with the international dimension, especially the New Urban Agenda and the Sustainable Development Goals; the general principle of gender mainstreaming, etc.. The Partnerships analyse challenges and bottlenecks to recommend focused, concrete and implementable actions in the form of an Action Plan to be finalised within two years after the start of their work. Their proposals adopted by consensus cover improvements of regulation, funding and knowledge but may also extend to policies, governance and practices. This approach takes into account the diversity of cities and their wider territorial context in order to contribute to the Union’s objective of territorial cohesion. All the twelve Partnerships have been set up in three phases between May 2016 and June 2017 (four Partnerships under the Dutch Presidency, four under the Slovak Presidency and four under the Maltese Presidency). Participating Member States and cities have been proposed by Member States, the Committee of the Regions, Eurocities, the Council of European Municipalities and Regions as well as the URBACT Programme and have been selected by the Directors-General Group on Urban Matters. A large number of cities and partners expressed their interest in participating in the Partnerships (with about 250 applications received in total). The coverage of the Partnerships is very broad: 22 Member States, 84 cities, 13 Directorates-General of the Commission, two associations of cities (Eurocities and the Council of European Municipalities and Regions), the EIB (in 8 Partnerships) and several stakeholders such as associations, non-governmental organisations, research and education bodies, and business representations (e.g. European Federation of National Organisations Working with the Homeless -, Polis - network of European cities and regions working on local transport -, Housing Europe). It is also worth underlining that the composition of the Partnerships is balanced with most Member States being involved, with cities of all sizes, of all parts of the EU and of all levels of economic and social development, as well as with some regional city networks and Regions. In order to ensure that the Partnerships remain operational, their size is limited to 15-20 members. It is therefore of key importance to work in full transparency and give a voice also to those outside its membership. This has been done through an interactive website called 'Futurium' which enables all those interested to be informed and to give feedback (e.g. on the first drafts Action Plans proposed by the Partnerships), a series of workshops and also a high-level conference organised by the Commission every two years called the 'Cities Forum'. The Urban Agenda for the EU requires the issues to be addressed in an integrated way. The priority themes require input and collaboration of experts from different policy fields. For example, the improvement of air quality is as much a matter of addressing issues related to transport, energy, sustainable management of natural resources, nature-based solutions, health, governance, housing, infrastructure, business, construction, financial models as well as research and innovation. In line with this approach experts from several Directorates-Generals of the European Commission participate in the work of the Partnerships which ensures, in particular, that they cover the many EU policies and instruments relevant for cities and that they work together to avoid duplications, establish complementarities and build on synergies. To reinforce a comprehensive approach of urban issues and consistent proposals to tackle these challenges, the Partnerships also coordinate their work among each other.‎ 3.First results 3.1.Impact on policy-making

3.1.1.Cities Cities are not only places where EU policies and instruments are implemented, they can also be the actors in developing EU policies addressing the challenges they face. In fact, through the work in the Partnerships many cities have demonstrated their ability to contribute in a meaningful way to EU policy-making. However, not all cities can invest time and resources to work at national and EU levels. It is therefore important to raise awareness and foster engagement of cities not directly involved in the work of the Partnerships. In addition, while not multiplying initiatives and networks, it is an important challenge for the coming years to support and build capacity to enable them to implement integrated approaches at local level through innovative cooperation between the administration, the business sector and citizens. 3.1.2.Member States Member States are very active in the implementation of the Urban Agenda for the EU and they have played a key role in the governance of the process. During the last Trio Presidency (Dutch, Slovak and Maltese Presidencies) this process has smoothly continued with the selection of partners for each of the twelve Partnerships, the monitoring of already established Partnerships and the discussions to steer the overall process. The Urban Agenda for the EU and the New Urban Agenda have also triggered a renewed policy interest in some Member States to develop or strengthen their national urban policy. This process has a wide potential by making the best use of the dynamism of cities and securing the integration of city initiatives and planning into the national and regional development strategies of the country. It can reinforce the cooperation between national and local levels, lead to the involvement of cities and stakeholders in the design of policies allowing for knowledge and good practices sharing on common issues. 3.1.3.EU Institutions and Bodies The Commission facilitates the overall process by bringing EU policy expertise in the Partnerships' meetings, providing a Secretariat for the Partnerships and having communication activities with all interested parties. The Commission reinforced the policy coordination to ensure a better coherence among EU policies, to avoid duplications, establish complementarities and build on synergies. This coordination still needs to be strengthened in the coming years to fully achieve results. In particular, the coordination happens both at political level, in the project team on urban matters and at operational level, in the inter-service group dedicated to urban matters which coordinates policy developments. The Urban Agenda for the EU constitutes the common frame for urban policy initiatives launched by the Commission. This is particularly the case for the European Innovation Partnership on Smart Cities and Communities, the Joint Programming Initiative Urban Europe , Horizon 2020 , the Covenant of Mayors (where many actions are in line with the key priorities of both the Urban Agenda for the EU and the New Urban Agenda, i.e. right to the city; public spaces; urban resilience), the Urban Innovative Actions (where the calls have been aligned to the twelve topics of the Urban Agenda for the EU), and for international commitments. Thus, the Urban Agenda for the EU is fully embedded in the work across the Commission and is referred to in a number of key policy documents such as: the Communication "Europe on the move - An agenda for a socially fair transition towards clean, competitive and connected mobility for all"; the e-Government Action Plan 2016-2020 under the Digital Single Market Strategy for Europe which includes the work of the Digital transition Partnership as one of its key actions; the Communication "Accelerating Clean Energy Innovation" where urban aspects are included, with a specific action on 'Smart, sustainable and inclusive urban demonstration projects and best practices in cities'; and the Action Plan on the integration of third country nationals which refers to the Partnership on inclusion of migrants and refugees as a framework to exchange experiences and best practices. The European Parliament is a very important player in the Urban Agenda for the EU through policy inputs to the Partnerships and funding for the Secretariat. Once the actions are finalised, they will be transmitted to the European Parliament to consider how they can be taken up in its work as co-legislator. The Committee of the Regions and the European Economic and Social Committee have been strong advocates of the Urban Agenda for the EU and continue to discuss urban issues on a regular basis. In particular, the COTER Commission agreed on a "Follow-up Strategy on the Implementation of the Urban Agenda for the EU". The European Investment Bank (EIB) is actively involved in the Urban Agenda for the EU. In particular, the EIB has created an Urban Agenda Working Group bringing together representatives from all EIB services to review the many ways in which the EIB can contribute to the Urban Agenda for the EU. 3.2.Actions proposed by the Partnerships Each Partnership has to formulate an Action Plan with concrete proposals for better regulation, better funding and better knowledge, related to the theme of the Partnership. The first three have delivered their draft Action Plans mid-2017 that will be finalised by the end of 2017 (on urban poverty, housing as well as inclusion of migrants and refugees). Afterwards these Partnerships may continue to work on the implementation of the proposed actions as well as potential further actions. The Action Plans of the remaining Partnerships are expected to be delivered in 2018/2019. There is no legal obligation to implement the actions which are therefore voluntary for the addressees of the actions. However, EU Institutions, Member States, cities and stakeholders should examine how to implement the actions falling within their competence. The Commission plans to do so, and may consider implementing some of those addressed to it in the form of legislative proposals, including funding instruments, inclusive policy-making processes or improved mechanisms for exchange of experience. Wherever relevant, the actions may be included in the Regulatory Fitness and Performance Programme (REFIT) for possible legislative amendments. 3.2.1.Better regulation Cities are faced with several layers of legislation produced at EU, national and sometimes also at regional and local level. Implementation of these regulations is sometimes difficult since the rules have not necessarily been prepared with an urban perspective. In the context of the Urban Agenda for the EU, the Commission explores how to better assess the impact on urban areas of EU legislation, using available tools and including stronger stakeholders' involvement. The Commission already analyses the potential territorial impacts of legislative or policy initiatives that have an urban dimension. In 2016 and 2017, the Commission tested the available methods on five cases: Evaluation of the Energy Performance of Buildings Directive; New Skills Agenda for Europe; Port reception facilities for ship generated waste and cargo residues; Minimum quality requirements for reused water in the EU; and Clean and energy efficient road transport vehicles. The territorial impact assessments gave the opportunity to experts of cities, regions and Member States to express their views to the Commission on EU initiatives and thereby provide useful insights on the varying potential impacts on cities. The results of the territorial impact assessments are being used for the Impact Assessments prepared by the Commission on its policy initiatives. In addition, the process allowed for close policy coordination among Commission services. The next step will be to draw conclusions from the test cases to ensure that improved territorial impact methodologies are used more broadly in the Commission and in Member States.

The first Partnerships' draft actions for better regulation focus on possible improvement of policy processes and legislation. They go beyond changing legislation and include new non-legislative proposals. These actions could be examined by the Commission in the frame of the REFIT Platform or through other channels. Some examples of draft actions that have been developed by Partnerships are: ·Review the Services of General Economic Interest decision regarding the target group for social housing – The objective is to review the current definition of the target group for social housing in the Services of General Economic Interest decision. The aim is to improve legal certainty for public and private social and affordable housing investors. ·Adopt a European Child Guarantee – The objective is to reduce the levels of poverty of children and young people at EU and national level with a Child Guarantee. The action requires defining a set of realistic objectives and measurable targets, guaranteeing children's rights through a child rights-based national plan or strategy for the fight against child poverty and providing adequate funds. ·Establish a European Migrant Advisory Board – The objective is to involve refugees and other migrants in the design of policies related to their integration. The Advisory Board will be comprised of migrants and refugees. At a first stage, it will provide advice to the Partnership (with the possible development of further actions) and at a later stage it could be extended to provide advice to the EU, national and local policy-makers. 3.2.2.Better funding Key European challenges such as energy transition, employment and inclusive society require investments in smart and sustainable energy, sustainable transport, information and communication technologies' infrastructures, social and nature-based innovation, affordable and energy efficient housing, education, health infrastructure, air quality or climate adaptation. Cities however face difficulties in financing these investments, following a steep decline in public investments since the crisis in 2010. Many EU instruments and funding opportunities are available to cities. For example, the European Regional Development Fund (ERDF) invests about EUR 100 billion (2014-2020) in cities and out of these, EUR 15 billion are managed directly by cities empowering them to develop their own strategies (integrating interventions from different policy fields based on local challenges and opportunities) and to select the most suitable projects for funding. ERDF also funds Urban Innovative Actions, with a budget of EUR 370 million (2015-2020), supporting cities in testing new solutions for urban development. Another important example is 'Horizon 2020' which has invested EUR 1.5 billion (2014-2017) on urban research and innovation actions, out of which EUR 435 million (2014-2017) devoted to innovation actions for Smart and Sustainable Cities. The European Investment Bank (EIB) invested EUR 116 billion (2011-2016) in EU urban development and lent directly to over 150 municipalities with a population above 75 000 inhabitants as well as indirectly to hundreds more through facilities with promotional banks. However, there is a need to better raise awareness about existing initiatives and the current advisory and financing landscape needs to be streamlined. To facilitate the exchange of experiences on funding urban projects, the Commission has established the Urban Development Network. At the same time existing sources need to be better tailored to cities' needs and challenges also by making use of other existing networks. To address this, the Commission and the EIB are working towards a new "Urban Investment and Advisory Platform" which will provide financial and technical advisory services for cities. The platform will offer bespoke support throughout the key stages of preparing and implementing integrated urban projects, including development of investment strategies, preparation of project pipeline and exploration of innovative financing tools such as the combination of European Structural and Investment Funds with the European Fund for Strategic Investments. The first Partnerships' draft actions for better funding focus on improved access of cities to EU funding based on the needs of local authorities and on the post-2020 cohesion policy framework. Some examples of draft actions that have been developed by Partnerships are: ·Establish a block grant for urban authorities to fight poverty in cohesion policy post 2020 – The objective is to facilitate access to EU Funds in cities through the introduction of a new thematic objective on urban development with the corresponding ex-ante conditionality and a possible earmarking of funds for urban poverty. ·Provide better access for cities to the EU funds supporting the integration of refugees and other migrants – The objective is to provide cities with a better access to EU funds promoting the integration of refugees and other migrants. In most cases cities do not have direct access to EU funds but have to go through their Member State or regions, which are responsible for managing the funds. In addition, the access to these funds can be complex which represents a challenge for cities that have limited administrative capacity and/or have to act in urgency. The action aims at improving the situation in the next multiannual financial framework (post 2020). 3.2.3.Better knowledge Cities have to adapt to a changing world. Their decisions should be based on accurate information and can be inspired by the experience of other cities. EU policies, legislation and instruments must also be based on strong and reliable evidence on urban issues. This is why the Urban Agenda for the EU aims to have a better knowledge base and promote exchange of good practices. In order to improve access to data, the Commission has established the 'Urban Data Platform' bringing together, for the first time, the available data from Eurostat on key urban challenges (e.g. housing, key pollutants or traffic) and providing key indicators, not just at city level but also for functional urban areas and metropolitan regions. In addition two important recent publications are contributing to the understanding of European cities: 'Urban Europe: statistics on cities, towns and suburbs' (2016) providing detailed statistics; the second presents the state of the European cities highlighting how the unique characteristics of European cities can support the EU priorities of jobs and growth, migration and climate action by boosting innovation, embracing people from different backgrounds and reducing the impact on the planet. The overall understanding of urban issues could greatly benefit from a global, harmonised definition of cities, as a means to move forward the evidence-base of global discussions on urbanisation and urban development. To progress on this, the Commission has taken a commitment towards the international community to develop such a definition. The Commission is also helping cities in better designing their own policies, for example, in self-assessing their environmental performance and sustainable approach on key environmental topics through a benchmarking tool called the 'Green City tool'. Knowledge and information also needs to be shared with the cities in a streamlined manner. This is why the Commission has established a single web entry point for cities and stakeholders, the 'one-stop-shop' on all the EU urban initiatives, which provides complete, reliable and customised information on EU regulations, funds and knowledge. It is important to capitalise on the knowledge and experience created. To do so, a fresh look on knowledge capitalisation, capacity building and networks is needed. Indeed, knowledge, which has been created over decades with EU support, is fragmented, made available through individual projects and is thus often too difficult to access for cities and policy makers. Scientific knowledge (e.g. from Horizon 2020 'Excellent Science' pillar, Civitas, the European Environment Agency or the European Commission's Joint Research Centre) and applied knowledge (e.g. from the Joint Programming Initiative Urban Europe, URBACT or ESPON programmes) needs to be brought together, synthesised and made available in an easy way for policy-makers. There have already been some attempts such as the Urban Development Network or the Knowledge Exchange Platform to capitalise knowledge created under EU programmes (for example, the Knowledge Exchange Platform presents to cities the new research and innovation solutions in response to the numerous societal challenges). This transfer of knowledge is also very relevant for external cooperation as the EU has a lot of experiences on urban development that can be shared with other countries. The first Partnerships' draft actions for better knowledge focus on the need to continue developing local data and their better use for policy making at all levels. Actions targeting data collection are scattered by target groups and sectorial policies. In order to improve urban policy making, actions in this field may foresee some consistency check. Some examples of draft actions that have been developed by Partnerships are: ·Draft guidance on EU regulation and public support for affordable housing – The objective is to improve legal certainty and clarity for public and private investors. The Housing Partnership has elaborated an in-depth analysis of the effects of the current EU state aid rule to affordable housing. This results in a guidance paper that addresses the main points of concern of social, affordable and municipal housing providers as well as legislators on Member States and EU level. ·Establish a peer-to-peer academy on integration strategies and practices – The objective is to offer trainings and different kind of activities to enhance the knowledge and capacity of policy-makers to promote the integration of refugees and other migrants. Indeed, local authorities are faced with a complex range of integration related challenges and they are more and more required to act quickly to react to changing demands and needs in their population. Being equipped with the necessary knowledge and capacity is crucial to develop responsive and effective integration policies.