I am focused on the intersection of urban planning and sustainable finance. I am interested in the finding the win-wins for innovative urban projects (e.g. parks and transit) that are currently lacking funding. Novel models can help to make them happen. This is where the potential lies.
In my career as an ESG Analyst at Sustainalytics, as a transit advocate that co-founded A Voice for Transit, and an academic researcher at the Ivey Business School, I have seen no shortage of planners with ambitious ideas for their municipalities. Likewise, I have encountered investors (institutional and retail) taking an interest in nature. However, it seems that planners are always coming up short for funds and unaware of the possibilities out there. There is a gap that can be bridged.
The Civic Infrastructure Bond
During my Master of Planning in Urban Development at Ryerson University (now Toronto Metropolitan University), my major research paper focused on new financial tools for parkland acquisition. The context was specific to Toronto, however these tools can be applied to many places globally. I organized a panel event at the University of Toronto in May 2022 to disseminate the findings and to increase the adoption of the ideas. Attendees included representatives from municipalities, institutional investors, foundations, NGOs and academia.
Out of the MRP and the event came my work on the Civic Infrastructure Bond, an financial instrument to acquire urban green space in Canada. Imagine if we could increase the number of urban parks while housing was being built? I have been working with a team of ex-bankers and conservationists for over a year on a prototype in Montreal and we are exploring doing this in other Canadian cities.
How would a Civic Infrastructure Bond work?
Investors would buy into a bond that pays X% over numerous years. Once this occurs, the funds can be used to acquire properties to create urban green space and/or improve properties with existing natural heritage. The property owners within a certain radius of the green spaces would enter into a legal agreement to distribute 10% of the value uplift of their property every time it is sold or refinanced. This would be the smart covenant. The value uplift would need to be attributed to the urban green spaces through appraisal reports. Once the bond is paid back, the smart covenant would remain and the proceeds could be used how members of a community governance mechanism decide.
Community Governance
A group of citizens would decide how the proceeds can be used after the bond is paid back. Proceeds could be used to subsidize rents for apartments or for the maintenance of parks. The point is for this decision-making to happen locally.
The Civic Infrastructure Bond encapsulates the intersection of planning and sustainable finance. There are planners and architects with great ideas that can get implemented, but that can go further with more funding available. For example, such a bond could even fund pedestrianization projects inspired by Barcelona’s Superblocks (Superilles in Catalan).
Meanwhile, there are investors interested in funding nature-based projects. However, more support is needed for these instruments to scale. The Kunming-Montreal Global Biodiversity Framework expresses the need to stimulate investment in “innovative schemes”.
Not just the Civic Infrastructure Bond
There are small businesses that can operate from selling products that are derived from protected green spaces, underscoring the need to help keep these spaces undeveloped. What kind of municipal planning policies can help to stimulate this? There are benefits for local economic development. Municipalities can also provide small grants for farmers to try out regenerative soil management practices like no-tillage and cover cropping, supporting farming in rural communities. The Experimental Acres Pilot in the counties of Wellington, Dufferin and Grey in Ontario did just that and is a model that should be replicated.
The City of Toronto has used part of the proceeds from $780 million (CDN) in green bond issuances between 2019 and 2022 to fund the Don Mouth Naturalization and Port Lands Flood Protection Project. A massive new park will be inaugurated in the Port Lands this summer. Torontonians do not brag about this project enough. In a 2021 report, A Voice for Transit called for the City of Toronto to issue a bond to fund the improvement of indoor air quality and disinfection on the Toronto Transit Commission’s subway system. (Full disclosure: I co-founded A Voice for Transit)
I have the seen the potential for such a future take shape in recent years. There are planners willing to try new ways of getting more parks while getting housing built. Likewise, there are investors with open minds and interested in this intersection.
