Redefining Spatial Planning and Development in Israel

2. The theory and practice of spatial planning and development

Abstract

This chapter reviews the theoretical background, history, and recent advances in spatial planning and development, and provides an overview of OECD country trends and practices. It includes an assessment of the major policy issues for spatial planning and development, including balanced economic development, sustainability, and inclusiveness, and provides several case studies of good practice policy responses. It also includes analysis of the international evidence relating to the implementation of spatial development, the role of complementary policies, and the interplay between multi-level governance and spatial planning and development frameworks. The chapter concludes with policy implications for Israel and suggestions on how it can learn from OECD practices.

Introduction

Spatial planning and development are policy tools used by almost all governments to help balance competing claims for the use of land and optimise economic and social well-being. It generally involves the drafting of long-term, publicly available plans by government authorities which guide and regulate future activities, as well as direct investment and development of space by government agencies to accelerate their implementation. The procedures from which spatial plans are formulated, the resources available in the specific place to enable implementation, the degree of cooperation between development actors and the ability of responsible authorities to effectively coordinate each step are also important components of the spatial planning and development process. These plans, policies and development projects implemented directly by government, and the broad array of complementary processes, can be designed to achieve a wide range of government objectives, including economic development, improved access to housing, reduced regional inequality and support of a particular industry or sector. Maintaining adherence to international commitments, such as UN conventions relating to climate change, biodiversity and the degradation of land, are a further justification for the use of regulations, policies and taxes by governments to direct and shape spatial development outcomes. Spatial planning and development can also be employed by governments for more general and less immediate purposes. For example, preparation for population growth, adaptation to the future impacts of climate change, bolstering resilience to external shocks, the transition to net zero greenhouse gas (GHG) emissions, and future infrastructure provision, all require long-term spatial planning, investment, and coordination.

The primary purpose of this chapter is to provide an overview of spatial planning and development practices across the OECD. This includes an exploration of why governments plan, the origins of the practice, why government-led development is generally limited to particular development types and situations, the typical forms that it can take, and examples of successful implementation. The chapter also highlights the central role of spatial planning in the policy-making process and its increasing sophistication. Within OECD countries, an estimated 100 000 individual spatial plans currently exist, and can be found at the national, regional and municipal levels. These plans and policies share a common aim to provide a transparent framework for development, help guide the decisions of households, provide incentives for business investment, for example favourable tax rates, grants, or low-interest loans, and support government agencies to achieve a broad range of objectives. However, the accumulation of overlapping spatial plans, including statutory, strategic and site-specific spatial development plans, and the growing number of objectives that each is aiming to achieve, greatly increases complexity and resource intensity. The proliferation of spatial plans has also created new challenges for governments such as competing objectives, incoherence in the spatial vision and inefficiency in land-use decisions that must consider multiple planning frameworks simultaneously.

To complement spatial planning processes, direct actions and government investment to develop and encourage high-priority activities are also undertaken throughout the OECD. In most cases, spatial development in OECD countries is focused on activities that spatial planning is unable to achieve because the private sector is unable or unwilling to invest in them at sufficient scale, for example to provide infrastructure, social housing, or new precincts to support innovation. In addition to direct investment, government coordination and management of development can also help to achieve good spatial outcomes. A wide range of strategies including the development of established planning hierarchies, inter-municipal coordination agreements, the establishment of consensus on development principles among tiers of government, capacity-building exercises, and knowledge sharing among different agencies have been utilised by governments to improve the efficiency, focus, and speed at which land-use and development changes are enacted.

Despite its widespread practice, spatial planning and development is not easily defined. It can include a wide variety of approaches, objectives and policies, and varies greatly depending on the geography and institutional framework of the relevant jurisdiction. The ultimate objective, however, is to balance competing activities, ensure the optimal use of space and achieve desired societal outcomes. These desired outcomes could include economic growth, improved service delivery, or a boost to educational attainment, among numerous others, with priorities changing regularly over time and across countries. In some OECD countries, spatial planning and development is better known as urban planning, land-use planning or simply planning, and the framework of laws, principles and development authorities is regularly referred to as the “planning system”. In other cases, spatial planning and development can also encompass regional planning and governance, as well as place-based policies that target specific (typically lagging) areas. This chapter will take the broadest possible view of spatial planning and development with an aim to include all decision-making processes that influence, shape, and regulate land use and spatial outcomes (Box 2.1).

Box 2.1. The definition of spatial planning and development

The term spatial planning and development is used in this study as a broad framework for the planning and management of spatial resources within a territory, in particular land. It can be defined as a set of governance practices used largely by the public sector to influence the future distribution of activities and resources (including capital, labour, infrastructure, and natural resources) in space. Spatial planning and development frameworks can encompass statutory and strategic land use planning, economic development, legal frameworks, policy implementation and multilevel governance institutions, among others.

The first part of this chapter provides a general overview of spatial planning and development, including a brief history of its theoretical origins and its evolution as a policy tool. It will also include a short discussion on complementary policies, including building regulations, infrastructure provision and taxation, that can potentially affect spatial outcomes. The second part of this chapter examines spatial planning and development trends throughout the OECD. This includes an analysis of recent reforms, broad similarities, and major differences, and features case studies from countries with comparable characteristics to Israel as much as possible. Specifically, it reviews how OECD countries grapple with spatial challenges such as economic development, demographic growth and regional inequality.

What is spatial planning and development

At a practical level, spatial planning and development is a mix of principles, guidelines, incentives, investments, and prohibitions provided by governments, which combine to influence the evolution of the built environment. Spatial policies are therefore primarily focused on future development, aiming to maintain the status quo and reshape land use gradually, sometimes in pursuit of a pre-conceived vision. More direct, and often more immediate government interventions are also pursued throughout the OECD in specific circumstances to ensure that the desired spatial objectives are achieved. Direct investment by government agencies, for example in the construction of social housing, may take place to fill a service delivery gap or correct a market failure. However, government partnerships with private-sector firms, or the competitive tendering of development rights accompanying rules and covenants designed to fulfil a social need, are more common approaches of direct government intervention to achieve specific land-use outcomes.

Irrespective of the practical form it takes, the fundamental justification for spatial planning and development is that it addresses market failures in the use of land (Evans, 2008[1]). Unconstrained land use can lead to sub-optimal outcomes, including conflict between uncoordinated land uses, environmental degradation and inequality. Further, important land uses, such as for housing, electricity generation and transport infrastructure, may be underprovided in the absence of government action due to the associated costs, complexity and risk. Government intervention is, therefore, necessary in many localities to ensure the adequate provision of public goods, the continuation of essential activities and to minimise negative externalities. Spatial policies and frameworks are also used by governments to support and advance economic growth and regional development (Box 2.2).

Box 2.2. Regional development and spatial planning and development

Economic development in most OECD countries is uneven, reflecting differences in natural endowments, which have attracted people and investment at uneven rates over time, as well as past policy choices and priorities. Through a range of investments and policy interventions, regional development policy aims to reduce existing disparities within countries by enhancing the competitiveness of less productive areas. The OECD defines regional development policy as:

A long-term, cross-sectoral, multi-level policy that aims to improve the contribution of all regions to national performance and reduce inequalities between places and between people by promoting long-term sustainable development in all regions through strategic and targeted public policy, investment and service provision measures that are tailored to the specific needs and opportunities of regions and their inhabitants.

Throughout the OECD, spatial planning and development has an important role in supporting regional development objectives. Coherent planning, efficient infrastructure and well-designed land-use regulations can assist regions to develop new housing, industry and services, that can in turn support new migrants, businesses and investment. Poorly designed or implemented spatial policies, by contrast, can impede economic activity and hold back regional development.

Note: Definition adopted by the Council on Regional Development Policy.

Source: Author’s elaboration, based on (OECD, 2023[2]) and (OECD, 2023[3])

The rationale of spatial planning and development extends beyond limitations on individual actions for the collective benefit of all. In some instances, spatial policies are a direct policy intervention aimed at creating completely new patterns of organisation that will boost societal welfare (Levy, 2017[4]). These interventions can be focused on supporting economic development, environmental sustainability, territorial coherence and many other strategic objectives. In practice, government interventions can include the promotion of new activities in existing settlements, encouragement of development in underutilised territories or, in exceptional circumstances, the creation of entirely new towns, industrial zones and even cities, to achieve a particular policy goal. Brasilia, in Brazil, and Milton Keynes, in the UK, are examples of cities that were authorised, planned and developed by governments.

These diverse spatial planning and development approaches, which can range from the publication of strategic guidelines to direct government investment, have important trade-offs. Comprehensive spatial development over a wide area, such as metropolitan plans, are complex, resource-intensive, and require consultation with many stakeholders. In contrast, targeted and local development plans can be completed more quickly, involve fewer stakeholders and can be more easily reoriented, but the benefits are limited in geographic scope. Direct intervention and investment in land use by government, such as the construction of new housing or the expansion of infrastructure, can be a more effective way of achieving desired land uses but comes with high capital costs and implementation risks.

As a result of these trade-offs, many OECD countries pursue a suite of spatial planning and development approaches depending on the spatial scale, costs, benefits and level of priority of each intervention. This typically results in the adoption of several national strategies and legal frameworks that outline high-level principles and priorities and provides the foundational rules for land uses throughout a country. In addition to clear guidance and a legal framework, such an approach can also provide valuable strategic direction for a wide range of regional, sectoral and other sub-national policies and plans, which can be adjusted to reflect place-specific needs and priorities.

Direct government intervention, in most OECD countries, is generally used to address development gaps that emerge in spatial planning frameworks, such as in circumstances when private actors are unwilling to build on, develop or utilise space as desired or actively prevented by government from doing so. These can include natural monopolies, such as railways and electricity grids. For example, in Texas, United States, the electricity transmission grid is operated, managed and regulated by state agencies, and the construction of independent transmission lines is prohibited to ensure efficiency and avoid expensive duplication (Ellig, 2021[5]). Direct interventions are also relatively more frequent in relation to development types that are less profitable, such as schools and social housing. In Denmark, for example, many social housing estates are designated and developed as a result of direct government action (Blackwell and Bengtsson, 2020[6]). These associations, which are self-managed, receive an endowment of base capital, land and loans from municipal authorities, alongside national government guarantees and subsidies, as the private sector is unwilling to provide social housing at sufficient scale.

The nature of these direct government interventions in the OECD, however, can range widely and include targeted tax benefits, the fast-tracking of approvals of priority projects and the establishment of specified precincts, e.g. for housing, industry or innovation services, where certain development types are preferred, and other alternative uses are prohibited. Direct interventions are also occasionally used by OECD countries to achieve unique policy objectives that meet their specific national needs. For example, in Japan, agricultural subsidies in the form of direct payments are granted to households that actively cultivate mountainous, sloping, and high-altitude farmland, a policy that seeks to reduce depopulation in rural areas (Takayama, Hashizume and Nakatani, 2020[7]).

Spatial planning is the predominant development policy throughout the OECD

The specific societal benefits of spatial planning include clarity, accountability and affordability. Spatial planning can provide clear guidance for all stakeholders, including non-experts, of the precise land-use outcomes sought and necessary investments required to achieve them. It can also be an effective deterrent of corruption and arbitrary decision-making. Although allowable land uses are regularly updated and altered by governments, and this process can potentially be vulnerable to corruption, significant deviations from the principles published in existing spatial plans can be easily identified and scrutinised.

For OECD governments, spatial planning can take a variety of forms, with statutory planning processes generally having the greatest role in shaping land-use outcomes. These entail legal prohibitions, limits and regulations on land use that all development is required to adhere to. Well-designed spatial plans and processes can therefore help reduce costs and boost citizen well-being in the long-term. Although the production of spatial plans requires significant government resources, it can also help reduce the frequency of individual development assessments, streamline application processes and avoid legal disputes. Additional benefits include more efficient construction and augmentation of infrastructure, increased productivity, reduced environmental impacts, the attraction of private investment and enhanced amenity, all of which can contribute to well-being. For private property owners, coherent planning provides predictability on property use and the likely activities on neighbouring land, both of which are conducive to investment and well-being.

Statutory planning also plays a critical role linking two other important components of land-use management: property regulation and development approvals. Property regulations, such as those relating to fire safety, apply equally to all buildings or businesses with certain characteristics. Due to the huge diversity of land types and potential uses, however, it is difficult to draft regulations that provide clear guidance for all situations. Development approvals, by contrast, provide a rigorous assessment of new proposals and consider the potential impacts on the surrounding area, but are costly and time consuming. A major benefit of spatial planning frameworks is, therefore, the production of proactive guidance on all land within its scope, often with clearly defined categories of use. These land-use categories help reduce the need for complex and potentially burdensome regulations and minimise the frequency and depth of individual development assessments undertaken by government agencies.

Box 2.3. Statutory planning in the OECD

In most OECD countries, the statutory planning system is the most influential policy framework, providing legal sanction to the potential uses of land, prohibitions on particular types of development and the permitted locations of particular economic and social activities. The vast majority of residential, industrial, commercial, mining and agricultural development, for example, are exclusively managed through statutory planning agencies and constructed by private-sector proponents with minimal involvement from governments.

Source: Author’s elaboration, based on (OECD, 2017[8]) and (Searle, 2016[9])

A further role of spatial planning and development among OECD countries is the integration of land use between spatial scales, such as local, regional and national perspectives. This integration may be required to connect the policies of different jurisdictions, for example to align the actions of different levels of government that may overlap or contradict each other. But it can also be required to coordinate land uses that are naturally large-scale and are rarely provided by the market at sufficient levels without government intervention, such as electricity generation and transport infrastructure, with the small-scale needs and priorities of individual towns and neighbourhoods.

Spatial planning does not always lead to optimal land use

Inefficient, unequal and undesired land uses are not easily eliminated through spatial planning policies. Significant resources are required, the priorities of government are constantly evolving, the capacities of government officials are limited and policies require regular updates and modifications. The division of spatial planning responsibilities, especially between national, regional and local governments, can also create complexities and inefficiencies in the spatial planning process (Box 2.4).

Box 2.4. Multi-level governance and spatial planning and development

Each country’s multi-level governance arrangements are complex and the roles, arrangements and conventions of government institutions can lead to specific spatial planning and development challenges. A significant part of this complexity arises from the blending of priorities that are highly place-based, such as those of municipalities, with regional and national perspectives that are more rigid and often seek to apply consistent rules and enforce minimum standards across a diverse range of localities. The incentives, capacities, and resources available to different government actors can also vary widely within countries, making collaboration difficult or resulting in duplication. Irrespective of the individual characteristics of each country’s multi-level governance system, spatial planning and development policies must work within existing governance frameworks to be effective, and policies that have been successful in one country or location may require modifications to achieve the same outcome in others.

Source: Author’s elaboration, based on (OECD, 2017[8])

The deliberate misuse of spatial planning mechanisms is a further challenge. Policy makers, residents, businesses and other stakeholders can, in some circumstances, influence the direction of spatial planning to pursue their own interests at the expense of broader objectives and considerations. This could include, for example, the prevention of development and higher density in selected neighbourhoods, or the placement of infrastructure in locations that will directly advantage nearby businesses. Robust multi-level governance arrangements, clear divisions of responsibility and coherent, long-term objectives can help reduce these risks and help realise the potential benefits of spatial planning.

Spatial development plays a complementary role to spatial planning

To overcome the shortcomings of spatial planning and achieve specific, strategic objectives, OECD governments also make targeted interventions to more directly shape spatial outcomes. These interventions, including the direct investment in development projects by government agencies, occur frequently but are concentrated in certain development types. The construction of roads and schools, for example, is typically funded and managed by government, whereas the construction of housing and commercial buildings, by contrast, are almost exclusively provided by the private sector within the statutory planning system. A wide variety of hybrid interventions, with government support or funding, but undertaken by private-sector proponents, are also widely pursued throughout OECD countries. The construction of new electricity generation plants, for example, often require access to government land, regulatory support and the provision of supporting infrastructure, and would therefore be undersupplied in the absence of direct government assistance and coordination (Qadir et al., 2021[10]). However, due to the resource costs involved, direct intervention in spatial development is generally limited to high-priority projects, heavily regulated sectors, public goods that are unprofitable for developers but provide significant societal benefits, or in locations that are undersupplied by the private sector.

Coordination and implementation are critical to good spatial outcomes

In addition to comprehensive spatial planning frameworks and well-targeted interventions and investment by government, coordination of development actors is another critical component of successful spatial planning and development. This includes numerous important functions that ensure spatial plans are well formulated, implementation is conducted efficiently, relevant stakeholders are consulted, and those responsible for executing development projects are monitored and held accountable their timely completion.

Evidence of the importance of co-ordination for good spatial outcomes can be seen in a comprehensive study of 19 cities in the United States and Canada and their individual experiences attempting to boost resilience to threats such as climate change and terrorism in their communities (Fastiggi and Meerow, 2020[11]). Despite broad similarities in the policy approaches and objectives, city governments with poorly-defined roles and responsibilities were notably less able to work with partner organisations, leading to patchy implementation and delays to adoption of new standards and operating procedures. Insufficient staff knowledge and levels of trust were further barriers for some cities, not just in the understanding of the problems they were attempting to solve, but also in the loss of credibility which hindered implementation further.

The mixed results of residential infill development policies in Gothenburg, Sweden, is a further example of the importance of co-ordination and implementation for achieving good spatial outcomes (Brochner et al., 2021[12]). In Gothenburg, issues relating to a lack of internal co-ordination within the municipality, insufficient collaboration with private developers, and a lack of dialogue with affected citizens led to significant delays in the realisation of new housing in inner city areas. However, despite minimal changes in the policy design itself, adjustments to internal management processes led to a rapid improvement in the policy’s efficacy. This entailed the formalisation of a poorly-defined hierarchy of decision making, the establishment of working groups to respond to and find solutions to problems identified in development applications, and the creation of a Coordination Group with officials and senior developers represented, to monitor and oversee each step of the operation, all of which resulted in a significant reduction in processing times and rapid increase in housing construction.

A brief history of spatial planning and development and recent advances

The theoretical origins of modern spatial planning and development emerged in Western Europe in the late 19^th century in response to urban overcrowding and the consequences for public health (Hall, 2000[13]). Reformers such as Josef Stübben in Germany and Ebenezer Howard in the UK advocated for the development of carefully planned settlements on the urban periphery that would actively redistribute population densities and improve living conditions. Reduced inner-city congestion, improved access to nature and lower rents for low-income households, as a result of an increase in overall housing supply, were also important objectives. Several small-scale housing schemes, suburbs and garden cities were planned and constructed around London, Dresden and Paris as a result of this advocacy. However, the resource costs of these developments was high, and governments did not have the capacity to implement projects of this kind at sufficient scale.

In 1909, the UK passed the Housing and Town Planning Act, a landmark piece of legislation that limited the number of allowable dwellings per acre and specified minimum distances between the frontage of houses. Despite these developments, the speed of reform remained modest in most European countries until after World War I when government planning became essential to coordinate reconstruction efforts. For example, France’s initial urban planning legislation, known as the Cornudet Law, was passed in 1919, and required the drafting of management plans by all cities exceeding 10 000 residents (Olson, 2018[14]).

The first jurisdiction to adopt comprehensive spatial planning practices was New York City. The 1916 Zoning Resolution provided detailed ordinance maps specifying what types of uses were permitted on each city lot, such as residential, industrial or commercial activities, alongside specific limits on building heights, dimensions and materials. Similarly-sized properties on the same street could potentially receive different classifications in pursuit of city-wide objectives such as preserving sunlight and reducing air pollution. Individual classifications were fiercely contested, but the in-principle benefits of zoning, i.e. enacting changes in spatial outcomes at low cost and without the need for direct government investment, were quickly understood, and similar plans were adopted by more than 500 US municipalities by 1925 (Shertzer, Tate and Walsh, 2022[15]).

Throughout the 1920s, formal planning commissions were established throughout Europe with a clear mandate to produce city-wide master plans and greatly increased the degree of government influence on development patterns. These plans expanded beyond zoning decisions to specify and direct the development of transport networks, recreation areas and street patterns (Levy, 2017[4]). Entire counties, regions, provinces and eventually countries were incorporated into new government-drafted plans that rapidly increased in sophistication. Alongside building restrictions and specifications, industrial plants, agricultural production, electricity generation, road networks, sewage infrastructure and numerous other elements of the built environment were progressively planned and controlled by governments. This more interventionist approach towards development and land-use was complemented by the advance and spread of new technologies in the early 20^th century. For example, the emergence of urban mass transit systems and automobiles provided additional opportunities to reorient residential development into outlying areas (Hall, 2000[13]).

The most significant changes to spatial planning and development in the mid-twentieth century were influenced by the growth of heavy industry and the increased role of the state in economic production. This advance in the comprehensiveness of spatial planning was most evident in socialist economies, such as Czechoslovakia and East Germany, with housing, transport and other essential services being planned to support large industrial complexes (Arzmi, 2023[16]). But market economies also incorporated industrial policy within their spatial policies, making provisions to support the growth of priority sectors through subsidies, loans, and favourable tax treatment, and explicitly accommodating the operations of state-owned corporations. For example, state-owned corporations in France specialising in nuclear energy, railways, aviation and defence industries were given preferential access to land, infrastructure and public utilities throughout the 1960s and 1970s, but spatial planning decisions in France did not provide comparable allocations of space or access for private-sector companies or international competitors (Owens, 2012[17]).

The latter stages of the 20^th century saw a reversal of this trend in many OECD countries, with a reduced government emphasis on industry, enhanced focus on supporting knowledge industries and the inclusion of a broader range of stakeholders in the planning process. For example, in Sweden throughout the 1970s and 1980s, following public criticism of the rigidity of centralised master planning, greater flexibility in implementation for municipalities was allowed in recognition of the varied needs and preferences of residents. But this change in approach was also driven by concerns about cost and efficiency. Government interventions and prescriptive planning were resource intensive and had the potential to introduce economic distortions. Development led by the private sector, by contrast, imposed only negligible costs on governments and, if properly regulated and encouraged, could achieve comparable spatial outcomes.

Concerns about the priorities and processes of government-led development were also influential in the reduced role of the state in spatial planning and development. One tangible demonstration of this evolution in approach towards a smaller role for government was the introduction of additional opportunities for participation in the planning process that were introduced throughout the OECD, such as formal roles for non-government organisations including tenants associations and environmental advocacy groups (Newman and Thornley, 1996[18]) This shift also included procedural changes, such as enhanced public consultation, greater use of independent experts, and participation of the private sector (Box 2.5). An example of the reduced role of the state in spatial planning is the lead role played by the private sector in the development of London’s Canary Wharf (Hebbert, 1992[19]). Additional policy objectives also increased in importance in the 1980s and 1990s, such as urban renewal, heritage preservation, mitigation of inequality and enhanced efforts to address environmental sustainability (Owens and Cowell, 2011[20]).

Box 2.5. Public-private spatial planning: London’s Canary Wharf

The redevelopment of Canary Wharf, in East London, aimed to transform former dockyards, warehouses and other industrial land into a new hub for the City’s fast-growing financial sector. The project had several aims, including to remove derelict buildings, renew disadvantaged neighbourhoods, attract new foreign investment and increase the competitiveness of the UK’s finance industry. The UK government and the Greater London Council, both of which contributed to the project, granted significant spatial planning powers to the private sector through the establishment of the London Docklands Development Corporation (LDDC) in 1981. The LDDC was given exclusive authority to masterplan the area with the aim of streamlining bureaucratic processes and reducing delays. To promote regeneration, the national government also invested in new transport links and offered tax breaks and other financial incentives to attract new businesses to the area.

Following its formation, the LDDC directly led negotiations with potential investors and was granted a full range of planning-authority powers to accept, reject, or seek modifications to development proposals. Under this devolution, the LDDC assessed hundreds of applications, approved dozens of high-rise commercial buildings and was responsible for the construction and maintenance of public spaces and essential infrastructure. This approach was emblematic of the market-led reorientation of spatial policies in the 1980s and 1990s. In 1998, with the foundations of the redevelopment complete, the LDDC was abolished and its planning powers were returned to the relevant local government areas.

Source: Author’s elaboration, based on (Hebbert, 1992[19])

The impact of other policies on spatial planning and development

The efficacy and impact of spatial planning is dependent on several complementary land-use policies. Land-use policy settings can assist spatial planning if they are aligned towards the same objectives but can in some circumstances reduce its impact or neutralise it completely. Poorly designed taxes, inadequate infrastructure provision and burdensome land-use regulations are examples of land-use policies that do not always align with spatial planning objectives. These examples have been highlighted due to their direct spatial impact and broad applicability across the OECD, however, almost all government policies, taxes, and regulations have the potential to impact development outcomes. Further, the effectiveness of and implementation of other policies also has important ramifications for spatial development. Government regulations and investments that are well-designed and intended to support spatial planning and development objectives, for example, can in fact worsen spatial outcomes due to poor implementation.

Tax policy has a direct relationship on spatial planning due to the highly variable financial incentives, disincentives and distortions that it can place on specific land uses. Broad-based land taxes, local government rates, one-off infrastructure charges, and stamp duties can potentially reduce the frequency of certain land uses and, in extreme cases, make some activities financially unviable. Income, corporate, and value-added taxes, although less directly influential on land use, also promote certain activities, investments, and industries and therefore also have a strong influence on long-term development patterns indirectly.

Equally, low or no-tax zones may encourage more intensive land use, population growth, and development in one location over another. This type of distortion can encourage inefficient patterns of spatial development by, for example, encouraging residential development in peri-urban areas. The distorting impact of taxation on land use, however, can also be harnessed to positively change behaviour and mitigate negative externalities. This positive effect can be clearly seen in land value-capture levies and charges which, if well-designed and properly targeted, can help prevent private landowners inadvertently profiting from government decisions on land use and infrastructure investment. Further adjustments to tax settings to achieve positive societal impact include offsets and deductions that recognise landowner efforts to protect biodiversity, reduce soil erosion and increase tree coverage in urban areas.

Infrastructure provision is a further potential constraint on spatial planning efficacy. In sparsely developed areas, the construction of new residential and commercial development is unviable in the absence of government provided transport, water, electricity, sanitation, and telecommunications. In more established communities, inadequate infrastructure provision can also undermine planning objectives. The prevalence of congestion, for example, imposes significant costs on both businesses and households and can dissuade potential land users from adhering to government plans. The availability of essential services such as medical care, education and cultural facilities, many of which are provided or subsidised by government, are also critical to the successful realisation of spatial planning and development objectives. Suitable spaces for businesses, start-ups and other commercial activities, if not available in sufficient quality, can also prevent future development from occurring in line with government expectations.

Government regulations are a broad grouping of laws, legislated rules and ministerial decisions that restrict the actions of land users, investors, owners, and developers. These can range from prohibited business activities, restricted trading hours, mandated building materials, minimum building ratios or unalterable heritage features. They can also include the need for impact assessments on the environment, noise, or heritage, which can impose additional costs and delays. If poorly calibrated these regulations can discourage certain land uses and may restrict the types of development that spatial plans are aiming to encourage. For example, in Florida, US, county regulations were shown to significantly alter the scale and style of residential development due to increased scarcity (Ihlanfeldt, 2006[21]). In particular, the average size of both houses and residential lots throughout Florida were shown to be larger, on average, in counties with relatively strict land-use restrictions. These regulations were promulgated with the objective of increasing amenity, not restricting housing supply, but had unintended ramifications on the pattern of residential development. Land use regulations are just one direct example of government rules and decision-making influencing development patterns, but there are numerous others. Regulations affecting industry, transport and agriculture, for example, can also have a significant influence on where people live and in what locations economic activity takes place.

Potential changes to spatial planning in Israel must therefore give careful consideration of how new proposals may interact with national infrastructure, existing regulations and applicable taxation arrangements. The alignment of other policies and government services, ranging from health, education, agriculture and the environment, should also be considered, as all government action has the potential to influence the effectiveness of spatial planning and development decisions. Further, the spatial planning policies of other OECD countries (e.g. Germany, the Netherlands, New Zealand, and Portugal) that have proven effective, but were implemented in different policy contexts, should be viewed as illustrative examples only, rather than templates of reform.

An overview of spatial planning and development in OECD countries

Spatial planning is undertaken by all OECD member countries, at the national, regional and local levels, in pursuit of a broad range of policy objectives. Each individual plot, and each potential new development, is subject to numerous planning documents and plans. Evolving government priorities, divergences in perspectives across departments and the relative independence of some government agencies can contribute to complex spatial policy arrangements. All spatial policies, including the production of new spatial plans, is therefore somewhat constrained by the large volume of prior planning that has already been undertaken, alongside the subsequent decisions made by government and private entities based upon planning specifications.

Spatial development – which includes the implementation of spatial plans and the direct actions and intervention of governments to achieve specific spatial outcomes – is also evident throughout OECD countries. Government agencies and state-owned corporations, at both the national and subnational level, are the primary vehicle through which large-scale development projects are realised, alongside a broad range of less interventionist policy alternatives. These include the provision of grants, subsidies, loans and other incentives to encourage development of a particular type. In addition to financial incentives, OECD governments also create and utilise co-ordination and management arrangements to achieve their spatial policy objectives. Development councils, regional boards, industry forums and similar bodies featuring representatives from major institutions, with government support and authority, can provide leadership and direction to and positively influence development patterns.

A comprehensive review of spatial and land-use planning throughout the OECD was undertaken in 2017 and estimated that the total number of plans exceeded 100 000 (Box 2.6). Co-ordination of spatial planning and development, it found, was primarily achieved through the hierarchical nature of planning systems, with clear principles, guidelines and prohibitions set at the highest level curtailing the development actions of public and private actors alike. Other findings included broad similarities across OECD countries in formal public consultation processes, comparable ease in accessing land for the construction of infrastructure, high levels of enforcement of land-use decisions, and wide, but limited, use of value-capture instruments (OECD, 2017[22]).

Box 2.6. Land-use Planning Systems in the OECD (2017)

The OECD’s systematic review of spatial and land-use planning systems in 2017 included a comprehensive survey of 32 member countries. It concluded that 229 different types of spatial plans were in use, covering a broad range of themes such as transport, housing, agriculture and industry. Of these 229 types, national, regional and local authorities were each responsible for approximately one third each. The review also identified significant diversity in the intended function, legal status and approval processes of planning documents, both among and within countries. Despite this variability in form, the findings of this review clearly demonstrated the centrality of spatial planning within OECD countries. It argued that spatial and land-use plans are “the most important and widely used instruments in land-use planning” and estimated that the total number of active plans was in excess of 100 000.

Source: Author’s elaboration, based on (OECD, 2017[22])

There are important similarities across spatial policies in the OECD

There is a high degree of similarity in the planning systems and development policies of OECD countries, all of which include important roles for long-term strategic planning, enforceable land-use prohibitions such as zoning, direct government investment in development, as well as discretionary decision-making powers for governments and planning authorities in relation to individual development proposals. These similarities, which are on the whole effective, have important insights for Israel which relies to a greater degree on government intervention to achieve desired spatial outcomes.

The power of central governments to influence and direct land use and development is diffused by a division of spatial policy powers in all OECD countries. This division includes separated roles within governments, such as the independent functions of ministers, departments, land courts and statutory authorities. It also includes a clear division of spatial planning and development roles between levels of governments. This often consists of three tiers aligned to national, regional and local government bodies. In some OECD countries, such as Estonia, that do not have a regional tier of government, regional spatial planning functions are still undertaken through the collaboration of local and national government representatives (OECD & UCLG, 2022[23]). In some others, multi-level governance arrangements for spatial planning are specified in constitutional arrangements (e.g. Belgium), comprehensive planning legislation (e.g. Portugal) or the formal roles of government agencies (e.g. Ireland) (OECD, 2017[22]). However, in all countries, the division of spatial planning and development policy responsibilities are complex, composed of numerous laws, conventions, regulations and past policies.

Stakeholder engagement and consultation is a core component of spatial planning and development throughout all OECD countries and is structured in similar ways (OECD, 2017[22]). It consists of both statutory requirements and less formal conventions that publicly communicate development projects prior to approval and ensure that potentially affected groups and individuals have the opportunity to provide feedback. Public hearings and online forums to solicit submissions from stakeholders are also increasingly mandated for large-scale developments.

In addition to engagement with those directly affected, consultations are also regularly undertaken by governments to solicit feedback from a broad range of stakeholders on proposals that could affect large numbers of anonymous users. For example, civic spaces, financial districts, parkland, heritage sites and cultural facilities can be potentially used and valued by millions of individuals dispersed over a wide geographic area. These consultations can serve a number of functions, including identification of existing uses, the solicitation of feedback on policy options and the potential impacts of new proposals, such as congestion and noise pollution, so that safeguards can be proactively put in place. Another consistent feature of public consultation and stakeholder engagement in spatial planning and development throughout the OECD is the ability for all individuals and groups to comment without restriction. This openness does not necessarily mean that the concerns and views of all parties are given consideration. Ultimately, governments and planning authorities maintain, subject to the relevant laws and division of powers, complete control of spatial planning decisions and do not allow voting, or the majority view of feedback providers, to determine land-use decisions.

The expropriation, or acquisition, of private land by governments is another feature of land-use planning in all OECD countries and can be undertaken to support the delivery of a wide variety of government projects and priorities (OECD, 2017[22]). These could include the construction of new transport infrastructure, the provision of public spaces, the protection of habitat in an area of high biodiversity, enabling commercial activities such as mining to take place, or increasing the resilience to natural disasters of communities in high-risk locations. In some countries, precise criteria are listed in the relevant law to guide and limit the situations in which expropriation is allowable. For example, in the Netherlands, land acquisition can only proceed after voluntary negotiations on the purchase of the land have concluded, and the final financial offer of the government has been rejected by the landowner (Holstag-Broekhof, Hartmann and Spit, 2018[24]). Further, expropriation decisions by government may be challenged, and overturned, if the intended use of the acquired land fails to meet one of nine public interest tests. These include the use of the acquired land for public housing, infrastructure or the realisation of land-use plans. Finally, if the acquisition proceeds, landowners, and any other affected parties, must receive full compensation. Financial compensation is calculated using the market value of the property, the decreased value of any remaining property, loss of income due to the compulsory purchase and any other financial damages directly caused by the expropriation. Nonetheless, the framework for land acquisition – under which expropriation must be in the public interest, transparently communicated, and landowners fairly compensated – is broadly consistent across OECD countries.

Land value capture policies are also used by OECD Member countries to help fund public investment, prevent private interests from disproportionately profiting from government decisions and align private uses of land to public objectives (OECD, 2022[25]). These include infrastructure levies, developer obligations, charges for development rights and land readjustment (or land pooling). Strategic land management, when governments actively purchase, develop and then lease or sell the acquired land, is a further strategy employed in some countries, including Canada, France and Poland, to capture increased land values resulting from public development or regulatory changes.

Despite their widespread use, land value capture policies are generally small-scale in the OECD and are therefore unable to fund comprehensive development plans. However, they can play an important role in support of large development projects and contribute, in conjunction with other policies and funding sources, to dramatic changes in land-use patterns. One of the most comprehensive examples of a government using land value capture is Hong Kong, which uses a variety of instruments on a large scale in conjunction with transport, housing and land reclamation projects to achieve new development patterns (Box 2.7).

Box 2.7. Land-value capture in Hong Kong to support spatial development

Land value capture is an important source of revenue in Hong Kong and has been used in conjunction with a wide variety of development projects and objectives. This consists of broad-based infrastructure levies, land readjustment practices, and charges for development rights, but also includes more targeted value capture policies that are designed to support city-shaping development projects. The city’s Mass Transit Rail Corporation, for example, of which the Hong Kong government is the majority shareholder, earned approximately 50% of its annual revenue in 2018 from value capture instruments, specifically from the development and leasing of floorspace above metro stations. Additional government revenues have also been raised from the reclamation of land from the sea, following extensive drainage and the construction of levees, and the subsequent leasing of development rights to private businesses. These strategies, although not self-funded, have allowed the construction of new infrastructure, the establishment of high-density development in new locations and the re-orientation of economic and residential activity across space quickly, efficiently and at relatively low cost.

Source: Author’s elaboration based on (OECD, 2022[25]) and (Li and Love, 2022[26])

The enforcement of government planning decisions is generally robust within OECD countries, however, non-complaint development continues to be an issue in some member countries including Portugal and Spain (Calor and Alterman, 2017[27]) (Barrado, 2020[28]). Unlike strategic plans, individual land-use decisions made by governments have strict legal force and are not intended for flexible interpretation. These decisions include zoning restrictions, which may have been in place for many years, to permit or restrict specific land uses, or decisions made by government in response to individual development proposals. For both types, illegal construction and unapproved land uses are rare in the OECD, and the punishments for breaches of planning conditions are substantial, often consisting of large fines. For example, in San Francisco, US, alterations to residential properties without a permit are liable for penalties of up to USD 250 000 per dwelling, imposed by city authorities (Loper, 2023[29]). For properties listed on either national or state heritage registers, fines can increase to USD 500 000 for each listed structure altered, damaged or demolished.

The stability of planning institutions and practices across OECD countries is another notable characteristic. Many land-use and spatial development governance systems were established before 1970, and major reforms of the planning system are rare (OECD, 2017[22]). This stability has not precluded significant changes in spatial planning and development practices, or the adoption of new technologies, but the institutional planning arrangements – the roles, powers, legal code and governance structures – generally last.

Notable differences in planning systems and arrangements

There are also some notable differences in planning practices across OECD members. In unitary countries, national governments generally produce framework legislation which determines the structure of the planning system, with local governments responsible for actual land-use planning. However, in federal countries, the state-level generally produces and maintains their own planning frameworks, with a much more limited role for the federal level. This can, in some cases, lead to inconsistent or contradictory approaches that introduce additional complexity to the implementation of spatial policies.

A further difference can be seen in the total number of levels of government within OECD countries. Because all levels of government are responsible for some elements of spatial planning and development policies, countries with four levels of government such as Spain and France differ greatly from others, such as Slovenia and Ireland, which have only two levels. For example, establishing clear roles and responsibilities, maintaining policy coherence, and communicating with affected government agencies can be significantly more time consuming and complex when the levels of government are greater. In addition to institutional structures, spatial frameworks, policies, laws and regulations in OECD countries are also shaped by their unique multi-level governance systems. This includes the formal roles and responsibilities of government agencies, informal governance practices and conventions, and a broad suite of policies that indirectly influence and restrict spatial decision-making and outcomes.

The delegation of land-use planning and development powers to local government, which is evident in both federal and unitary countries, is also granted with varying degrees of autonomy. In some OECD countries, such as Poland, there is direct oversight of spatial planning decisions made by local government. Spatial planning in the US, by contrast, although subject to framework legislation set at the state level, is largely delegated to local governments enabling a high degree of autonomy and independence (OECD, 2017[22]).

Regional spatial planning plays an important role in all OECD countries but takes a diverse range of forms. This diversity includes differences in geographic scales, in the strength of planning powers executed at the regional level, and differences within countries between regions (Box 2.8). In some OECD countries regional planning is focused on distinct territorial units that align with the jurisdictional boundaries of intermediate tiers of governments (OECD, 2017[22]). For example, in France, the eighteen regions are responsible for the preparation of a strategic plans that outline policy priorities and develop a spatial vision for their own specific areas. However, regional planning can also encompass areas that cut across, or group together, large numbers of sub-national government entities.

Box 2.8. Regional spatial planning and levels of government

Regional spatial planning is used in most OECD countries to build cohesion between national and local government frameworks and help address development disparities that are geographically concentrated. Regions, unlike local and national governments, generally do not play a direct role in spatial development within OECD countries, but rather focus on planning, prioritisation and co-ordination. In this report, regions refer to large territorial areas that encompass multiple local government entities, such as councils, municipalities and counties. In 2017, approximately 70% of regional plans in OECD countries contained general policy guidelines, 75% included elements of strategic plans and 34% were legally binding. In approximately three quarters of OECD countries, spatial planning undertaken at the regional level is organised and executed by the relevant regional tier of government that has jurisdiction over the territory. However, regional planning functions can also be undertaken by the national government, with assistance from regional stakeholders, or delegated to a specific agency with a mandate to undertake regional planning but without the requisite administrative powers to implement or enforce.

Source: Author’s elaboration, based on (OECD, 2017[22])

The enforceability of spatial planning documents also varies widely, both within and across OECD countries. Many spatial plans are drafted to provide strategic guidance for future decision-making and contain no legal force or obligations on land users. Others, particularly those developed by local government, provide clear limits on land use that can only be overridden once approval is granted by the relevant authority. For example, in Italy, a “variation request” can be made by individuals and developers to propose projects that differ from the municipal plan (Berisha et al., 2021[30]). A minority of planning documents have strict legal enforceability and limited scope for circumvention, but will usually only apply to clearly measurable restrictions, such as building heights, or in high-risk areas, such as flood plains. In most cases, spatial plans are purposefully designed to allow flexibility and allow land uses to evolve as priorities and circumstances change.

The process of subnational coordination also differs across the OECD countries. Some countries, including Czechia, Estonia, Ireland and Portugal, have formal hierarchical planning structures (OECD, 2017[22]). These structures enable national governments to impose restrictions, or issue binding guidelines, on lower levels of government. Other countries, including Austria, Belgium and the Netherlands, have no formal hierarchy. National governments in these countries can still influence local planning and development decisions and can, in some cases, override the independence of local authorities in pursuit of national objectives, yet their sub-national governments maintain a high degree of independence and autonomy in the development and implementation of spatial planning.

Market failure and public investment in spatial development

All OECD countries utilise public resources to achieve desired land-use outcomes, however, investment by governments to directly realise spatial development is relatively rare. For the vast majority of land uses, development – to support commercial, residential, agricultural and industrial uses – is primarily financed and implemented by the private sector. Nonetheless, public-funded developments can have a transformative impact, particularly when in support of land uses that are unable to attract sufficient private investment. The creation of new social housing, innovation hubs, cultural institutions and universities, for example, is regularly funded and constructed by governments.

Specific geographic, demographic, social and economic challenges can also warrant direct government investment in development projects typically financed by the private sector. For example, in the Northwest Territories of Canada, due to limited depth, and in some regions the non-existence, of the private housing market, residential construction is predominantly led, funded and operated by government (Agrawal and Zoe, 2021[31]). Low population densities, poor infrastructure, low average household incomes and the high costs of construction due to remoteness are all contributing factors to the undersupply of housing that is too significant to overcome with spatial planning policies that are effective in other parts of the country.

Targeted public investment is also used to develop projects that are complex, high-cost, have multiple beneficiaries and can create synergies between land uses. Projects of this nature can include pilots or demonstration projects aiming to test the feasibility of a particular land use, in order to catalyse future investment from the private sector. For example, in Sweden, a publicly-funded manufacturing plant was developed to test new industrial techniques that could in turn support regional development (Box 2.9). Innovation hubs, tech precincts, medical research facilities and other similar projects aiming to support collaborative agglomerations of priority sectors are also regularly funded by government.

Box 2.9. Etanolpiloten, Sweden

Government investment to support the development of new industries

Etanolpiloten, a biorefinery demonstration plant established in Örnsköldsvikno, northern Sweden, was developed by three Swedish municipal governments in 2004 to research and test new industrial techniques in the ethanol industry. Constructed and managed by a publicly-owned company, which is in turn co-owned by municipal energy companies, and using funding grants from the Swedish Energy Agency and the EU, Etanolpiloten sought to develop new methods of bioethanol production that could utilise residual products from forestry and agricultural production, support regional development and enhance sustainability. Sekab, the company responsible for the plant’s operation, was initially granted research autonomy to pursue new technologies and develop new products. However, in 2013 the SP Technical Research Institute of Sweden, an independent, state-owned research centre, was engaged to assist Sekab, expand the plant’s operations and commercialise its most advanced processing technology, CelluTech. Since the completion of the pilot, the technologies developed at the plant have been scaled up and commercialised by Swedish chemical and biofuel companies and the plant itself has transitioned to a private financing model that focuses on more advanced industrial collaborations.

Source: Author’s elaboration, based on (Hellsmark et al., 2016[32]); (Sekab, 2023[33]).

Major issues and policy objectives for spatial planning and development in OECD countries

Spatial planning and development policies are used throughout the OECD to attain a wide variety of objectives, and individual programmes will, in many instances, have multiple aims and priorities. Some of the most frequent objectives include reducing socio-economic inequality, improving housing affordability, building resilience to external shocks such as climate change, enhancing environmental sustainability, accommodating changing population patterns and supporting productivity. These objectives are also highly relevant to Israel, which can draw valuable lessons from the success of some other OECD countries.

Planning systems and processes are also beset by common problems and shortcomings, which increase the difficulty of spatial planning throughout the OECD. These include imprecise cadastre data, cumbersome development approval processes, and a lack of regional planning, and poor coordination between levels of government. In addition to planning challenges, the management and implementation of spatial development, such as insufficient collaboration between development agencies, unaligned policies, and insufficient resources to support implementation can also result in suboptimal spatial outcomes.

Practical barriers to good spatial planning and development

Lengthy planning processes and delayed development approvals are widely reported within OECD countries. These delays, which impose costs on businesses and households, are an impediment to economic growth, an inefficient use of government resources and can undermine spatial planning objectives. For example, in Scotland, UK, insufficient capacity within planning authorities is partially responsible for a significant number of planning delays. A review of application delays relating to housing found that a delayed response from a planning officer or other council officer was the primary cause in 28% of cases, with insufficient planning authority staff levels primarily responsible for a further 7% (Ironside Farrar, 2018[34]). More specifically, the research identified caseload pressures, shortages of key skills within councils, mismanagement of supporting technology and misunderstandings by staff of the information submitted by applicants.

Cadastre data, derived from the official register of all land titles, is a critical tool for spatial planning and limitations on its coverage and usability is an issue in some OECD countries, especially in rural areas (OECD, 2017[22]). At its most rudimentary, cadastre data includes information on ownership, tenure, area, value, parcel boundaries, coordinates and other geometric details. More sophisticated data include specific land uses, geographic characteristics, the number of buildings, associated legal documents such as leases, maps, and other visualisation tools. Although greater detail greatly aids spatial planning, imprecision, errors and missing data are a much more significant issue. For example, imperfect knowledge of land ownership and other characteristics constrains the drafting, and enforceability, of detailed land-use planning. Low-quality or imprecise cadastre data can also compromise property tax calculations, which can distort land-use decisions and undermine government resources.

In addition to government capacity and comprehensive cadastre data, there are several specific challenges in some OECD countries that are highly applicable to Israel. For example, in Turkey, heritage considerations and the risk of disturbing archaeological remains are high, placing strict limits on land use, especially those requiring tunnelling or excavation (Baraldi, Shoup and Zan, 2017[35]). Not only are heritage assessments required before approval of new developments, imposing additional costs, but the discovery of archaeological remains during a construction project can also impose significant delays and design changes.

Vulnerabilities to natural disasters are a further spatial planning challenge for OCED countries with specific geographic features. In Japan, for example, which is vulnerable to earthquakes, large-scale developments must abide by strict land-use conditions, such as the construction of evacuation assembly points adjoining high-rise buildings and require technical assessments to ensure safety and functionality (Strusińska-Correia, 2017[36]). Although assessments for heritage, risk of natural disasters and other place-specific considerations are highly important, well-designed multi-level governance arrangements, as described below, are essential to ensure that the process is as efficient, easy-to-use and proportionate to risk as possible.

Regional co-ordination is required to manage different levels of government

The absence of regional strategic planning, ineffective co-ordination and deficient management are further barriers to effective spatial outcomes. Because political boundaries often do not perfectly align with land uses, the spatial planning and development decisions of one local government may affect neighbouring areas. Equally common is the fragmentation of planning and development processes, with local councils and municipalities in close proximity responsible for their specific territories but without a coherent institutional framework to guide the broader region of which they are all constituent parts. An example of the costs of fragmentated spatial planning and development is the under-provision of housing. This can occur because there is limited consideration of, and incentive for, local government areas to boost housing supply that might reduce the amenity of current residents. The housing needs of future residents, and the city’s housing needs as a whole, can therefore be easily overlooked at the local level with long-term ramifications on affordability. Regional plans can help, for example by setting targets and priorities relating to new housing supply, and agencies with responsibility for regional development can help manage collective problems, hold key stakeholders accountable for their contributions to the targets and coordinate the efforts of smaller government units to minimise duplication.

Regional planning can also play a constructive role in addressing regional disadvantage. National planning frameworks, and the roles and responsibilities of development agencies, which can be highly effective overall, are not necessarily well-suited to the needs and priorities of each region. Variations in industrial structure, topography, population density and available infrastructure, for example, can affect the planning and development priorities and challenges of a specific region in unique ways. A relevant case study of this can be seen in Ireland, which has significant issues with housing affordability and congestion in Dublin, but slower population growth and skills shortages in Mayo and Sligo counties, in the northwest (Bergin and Garcia-Rodriguez, 2020[37]). Spatial policies that take into account these region-specific challenges, set tailored regional priorities, establishes place-sensitive benchmarks to measure progress and provide opportunities for broad participation from relevant stakeholders can, in these cases, prove complementary to national spatial planning (Box 2.10).

Box 2.10. Regional planning, management, and co-operation in Ireland and Germany

Ireland’s National Planning Framework

As a unitary country without a formal intermediate tier of government, regional planning and development in Ireland has been initiated and supported through central government actions. In 2018, Ireland adopted the National Planning Framework, which recognises the division of Ireland into three distinct regions with specific characteristics, challenges and development needs. This place-based approach to spatial planning marked a shift away from past attempts to promote interregional distribution – of economic activity, population and infrastructure – away from Dublin to more peripheral areas, with a new emphasis on optimising the functional spaces of each region and promoting organic growth.

Co-operative regional development in the Rhine-Neckar Metropolitan region

The Rhine-Neckar, in south-west Germany, has developed a "layered-network” form of governance to lead spatial policy making, that includes representatives from municipalities, the private sector and local institutions. This approach has been undertaken due to the region’s high-density, polycentric form, and, because its territory stretches over the border area of three adjoining states, to make up for the lack of a formal governance structure. The region, due to its economic links and common planning challenges, has adopted a cross-state treaty, developed a standardised regional plan and implemented numerous collective actions, such as the creation of a land-use information platform, to coordinate regional planning.

Source: Author’s elaboration, based on (Yan and Growe, 2022[38]); (Walsh, 2019[39])

Regional planning is a particular issue in unitary countries that lack state or provincial tiers of government. Challenges include the absence of clear jurisdictional boundaries, the competing priorities of local governments and insufficient resources, including access to adequately trained civil servants. In recent years, unitary countries including Ireland, Estonia and the UK have developed more rigorous regional planning to bridge the divide between local and national policies, an approach that could be highly beneficial for Israel.

Urban sprawl and low-density housing undermines environmental sustainability

The expansion of urban areas, and the construction of low-density residential areas on the periphery of major metropolitan centres is a policy challenge affecting many OECD countries. This pattern of land use, which is often reliant on individual car use, has a high impact on the natural environment, health and congested roads, and is undermining efforts to reduce carbon emissions, protect biodiversity and prevent the degradation of land. The primary disadvantages of urban sprawl from a sustainability perspective are the high quantities of new land required to accommodate new dwellings, the reliance of residents upon automobiles for transport, and the high energy requirements for heating and cooling detached housing units, as well as substantially higher infrastructure costs.

Strategies to ameliorate the environmental impact of urban sprawl have included attempts to reduce the supply of land on the urban fringe available for residential development, the provision of improved public transport, more stringent regulations on the energy efficiency of new dwellings and more onerous biodiversity offsets.

An example of effective policies that have mitigated urban sprawl can be seen in Portugal (Box 2.11). Like Israel, Portugal has a warm climate, a centralised governance system and a long-term trend of internal migration towards coastal areas. However, sustainability has only recently emerged as a major priority for spatial planning policies and a complete reorientation of the built environment would be extremely costly and impractical. As an alternative approach, Portuguese authorities have sought to coordinate their own land and planning policies to limit urban sprawl, encourage greater density in inner-city areas and arrest the growth of car-dependent commuter communities (Fernandes et al., 2020[40]).

Copenhagen, Denmark, is another relevant example of long-term, sustainable spatial planning and complementary policies (Ayten and Seyhan Ayten, 2017[41]). Its long-term approach, investment in public transport and approval of high-density development has resulted in an urban form that minimises environmental impacts without compromising liveability (Box 2.11). The approach of Copenhagen is not immediately applicable for other cities and countries, but it does demonstrate the long-term benefits of incorporating sustainability as a spatial planning and development priority and directing future growth into patterns which minimise environmental impacts.

Box 2.11. Sustainability and spatial policies in Portugal and Denmark

Portugal: Sustainable Cities 2020

Portugal’s Sustainable Cities 2020 strategy was formulated to explicitly promote sustainable urban development with a focus on improved multi-level co-ordination. Following the implementation of municipal master plans, the national government sought to expand the dimensions of territorial development, introduce participatory governance and promote bottom-up strategies that would cover broader geographic areas. Such an approach was required due to the absence of regional government within Portugal and the inability of individual local governments to address development needs that extended beyond their immediate administrative boundaries. The development of low-density communities beyond the borders of large metropolitan areas were an example of how the fragmented governance structure for spatial planning was leading to poor sustainability outcomes, with the growth of large residential communities taking place in locations within commuting distance of Lisbon and Porto. These communities had a high carbon footprint and were contributing to congestion. The major success of Sustainable Cities 2020 was the consensus it generated on the need for coordinated development within urban centres and outlying areas. This was supported by complementary investments focused on urban renewal, the creation of an information-sharing forum for participating cities, and the development of a barometer, or dashboard, to monitor progress and encourage competition.

Copenhagen: a long-term approach to sustainable spatial planning

Although formal plans, legislation and other land-use policies have evolved over time, sustainability principles have been consistently maintained and enforced by planning authorities in Copenhagen over several decades. Commencing with the Fingerplanen, an urban plan released in 1947, Copenhagen’s steady population growth has been carefully coordinated to minimise environmental impacts. Examples of this commitment to sustainability include ongoing adherence to high-density urban forms, the concentration of city expansion along transport corridors, strict standards of energy efficiency, the promotion of cycling and preservation of green spaces. The result of these principles is a pattern of development in which radial “fingers” expand from the city centre along high-capacity railways. Such an approach enables good connections for most residents to employment centres and essential services, while also enabling easy access to green space and recreational areas, due to the limits on development, between the fingers.

Sources: Author’s elaboration, based on (Fernandes et al., 2020[40]); (Ayten and Seyhan Ayten, 2017[41])

Existing land-use patterns can exacerbate inequalities between groups and regions

Inequalities among different groups within society can be exacerbated and entrenched by spatial planning and development policies. These can include uneven outcomes for specific ethnic, religious, and other minorities and socio-economic groups, but can also exist between adjoining geographic agglomerations such as regions, provinces or neighbourhoods.

Realignment of spatial planning and development priorities is therefore a common strategy to help improve outcomes for disadvantaged groups and localities. This can include the targeted provision of new infrastructure, the encouragement of new industries to help support employment in a specific area and the development of new amenities such as green spaces and cultural facilities. Addressing these inequalities, however, requires a long-term strategy and a multi-faceted approach as there are often several interrelated causes contributing to inequality.

One successful spatial planning and development strategy to reduce inequality is the extension of existing transport networks into low socio-economic metropolitan neighbourhoods. These interventions, especially if focused upon concentrated communities of households with low or no-car ownership, can significantly improve well-being and economic participation. Evidence from Toronto, Canada, demonstrates that higher rates of public transport accessibility led to increased social and economic activity among low-income groups (Allen and Farber, 2020[42]). Participation in the labour market, higher education and cultural activities were all shown to increase as a result of additional public transport services. These increases were positive across all households, but low-income households benefited the most from improved public transport connectivity. For example, among households with no vehicle access and income below CAD 40 000, a 10% increase in transport access resulted in a 17% increase in activities. Building upon this evidence, the Greater Toronto and Hamilton area drafted the 2041 Regional Transportation Plan (Metrolinx, 2024[43]), with the aim of expanding access to rapid transport from 9% to 38% of residents over a thirty-year period, with a particular focus on disadvantaged neighbourhoods. The plan’s implementation, led by Metrolinx, the regional transport agency, also includes collaborations with 30 local municipalities and nine local transit agencies for access to land and co-ordination of services, as well as private partners responsible for the construction and testing of new transport infrastructure.

Metropolitan governance mechanisms are another effective strategy for sub-national governments to overcome fragmentation. Evidence from the US, which has endured high levels of local government fragmentation in some metropolitan regions, suggests that sprawl, high service costs, income inequality and racial segregation can be exacerbated in the absence of agreements or binding institutional arrangements among adjoining metropolitan governments (Ahrend et al., 2014[44]; Klink, 2008[45]). The benefits of inter-municipal cooperation, as opposed to consolidation and centralisation of local government, are operational flexibility and lower up-front implementation costs. Arrangements could include shared contracting of outsourced services such as waste collection, data sharing, coordinated tax arrangements and formal planning bodies.

A good example of government action to ameliorate regional inequality is in Japan, which has exceptionally low rates of inter-regional inequality (World Bank Group, 2017[46]). The development strategy, which aimed to foster regional economic growth and employment, focused on creating industrial hubs in regions. This approach enabled the relative decline of agricultural production, and the benefits of urbanisation, industrialisation and agglomeration, to be absorbed in multiple metropolitan areas, in several regions, redirecting the internal migration of skilled workers to less distant locations. The implementation of this strategy was successful but required significant investment and support from the national government. This included long-term commitment to the locations chosen for industrial production, the appropriate zoning of sufficient land for industrial activities and the provision of supporting infrastructure such as rail and port facilities. A further supporting measure was the provision of high-quality government services. The national government successfully delivered education, healthcare, and other social services of a comparable level throughout all areas of Japan, reducing the incentive for skilled workers to migrate to major cities such as Tokyo and Osaka.

These successful policy interventions are highly relevant to Israel, which has high concentrations of income inequality among regions, social groups and neighbourhoods. Long-term spatial planning is unable to eliminate inequality by itself but can complement and help support government interventions and programmes targeted towards disadvantaged groups and localities.

Lack of affordable housing can limit welfare and productivity while exacerbating inequalities

Housing affordability is a major issue in many OECD countries, particularly those with fast growing populations, such as Australia, Canada, New Zealand and the US. The specific causes leading to high housing prices differ across countries and regions, but the impacts are broad and significant. Of greatest concern are the impacts of higher housing costs which limit choice and overall welfare among households. Productivity can also be affected through longer commute times, limitations on mobility and high land costs on business investment. Housing shortages, through the appreciation of existing assets, can also affect inequality by rapidly increasing the wealth of a minority of asset-owning households.

The approach of Auckland, New Zealand, provides a good example of effective spatial planning policies to improve housing affordability while limiting sprawl (Box 2.12). To increase housing supply in inner-city areas, the Auckland Council introduced a new medium-density building code that allowed the development of multiple dwellings on land that had previously been limited to freestanding houses (Greenaway-McGrevy and Phillips, 2023[47]). An alternative case study is the approach of governments in the Netherlands, which has historically taken a more hands-on role in planning, financing and ownership of new housing developments (Obrien and Dembski, 2020[48]).

Box 2.12. Examples of effective spatial planning for housing in New Zealand and the Netherlands

The Auckland Unitary Plan

The Auckland Unitary Plan, implemented in 2016, provided a new, medium-density housing code on three quarters of the city’s residential land that had previously been restricted to accommodate a single dwelling. The Plan, in effect, removed the single-dwelling restriction, streamlined the application process and reduced the number of possible objections to new housing development. The resulting surge in residential permits and housing completions greatly improved housing supply overall, reoriented development away from greenfield sites towards urban infill and reduced the administrative burden on developers, all of which contributed to improved housing affordability.

Development of new housing stock in the Netherlands

Within the Dutch planning system, the identification of locations for housing can be made by the national, provincial and municipal tiers of government. In practice, the national government usually determines the regions and cities it considers most appropriate for additional housing development and the specific locations are then identified by municipalities. These locations, once chosen, are carefully planned and often include a combination of private and municipal ownership. Therefore, despite the majority of residential construction being undertaken by private-sector developers, the speed, design and density of new housing stock is closely controlled by government. This approach has been highly successful, resulting in a steady number of new, high-quality and well-connected housing units constructed each year.

Source: Author’s elaboration, based on (Greenaway-McGrevy and Phillips, 2023[47]); (Obrien and Dembski, 2020[48])

Although both housing strategies have been successful, the approach taken by Auckland may be more immediately applicable for Israel. The introduction of a medium-density building code in central Tel-Aviv, for example, could be implemented quickly, would not require government funding and would impose a relatively small administrative burden. The scarcity of suitable land in Israel for residential construction is a further argument in favour of urban infill, which more liberal zoning could encourage, rather than carefully planned greenfield development.

Poor prioritisation can suppress productivity growth

The sub-optimal use of land, and the resultant drag on productivity, is a further issue affecting many OECD countries. This issue extends beyond the competing interests of potential land users, and the occasional conflicts between them, that the planning system is explicitly designed to resolve and also includes implicit features of related policies and administrative arrangements that inadvertently result in inefficient development outcomes. For example, a government may introduce updated building safety standards that result in fewer new entrants and stifle innovation, leading to reduced competition in the construction sector. These outcomes are not intentionally created, or desired, but are the consequence of important development considerations being omitted from government decision-making processes.

Congestion, which to varying degrees affects all OECD countries and is a particularly pressing issue in Israel, is a commonly-occurring unintended consequence of spatial planning and development policies. The pattern of development allowed by and actively shaped by government, and the inadequate provision of supporting infrastructure, can lead to pinch points throughout a transport network and impose significant costs on society. In Australia, for example, road congestion and public transport crowding was estimated to cost the economy AUD 19.0 billion in lost productivity per annum (Infrastructure Australia, 2019[49]). Spatial planning and government investment both have the capacity to ameliorate congestion, but congestion can also be directly caused through the pursuit of other policy priorities, such as the preservation of heritage, green space and low-density neighbourhoods.

The total amount of lost productivity from sub-optimal land use is difficult to quantify, but more efficient patterns of development have the potential to reduce costs, facilitate new economic activity and improve the functioning of existing uses. Evidence of land-use regulations leading to lost productivity can be seen in the UK’s commercial property sector (Cheshire, Hilber and Kaplanis, 2015[50]). As a result of the Town Centre First policy, which imposed more restrictive regulations on the high streets of major towns and cities within England, the number of locations available for large-scale retail significantly decreased. As a result of this policy, and after controlling for several explanatory variables such as population size, new supermarkets that opened in English towns covered by the policy achieved 32% lower output, on average, compared to those of a comparable size that opened in other parts of the UK over the same period.

Optimising productivity, or minimising lost productivity, can be achieved through a wide variety of correcting policy measures including subsidies, development charges, value-capture levies, and regulations to limit the frequency of certain activities at the same time, including policies to encourage more efficient use of new infrastructure. In Denmark, which is the highest-ranking country in infrastructure governance, the efficiency of rail, seaport and air transport services are very high (Global Infrastructure Hub, 2020[51]). This has been partially achieved through the use of state guarantees from the Danish government to support the creation of special purpose vehicles that allow multiple investors to pool resources and construct new infrastructure, manage its operation and collect user charges. The advantage of this model is the reduced risk, cost and complexity, compared to privately-financed models, which enables a greater number of potential projects to become financially viable and therefore delivered.

A lower cost, but less immediate alternative to government interventions aimed at correcting lost productivity, is improved prioritisation within the spatial planning framework. Governments throughout OECD countries are aiming to achieve numerous objectives simultaneously through spatial planning and development, but the relative ordering of these priorities is rarely specified. A clear ordering of priorities can give greater prominence to particular activities, rationalise development patterns, and reduce inefficiency. For example, if reduced greenhouse gas emissions and economic growth were deemed to be the highest national priorities, the pattern of development could be shaped to achieve these objectives at the lowest possible cost. Such an approach, where national priorities are ordered and published, would greatly assist the decision-making processes of the Israeli government as it seeks to achieve development that balances a variety of social, economic and ecological considerations.

Recent spatial planning and development trends across the OECD

Spatial planning and development in the 21^st century has been affected by four major trends: i) digitisation; ii) a new emphasis on placemaking in public spaces; iii) climate change; and iv) innovation. Similar to its evolution over the preceding 100 years, these trends have not replaced existing considerations but have added additional complexity and scope to an already complex spatial planning and development processes. Despite these changes, the precise role of spatial planning and development in OECD governments has remained unaltered, with statutory planning instruments utilised to steer and regulate private actors responsible for the vast majority of spatial development, and direct government action limited to instances of market failure, natural monopoly or areas of strategic importance.

Increased internet access and the digitisation of government services has greatly affected spatial planning and development processes, mostly in positive ways (Heyder, Höffken and Heydkamp, 2021[52]). Government planning documents are more easily accessible, public authorities are more visible, and new communication channels such as social media, online surveys and interactive maps allow more information to be shared with, and received from, residents and stakeholders (Box 2.13). For active participants in the planning system, such as property developers, digitisation has also streamlined approval processes. Online applications are faster, simpler and easier to track. Public consultations can be solicited and compiled online, reducing the need for in-person meetings (Hofmann, Münster and Noennig, 2019[53]). The chief benefit of these advances for spatial planning and development is better management, higher quality feedback between planning authorities and stakeholders, including other government agencies. By providing more information about particular projects and plans at the commencement of a new spatial planning initiative, misunderstandings about potential negative impacts can be avoided or reduced. Further, affected individuals and groups with good access to information and clear channels of exchange are easily able to communicate specific concerns and suggestions relating to specific development projects, which can then be incorporated into the final design, when relevant, by the developer or project proponent.

Box 2.13. Digitisation of spatial planning and development in the United Kingdom

Development approval processes in the United Kingdom have successfully adopted new technological platforms over the past two decades to streamline activities, increase engagement and improve transparency. The first wave of digitisation took place in the mid-2000s, with policy documents, maps, and other information transferred from paper files onto publicly-accessible websites. These practices have grown in scale, but also complexity, for example through the development of online visual tools provided by local planning authorities to demonstrate the likely visual impacts of new proposals.

The UK planning system has also been fast to adopt online community engagement. In England, the majority of community meetings and information sessions are now hosted online, while feedback is regularly consolidated through web-based forums and surveys. In addition, approximately 84% of statements of community involvement included social media to engage with the community by 2021.

Source: Author’s elaboration, based on (Wilson and Tewdwr-Jones, 2022[54])

A renewed focus on the quality and accessibility of public spaces is another recent development in spatial planning and development (Carmona, 2019[55]). Historically, alterations to the rights of landowners and leaseholders have been the primary mechanism through which government has sought to implement land-use changes. In recent decades, this focus has shifted to include public spaces such as streets, parks, pedestrian, squares and plazas. For example, the pursuit of “activation” in urban spaces deemed to be in need of transformation has become a high-priority spatial planning objective (Andres and Kraftl, 2021[56]). This can include the promotion of artistic performances, encouragement of pedestrian access, the introduction of small-scale commercial activities such as markets or the funding of one-off events, such as festivals and concerts. Large numbers of government-led, funded and developed precincts for public use, particularly in disadvantaged areas, have also been pursued by OECD countries in recent years. For example, in Bilbao, Spain, the multi-purpose Bilbao Society and Contemporary Culture Centre was established in 2010 within a former warehouse that had been out of operation since the 1970s to host exhibits, concerts, and other artistic performances (Azkuna Zentroa, 2024[57]). Such objectives are unique because they seek to accommodate multiple uses and multiple users simultaneously, but without altering property rights. Further, unlike many spatial policy instruments, they actively seek to promote specific uses that will maximise social well-being rather than simply restricting undesirable uses of land.

Climate change has greatly influenced spatial planning and development in recent years, both as a tool to reduce carbon emissions and to adapt the built environment for its anticipated impacts (Reckien, 2018[58]). In terms of mitigation, a suite of new practices have been incorporated to reduce carbon emissions. These include mandatory provisions for electric vehicle charging, encouraging or requiring rooftop solar panel installations, the release of seabed territory for wind turbine construction and the enforcement of strict energy efficiency standards. The direct and indirect carbon emissions of large-scale development projects, such as new mining facilities, as well as the biodiversity, carbon storage or water resource protection potentials from preserving or restoring natural habitats, are also increasingly among the criteria considered by ministers and government agencies before new developments are approved.

The impact of climate change adaptation on spatial planning and development has been equally significant. In the short-term, new, policies have been implemented to limit the growth of communities located at sea level, with scarce water resources, on flood plains, or in fire-impacted areas. These have included the construction of mitigating infrastructure sure as levees and firebreaks, and the installation of new warning systems to minimise the impact of natural disasters. Long-term adaptation and resilience strategies have also been influential, with the modelling of future climate scenarios guiding present land-use decisions. For example, in the Netherlands, sophisticated modelling of different climate scenarios has been undertaken to forecast sea-level increases and how these will affect low-lying communities (IMF, 2023[59]). Long-term forecasts of maximum summer temperatures, for example, has helped the State of California (US) to identify eligible housing for grants to undertake building upgrades that reduce wildfire risk, better plan new infrastructure vulnerable to flooding, such as railway lines, and inform the issuance of permits for the construction of dwellings (State of California, 2021[60]).

Innovation’s critical role in supporting economic growth and improved living standards has become increasingly well understood by OECD governments with broad implications for spatial planning and development (Yigitcanlar and Adu-McVie, 2020[61]). This had led to the creation, investment in and ongoing management of a wide variety of innovation districts, precincts and zones. For example, in Philadelphia, United States, a public-private innovation cluster was developed and funded using municipal funding but operated and managed by private-sector partners with relevant industry experience. In the Silesia region of Poland, however, innovation investment was led by the relevant regional government and was specifically focused on the creation of a “clean coal technology cluster”. A wide variety of innovation models and investments have been developed by OECD governments, often anchored within universities, places specialising in strategic industries or within inner-city neighbourhoods with regeneration potential. The costs of innovation precincts, however, are high, and the desired productivity gains are difficult to realise without careful planning, collaboration with relevant industry actors and co-ordination among levels of government to reduce duplication.

The role of administrative decentralisation in spatial planning and development

The decentralisation of administrative powers has led to a devolution of some spatial roles and functions from national to subnational governments – resulting in a relatively larger role for regions and local government. The drafting of spatial planning documents, the assessment of large-scale development proposals, the development of new precincts, the co-ordination of development agencies, and the undertaking of community consultation, although still a national government responsibility in many circumstances, are increasingly performed by subnational governments. For example, in Estonia, Latvia, and Lithuania, spatial planning and development functions have been gradually reformed over the past three decades to include a greater role for municipalities and the introduction of additional spatial scales, including regions, to complement national frameworks (Auzins, Jurgenson and Burinskiene, 2020[62]).

In addition to the decentralisation of spatial policy processes, there has also been a broader change in administrative powers, responsibilities and tasks. In Poland, for example, a range of new policy responsibilities have been transferred from the central government to municipalities in recent years, including several that overlap with spatial planning. These include the provision of transport infrastructure, urban rehabilitation, management of protected areas and the drafting of territorial strategies for investment attraction (OECD, 2020[63]).

The decentralisation of spatial planning functions, development responsibilities, and broader governance roles have, in combination, greatly altered the practical administration of land-use policies and strategies, enabled regions and local governments to play a greater role in shaping their territory and presented new challenges that may also be applicable to Israel. In particular, it has underlined the challenge of matching government responsibilities with the tools and capacities needed to fulfil them. If subnational governments do not possess the requisite administrative capacities, funding resources or legal powers required to fulfil new roles, decentralisation of spatial planning powers can potentially lead to more complex and less efficient spatial outcomes.

Spatial challenges and support of place-based policies

The more frequent use of place-based policies for territorial development has also influenced spatial planning and development practices throughout the OECD. Place-based policies, which are characterised by an enhanced role for, and consultation with, subnational governments and non-government actors, seek to harness local knowledge, skills and institutional power in both policy design and implementation. Place-based policies are also characterised by consideration of functional areas, coordination of complementary programmes and the use of targeted, strategic public investment. This approach, which recognises that national policies may not be equally effective in all regions and localities, has been adopted by many governments, especially in pursuit of regional development. It is characterised by multi-level governance systems (i.e. institutions, frameworks and practices for decision making among levels of government) that can harness the knowledge, skills and institutional power of local actors to help overcome specific barriers limiting development. The emergence of place-based policies has had numerous implications for spatial planning and development (McCann, 2023[64]). For example, place-based policies have refocused spatial policy objectives to emphasise and help realise the potential of less-performing regions, rather than to compensate for and mitigate existing disparities. A more strategic emphasis, and involvement from a broader range of public, private and civil society actors, with attached incentive structures and/or conditionality requirements, are further characteristics of place-based policies implemented in the last decade.

Spatial planning, in tandem with spatial development projects led by government, can greatly influence the development of a place or region and has become an important tool used by governments to progress place-based policies. Through the restructuring and shaping of development and land use, spatial planning can help places and localities realise their desired vision through the optimisation of their natural resources, infrastructure and industrial agglomerations. In addition to encouraging desired land uses, the processes and procedures of spatial planning can also strengthen place-based policies. The analysis of existing land uses, measurement of issues such as congestion, consultation with local stakeholders and long-term vision setting are fundamental spatial planning activities that can complement and strengthen place-based approaches to development.

For Israel, spatial planning and development could also assist in the implementation of place-based policies and support regional development. This could include, for example, an increased role for a broad range of public, private and civil society actors, and especially local government, to encourage better alignment of land-use and development priorities. New multi-level governance arrangements, such as regional planning, development and co-ordination bodies, could also be explored to take advantage of the complementary processes that connect and advance spatial policies and objectives and regional development simultaneously.

Conclusion: Policy implications

Spatial planning and development consist of a broad suite of policies that are utilised by all OECD Member countries and by all levels of government, in order to achieve a broadly comparable set of objectives. The specific approach of each individual country, however, reflects its geography, history and institutional framework, and has evolved into a wide variety of laws, regulations, investments, plans and practices. These diverse approaches to similar problems provide valuable insights for Israel and its spatial planning and development issues. For example, the digitalisation of planning processes, the incorporation of net-zero objectives and the increasing use of pace-based policies are broad OECD trends that warrant careful consideration by Israeli policy makers.

The widespread challenges of implementing spatial planning throughout the OECD can also provide important lessons for Israel. These include practical issues, such as imprecise cadastre data, bureaucratic planning processes, a lack of regional planning, misaligned service delivery and poor coordination among levels of government, which can undermine the impact of otherwise well-conceived spatial policies.

The broader, more complex policy challenges affecting OECD countries further highlight the difficulties of employing spatial planning techniques to address perennial policy problems. Housing affordability, sustainability, inequality and productivity can all potentially be improved through coherent spatial planning and strategic development interventions by government agencies, but achieving the right balance between competing priorities and stakeholders has proven difficult in many advanced economies.

However, as the case studies of Denmark, Japan, the Netherlands, New Zealand, Portugal and other OECD Member countries clearly demonstrate, well-targeted spatial policy interventions can have transformative impacts. Because many of the issues experienced in these countries overlap with those occurring in Israel, these case studies are particularly relevant and should be investigated further for potential application (with the necessary contextual adjustments) to the Israeli context.

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