At the World Urban Forum (WUF13) in Baku, delegations from Colombia, Mexico, and Ecuador made a concerted push for innovative housing finance models capable of supporting affordable, climate-resilient urban development. As urban populations swell across Latin America, policymakers warned that traditional state-led housing systems are buckling under rising demand, climate risks, and deepening inequality.
Aydeé Marsiglia Bello, Colombia's housing minister, argued that governments can no longer rely solely on public spending to address the scale of the housing crisis. "Public investment continues to play a fundamental role, especially to guarantee equity and protect vulnerable communities," Bello told Euronews Business. "But housing challenges today are too large to be addressed by governments alone." Colombia is combining public subsidies, territorial investment, and multilateral cooperation to expand affordable housing while integrating climate resilience into urban planning, she said. "Through initiatives such as the Resilient and Inclusive Housing Project, we are integrating housing with climate adaptation, public space and social inclusion."
Reforming Global Finance for an Urban World
Delegates repeatedly highlighted how climate-related disasters are straining fragile urban systems, particularly in lower-income communities vulnerable to displacement and informal housing. Former Quito mayor Mauricio Rodas said the future of urban development depends heavily on reforming global finance systems to give cities better access to long-term capital. "It is in cities where more than half of the world's population lives, and very soon it will be close to 70%," Rodas told Euronews Business. "Cities produce 80% of global GDP, but also generate more than 70% of CO2 emissions."
Rodas argued that the current international financial architecture, largely designed around national governments, is no longer suited to an increasingly urbanised global economy. "We need to reform the international finance system, deploying new direct financial facilities for cities," he said, warning that municipalities often struggle to secure financing for affordable housing and climate adaptation projects. Attracting private investment into affordable housing will become increasingly important as governments face growing fiscal pressure, he added. "Housing is fundamentally a matter of dignity, but also a matter of providing opportunities to prosper."
One of the main barriers, he argued, remains the lack of regulatory frameworks capable of giving investors long-term confidence in urban housing projects. Bello echoed that view, identifying limited financing capacity in vulnerable municipalities as one of Colombia's biggest obstacles. "One of the main bottlenecks remains the fiscal ceiling and the limited long-term financing capacity for vulnerable territories," she said.
Private Capital and the Affordability Challenge
Discussions in Baku also focused on the growing role of private capital in urban development, with governments looking for ways to attract institutional investment into affordable housing without weakening social protections. "Private capital is essential to scale resilient infrastructure, sustainable urban development and climate-adaptive housing solutions," Bello said. Governments, she added, need to create "stable regulatory frameworks", improve territorial planning, and reduce uncertainty through clearer risk-management systems to draw in institutional investors.
This push for new financing models echoes challenges seen in Europe, where cities like Berlin and Paris grapple with housing affordability amid climate goals. The housing crisis rooted in governance failures, not funding, as mayors told the Baku forum, underscores the need for systemic change.
Mexico City Looks Ahead to 2030
Mexico City mayor Clara Brugada said the forum was helping shape the next phase of the global urban agenda ahead of the 2030 sustainable development targets. "This forum means construction of the bases for 2030," she said, describing Baku as a key moment for reviewing how cities can realistically meet future urban development goals. Brugada also confirmed that the next World Urban Forum will take place in Mexico City, positioning the Mexican capital at the centre of upcoming international urban policy discussions.
On housing, Brugada said Mexico City is increasing public investment to tackle both housing shortages and deteriorating living conditions. She doubled the housing budget upon taking office, she said, describing it as one of the city's top priorities. Brugada also warned about the growing impact of gentrification in the Mexican capital, describing it as part of a broader global trend displacing lower-income residents from central districts. The city is preparing new legislation on "fair, affordable and reasonable rents" while expanding social housing programmes and tenant protections. Mexico City has committed to delivering 200,000 housing actions by 2030 as part of broader efforts to strengthen housing access and affordability.
These developments resonate with European efforts to balance climate resilience and housing, such as Spain's €9 billion climate social plan for energy transition, which addresses similar challenges of equity and sustainability. As Latin American cities push for reform, the lessons from both regions highlight the urgent need for innovative finance and governance to build resilient urban futures.
