Over 70% of natural resource consumption occurs in cities—so how can the "compact city" strategy guide growth while safeguarding the planet?

Compact city strategies and comprehensive planning can address the social and environmental challenges caused by urban sprawl.‍‍‍‍

Image source:Unsplash/Deva Darshan

Cha-Ly Koh

CEO of Urbanmetry

Martín Anzellini

Architect and Founder of AGRA

Unlimited urban expansion, particularly in developing regions, exacerbates poverty, forces population displacement, and leads to environmental degradation.
The compact city strategy, which involves high-density development and efficient land use, can help mitigate the negative impacts of unplanned urban sprawl.
Effective urban planning requires integration with growth boundaries, sustainable housing solutions, land value taxation, inclusive zoning, and public-private partnerships.

Urban growth and expansion are a defining trend of the 21st century, particularly evident in developing countries and emerging economies. The doubling of populations, coupled with rising numbers of impoverished people and homeless individuals, highlights just some of the challenges that unchecked urban sprawl can bring. Without controlled development, those lacking resources are increasingly forced to live farther and farther from city centers.

Urban expansion not only affects city residents but also poses a serious threat to nature and biodiversity, as expanding infrastructure encroaches on farmland, forests, water bodies, and other flood-prone areas. Currently, around 70% to 75% of global resource consumption occurs in urban areas. Meanwhile, cities’ material consumption is projected to surge from 40 billion tons in 2010 to 90 billion tons by 2050—far exceeding the planet’s sustainable capacity.

While urban growth is inevitable and one of the most prominent spatial phenomena of our time, it doesn’t necessarily have to come at the expense of an ever-expanding urban footprint. Compact city strategies emphasize higher density and more efficient land use, helping to mitigate the negative environmental impacts of uncontrolled urban sprawl.

Adapting to urban growth with a compact city strategy

Compact cities are characterized by their dense development patterns, extensive public transportation systems, and convenient access to local services and employment opportunities. As a result, compact cities offer a viable alternative for meeting the growing demands of urban areas. Moreover, these cities help shorten distances within the city, reduce reliance on cars, and ultimately minimize their environmental impact.

A comprehensive compact strategy can further prevent the disorderly expansion of cities, while also protecting the natural environment in urban fringe areas, curbing rising land prices, and ensuring the availability of affordable housing. The comprehensive compact strategy includes:

Implementing the Urban Growth Boundary Strategy, such as cities like Portland, Melbourne, and Bangalore. The purpose of urban growth boundaries is to direct city expansion toward areas where adequate infrastructure and services are available, while protecting other valuable suburban lands (and their environmental features) from the pressures of urban development.
Implementing sustainable and affordable housing solutionsInstead of temporary housing, prioritize long-term livability. For instance, in Kuala Lumpur, urban density is allowed to increase—provided that affordable housing options are made available.
Imposing a land value-added tax on land whose value has increased due to public infrastructure investments., encouraging development on existing land rather than new areas. Tax revenues can be used to enhance public spaces, such as planting trees and establishing nature reserves. Pennsylvania, Kenya, New Zealand, Australia, Denmark, Estonia, Hong Kong, Singapore, and Taiwan have all adopted this tax approach.
Implementing inclusive zoning, rent control, and incentive measuresThis helps balance rising land and housing prices, promoting efficient land use and the development of affordable housing. In Kuala Lumpur, densification and transit-oriented development have reduced both land consumption and commuting distances, while offering a 30% incentive for brownfield redevelopment near transit corridors, effectively addressing most housing needs.
Leveraging public-private partnerships, private investors and landowners exchange assets through development rights, enabling the city to swap socially affordable housing units—and even develop facilities, public spaces, and land designated for nature reserves—with areas zoned for construction.

Since cities often grow and expand in an unplanned manner, the urgent need to narrow the gap in basic services and infrastructure provision will persist; therefore, planning must be continuously reviewed and updated.

Any planning strategy must be backed by sound policies to prevent the emergence of "compact yet short-lived" cities that lack long-term viability. Therefore, a densification strategy must be complemented by forward-thinking policies that promote modernization, resource consumption monitoring, and efficient transportation systems—while, where necessary, addressing informal settlements through effective management approaches.

The plan should also include substantial investments in infrastructure projects such as roads, public transportation systems, urban parks, public facilities, and utilities, while carefully considering the impact of these initiatives on both nature and vulnerable populations. At the same time, the government must strengthen social services like education and healthcare to meet the growing needs of residents.

To help cities strike a balance between urban growth and achieving a nature-positive future, the World Economic Forum is collaborating with Oliver Wyman to develop a framework that includes guiding principles and concrete actions—tools designed to enable cities to take their first transformative steps while ensuring they have the right, supportive environment in place.

Nevertheless, we still need to put in more effort. Through education and a shift in mindset, leaders will equip themselves with the tools needed to guide development over the coming decades.

This article was originally published in the "Nature-Positive Cities" initiative series, a collaboration between the World Economic Forum and Oliver Wyman.Translated from the World Economic Forum Agenda blog; the Chinese version is for reference only.Feel free to share this on WeChat Moments; please leave a comment below the post if you’d like to republish.

Translated by: Sun Qian | Edited by: Wang Can

The World Economic Forum is an independent and neutral platform dedicated to bringing together diverse perspectives to discuss critical global, regional, and industry-specific issues.

"World Economic Forum"