Cities are seen as both the source and solution to today's economic, environmental and social challenges. Europe's urban areas are home to over two-thirds of the EU's population, they account for about 80 % of energy use and generate up to 85 % of Europe's GDP. These urban areas are the engines of the European economy and act as catalysts for creativity and innovation throughout the Union. But they are also places where persistent problems, such as air pollution, unemployment, segregation and poverty, are at their most severe.

Moreover, urban policies have an even wider cross-border significance for EU Regional Policy. As people often live in different places where jobs and services are located, rural and urban areas and communities must act together.

In the 2014-2020 period, around 115 billion EUR Cohesion Policy funding is being invested in cities, towns or suburban areas.  Until now, around EUR 81 billion of urban funding has been invested.

Planned allocations to one territory type may nonetheless have spillover effects in another (for instance, investments made to improve the businesses or social infrastructure of a small town can be registered as urban, but benefit the surrounding rural area).

Cohesion Policy provides targeted investments adapted to different local and regional contexts. It tackles many interlinked urban challenges found across Europe: social inclusion and regeneration of urban neighbourhoods, sustainable urban mobility, circular economy and housing in functional urban areas, or access to public services and digital solutions in small and medium sized cities and links with rural communities.

As the various dimensions of urban life – environmental, economic, social and cultural – are interlinked, success in urban development can only be achieved through an integrated approach. For example, measures concerning physical urban renewal must be combined with those promoting education, economic development, social inclusion and environmental protection. 

Out of all the urban investments, a significant share, EUR 16,9 billion is implemented locally through more than 900 integrated and sustainable urban development (SUD) strategies managed by urban and local authorities. Until end of 2019, around EUR 13,6 billion has been allocated to projects via one of the territorial delivery instruments – integrated territorial investment, specific priority axis or programme – representing 81% of the planned allocation, and showing a general catching-up trend (compared to the overall average) after strategies and governance arrangements were put in place in the early years of the period.

Besides strategic planning, an integrated approach also calls for strong partnerships between local citizens, civil society, industry and various levels of government. Moreover, although it is not the dominant approach for sustainable urban development strategies, Cohesion Policy funding acted as a catalyst for several Member States to promote cooperation at functional urban area level, especially where significant barriers had to be overcome.

Integrated and sustainable urban development strategies receive support and contribute to different thematic objectives at the same time. Due to the different local contexts, they often support a significantly different thematic mix of interventions than ERDF as a whole.

It should also be pointed out that finances allocated to integrated approaches often programmed in multi-thematic priority axis. With further analysis, the data shows that funding will be concentrated on sustainable and inclusive growth, with the bulk of the allocation (75%) contributing to low-carbon economy (TO4), environment and resource efficiency (TO6), and social inclusion (TO9).

The Commission carries out further research to identify the thematic scope and other features of local strategies, and publishes information on the JRC Strat-Board webtool (see below).